JUDGMENT Hon’ble Sudhir Agarwal, J.—This writ petition arises out of the order and award dated 13th December, 1978 of Special Officer (Electricity) appointed under Section 7-A (6) of The Indian Electricity Act, 1910 (hereinafter referred to as the Act of 1910), as amended vide U.P. Amendment and Validation Act, 1975 (hereinafter referred to as the U.P. Act No.16 of 1975), determining the net amount payable to the petitioner under Section 7-A of the Act of 1910 as a result of purchase of the electrical undertaking of the petitioner by the U.P. State Electricity Board (in short ‘UPSEB’). The petitioner has also challenged the validity of Section 7-A of the Act of 1910 as substituted by U.P. Act No. 16 of 1975 as well as Section 7 of U.P. Act No. 16 of 1975 and has sought a direction to respondents No. 1 and 2 to determine the amount payable to the petitioner afresh in accordance with law. 2. The Indian Electricity Act, 1910 was enacted as a result of the experience gained by Government of India after enactment of Indian Electricity Act, 1903 and the recommendations made by the Committee constituted in this regard to consider the technical and financial aspect of the matter. Section 3 of the Act of 1910 empowers the State Government to grant licence to any person to supply energy in any specified area on an application made in the prescribed form and on the payment of prescribed fee and for laying down electric supply lines for the conveyance and transmission of energy. One Sri Lal Bahadur Prasad applied for and granted licence for supply of electricity on 15.12.1922 by the U.P. Government for carrying on the business under the Name and Style of "M/s. General Electric Trading Company” for supply of energy in the area within the Municipal Limits of Saharanpur. The aforesaid licence was transferred to petitioner M/s Electric Supply Company Limited Saharanpur vide Government Order dated 10.7.1928 and the terms and conditions of licences, it appears, were amended from time to time vide Notifications dated 12.3.1931, 21.11.1942, 2.8.1948, 16.9.1948, 22.3.1949 and 3.8.1967. 3. Clause-7 of the licence conferred an option of purchase of the electrical undertaking by the UPSEB after a period of 50 years initially from the date of Notification of the licence, failing which on the expiration of every subsequent period of twenty years. 3. Clause-7 of the licence conferred an option of purchase of the electrical undertaking by the UPSEB after a period of 50 years initially from the date of Notification of the licence, failing which on the expiration of every subsequent period of twenty years. Clause 7 of the Licence reproduced as under : “7(1) The option of purchase given by Section 7, sub-section (1) of the Act shall first be exercisable on the expiration of 50 years from the date of the notification of this licence and on the expiration of every subsequent period of 20 years (and the terms of such a purchase shall be as laid down to the Act). The percentages of the value is to be determined in accordance with and for the purpose of Section 7(1) of the Acts of the lands, buildings, works materials and plant of the licensees therein mentioned to be added under the second proviso of that sub-section to each value on account of compulsory purchase shall be 20%. (2) ln accordance with Section 3, sub-section (2) Clause (d) (ii) of the Act, it is hereby declared that the generating station to be set in connection with understanding shall form part of the undertaking for the purpose of purchase under sub-section (5) of Section 7.” 4. The UPSEB exercised an option of purchase of undertaking owned by the petitioner Company on the expiry of 50 years period counted from 15th December, 1922 and served a notice dated 12th October, 1971 upon the petitioner to sell and deliver the undertaking to UPSEB on the date of the expiry of the current period of the licence and thereafter the possession of the undertaking was taken over on 14/15.12.1972. To determine purchase price payable to the petitioner under the Act enforced at the relevant time, the UPSEB appointed an Executive Engineer creating a full-fledged division for the said purpose at Saharanpur. However, before the purchase price could be determined by the aforesaid Officer, the Act was amended vide U.P. Act 16 of 1975 and pursuant to the amended provisions as aforesaid, one Sri H.G. Verma, Special Officer (Electricity) was appointed vide Government Notification dated 29.3.1976 entrusting him the work of determination of net amount payable to the petitioner. However, before the purchase price could be determined by the aforesaid Officer, the Act was amended vide U.P. Act 16 of 1975 and pursuant to the amended provisions as aforesaid, one Sri H.G. Verma, Special Officer (Electricity) was appointed vide Government Notification dated 29.3.1976 entrusting him the work of determination of net amount payable to the petitioner. The said Officer was to determine the aforesaid amount under Section 7-A of the Act as amended in U.P. Sri H.G. Verma retired on 5.12.1977 and was replaced by Shri Sher Singh, Special Officer (Electricity) vide Government Notification dated 19.1.1978, who vide its order and award dated 13th December, 1978 (impugned in this present writ petition) provided that a sum of Rs. 6,59,207/- is payable by the petitioner to UPSEB. Challenging the aforesaid order and award, the petitioner has invoked extraordinary jurisdiction of this Court under Article 226 of the Constitution of India and has also questioned the validity of the U.P. Act No. 16 of 1975 on the anvil of Article 14 of the Constitution of India. 5. Sri Murlidhar, learned Senior Advocate assisted by Sri Ajai Kumar Sharma, learned Counsel appearing on behalf of the petitioner broadly advanced the followings submissions : (A)(1) The electrical undertaking of the petitioner company was purchased by the UPSEB in the midnight of 14/15 December, 1972 on the expiry of 50 years of the period as per Clause 7 of the Licence read with Sections 6 and 7 of the Act. At the time of transfer of the undertaking the representation made by the Board as contained in its notice dated 12.10.1971 exercising its option to purchase undertaking clearly mentioned the determination of purchase price of the undertaking based on market value on the date of take over of all lands, buildings, works, materials and plant of the Company etc., i.e., in accordance with Section 6(7) read with Section 7-A of the Act as existed on the said date. Subsequently, since the purchase price could not be finally determined and in the meantime the Act was amended by the U.P. Act No. 16 of 1975 changing the very basis of determination of purchase price from the “market value” to “book value” it has resulted in serious prejudice to the petitioner in the matter of determination of the purchase price of the undertaking. He contended that the Board having already represented to pay purchase price in accordance with “market value” could not have retracted from its stand changing the basis of determination of purchase price to “book value” as per amended Act. (2) In the alternative he submitted that U.P. Act No. 16 of 1975 is arbitrary and discriminatory, inasmuch as, it has made classification on the basis of the undertakings in which valuation process had come to an end and where valuation process is still continuing. In respect to cases, where valuation price had come to an end and valuation has been determined, the U.P. Act No. 16 of 1975 does not apply although all other things are similar but for the sheer contingency that the process is still continuing, the Act has made a classification by creating such undertakings as a separate class and changing the basis of the price determination from “market value” to “book value” which is arbitrary. Learned Counsel for the petitioner, therefore, submitted that the classification is wholly irrational and unintelligible having no nexus with the object sought to be achieved. Thus, it is urged that the U.P. Act No. 16 of 1975 infringes Article 14 of the Constitution of India being arbitrary and discriminatory. (B) Assailing the order and award of the Special Officer on merits the learned Counsel for the petitioner has confined its challenge to the following items : (1) Supervision charges; (2) Assets created from contribution made by consumers/local bodies; (3) Deduction for depreciation of assets created from the consumers’ contribution; (4) Amount paid by the consumers by way of security deposit and arrears of interest due on the vesting date as per Section 7-A (5)(f) of the Act; (5) Advances from consumers and prospective consumers who have not taken connection till the date of vesting; (6) Contingency reserve; (7) Development reserve. 6. Sri B.P. Singh, learned Counsel appearing for the respondents contended that so far as the question of vires of U.P. Act No. 16 of 1975 is concerned, the issue stands concluded by the judgment of the Hon’ble Apex Court in Tinsukhia Electricity Co. Limited v. State of Assam, 1989 (3) SCC 709 wherein the validity of the aforesaid Act has been upheld. Limited v. State of Assam, 1989 (3) SCC 709 wherein the validity of the aforesaid Act has been upheld. In respect to other submissions, he broadly contended that the order of the Special Officer is correct, in accordance with the provisions of the Act and needs no interference. He referred to the stand taken by the respondents in its counter affidavit. He has also filed a short written submission confined to the item pertaining to the “contingency reserve” and submits since the Board has taken all the employees of the ex-licensee in its employment, there is no question of payment of any amount by the ex-licensee to any employee and, therefore, the order of the Special Officer with respect to the “contingency reserve” does not require any interference. He sought to support the above submissions placing reliance on Bholanath Mukherjee and others v. Government of West Bengal, 1997(1) SCC 562 . 7. We have heard learned Counsels for the parties and perused the record. 8. Before considering the rival submissions, it would be necessary to have a background of the relevant provisions applicable in the present case. 9. The Act of 1910, although was published in the Gazette of India, 1910 on 10.3.1910 but came into force with effect from 1.1.1911. As enacted, initially it was not sought to be made a complete code on the subject of electricity but, as is apparent from the preamble, sought to be an enactment to amend the law relating to supply and use of electrical energy. The Legislations pertaining to electrical energy prior to 1910 Act were not much older, inasmuch as, the first legislation on the subject came in 1887, i.e., The Electricity Act, 1887 which provided for protection of person and property, from injury and risks attendant to the supply and user of electricity for lighting and other purposes. The aforesaid Act was repealed and replaced by the Indian Electricity Act, 1903 (Act No. 3 of 1903). This was found to be a tentative/stop gap measure and lot of defects and shortcomings were realized in the short period of four years, i.e., 1903 to 1907 resulting in constitution of a “Committee” to consider and recommend the technical and financial aspect of the matter and ultimately 1910 Act was enacted as an Act to amend Law. It was primarily concerned only with supply and use of electricity. 10. It was primarily concerned only with supply and use of electricity. 10. A Division Bench of Madras High Court in the case of Corporation of Madras v. Madras Electric Tramways Limited, AIR 1931 Mad 152 observed that the Electricity Act does not purport to be a Code. It does not purport to be a consolidating Act like the Arms Act, Abkari Act or the Petroleum Act. It is an Act to amend the law relating to the supply and use of electrical energy and was not primarily concerned with the generation. Thus, the Act was not intended to be a comprehensive Act in order to include everything concerning the generation, supply and use of electrical energy. 11. Under the Government of India Act, 1935 as well as in the Constitution of India, 1950 the subject of “electricity” was placed under the concurrent list empowering the “Central” as well as the State Legislature to make laws on the subject of electricity. The Central Legislature enacted Electricity (Supply) Act, 1948 (hereinafter referred to as the “Act of 1948”) with an objective to provide for rationalization of the production and supply of electricity and generally for taking measures conducive to electrical development. One of the principal features of the Act of 1948 was the provision for the Constitution of autonomous bodies, like, Electricity Boards to be set up by the Provincial Government, which would be in the nature of Trading Corporations within the meaning of Entry 33 of List I of the Government of India Act, 1935 and intended to be most suitable organisation for working “Grid System” on quasi commercial lines. The Constitution of Electricity Boards under Act of 1948 subsequently resulted in major amendments under the Act of 1910 also. 12. Section 4 of Act of 1910, as originally enacted, provided for revocation of licence empowering the State Government to revoke licence in public interest. The power could be exercised on the occurrence of any of the four cases, namely, (a) wilful or unreasonably prolonged default by licence of anything required by or under the Act (b) breach of such terms and conditions in the licence the specified consequence of which is revocation, (c) failure of licensee to satisfy as regards the duties and obligations under its licence or failure to deposit the requisite security, (d) where the licensee is an insolvent. Section 4 was substantially amended vide Electricity (Amendment) Act, (Act No. 32 of 1959) with effect from 5.9.1959. This amendment places the State Electricity Board also in controlling position with respect to revocation of licence since the State Government is now required to exercise power after consulting the State Electricity Board. Further a provision for opportunity to the licensee before revocation of his licence was also added. 13. Sections 5, 6 and 7 of Act of 1910, as originally enacted, made provision with respect to revocation of licence, purchase of undertaking and vesting of the undertaking in the purchaser. The aforesaid provisions were substituted vide Act No. 32 of 1959. It also inserted Section 7-A making provision for determination of purchase price of an undertaking. 14. Subsequently, there are some provisional amendments with which we are convinced. Vide U.P. Act No. 36 of 1974 sub-sections (2) to (5) were inserted in Section 7 of 1910 Act and a proviso was inserted after sub-section (1) of Section 7. Section 6 was also amended inserting sub-section (6-A). 15. Vide U.P. Act No. 16 of 1975, which came into force on 4.2.1975, Section 5 of 1910 Act was amended substituting sub-sections (2) and (3). Under Section 6 of 1910 Act, sub-sections (6) and (7) were repealed and re-enacted with effect from 5th September, 1959. In Section 7 proviso was substituted and in sub-sections (2), (3) and (5) wherever the word “purchase money” occurred was substituted by the word “amount”. Section 7-A of 1910 Act, which was inserted in 1959, was also substituted by new Section. Section 7 of U.P. Act No.16 of 1975 provides that the provisions of the said Act shall apply to all licensees in respect of their undertakings sold after September 5, 1959 under Sections 5 and 6 of the Principal Act and purchase price in respect whereof was not determined prior to the commencement of the said Act. 16. Vide U.P. Act No. 14 of 1976 under Section 6(1) the words ‘one year’ were substituted by the words ‘11 months’ and it was provided that it shall always be deemed to have been substituted. Besides that Section 6-A was also inserted providing for revocation of licence and acquisition of undertaking. 16. Vide U.P. Act No. 14 of 1976 under Section 6(1) the words ‘one year’ were substituted by the words ‘11 months’ and it was provided that it shall always be deemed to have been substituted. Besides that Section 6-A was also inserted providing for revocation of licence and acquisition of undertaking. Corresponding amendment, due to insertion of Section 6-A was also made under Sections 7and 7-A of the 1910 Act as amended in U.P. A comparative chart of Sections 5, 6, 7 and 7-A of Act of 1910 as amended vide Act No. 32 of 1959 and as they stood after U.P. Amendments vide U.P. Act No. 36 of 1974, 16 of 1975 and 14 of 1976 is being reproduced as under : Sections 5, 6, 7 and 7-A as stood vide Act No. 32 of 1959 5. Provisions where licence of a licensee, is revoked.—(1) Where the State Government revokes, under Section 4, sub-section (1), the license of a licensee, the following provisions shall have effect, namely: — (a) the State Government shall serve a notice of revocation upon the licensee and shall fix a date on which the revocation shall take effect; and on and with effect from that date, or on and with effect from the date, if earlier, on which the undertaking of the licensee is sold to a-purchaser in pursuance of any of the succeeding clauses or is delivered to a designated purchaser in pursuance of sub-section (3) all the powers and liabilities of the licensee under this Act shall absolutely cease and determine; (b) the State Government shall enquire from the State Electricity Board, and where the lincensee is not a local authority, also from any local authority constituted for the area within which the whole of the area of supply is included, whether it is willing to purchase the undertaking; (c) if the State Electricity Board is willing to purchase the undertaking, the State Government shall, by notice in writing require the licensee to sell, and thereupon, the licensee shall sell the undertaking to the State Electricity Board; (d) if the State Electricity Board is not willing to purchase the undertaking, the State Government shall have the option of purchasing the undertaking and if it elects to purchase, it shall by notice in writing require the licensee to sell, and thereupon the licence shall sell the undertaking to it; The provisions inserted through amendments/substitutions vide U.P. Act Nos. 36 of 1974, 16 of 1975 and 14 of 1976 in Sections 5, 6, 7 and 7-A 5. 36 of 1974, 16 of 1975 and 14 of 1976 in Sections 5, 6, 7 and 7-A 5. Provisions where licence of a licensee, is revoked.—(1) Where the State Government revokes, under Section 4, sub-section (1), the licence of a licensee, the following provisions shall have effect, namely: — (a) the State Government shall serve a notice of revocation upon the licensee and shall fix a date on which the revocation shall take effect; and on and with effect from that date, or on and with effect from the date, if earlier, on which the undertaking of the licensee is sold to a purchaser in pursuance of any of the succeeding clauses or is delivered to a designated purchaser in pursuance of sub-section (3) all the powers and liabilities of the licensee under this Act shall absolutely cease and determine; (b) the State Government shall enquire from the State Electricity Board, and where the lincensee is not a local authority, also from any local authority constituted for the area within which the whole of the area of supply is included, whether it is willing to purchase the undertaking: (c) if the State Electricity Board is willing to purchase the undertaking, the State Government shall, by notice in writing require the licensee to sell, and thereupon, the licensee shall sell the undertaking to the State Electricity Board; (d) if the State Electricity Board is not willing to purchase the undertaking, the State Government shall have the option of purchasing the undertaking and if it elects to purchase, it shall by notice in writing require the licensee to sell, and thereupon the licence shall sell the undertaking to it; (e) if the State Electricity Board is not willing to purchase the undertaking and the State Government does not itself elect to purchase it, the State Government in any case where the local authority referred to in clause (b) is willing to purchase the undertaking shall by notice in writing require the licensee to sell, and thereupon the licensee shall sell the undertaking to that local authority; (f) if no sale of the undertaking is effected under any of the foregoing clauses and if any other person is willing to purchase the undertaking, the State Government may by notice in writing require the licensee to sell, and thereupon the licensee shall sell the undertaking to such other person. (2) Where an undertaking is sold under sub-section (1) the purchaser shall pay to the licensee the purchase price of the undertaking determined in accordance with the provisions of sub-sections (1) and (2) of Section 7A, or as the case may be, sub-section (3) of that section. (3) Where the State Government issues any notice under sub-section (1) requiring the licensee to sell the undertaking, it may by such notice require the licensee to deliver, and thereupon the licensee shall deliver on a date specified in the notice the undertaking to the designated purchaser pending the determination and payment of the purchase price of the undertaking : Provided that in any such case, the purchaser shall pay to the licensee, interest at the Reserve Bank rate ruling at the time of delivery of the undertaking plus one per centum on the purchase price of the undertaking for the period from the date of delivery of the undertaking to the date of payment of the purchase price. (e) if the State Electricity Board is not willing to purchase the undertaking and the State Government does not itself elect to purchase it, the State Government in any case where the local authority referred to in clause (b) is willing to purchase the undertaking shall by notice in writing require the licensee to sell, and thereupon the licensee shall sell the undertaking to that local authority; (f) if no sale of the undertaking is effected under any of the foregoing clauses and if any other person is willing to purchase the undertaking, the State Government may by notice in writing require the licensee to sell, and thereupon the licensee shall sell the undertaking to such other person. (2) Where an undertaking is sold under sub-section (1), the purchaser shall pay to the licensee an amount determined in accordance with the provisions of Section 7 and Section 7-A as substituted by the Indian Electricity (Uttar Pradesh Amendment and Validation) Act, 1975, excepting sub-section (3) of the said Section 7-A. (3) Where the State Government issues any notice under sub-section (1) requiring the licensee to sell the undertaking, it may by such notice require the licensee to deliver, and thereupon the licensee shall deliver on a date specified in the notice the undertaking to the designated purchaser or to such officer as the designated purchaser may appoint in that behalf pending determination and payment of the said amount to the licensee : Provided that in any such case, the purchaser shall pay to the licensee, interest at the Reserve Bank rate ruling at the time of delivery of the undertaking plus one per centum, on the amount payable to the licensee for the period from the date of delivery of the undertaking to the date of payment of such amount. (4) Where before the date fixed in the notice issued under clause (a) of sub-section (1) as the date on which the revocation of the licence shall take effect, no notice has been issued to the licensee requiring him to sell the undertaking or where for any reason no sale of the undertaking has been effected under that sub-section, the licensee shall have the option of disposing of all lands, buildings, works, materials and plant belonging to the undertaking in such manner as he may think fit : Provided that if the licensee does not exercise such option within a period of six months from the aforesaid date, the State Government may forthwith cause the works of the licensee in, under, over, along, or across any street to be removed and every such street to be reinstated, and recover the cost of such removal and reinstatement from the licensee. 6. 6. Purchase of undertakings.—(1) Where a licence has been granted to any person, not being a local authority, the State Electricity Board shall, — (a) in the case of a licence granted before the commencement of the Indian Electricity (Amendment) Act, 1959, on the expiration of each such period as is specified in the license; and (b) in the case of a licence granted on or after the commencement of the said Act, on the expiration of such period not exceeding twenty years and of every such subsequent period, not exceeding ten years, as shall be specified in this behalf in the licence, have the option of purchasing the undertaking and such option shall be (Amended/substituted vide U.P. Act No.16 of 1975 w.e.f.4.2.1975) (4) Where before the date fixed in the notice issued under clause (a) of sub-section (1) as the date on which the revocation of the licence shall take effect, no notice has been issued to the licensee requiring him to sell the undertaking or where for any reason no sale of the undertaking has been effected under that sub-section, the licensee shall have the option of disposing of all lands, buildings, works, materials and plant belonging to the undertaking in such manner as he may think fit : Provided that if the licensee does not exercise such option within a period of six months from the aforesaid date, the State Government may forthwith cause the works of the licensee in, under, over, along, or across any street to be removed and every such street to be reinstated, and recover the cost of such removal and reinstatement from the licensee. 6. Purchase of undertakings. 6. Purchase of undertakings. —(1) Where a licence has been granted to any person, not being a local authority, the State Electricity Board shall,— (a) in the case of a licence granted before the commencement of the Indian Electricity (Amendment) Act, 1959, on the expiration of each such period as is specified in the licence; and (b) in the case of a licence granted on or after the commencement of the said Act, on the expiration of such period not exceeding twenty years and of every such subsequent period, not exceeding ten years, as shall be specified in this behalf in the licence, have the option of purchasing the undertaking and such option shall be exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than one year requiring the licensee to sell the undertaking to it at the expiry of the relevant period referred to in this sub-section. (2) Where a State Electricity Board has not been constituted, or if constituted, does not elect to purchase the undertaking, the State Government shall have the like option to be exercised in the like manner of purchasing the undertaking. (3) Where neither the State Electricity Board nor the State Government elects to purchase the undertaking, any local authority constituted for an area within which the whole of the area of supply is included shall have the like option to be exercised in the like manner of purchasing the undertaking. (4) If the State Electricity Board intends to exercise the option of purchasing the undertaking under this section, it shall send an intimation in writing of such intention to the State Government at least eighteen months before the expiry of the relevant period referred to in sub-section (1) and if no such intimation as aforesaid is received by the State Government the State Electricity Board shall be deemed to have elected not to purchase the undertaking. (5) If the State Government intends to exercise the option of purchasing the undertaking under this section, it shall send an intimation in writing of such intention to the local authority, if any, referred to in sub-section (3) at least fifteen months before the expiry of the relevant period referred to in sub-section (1) and if no such intimation as aforesaid is exercised by the State Electricity Board serving upon the licensee a notice in writing of not less than eleven month requiring the licensee to sell the undertaking to it at the expiry of the relevant period referred to in this sub-section. (Amended vide U.P. Act No.14 of 1976 w.e.f. 27.11.1975) (2) Where a State Electricity Board has not been constituted, or if constituted, does not elect to purchase the undertaking, the State Government shall have the like option to be exercised in the like manner of purchasing the undertaking. (3) Where neither the State Electricity Board nor the State Government elects to purchase the undertaking, any local authority constituted for an area within which the whole of the area of supply is included shall have the like option to be exercised in the like manner of purchasing the undertaking. (4) If the State Electricity Board intends to exercise the option of purchasing the undertaking under this section, it shall send an intimation in writing of such intention to the State Government at least eighteen months before the expiry of the relevant period referred to in sub-section (1) and if no such intimation as aforesaid is received by the State Government the State Electricity Board shall be deemed to have elected not to purchase the undertaking. (5) If the State Government intends to exercise the option of purchasing the undertaking under this section, it shall send an intimation in writing of such intention to the local authority, if any, referred to in sub-section (3) at least fifteen months before the expiry of the relevant period referred to in sub-section (1) and if no such intimation as aforesaid is received by the local authority, the State Government shall be deemed to have elected not to purchase the undertaking. (6) Where a notice exercising the option of purchasing the undertaking has been served upon the licensee under this section, the licensee shall deliver the undertaking to the State Electricity Board, the State Government or the local authority, as the case may be, on the expiration of the relevant period referred to in sub-section (1) pending the determination and payment of the purchase price. (7) Where an undertaking is purchased under this section, the purchaser shall pay to the licensee the purchase price determined in accordance with the provisions of sub-section (4) of Section 7A. received by the local authority, the State Government shall be deemed to have elected not to purchase the undertaking. (6) Where a notice exercising the option of purchasing the undertaking has been served upon the licensee under this section, the licensee shall deliver the undertaking to the State Electricity Board, the State Government or the local authority, as the case may be, or to such officer as the Board, the Government or the local authority may appoint in that behalf on the expiration of the relevant period referred to in sub-section (1) pending the determination and payment referred to in sub-section (7): Provided that the licensee shall, in addition to the said amount, be entitled to interest thereon at the Reserve Bank rate ruling at the time of delivery of the undertaking plus one percentum for the period from the date of delivery of the undertaking to the date of payment of said amounts. (Amended vide U.P. Act No.16 of 1975) (6-A) After the service upon the licensee under this section of a notice by the State Electricity Board exercising the option of purchasing the undertaking— (a) the licensee shall prepare and furnish to the Board within a period of three months from the date of service of such notice an inventory of all lands, buildings, works, materials and plant belonging to the undertaking at the time of the service of such notice and shall be bound to allow the Board or its agents or the Electrical Inspector to the State Government or any officer subordinate to him authorised by him in that behalf, at all reasonable times during the pendency of the said notice and until delivery of the undertaking to the Board under sub-section (6), to enter upon such lands, buildings and works, and inspect such lands, buildings, works, materials and plant and prepare an inventory thereof or to check the correctness of the inventory furnished by the licensee; (b) the licensee shall be bound to keep all his lands, buildings, works, materials and plant belonging to the undertaking in as good condition as they were at the time of the service of such notice, subject only to changes caused by reasonable wear and tear or by irresistible force and to allow the said Board and its agents, or the Electrical Inspector to the State Government or any officer subordinate to him authorised by him in that behalf, at all reasonable times during the pendency of the said notice and until delivery of the undertaking to the Board under sub-section (6), to enter upon such lands, buildings and works and inspect the condition thereof and the condition of the said materials and plant; (c) the licensee may use the said lands, buildings, works, materials and plant as a person of ordinary prudence would use them if no such notice as aforesaid were served, but he shall not pull down or damage any such buildings, works, materials or plant or commit any other act which is destructive thereof or permanently injurious thereto or remove any such materials or plant from the undertaking; (d) the licensee shall be liable to account to the Board for all such lands, buildings, works, materials and plant, as existed at the time of the service of such notice.” 7. Vesting of the undertaking in the purchaser.—Where an undertaking is sold under Section 5 or Section 6, then upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser under sub-section (3) of Section 5 or under sub-section (6) of Section 6, as the case may be, whichever is earlier— (i) the undertaking shall vest in the purchaser or the intending purchaser, as the case may be, free from any debt, mortgage or similar obligation of the licensee or attaching to the undertaking : Provided that any such debt, mortgage or similar obligation shall attach to the purchase money in substitution for the undertaking; (ii) the rights, powers, authorities, duties and obligations of the licensee under his licence shall stand transferred to the purchaser and such purchaser shall be deemed to be the licensee: Provided that where the undertaking is sold or delivered to a State Electricity Board or the State Government, the licence shall cease to have further operation. (Amended vide U.P. Act No. 36 of 1974) (7) Where an undertaking is purchased under this section, the purchaser shall pay to the licensee an amount determined in accordance with the provisions of Section 7 and Section 7A as substituted by the Indian Electricity (Uttar Pradesh Amendment and Validation) Act, 1975". (Amended/substituted in Section 6 vide U.P. Act No. 16 of 1975 w.e.f. 5.9.1959) 7. (Amended/substituted in Section 6 vide U.P. Act No. 16 of 1975 w.e.f. 5.9.1959) 7. Vesting of the undertaking in the purchaser.—(1) Where an undertaking is sold under Section 5 or Section 6, then upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser under sub-section (3) of Section 5 or under sub-section (6) of Section 6, as the case may be, whichever is earlier— (i) the undertaking shall vest in the purchaser or the intending purchaser, as the case may be, free from any debt, mortgage or similar obligation of the licensee or attaching to the undertaking : Provided that any such debt, mortgage or similar obligation shall attach to the amount payable for the undertaking; (Amended/substituted in Section 7 vide U.P. Act No. 16 of 1975 w.e.f. 4.2.1975) (ii) the rights, powers, authorities, duties and obligations of the licensee under his licence shall stand transferred to the purchaser and such purchaser shall be deemed to be the licensee: Provided that where the undertaking is sold or delivered to a State Electricity Board or the State Government, the licence shall cease to have further operation. “(2) Where an undertaking is purchased by the State Electricity Board and (i) any amount of wages, bonus, gratuity, provident fund or other payment due on the date of purchase or of the delivery of the undertaking, as the case may be, to persons employed as workmen (within the meaning of the U.P. Industrial Disputes Act, 1947) in connection with the undertaking remains unpaid by the licensee to such workmen; or (ii) the licensee has failed to pay any amount due on the said date in respect of either the licensee’s contribution or the employee’s contribution realised by the licensee or any other dues recoverable from the licensee under the Employees’ Provident Funds Act, 1952 or the Employees’ State Insurance Act, 1948, in respect of persons employed in connection with the undertaking, the Board may pay the said amounts to the employees or to the Board of Trustees under the first mentioned Act, or to the Employees State Insurance Corporation, under the second mentioned Act, as the case may be, and deduct the same from the amount to be paid to the licensee, and if the amounts so paid exceed the purchase money available, recover the excess from the licensee as arrears of revenue. (3) All security deposits made by the consumers with the licensee that remain unpaid to the consumers on the said date shall be transferred by the licensee to the Board, and if they are not so transferred the Board shall deduct the amount of the said deposits from the amount to be paid to the licensee, and if the said amount exceeds the purchase money available, recover the excess from the licensee as arrears of revenue. (4)The liability of the licensee towards his employees or consumers, as the case may be, to the extent of deductions and recoveries made by the Board under sub-sections (2) and (3) shall stand discharged. (5) The provisions of sub-sections (2), (3) and (4) shall apply in respect of all undertakings purchased before or after the commencement of the Electricity Laws (Uttar Pradesh Amendment) Act, 1974, in respect of which the purchase money remains to be paid to the licensee.” (Amended/substituted in Section 7 vide U.P. Act No. 36 of 1974 and 16 of 1975 w.e.f. 4.2.1975) “(2) Where an undertaking is purchased by the State Electricity Board or acquired under Section 6-A and (i) any amount of wages, bonus, gratuity, provident fund or other payment due on the date of purchase or of the delivery of the undertaking, as the case may be, to persons employed as workmen (within the meaning of the U.P. Industrial Disputes Act, 1947) in connection with the undertaking remains unpaid by the licensee to such workmen; or (ii) the licensee has failed to pay any amount due on the said date in respect of either the licensee’s contribution or the employee’s contribution realised by the licensee or any other dues recoverable from the licensee under the Employees Provident Funds Act, 1952 or the Employees’ State Insurance Act, 1948, in respect of persons employed in connection with the undertaking, 7A. Determination of purchase price.—(1) Where an undertaking of a licensee, not being a local authority, is sold under sub-section (1) of Section 5, the purchase price of the undertaking shall be the market value of the undertaking at the time of purchase or where the undertaking has been delivered before the purchase under sub-section (3) of that section, at the time of the delivery of the undertaking and if there is any difference or dispute regarding such purchase price, the same shall be determined by arbitration. (2) The market value of an undertaking for the purpose of sub-section (1) shall be deemed to be the value of all lands, buildings, works materials and plant of the licensee suitable to, and used by him, for the purpose of the undertaking, other than (i) a generating station declared by the licensee not to form part of the undertaking for the purpose of purchase, and (ii) service-lines or other capital works or any part thereof which have been constructed at the expense of consumers, due regard being had to the nature and condition for the time being of such lands, buildings, works, materials and plant and the state of repair thereof and to the circumstance that they are in such position as to be ready for immediate the Board may pay the said amounts to the employees or to the Board of Trustees under the first mentioned Act, or to the Employees State Insurance Corporation, under the second mentioned Act, as the case may be, and deduct the same from the purchase money to be paid to the licensee, and if the amounts so paid exceed the purchase money available, recover the excess from the licensee as arrears of revenue. (3) All security deposits made by the consumers with the licensee that remain unpaid to the consumers on the said date shall be transferred by the licensee to the Board, and if they are not so transferred the Board shall deduct the amount of the said deposits from the amount to be paid to the licensee, and if the said amount exceeds the purchase money available, recover the excess from the licensee as arrears of revenue. (4) The liability of the licensee towards his employees or consumers, as the case may be, to the extent of deductions and recoveries made by the Board under sub-sections (2) and (3) shall stand discharged. (4) The liability of the licensee towards his employees or consumers, as the case may be, to the extent of deductions and recoveries made by the Board under sub-sections (2) and (3) shall stand discharged. (5) The provisions of sub-sections (2), (3) and (4) shall apply in respect of all undertakings purchased before or after the commencement of the Electricity Laws (Uttar Pradesh Amendment) Act, 1974, in respect of which the purchase money remains to be paid to the licensee.” (Amended/substituted in Section 7 vide U.P. Act No.14 of 1976 w.e.f. 27.11.1975) (4) Where an undertaking of a licensee is purchased under Section 6, the purchase price shall be the value thereof as determined in accordance with the provisions of sub-sections (1) and (2): Provided that there shall be added to such value such percentage, if any, not exceeding twenty percentum of that value as may be specified in the licence on account of compulsory purchase. 7-A. Determination of amount—(1) Where an undertaking of a licensee is sold under sub-section (1) of Section 5 or is purchased under Section 6, the amount payable therefor shall be determined as hereinafter provided. 7-A. Determination of amount—(1) Where an undertaking of a licensee is sold under sub-section (1) of Section 5 or is purchased under Section 6, the amount payable therefor shall be determined as hereinafter provided. (2) The gross amount payable to such licensee shall be the aggregate value of the amounts specified below— (i) the book value of all completed works in beneficial use pertaining to the undertaking and taken over by the State Electricity Board, the State Government or local authority, as the case may be (excluding works paid for by consumers), less depreciation calculated in accordance with the Sixth Schedule read with the Seventh Schedule to the Electricity (Supply) Act, 1948; (ii) the book value of all works in progress taken over, excluding works paid for by the customers or prospective consumers; (iii) the book value of all stores, including spare parts taken over, and in the case of used stores and spare parts, if taken over, such sum as may be decided upon by the Special Officer referred to in sub-section (6) (hereinafter referred to as the Special Officer); (iv) the book value of all other fixed assets in use on the date of vesting under Section 7, hereinafter referred to as the vesting date, and taken over, less depreciation calculated in accordance with the said Schedules; (v) the book value of all plants and equipments existing on the vesting date, if taken over but no longer in use owing to wear and tear or to obsolescence, to the extent such value has not been written off in the books of the licensee, less depreciation calculated in accordance with the said Schedules; Explanation.—The book value of any fixed asset means its original cost and shall comprise— (i) the purchase price paid by the licensee for the asset, including the cost of delivery and all charges properly incurred in erecting and bringing the asset into beneficial use as shown in the books of the undertakings; (ii) the cost of supervision actually incurred, but not exceeding fifteen percent of the amount referred to in paragraph(i): Provided that before deciding the amount under this sub-section, the licensee shall be given an opportunity by the Special Officer of being heard, after giving him a notice of at least 15 days therefor. (3) A sum equal to 10 per cent of the amounts assessed under clauses (i) to (iv) of sub-section (2) shall be paid to the licensee in respect of compulsory purchase under Section 6. (4) When any asset is acquired by the licensee after the expiry of the period to which the latest annual accounts relate, the book value of the asset shall be such as may be decided upon by the Special Officer : Provided that before deciding the book value of any such asset, the licensee shall be given an opportunity by the Special Officer of being heard, after giving him a notice of at least 15 days therefor. (5) The purchaser shall be entitled to deduct the following sums from the gross amount payable under the foregoing sub-section to a licensee— (a) the amount, if any, already paid in advance; (b) where the purchaser is the State Electricity Board the amount due, if any, including interest thereon, from the licensee to the Board for energy supplied by the Board before the vesting date; (c) all amounts and arrears of interest, if any, thereon, due from the licensee to the State Government or the State Electricity Board; (d) the amount, if any, equivalent to the loss sustained by the purchaser by reason of any property or rights belonging to the undertaking not having been handed over to the purchaser, the amount of such loss being deemed to be the amount by which the market value of such property or rights exceeds the amount payable therefor under this section, together with any income which might have been realised by the purchaser, if the property or rights had been handed over on the vesting date; (e) the amount of all loans due from the licensee to any corporation as defined in the Uttar Pradesh Public Moneys (Recovery of Dues) Act, 1972, and arrears of interest, if any, thereon; (f) all sums paid by the consumers by way of security deposit and arrears of interest due thereon on the vesting date, in so far as they have not been paid over by the licensee to the purchaser, less the amounts which according to the books of the licensee are due from the respective consumers to the licensee for energy supplied by him before that date; (g) all advances from consumers and prospective consumers, and sums which have been or ought to be set aside to the credit of the consumers, in so far as such advances or sums have not been paid over by the licensee to the purchaser; (h) the amounts remaining in Tariffs and Dividends Control Reserve, Contingencies Reserve and the Development Reserve, in so far as such amounts have not been paid over by the licensee to the purchaser. (6) The State Government shall appoint, by order in writing, a person having adequate knowledge and experience in matter relating to accounts, to be Special Officer to assess the net amount payable under this section to the licensee, after making the deductions mentioned in this section. (6) The State Government shall appoint, by order in writing, a person having adequate knowledge and experience in matter relating to accounts, to be Special Officer to assess the net amount payable under this section to the licensee, after making the deductions mentioned in this section. (7)(a) The Special Officer may call for the assistance of such officers and staff of the State Government or the State Electricity Board or the licensee as he may deem fit in assessing the net amount payable. (b) The Special Officer shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (Act V of 1908), when trying a suit, in respect of the following matters— (i) enforcing the attendance of any person and examining him on oath; (ii) compelling the production of documents; and issuing commissions for the examination of witnesses. The Special Officer shall also have such further powers as may be specified by the State Government by notification in the Gazette. (8) Where the gross amount payable to the licensee is (a) equal to the total amount to be deducted under this section, no payment shall be made to the licensee by the purchaser; (b) less than the total amount to be deducted under this section, the difference between the gross amount so payable and the total amount to be deducted shall on a certificate of the Special Officer be recoverable as arrears of land revenue; (9) Where any amounts not belonging to it have been deducted by the purchaser under clause (c), clause (e), clause (f) or clause (g) of sub-section (5) or recovered under sub-section (8), the liability of the licensee towards the State Government or other bodies or consumers or prospective consumers, as the case may be, shall, to the extent of the deduction and recoveries so made, stand discharged and the purchase shall in substitution of the licensee become liable towards them to that extent. (Amended/substituted in Section 7-A vide U.P. Act Nos.16 of 1975 and 14 of 1976 w.e.f. 4.2.1975) 17. Sections 7 and 8 of U.P. Act No. 16 of 1975 provide as under : “7. (Amended/substituted in Section 7-A vide U.P. Act Nos.16 of 1975 and 14 of 1976 w.e.f. 4.2.1975) 17. Sections 7 and 8 of U.P. Act No. 16 of 1975 provide as under : “7. Vesting of the undertaking in the purchaser.—Where an undertaking is sold under Section 5 or Section 6, then upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser under sub-section (3) of Section 5 or under sub-section (6) of Section 6, as the case may be, whichever is earlier— (i) the undertaking shall vest in the purchaser or the intending purchaser, as the case may be, free from any debt, mortgage or similar obligation of the licensee or attaching to the undertaking: Provided that any such debt, mortgage or similar obligation shall attach to the purchase money in substitution for the undertaking; (ii) the rights, powers, authorities, duties and obligations of the licensee under his licence shall stand transferred to the purchaser and such purchaser shall be deemed to be the licensee : provided that where the undertaking is sold or delivered to a State Electricity Board or the State Government, the licence shall cease to have further operation. 8. Provisions where no purchase and licence revoked with consent of licensee.—Where, on the expiration of any of the periods referred to in Section 6, sub-section (1), the undertaking is not purchased by the State Electricity Board, the State Government or the local authority, and the licence, is, on the application or with the consent of the licensee, revoked, the licensee shall have the option of disposing of all lands, buildings, works, materials and plant belonging to the undertaking in such manner as he may think fit : Provided that, if the licensee does not exercise such option within a period of six months, the State Government may proceed to take action as provided in Section 5, sub-section (4), proviso.” 18. Therefore the net effect of the aforesaid amendments was that the determination of purchase price of such undertakings where it has not completed by 4.2.1975 was to be made on the basis of “book value” instead of “market value” and this change resulted in a vital reduction in the amount payable to the erstwhile owner of the electrical undertakings purchased or taken over by the UPSEB. (A) VALIDITY OF U.P. ACT NO.16 OF 1975 19. (A) VALIDITY OF U.P. ACT NO.16 OF 1975 19. The constitutional validity of Section 7-A of the Act of 1910 as substituted by U.P. Act No.16 of 1975 as well as Section 7 of U.P. Act No.16 of 1975 was subject matter of challenge before the Hon’ble Calcutta High Court in the writ petition filed by M/s Upper Jumna Valley Electricity Supply Company Limited. The Hon’ble Single Judge struck down Section 5 of U.P. Act No.16 of 1975 whereby Section 7-A of the Act of 1910 was substituted as well as Section 7 thereof as unconstitutional being violative of Articles 14, 19(1)(f) and (g) and 31 of the Constitution of India. The special appeal filed by the U.P. State Electricity Board was dismissed vide judgment reported in AIR 1988 Cal 336 (U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others). However, in a Special Leave Petition filed by the UPSEB, the judgment of Hon’ble Calcutta High Court was reversed upholding U.P. Act No.16 of 1975 and the judgment is reported in AIR 2000 SC 2736, U.P.S.E.B. v. Upper Jamuna Valley Electricity Supply Co. Ltd. 20. Learned Counsel for the petitioner, however, contended that the Hon’ble Apex Court has not considered the question of discrimination in respect to such undertakings where the determination of price of the electrical undertaking purchased by the State Electricity Board was already finalised and in those cases where for one or the other reason, the determination was pending and could not be finalised. The Amending Act excludes from its purview such undertakings, which were purchased and the determination of price was already finalised prior to 4.2.1975, i.e., the date on which the U.P. Ordinance No.7 of 1975 was enacted substituting Section 7-A which was replaced by U.P. Act No.16 of 1975. He submits that the classification basis and on this ground also the amending provision was held violative of Article 14 of the Constitution of India by the Hon’ble Calcutta High Court but this aspect has not been touched by the Hon’ble Apex Court, since the foundation of the judgment of the Hon’ble Apex Court is the earlier cases decided upholding similar provisions, namely, Tinsukhia Electric Supply Co. Ltd. v. State of Assam, AIR 1990 SC123; Maharashtra State Electricity Board v. Thana Electric Supply Co., AIR 1990 SC153; and Vellore Electric Corporation Ltd. v. State of Tamil Nadu, AIR 1989 SC 1741 and in none of the aforesaid three cases, this question was involved. He, therefore, contended that the offending provisions are still bad being violative of Article 14 of the Constitution and the Apex Court verdict cannot be taken as a binding precedent since this issue has not been adverted to and decided. 21. In our view, submission is thoroughly misconceived. In U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra), the Hon’ble Apex Court has considered the validity of the impugned enactment on the anvil of Article 14 of the Constitution also, and referring to its earlier judgment in Maharashtra State Electricity Board v. Thana Electric Supply Co. (supra), the Hon’ble Apex Court in para-18 observed that the challenge on the ground of violation of Articles 14, 19 and 31 of the Constitution has not been accepted. The relevant observations are re-produced as under : “Thus, in this case this Court proceeded on the basis that Articles 19(1)(f) and 31 applied to the facts of that case. The Court still set aside the judgment of the High Court, which had upheld the challenge. This Court still held that the challenge on grounds of violation of Articles 14, 19 and 31 fails. The contention that compensation was not adequate and/or illusory was not accepted.” (Para-18) 22. The further contention of the learned Counsel for the petitioner is that in U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra), the question of unintelligible differentia regarding the basis of valuation based on the cut off date of 4.2.1975 has not been considered. In our view, it is not open to the petitioner to raise such issue challenging the vires of U.P. Act No. 16 of 1975, inasmuch as, the law laid down by the Hon’ble Apex Court cannot be allowed to be distinguished on the ground that certain issues or aspects were not raised or considered, particularly, when the issue pertains to the constitutional validity of the statutory provisions. 23. 23. In Director of Settlements, A.P. and others v. M.R. Apparao and another, AIR 2002 SC1598, the Hon’ble Apex Court has held : “The law which will be binding under Article 141 would, therefore, extend to all observations of points raised and decided by the Court in a given case. So far as constitutional matters are concerned, it is a practice of the Court not to make any pronouncement on points not directly raised for its decision. Supreme Court cannot be assailed on the ground that certain aspects were not considered or the relevant provisions were not brought to the notice of the Court (See AIR1970 SC1002 and AIR 1973 SC 794).” (Para-7) 24. Similarly in Suganthi Suresh Kumar v. Jagdeeshan, AIR 2002 SC 681 repelling a similar argument, as is sought to be raised by the petitioner in the present case, the Hon’ble Apex Court held : “It is impermissible for the High Court to overrule the decision of the Apex Court on the ground that Supreme Court laid down the legal position without considering any other point. It is not only a matter of discipline for the High Courts in India. It is the mandate of the Constitution as provided in Article 141 that the law declared by the Supreme Court shall be binding on all Courts within the territory of India. It was pointed out by this Court in Anil Kumar Neotia v. Union of India, AIR 1988 SC 1353 that the High Court cannot question the correctness of the decision of the Supreme Court even though the point sought before the High Court was not considered by the Supreme Court.” 25. In the case in hand, it is not disputed that the facts in U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra) were similar to the case of the petitioner. In Upper Jamuna (supra) the undertaking was taken-over at the midnight of 27/28.6.1964 and a sum of Rs. 9,36,868.86 was paid towards price determined by the UPSEB as per the provisions applicable at that time. However, Upper Jumna Valley Electricity Supply Company Limited disputed the quantum of the amount claiming higher amount including Solatium payable under Section 7-A of the Act of 1910 at Rs. 9,36,868.86 was paid towards price determined by the UPSEB as per the provisions applicable at that time. However, Upper Jumna Valley Electricity Supply Company Limited disputed the quantum of the amount claiming higher amount including Solatium payable under Section 7-A of the Act of 1910 at Rs. 9,14,480.78 and when the said claim was not accepted by the Board, the dispute arose which was referred to arbitration under Section 7-A (1) of the Act of 1910. When such matter was pending, the U.P. Act No. 16 of 1975 promulgated changing the very basis of the calculation of the amount payable to the undertaking purchased by the Board and the validity thereof was challenged. Therefore, the facts of the present case are similar to that of U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra) so far as the purchase of the undertaking prior to 4.2.1975 is concerned. The Hon’ble Apex Court upheld the validity of U.P. Act No. 16 of 1975. Some of the reasons relevant for the case in hand upholding the validity of Section 7-A as substituted by U.P. Act No.16 of 1975 as observed in U.P.S.E.B. v. Upper Jumna Valley Electricity Supply Company Limited and others (supra) are : (1) The concept of book value is an accepted accountancy concept, it cannot be held to be illusory. (2) The purchase of undertaking did not amount to acquisition of a chose in action or debt but what was purchased was an undertaking, which dealt with the material resource of the country. (3) There was no crystallization of any amount. The only right was a right to receive compensation, which was to be worked out on certain principles. (4) The Amending Act has only changed the method or principle on the basis of which the compensation is to be worked out. It cannot be held to be a piece of colourable legislation. (5) Lastly, the Hon’ble Apex Court clearly took the view that the dispute involved in U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra) was fully covered by Hon’ble Apex Court judgment in Tinsukhia Electric Supply Co. Ltd. v. State of Assam (supra), Maharashtra State Electricity Board v. Thana Electric Supply Co. (supra) and Vellore Electric Corporation Ltd. v. State of Tamil Nadu (supra). 26. Ltd. v. State of Assam (supra), Maharashtra State Electricity Board v. Thana Electric Supply Co. (supra) and Vellore Electric Corporation Ltd. v. State of Tamil Nadu (supra). 26. In these circumstances, it is not open to this Court to permit the petitioner to raise any further argument in his endeavour to re-agitate an issue already settled by the Hon’ble Apex Court. Such an attempt is neither permissible in law nor we are inclined to permit him to re-agitate this issue. We are, therefore, of the view that Section 7-A as substituted by U.P. Act No. 16 of 1975 as well as Section 7 of U.P. Act No. 16 of 1975 are valid as already held by the Hon’ble Apex Court in U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra). 27. The submission of the learned Counsel for the petitioner that the UPSEB vide its notice dated 12th October, 1971 having exercised its option to purchase undertaking mentioning the basis of determination of purchase price of the undertaking being market value, could not have changed the basis on account of subsequent amendments in effect is the plea of promissory estoppel. However, we have no hesitation in holding that the said contention is thoroughly untenable for more than one reason. 28. Firstly, the option was exercised by UPSEB in accordance with Clause-7 of the Licence, which provides the determination of the value of the undertaking according to Section 7 of the Act. The licence does not provide any basis for determination of the purchase price and on the other hand, states that the same would be in accordance with the provisions of the statute. Admittedly the statute has been amended from time to time and the determination of the value of the undertaking has been made by the Special Officer in accordance with the statute. In this view of the matter, it cannot be said that the UPSEB was bound to have the determination of purchase price of the undertaking based on market value merely on the basis of its notice dated 12.10.1971. In this view of the matter, it cannot be said that the UPSEB was bound to have the determination of purchase price of the undertaking based on market value merely on the basis of its notice dated 12.10.1971. The determination has been made in accordance with Clause 7 of the Licence read with Section 7-A of the Act of 1910 as amended in U.P. and were existing and applicable on the date of determination price as per the provisions made in the statute which is consistent with the conditions of licence and the statute. Secondly, it cannot be disputed that the determination of purchase price having been made as per the provisions of the statute. The principle of promissory estoppel do not apply against the statute. This exposition of law has been reiterated by the Hon’ble Apex Court in a catena of decisions and instead of burdening this judgment with all those cases it would be sufficient to refer some of the recent judgments : (1) A.P. Pollution Control Board-II v. Prof. M.V. Nayudu (Retd.) and others, (2001) 2 SCC 62 ; (2) M/s. Sharma Transport Represented by D.P. Sharma, v. Government of A.P. and others, AIR 2002 SC 322 ; (3) Pune Municipal Corporation and another v. Promoters and Builders Association and another, AIR 2004 SC 3502 (4) Bangalore Development Authority and others v. R. Hanumaiah and others, JT 2005(12) SC64. Thirdly, the doctrine of promissory estoppel operates on equity and public interest. The Hon’ble Apex Court in Mahabir Vegetable Oils (P) Ltd. and another v. State of Haryaya and others, 2006(3) SCC 620 observed as under : “The promissory estoppel operates on equity and public interest.” Thus, to attract the doctrine of promissory estoppel a representation on the part of one party to other to do or not to do something in order to give certain benefits and the actual change of position by the other party acting on such representation to its prejudice creating a situation where the position could not be reversed at all is necessary to be pleaded supported by relevant material on record. In Union of India and another v. Wing Commander, R.R. Hingorani (Retd.), AIR 1987 SC 808 the Hon’ble Apex Court held that before an estoppel can arise, there must be first a representation of an existing fact distinct from a mere compromise made by one party to other; secondly that the other party believing it must have been induced to act on the faith of it; and, thirdly that he must have so acted to his detriment and unless these three ingredients are demonstratively existing on record and duly pleaded, the plea of promissory estoppel cannot be raised. In S.B. International Limited etc. v. Assistant Director General of F.T. and others etc., JT 1996(1) SC 588 it was held that the applicability of the promissory estoppel is not a pure question of law. The person invoking the equitable rule of promissory estoppel is required to provide precise data in support of its plea and to establish the various ingredients to the rule. These principles have been reiterated by the Hon’ble Apex Court in M/s Larsen and Toubro Ltd. v. Union of India and others, AIR 2005 SC 4180 . Thus, it is well settled that in order to invoke the doctrine of promissory estoppel clear, sound and positive foundation must be laid in the petition itself by the party invoking the doctrine and bald expressions without any supporting material to the effect that the doctrine is attracted because the party invoking the doctrine has altered its position relying on the assurance of the Government would not be sufficient to press into aid the doctrine. This leads to the inevitable holding the plea of promissory estoppel is untenable and accordingly rejected. (B) CONTENTIONS 29. Now coming to various issues raised on the merit of the award of the Special Officer in respect to items disputed by the petitioner, we propose to discuss the issues raised in respect to different items separately as hereunder: (1) Supervision Charges 30. (B) CONTENTIONS 29. Now coming to various issues raised on the merit of the award of the Special Officer in respect to items disputed by the petitioner, we propose to discuss the issues raised in respect to different items separately as hereunder: (1) Supervision Charges 30. Section 7-A (2) Explanation provides that the book value of any fixed asset means its original cost and shall also comprise the purchase price paid by the licensee for the asset including the costs of delivery and all charges properly incurred in erecting and bringing the asset into beneficial use as shown in the books of the undertakings; and the cost of supervision actually incurred but not exceeding 15 percentum of the amount referred to in Para (i). 31. The claim of supervision charges to the extent of 15% is based on the aforesaid provision. The petitioner is claiming addition of 15% supervision charges, which has been disallowed by the Special Officer. The petitioner contended that he was entitled for supervision charges upto 15% for the following reasons: (1) The licensee was under statutory obligation to maintain accounts as per the provisions of Section 11 of the Act of 1910 and Rule 26 of the Electricity Rules, 1956 and under the aforesaid provisions there was no system to maintain separate head of “supervision charges”. (2) The ex-licensee being a public utility company, the rate of tariff was already fixed by the Government and for calculating the rate of tariff, provisions contained in VIth Schedule of the Act of 1948 were taken into consideration which includes the “supervision charges” as contemplated in sub-clause (c) of Clause (b) of Para XVII of the said Schedule. (3) At the stage of erection and during the phase of operation, “supervision charges” are normally part of the staff expenditure and there cannot ordinarily be any separate head of “supervision charges”. They were computed on notional basis and it is unrealistic approach to expect specific item of expenditure in the accounts debited as “supervision charges”. 32. The Special Officer (Electricity) has disallowed the claim towards “supervision charges” on the ground that the petitioner, admittedly, failed to produce any material to show “supervision charges” actually incurred by the undertaking. The petitioner claimed that the same may be allowed on notional basis but the Special Officer has rejected since it was contrary to statutory provision. 32. The Special Officer (Electricity) has disallowed the claim towards “supervision charges” on the ground that the petitioner, admittedly, failed to produce any material to show “supervision charges” actually incurred by the undertaking. The petitioner claimed that the same may be allowed on notional basis but the Special Officer has rejected since it was contrary to statutory provision. The statutory provisions quoted above makes it clear that “supervision charges” are allowable only to the extent of cost actually incurred towards “supervision charges”. The cost of “supervision charges”, if more than 15%, the statute restrict it to 15% and it cannot be more than 15% but there is no minimum amount permissible to be computed towards the cost of “supervision charges”. If actual cost cannot be ascertained due to want of material, in our view, the Special Officer’s findings cannot be said to be erroneous, inasmuch as, the law requires addition of such cost towards “supervision charges”, which is actually incurred. Notional computation is not contemplated. It is the responsibility of the undertaking by placing the relevant material to show the actual cost of “supervision charges” incurred by it. If it fails to place any material to show that it has incurred any cost towards “supervision charges”, there is no occasion for the Special Officer (Electricity) to allow hypothetical and imaginary cost towards “supervision charges”. The Special Officer (Electricity) could not and ought not to have allowed something contrary to the statutory provisions. 33. Similar argument came to be considered before the Hon’ble Apex Court in Pilibhit Electric Supply Co. (P). Ltd. and another v. Special Officer (Electricity) and another, 1996 (11) SCC 288 wherein the Hon’ble Apex Court upholding the decision of the Special Officer (Electricity) denying the cost of “supervision charges” under the aforesaid provision, observed as under : “A mere look at Explanation (ii) to Section 7-A(2) shows that before claiming permissible supervision costs not exceeding 15% of the purchase price of the asset it has to be shown by the appellant that it had actually incurred supervision costs by engaging staff for supervising these fixed assets. In this connection the learned Senior Counsel for the appellant submitted that all the relevant documents were in the custody of the Board which could have been easily called for by the Special Officer for his scrutiny. In this connection the learned Senior Counsel for the appellant submitted that all the relevant documents were in the custody of the Board which could have been easily called for by the Special Officer for his scrutiny. Even that apart the balance sheets which were available on the record of the Special Officer showed that the appellant had bifurcated various costs incurred on the staff and one of the specified items was the cost of supervisory staff incurred by the appellant during the year. A mere look at a specimen of one such balance-sheet shown to us indicated that a lump sum figure was shown in the balance-sheet as the amount spent on supervisory staff. It is difficult to appreciate how this lump sum amount could be treated as the cost of supervision actually incurred by the appellant by way of meeting the wages of the staff engaged for supervising the concerned fixed assets which were the subject-matter of acquisition. It is easy to visualize that supervisory staff may be engaged by the licensee not only for supervising the fixed assets but also the office staff. Even that apart there would be a watchman kept for supervising not only the factory premises consisting of the relevant fixed assets but also for supervising the cash room, compound and other properties of the licensee. Unless clear evidence was available on record pointing to the actual amount of cost incurred by the licensee from year to year for meeting the wage bill of supervisory staff which was entrusted with the sole duty of supervising over the concerned fixed assets which ultimately vested in the State and the Electricity Board, it could not be said that the appellant had made out a case for grant of costs of supervision actually incurred by it in maintaining these fixed assets and that it had satisfied the requirements of Explanation (ii) to Section 7-A(2). Therefore, the second ground on which the Special Officer rejected the claim cannot be found fault with. Consequently the first claim for additional compensation is found to be devoid of any substance and is, therefore, rejected.” 34. The petitioner has not disputed its inability to produce any evidence to show cost of “supervision charges” actually incurred. Therefore, the second ground on which the Special Officer rejected the claim cannot be found fault with. Consequently the first claim for additional compensation is found to be devoid of any substance and is, therefore, rejected.” 34. The petitioner has not disputed its inability to produce any evidence to show cost of “supervision charges” actually incurred. It has also not disputed or contradicted the finding of the Special Officer (Electricity) in this regard as contained in the impugned order and award, reproduced as under : “They requested that these supervision charges may be allowed to them on a lump-sum percentage on the basis of such supervision charges incurred by other undertakings in the State. They showed their inability to produce any further documentary evidence vide which the percentage of supervision charges actually incurred by the undertaking may be worked out.” 35. During the course of arguments, learned Counsel for the petitioner has only referred to various reasons on account whereof it could not be possible to the petitioner to show the actual cost of “supervision charges” incurred by it but it has not disputed the factum of absence of any material to show the cost actually incurred towards “supervision charge”. In the absence of any material, on the basis of hypothesis, the amount under the aforesaid provision cannot be allowed. Thus, the claim of the petitioner towards “supervision charges” is to be rejected. We, therefore, do not find any fault in the order and award of the Special Officer (Electricity) rejecting the aforesaid claim of the petitioner. (2) Assets Created from Contribution made by Consumers Local Bodies 36. The petitioner claims an addition of Rs. 3,39,485.74 being the assets created from the consumer’s contribution before 5.9.1959 and contended that the assets created prior to, 5th September, 1959 are not deductible. 37. The Special Officer in the impugned award at pages 35-38 has considered the aforesaid item. It appears that the total amount with respect to the assets created from contributions made by the consumers/local bodies from the date of inception of the company till the date of take over worth Rs. 25,04,755.00, out of which as per the claim of the petitioner company, assets worth Rs. 60,885.24 were created from the consumers’ contribution before 1.4.1951 and the statement of accounts to this effect were also placed before the Special Officer. 25,04,755.00, out of which as per the claim of the petitioner company, assets worth Rs. 60,885.24 were created from the consumers’ contribution before 1.4.1951 and the statement of accounts to this effect were also placed before the Special Officer. However, the Special Officer has rejected the entire claim for adding the cost of the aforesaid assets, i.e., the service lines towards determination of the amount payable to the petitioner and has excluded the entire amount of Rs. 25,04,755.00 from the book value of the capital assets on account of the cost of works constructed by the consumers’ contributions/local bodies. 38. The learned Counsel before coming to the legal submission, pointed out that the claim under the aforesaid head has been rejected by the Special Officer on the advice it has obtained from the Legal Remembrancer to U.P. Government through Secretary Power Department vide G.O. No. 982-P-3/78-23 dated 20.4.1978. It is submitted that the said advice was obtained behind the back of the petitioner and the procedure adopted by the learned Special Officer was in violation of the principles of natural justice and otherwise also, it is vitiated in law. He further submits that if the assets would have been acquired or purchased prior to 5.5.1959, the service lines, even if, constructed by the contribution made by the consumers, would have been the assets of the petitioner company and were liable to be included for determination of the amount or compensation payable to the petitioner since Section 7-A was amended on and after 5th May, 1959 and not prior to that. 39. Considering the later argument first, the submission is ex facie mis-conceived. It is not the case of purchase of undertaking, by the U.P.S.E.B. prior to 5th May, 1959. Admittedly, the undertaking of the petitioner has been taken over by the Board on the expiry of 50 years of period, i.e. with effect from 14/15th December, 1972 and, therefore, the law, as it was applicable on the said date, would govern the amount of compensation payable to the petitioner and not the proportionate determination of the assets with respect to time and law, as it was applicable from time to time. It is the date of purchase or transfer, which will govern the principles for determination of compensation payable to the petitioner, and in our view, the submission advanced by the learned Counsel for the petitioner has no force. 40. It is the date of purchase or transfer, which will govern the principles for determination of compensation payable to the petitioner, and in our view, the submission advanced by the learned Counsel for the petitioner has no force. 40. Further the reliance placed by the learned Counsel for the petitioner on Upper Ganges Valley Electricity Supply Co. Ltd. v. U.P. Electricity Board, AIR 1973 SC 683 is totally mis-placed, since the aforesaid case does not support at all the contention of the petitioner advanced above. He has stress on paragraphs 18 to 22 of the judgment, and the following observations made in para-21. "The conditions of the licence, the provisions of the Act and the legal position point only in one direction: that the appellant is entitled to receive compensation for the service lines laid at the cost of the consumers. In the award, the Umpire has made calculations for arriving at the market value of the appellant’s undertaking and has expressly excluded therefrom the “value of the portion of services installed at the cost of the consumers.” In making this exclusion, the Umpire misconducted himself in law, thereby rendering the award erroneous on its face.” 41. No doubt, the law laid down in para-21 of the aforesaid judgment supports the contention of the petitioner and we also would have followed the same provided the undertaking of the petitioner itself would have been acquired or purchased or transferred to U.P.S.E.B. prior to 4/5th May, 1959. This aspect has been clarified in Upper Ganges Valley Electricity Supply Co. Ltd. v. U.P. Electricity Board (supra) itself. After referring to this argument the Hon’ble Apex Court in para-22 held : "The reason for this error may easily by this: Under Section 7 of the Act to which we have called attention, the licensee was entitled to the “payment of the value of all lands, buildings, works” etc. This section, along with certain others, was amended by the Electricity (Amendment) Act, 32 of 1959, which came into force on September 5, 1959. By this amendment, a new Section 7A was inserted in the Act in order to provide for the “Determination of purchase price”. Under the relevant part of sub-section (2) of that section, the market value of an undertaking is to be the value of all lands, buildings, works etc. other than “service lines....... By this amendment, a new Section 7A was inserted in the Act in order to provide for the “Determination of purchase price”. Under the relevant part of sub-section (2) of that section, the market value of an undertaking is to be the value of all lands, buildings, works etc. other than “service lines....... which have been constructed at the expense of consumers.” The appellant’s undertaking having been acquired on 4/5 May, 1959, the provisions of old Section 7 and not of the newly added Section 7A would govern his rights. The Umpire made his award on November 27, 1961 relying, probably, on Section 7A which had no application.” 42. The attempt on the part of the petitioner to create a distinction on the basis of the period on which the assets were created is misconceived and finds no support from the statute. Moreover, this question has not rested here itself, inasmuch as, similar issues were raised subsequently in respect to the electrical undertakings purchased or acquired by the Board subsequent to 5th September, 1959 and throughout similar contentions have been negated. 43. In Tinsukhia Electric Supply Co. Ltd. v. State of Assam (supra) a question was raised that the service lines are the property of the licensee but they have been excluded by the amended Section 7-A of the Act of 1910 and, therefore, it is justified to exclude the entire service line from the computation of net wealth of the licensee. Repelling this contention, the Apex Court held that the service lines are not to be included for the purpose of determination of the amount payable to the ex-licensees for the reason that the new licensee would also be under an obligation not only to maintain and repair those lines but also to replace them when they become unserviceable. The Court also referred to its earlier judgment in Calcutta Electric Supply Corporation v. Commissioner of Wealth Tax, AIR 1971 SC 2447 where at page 2450, after referring Section 7-A of the Act of 1910 the Court observed : “It is true that in view of Sec. 7(A)(2) of the Electricity Act, in computing the market value of the undertaking sold under sub-section (1) of Section 5 of that Act the value of service lines which had been constructed at the expense of the consumers will not be taken into consideration. The reason for this provision is obvious. The reason for this provision is obvious. It will be the duty of the new licensee to not only maintain and repair those lines but also to replace them when they become unserviceable.” 44. The above observation was quoted with approval by the Constitution Bench in Tinsukhia Electric Supply Co. Ltd. v. State of Assam (supra) in para-42 of the judgment and after quoting the aforesaid passage, the Court observed : “Under the law when a requisition is made by an intending-consumer for electrical-energy, the licensee has an obligation to lay down Service-lines. But, according to the provisions the entire cost of service-line is not required to be borne by the licensee. The licensee is entitled to call upon the consumer to pay part of the cost of service-line which may in a given case amount to a substantial part in accordance with the provisions in the Schedule to the Electricity Supply Act.” 45. The Hon’ble Apex Court also approved the reasoning of Hon’ble Gujarat High Court in Dakor-Umreth Electricity Company Ltd. v. State of Gujarat, (1972) 13 Guj LR 88 at page 106 wherein the High Court held : “...... The question is whether the exclusion of such service lines from the valuation can be said to have rendered the principle of compensation irrelevant or inappropriate. We do not think so... The petitioner is not constituted the owner of these service lines for all purposes. Moreover, even after the purchase, these service lines would continue to be utilized for supplying electrical energy to the consumers who paid for them. It would be most inequitable in these circumstances to provide for payment of compensation to the petitioner for these service lines. There is no reason in logic or principle why the petitioner should be allowed to make unjust and undeserved profit from transfer of these service lines for which it has paid nothing and which are not the product of its own labour.....” 46. To the same effect is the view taken in Vellore Electric Corporation Ltd. v. State of Tamil Nadu (supra) and in para-13 of the judgment the Hon’ble Apex Court rejected a similar contention. Recently in Pilibhit Electric Supply Co.(P). To the same effect is the view taken in Vellore Electric Corporation Ltd. v. State of Tamil Nadu (supra) and in para-13 of the judgment the Hon’ble Apex Court rejected a similar contention. Recently in Pilibhit Electric Supply Co.(P). Ltd. and another v. Special Officer (Electricity) and another (supra) the issue was not directly involved but while considering the question of depreciation on the total assets acquired, it was held that the cost of assets raised from the contribution of the consumers, namely, service lines, since are excluded under Section 7-A (2), and, therefore, the depreciation of the aforesaid amount also could not have been taken into account. 47. Applying the aforesaid principles either the service lines created from the contribution of the consumers prior to 5th September, 1959 or subsequent, would make no difference since the obligation of the UPSEB after taking over the undertaking of the petitioner in respect to maintenance, repair and replacement of service lines would continue in the same manner and to the same extent. Therefore, in our view, attempt on the part of the petitioner to draw a line in respect to the assets towards service line with reference to the date of amendment of Section 7-A is wholly illusory, non est and contrary to law, as discussed above. Accordingly, the claim under this head is rejected and we hold that the Special Officer was right in excluding the entire service lines while determining the amount payable to the petitioner. 48. Since in law we find that the ultimate conclusion drawn by the Special Officer in respect to the aforesaid item is correct, therefore, we are not inclined to interfere with the impugned award only on the ground that the Special Officer obtained and acted upon the advice it has received from the Legal Remembrancer. No doubt the Special Officer while exercising power under Section 7-A was a quasi-judicial authority and expected to consider and decide the matter on his independent decision without being influenced from any external material. It was not appropriate onhis part to obtain an opinion from the Legal Remembrancer of the U.P. Government, particularly without bringing the said material to the notice of the petitioner and giving it an opportunity to make its submission against the said opinion. We find that the Hon’ble Apex Court in Pilibhit Electric Supply Co. (P). It was not appropriate onhis part to obtain an opinion from the Legal Remembrancer of the U.P. Government, particularly without bringing the said material to the notice of the petitioner and giving it an opportunity to make its submission against the said opinion. We find that the Hon’ble Apex Court in Pilibhit Electric Supply Co. (P). Ltd. and another v. Special Officer (Electricity) and another (supra) has also expressed its total disapproval to a similar exercise undertaken by the Special Officer of obtaining opinion from the Legal Remembrancer and the Court has seriously deprecated this approach. However, the issue under consideration on merits is no more res-integra having already been settled by the Hon’ble Apex Court in various cases, as discussed above and, therefore, despite the fact that we have not approved the manner in which the Special Officer decided this aspect after obtaining opinion from the Legal Remembrancer yet on merits so far as this item is concerned, the ultimate decision of the Special Officer is upheld and needs no interference. (3) Deduction for Depreciation of Assets Created from Consumers Contribution 49. The Special Officer, as discussed above, from page 35 to 38 has excluded the cost of service lines created from the contributions made by the consumers and, therefore, a sum of Rs. 25,04,755/- has been excluded from book value of capital assets. However, while calculating the depreciation the same has been calculated on the total assets of Rs. 62,32,075.13 which included the assets created from the contribution made by the-consumers/local bodies, i.e., service lines. 50. Learned Counsel for the petitioner submits that in this way the impugned order and award of the Special Officer has resulted in double loss to the petitioner, inasmuch as, on one hand from the total value of the assets the cost of service line was already excluded in determining compensation payable to the petitioner but simultaneously for the purposes of depreciation, the cost of service line has been included in the assets. The manner in which the Special Officer has calculated the aforesaid item as apparent from Annexure-1 to the impugned award at page 21 of the paperbook may be demonstrated as under : 1(a). Book value of all completed works in beneficial use pertaining to the undertaking and taken over by the U.P. State Electricity Board as per Annexure-IV ....Rs. 62,32,075.13 Loss. Book value of all completed works in beneficial use pertaining to the undertaking and taken over by the U.P. State Electricity Board as per Annexure-IV ....Rs. 62,32,075.13 Loss. (i) Assets created at the cost of local bodies for street lighting and works paid for by consumers as per Annexure-IV (-)....Rs. 25,04,744.00 (ii) Depreciation calculated in accordance with the Sixth Schedule read with the Seventh Schedule to the Electricity (Supply) Act, 1948 as per Annexure-IV (-)...Rs. 23.35.769.81 Rs. 13,91,550.32 Book value as admissible under Section 7-A(2) (i) of Indian Electricity Act, 1910. Rs.13,91,550.32 51. The aforesaid shows that after excluding the cost of service line under Section 7-A (2) of 1910 Act the total book value of the cost of capital assets has been calculated by the Special Officer by deducting Rs. 25,04,755.00 from Rs. 62,32,075.13. However, Annexure-1 to the award when read with the discussions made at page 38-39 thereof shows that the depreciation of Rs. 23,35,769.81 has been arrived at on the total capital assets of Rs. 62,32,075.13. Obviously, when the cost of service lines beyond assets created at the cost of the consumers was already excluded from the book value of the capital assets taken over by the Board, for the purposes of depreciation also, the said assets ought not to have been taken into account. It appears that the petitioner raised this objection before the Special Officer but on behalf of the Board it was contended that the depreciation is to be calculated at the entire assets including the assets of the consumers’ contribution, and the Special Officer has acted in conformity with the stand of the Board. The rival submissions raised before the Special Officer are apparent from page 293 of the impugned award, which may be reproduced as under : “At this stage the ex-licensees stated that from the above amount of depreciation, the depreciation on the works constructed at the cost of the consumers has to be excluded in accordance with Section 7-A (2)(i) of the I.E. Act, 1910 and this amount would work out to approximately Rs. 10,00,000.00 on the contribution of the consumers. Inclusion of this depreciation will mean deducting the depreciation twice on the works created by the consumers. 10,00,000.00 on the contribution of the consumers. Inclusion of this depreciation will mean deducting the depreciation twice on the works created by the consumers. The total cost of the works constructed at the cost of the consumers including the depreciation thereon has already been deducted first from assets and the depreciation on these assets is also being proposed for deduction again. Sri N.P. Jindal stated the viewpoint of the Board has been expressed in Chief Engineer (Com.) D.O. Letter No. 381-BC(L)/80 Genl. Dated 14.12.76 to the Special Officer (Electricity) in which it has been stated that the depreciation should be calculated on all the assets including the assets created with consumer’s contribution. The ex-licensees requested that in view of the letter produced by the UPSERB (a copy of which has also been handed over to them by the representative of the Board) they would like to give further arguments in this connection at the next meeting.” 52. This question, in our view, is squarely covered by the Honble Apex Court verdict in Pilibhit Electric Supply Co.(P). Ltd and another v. Special Officer (Electricity) and another (supra). A similar argument was raised on behalf of the ex-licensees that the Special Officer had erroneously deducted from the book value of the assets of the petitioner Rs. 2,48,718.00 being the purported depreciation on the work paid for by the consumers and it amounts to double deduction. Considering this question in para-10 to 12 of the judgment the Hon’ble Apex Court in para-11 held as under: “It is, of course, true that as mentioned in paragraph XII of the Sixth Schedule while considering the question of total capital base which includes the assets consisting of service lines for installation of which contributions are made by consumer towards the construction of such service lines, the net cost of such service lines after deducting such contributions has to be included in the costs of such fixed assets. It is also true that, however, for computing the depreciation as per paragraph VI on such assets, wherein consumers have contributed towards their acquisition, the total original cost of construction of the service lines had to be taken into account. The Special Officer has applied paragraph XII whole had while deducting the depreciation from the book value of all completed works which are acquired from the licensee as per Section 7-A(2) (i). The Special Officer has applied paragraph XII whole had while deducting the depreciation from the book value of all completed works which are acquired from the licensee as per Section 7-A(2) (i). In our view the said approach of the Special Officer is ex facie unjustified. The reasons are obvious. Paragraph XII of the Sixth Schedule to the Supply Act deals with a special type of asset, namely, service lines which are installed by the licensee wherein the consumers have contributed towards the cost of construction of such service lines. For this type of assets, in computing the capital base of the licensee, the contribution by the consumers has to be excluded but for computing depreciation under paragraph VI for such assets, namely, the service lines, the total original cost of construction of service lines has to be taken into account which may include the cost of construction of service lines incurred by the licensee as well as the other part of the component of the cost of construction of service lines which has come from the pockets of the consumers. But entire paragraph XII deals with only one type of assets, namely, service lines construction cost of which is wholly or partially borne by the consumers. Paragraph VI of Schedule VI, however, is general in nature and covers all types of fixed assets and the method of computation of depreciation on these fixed assets. It is axiomatic that fixed assets employed in the business of electricity supply may consist of those assets which are wholly acquired at the cost of the licensee and may also include assets like service lines which may partly be acquired and installed at the cost of the licensee and partly out of contribution of the consumers who would be interested in getting electrical supply at their own premises and for that purpose they may be willing and may be made to pay contribution towards extension of service lines to their premises. Therefore, reference to service lines in paragraph XII of Schedule VI is with a view to finding out as to how depreciation has to be computed for such a special type of asset, namely service lines wherein consumers have also contributed towards their installation. Therefore, reference to service lines in paragraph XII of Schedule VI is with a view to finding out as to how depreciation has to be computed for such a special type of asset, namely service lines wherein consumers have also contributed towards their installation. Consequently on a conjoint reading of paragraph VI and paragraph XII of Sixth Schedule the depreciation on such service lines installed by drawing upon the contributions from the consumers is required to include the total original cost of construction of such service lines and that would necessarily include the component of the amount of cost contributed by the consumers. However that has nothing to do with the computation of depreciation on the assets which are acquired by the acquiring authority under Section 6-A read with Section 7-A(2)(i). It is now well settled that service lines whose installation had been paid for by the consumers are not to be compensated for and they vest in the acquiring authority under Section 6-A read with Section 7-A free of cost of payment of compensation to the licensee. The logic underlying this settled legal position is that as the licensee had not spent from his pocket for installing such an asset, he was not required to be compensated for that part of the asset, which was paid for by consumers. A mere look at Section 7-A(2)(i) shows that the gross amount payable to such licensee for acquiring his assets amongst others has to consist of an amount of the book value of all completed works in the beneficial use pertaining to the undertaking. While computing such book value of acquired assets the works paid for by the Consumers have to be ignored and omitted from consideration. Therefore, the amount of book value computed as per Section 7-A(2)(i) will consist of only those works which are for beneficial use of the undertaking which was installed and acquired by the licensee at its own cost. Having computed this amount the next question survives about deducting the depreciation on such acquired assets. That would naturally imply deduction of depreciation on such assets from the amount so computed being the book value of the completed works installed and acquired at the cost of the licensee. Having computed this amount the next question survives about deducting the depreciation on such acquired assets. That would naturally imply deduction of depreciation on such assets from the amount so computed being the book value of the completed works installed and acquired at the cost of the licensee. If these are the assets whose book value has to be computed as per Section 7-A(2)(i) the question of deduction from that amount would necessarily imply deduction of depreciation on these very assets. In other words the field is clearly earmarked both for computation of the book value of the concerned assets as also from deduction of depreciation on such assets as enjoined by the second part of Section 7-A(2)(i) itself. It is axiomatic that before any depreciation is deducted from the computed book value of an asset it should be for the same asset whose book value has been ascertained and from that value depreciation is to be deducted. It cannot be that for computing the book value of licensee’s assets only self-financed assets are to be taken into consideration and not the works paid for by the consumers but while deducting from this very amount of book value the depreciation is to be deducted qua not only the assets whose book value is computed but also qua the assets belonging to somebody else like the consumers who have paid for the works. This would on the face of it be very anomalous and unfair. It is also pertinent to note that from the book value of the assets which were financed by the licensee as computed as per Section 7-A(2)(i) when a question arises about deducting the depreciation, only the calculation of such depreciation on the concerned asset is to be done in accordance with Sixth Schedule because the words advisedly used by the Legislature in Section 7-A(2)(i) in this connection are less depreciation calculated in accordance with the Sixth Schedule read with the Seventh Schedule. Therefore, only the method of calculation of depreciation has to be applied by way of reference to the Sixth Schedule. But the type of asset for which depreciation has to be computed is not to be gathered from the Sixth Schedule. Therefore, only the method of calculation of depreciation has to be applied by way of reference to the Sixth Schedule. But the type of asset for which depreciation has to be computed is not to be gathered from the Sixth Schedule. It has to be gathered from the very first part of Section 7-A(2)(i), namely, only self-financed fixed assets whose book value is to be computed by the Special Officer for payment to the licensee and from that amount depreciation is to be deducted which would necessarily mean depreciation on the very same asset which has undergone the book valuation as per Section 7-A(2)(i). If for calculating the book value of such assets the works paid for by the consumers are to be excluded they necessarily cannot be included for the purpose of ascertaining deductible depreciation on such assets.” 53. The Hon’ble Apex Court in the above case also rejected the reasoning that the licensee having obtained benefit of such depreciation under the Income Tax Act or under any other statutory provision is not liable for deduction of the said amount from the total amount of book value for the purpose of depreciation and held that the said consideration is totally irrelevant for deciding the question whether the determination of depreciation of the concerned assets on book value is to be computed as per Section 7-A(2) (1) and it further held as under : “In our view the Special Officer was patently in error when he computed the depreciation on the assets under Section 7-A(2)(i) by adding the amount of depreciation on the service lines which were paid for by the consumers. Reference to paragraph XII of Sixth Schedule in this connection was wrongly made and the said paragraph was wrongly pressed in service by the Special Officer. In this connection it has also to be kept in view that the amount of Rs. Reference to paragraph XII of Sixth Schedule in this connection was wrongly made and the said paragraph was wrongly pressed in service by the Special Officer. In this connection it has also to be kept in view that the amount of Rs. 2,48,718/- being the depreciation amount on the works constructed at the cost of consumers was not disputed by the Board and the only contention of the Board before Special Officer was that as per paragraph XII of Sixth Schedule the said amount of depreciation was also to be deducted from the book value of the assets acquired by the Board under Section 6-A read with Section 7-A. As the reliance placed on paragraph XII of Sixth Schedule by the Special Officer is found by us to be unjustified and as the amount of depreciation deducted from the book value on this score is undisputedly Rs. 2,48,718,81 this amount of depreciation deducted from the book value on this score is undisputedly Rs. 2,48,718.81 this amount must be treated to have been wrongly deducted from the book value by way of depreciation on consumer-financed assets, namely, service lines.” 54. In the present case also the contention of the petitioner on this question has been discussed by the Special Officer in the impugned award from page 42 to 54 and referring to Rule 6 of the Rules framed under the Act of 1948, the Special Officer has rejected the contention of the petitioner relying on the opinion of the Legal Remembrancer. Since the reasoning and the method adopted by the Special Officer in respect to depreciation on assets created from consumers’ contribution is squarely covered by the judgment of the Hon’ble Apex Court in Pilibhit Electric Supply Co. (P). Ltd. and another v. Special Officer (Electricity) and another (supra) and, therefore, to that extent the impugned award cannot be sustained and the petitioner is entitled to have the deduction of amount of depreciation on the assets created from the consumers’ contribution. There is no dispute on the amount of such depreciation, which is mentioned at page 42 of the impugned award being Rs. 9,88,520.13. It results that in place of the amount of depreciation of Rs. 23,35,796.11, the Special Officer ought to have deducted only Rs. 13,47,275.98.