| Headnote |
Electricity Undertaking —Acquisition Act - Validating action taken under earlier Act declared ultra vires—Validity—Basis of computation of compensation, if valid—Madras Electricity Supply Undertakings (Acquisition) Act, (Mad. 43 of 1949), S. 4—Madras Electricity Supply Undertakings (Acquisition) Act, 1954 (Mad. 29 of 1954), ss. 5, 24—Constitution of India Arts. 20(1), 31 (1) (2).By an order dated May 17, 1951, the appellant under- taking vested in the respondent from September 21, 1951, under the provisions of s. 4(1) of the Madras Electricity Supply- Undertakings Act 1949. Thereafter the respondent appointed the Chief Electrical Adviser as the Acquisition Officer who took over possession on the appointed date, and a part of the compensation payable under the Act was paid. The validity of the said Act, was challenged by some other electrical undertakings in Madras and in Rajamundhry Electric Supply Corporation Ltd. v. State of Andhra Pradesh, the Supreme Court held that the Act of 1949 was ultra vires. After the said decision was pronounced, the Madras Legislature passed the impugned Act, the Madras Act, 29 of 1954. The Act incorporated the main provisions of earlier Act of 1949 and purported the validate action taken under the said earlier Act. A new Government order was issued and the Chief Electrical Adviser was appointed the Acquisition Officer of the appellant concerned. As a result of this order, the appellant undertaking which had been taken over by the respondent earlier in 1951, continued to be in the possession of the Respondent. The appellant filed two writ petitions and alleged that to the extent to which the Act purported to validate acts done under the earlier Act of 1949 it was ultra vires, ineffectual and inoperative. It was further urged that the three basis of compensation laid down by the Act were inconsistent with the requirements of Art. 31 of the Constitution, and so the operative provisons of the Act were unconstitutional. The question was also raised whether or not it was competent to the Legislature to pass a law retrospectively to validate. action taken under a void Act. Held, that it was within the competence of the Madras Legislature to enact a law and make it retrospective in operation, The Madras Act, 29 of 1954, in terms is intended to apply to undertakings of which possession had already been taken, and that obviously means that its material and operative provisions are retrospective. The effect of s. 24 is that if a notification had been issued properly under the provisions of the earlier Act and validity could not have been impeached if the said provisions were themselves valid, it would be deemed to have been validly issued under the provisions of the Act, provided, of course, it is not inconsistent with the other provisions of the Act. It is a saving and validating provision and it clearly intends to validate action taken under the relevant provisions of the earlier Act which was invalid from the start. Held, further, that Art. 31(1), of the Constitution, unlike Art. 20(1), does not use the expression "law in force at the time", is merely says "by authority of law” and so, if a subsequent law passed by the Legislature is retrospective in its operation, it would satisfy the requirement of Art. 31(1) and would validate the impugned notification in the present case. The Legislature can pass a law retrospectively validating action taken under a Jaw which was void because it contravened fundamental rights. If the Legislature can by retrospective legislation cure the invalidity of action taken in pursuance of laws which were void for want of legislative competance and can validate such action by appropriate pro- visions, the same power can be equally effectively exercised by the Legislature for validating actions taken under laws which are void for the reason that they contravened fundamental rights.- Held, also, that the failure of the Legislature to refer to the fair -market value cannot, be regarded as conclusive or even presumptive evidence of the fact that what is intended to be paid under s. 5 does not amount to a just equivalent of the undertaking taken over. After all, in considering the question as’ to whether compensation payable under one or the other of the bases amounts to a just equivalent, the court must try to assess what would be payable on the said basis of market value. It may be that in some basis B may work hardship and conceivably even basis A or basis C may not be as satisfactory as it should be ; but when a party challenges the validity of a statutory provisions like s. 5, it is necessary that the party must adduce satisfactory and sufficient material before the Court on which it’ wants the court to hold that the compensation which would be paid under everyone of - the three bases under the impugned statutory provisions does not amount to a just equivalent. Looking merely at the scheme of the section itself, it is impossible to arrive at such a conclusion. |
