vil Appeal No 2525 of 1966
Appeal from the judgment and order dated October 30 1963 of the Gujarat High Court in Special Civil Application No 94 of 1962
CK Daphtary Attorney General and 1
N Shroff for the appellant
HR Gokhale SB Vakil Janendralal and BR Agarwala for the respondent
The Judgment of the Court was delivered by Hegde J
The only question that falls for decision in this appeal is whether on the basis of the notice issued by the Bombay State Electricity Board on January 8 1959 under section 7 of the to be hereinafter referred to as the Act prior to its amendment in 1959 the appellant can compulsorily purchase from the respondent his concern The Bilimora Electric Power Supply Co 
In his application before the High Court under article 226 of the Constitution the respondent challenged the vires of section 7 of the Act
But that contention remains to be examined
The High Court has chosen to allow the petition
solely on the ground that as the requirements of section 7 have not been complied with the appellant cannot compel the respondent to sell the undertaking
If we come to the conclusion that that conclusion is unsustainable then the matter will have to go back to the High Court for deciding the constitutionality of section 7
The respendent was given a licenee on
February 11 1932 under the provisions of the Baroda Electricity Act Samvat 1983 for supplying electricity within the area mentioned
in the licenee
Clause 27 of that licenee provided that the option of purchase 582 given by section 9 of the Baroda Electricity Act shall be exercisable first on the expiration of thirty years computed from the commencement of the licence and thereafter on the expiration of every subsequent period of ten years during the subsistence of the licence
The manner in which the undertaking should be valued is laid down in that Act
On the merger of the former Baroda State with the Province of Bombay the Act as well as the Act 54 of 1948 were made applicable to the territories of the former State of Baroda and the corresponding Baroda Acts were repealed with the saving clause that the licences issued under the repealed Act shall continue to remain in force as if issued under the Act until the expiration of the period of those licences
In exercise of the powers conferred by section 5 of the Electricity Supply Act 1948 the Government of Bombay constituted the Bombay State Electricity Board on January 31 1945
On January 8 1959 that Board issued to the respondent a notice under section 7 of the Act
That notice is important for our present purpose
Hence we shall quote the relevant portion thereof
It runs thus In exercise of the powers conferred on the Bombay State Electricity Board by virtue of section 71 of the Electri city Supply Act 1948 read with section 7 of the  you are hereby notified that the Bombay State Electricity Board has decided to exercise and shall exercise the option of purchasing your under taking on the expiry on 10 2 1962 of the licence granted to you 
The receipt of this notice may please be acknowledged
 As a result of the Bombay Re organization Act 1960 the present Gujarat State came into existence
In exercise of the powers conferred by section 5 of the read with sub section 4 of section 68 of the Bombay Reorganization Act 1960 the appellant Corporation was constituted by the Government of Gujarat by means of a notification dated May 1 1960
The Central Government by the notification No EL 1I 12260 dated the 17th June 1960 made in exercise of the powers conferred by cl
a of sub section
4 of section 68 of the Bombay Reorganization Act 1960 directed that the appellant Corporation shall with effect from 1st May 1960 take over from the Bombay State Electricity Board all its undertakings assets rights and liabilities in the area comprised in the State of Gujarat
The said notification was amended in some respect by notification of the Government of India dated October 3 1960 providing therein that the amendment thereby made in the notification dated June 17 1960 shall be deemed always to have been made
On the basis of the aforementioned notifications the appellant is claiming the right to compulsorily purchase the undertaking
583 The respondent is contesting the right of the appellant to compulsorily purchase his undertaking
With a view to forestall the appellant from taking action against him the respondent an application under article 226 of the Constitution in the High Court of Gujarat seeking directions to the appellant to forbear from compelling him to sell or deliver his undertaking refrain the appellant from ceasing to supply electricity to him for the purpose of his said undertaking and also refrain the appellant from preventing him from supplying electric energy in the area mentioned in his licence
Some other incidental reliefs were also sought
The High Court came to the conclusion that though the notice issued by the appellant on January 8 1959 is a valid notice under section 74 of the Act but that by itself is not sufficient to compel the respondent to sell his undertaking to the appellant before the respondent can be compelled to sell his undertaking to the appellant it was necessary for the appellant to exercise its option to purchase the undertaking on the expiration of the period of licence
As the appellant had failed to exercise that option on the expiration of the period of licence it cannot compel the respondent to sell his undertaking
On the basis of these findings the High Court has substantially granted the relief prayed for by the respondent
The appellant challenged the correctness of this conclusion
On the other hand the respondent is supporting the judgment of the High Court not only on the ground accepted by the High Court but also on some of the other grounds advanced on his behalf before the High Court but rejected by that Court
We shall first take up the question whether the High Court was right in holding that the appellant had to take two independent steps viz  1  an election to purchase the undertaking followed up by a notice to the respondent in pursuance of that election within the period mentioned in section 74 of the Act and 2 exercise its option to purchase on the expiration of the period of licence and communicate the same to the respondent
Before addressing ourselves to that question it is necessary to mention that the High Court s finding that the rights of the Shriman Sarkar Baroda Government to purchase the undertaking under section 9 of the Baroda Electricity Act had devolved on the State Government was not challenged before us
Therefore it is not necessary for us to trace how the rights of the Baroda Government came to devolve on the then State of Bombay
But the respondent did contest the appellant s claim to exercise that right
That question we shall separately consider
For the present we shall proceed on the basis that the appellant is entitled to exercise the right of purchase conferred on the Baroda Government under the licence read with section 9 of the Baroda Electricity 584 Act
We may also state at this stage that the conclusion of the High Court that the licence issued under s 9 of the Baroda Electricity Act should be considered as a licence issued under section 7 of the Act was also not challenged before us
Now we shall proceed to consider the true scope of section 7 of the Act
For our present purpose only sub sections 1 2 and 4 of section 7 of the Act are relevant
They read as follows Section 7  1 
Where a license has been granted to any person not being a local authority and the whole of the area of supply is included in the area for which a single local authority is constituted the local authority shall on the expiration of such period not exceeding fifty years and of every such subsequent period not exceeding twenty years as shall be specified in this behalf in the license have the option of purchasing the undertaking and ff the local a uthority with the previous sanction of the State Government elects to purchase the licensec shall sell the undertaking to the local authority on payment of the value of all lands buildings works materials and plant of the licensee suitable to and used by him for the purposes of the undertaking other than a generating station declared by the license not to form part of the undertaking for the purpose of purchase
such value to be in case of difference or dispute determined by arbitration 4 Not less than two years  notice in writing of any election to purchase under this section shall be served upon the licensee by the local authority or the State Government as the case may be
In our opinion sub section
4  of section 7 is complementary to sub as
1 and 2 of that Section and therefore they must be read together
On an analysis of these provisions it is seen that before a licensec can be compelled to sell his undertaking the authority entitled to purchase must elect to purchase the same by exercise of the option given to it under the licence read with section 7 of the Act followed by a notice as required by section 7 4 of the Act
In section 7 the expression option of purchasing an undertaking merely means the right of purchasing the undertaking
The word option  is used because two courses are open to the concerned authority namely either to purchase the undertaking or renew the licenee
Once the authority elects to purchase then the notice prescribed in sub section 4 should be given before the period mentioned thereto
We are not able to agree with the High Court that the Section contemplates two stages namely 1 to elect to purchase the 585 undertaking at least two years before the expiration of the licenee and 2  exercise the option to purchase at the end of the licence period
The exercise of option to purchase as well as electing to purchase is one integral process and not two independent steps
By the very act of electing to purchase the authority exercises its option to purchase
In our opinion sub sections 1 2 and 4 of section 7 are plain and unambiguous
They do not lend them selves to any subtleties
In construing a provision all its relevant parts should be considered together and their true effect ascertained
One can easily find out the reasons behind the procedure prescribed in section 7
In view of the term of the licenee read with section 7 1  and 2  the concerned authority has two courses open before it
It can either decide to purchase the undertaking or renew the licence on the expiration of the period for which the licence is granted
The licensee must know in good time what course the authority is going to adopt so that he may so arrange his affairs as to Cause least inconvenience to himself
Hence though the power to exercise the option to purchase arises on the expiration of the period of licence as per the terms of the licenee section 7 lays down that if the authority wants to purchase the undertaking it must elect to do so at least two years before the expiration of the licence and communicate the same to the licensec
Once the concerned authority exercises its option and communicates the same to the licensee the same is binding on the authority as well as the licensec
Otherwise there is bound to be considerable inconvenience both to the licensee and to the public
We are not able to find any good reason for reading into section 7 a requirement that after a notice under section 74 is issued the authority must again exercise its option to purchase on the expiration of the period of licence
It is no doubt true that the right to purchase the undertaking accrues only at the expiration of the period of licenee but for exercising that right the authority must make its election within the period prescribed in section 7 4 and issue a notice as required by that sub section
The requirements of section 7 were fully complied with by the notice issued by the Bombay State Electricity Board on January 8 1959
We shall
now take up the other contention advanced by Mr HR Gokhale learned Counsel for the respondent in support of the decision under appeal
One of his contentions was that whether the State Government was competent to purchase the undertaking or not neither the Bombay State Electricity Board nor the appellant was competent to exercise that right
His argument on this question proceeds thus Section 71 prior to its amendment in 1959 empowered the local authority or the State Government to make the purchase 586 contemplated under that Section the Electricity Board is not within the contemplation of that Section the finding of the High Court that the provisions contained in sub sections 1 2 and 4 of section 7 of the Act read with section 71 of the  confers on the appellant such a power is not correct because the right or option to purchase the undertaking was conferred on the State Government or the appropriate local authority under the licence and not under the provisions of the Act in other words the said right is merely a contractual right and not a right flowing from the provisions contained in section 7 of the Act as
held by this Court in Fazilka Electric Supply Co Ltd vs The Commr
of Income Tax Delhi1 and therefore the appellant cannot take any assistance from section 71 of the 
This contention did not commend itself to the High Court
We shall now proceed to examine how far the same is correct
Section 71 of the provides Rights and options to purchase under Act 9 of 1910 to vest in Board
Where under the provisions of the Indian Electricty Act 1910 9 of 1910 any right or option to purchase the undertaking of a licensec vests in the State Government or a local authority such right or option shall be deemed to be transferred to the Board and shall be exercisable by the Board in accor dance with the provisions of the said Act applicable to the exercise of such right or option by the State Government or a local authority as the case may be Board is defined in section 22 of that Act as meaning State Electricity Board constituted under section 5 thereof
It is true that before section 71 can be held to be attracted to a case it must be shown that the right or option to purchase the undertaking of the licensec vested in the State Government or a local authority under the provisions of the Act
It is also true that this Court had held in
Fazilka Electric Supply Company sx case that from the provisions of the Act read with the rules made thereunder it is manifest that the condition as to the option of purchase either by the local authority or by the Government is the result of an agreement between the applicant who had applied for licenee and the Government who granted the licenee
In that case this Court was consideting whether the sale concerned in that case fell within the scope of section 1027 of the Indian Income Tax Act or whether it  can be held to be compulsory acquisition as contended by the assessee
A sale compelled by law may also be a sale  under the Sale of Goods Act
But that does not mean that the right to purchase the undertaking does not vest in the concerned authority 1 1962 3 Supp
SCR 496
587 by virtue of section 7
That right may accrue either because it is directly conferred by section 7 or because it is obtained as a result of a contract compelled by that Section
In either case it is a right obtained by the authority by virtue of section 7
There is no dispute that the licence granted must conform to the requirements of section 7
In Okara Electric Supply Ltd and Anr
vs State of Punlab1 this Court observed that sections 5
6 and 7 show that in the case of a licensee specific provisions have been made for the acquisition of the undertaking in cases of revocation or cancellation of licenses
For the aforementioned reasons we hold that appellant had acquired the right to purchase the undertaking by the combined operation of section 7 of the Act and section 71 of the 
It was next contended on behalf of the respondent that by the time the licence period expired section 7 of the Act had been amended and section 71 of the Electric Supply Act 1948 repealed no provision was made to preserve the rights already acquired under those provisions hence the appellant is not entitled to purchase the undertaking
It is not the case of the respondent that either expressly or by necessary implication the new law had taken away the right acquired earlier
That being so section 6 of the General Clauses Act comes to the aid of the appellant
That Section provides that where that Act or any Central Act or Regulation made after the commencement of that Act repeals an enactment hitherto made or hereafter to be made then unless a different intention appears the repeal shall not affect any right privilege obligation or liability acquired accrued or incurred under any enactment so repealed
It also saves the previous operation of any enactment so repealed or anything duly done or suffered thereunder
The right to purchase the respondent s undertaking came to vest firsfly in the Bombay State Electricity Board subsequently in the appellant in view
of the various notifications referred to earlier
That right has to be worked on the basis of law as it stood on the date the notice under section 74 of the Act was given
In this Court a new contention was taken on behalf of the respondent namely that in any case the appellant s right to purchase is conditional on the payment of the price as provided in section 7 and hence the appellant cannot demand possession of the undertaking without paying the price after the same is determined according to law
This contention had not been taken before the High Court
The High Court may go into this question while deciding the writ petition
 588 For the reasons mentioned earlier we allow this appeal set aside the order of the High Court and remit the case back to High Court for deciding the issues that were left open
Costs of this appeal shall be costs in the cause
GC Appeal allowed


Summary:
On January 8 1959 the Bombay State Electricity Board purporting to exercise its powers under section 7 of the read with section 71 of the gave notice to the res pondent that it would exercise its option of purchasing the electric supply undertaking which the respondent ran under a licence on the expiry of the said licenee on February 10 1962
On the creation of the State of Gujarat the appellant corpOration was formed and succeeded to the rights and liabilities of the Bombay State Electricity Board
The respondent filed a writ petition in the High Court in which he challenged the right of the appellant to purchase his undertaking
The High Court came to the conclusion that though the notice issued on January 8 1959 was a valid notice under section 74 of the Act that by itself was not sufficient to compel the respondent to sell his undertaking to the appellant before the respondent could be compelled to sell his undertaking it was necessary for the appellant to exercise its option to purchase the undertaking on the expiration of the period of licenee which it had not done
respondent s writ petition was therefore allowed
The appellant came to this Court
The questions that fell for consideration were i whether the High Court s interpretation of section 7 was correct ii whether the appellant was empowered under section 71 of the to exercise the powers of the local authority under section 7
HELD i The provisions of the sub section of section 7 must be read together
So read the section only means that before a licensee can be compelled to sell his undertaking the authority entitled to purchase must elect to purchase the same by exercise of the option given to it under the licence read with section 7 of the Act followed by a notice as required by section 74 of the Act
In section 7 the expression option of purchasing an undertaking  merely means the right of purchasing the undertaking
The word option  is used because two courses are open to the concerned authority namely
either to purchase the undertaking or renew the licence
Once the authority elects to purchase then the notice prescribed in subs
4 should be given before the period mentioned therein
The object of the provision is that the licensee must know in good time what course authority is going to adopt
Otherwise there is bound to be considerable inconvenience to the licensec as well as to the public
584 F H 585 C D There is no good reason for reading into section 7 a requirement that after a notice under section 7 4 is issued the authority must again exercise its option to purchase on the expiration of the period of license
The exercise of option to purchase as well as electing to purchase is one integral process and not two independent steps
By the very act of electing to purchase the authority exercises its option to purchase
 585E F 581 In the present case therefore the requirements of section 7 were fully complied with by the notice issued on January 8 1954
585 F G ii It is true that before section 71 can be held to be attracted to a case it must be shown that the right or option
to purchase the undertaking of the licensee vested in the State Government or a local authority under the provisions of the Act
In the present case the right to purchase vested in the concerned authority by virtue of section 7 and it could not be said that the right accrued only by virtue of the agreement under which the licence was granted
The right to purchase may accrue either because it is directly conferred by section 7 or because it is obtained as a result of a contract compelled by that section
In either case it is a right obtained by the authority by virtue of section 7
The appellant Board was therefore empowered by section 071 to issue the notice under section 7
586 F 587 A Fazilka Electric Supply Co Ltd vs The Commr
of Income tax Delhi 1962 3 Supp
SCR 496 distinguished
Okara Electric Supply Ltd  Anr
vs State of Punjab  applied