ORDER
BILAL NAZKI, J :
1. The plaintiffs-respondents filed a suit before the District Judge, Guntur being OS No.15 of 1973 against the appellant-defendant. The suit was filed for possession of the plaint schedule property along with profits from the date of the suit till the delivery of possession and costs of the suit. The facts which led to filing of the suit needs to be narrated in detail. According to the averments in the plaint the Guntur Power and Light Limited (hereinafter referred as GPL) was a limited company constituted for the purpose of running an electrical undertaking to supply electricity to Guntur area. It was granted licence for the aforesaid purpose under the provisions of Indian Electricity Act, 1910. For the purpose of the undertaking the GPL acquired various properties including the plaint schedule property. In the year 1945 the GPL leased out the schedule property to a sister concern namely Guntur Tobaccos Ltd., which was defendant in the suit and the GPL executed a lease deed dated 3-8-1945. The lease was further extended on 4-11-1949. Subsequently two more lease deeds were executed on 15-3-1950 and 18-3-1954 by GPL in favour of thedefendants making certain modifications in the terms of the prior lease deeds and the lease period was extended till the end of year 1971. In the year 1956 the second plaintiff which is the Government of Andhra Pradesh acquired the electrical undertaking of the GPL in exercise of its powers under the A.P. Electricity Supply Undertakings Acquisition Act, 1954. The undertaking in question vested in the State Government with effect from 1st May, 1956. The plaint schedule property comprising of 3.00 acres of land together with buildings situated thereon which form the part and parcel of the undertaking of the GPL became the property of the State Government by virtue of the acquisition. The plaintiff Corporation was formed under Section 5 of the Electricity Supply Act, 1948 on 1-4-1959 and the State Government in pursuance to its general policy transferred the suit undertaking with all its assets to the Electricity Board, the first plaintiff in the suit. Thus, the plaintiff-respondent No.1 became the owner of the plaint schedule property. In the year 1961 the validity of the lease deed executed by the GPL in favour of the defendant in respect of the schedule property was scrutinized and it was noticed that GPL had executed the lease in favour of the appellant-defendant without sanction of the Government in terms of Section 9(2) of the Indian Electricity Act, 1910 and as such the lease was bad and the lease deeds were void. The Electricity Board was of the opinion that the appellant's (defendant) possession was in the nature of a licence and it was entitled to it as long as the owner permitted it. The second plaintiff i.e., the present respondent No.l thereafter issued a letter on 9-1-1962 informing the present appellant that the lease deed in their favour was void. They were also called upon to vacate the suit premises and deliver possession of the suit properties to the second plaintiff i.e., respondent No.1. The defendant instead of complying with the said demand sent a lawyer's notice on 22-1-1962 to the plaintiff contending that hewas entitled to remain in possession of the suit property till 1971. Subsequently the defendant made several representations to the plaintiff seeking settlement of the issues. The defendant was allowed to remain in possession without change in legal status as mere licensee. However, even after expiry of lease period the defendant did not vacate the suit premises and defendant was stating that, under the lease deeds he had the option of purchasing the schedule properties. The defendant issued a notice on 29-10-1969 to the plaintiffs exercising his option of purchase of the suit property. The plaintiff's case was that since the defendant had no the title over the suit property and he was merely a licensee therefore he had to vacate the premises on demand. On the basis of this factual assertion the suit was filed. The defendant contested the suit and the trial Court framed five issues on 21st April, 1975. Two issues were later on added on 19-8-1976. The defence taken by the defendants in their written statement was that the GPL was a licensee under the Electricity Act for the generation and distribution of electricity in Guntur area however in 1938 generation of electricity was given up by the GPL and it used to purchase electricity from Government and distribute the same in Guntur area. From 1938 there was no generation of power made by the GPL and it was only distributing power. Receiving and distributing stations were located in places outside the suit property belonging to the GPL. The suit property was not used by GPL for the purposes of electricity undertaking or for any other connected purpose from the year 1939. The schedule property was leased out by GPL to the defendant under two registered lease deeds dated 3-8-1945 and 4-11-1949. They were subsequently modified and the period of lease was extended by two more registered deeds on 15-3-1950 and 18-3-1954 and the lease of suit property in favour of the defendant-company was extended upto theend of 1971. The extension of lease sought by the defendant was in fact sought at the instance of Government of Madras, the predecessor in authority to the second plaintiff, and the Madras Government had accepted and approved the lease deed in all its modifications, therefore the second plaintiff could not turn around and challenge the validity of the lease deed. It was further contended that the lease deed executed by GPL in favour of the defendant in respect of the suit property were not hit by provisions of Section 9(2) and (3) of the Indian Electricity Act, 1910. As the schedule property was not under use by the date of the said lease deed either for generation or for distribution of electricity the suit property had ceased to be a part and parcel of Electricity undertaking. It was further contended that the plaintiffs had all along treated the defendant as a lessee entitled to be in possession of the suit property at any rate till the end of 1971. The plaintiffs had accepted the rent paid by the defendants for each month as stipulated in the lease deed and issued receipts thereto. Because of the conduct of the plaintiffs they were estopped from disowning such relationship and treating them as licensees. On the basis of the pleadings of the parties the issues framed were :
1. Whether the lease deeds dated 3-8-1945, 4-11-1959, 15-3-1950 and 18-3-1954 obtained by the defendant are void under Section 9(3) of the IndianElectricity Act of 1910?
2. Whether this Court has jurisdiction to entertain the suit in view of the specific provisions of the Andhra Pradesh Buildings, Lease and Rent Control Act?
3. Whether the plaintiff is entitled to claim the future profits?
4. Whether the plaintiff is entitled to recover possession of the suit property from the defendant?
5. To what relief?
The additional issues framed on 19-8-1976 were :
1. Whether the defendant is entitled to the benefits of Section 53A of the Transfer of Property Act?
2. To what equities is the defendant entitled?
The trial Court decided issue No.1 in favour of the plaintiff and against the defendant. The Court was of the view that Exs.B1 to B6 were void and they were contrary to Section 9(3) of the Indian Electricity Act, 1930. He further found that these agreements of lease were not binding on the plaintiffs. On issue No.2 also the Court found that the Court had jurisdiction to entertain the suit. On additional issue No.l it was held that defendant was not entitled to claim protection under Section 53A of Transfer of Property Act. On issue No.4 it was held that the plaintiffs were entitled to recover possession of plaint schedule property from the defendant. On issue No.3 relating to future profits also the finding was in favour of the plaintiff. On additional issue No.2 the Court found that the defendant was not entitled to any equities as the question of plaintiffs paying compensation for the structures to the defendants would only arise after the possession was surrendered. Accordingly a decree of possession was passed in favour of the plaintiff and against the defendant. Thereafter an appeal came to be filed which was decided by the learned single Judge of this Court on 4th June, 1987. The learned single Judge dismissed the appeal. Hence this letters patent appeal.
2. The question which needs to be considered in this letters patent appeal in the light of the pleadings and the evidence would be, whether the agreementsentered into between the parties are void or valid, if valid what would be the effect on the suit particularly in view of various statutes which are in operation.
3. The learned senior advocate appearing for the appellants submits that the property was leased under Ex.B1 dated 3rd August, 1945 and Ex.B2 dated 4th November, 1949 for a period of 20 years with a right of renewal and thereafter an option to purchase under clause 5 of Ex.B1. Pursuant to the agreements the defendant was inducted into possession and was in enjoyment thereof. He further states that it is not disputed that the leases were extended upto 1st May, 1971. Therefore the State Government as well as the Electricity Board was bound by the terms of the agreement. On the other hand it is disputed by the learned Counsel for the respondent Electricity Board who submits that the agreement of 1945 and 1949 were both in contravention of the Electricity Act, 1910 in as much as no permission had been sought from the Government by the lessee. The lessee was admittedly a licensee and therefore he could not transfer any part of the undertaking to anybody else by way of a lease. Had there been an agreement of 1945 and 1949 perhaps this argument could have been accepted but there were further developments in the matter. Therefore, the argument cannot be accepted without considering those developments. Exs.B1 to B6 are the copies of the registered lease deeds executed by GPL in favour of the defendant in respect of the suit site. Extensions were granted and lease was to expire at the end of 1971. These tease deeds are not in dispute but their legality is.
4. On 13-9-1957 the Government of A.P. wrote a letter to the defendant. This letter notes that the assets belonging to the GPL were leased out to M/s. Guntur Tobaccos Ltd., upto 1971 without priorpermission of the State Government which was a condition precedent under Section 9(2) of Indian Electricity Act, 1910. The defendant was further informed that the agreement was void. He was also informed of the proposal to terminate the lease but it was also stated in the letter that Government may approve a fresh lease to M/s. Guntur Tobaccos Ltd., on revised terms if they so desire. The defendant was asked to furnish the proof as to whether any permission had been granted to him by the Government. This letter was replied by the defendant on 21-9-1957. In this letter the defendant gave the history of the case and they took the plea that since with the stoppage of the generation of electricity the power house building ceased to form part of the licensee's undertaking therefore Section 9(2) of the Indian Electricity Act was not applicable. They refer to clause 12 of the licence to substantiate that when the licensee ceases to generate electricity in the building the land and building ceases to form part of undertaking. They also took a plea that the defendants had made an application under the State Aid to Industries Act for grant of loan and the Government felt compelled to ask the lessee to get the concurrence of the lessor for the extension of the lease and the lease hold rights of the lessors' property till the last instalment of the repayment of the loan under State Aid till 1971. The draft of the agreement, resolution passed by the lessee company were furnished by them to the Government Solicitors who scrutinised the papers of the lessee company. Therefore, a plea was taken that the Government was aware of leasing out of the assets belonging to licensing company. In fact, it was at the Government's instance that an extension of lease had been obtained till 1971. The original lease had to expire in 1960. Inspite of Government having the knowledge of this fact the Government Solicitors insisted on getting the lease extended upto 1971, Therefore, it should be presumed thatGovernment had granted the sanction atleast to the renewed lease which had to expire in 1971. The Government thereafter remained silent for a period of almost four years and then wrote a letter on 5-1-1962. By this letter the defendant was informed that the leased property had been acquired by the Government from 1-5-1956. The Government further stated that the lease deeds in question were void as they were hit by Section 9(3) of Indian Electricity Act, 1910. Therefore, the defendant was asked to vacate the possession of the property leased out and hand over the vacant possession to the Collector, Guntur within a month. Thereafter nothing was done and a notice was given under Section 80 of the Civil Procedure Code by the defendant to the plaintiff. It is an admitted case of even the defendant that there was no permission sought by them or by the lessee for executing the lease when initially the lease was created but it is their case that no permission or sanction was required in terms of Section 9(3) of the Indian Electricity Act as the suit property was not part of undertaking when the lease was executed, We are going to deal with this question later but presently we will be dealing with another aspect of the case which relates to extension of lease till 1971. In this connection, in the light of the correspondence referred to above, it is stated by the learned Counsel for the appellant that the respondent-State was fully aware of the fact that the property had been leased out and in fact when they applied for loan under State Aid to Industries Act the Government advised them to get the extension of lease so that the loan is repaid and there was sufficient time for the defendant-appellant to pay back the loan. The matter was examined by the Government Solicitor at Madras. When he examined the request of the appellant for sanction of the loan he gave the opinion on 8-3-1950, The opinion reads:
'The lessors of the leased lands on which the factory stand should execute an undertaking to the borrowing company to renew the leases until 1st May, 1971 or until the final instalment of the State Aid loan of Rs.2,00,000/- with interest be repaid to Government whichever be the later date and that their claims under clause 7 of the lease deed dated 3rd August, 1945 and clause 6 of the subsequent lease deed dated 4th November, 1949 shall be subject and postponed to Government's mortgage rights in respect of the loan. Please submit a draft of the agreement to lease etc.'
After this letter the Government advanced a loan of Rs.2,00,000/- to the company which was also repaid and the property during this period remained under mortgage with the State Government. It is contended by the learned Counsel that this letter was written on 8-3-1950 and thereafter the parties extended the lease therefore it should be presumed that there was a sanction for such a lease. A supplemental deed was thereafter entered into between the parties which is Ex.B3. It is termed as Supplemental lease deed dated 15-3-1950. Among other things, it states :
'Whereas the lessees have applied to Government for a loan of Rupees two lakhs under the Madras State Aid to Industries Act on the security of the said leasehold premises and whereas the Government have required the lessees to obtain from the lessors the lessors' agreement to grant a renewal of the leased premises until First day of May one thousand nine hundred and seventy one or until the final instalment of the loan is repaid to Government and the Government have also directed the lessees to obtain from the lessors a variation of terms of clause 7 of the lease as hereinafter provided and whereas atthe request of the lessees the lessors have agreed to add to and amend the principal lease in manner hereinafter appearing.'
Another amendment was also carried on 18-3-1954 by a separate deed, Ex.B5. By this deed clause 5 of the original agreement was deleted and a new clause was inserted which reads as under :
'On the expiry of the period of the lease (under substituted clause 9 hereunder) the lessees shall have the option either to purchase the land (as delineated in the sketch) and the buildings and superstructures thereon then existing and belonging to the lessors, or to be reimbursed by the lessors of the then market value of the buildings and superstructures put up by the lessees and the improvements effected by the lessees, and in either case the value of the lands and buildings, superstructures and improvements effected, shall be determined as set out in clause 8 hereunder.'
In the light of these agreements and loan having been sanctioned by the Government and the property accepted by the Government in mortgage it will have to be seen whether it amounted to permission/sanction under the Indian Electricity Act, 1910. Clause (2) of Section 9 lays down that the licensee shall not at any time assign his licence or transfer his undertaking or any part thereof by sale, mortgage, lease exchange or otherwise without previous consent of the State Government. Assuming at this stage that the suit property was part of undertaking we will examine whether there was a sanction of the Government, or not. There is no particular method or form prescribed under clause (2) of Section 9 for obtaining sanction. True that there was no sanction obtained when the lease was created but in 1950 when the defendant applied for a loan to the Government he was advised bythe Government itself to get the lease extended upto 1971. The Government further advised that the suit property would remain as mortgaged with the Government till the loan was discharged. Therefore, we feel that the latest agreements of lease with respect of suit property were created under the implied sanction of the State Government. In fact the lease period had been extended on the opinion of the Solicitor to the Government dated 8-3-1950. Not only that the property was taken as mortgage but loan was also advanced and the Government at that time was also aware of the fact that the lessor was a licensee under the Indian Electricity Act, 1910. Therefore, we are of the view that the sanction had been given by the Government for extension of lease in the year 1950. Therefore, the lease is not hit by Section 9(2) of the Indian Electricity Act as far as lease is concerned with respect to period ending 1971. On this short point the appellant should succeed in establishing that the lease property was leased out with the previous sanction of the State Government. The learned Counsel for the respondents, however, submits that if the original lease was void even the assumed sanction of the State Government could not be correct. We are not impressed by this argument because the Government with its eyes wide open asked the lessee to get lease extended upto 1971 and even accepted the property as mortgage. May be the earlier lease and the original lease were void but from the date the supplemental agreement was drawn at the instance of the Government the lease became perfect from that date onwards, atleast for the purposes of Section 9(2) of the Indian Electricity Act. The learned Counsel further contended that the Government had no occasion to see the lease therefore there was no occasion for it to accord permission. In this connection he relies on Maritime Elec. Co. v. General Dairies, AIR 1937 PC 114. We are not equally attracted by thisargument. He also relied on another judgment in Delhi University v. Ashok Kumar, AIR 1968 Del. 131. These judgments lay down that there cannot be any estoppel on the statute. This is not a case of violation of a statute. The statute requires a sanction and we feel that the sanction can be assumed in view of the findings recorded hereinabove.
5. Following this finding by us normally the relief in favour of the appellant would follow. But, the matter does not rest here. There were further developments. The lease was granted by the lessee to the lessor in 1950 which had to expire in 1971. In between an Act came to be passed being Madras Electricity Supply Undertakings (Acquisition) Act (Act 43 of 1949), but it came to be struck down by Supreme Court by a judgment reported in RES Corporation v. State of Andhra, : [1954]1SCR779 . Till that time the reorganisation of States was taken up then another Act was passed being Electricity Supply Undertakings (Acquisition) Act (Act 15 of 1954). This Act was enacted for the purposes of providing for the acquisition by the Government all undertakings which supply electricity in the State of Andhra Pradesh. Section 4 of the Act gave power to the Government to pass an order in writing that an undertaking shall vest in the Government on the dates specified therein. Under Section 5 compensation was payable to a licensee. Under Section 6 fixed assets, cash security, investments, documents and the like and obligation as on the vesting date are given. Now, because of promulgation of this Act the vesting took place and the undertaking vested with the Government and the Government passed an order in terms of Section 3. Reference is made in Ex.B10 that the Government had acquired the undertaking on and from 1-5-1956. Therefore, the effect of law was that, from 1-5-1956 the property if it was part of an undertaking, vested with the State Government. Needless to say thatneither the Act of 1954 nor the order of vesting on 1-5-1956 has been challenged by the present appellants. Therefore, if this Court comes to a conclusion that the suit property was part of the Electricity undertaking then it has to come to the conclusion that it has vested in the State Government from 1-5-1956 and in such a case the lessor himself has lost all the rights over the property, his rights in the property get extinguished by promulgation of Act 15 of 1954 and therefore there cannot be any question relating to enforcement of clause (5) of the Supplemental agreement which laid down that the lessee shall have a right of purchase. Whether such a clause was enforceable or not would be a moot question, because under that clause right to purchase could be enforced by the present appellant against his lessor but when lessor lost his rights of ownership over the property in question the clause (6) becomes unenforceable. There is no provision in the Act which would allow the State Government to sell part of undertakings to licensees. As a matter of fact that could be the negation of the Act itself. Therefore, clause 6 of the agreement cannot be enforced as it could be against public policy and it could be defeating the Act itself.
6. Now the only question which remains to be decided is whether the suit property is part of the Electricity undertaking. If it is so, then the property has vested in the State Government and if it is not so then the State Government has nothing to do with the property and the rights and liabilities of the lessor and lessee can be settled elsewhere as the lessor is not even a party to these proceedings. Unfortunately, neither in the Electricity Act of 1910 nor in the A.P. Electricity Supply Undertakings (Acquisitions) Act, 1954 the word 'Electrical undertaking' has been defined.
Clause (5) of the licence which is exhibited as Ex.B13 lays down :
'5. Area of supply :-The area within which the supply of energy is authorised by this licence is the whole of the area contained within a circle of three miles radius from the junction of Koritepadu Road and Ring Road in Guntur.
Clause (7) lays down :
'7. Systems of supply:-The systems to be adopted for the supply and transmission of electric energy under this licence are the following :
(1)(a) A medium pressure alternating current three phase four wire supply at a pressure at the consumer's terminals of 400 volts (approximately) between phases and 230 volts between phase and neutral which shall be earthed at one point only on each separate distributing system at a frequency of fifty complete periods per second.
(b) A high pressure alternating current three phase supply at a pressure of 6,600 volts between phases at a frequency of fifty complete periods per second.
(c) The neutral points of the high or extra high pressure system may with the approval of the Government of Madras and the concurrence of the Telegraph authority and the Madras and Southern Mahratta Railway be connected to earth:
Provided always that it shall be lawful for the Government from time to time to issue, with due regard to the expense involved and to the effect upon the commercial prospects of the undertaking regulations dealing with the above systems of supply or to authorise subject to such limitations and conditions as shall be prescribed in writing by the Government other system of supply to be adopted for the purpose of this licence'.
Clause (9) lays down :
'9. Generating station :-(a) There shall be only one generating station and it shall be within the area of supply.
(b) The licensee shall be at liberty to generate from one generating station with the area of supply energy to satisfy all or part of their requirements and buy remainder in bulk or to generate no energy and to buy all the energy required for distribution and re-sale from a hydro electric project or other source having a generating station outside the area of this licence'.
Clause (12) lays down :
'12. Purchase of undertaking;-(a) The option of purchase given by Section 7, sub-section (1) of the Act shall first be exercisable on the expiration of twenty years from the commencement of this licence and on the expiration of every subsequent period of ten years during the continuance of this licence. The percentage of the value to be determined in accordance with and for the purpose of sub-section (1) of Section 7 of the Act of all lands, buildings, works, materials and plants of the licensees therein mentioned to be added under the second proviso of the sub-section to such value on account of compulsory purchase shall be twenty per centum.
(b) In accordance with Section 3, subsection (2), clause (d) (ii) of the Act, it is hereby expressly declared that the generating station within the area of supply belonging to the licensees and to be used in connection with the undertaking, or if there is no generating station within the area of supply but energy is bought a hydro-electric period or other source, then in that case the one or more receiving anddistributing stations to be used in connection with the undertaking shall form part of the undertaking for the purpose of purchase under Section 5 or Section 7 of the Act.'
In view of these clauses in the licence the learned senior Counsel appearing for the appellant submits that once a unit ceases generation of electricity it ceases to be part of undertaking as well and according to him it has been conclusively proved that the power station at the suit premises had ceased to generate electricity from the year 1939 and as such, in view of the clauses mentioned above, particularly clause 12(b) the suit property cannot be part of the undertaking. He submits that even the trial Court had come to the conclusion on the basis of the evidence that GPL had not given up the business of supplying energy to Guntur area though it had stopped generation. Its receiving points and supplying points were located in the land which was retained by it out of total extent of Ac.5-86 cents in Survey No.985/2 of Guntur and the vacant site which was leased out was being used as source for keeping its poles, wires, angulars etc. The double storeyed building was used for locating private telephones and for stacking the stores. Therefore, the learned Counsel for the appellants submits that, in terms of clause 12 sub-clause (2) the building and the land appurtenant thereto was not being used for generation or distribution of electricity and therefore it was not part of the undertaking when it was leased out. This argument had been rejected by the trial Court as well as by the learned single Judge. Though the 'undertaking' has not been defined in the Act of '1910 or 1954 the learned Counsel appearing for the appellants wants this Court to interpret the undertaking to mean, those parts of the land or building which are actually used for the purpose of generation or supply of the electricity and according to him if the generation and distribution hadceased from a particular site that site ceases to be part of the undertaking. On the other hand this argument is refused by the learned Counsel for the respondents and he submits that, since GPL is a licensee under the Electricity Act and at the time of grant of licence whatever the property was part of undertaking that would continue to remain part of undertaking as long as the licence under Indian Electricity Act, 1910 was intact. It was not disputed at any stage by the appellants-defendants that the suit property was not at all a part of undertaking but they have pleaded consistently that the suit property had ceased to be part of the undertaking. Even in Ex.B15 as early as on 21st September, 1957 they took the firm stand that the land and power house building were leased out only after it was found that there was no need for the same for the licensees undertaking.
7. 'Undertaking' as has been mentioned hereinabove, is not defined in any of the Acts. There are not many precedents which could guide this Court to give a meaning to the word 'undertaking', but we are of the view that the word 'undertaking' basically cannot have a definite meaning but it would change its meaning in the context it is used. To undertake, in accordance with the Oxford dictionary meaning is 'to bind oneself to perform', 'make oneself responsible for', 'engage in', 'enter upon'. In Halsbury's Laws of England, 3rd edition, Vol.6, Article 75 at page-43 'although various ingredients go to make up an undertaking the term describes not the ingredients but the completed work from which the earnings arise'. The dictionary meaning would also disclose that, to undertake mean basically to accept an obligation or to make a promise or to carry out commission or an omission of an act. 'Undertaker' is the person who undertakes such an obligation. It is in this context that the word 'undertaking' has to be given ameaning to. If this definition or meaning is kept in consideration it would obviously mean that the word 'undertaking' would have to be interpreted and defined with reference to a context. Therefore, whatever meaning we may give to word 'undertaking' in this appeal may not be appropriate meaning to the word if the word is again to be defined and interpreted in another context. Therefore, whatever the judgments have been produced before us where the word 'undertaking' came up for consideration by the Courts, may or may not be helpful in the present context. In Madras Gym Club Employees Union v. Management, : (1967)IILLJ720SC , the Industrial Tribunal Madras had held that management of the Gymkhana Club, Madras was not liable to pay bonus to its workmen as the club was not an industry. The primary question which was before the Supreme Court was as to what work could be termed as Industry. The word 'undertaking' also in this context was interpreted by the Supreme Court. It referred to D.N. Banerji v. P.R. Mukherjee, : [1953]4SCR302 , where the Court had referred to Wilsbury's dictionary meaning to the word 'undertaking' according to which the word 'undertaking means 'anything undertaken or any business or any work or project which one engages in or attempts as an enterprise'. In Para 26 the Supreme Court laid down :
'Therefore, the word 'undertaking' must be defined as 'any business or any work or project which one engages in or attempts as an enterprise analogous to business or trade'.
Similarly in R.C. Cooper v. Union of India, : [1970]1SCR629 , in the context of challenge to Banks nationalisation the Supreme Court in para-40 of the judgment while defining the word 'undertaking' used in Section 4 of Act 22 of 1969 held that, 'the expression 'undertaking' in Section 4 of Act 22 of 1969 clearly means a going concern with all its rights, liabilitiesand assets as distinct from various rights and assets which compose if. In a judgment from Andhra Pradesh being Radhakrishna Rice and Oil Mill Contractors v. APSEB, 1969 (1) APLJ 462, some persons were contesting the payment of electricity charges towards Vijayawada Municipality which had supplied the power from 1-5-1956 to 21-12-1961. In between, the Andhra Pradesh Electricity supply (Acquisition) Act, 1954 came and the State Government took over the undertaking and it was contended before the High Court that since the Government had not supplied the power to the petitioners from 1-5-1956 to 21-12-1961 they were not empowered to demand the amount even if they were due to the Municipality. The Court refused this argument on interpretation of the Act and held that since the undertaking had been taken over by the Government, therefore that would mean they had taken undertaking of all their assets and liabilities. The Court rejected the argument on arrears of consumption charges due from the consumers to the Municipality could not be effectively be acquired under Electricity Undertakings (Acquisition) Act. The Court was of the view that even the arrears which were due to the Municipality could be recovered on taking over of the undertakings in terms of A.P. Electricity Supply Undertakings (Acquisition) Act. In Ma Kyin Hone v. Ong Boon Hock, AIR 1937 Rangoon 47, it was held that 'the undertaking include lands, buildings machinery, lines of supply, goodwill etc., in fact everything which appertains to the supply of electricity under the licence'. In the Patna High Court judgment Murli Prasad v. Parasnath Prasad, : AIR1967Pat191 , however a distinction was made and it was stated by the Court while interpreting the same Act i.e., Indian Electricity Act, 1910 that, if the concern is not a running one then the plant, machinery, other material constituting the undertaking become ordinary goods.
8. In the light of the judgments and in the light of the contextual facts it will be necessary to know the terms of the licence. In accordance with the terms of the licence the licensee had to give the maps and the details and particulars with regard to the properties that were being used as part of the undertaking. The licence was granted under Section 3 of the Act. Under Section 3(2)(d)(ii) it is laid down:
'3.(2)(d)(ii)- Save in cases in which under Section 10, clause (b) the provisions of Sections 5 and 6, or either of them, have been declared not to apply, every such licence shall declare whether any generating station to be used in connection with the undertaking shall or shall not form part of the undertaking for the purpose of purchase under Section 5 or Section 6'.
Section 4A makes a provision for amendment of licence. Section 6 makes a provision for purchase of undertaking. Going by these provisions, it is clear that in the context of the Electricity Act, 1910 all those properties be the lands or buildings remain a part of undertaking if it is a part of undertaking when the licence was granted unless the licence is modified or revoked. It is immaterial whether the building or the land as in the present case was being used for generation or supply of the Electricity or not. What is material is, was it a part of the undertaking when the licence was granted because if there was an intention on the part of the licensor or the licensee to take it out from the undertaking there are methods prescribed in the Act itself. The licence could have been modified. It is the case of the appellant as well that the suit property was part of the undertaking when the licence was granted. Therefore, we are not persuaded to accept the argument made by the learned Counsel for the appellant that since the suit property was not being usedfor the purpose, of either generation or distribution of electricity, therefore it had ceased to be part of undertaking. Clause 12(b) of the Licence has to be interpreted in the light of the observations made above. This clause doesn't at all mention that if generation was stopped from a particular site that site would be excluded from the undertaking. It only takes into account the mandate of Section 3(2)(d)(ii) of the Act and it makes it clear that even if other sites are being acquired for distribution of the electricity from outside the licensed area that would also form part of the undertaking. This clause is not excluding any part of the licensed undertaking in any event from the undertaking but it includes those premises into undertaking which are not part of the undertaking but which may be used in future for the purpose of distribution of energy. Therefore, the argument fails.
9. Now, since we have held that the suit property was part of the undertaking, therefore it was validly acquired by the State Government on 1-5-1956. Since the original landlords had been divested of their ownership therefore the owner of the property had no rights in the property from 1-5-1956. Therefore, there was no question of enforcement of the agreement dated 18-3-1954 by which the appellant could exercise the option of purchase of the suit property. Under the operation of the statute i.e., A.P. Electricity Supply Undertaking (Acquisition) Act, 1954 the property vested in the State Government. It has been taken over on 1-5-1956. No grievance has been agitated against the action of the Government taken under the Act. Therefore, we are not inclined to go further in the matter.
10. For all these reasons, we hold that although the agreement dated 18-3-1954 was not hit by Section 9 of the Indian Electricity Act, 1910 but the second partof the agreement which gives an option to the licensee of purchasing the properly cannot be enforced because of the statutory obligation of A.P. Electricity Supply Undertakings (Acquisition) Act, 1954.
11. For these reasons, we dismiss the letters patent appeal. No costs.