GUNTUR TOBACCOS LTD. versus THE TRANSMISSION COPRN. OF A.P. & ANR.

GUNTUR TOBACCOS LTD. versus THE TRANSMISSION COPRN. OF A.P. & ANR.

Upon statutory acquisition of electricity undertaking under the Andhra Pradesh Electricity Supply Undertakings (Acquisition) Act, 1954, all properties included in the licence vest in the State unless the licence is modified, and contractual purchase options under terminated leases cannot be enforced against the State, which is under no obligation to honor such options.

Parties
Appellant: Guntur Tobaccos Ltd.; Respondent No.1: The Transmission Corporation of A.P.; Respondent No.2: State Electricity Board of Andhra Pradesh
Jurisdiction
India
Judgment Date
11 April 2008
Procedural Posture
Civil Appeal / Appeal Before Supreme Court From Division Bench Decision of Andhra Pradesh High Court
Outcome
Appeal dismissed
Legal Topics
Lease Termination, Statutory Vesting of Properties, Option to Purchase Property Under Lease, Invalidity of Lease Under Electricity Act, Acquisition of Electricity Undertakings
Property Law Electricity Law Administrative Law Lease Termination Statutory Vesting of Properties Option to Purchase Property Under Lease Invalidity of Lease Under Electricity Act Acquisition of Electricity Undertakings

Case Brief

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Parties

Guntur Tobaccos Ltd.

Appellant

The Transmission Corporation of A.P.

Respondent No.1

State Electricity Board of Andhra Pradesh

Respondent No.2

Procedural Posture

Civil Appeal / Appeal Before Supreme Court From Division Bench Decision of Andhra Pradesh High Court

Legal Issues

  1. 1 Whether the option to purchase property granted to the lessee under a lease deed survives State acquisition under Andhra Pradesh Electricity Supply Undertakings (Acquisition) Act, 1954
  2. 2 Whether the lease deeds executed in favour of the appellant are void under Section 9(2) & (3) of the Indian Electricity Act, 1910
  3. 3 Whether State Government is obliged to honor purchase option post-acquisition

Ratio Decidendi

Upon statutory acquisition of electricity undertaking under the Andhra Pradesh Electricity Supply Undertakings (Acquisition) Act, 1954, all properties included in the licence vest in the State unless the licence is modified, and contractual purchase options under terminated leases cannot be enforced against the State, which is under no obligation to honor such options.

Court Disposition

Appeal dismissed

Orders

  • No costs awarded