Case Note & Summary
The dispute arose from the proposed acquisition of an electrical supply undertaking in Kerala under Section 6 of the Indian Electricity Act, 1910. The appellant, Cochin State Power and Light Corporation Ltd., held a licence originally granted under the Cochin Electricity Regulation III of 1902, with a first purchase option exercisable after 25 years from December 3, 1935, expiring on December 2, 1960. The Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 were made applicable to Travancore-Cochin by the Part-B States Laws Act, 1951. The Kerala Electricity Board was constituted on March 31, 1957, and under Section 71 of the Electricity (Supply) Act, 1948, the right and option to purchase the undertaking under the Indian Electricity Act, 1910 vested in the Board. The original Section 7(4) of the Indian Electricity Act, 1910 required a two-year notice for election to purchase, expiring December 2, 1958. The Board's first notice on February 11, 1959 was invalid. On September 5, 1959, the Indian Electricity (Amendment) Act, 1959 substituted new Section 6, which allowed the Board to exercise option after serving a notice of not less than one year, with Section 6(2) giving the State Government a like option if the Board does not elect to purchase. Section 6(4) required the Board to send intimation of intention to purchase to the State Government at least eighteen months before expiry of the relevant period, failing which the Board would be deemed to have elected not to purchase. The Board served election notices on October 24 and October 29, 1959, and the State Government served its own notice on November 20, 1959. The appellant filed a writ petition in the Kerala High Court on November 14, 1960 challenging these notices. During hearing, the State Electricity Board waived its notices, and a single Judge dismissed the writ petition, holding the State Government entitled to proceed under its notice. The Division Bench dismissed the appeal on October 4, 1962, affirming the State Government's right. The appellant then appealed to the Supreme Court. The core legal issues were whether the State Government could exercise its option under Section 6(2) after the Board had already elected under Section 6(1), and whether Section 6(4)'s intimation requirement rendered the Board's election ineffective. The appellant argued that absence of a two-year notice under old Section 7(4) created a vested right to continue the licence until 1970, and that the expression 'on the expiration of each such period as is specified in the licence' in new Section 6(1)(a) meant a period not yet expired, so no option arose on December 2, 1960. The State contended that the Board's notices were ineffective due to non-compliance with Section 6(4), thereby enabling the State Government's option. The Supreme Court held that the option to purchase under Section 6(1) vested exclusively in the State Electricity Board, and since the Board duly elected by serving notice, the State Government acquired no right under Section 6. The Court further held that Section 6(4) was inapplicable because the provision came into force less than eighteen months before the expiry date, making compliance impossible; applying the doctrine of lex non cogit ad impossibilia, the Board could not be deemed to have elected not to purchase. The Court allowed the appeal, set aside the High Court judgment, and ruled that the State Government's notice was unauthorised and without legal effect.
Headnote
A) Electricity Law - Option to Purchase - State Electricity Board's Exclusive Option Under Section 6(1) - Indian Electricity Act, 1910, Sections 6(1), 6(2) - The State Electricity Board, on expiry of licence period, had the option to purchase the licensee's undertaking under Section 6(1). The Board served notice of election on the appellant, thereby duly electing to purchase. Held that once the Board elected, the State Government's option under Section 6(2) did not arise and its notice was without authority (Para 193 G-H). B) Statutory Interpretation - Impossibility of Performance - Lex Non Cogit Ad Impossibilia - Indian Electricity Act, 1910, Section 6(4) - Section 6(4) required the Board to send intimation to the State Government at least eighteen months before expiry of licence period. However, Section 6 came into force less than eighteen months before December 2, 1960, making compliance impossible. Held that the doctrine of lex non cogit ad impossibilia applied, Section 6(4) was inapplicable, and the Board was not deemed to have elected not to purchase (Para 193 E-F).
Issue of Consideration
Whether the State Government could exercise the option to purchase the electricity undertaking under Section 6(2) of the Indian Electricity Act, 1910 after the State Electricity Board had already elected to purchase under Section 6(1), and whether the Board's failure to send intimation under Section 6(4) rendered its election ineffective when compliance was impossible due to the provision's recent enactment.
Final Decision
Supreme Court allowed the appeal, set aside the High Court judgment, and held that the State Government acquired no right or option to purchase the undertaking under Section 6 of the Indian Electricity Act, 1910 because the State Electricity Board had duly elected by serving notice; Section 6(4) was inapplicable due to impossibility of compliance, so the Board was not deemed to have elected not to purchase.
Law Points
- State Electricity Board has exclusive option to purchase under Section 6(1) of Indian Electricity Act
- 1910
- State Government option under Section 6(2) arises only if Board does not elect
- Section 6(4) intimation requirement inapplicable when compliance impossible
- doctrine of lex non cogit ad impossibilia applied
