Appeal No 155 of 1971
Appeal by Special Leave from the Judgment and Order dated 24 3 1975 of the Andhra Pradesh High Court in Appeal No 1972
BV Subrahmanyam and A Subba Rao for the Appellant
A K Sen KR Chaudhary Miss Nihar Saha and Mrs Veena Devi Khanna for the ReSpondent
The Judgment of the Court was delivered by BEG J
This is a defendant s appeal by special leave against the judgment of the High Court of Andhra Pradesh decreeing with costs the claim of the plaintiffs respond ents the Andhra Pradesh State Electricity Board and the Andhra Pradesh State Government for Rs 33444377 as arrears of electricity charges said to be due from the Vijayawada Municipal Council in respect of amounts which were shown in its books as payable to it by consumers of electricity
The plaintiff s claim flowed from the terms of the Andhra Pradesh Andhra Area Electricity Supply Undertaking Acquisition Act 15 of 1954 hereinafter refered to as the Act  the provisions of which were applied to the electric ity undertaking of the appellant Municipal Council with effect from 22nd December 1961
by the Government of Andhra Pradesh
The rights of the State were transferred to the Andhra Pradesh Electricity Board the co plaintiff re spondent
The amounts claimed were shewn in the books of the Council s electricity undertaking on the date of its acquisition as due to it from direct consumers of electric ity to whom it used to sell electricity supplied to it in bulk
The Electricity undertaking was taken over by the Government by an order under Section 4 1  of the Act
This section provided 4
Power of Government to take over any undertaking  1  The Government may in respect of any undertaking not taken over by them before the commencement of this Act by order in writing declare that it shall vest in them on the 848 date specified therein such date not being earlier than four months from the date of the declaration  The Municipal Council was the licensee from whom the undertaking as a commercial concern was taken over
A licensee is de fined by section 2j to mean   a person licensed under part II of the Electricity Act to supply electricity energy or a person who has obtained sanction under section 28 of that Act to engage in the business of supplying electricity and in relation to an undertaking taken overor an undertaking which has vested in the Government under section 4 the person who was the licen see at the time the undertaking was taken over or vested in the Government as the case may be and includes the successorin interest of any such person The State Electricity Board stepped into the shoes of the licensee on behalf of the State to discharge all the existing obligations of the licensee arising out of past transactions and for this reason became entitled to the benefits of all contracts whether they had accrued in the past or were to arise in future which existed at the time of the taking over of the undertaking
The effect of the taking over of an undertaking and the vesting the rights and liabilities of the former licensee in the State by operation of law was indicated by sections 5 and 6 of the Act
Section 5 provided for compensation to be paid on one of three alternative bases specified in this provision
The licensee could opt for one of the three bases
The provisions of section 62 of the Act give the consequences of vesting
Section 62 of the Act enacts 62 a If compensation is payable in respect of an undertaking under Basic C only the property rights liabilities and obliga tions specified herein shall vest or be deemed to have vested in the Government on the vest ing date  i all the fixed assets of the licensee and all the documents relating to the under taking ii all the rights liabilities and obligations of the licensee under hire pur chase agreements if any for the supply of materials or equipment made bonafide before the vesting date iii all the rights liabilities and obligations of the licensee under any other contract entered into bona fide before the vesting date not being a contract relating to the borrowing or lending for money
b All the assets specified in clause a i shall vest or shall be deemed to have vested in the Government free from any debts mortgages or similar obligations of the licen see or attaching to the undertaking 849 Provided that such debts mortgages or obligations shall attach or shall be deemed to have attached to the compensation
payable under this Act for the assets
A glance at clause 2 a iii of section 6 indicates that it clearly provides for the vesting of all the rights liabilities and obligations of the licensee under contracts entered into before the date of vesting
Therefore we find no merit in the objection on behalf of the Municipal Council that past dues of consumers of electricity shown in the books of Vijayawada Municipal Council could not vest in the State Government in a case in which basis C is applicable for compensation
The compensation provided by Section 53vi applicable to basis C  takes in the book value of all intangible assets to the extent such value has not been written off in the books of the licensee
The result  is that the aggregate value of all items speci fied in section 53 including items falling under sub clause vi became payable as compensation to the licensee on principle s specified in the Act
The learned Counsel for the appellant has placed a great deal of reliance on the provi sions of Section 102b iii which are applicable to cases of compensation payable on basis C 
Section 10 gives a list of deduc tions from compensation
One of the items of this deduction is found in section 102biii which lays down all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date in so far as they have not been paid over by the licensee to the Government less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied by him before that date The provision set out above is sought to be made the corner stone of the arguments of the learned Counsel for the Appel lant Municipal Council although this very provision was held by the High Court to be decisive against the appel lant s case that the amounts shown as due from the consumers of the licensee for energy supplied before the vesting date were claims for amounts which the Vijayawada Municipal Council was entitled to appropriate as they must be deemed to be exempted from the effects of vesting of rights and obligations of the undertaking in the State
It is true as the learned Counsel for the Municipal Council points out that only those rights and liabilities and obligations which are specified in section 62 a are to vest in the State Government
But the contention based on alleged non specification of the claims of the licensee against direct consumers to whom it used to supply electric ity over looks the sweep of section 62 a iii already indicated above which will cover all rights and liabilities under contracts entered into bona fide before the date of vesting
It is not possible to assert that the rights of the Municipal Council to realise arrears of dues from the consumers will not be transferred to the State Government when they are covered by the specific language of section 62 a iii
The 850 explicitly wide language used dispenses with the need to specify by enumerating all items which are covered by it
That is the very object of such language
We have also indicated how section 53vi meant for application to basis C  mentions all intangible rights shewn in the books of the licensee
This also supports the interpretation we place on section 62aiii and on the wide ambit of the specification here which must obviously not conflict with section 53vi
We are therefore completely unimpressed by arguments based on supposed non specification of the claims of the former licensee under taking against consumers to whom it had supplied electricity in the past and against which it had claims which vested from the specified date in the State Government
Learned Counsel s argument on the meaning of Section 10b iii is really meant to reinforce the argument indicated above based on alleged non specification of the claims of the Municipal Council as a licensee for supplying electrici ty to consumers
If the meaning of relevant provisions of section 5 and 6 is clear we do not think that any assist ance could be derived  by the appellant Municipal Council from the provisions of section 102biii unless these clearly conflicted with the other provisions
If however two interpretations were possible of these provisions we should we think prefer the one which is in harmony with the clear meanings of the terms of section 53 read with section 62 a of the Act as indicated above
This is the salutary rule of construction resting upon the doctrine that a statute like any other document must be read as a whole to extract its meaning and intendment correctly
Learned Counsel for the appellant submits that the exclu sion by section 102biii of the amounts which accord ing to the books of the licensee are due from the consum ers to the licensee for energy supplied by him before that date ie the date of vesting from the ambit of deduc tions from compensation necessarily implies that these amounts can be appropriated by the appellant Municipality
We are quite unable to see how this inference follows from an exclusion from items of deduction from compensation
A deduction from an item of compensation may if there was nothing else to furnish a clue as to its meaning imply that it was not being compensated for because the party whose rights were acquired was retaining the item
But an exclusion from an item of deduction from compensation itself could according to its natural meaning only indicate that this was being done because this was an item which is cov ered by the compensation provided for and to be paid
A close examination of section 102biii wilt show that it is meant for security deposits and arrears of inter est due on them which are generally held in trust by the licensee so as to be ultimately returned to the consumers if the dues of the consumers have been met without resorting to the amounts deposited
They are used for a deduction of dues where these have not been paid We know that these deposits are required so as to cover claims from defaulting consu 851 mers in order to avoid the trouble of litigating to enforce them
If these deposits have not been made over by the licensee to the Government they will be claimable by the depositors from the licensee
Hence it seems fair to deduct them from any item of compensation as these deposits are not meant to be kept by the licensee
They do not constitute profits of the business or price for anything supplied or payment for services rendered or an asset out of which liabilities of the licensee may be met
If howev er there are any amounts shewn in the books o the licensee as due from the consumers of energy supplied before the date of vesting they would become realisable by the Govt
Hence the amounts for which deductions from items of compensation will have to be made is reduced by the amounts which are due from consumers to the licensee for energy supplied by the licensee before the date of vesting as they become the claims realisable by the successor in interest of the licensee
Therefore the High Court s interpretation was obviously correct
This provision supports the case of the respondents rather than that of the former licensee Municipal body
It is very difficult to see how it supports the appellant s case
It appears that no question was raised before the High Court as to the nature of the obligation incurred by the Municipal Council to pay the amount claimed apart from its right to appropriate the amount itself as part of the assets which had it was asserted not vested in the State Govern ment
An attempt was however made before us to confuse it with the payment made by the Municipal Council itself to the Government for the bulk supply of electricity used inter alia for street lighting and other purposes by the Council itself
But no question was raised in the plead ings to indicate that the plaintiff s claim included these past dues
We do find that the licensee had set up certain reasons for its inability to realise certain amounts from the consumers
We do not know what all these reasons precisely were or whether the licensee was really unable to realise them for any of these reasons
But ground No 1 of the special leave petition shows that the Municipal Council had Rs 9 lakhs with it in deposit for the recovery of the claims not realised from which it proposed to deduct the amounts claimable towards dues and to
appropriate them itself
The ground runs as follows In the instant case the learned trial judge found that there was a deposit of 3 lakhs of rupees with the Vijayawada Municipal ity and the Vijayawada Municipality by virtue of section 102biii is certainly entitled to adjust and by virtue of section 102biii of the Act 15 of 1964 the Government can deduct that security from out of compensation less the amount due to the licensee from its consumers upto the vesting date
 We may also mention that it was not argued on behalf of the Municipal Council that what was vested in the Government was only the right to realise the claims itself and not an amount of money which the Municipal Council had actually realised or could have realised if 852 it took steps to make realisations
On the other hand ground No 1 of the grounds of appeal quoted above shows that the case of the Municipal Council was simply that it is entitled to deduct amounts claimed from whatever may be the amounts in deposit be cause
the claims against the consumers had vested in the Municipal Council and not in the Government
We think that legal questions of interpretation of the Act to which the learned Counsel for the parties rightly con fined their arguments apart from some at tempts to raise questions outside the plead ings which could not succeed were rightly answered by the High Court when it held that the relevant provisions if correctly inter preted meant that the claims for dues on electricity supplied at enhanced rates the validity of which had been unsuccessfully challenged by some consumers in certain other proceedings initiated before filing of the suit now before us had vested in the State Government
Consequently we affirm the judgment and decree of the High Court and dismiss this appeal with costs
VPS Appeal dismissed


Summary:
Section 4 of the Andhra Pradesh Andhra Area Electricity Supply Undertaking Acquisition Act 1954 empowered the Government to declare that an electricity undertaking of the licensee Municipal Council shall vest in Government on a specified date
Section 5 provides for compensation to be paid on one of three alternative bases A B or C set out in the Act
Where compensation is on the basis C  it in cludes under section 53vi the book value of all intangible assets to the extent such value has not been written off in the books of the licensee and section 62a mentions the items that would vest in the State Government
Section 62aiii relates to all the rights liabilities and obligations of the licensee under any other contract entered into bona fide not being a contract relating to the borrowing or lending for money
Section 102 biii lays down that the Government may deduct from the compensation all sums paid by consumers by way of security deposit and arrears of interest due thereon on the vesting date in so far as they have not been paid over by the licensee to the Government less the amounts which according to the books of the licensee are due from the consumers to the licensee for energy supplied to such consumers before that date
In the present case the State Government made a decla ration regarding the vesting of the Electricity Undertaking of the appellant in the State Government and transferred its rights to the respondent Electricity Board
Certain amounts were shown in the books of the appellant as due to it from consumers
The respondent claimed those amounts and flied a suit against the appellant for their recovery
The trial court dismissed the suit but the High Court allowed the appeal
In appeal to this Court it was contended that past dues from the consumers would not vest in the respondent as they were not specifically mentioned in section 62a and that under section 102biii the appellant was entitled to deduct and appropriate the amounts due from consumers for supply of electricity from their security deposits
Dismissing the appeal to this Court HELD 1 The explicitly wide language used in section 62aiii dispenses with the need to specify all items which are covered by it and arrears of dues from consumers are covered by the wide language of the clause
850 A 2a Section 102biii is meant for security deposits and arrears of interest due on them which are generally held in trust by the licensee so as to be ulti mately returned to the consumers
if the dues of the con sumers have been met without resorting to the amounts depos ited
They are used for a deduction of dues from deposits where these have not been paid
If these deposits have not been made over by the licensee to the Government they will be claimable by the depositors and therefore they are deducted from the compensation
If however there are any amounts due shown in the books of the licensee as duo from the consumers of energy they would become realisable by the Government under section 62aiii
It is for this reason that the deduction of security 847 deposit from compensation is reduced by the amounts which are due from consumers to the Undertaking for energy sup plied by the Undertaking before the date of vesting as they become the claims realisable by the successor in interest of the Undertaking
An exclusion from an item of deduction from compensation could only indicate that this was being done because this was an item which is covered by the compensation provided for and to be paid
850 A b In the present case the only contention of the appellant was that the right to appropriate the amount of dues did not vest in the respondent but that the amount had vested in the appellant
It was not argued on behalf of the appellant that what was vested in the Government was only the right to realise the dues from the consumers and not to recover from the appellant the amount which the appellant had actually realised or could have realised
3 The High Court s interpretation of section 102biii must be accepted as a correct interpretation because it is in harmony with the meaning of the terms of section 53vi read with section 62a of the Act
851C