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State of Uttar Pradesh - Section

Section 224C in The U.P. Municipalities Act, 1916

224C. [ Provisions where licence of a licensee is revoked. - (1) Where the licence of a licensee is revoked under Section 224-B as it stood immediately before the commencement of the U.P. Municipalities (Amendment) Act, 1975, or where such licence stands revoked by virtue of the new Section 224-B as substituted by the said Act, all the property pertaining to the water-works (namely, all existing water supply services, including all plants, machinery, water-works, pumping sets, filter beds, water mains and pipes laid down along, over or under any public street, and all buildings and other works, materials, stores and things appurtenant thereto) belonging to or vested in the licensee immediately before the date of revocation of the licence (hereinafter in this section referred to as the 'said date') shall as from the said date vest in and stand transferred to the] [Substituted by U.P. Act No. 45 of 1975.] [Municipality] [Substituted by U.P. Act No. 12 of 1994.] free from any debt, mortgage or similar obligation of the licensee attached to such property :

Provided that any such debt, mortgage or similar obligation shall attach to the amount referred to in sub-section (2) in substitution for such property.
(2)Where any property belonging to the licensee vests in the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] under sub-section (1), not being water-works of which only the management was transferred to him by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] under clause (d) of Section 224 the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] shall pay to such licensee an amount determined as hereinafter provided in this section :Provided that the licensee shall, in addition to the said amount, be paid interest thereon on the Reserve Bank rate ruling on the said date plus one per centum for the period from the said date to the date of payment of the said amount.
(3)The State Government shall appoint, by order in writing, a person having adequate knowledge and experience in matters relating to accounts, to be Special Officer to assess any amount payable under this section to the licensee after making the deductions mentioned in this section.
(4)
(a)The Special Officer may call for the assistance of such officers and staff of the State Government in the Local Self-Government Engineering Department or of the licensee as he may deem fit for assessing the net amount payable.
(b)The Special Officer shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908, when trying a suit, in respect of the following matters
(i)enforcing the attendance of any person and examining him on oath;
(ii)compelling the production of documents; and
(iii)issuing commissions for the examination of witnesses.
The Special Officer shall also have such further powers as may be specified by the State Government by notification in the Gazette.
(5)The gross amount payable to such licensee shall be the aggregate value of-the amounts specified below, -
(i)the book value of all completed works in beneficial use pertaining to the water-works and taken over by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] (excluding works paid for by the consumers), less depreciation calculated in accordance with the Table appended to this section;
(ii)the book value of works in progress taken over, excluding works e paid for by the consumers or prospective consumers;
(iii)the book value of all stores, including spare parts taken over and in the case of used stores and spare parts, if taken over, such sum as may be decided upon by the Special Officer;
(iv)the book value of all other fixed assets in use on the said date and taken over, less depreciation calculated in accordance with the said Table;
(v)the book value of all plants and equipments existing on the said date, if taken over, but no longer in use owing to wear and tear or to obsolescence, to the extent such value has not been written off in accordance with the said Table.
Explanation. - The book value of any fixed asset means its original cost, and shall comprise, -
(i)the purchase price paid by the licensee for the assets, including the cost of delivery and all charges properly incurred in erecting and bringing the assets into beneficial use, as shown in the books of the licensee;
(ii)the cost of supervision actually incurred, but not exceeding fifteen per cent of the amount referred to in paragraph (i) :
Provided that before deciding the amount under this sub-section, the licensee shall be given an opportunity by the Special Officer of being heard, after giving him a notice of at least 15 days therefor.
(6)The [Municipality] [Substituted by U.P. Act No. 12 of 1994.] shall be entitled to deduct the following sums from the gross amount payable under sub-section (5) to the licensee, -
(a)all amounts and arrears of interest, if any, thereon, due from the licensee to the [Municipality] [Substituted by U.P. Act No. 12 of 1994.];
(b)all amounts and arrears of interest, if any, thereon, due to the State Government or the State Electricity Board;
(c)any amount of wages, bonus, gratuity, provident fund or other payments due to remaining unpaid on the said date to persons employed as workmen (within the meaning of the U.P. Industrial Disputes Act, 1947), in connection with the water-works;
(d)any amount which licensee may have failed to pay in respect of either Iris contribution or the employees' contribution realised by him or any other dues recoverable from licensee under the Employees' Provident Fund Act, 1952 or the Employees' State Insurance Act, 1948 in respect of persons employed in connection with the water-works.
(7)The liability of the licensee towards the State Government or the State Electricity Board or towards his employees, as the case may be, to the extent of deduction made under sub-section (7) shall stand discharged. Upon any such deduction being made the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] shall to that extent be liable to make payment to the State Government, the State Electricity Board or the workmen, as the case may be.
(8)Where the gross amount payable to the licensee is equal to or less than the amount to be deducted under this section no payment shall be made to the licensee by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.].
(9)The amount, if any, payable by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] to the licensee shall be as determined by the Special Officer under sub-sections (5), (6) and (8) and nothing in Section 324 shall be construed to apply in relation to the determination of the amount payable by the [Municipality] [Substituted by U.P. Act No. 12 of 1994.] under this section.Table of depreciation based on the period of life expectancy of various assetsThere shall be deducted for each year in respect of fixed assets employed in the licensee's undertaking such an amount as would, if set aside annually throughout the period specified in the following table and accumulated at compound interest at four per cent per annum, produce at the end of the said period an amount equal to ninety per cent of the original cost of the asset after taking into account the sums already written off or set aside in the books of licensee :
Column 1Description of asset Column 2Number of years or period
A. Land owned under full title Infinite
B. Land held under lease. The period of the lease or the period remaining unexpired onthe assignment of the lease.
C. Assets purchased now, -  
(a) buildingand Civil Engineering works of a permanent character notmentioned above -  
(i) Offices Fifty
(ii) Temporaryerections such as wooden structures. Five
(iii) Roadsother than Kachcha Roads. One hundred
(iv) Others Fifty
(b)Self-propelled vehicles Seven
(c) (i) Officefurniture and fittings. Twenty
(ii) Officeequipment Ten
D. Assets purchased second hand and assets not otherwiseproposed for in this Table. Such reasonable period as the Special Officer determines ineach case having regard to the nature, age and condition of theasset at the time of its acquisition by it.