The amendments to the Indian Electricity Act, 1910, contravene constitutional rights by altering compensation from market value to book value without adequate compensation, thus infringing on vested rights.

1. The material facts and proceedings leading up this appeal are, inter alia, that the Government of United Provinces of Agra and Oudh, the predecessor of the present Government of Uttar Pradesh granted a licence under the Indian Electricity Act, 1910 , dt. the 28th June 1929, for generation and distribution of electricity in the districts of Saharanpur, Muzaffarnagar and Meerat in the then province of Uttar Pradesh in favour of one Martin and Co. The said Martin and Co. assigned the said licence in favour of Upper Jumna Valley Electricity Co. Ltd. the respondent No. 1 herein, whereupon the latter became a licensee within the meaning of the said Act of 1910.

2. Under cl.12(l) of the said Licence an option was conferred on the State Government to purchase the electricity undertakings of the licensee after the expiry of 35 years from the commencement of the licence and also on the expiration of every subsequent period of 20 years during the subsistence of the licence on one years notice and upon payment of the market value thereof at that time.

3. The respondent 1 set up its undertakings at Saharanpur, Muzaffarnagar, and Meerat for supply and distribution of electricity in the specified areas and had been Supplying and distributing electricity in terms of the said licence till the midnight of the 27th / 28th June, 1964.

4. On the 1st April 1959, the U.P. State Electricity Board the appellant was constituted under S.5 of the Electricity Supply Act of 1948 (hereafter referred to as the said Act of 1948).

5. The right or option to purchase the undertakings of the respondent No. 1 vested in the appellant under S.6(1) of the Act of 1910 after the constitution of the appellant.

6. On the 30th Nov. 1962, the appellant issued a notice to the respondent 1 under S.6(1) of the Act of 1910 requiring the respondent 1 to sell its undertakings to the appellant with effect from the date of the expiration of 35 years computed from the commencement of the said licence dated the 28th June 1929. The said period expired on the midnight of the 27th / 28th June 1964.

7. At the midnight of the 27th / 28th June 1964, possession of the said undertakings was taken over by the appellant and a sum of Rs. 9,36,868.86 p. was paid by the appellant to the respondent No. 1.

8. The respondent No. 1 valued its said undertakings including solatium payable under S.7A(4) of the said Act of 1910 at Rs. 91,40,480.79 p. and claimed the same from the appellant under Sub-Ss. (1) and (2) of S.7A of the said Act of 1910. The said claim of the respondent No. 1 was not accepted by the appellant. Disputes and differences between the appellant and the respondent on the amount payable for the taking over of the said undertakings were referred to arbitration as provided in S.7A(1) of the said Act of 1910.

9. Both the appellant and the respondent No. 1 appointed their respective arbitrator who entered into the reference. The arbitrators appointed a former Judge of the Allahabad High Court as the Umpire. On the 5th July 1972 there was a difference of opinion between the arbitrators. The respondent No. 1 called upon the Umpire to enter into the reference. The Umpire duly entered into the reference and issued notices to the parties to appear before him on the 12th Nov. 1972 and thereafter on the 22nd Nov. 1972. The appellant who did not appear before the Umpire moved the Civil Judge, Lucknow and obtained an interim injunction restraining the Umpire from proceeding with the arbitration.

10. The said application of the appellant was ultimately dismissed by the Additional Civil Judge (Small Cause Court) Lucknow on the 14th Feb. 1974. The appellant, thereupon, moved in revision before the District Judge, Lucknow, against the said order of dismissal.

11. Thereafter a number of Ordinances and Acts were promulgated by the Government of Uttar Pradesh by which the said Act of 1910 were amended. The relevant provisions of the said Ordinances and Acts are noted hereafter.

12. On the 26th Feb. 1975 the