Where an undertaking is sold under section 5 or Section 6, then upon the completion of the sale or on the date on which the undertaking is delivered to the intending purchaser under subsection (3) of section 5 or under sub-section (6) of Section 6, as the case may be, whichever is earlier—
(i) The undertaking shall vest in the purchaser on the intending purchaser, as die case may be, free from any debt, mortgage or similar obligation of the licensees or attaching to the undertaking:
Provided that any such debt, mortgage or similar obligation shall attach to the purchase money in substitution for the undertaking;
(ii) The rights, powers, authorities, duties and obligations of the licensee under his license shall stand transferred to the purchaser and such purchaser shall he deemed to be the licensee:
Provided that where the undertaking is sold or delivered to a State Electricity Board or the State Government, the license shall cease to have further operation.
7A. Determination of purchase price.
(1) Where an undertaking of a licensee, not being a local authority, is sold under subsection (1) of Section 5, the purchase price of the undertaking shall be the market value of the undertaking at tile time of purchase or where the undertaking has been delivered before the purchase under subsection (3) of that section, at the time of the delivery of the undertaking and if there is any difference or dispute regarding such purchase price, the same shall be determined by arbitration.
(2) The market value of an undertaking for the purpose of subsection
(1) shall be deemed to be the value of all lands, buildings, works materials and plant or the licensee suitable to, and used by him, for the purpose of the undertaking, other than (i) a generating station declared by the license not to form part of the undertaking for the purpose of purchase, and (ii) service-lines or other capital works or any part thereof which have been constructed at the expense of consumers, due regard being had to the nature and condition for the time being of such lands, buildings, works, materials and plant and die state of repair thereof and to the circumstance that they are in such position as to be ready for immediate working and to the suitability of the same for the purpose of the undertaking, but without any addition in respect of compulsory purchase or of goodwill or of any profits which may be or might have been made from the undertaking or of any similar consideration.
(3) Where an undertaking of a licensee, being a local authority, is sold under sub-section (1) of Section 5, the purchase price of the undertaking shall be such as the State Government, having regard to the market value of the undertaking shall be Such as the State Government, having regard to the market value of the undertaking at the date of delivery of the undertaking, may determine.
(4) Where an undertaking of a licensee is purchased under Section 6, the purchase price shall be the value thereof as determined in accordance with the provisions of sub-sections (1) and (2):
Provided that there shall be added to such value such percentage, if any, not exceeding twenty per centum of that value as may be specified in the license on account of compulsory purchase.