Case Note & Summary
The dispute arose between The Okara Electric Supply Co. Ltd. and the State of Punjab regarding the validity of a notification that allowed the State to acquire the electricity undertaking of the petitioners. The petitioners claimed that the notification's Clause II, which permitted compulsory acquisition after a specified notice period, was ultra vires Section 28 of the Indian Electricity Act, 1910, and violated their fundamental rights under Articles 19 and 31 of the Constitution. The petition was filed on January 3, 1959, challenging a notice issued by the State on January 3, 1958, which exercised the option to acquire the undertaking. The petitioners argued that the condition imposed was an unreasonable restriction on their right to carry on business. The respondents contended that the petitioners accepted the clause before the Constitution came into force and that the clause was justified under Section 28. The court analyzed the statutory provisions and concluded that the imposition of such a condition was within the scope of Section 28, which allowed the State to impose conditions related to the business of supplying energy. The court further held that the limitations imposed were reasonable restrictions in the public interest and did not violate the Constitution. Consequently, the petition was dismissed without any order as to costs.
Headnote
A) Constitutional Law - Fundamental Rights - Infringement of Rights - Indian Electricity Act, 1910, Section 28 - The petitioners contended that Clause II of the notification was ultra vires Section 28 and violated Articles 19 and 31 of the Constitution. The court held that Clause II was intra vires Section 28, as it dealt with the position arising upon termination of the sanction and provided for compensation, thus not infringing fundamental rights (Paras 1-2).
Issue of Consideration
Whether Clause II of the notification imposing compulsory acquisition of the electricity undertaking is ultra vires Section 28 of the Indian Electricity Act, 1910 and infringes fundamental rights under Articles 19 and 31 of the Constitution.
Final Decision
The petition was dismissed, with the court holding that Clause II of the notification was intra vires Section 28 of the Indian Electricity Act, 1910, and did not infringe fundamental rights under Articles 19 and 31.
Law Points
- Constitutional validity
- Electricity supply
- Fundamental rights
- Compulsory acquisition
- Reasonable restrictions
