Deductions from the compensation

(1) The Government shall be and shall be deemed always to have been entitled to deduct the following sums from the compensation payable under this Act to a licensee :— (a) the amount, if any, already paid by way of compensation ; (b) the amount, if any, specified in section 9 ; (c) the amount due, if any, from the licensee to the Government [or the Board] for the energy supplied by the Government or the Board before the vesting date ; (d) all other amounts and arrears of interest, if any, thereon due from the licensee to the Government [or the Board] except loans and arrears of interest, if any, thereon ; (e) the amount, if any, equivalent to the loss sustained by the Government by reason of any property or rights belonging to the undertaking not having been handed over to the Government, the amount of such loss being deemed to be— (i) in cases where compensation is payable under Basis A or Basis B, the market value on the vesting date of such property or rights, together with any income which might have been realized by the Government if the property or rights had been handed over on the vesting date ; and (ii) in cases where compensation is payable under Basis C, the amount by which the market value of such property or rights exceeds the compensation payable therefor under this Act, together with any income which might have been realized as aforesaid. (2) In addition to the deductions specified above, the Government shall also be and be deemed always to have been entitled to make the following deductions :— (a) in cases where the compensation is payable under Basis A or B, any sum which during a period not exceeding three consecutive account years immediately before the vesting date has been distributed as profits, but is not correctly so distributable ; (b) in cases where the compensation is payable under Basis C— (i) the amount of all loans due from the licensee to the Government [and the Board] and arrears of interest, if any, thereon ; (ii) a portion of the amount of solatium bearing the same proportion to the total amount of solatium, as the amount of all loans due to the Government [and the Board] from the licensee on the vesting date bears to the aggregate of— (a) the paid up share capital of the licensee not being a local authority, or the value of the capital assets shown in the capital account of the undertaking in the case of a local authority ; (b) the amount of all loans due to the Government [and the Board] as aforesaid ; (iii) such amount as the Government may, with the concurrence of the Board, determine as equivalent to the value of the energy supplied by the licensee to the consumers, before the vesting date, which according to the books of the licensee are due from the consumers to the licensee for energy supplied by him before that date ; (iv) all advances from consumers and prospective consumers, and all sums which have been or ought to be set aside to the credit of the consumers' fund in so far as such advances or sums have not been paid over by the licensee to the Government ; Explanation.—For the purpose of this clause, ‘consumers' fund’ shall, in the case of the undertaking of a licensee being a local authority, mean the amount referred to as such in the bulk supply agreement or, where no such reference has been made in the bulk supply agreement, the net profits of the undertaking remaining after effecting the appropriations to the general funds of the local authority in accordance with the terms of the said agreement. In the case of the undertaking of a licensee other than a local authority, for any account year prior to the date on which the Sixth Schedule to the Electricity Supply Act came into force, it shall mean the amount referred to as such in the bulk supply agreement and, for any account year on and from the said date, it shall mean the amount specified in paragraph I (1) of the said Schedule as the amount to be set apart for distribution to consumers ; (v) all deposits made by, and all amounts due to the staff transferred to the Government on account of Provident Fund or other beneficial schemes, in so far as such deposits or sums have not been paid over by the licensee to the Government, less the amounts which the Government are satisfied are due to the licensee from the members of the staff so transferred ; Provided that no deduction shall be made in pursuance of paragraph (v), in so far as the deposits or sums aforesaid may be in the custody of trustees under a valid deed of trust. (3) In the case referred to in the foregoing proviso, the Government shall have, and shall be deemed always to have had power to require the trustees to transfer the funds with them, and all the securities and other properties, if any, in which the same may have been invested, to the Government, and the staff transferred to the Government shall be completely discharged in respect of all claims either against the Government or enforceable against the trustees, in respect of the funds, securities and other properties so transferred.