2006 Supreme(All) 1766

[2006(6) ADJ 670 (DB)]
ALLAHABAD HIGH COURT
(Division Bench)
BEFORE : S. RAFAT ALAM AND SUDHIR AGARWAL, JJ.
SAHARANPUR ELECTRIC SUPPLY CO. LTD., DEHRADUN AND ANOTHER ....Petitioners
Versus
STATE OF U.P. AND OTHERS ....Respondents
(Civil Misc. Writ Petition No. 2154 of 1979, decided on 10th July, 2006)

Headnote:(A) Electricity Act, 1910—Section 7-A—Constitutional validity of enactment—Once upheld by Supreme Court—Not open to be reagitated—Even on ground that Supreme Court failed to consider particular aspect or particular relevant provision were not brought to notice of Supreme Court—Law declared by Supreme Court—Binding under Article 141—Constitutional validity of Section 7-A of the Electricity Act, 1910, as amended by U.P. Amendment and Validation Act, 1975 (U.P. Act No. 16 of 1975) and Section 7 of the U.P. Act No. 16 of 1975, itself—Was challenged—It was upheld by Supreme Court and found that amendment and Amending Act is constitutionally valid—Does not violate Articles 14, 19 and 31—It only changed method or principle of basis of determination of compensation—It is not a piece of colourable legislation—This declaration of Supreme Court—Has binding effect—As such, not open to be reagitated on any ground whatsoever. [U.P. Amendment and Validation Act, 1975 (U.P. Act No. 16 of 1975), Section 7—Constitution of India, Articles 14, 19, 31, 141 and 226]. [Paras 19 and 21 to 26]

       (B) Promissory Estoppel—Doctrine of—Applicability—It does not apply against statute—Its operation is based on equity and public interest but not against law—Relevant features necessary for its applicability—Mentioned—In the instant case, notice dated 12-10-1971 sent by U.P.S.E.B.—No doubt contained basis of determination of purchase price to be market value and was in accordance with clause 7 of Licence—But in view of amendment in law w.e.f. 4.2.1975 by U.P. Act No. 16 of 1975, which changed method of determination of purchase price and compensation, that notice cannot operate as promissory estoppel—Because, stand of U.P.S.E.B. was changed due to amendment in law. [Electricity Act, 1910, Section 7-A]. [Paras 27 and 28]

       (C) Electricity Act, 1910—Section 7-A(2)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—Option for such purchase—Exercised after coming into force of amended provisions of Section 7-A, i.e., after 4.2.1975—Claim of petitioner for supervision charges exceeding 15%, in absence of any material in its support—Not acceptable in view of Explanation to Section 7-A(2), which permits cost of supervision actually incurred but not exceeding 15%—Thus, Special Officer (Electricity) rightly refused to grant supervision charges in excess to 15%—He cannot permit anything contrary to statutory provision. [Paras 30, 32, 34 and 35]

       (D) Electricity Act, 1910—Section 7-A(2)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—Claim of petitioner for addition of amounts of assets created from contributions made by consumers—Rejected by Special Officer (Electricity)—Found justified, as that claim is contrary to law—Although High Court found the Special Officer ought not to have taken advice on that claim by Legal Remembrancer and if he took advice, he ought to have given opportunity to petitioner to make his submissions on that advice—But in view of legal position of that claim, High Court while deprecated that approach of Special Officer, found that on merits ultimate decision taken by Special Officer was correct—As such, no interference is necessary. [Paras 39 and 46 to 48]

       (E) Electricity Act, 1910—Section 7-A(2)(i)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—Deduction of amount for depreciation of assets created from contributions made by consumers—By Special Officer (Electricity) while giving award—Not justified when he refused to pay the amount of assets created from contributions made by consumers—High Court, therefore, directed that amount deducted for such depreciation be added in award of compensation. [Paras 50, 51, 54 and 55]

       (F) Electricity Act, 1910—Sections 7-A(3), 7-A(4) and 7-A(5)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—Security deposit amount of consumers—Has to be paid to U.P.S.E.B. by petitioner-company—Special Officer (Electricity), therefore, committed no mistake in deducting that amount while making award of compensation. [Paras 58 to 60]

       (G) Electricity Act, 1910—Section 7-A(5)(a)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—Security deposit amount of consumers, who are prospective consumers, i.e., they have not been given electricity connection till date of purchase—Also cannot be retained by petitioner-Company—Thus, claim of petitioner-Company that such amount cannot be taken by U.P.S.E.B.—Against law—Rightly rejected—Needs no interference by High Court. [Paras 62 and 63]

       (H) Electricity (Supply) Act, 1948— Schedule VI, Paras III, V(1) and V(2)—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—'Contingency reserve' amount—Also is to be given to purchaser Board—Special Officer (Electricity) deducted amount shown to be balance in contingency reserve while making award for compensation—Committed no legal error—Requirement of creation of contingency reserve account—Is requirement of law. [Paras 64, 71, 73 and 75]

       (I) Electricity (Supply) Act, 1948—Schedule VI, Para V-A—Purchase of Electrical Undertaking—By U.P.S.E.B. from petitioner-company (Licensee)—‘Development reserve’ amount, which is required to be created by Licensee—In the instant case, Special Officer (Electricity) while making award for compensation of purchase, deducted that amount on finding that petitioner-Company has not utilized that amount in business of electricity supply of undertaking—Committed no legal error. [—Electricity Act, 1910, Section 7-A(5)(h)]. [Paras 77 and 78]