- (1.) SUDHIR Agarwal, J. This writ peti tion 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 undertak ing 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 ex perience gained by Government of India after enactment of Indian Electricity Act, 1903 and the recommen dations made by the Committee con stituted in this regard to consider the technical and financial aspect of the matter. Section 3 of the Act of 1910 em powers 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 ener gy. 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 busi ness under the Name and Style of "m/s General Electric Trading Company" for supply of energy in the area with in 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 licenses, 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. Clause-7 of the licence con ferred 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 deter mined in accordance with and for the pur pose 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 pur chase shall be 20%. (2) In accordance with Section 3, sub section (2) Clause (d) (ii) of the Act, it is here by declared that the generating station to be set in connection with understanding shall form part of the undertaking for the pur pose of purchase under sub-section (5) of Section 7. " 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 under taking to UPSEB on the date of the ex piry of the current period of the licence and thereafter the possession of the un dertaking was taken over on 14/15-12-1972. To determine purchase price pay able to the petitioner under the Act en forced 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 Notifica tion dated 29-3-1976 entrusting him the work of determination of net amount payable to the petitioner. The said Of ficer 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.
(3.) SRI Murlidhar, learned Senior Ad vocate assisted by SRI Ajai Kumar Sharma, learned Counsel appearing on be half 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 Sec tions 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 deter mination of purchase price of the undertak ing 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 ac cordance 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 UP 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 pur chase 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 dis criminatory, in as much as, it has made clas sification on the basis of the undertakings in which valuation process had come to an end and where valuation process is still continu ing. 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 undertak ings 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 irra tional 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 infr inges 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 Coun sel for the petitioner has confined its chal lenge to the following items: (1) Supervision charges. (2) Assets created from contribution made by consumers/local bodies. (3) Deduction for depreciation of as sets created from the consumers' contribu tion. (4) Amount paid by the consumers by way of security deposit and arrears of inter est 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. Sri B. R Singh, learned Counsel appearing for the respondents con tended that so far as the question of vires of U. P Act No. 16 of 1975 is con cerned, 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. 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 in terference. 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 per taining 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-licen see 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 Ors. v. Government of West Bengal, 1997 (1) SCC 562.;