JUDGMENT Hon’ble Sudhir Agarwal, J.—The petitioner M/s Farrukhabad Electric Supply Company Ltd. has assailed the award dated 26.10.1977 of Special Officer (Electricity) appointed under Section 7-A (6) of the Indian Electricity Act, 1910 (hereinafter referred to as 1910 Act’) amended vide U.P. Amendment and Validation Act, 1975 (hereinafter referred to as ‘U.P. Act No. 16 of 1975’) determining the net amount payable under Section 7-A of 1910 Act as a result of revocation of licence of the petitioner for supply of electricity in the city of Farrukhabad-cum-Fatehgarh with effect from 1.12.1975. The Special Officer as computed and determined the liability of the petitioner to the tune of Rs. 14,65,783 payable to the respondent No. 1. The petitioners have also challenged the validity of Section 7 and 7-A of 1910 Act as amended by U.P. Act No. 16 of 1975 in the State of U.P. 2. The facts in brief giving rise to the present dispute are that the petitioner No. 1, a company registered under the provisions of Companies Act was incorporated with the principal object of generation and distribution of electricity. The petitioner No. 2 is a share holder of the petitioner No. 1. In the year 1934, the petitioner was granted licence under Section 3 of 1910 Act for distribution of electricity in the city of Farrukhabad-cum-Fatehgarh. With effect from 1.12.1975, the licence of the petitioner was revoked by respondent No. 1 in exercise of its power under Section 4 of the Act whereupon the State Government appointed a Special Officer under Section 7-A(6) of the 1910 Act for computation of net amount as a result of revocation of licence and transfer of electricity distribution undertaking of the petitioners-company to the respondent No. 1. The Special Officer has given its award dated 26.10.1977 whereby it held the petitioner liable to pay Rs. 14,65,783 to the respondent No. 1. The petitioners have challenged the aforesaid award, besides the validity of Section 7 and 7-A of the Act, contending in brief as under : (A) Section 7 and 7-A as amended by U.P. Act No. 16 of 1975 altering the basis of determining the net amount payable to the licensee from market value to book value, are ultra vires to Articles 14, 19 and 31 of the Constitution of India. (B) The award of the Special Officer has been assailed on merits in respect to the following items : (1) Development reserve.—The special Officer has allowed deduction only of the amount which was remaining and available at the time of takeover and not the entire amount entrusted by the petitioners company under the head Development Reserve. (2) Deduction of consumers contribution, basically toward service lines (3) Gratuity (4) Non allowing appropriation against future profits and amount towards goodwill (5) Deduction of wages for the period of earned leave of workers (6) Depreciation (7) Deduction on account of electricity duty 3. We have heard Sri B.D. Mandhyan, Senior Advocate, assisted by Sri Satish Mandhyan for the petitioner and Sri B.P. Singh and learned Standing Counsel for the respondents. 4. So far as the validity of Section 7 and 7-A as amended by U.P. Act No. 16 of 1975 is concerned, the same has already been upheld by the Apex Court in UPSEB v. Upper Jamuna Valley Electricity Supply Co. Ltd., AIR 2000 SC 2736 which has been followed by this Court also in Saharanpur Electric Supply Company Limited and another v. State of Uttar Pradesh and others, 2006 (6) ADJ 670 , wherein we have held as under : “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).” 5. The learned Counsel for the petitioner could not dispute that the aforesaid issue is squarely covered by the aforesaid judgment and could not raise any issue so as to pursue us to take a different view in this case. We, accordingly, uphold Section 7 and 7-A as amended by U.P. Act No. 16 of 1975. 6. Now coming to the various aspects on which award of the Special Officer has been challenged by the petitioner, we propose to deal with each item separately as under : (1) Development Reserve : 7. On the matter of development reserve, the legal position is very clear. This Court has already considered this aspect in Saharanpur Electric Supply Company Limited (supra) and referring to the Apex Court’s decision in Tinsukhia Electricity Co. On the matter of development reserve, the legal position is very clear. This Court has already considered this aspect in Saharanpur Electric Supply Company Limited (supra) and referring to the Apex Court’s decision in Tinsukhia Electricity Co. Limited v. State of Assam, 1989 (3) SCC 709 this Court has observed as under : “In our view, the position in respect to Development Reserve is very clear. In Tinsukhia Electric Supply Co. Ltd. v. State of Assam (supra) the Hon’ble Apex Court read the statutory provisions in the manner that if any part of the reserve is invested in “fixed assets” and the reserves in the form of “fixed assets” are taken over pursuant to the acquisition, what remains to be accounted for by the licensee is only the amount remains balance in the concerned accounts. Meaning thereby, in case the amount under the “Development Reserve” having already been invested in the form of fixed assets, that is already transferred to the Board and in case the amount is not invested and remained with the ex-licensee, the same has to be transferred by it. The Hon’ble Apex Court in U.P. State Electricity Board v. Upper Jumna Valley Electricity Supply Company Limited and others (supra) also observed that the “development reserve” is available for investment in the business of electricity supply of the undertaking.” 8. From the written argument submitted by the petitioner, this legal position appears to be accepted by the petitioner also. In the light thereof, we have perused the impugned award. The Special Officer has dealt with the matter of Development Reserve in para-9 on page-152 of the paper book. The Special Officer has dealt with the objection of the petitioner where he claimed that the amount invested in the business of electricity should be excluded and the only balance under the head “Development Reserve” should be required to be deducted. It is not the case of the petitioners that they placed any material before the Special Officer demonstrating that the amount of Development Reserve was invested into fixed assets which have already stood transferred to U.P. State Electricity Board (hereinafter referred to as ‘UPSEB’) and, therefore, only the remaining amount it was allowed to transfer. On the contrary, what they claim is that the amount was invested in the business of electricity and that should not have been taken into account. On the contrary, what they claim is that the amount was invested in the business of electricity and that should not have been taken into account. In our view, the Special Officer has rightly rejected the aforesaid contention of the petitioner and in the light of the Apex Court’s decision in Tinsukhia Electricity Co. Limited (supra) and Upper Jamuna Valley Electricity Supply Co. Ltd. (supra), we find the aforesaid view of the Special Officer is consistent with the law laid down by the Apex Court. It was incumbent upon the petitioners to show that the Development Reserve was utilized for creating fixed assets and it was also incumbent upon the petitioners to place relevant materials in support thereof. Having failed to place any such material, it would not have been allowed to get the amount of Development Reserve excluded which it had utilized in the course of business of electricity and not specifically invested in fixed assets. As already observed by this Court in Saharanpur Electric Supply Company Limited (supra), under Clause V-A of Schedule VI of Electricity (Supply) Act, 1948 (hereinafter referred to as the ‘1948 Act’), the petitioner was under a statutory obligation to utilize funds available under the head “Development Reserve” for creating fixed assets and not for general utilization in the business of electricity. We, therefore, do not find any error in the view taken by the Special Officer and the contention of the petitioner to the extent that Development Reserve has wrongly been calculated and disallowed is, thus, rejected. (2) Deduction of consumers contribution, basically towards service lines : 9. It is contended that the consumers contribution received by the petitioners was invested in the undertaking and the assets created thereby were transferred to UPSEB, therefore, the petitioner was not liable for deduction of any amount towards consumers’ contribution. The aforesaid amount is basically the amount alleged to be spent by the petitioners on laying down service lines for supply of electricity to the consumers. The aforesaid amount is basically the amount alleged to be spent by the petitioners on laying down service lines for supply of electricity to the consumers. The objection of the petitioners with respect to contribution made by the consumers has been dealt with by the Special Officer in Para 1 of the award and it has recorded the following finding : “The ex-licensee is, therefore, not entitled to any relief on this account and the total amounts of the contributions made by the consumers prior to, or subsequent to 1948, have to be deducted under the provisions of Section 7-A(2) (i) of the Indian Electricity Act, 1910.” 10. A perusal of Section 7-A(2) shows that while determining the book value, the works paid for by the consumers have to be excluded. This is in consonance with the Apex Court’s decision in Upper Ganges Valley Electricity Supply Co. Ltd. v. U.P. Electricity Board, AIR 1973 SC 683 . This aspect has also been considered by this Court in Saharanpur Electric Supply Company Limited (supra) and it has been held that Special Officer was right in excluding the entire service line, which was created by the contributions of the consumers while determining the amount payable to the ex-licensee. The learned Counsel for the petitioner could not raise any such argument while may pursue us to take a different view and, therefore, applying the reasons contained in aforesaid judgments, we reject the contention of the petitioner under this head and uphold the finding of the Special Officer on this aspect also. (3) Gratuity : 11. The contention of the petitioner is that since the gratuity is payable to the employees on termination of their employment and thus employees who were working and were transferred to UPSEB on transfer of undertaking on 1.12.1975 had no amount due towards gratuity on that day. Therefore, no deduction could have been allowed by the Special Officer notionally under the head ‘gratuity’. Therefore, no deduction could have been allowed by the Special Officer notionally under the head ‘gratuity’. This aspect has been dealt with by the Special Officer in para-4 on page 149/150 of the paper book and he has rejected the same by observing as under : “So far as the ex-licensee is concerned, the services of all the staff taken over by the U.P. State Electricity Board stand terminated by the licensee on 30.11.76 otherwise he would have been held responsible for making payment of the salaries of the staff even after their being taken over by the U.P. State Electricity Board, but so far as the employees taken over are concerned their services stand transferred to the U.P. State Electricity Board which took over, the responsibility for payment of their dues in accordance with the provisions contained in Section 7 of the Indian Electricity Act, 1910 (as amended). This point has been made clear as would appear from a perusal of Section 6-A (i)(g). Since the Board shall be required to pay the gratuity to the staff for the entire period of their services including the period served by them before 1.12.75 with the licensee, the ex-licensees should bear the responsibility for payments that became due upto 30.11.75 and the U.P. State Electricity Board for the period subsequent to 30.11.75.” 12. In our view, the view taken by the Special Officer cannot be faulted. Section 7 sub-section (2) of 1910 Act clearly provides as under : “7. In our view, the view taken by the Special Officer cannot be faulted. Section 7 sub-section (2) of 1910 Act clearly provides as under : “7. (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.” 13. This being the liability of the Board on transfer, the same was rightly calculated on notional basis by the Special Officer so as to deduct from the amount determined to be payable to the petitioner. We do not find any force in the contention of the petitioner that the same could not have been calculated notionally on the date of vesting of undertaking in respondent No. 1 and the same is rejected. (4) Non allowing appropriation against future profits and any towards good-will : 14. We do not find any force in the contention of the petitioner that the same could not have been calculated notionally on the date of vesting of undertaking in respondent No. 1 and the same is rejected. (4) Non allowing appropriation against future profits and any towards good-will : 14. The learned Counsel for the petitioner submitted that as a prudent commercial transaction, it was incumbent upon the Special Officer to give due weightage to both the aforesaid aspects, namely, ‘future profits’ and ‘goodwill’ inasmuch the petitioner company was in the business of electricity for the last more than 40 years and, therefore, has earned a specific goodwill, which ought to have been taken into account for computation of amount payable to the petitioners and certain amount ought to have been determined under the said head. Similarly, for loss of business due to transfer of undertaking, the petitioner also suffered adversely, otherwise he would have earned profits in future. Therefore, it is argued that on both the aforesaid counts, the Special Officer ought to have determined appropriate amount payable to the petitioners. The argument is more in the nature of a good sensible business proposition than that it ought to have been when the matter is governed strictly by the statute. In the case in hand, the determination of amount payable to the petitioners is strictly governed by the statutory provisions, namely, Sections 7 and 7-A of the Act as amended in U.P. Learned Counsel for the petitioner could not show any provision whereunder the petitioners would have claimed any amount under the aforesaid two heads. That being so, we do not find any force in the aforesaid submission of the petitioners. (5) Deduction of wages for the period of earned leave of workers : 15. The arguments under this head are similar to that raised in respect to gratuity, which we have already dealt with hereinabove, and, therefore, for the reasons given thereunder, we reject the contention of the petitioner under this head also. (6) Depreciation : 16. (5) Deduction of wages for the period of earned leave of workers : 15. The arguments under this head are similar to that raised in respect to gratuity, which we have already dealt with hereinabove, and, therefore, for the reasons given thereunder, we reject the contention of the petitioner under this head also. (6) Depreciation : 16. It is contended that on the one hand, the Special Officer deducted the assets created with the consumers contribution in full and on the other hand, while calculating depreciation, he has taken the value of entire fixed assets on the date of taking over of undertaking and this has resulted in causing loss to the petitioner by deducting depreciation on such amount of the assets which was already deducted under the head of “Consumers Contribution”. It is contended that depreciation on the assets of consumers contribution could not have been taken into account and for the purpose of depreciation, the said assets ought to have been taken away. The Special Officer has considered this aspect of the matter in para-2 on page 147-148 of the paper book and has rejected the contention of the petitioners on the ground that such exclusion of depreciation from the entire assets is not permissible under the Act and, therefore, the depreciation has to be taken on the entire fixed assets. In our view, this finding of the Special Officer cannot sustain. A similar issue has already been considered by the Apex Court in Pilibhit Electric Supply Co. (P). Ltd. and another v. Special Officer (Electricity) and another, 1996 (11) SCC 288 and we have also considered this aspect in our judgment in Saharanpur Electric Supply Company Limited (supra) from page 49 to 55 and it has been held that the Special Officer has erred in deducting from the book value of the assets the purported depreciation on the contribution paid by the consumers, as it amounts to double deduction. Learned Counsel for the respondents could not show any reason to take a different view and, therefore, for the reasons given in the aforesaid judgments, we hold that while calculating the depreciation, the assets created with the contribution of the consumers had to be excluded and, to that extent, the impugned award and the determination of amount is liable to be modified. (7) Deduction on account of electric duty : 17. (7) Deduction on account of electric duty : 17. Learned Counsel for the petitioner, during the course of argument, could not point out any reason or error in respect of the aforesaid item and from the perusal of the impugned award also, we do not find that any such objection was raised on behalf of the petitioner before the Special Officer. Therefore, in this view of the matter, we do not find any reason to interfere with the impugned award under the aforesaid head. 18. Lastly, it is contended that the assessment made by the Chief Electrical Inspector under various heads was provisional, which was subsequently revised. The Special Officer, in its award, has specifically stated that in case, the assessment made by the Electrical Inspector is revised and revised figures are made available, the same would be accepted and be given effect to, as is evident from the relevant part of the award, reproduced hereunder, as contained on page 155 of the paper book : “(i) The Chief Electrical Inspector may intimate on a later date, the different amounts against any or all the reserves mentioned in Section 7-A(5) (h). The revised figures given by the Chief Electrical Inspector be accepted in place of the figures mentioned in this order and the benefit of otherwise, if any, be passed on to the ex-licensee.” 19. It is not disputed between the parties that revised figures have been made available by the Chief Electrical Inspector to the respondents whereunder various figures have undergone certain changes. That being so, since the Special Officer has already made provision for giving benefit to such revised figures, we have no manner of doubt that while giving effect to the impugned award, the respondents shall take into account and recalculate the amount as per the revised figures submitted by the Chief Electrical Inspector. 20. In the result, the writ petition partly succeeds and is, accordingly, allowed in part. The amount payable to the petitioner, if any, under 1910 Act pursuant to the impugned award dated 26.10.1977 of the Special Officer shall be computed by the respondents in the light of the findings recorded hereinabove particularly in respect to Depreciation and revised figures made available by Chief Electrical Inspector, and the impugned award shall stand modified to the extent as stated above. The respondents shall recalculate the amount as per the aforesaid directions within a period of three months from the date of production of a certified copy of this order and if any amount is found payable to the petitioner, the same shall be paid alongwith interest etc. in accordance with law within further period of three months. In case, it is found that the petitioner has to pay some amount to the respondents, necessary steps for recovery of the same shall be taken by the respondents accordingly without any further delay. 21. There shall be no order as to costs. ————