Case: Bharat Hydro Power Corpn. Ltd.  Vs. State Of Assam

Facts:2. In the year 1979, the Planning Commission of India sanctioned a proposal of the Assam State Electricity Board (hereinafter referred to as the Board) for construction of a Hydro Elelectric Power Station in the District of Karbi Anglong on the river Barapani at an estimated cost of Rs. 36.36 crores. The project comprised construction of 51 meter high concrete dam on the river "Barapani near Hatidubi for utilising flow of water from catchment area of 1178 Sq.km. The installed capacity of the project was 2 x 50 MW. The dam was to be completed in the year 1986, but due to the failure to the local contractor, the project could not be completed and the Board terminated the contract and protracted litigation ensued.3. In the year 1992, after termination of the contract as aforesaid, the project was entrusted to National Project Construction Corporation (in short NPCC), but the similar fate followed and Board had to terminate their contract as well in the December, 1992. In the mean time, cost of the project initially sanctioned at Rs. 36.36 crores rose to Rs. 189.90 crores. Out of the aforesaid estimate, the work completed was of about Rs. 116 crores and the Board needed about Rs. 60 crores to complete the project excluding other liabilities. The Board could not generate the additional fund required for completing the project.4. The Central Government in the year 1992-93 accepted the policy of privatisation even in the power sector. The State Government following the policy of privatisation of the Central Government decided to transfer the project to joint sector.5. On 25th March, 1993, Memorandum of Undertaking (MOU) was signed between the Board, Government of Assam and M/s. Subhash Project and Marketing Limited (SPML), appellant No.2 herein. According to the said MOU, SPML was no promote a new company to complete the project. In terms of the said MOU a new company under the name and style of M/s. Bharat Hydro Power Corporation Limited (hereinafter referred to as a appellant No.1) came into existence in which the equity participation was as follows:ASEB (The Board) - 11%SPML (Appellant No.2) - 40%General Public - 49%6. On 8th April, 1993 the Deed of Assignment was executed between the Board and the appellant No.1, in terms of which all the assets and liabilities of the project were transferred to the appellant No.1 w.e.f. 8.4.1993. In terms of the said Deed of Assignment appellant No.1 was to complete the project and start generation by June, 1995 which was subsequently extended to June, 1996. Disputes arose between the parties. According to Board as well as the State of Assam, the appellant No.1 after its incorporation failed to take charge of the project till 5th April, 1994. Even after taking over of the project, the appellant No.1 could not achieve any progress towards completion of the project due to serious lapses and negligence on its part. On the other hand, appellants Nos. 1 & 2 put the entire blame on the Board and the State Government for the delay in the progress of the project.7. On 20th December, 1995, appellant No.1 filed a suit being TS No. 244/96 in the Court of the Assistant District Judge No.1, Guwahati for specific performance of the contract against the Board alleging that the Board was remiss in the performance of its obligation under the MOU and the Deed of Assignment. Board filed an application for stay of suit in view of arbitration clause. Appellant No.1 filed an application in the High Court under Sections 8 and 11 of the Arbitration and Conciliation Act, 1996 for appointment of Arbitrator to decide pending disputes between the parties. On 27th May, 1996, Board wrote to appellant No.1 that due to the failure of the Appellant No.1 to complete the work within the extend period, the MOU was liable to be terminated and repudiated.8. On 30th November, 1996 the State of Assam, keeping in view, the inordinate delay in the completion of the project and to safeguard the public interest by completing the project as early as possible in the context of acute power shortage in the State, promulgated Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Ordinance, 1996 acquiring the undertaking of Karbi Langpi Project of appellant No.1. The Ordinance was subsequently replaced by Bharat Hydro Power Corporation Limited (Acquisition and Transfer of Undertaking) Act, 1996 (hereinafter referred to as the Act). On 1st December, 1996, the State Government by Notification transferred to and vested the said project in the Board. After the said notification the possession of the project was handed over to the Board in the presence of the representatives of the both sides on 2nd December, 1996. On 5th December, 1996 Memorandum of handing over and taking over was signed. Thereafter writ petitions being CR 6/97 and CR 283/97 were filed in the High Court of Assam challenging the legality and validity of the Ordinance of the Act.9. In the writ petitions the appellants challenged the constitutional validity of the Act being ultra vires and violative of Articles 14 and 19(1)(g) of the Constitution of India and on the ground of being vague, unfair and arbitrary. It was prayed that the Act be struck down being unconstitutional and beyond the legislative powers of the State and/ or is inoperative and void in law on the grounds mentioned in the writ petitions.On completion of the pleadings, the writ petitions were placed for hearing before a learned Single Judge who after hearing the counsel for the parties, passed a detailed order striking down Sections 3,4, 5, 6, 7, 7A, 15(2), 23 and 24 of the Act being repugnant to the Central Acts, i.e., the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948. It was observed that because of the striking down of the various provisions, the impugned Act could not be given effect to. The entire Act was held to be unenforceable.12. The Board and the State of Assam filed separate Writ Appeals Nos. 460 of 1997 and 464 of 1997 challenging the order of the learned Single Judge. The Division Bench by its impugned judgment has set aside the judgment of the learned Single Judge and held the Act and its provisions to be intra vires of the Constitution. Resultantly the writ appeals were accepted and writ petition filed by the appellants were ordered to be

Court's reasoning:
We do not find any substance in this submission.Section 37 of Act of 1948 provides for purchase of generating stations or undertakings or main transmission lines by the Board. This Section would also not apply to the present case. The legislature in its wisdom made only certain provisions of Act of 1910 applicable to a generating company in Section 26A. Contention that the impugned Act is in violation of provisions of Act of 1910 or the Act or 1948 has no basis to stand on.38. The impugned Act and the Central Acts in the instant case operate in two different fields without encroaching upon each others field in as much as the true nature and character of the impugned State Act is to acquire the undertaking and pay compensation as provided in the Act whereas both the Central Acts (Acts of 1910 and 1948) have made general provisions with regard to supply and use of electrical energy. The provisions regarding purchase of undertaking in the Act of 1910 would not be applicable as the appellants are not licensees within the meaning of the Act of 1910. There is not even a semblance of conflict what to talk of direct conflict between the impugned State Act and the Central Acts to bring about the situation where one cannot be obeyed without disobeying the others. Both the Acts can operate simultaneously as they do not occupy the same field. As the enactments operate in two different fields without encroaching upon each others field there is no repugnancy.39. Since there is no repugnancy the question of the State Act being kept for the consideration of the President or receiving his assent did not arise.