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TMI Blog1972 (12) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... 959 and under section 71 of the Electricity (Supply) Act, 1948, the option of the Government of Uttar Pradesh to purchase electrical undertakings stood transferred to the respondent. By a letter dated May 1, 1959 respondent informed the appel- lant that it had decided to purchase the Undertaking on payment of a sum of Rs. 25,38,407/-, being the fair market value of all its assets, inclusive of solatium. On May 4, 1959 respondent made a provisional payment of rupees 15 lakhs to the appellant which, the latter accepted under protest. The Undertaking was eventually taken over by the respondent on May 4/5, 1959. Being unable to agree on the true market value of the Under- taking, parties referred their differences to two arbitrators. Out of the several contentions raised before the arbitrators, we are concerned with one only : Whether, in the computation of the market value of its Undertaking, the appellant was entitled to compensation for the "service lines" which were laid with the help of contributions made by consumers. On this question, arbitrators were unable to agree and therefore they referred it to the decision of an umpire, Shri Randhir Singh. Out of the eight issues frame ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uestion whether the appellant was entitled to compensation for the service lines. The appellant filed an appeal in the High Court of Allahabad against that judgment while the respondent filed its cross- objections. By a judgment dated April 15,1966 the High Court held that the Umpire was justified in refusing to award compensation to the appellant for the service lines. 'the appeal as well as the cross-objections were dismissed by the High Court. This appeal by special leave is directed against that judgment. The only point of dispute in the appeal is whether the appellant is entitled to compensation for the service lines. Before considering this question, it is necessary to emphasise that these proceedings arise, not out of a suit but out of an application made under section 30 of- the Arbitration Act, 1940 for setting aside an award. That section provides that an award shall not be set aside except on one or more of the grounds therein mentioned. Two of the three grounds on which alone an award is liable to be set aside under section 30 are that the arbitrator or umpire has misconducted himself or the proceedings, or (ii) that the award has been improperly procured or is otherw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions contained in the Schedule to the Act are to be deemed to be incorporated' with and to form part of every licence granted under the Act, save in so far as they are expressly added to, varied or excepted by the licence. Paragraph VI(1) of the Schedule casts on the licensee an obligation, subject to certain exceptions, to supply electric energy to the opner or occupier of premises situated within the area of supply, within one month of the requisition. Under clause (b) of the first provision to Paragraph VI(1), however, the licensee is not bound to comply with such requisition unless, among other things, the person making the requisition, if required by the licensee so to do, pays to the licensee the cost of so much of any service line as may be laid down or placed for the purposes of the supply upon the property in respect of which the requisition is made. Section 7 of 'the Act, as it stood then, conferred on the State Government an option to purchase the undertaking of a licensee " on payment of the value of all lands, buildings, works, materials and plant of the licensee suitable to, and used by him for, the purposes of the undertaking-." The first proviso to section 7(i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was forwarded by the Government of India to The Government of the United Provinces., When years later, the same question cropped over once again, the Government of Uttar Pradesh informed all the electric supply undertakings in the State by their letter dated December 5, 1952 that the Government had decided "that the ownership of a service line vests in the licensee irrespective of whether the cost of the whole or part of it, has been paid for by a consumer or not". On March 10, 1953, the, Government of Uttar Pradesh sent an intimation to all the electricity supply companies in the State including the appellant that the Governor of Uttar Pradesh had, under section 21 (2) of the Act, given his sanction to an amendment or modification in the existing conditions of the licences by the addition of a new clause 4. That clause reads thus : "The whole of the service line, irrespective of the payment made by the consumer, shall be and remain the property of the company to whom and at whose cost it shall be maintained and the Company reserves the rights to extend alter, remodel or replace the said service line or cable to afford a supply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny is not entitled to claim from the Board the value of the portion of the service lines which were laid at the cost of the consumers". The calculations made by the Umpire in the award for ascertaining the true market value of the appellants undertaking show that the " value of the portion of services installed at the cost of the consumers" was expressly excluded from the total market value of the assets of the undertaking. It seems beyond the pale of controversy that the Umpire did not award compensation to the appellant in respect of the service lines for the sole reason that they were laid at the cost of the consumers. Some market- value the service-lines must have had, even if it be no more than the scrap value. But to the way of thinking which the Umpire adopted, that consideration had no relevance. The service-lines were paid for by the consumers and that for the Umpire, was the end of the matter. That, patently, was the wrong end, Respondent drew our attention to the decision in Durga Prasad Chamria and Anr. v. Sewkishendas Bhattar and Ors.(A.T.R. 1949 P.C. 334) in which it was held that if a question of law is specifically referred to an arbitrator for his decision. it wou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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