Case: Guntur Tobaccos Ltd Vs. The Transmission Corpn. Of A.P.

but the second part of the agreement which gives an option to the licensee of purchasing the property cannot be enforced because of the statutory obligation of A.P. Electricity Supply Undertakings (Acquisition) Act, 1954." 19. Mr. Pallav Sishodia, learned counsel for the appellant, while questioning the finding of the Division Bench of the High Court submitted that since the leases in question had been executed in compliance with the provisions of Section 9(2) of the Indian Electricity Act, 1910, the lessor was under an obligation to comply with the conditions relating to option of purchase as contained in clause 6 of the lease deed. It was submitted that even if the properties of the Undertaking are accepted to have vested in the State Government, the status of the lessor remained the same though the identity may have been altered and the person who had stepped into the shoes of the lessor was equally bound to give effect to the provisions of clause 6 of the lease deed in the event the lessee opted to exercise such right.20. However, Mr. Sishodia also reiterated the submission that once the demised property was no longer used for the purpose of generation of electricity, it ceased to be a part of the Electrical Undertaking and did not, therefore, vest in the State under the 1954 Act. Mr. Sishodia urged that the Division Bench had erred in interpreting the provisions of Section 3(2)(d)(ii) along with Section 4(A) and Section 6 of the Indian Electricity Act, 1910 in arriving at a finding that till such time the licence granted for generation of power was either modified or rectified, all the properties belonging to the Undertaking would continue to remain a part of the Undertaking. It was urged that it was on account of such faulty reasoning that the Letters Patent Appeal, which was filed by the appellant, came to be dismissed.21.It was lastly urged by Mr. Sishodia that having included the clause relating to option of purchase and having put the appellant into possession of the demised property, the appellants possession was also protected under Section 53A of the Transfer of Property Act, 1982. In support of his said contention Mr. Sishodia referred to and relied upon the decision of this Court in Shrimant Shamrao Suryavanshi and Anr. Vs. Pralhad Bhairoba Suryavanshi (2002 (3) SCC 676 ), in which this Court observed that a person who obtained possession of the property in part-performance of an agreement of sale, could defend his possession in a suit for recovery of possession filed by the transferor or by a subsequent transferee of the property claiming under him, even if a suit for specific performance of the agreement of sale becomes barred by limitation. 22. Mr. Rakesh K. Sharma fully supported the decision of the Division Bench impugned in this appeal and submitted that no case had been made out for interference in the appeal. He reiterated the submissions made before the High Court that once the Undertaking had vested in the State in terms of the 1954 Act, all the properties of the Undertaking, whether being used or not for the generation of electricity, would stand vested in the State Government. He also reiterated that in view of the provisions of the Indian Electricity Act the State Government was under no obligation to act in terms of the condition stipulating option of purchase by the lessee. He submitted that once the Electricity Undertaking, namely, GPL, came to be vested in the State Government under the 1954 Act and the lease was terminated by the State Government, the appellant continued to be in occupation of the demised premises as a licensee and such licence could be terminated at the will of the licensor. Mr. Sharma urged that the State Government was no longer under any obligation to comply with the provisions relating to the option of purchase contained in clause 6 of the lease agreement, since the lease deeds had ceased to be operative. 23. We have carefully considered the submissions of the respective parties and do not find any reason to disagree with the view taken by the Division Bench of the High Court, in dismissing the Letters Patent Appeal. Having regard to the opinion given by the Government Solicitor, the finding arrived at by the High Court regarding the implied consent of the State Government does not require any interference.24. The other submission made on behalf of the appellant that, since the State Government had stepped into the shoes of the lessor, it was bound by the terms of the lease agreement and in particular clause 6 thereof, cannot also be accepted in view of the provisions of Sections 4 and 6 of the A.P. Electricity Supply Undertakings (Acquisition) Act, 1954. The defence taken on behalf of the appellant/lessee that, since the demised lands were no longer required by GPL, they ceased to be part of the Electricity Undertaking, has been rightly rejected by the High Court. The High Court has considered the matter in some detail and various decisions of this Court and other High Courts have been considered by it in ultimately coming to the conclusion that in view of Sections 4 and 6 of the 1954 Act read with the provisions of the Indian Electricity Act, 1910, all the properties of the Undertaking for which licence was granted for generation of electricity, remained a part of the Undertaking unless the licence had been modified. As has been noted by the High Court, the properties involved were mentioned and included in the licence granted to GPL and the said licence remained unchanged when on the basis of the order passed by the Government under Section 3 of the 1954 Act, all the properties of the Electricity Undertaking came to be vested in the State. Moreover, once the lease came to an end, the State Government was no longer under any obligation to act in accordance with the option given to the lessee to purchase the property.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]23. We have carefully considered the submissions of the respective parties and do not find any reason to disagree with the view taken by the Division Bench of the High Court, in dismissing the Letters Patent Appeal. Having regard to the opinion given by the Government Solicitor, the finding arrived at by the High Court regarding the implied consent of the State Government does not require any interference.24.The other submission made on behalf of the appellant that, since the State Government had stepped into the shoes of the lessor, it was bound by the terms of the lease agreement and in particular clause 6 thereof, cannot also be accepted in view of the provisions of Sections 4 and 6 of the A.P. Electricity Supply Undertakings (Acquisition) Act, 1954.The defence taken on behalf of the appellant/lessee that, since the demised lands were no longer required by GPL, they ceased to be part of the Electricity Undertaking, has been rightly rejected by the High Court. The High Court has considered the matter in some detail and various decisions of this Court and other High Courts have been considered by it in ultimately coming to the conclusion that in view of Sections 4 and 6 of the 1954 Act read with the provisions of the Indian Electricity Act, 1910, all the properties of the Undertaking for which licence was granted for generation of electricity, remained a part of the Undertaking unless the licence had been modified. As has been noted by the High Court, the properties involved were mentioned and included in the licence granted to GPL and the said licence remained unchanged when on the basis of the order passed by the Government under Section 3 of the 1954 Act, all the properties of the Electricity Undertaking came to be vested in the State. Moreover, once the lease came to an end, the State Government was no longer under any obligation to act in accordance with the option given to the lessee to purchase the property.