GUNTUR TOBACCOS LTD.versusTHE TRANSMISSION COPRN. OF A.P. & ANR.

                             [2008] 6 S.C.R. 401


                        GUNTUR TOBACCOS LTD.                               A
                                      V.
             THE TRANSMISSION COPRN. OF A.P. & ANR.
                   (Civil Appeal No. 312 of 2002)
                              APRIL 11, 2008
                                                                           B
              (A.K. MATHUR AND ALTAMAS KABIR, JJ.)
. -t
             Andhra Pradesh Electricity Supply Undertaking
       Acquisition Act, 1954/lndian Electricity Act, 191 O; Section 9(2)
       & (3):                                                              c
              Lease deed - State Government granting a licence in
       favour of a company for running an Electrical Undertaking to
       generate and supply electricity, and in connection thereof
       transferred certain land/property to it - The company
       transferring the land in question in favour of appellant-company    D
       - State Government acquiring the Electrical Undertaking from
       the company in terms of provisions under 1954 Act - State
       Government transferring the land in question to State
       Transmission Corporation/Electricity Board - Issuance of
       notice to lessee to vacate the land - Eviction suit-Allowed by      E
       trial Court - Appeal filed against, dismissed by Single Judge
       of the High Court - Letters Patent Appeal dismissed by
       Division Bench of the High Court - Correctness of - Held:
       Correct - In view of Ss.4 & 6 of the 1954 Act rlw relevant
       provisions u/1910 Act, the properties transferred to the
       company for which licence was granted for generation of             F
       electricity remained a part of the company unless licence
       modified - Licence not modified - Thus, the properties
       remained vested with the company - In terms of order of the
       State Government passed under the provisions of 1954 Act,
       the said properties transferred to State Electricity Transmission   G
       Corporation/Board, therefore, came to be vested with them -
       Since lease came to an end, the State Government was no
       longer under the obligation to act in accordance with the terms
       of the lease agreement, whereby option was given to the lessee
                                       401                                 H
   402      SUPREME COURT REPORTS                [2008] 6 S.C.R.


A to purchase the property - Hence, the appeal fails on merit -
  Transfer of Property Act - S. 54 - Benefits under, entitlement
   to.

       State Government of Andhra Pradesh had granted a
  licence to a company, namely, Guntur Power and Light
8 Limited (GPL) for the purpose of supplying electricity to
  certain area of the State, and in connection thereof
  acquired certain land and transferred the same to the
  company. Later, in the year 1938, the company ceased to
  generate electricity and confined itself only to distribution
C of power. From 1939 onwards, GPL did not use the
  properties meant for running the Electrical Undertaking
  or for ancillary purpose. In the year 1945, GPL granted a
  lease in favour of its sister- company, namely, Guntur
  Tobacco Company (GTC), the appellant in respect of
D certain land with right to construct buildings thereon and
  with an option to purchase the demised land in terms of
  relevant clauses of the sale deed. Subsequently, further
  land was transferred by the company in favour of appellant
  by executing sale deeds and the period of the lease also
E extended till the end of the year 1971. In the year 1956, the
  State Government allegedly acquired the Electrical
  Undertaking from GPL, whereupon the Undertaking of
  GPL vested in the State Government and the property in
  question was transferred by the State Government to the
F State Electricity Board. However, GTC continued to
  remain in possession of the properties in question
  purportedly on the strength of the lease deed executed
  by GPL in its favour. The Transmission Corporation of
  Andhra Pradesh issued a notice to the appellant calling
G upon to vacate the demised premises. Since the appellant
  failed to respond to the notice to vacate the premises, the
  Corporation filed an eviction suit on the ground that the
  lease in question executed and registered in favour of GTC
  were not valid; and that GTC was liable to be evicted. Trial
  Court decreed the suit in favour of respondent No.1.
H
     GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                403
              COPRN. OF A.P. & ANR.

    Appeal filed thereagainst by the appellant was dismissed A
    by the Single Judge of the High Court. Aggrieved, the
    appellant filed a Letters Patent Appeal, which was
    dismissed by the High Court holding that although the
    agreement dated 18.3.1954 was not hit by s.9 of the Indian
    Electricity Act, 1910 but the second part of the agreement B
    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. Hence, the present appeal.
         Appellant contended that since the leases in question      C
    had been executed in compliance with the provisions of
    s.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; that even if the properties of the Undertaking are        D
    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       E
    the event the lessee opted to exercise such right; 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; that the Division Bench of the        F
    High Court had erred in interpreting the provisions of
•   s.3(2)(d)(ii) along with Section 4(A) and s.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      G
    Undertaking would continue to remain a part of the
    Undertaking; that it was on account of such faulty
    reasoning that the Letters Patent Appeal, which was filed
    by the appellant, came to be dismissed; and that having
    included the clause relating to option of purchase in the       H
   404       SUPREME COURT REPORTS               [2008] 6 S.C.R.

                                                                   'it
A lease deed and putting the appellant into possession of
  the demised property, the appellant's possession was
  protected in terms of the provisions under s.53A of the
  Transfer of Property Act, 1982.
        Respondent submitted once the Undertaking had
B 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; that in view of the provisions of the
  Indian Electricity Act the State Government was under no
c obligation to act in terms of the condition stipulating option
  of purchase by the lessee; 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
D continued to be in occupation of the demised premises
  as a licensee and such licence could be terminated at the
  will of the licensor; and that the State Government was
  no longer under any obligation to comply with the
  provisions relating to the option of purchase contained
E in clause 6 of the lease agreement, since the lease deeds
  had ceased to be operative.
         Dismissing the appeal, the Court
       HELD: 1.1 This Court does not find any reason to
F disagree with the view taken by the Division Bench of the
  High Court, in dismissing the Letters Patent Appeal.
  (Para - 23) [414-G]
       1.2 The defence taken on behalf of the appellanU
  lessee that, since the demised lands were no longer
G required by the lessor, 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
H coming   to the conclusion that in view of Sections 4 and 6
 GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                    405
   COPRN. OF A.P. & ANR. [ALTAMAS KABIR, J.]

of the Andhra Pradesh Electricity Supply Undertakings A
(Acquisition) Act, 1954 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 B
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 c
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. Hence, the appeal
lacks merit. (Para - 24 and 25) [415-B-F]
                                                                    D
    CIVIL APPELLATE JURISDICTION : Civil Appeal No.
312 of 2002.
     From the Judgment and Order dated 29.12.2000 of the
High Court of JudicatureAndhra Pradesh at Hyderabad in L.P.A.
No. 78/1988.                                                        E
    Pallav Sishodia, Laxmi Shastri and Shipra Ghose for the
Appellant.
    Rakesh K. Sharma, Gulnar and Atul Sandhu for the
Respondents.                                                        F
     The Judgment of the Court was delivered by
     ALTAMAS KABIR, J. 1. This appeal, by way of special
leave, is directed against the judgment and order dated 29th
December, 2000, passed by the Division Bench of the Andhra G
Pradesh High Court in Letters Patent Appeal No. 78 of 1988,
which was preferred against the order passed by the learned
single Judge in A.S. No. 610 of 1979 on 24th June, 1987.
     2. As it appears from the materials on record, the appellant   H
    406       SUPREME COURT REPORTS                 [2008] 6 S.C.R.


A herein, Guntur Power and Light Limited, hereinafter referred as
  "GPL", was incorporated for the purpose of running an Electrical
  Undertaking to supply electricity to the Guntur area of Andhra
  Pradesh. It was granted a licence for the aforesaid purpose
  under the provisions of the Indian Electricity Act, 1910 and
B acquired various properties for the Undertaking.
        3. In 1938, GPL ceased to generate electricity and it
  confined itself only to distribution of power. Receiving and
  distributing stations were located in places belonging to the
  GPL, outside the properties forming the subject matter of the
C present appeal. It is the categorical case of the appellant herein
  that the said properties were not used by GPL for the purposes
  of the Electricity Undertaking or for any other ancillary purpose
  from the year 1939 onwards.
D         4. On 3rd August, 1945, GPL granted a lease in favour of
  Guntur Tobacco Company, hereinafter referred to as "GTC", a
  sister company, in respect of two acres of land with right to
  construct buildings thereon in terms of Clause 5 of the registered
  Lease Deed and also with an option to purchase the demised
  land in terms of Clause 8 thereof. By another registered Lease
E Deed executed by GPL in favour of GTC on 4th November, 1949,
  a further portion of vacant land measuring one acre was also
  demised in favour of GTC, which is the appellant in these
  proceedings. Subsequently, two more lease deeds were
  executed by GPL in favour of GTC on 15th March, 1950 and
F 181h March, 1954, extending the period of the lease till the end
  of the year 1971. In the Lease Deed of 1sth March, 1954, clause
  8 containing the option of purchase was substituted by a new
  clause, which, inter alia, provided that even ifthe lessors came
  to be wound up voluntarily or went into liquidation or became
G insolvent, or if the lessors ceased to carry on business, the
  lease would not terminate but would remain in full force with
  the right to the lessees to purchase the demised lands and
  buildings and structures thereon belonging to the lessors at
  the market value or be entitled to repayment of the market
H value of the buildings and super structures which may be put
      GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                 407
        COPRN. OF A.P. & ANR. [ALTAMAS KABIR, J.]

     up by the lessees.                                              A
           5. In 1956, the Government of Andhra Pradesh acquired
     the Electrical Undertaking from GPL in exercise of its powers
     under the Andhra Pradesh Electricity Supply Undertaking
     Acquisition Act, 1954, whereupon the Undertaking of GPL
     vested in the State Government with effect from 1st May, 1956. B
     Upon such vesting, the demised premises, along with the land
     and buildings situated thereupon, became the property of the
     State Government by virtue of such acquisition. The
     Transmission Corporation of Andhra Pradesh, being the
     respondent No. 1 herein, was formed on 1st April, 1959, under C
     Section 5 of the Electricity Supply Act, 1948, and pursuant to its
     policy the State Government transferred the Undertaking of GPL
     with all its assets to the Andhra Pradesh State Electricity Board,
     which became the owner of the said properties.
                                                                     D
           6. Even after formation of the respondent No. 1
..   Corporation, GTC continued to remain in possession of the
     properties in question purportedly on the strength of the Lease
     Deeds executed by GPL in its favour. According to the
     respondent No. 1 Corporation, in 1961 the Lease Deeds
     executed by GPL in favour of GTC came to be scrutinized. and it E
     was noticed that GPL had executed the leases in favour of GTC
     without obtaining requisite sanction of the Government in terms
     of Section 9(2) of the Indian Electricity Act, 191 Owhich rendered
     the Lease Deeds void. The Andhra Pradesh State Electricity
     Board was of the view that the possession of GTC was in the F
     natuce of a licence and GTC was entitled to remain in possession
     as long as the respondent No. 1 Corporation, as owner of the
     property, permitted it to do so. Consequent thereupon, the
     respondent No. 1 Corporation issued a letter on 9th January,
     1962, to the appellant informing it that the Lease Deeds G
     executed in its favour were void and it was also called upon to
     vacate the demised premises and to deliver possession thereof
     to the respondent No. 1 Corporation. The appellant responded
     to the said letter by a lawyer's notice dated 22nd January, 1962,
     contending that it was entitled to remain in possession of the H
    408       SUPREME COURT REPORTS                    [2008] 6 S.C.R.


A   demised property till 1971. The appellant continued to remain
    in possession of the demised property even after expiry of the
    lease and instead of vacating the same sought to exercise its
    option of purchase of the said properties by a notice dated 29th
    October, 1969. On 25th March, 1971, the respondent No. 1
B   Corporation by its letter called upon GTC to quit the suit
    properties and surrender the possession thereof to the Electricity
    Board by 1st January, 1972. An attempt to arrive at an amicable
    settlement having failed, the respondent No. 1 Corporation filed
    a suit, being O.S. No. 15 of 1973, in the Court of Additional
c   Subordinate Judge, Guntur, against GTC in 1972 seeking its
    eviction from the suit property, being the demised properties,
    on the ground that the leases in question executed and
    registered in favour of GTC were not valid and that GTC was
    liable to be evicted as mere licensees of the respondent No. 1
D   Corporation. The appellant herein contested the suit by filing
    written statement contending that although GPL had been
    incorporated for the purpose of distributing electricity in Guntur
    area and was also a licensee under the Indian Electricity Act,
    1910, for the generation and distribution of electricity in the said
    area, in 1938 it ceased its operations relating to generation of
E   electricity and confined itself to distribution of power only.
    According to the appellant, since the suit properties were no
    longer used by GPL from 1939 for the purposes of the Electricity
    Undertaking or for any other connected purpose, from 1939 it
    ceased to be part of the Undertaking for the purposes of
F   generation and distribution of electricity and the Lease Deeds
    executed by GPL in favour of GTC were not, therefore, hit by the
    provisions of Section 9(2) and (3) of the Indian Electricity Act,
    191 O. It was also contended that since the suit properties had
    ceased to be part and parcel of the Electricity Undertaking after
G   1939, it could not have vested in the Andhra Pradesh State
    Electricity Board or the State Government and consequently the
    appellant was entitled to remain in possession of the suit
    properties at least till the end of 1971, particularly, when the
    respondent No. 1 Corporation had accepted the rents from the
H   appellant herein in the manner stipulated in the Lease Deeds
      GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                    409
        COPRN. OF A.P. & ANR. [ALTAMAS KABIR, J.]

     and had even issued receipts therefor. It was contended that A
     because of the conduct of the respondent No. 1 Corporation it
     was estopped from disowning such relationship and could not
     treat the appellant as a licensee.
          7. On the basis of the pleadings, initially five issues were
     framed, namely: -                                                    B
          "1.   Whether the lease deeds dated 3rd August, 1945,
                4th November, 1945, 15th March, 1950 and 1ath
                March, 1954 obtained by the defendant are void
                under Section 9(3) of the Indian Electricity Act of       c
                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?
                                                                          D
          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?
                                                                          E
          5.    To what relief?"
         Subsequently, two additional issues were framed on 19th
     August, 1976, namely: -
          "1.   Whether the defendant is entitled to the benefits of
                                                                          F
..              Section 53A of the Transfer of Property Act?
          2.    To what equities is the defendant entitled?"
          8. The trial court decided issue No. 1 initially framed in
     favour of respondent No. 1 Corporation/ plaintiff and against
     the appellant/defendant on the ground that the Lease Deeds G
     were void since they were contrary to Section 9(2) and (3) of
     the Indian Electricity Act, 1910. The trial court also found that
     the said agreements of lease were not binding on the respondent
     No. 1 Corporation/plaintiff.
                                                                       H
    410        SUPREME COURT REPORTS                      [2008] 6 S.C.R.


A         9. On issue No. 2, the trial court found that it had jurisdiction
    to entertain the suit.
         10. On additional issue No. 1, it was held that the appellant
    herein/defendant was not entitled to claim protection under
    Section 53A of the Transfer of Property Act.
B
          11. On issue No. 4, it was held that the respondent No. 1
    Corporation/plaintiff was entitled to recover possession of the
    suit property from the appellant herein/defendant.
       12. Issue No. 3 and additional issue No. 2 were also found
C in favour of the respondent No. 1 Corporation/ plaintiff.
  Accordingly, a decree for possession was passed in its favour
  against the appellant/defendant.
        13. The appellant herein filed an appeal before the single
D Judge of the Andhra Pradesh High Court, which was dismissed
  on 4th June, 1987, giving rise to a Letters Patent Appeal before
  the Division Bench of the said High Court.
           14. Before the Division Bench of the High Court, it was
    contended that both the courts below had factually erred in
E   arriving at a finding that the leases in question had been executed
    without the prior permission of the Government as contemplated
    under Section 9(2) of the Indian Electricity Act, 1910. It was urged
    that the State was fully aware of the fact that the property had
    been demised to the appellant herein, inasmuch as, when the
F   appellant applied for a loan under the State Aid to Industries
    Act, the State Government advised the appellant to get the lease
    extended so that there was sufficient time for the appellant to
    pay back the loan. It was also submitted that the matter had
    been examined by the Government Solicitor at Madras and in
G   his opinion, which has been set out in the impugned judgment,
    it had been indicated that the lessors of the leased lands, 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 with interest was repaid to the Government. It was
H   contended that it is only after the said letter of the Government
 GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                    411
   COPRN. OF A.P. & ANR. [ALTA'v1AS KABIR, J.]

Solicitor that the Government extended a loan of Rs.2 lacs to        A
the Company, which sum was also repaid during the period of
the lease and during such period the lease-hold property stood
mortgaged with the Government.
     15. On the basis of the aforesaid submission, the Division
Bench of the High Court held that the properties had been            B
demised in favour of the appellant with the implied sanction of
the State Government and the lease was not therefore hit by
Section 9(2) and (3) of the Indian Electricity Act, 1910.
      16. Despite the aforesaid finding, the Division Bench while    c
observing that the aforesaid finding was sufficient to grant the
relief prayed for by the appellant, took note of certain further
developments, namely, that though the lease was to expire in
1971, the Electricity Supply Undertakings (Acquisition) Act,
1954, came to be enacted in the meantime. The Division Bench D
observed that the Act had been enacted for the purpose of
providing for the acquisition by the Government of all
Undertakings which supplied electricity in the State of Andhra
Pradesh. Section 4 of the Act empowers the Government to
pass an order in writing that an Undertaking would vest in the
Government on the dates specified therein. Section 5 provides E
for payment of compensation to the lessee. Section 6 provides
for vesting of all fixed assests, cash security, investments,
documents, and obligations of the lessee Undertaking as on
the date of vesting. The Division Bench found that the assets of
the Undertaking stood vested with the Government in terms of F
an order passed in accordance with Section 3, as a result
whereof, the Undertaking stood vested with the Government with
effect from 1st May, 1956. The Division Bench also observed
that neither the 1954 Act nor the order of vesting of 1st May,
1956, had been challenged by the appellants.                      G
     17. On the basis of the aforesaid reasoning the Division
Bench came to the conclusion that since the Electricity
Undertaking of the appellant had vested in the State Government
from 1st May, 1956, the lessor itself had lost all rights over the   H
    412        SUPREME COURT REPORTS                    [2008] 6 S.C.R.


A property and the same stood extinguished by the promulgation
  of the 1954 Act. The Division Bench came to the conclusion
  that since the lessor had lost its rights of ownership over the
  property in question, the provisions in the lease deed regarding
  option of purchase as contained in clause 6 thereof became
B unenforceable against the lessor. The State Government having
  stepped into the shoes of the lessor, it was not empowered by
  the provisions of the statute to sell any part of the Undertaking
  to the licensees. It was held that clause 6 of the agreement could
  not, therefore, be enforced as it would be against public policy
c and would also defeat the purpose of the Act itself.
          18. Thereafter, on an analysis of the provisions of the licence
  which had been granted to GPL, the Division Bench held that in
  the context of the Electricity Act, 1910, all the properties of the
  Electricity Undertaking remained a part of the Undertaking even
D if it ceased to use the same for generation or supply of electricity.
  Referring to the provisions of Section 3(2)(d)(ii) the Division
  Bench held further that what was material, was the question as
  to whether the properties formed part of the Electricity
  Undertaking when the licence had been granted to it. In arriving
E at the aforesaid conclusion, the Division Bench also mentioned
  that clause 12(b) of the licence did not mention that if generation
  was stopped from a particular site, that site would be excluded
  from the Undertaking. By holding as above, the Division Bench
  negated the submissions of the appellant that since the
F properties were no longer used for generation of electricity, it
  would have to be held that the said properties ceased to be the
  properties of the Electricity Undertaking and was not therefore
  affected by the Electricity Supply Undertakings (Acquisition) Act,
  1954. On the basis of the aforesaid findings, the Division Bench
G ultimately held as follows:-
          "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 part of the agreement
          which gives an option to the licensee of purchasing the
H         property cannot be enforced because of the statutory
     GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                     413
       COPRN. OF A.P. & ANR. [ALTAMAS KABIR, J.]

         obligation of A.P. Electricity Supply Undertakings               A
         (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         B
    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        C
    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.                                                  D
          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
    un_der the 1954 Act. Mr. Sishodia urged that the Division Bench       E
    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        F
    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.ltwas lastly urged by Mr. Sishodia that having included       G
    the clause relating to option of purchase and having put the
    appellant into possession of the demised property, the
~   appellant's 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
                                                                          H
    414       SUPREME COURT REPORTS                    (2008] 6 S.C.R.


A 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
B 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
C   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
D   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
E   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
F   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
3   the view taken by the Division Bench of the High Court, in
    dis mi >sing the Letters Patent Appeal. Having regard to the
    opin.::>n 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.
H
 GUNTUR TOBACCOS LTD. v. THE TRANSMISSION                    415
   COPRN. OF A.P. & ANR. [ALTAMAS KABIR, J.]

      24. The other submission made on behalf of the appellant A
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 B
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 C
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
                                                                   0
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. E
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.
     25. In view of the above, we find no merit in the appeal and   F
the same is accordingly dismissed, but without any order as to
costs.
S.K.S.                                      Appeal dismissed.