The Shillong Electricity Supply Undertaking (Acquisition) Act (Act No.10 of 1977) 1977.

MEGHALAYA ACT 10 OF 1977
THE SHILLONG ELECTRICITY SUPPLY UNDERTAKING (ACQUISITION) ACT,
1977.
(As passed by the Assembly)
[Received the assent of the President on the 25th December 1977]
(Published in the Gazette of Meghalaya, Extraordinary, dated 26th December, 1977)
An
Act
to provide for the acquisition of the Shillong Electricity Supply
Undertaking for a public purpose.
Be it enacted by the Legislature of Meghalaya in the Twenty-eight Year of the Republic of
India as follows:-
Short title, extent and
commencement.
1. (1) This Act may be called the Shillong Electricity
Supply Undertaking (Acquisition) Act, 1977.
(2) It extends to the whole of the State of Meghalaya.
(3) It shall be deemed to have come into force on the
15th day of July, 1977.
Definitions and
Interpretation.
2. In this Act, unless the context otherwise requires,-
a) ‘Annual Account’ means the accoun t of the
undertaking rendered to the Government annually
under and in accordance with the Electricity Act;
b) ‘Board’ means the Meghalaya State Electricity
Board constituted under Section 5 of the
Electricity Supply Act;
c) ‘Document’ in relation to the undertaking, includes
its books, accounts, registers maps and plans, and
all other documents of whatever nature relating to
the undertaking ;
d) ‘Electricity Act’ means the Indian Electricity Act,
1910 (Act 9 of 1910).
e) ‘Electricity Supply Act’ means the Electrici ty
(Supply) Act, 1948 (Act 54 of 1948) ;
f) ‘Fixed Assets’ includes works, spare parts stores,
tools motor and other vehicles, instruments, office
and other equipments and furniture;
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g) ‘Government’ means the Government of
Meghalaya ;
h) ‘Licensee’ means the Shillong  Hydro Electric
Ltd. ;
i) ‘Prescribed’ means prescribed by rules made under
this Act;
j) ‘Schedule’ means the Schedule appended to this
Act ;
k) ‘Undertaking’ means the electric supply
undertaking at Shillong owned and managed by
the Shillong Hydro Electric Ltd.
l) ‘Vesting date’ means the date and time on which
the undertaking shall vest in the Government under
section 3 of this Act ;
m) ‘Works’ includes electric supply lines, any land,
buildings, structure, plant, machinery or apparatus
required to supply energy and to carry into effect
the object of a licence granted under the Electricity
Act ;
n) Other expressions shall have the meanings
respectively assigned to them in the Electricity
Act.
Power of Government
to take over the
undertaking.
3. (1) The undertaking shall be deemed to have been taken
over by transferred to and vested in, the Government on
an from the 16th day of July, 1977 at 13:00 hours.
(2) The Government shall, by force of vesting in it of the
undertaking under sub -section (1), be deemed to have
entered into possession of all the properties movable and
immovable, fixed assets, rights, powers, authorities and
privileges of the undertaking form the vesting date.
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Transfer of
undertaking to Board.
4. The may be an order in writing , transfer the undertaking
acquired under this Act to the Board on such terms and
conditions, as may be specified therein, and on such
transfer the undertaking together with all assets,
libilities, rights and obligations, which by virtue of this
Act have vested in the Government shall thereupon vest
and devolve on the Board.
Vested 5. (1) The property, rights, liabilities and obligations
specified below in respect of the undertaking shall vest
in the Government on the vesting date –
i. all the fixed assets of the licensee and all the
documents relating to the undertaking ;
ii. all the rights, liabilities and obligations of the
licensee under hire-purchase agreements, if any,
for the supply of materials or equipment made
bonafide before the vesting date ;
iii. all the righrs, liabilities and obligations of the
licensee under any other contrat entered into
bonafide before the vesting date, not being a
contract relating to the borrowing or lending of
money, or to the employment of staff ;
iv. (a) all cash and ban k balances of the licensee
relatable to the undertaking on the vesting date;
(b) all amounts due or accruable or accrued
tothe licensee in connection with electrical
energy supplied or other supplies made or
services rendered by the licensee, in the cou rse
of operations of the undertaking, upto the
vesting date; and
(c) all investments, loans, advances or deposits
relatable to the operations of the undertaking,
made by the licensee and outstanding on the
vesting date except loans and advances to the
employees of the licensee.
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(2) All the assets specified in clause (i) of sub -section
(1) shall vest in the Government free from any
encumbrances, debts, mortgages or similar obligations
of the licensee or attaching to the undertaking :
Provided that such debts, mortgages or obligations
shall attach to the amount payable under this Act for the
assets.
(3) The licence granted to the undertaking under the
Electricity Act shall be deemed to have been terminated
on the vesting date and all the rig hts, liabilities and
obligations of the licensee under any agreement to
supply electricity entered into before that date shall
devolve or shall be deemed to have devolved on the
Government :
Provided that where any such agreement is not in
conformity with the rates and conditions of supply
approved by the Government and in force on the vesting
date, the agreement shall be voidable at the option of the
Government ;
Provided further that on and from the vesting date the
consumers will be governed by the Tariff for supply of
electricity and the general conditions of supply of the
Board.
(4) On and from the vesting date, it shall be lawful
for the Government or their authorised representative,
after removing obstruction, if any, to take physic al
possession of all the property, movable and immovable
including fixed assets and documents of the undertaking.
(5) All the liabilities and obligations, other than those
vesting in the Government under sub -sections (1) and
(3), shall continue to be the liabilities and obligations of
the licensee, after the vesting date.
Explanation.-All liabilities and obligations in respect
of staff, taxes, provident fund, Employees State
Insurance Industrial disputes and all other matters upto
and including the vesting date, shall continue to be the
liabilities and obligations of the licensee, after the
vesting date.
Gross amount payable
to  Licensee
6. (1) The gross amount payable to the licensee shall be the
aggregate value of the amount specified below:-
i. the book value of all completed works in
beneficial use pertaining to the under taking and
taken over by the Government (excluding works
paid for by consumers) less depreciation
calculated in accordance with the Schedule ;
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ii. the book value of all works in progress taken
over by the Government, excluding works paid
for by consumers or prospective consumers ;
iii. the book value of all stores including spare parts
taken over by the Government and in the case of
used stores  and spare parts, if taken over, suc h
sum as may be decided upon by the
Government.
iv. the book value of all other fixed assets in use on
the vesting date and taken over by the
Government less depreciation calculated in
accordance with the Schedule ;
v. the book value plants and equipments exist ing
on the vesting date, if taken over by the
Government, but no longer in use owing to wear
and tear or to obsolescence, to the extent such
value has not been written off in the books of
the licensee less depreciation calculated in
accordance with Schedule ;
vi. the amount due from consumers in respect of
every hire -purchase agreement referred to in
clause (ii) of sub-section (1) of Section 5 , less a
sum which bears to the difference between the
total amount of the instalments and the original
cost of the ma terials or equipments, the same
proportion as the amount due bears to the total
amount of the instalments ;
vii. any amount paid actually by the licensee in
respect of every contract referred to in clause
(iii) of sub-section (1) of Section 5 ;
viii. the amount of cash and bank balances taken
over by the Government under sub -clause (a) of
clause (iv) of sub-section (1) of Section 5 ;
ix. the value of the items taken over by the
Government under sub -clauses (b) and (c) of
clause (iv) of the sub -section (1)  of Section 5 ,
less bad debts or unrealisable amounts, as the
case may be.
Explanation: The book value of any fixed
asset means its original cost and shall comprise:-
(i) the purchase price paid by the licenses for the asset,
including the cost of delivery and all charges
properly incurred in erecting and bringing the asset
into beneficial use as shown in the books of the
undertaking ;
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(ii) the cost of supervision, of any, actually incurred and
charged to the value of the assets in the books of the
undertaking, but not exceeding fifteen percent of the
amount referred to in paragraph (i) ;
Provided that before deciding the amount under
this sub -section, the licensee shall e given an
opportunity by the Government of being heard, after
giving him a notice of at least 15 days therefor.
(2) In addition a sum equal to 10 percent of the
amounts assessed under clauses (i) to (iv) of sub -
section (i) shall be paid to the licensee by the
Government.
(3) When any asset has been acquired by the
licensee after the expiry of the period to which the
latest annual accounts relate the book value of the
asset shall be such as may be decided upon by the
Government :
Provided that before deciding the book value of
any such asset, the licensee shall be given an
opportunity by the G overnment of being heard, after
giving him a notice of at least 15 days therefor.
Deduction from the
gross amount.
7. The Government shall be entitled to deduct the
following sums from the gross amount payable
under this Act to the licensee:-
a) the amount, if any, already paid in advance;
b) the amount, if any specified in Section 8 ;
c) the amount payable, due, or accrued, if any,
including interest and/or surcharge thereon,
from the licensee to the Board, for energy
supplied by the Board before the vesting
date ;
d) all amount and arrears of interest, if any ,
thereon, due from the licensee to the
Government ;
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.
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 ha ving been handed over to
the Government, the amount of such loss
being deemed to be the amount by which the
market value of such property or rights
exceeds the amount payable therefore under
this Act, together with any income which
might have been realised by the Government
if the property or rights had been handed over
on the vesting date ;
f) the amount of all loans due from the licensee
to any financial institutions constituted by or
under the authority of the Government and
arrears of interest, if any, thereon ;
g) all sums paid by consumers by way of
security deposit and arrears of interest due
thereon on the vesting date in so far as they
have not been paid over by the licensee to the
Government ;
h) all advances from consumers and prospective
consumers, and all sums which have been or
ought to be set aside to the credit of the
consumer’s fund, in so far as such advances or
sums have not been paid over by the licensee
to the Government ;
i) the amounts remaining in Tariffs, and
Dividends Control Reserve, Contin gencies
Reserve, Provident Fund and Staff Gratuity
Fund accounts and the Development reserve,
in so far as such amounts have not been paid
over by the licensee to the Government ;
j) the amount if any, as specified in sub -sections
(2) and (3) of Section 10 ;
k) the amount , if any, relating to debts,
mortgages or obligations as mentioned in
proviso to sub-section (2) of Section 5:
Provided that before making any deduction under
this section, the licensee shall be given a notice to show cause
against such deduction, within a period of fifteen days from the
date of receipt of such notice.
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Effect of transactions
not bonafide.
8. Where the Government are of opinion that the
licensee has on or before the 1 st January, 1975,
disposed of any fixed asset whether by way of sale,
exchange, gift, lease or otherwise , or incurred any
expenditure, liability or obligation otherwise than in
the normal course of events, with a view to benefit
unduly the licensee or some other person and
thereby caused loss to the Government as
succeeding owners of the undertaking the
Government shall be entitled to deduct from the
amount payable to the licensee under this Act, an
amount which they consider to be the loss sustained
by them :
Provided that before making such deduction, the
licensee shall be given a notice within nine months
of the vesting date to show cause against such
deduction, within a period of fifteen days from the
date of receipt of such notice.
Manner of payment of
act amount
9. (1) The Government shall appoint, by o rder in
writing, a person having adequate knowledge and
experience in matters relating to accounts, as Special
Officer to assess the net amount payable under this
Act by the Government to the licensee, after making
the deductions mentioned in Section 7.
(2) The Special Officer may call for the assistance of
such Officers and staff of the Government or Board,
or the undertaking as he may deem fit, in assessing
the net amount payable.
(3) The net amount due to the licensee under this
Act shall be paid by th e Government to the licensee
within one year from the vesting date.
Provided that this period may be suitably
extended by the Government if the licensee fails to
furnish or delays the furnishing of accounts,
information, particulars or documents as mentioned
in section 11.
(4) The net amount payable shall bear simple
interest at the rates of one per centum over the
average of the Reserve Bank rates between the
vesting date and the date of payment or tender of
payment:
Provided that no interest s hall be payable during
any extension of time granted under the proviso to
sub-section (3).
(5) Where the gross amount payable to the licensee
is equal to or less than the total amount to be
deducted under section 7, no payment shall be made
to the licensee by the Government.
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.
Provisions for existing
staff of licensee.
10. (1) Every person who was employed in connection
with the affairs of the undertaking as its employee
immediately before the vesting date, other than
directors or advisers, shall become o n the vesting
date an employee of the Government and thereafter
an employee of the Board on the date of  transfer of
the undertaking to the Board under section 4, and
shall hold his service on the same term and
conditions and with the same rights to pensi on,
gratuity and other matters as would have been
admissible to him if the undertaking had not been
transferred to and vested in the Government or the
Board, as the case may be, and continue to do so
unless and until his employment under the
Government or the Board, as the case may be, is
terminated after giving him three calendar months’
notice in writing, or paying him three months’ pay
in lieu of such notice, as the case may be, or until his
remuneration, terms or conditions are duly altered
by the Government or the Board, as the case may be.
(2) If the licensee fails to pay such an employee his
dues arising or accrued on or before the vesting date,
the Government or the Board, as the case may be,
may pay him the said dues and the amount so paid
shall be deducted from the amount payable by the
Government to the licensee.
(3) In case the Government or the Board, as the may
be, retrench any such employee within a period of
one year from the vesting date, the amount payable
to such an employee on retrenchme nt shall be
deducted from the amount payable by the
Government to the licensee.
(4) For the persons who immediately before the
vesting date were the trustees for any pension,
provident, gratuity or other like fund constituted for
employees of the licensee , these may be substituted
as trustees, such persons as the Government may, by
general or special order, specify.
(5) Notwithstanding anything contained in the
Industrial Disputes Act, 1947 (Act 14 of 1947), or in
any other law for the time being in force, the transfer
of the services of any employee from the licensee to
the Government or from the Government to the
board, shall not entitle such employee to any
compensation under this Act or any other law from
the time being in force and no such claim shall be
entertained by any court, tribunal or other authority.
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(6) If any question arises as to whether or not any
person was employed in connection with the affairs
of the undertaking as its employee immediately
before the vesting date, or whether or not the
services of any persons have been transferred to the
Government or Board under this Act, it shall be
decided by an officer authorised for this purpose by
the Government and an appeal shall lie against his
decision to the Government whose decisi on shall be
final.
Inventory of assets and
informations.
11. (1) The licensee shall, within ninety days from the
vesting date or such further time as may be granted
by the Government, prepare and hand over to the
Government a complete inventory of all proper ty
including fixed assets belonging to the undertaking
along with the book value, year of purchase and all
relevant documents.
(2) The licensee shall also write up the accounts of
the undertaking up to the vesting date, get them
audited and submit them to the Government within
four months from that date or such further time as
may be granted by the Government.
(3) The licensee shall also, within such time as may
be specified by the Government, furnish to them
such information and particulars as may be req uired
by the Government in regard to documents relating
to the undertaking.
(4) The licensee shall not destroy any document
relating to the undertaking and shall hand over to the
Government on vesting date all such documents as
are necessary for ascertaini ng the assets of the
undertaking, the rights, liabilities and obligation
attaching thereto and for determining the amount
payable or deductable in respect of the undertaking
under this Act.
(5) Where the documents aforesaid have been
taken possession of by the Government, the licensee
or any person authorised by him in this behalf, shall
have access to such documents at all reasonable
times and shall also be entitled to take copies thereof
or extracts therefrom.
Power of entry. 12. Any employee of the Go vernment or the Board
authorised in this behalf by general or special order
by the Government, or the special officer appointed
under Section 9 may, at any time after giving the
licensee reasonable notice, enter upon any land or
premises in his possession and make any survey,
examination or investigation preliminary or
incidental to the purposes of this Act.
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Penalties. 13. (1) Whoever, being required to furnish any
information or make any statement under this Act,
furnishes any information or makes any stat ement
which he knows to be false, or whoever wilfully
fails to hand over to the Government or obstructs in
taking over by the Government of any property,
including fixed asset or documents belonging to the
undertaking or wilfully suppresses or damages or
destroys such property, fixed asset or document,
which is to be taken over by the Government, shall
be punishable with imprisonment for a term which
may extend to two years, or with fine which may
extend to five thousand rupees or with both, and in
the case of a continuing offence, with an additional
fine wh ich may extend to five hundred rupees for
every day after the first during which the offence
continues.
(2) Whoever fails, without reasonable cause, to
comply with any of the provisions of this Act or th e
rules made thereunder, or any direction or order
issued in pursuance thereof, shall, if the case be not
governed by sub-section (1), be punishable with fine
which may extend to five thousand rupees and in the
case of continuing offence, with an additiona l fine
which may extend to five hundred rupees for every
day after the first during which the offence
continues.
(3) No Court shall take cognisance of an offence
punishable under this section except with the
previous sanction of the Government or of an officer
authorised by them in this behalf.
Offence by
Corporation.
14. Where a person committing any offence punishable
under this Act is a company or an association or a
body of persons, the Manager, Secretary, agent or
other principal officer managing the a ffairs of the
company, association or body shall be deemed to be
guilty of such offencee.
Protection of action. 15. No suit, prosecution or other legal proceeding shall
lie against the Government or the Board or any
employees of the Government of the Board o r the
Special Officer appointed under section 9 or any
other person authorised or acting under the direction
of the Government or the Board or aiding or
assisting the Government or the Board or an
employee of the Government or the Board, in
respect of anyt hing which is in good faith done or
intended to be done in pursuance of this Act or any
rule or order made thereunder.
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Bar to jurisdiction of
Court.
16. Notwithstanding anything contained in any other law
for the time being in force, no court or tribunal shall
call in question any other notification, or any other
acct done or purported to have been done under this
Act.
Effect of other Laws 17. No provision of the Electricity Act, the Electricity
Supply Act, or any other Act, for the time being in
force and of any rule made under any of those Acts
or of any instrument including licence having effect
by virtue of any of those Acts or any rule made
thereunder, shall, in so far as it is inconsistent with
any of the provisions of this Act, have any effect
Power to remove
difficulties.
18. If any difficulty arises in giving effect to the
provisions of this Act, the Government may, as
occasion may require, do anything which appears to
them necessary for the purpose of removing the
difficulty:
Provided that no such order shall be made after
the expiry of two years from the vesting date.
Arbitration. 19. (1) Where any dispute arises in respect of any of the
matters specified below, it shall be determined by an
arbitrator appointed by the Government:-
a) Whatever any prop erty belonging, or any
right, liability or obligation attaching to the
undertaking, vests in the Government;
b) Whether any fixed asset forms part of the
undertaking ;
c) Whether any contract including any contract
or agreement referred to in clauses (ii) and
(iii) of sub -section (1) of section 5 has been
entered into bonafide or not;
d) Whether any agreement to supply electricity
entered into by the licensee prior to the
vesting date is of the nature referred to in the
first date is of the nature referred to in the first
proviso to sub-section (3) of section 5;
e) Any other dispute that may arise regarding the
gross or net amount payable to the licensee
under this Act.
(2) Subject to the provision of this section, they
provisions of the Arb itration Act, 1940 (Act 10 of 1940), shall
apply to all arbitration under this Act.
Power to make rules. 20. The Government may make rules to carry out the
purposes of this Act.
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Repeal and Savings. 21. (1) The Shillong] Electric Supply Undertaking
(Acquisition) Ordinance, 1977 is hereby repealed.
(2) Notwithstanding such repeal, any action taken or
purported to have been taken or anything done or
purported to have been done including taking over
possession of the property of the undertaking under
the Ordinance so repealed shall be deemed to have
been taken or done under the corresponding
provisions of this Act by or on behalf of the
Government or the Board.
SCHEDULE
[See section 6 (1)]
For purpose s of determining the amount payable under section 6 (1), the depreciation shall be
calculated at annual rates arrived at by dividing ninety percent of the book value of each asset by the
number of years of life of the asset as specified in the table below running in each case from the
beginning of the year of account next following that in which the particular asset become available for
use in the business. For the period after the licensee’s last completed financial year till the vesting
date, the depreciation shall be calculated pro -rata. Depreciation shall not be calculated for any period
beyond the life of the asset as prescribed herein.
TABLE
Description of asset Number of years of life of asset
(1) (2)
A. Land owned under full title ... Infinity
B. Land held under lease –
(a) for investment in the land ... The period of the lease, or the period
remaining unexpired on the assignment
of the lease.
(b) for each of clearing site ... The period of the lease remaining
unexpired at the date of clearing the site.
C. Assets purchased new -
(a) Plant and machinery
stations, including plant
foundations-
(i) Hydro electric              ...
(ii) Steam electric              ...
(iii) Diesel electric              ...
...
...
...
Thirty-five.
Twenty-five.
Fifteen.
(b) Cooling towers and
circulating water systems.
... Thirty.
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Description of asset Number of years of life of asset
(1) (2)
(c) Hydraulic works forming
part of a hydro-electric
system including-
(i) Dam spillways, weirs,
canals, reinforced concrete
flumes and siphons.
... One hundred
(ii) Reinforced concrete pipe
line and surge tanks, steel
pipe lines, sluice gates,
steel surge tanks, hydraulic
control valves and other
hydraulic works
... Forty.
(d) Building and civil engineering
works of a permanent character,
not mentioned above –
(i) Office and showrooms ... Fifty.
(ii) Containing thermo-electric
generating plant.
... Thirty.
(iii) Containing hydro-electric
generating plant.
... Thirty-five.
(iv) Temporary erections such
as wooden structures.
... Five.
(v) Roads other than katcha
roads
... One hundred.
(vi) Others ...          ... ... Fifty.
(e) Transformers, transformers
kiosks, sub-station
equipment and other fixed
apparatus (including plan
foundation) –
(i) Transformers (including
foundation) having a rating
of 100 kilovolt amperes
and over
... Thirty-five.
(ii) Others     ...       ....         ... ... Twenty-five.
(f) Switchgear, including cable
connections.
... Twenty.
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Description of asset Number of years of life of asset
(1) (2)
(g) Lightning arrestor s-
(i) Station type         ...         ... ... Twenty
(ii) Pole type             ...         ... ... Fifteen.
(iii) Synchronous condensers ... Thirty-five.
(h) Batteries ...             ... ... Ten.
(i) (i) Underground cables
including
joint boxes and
disconnecting
boxes.
... Forty.
(ii)Cable  duct system         ... ... Sixty.
(j) Overhead lines including
support-
(i) Lines on fabricated steel
support operating at nominal
voltages higher than 60
kilovolts.
... Thirty-five.
(ii)Lines on steel supports
operating at nominal voltages
higher than 13.2 kilovolts but
not exceeding 66 kilovolts.
... Thirty.
(iii) Lines on steel or reinforced
concrete supports.
... Twenty-five.
(iv) Lines on treated wood
supports
... Twenty.
(k) Meters        ...              ...
...
... Fifteen.
(l) Self-propelled vehicles
...
... Seven.
(m) Static-machine tools     ...
...
... Twenty.
(n) Air conditioning plant -
(i) Static               ....                  ... ... Fifteen.
(ii)Portable           ....                  ... ... Seven.
(o) (i) Office furniture and
fittings
... Twenty.
(ii) Office equipment                  ... ... Ten.
(iii) Internal wiring, including
fittings and apparatus.
... Fifteen.
(iv) Street-light fittings                ... ... Fifteen.
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Description of asset Number of years of life of asset
(1) (2)
(p) Apparatus let on hire-
(i) Other than meters                ... ... Seven.
(ii)Meters                ...               ... ... Twenty.
(q) Communications
equipment-
(i) Radio and high frequency ... Fifteen.
(ii) Telephone lines and
telephone.
... Twenty.
D Assets purchased second hand and assets
not otherwise provided for in this table.
... Such reasonable period as
Government determines in each case
having  regard to the nature of the
asset at the time of its acquisition by
the licensee
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