Please explain how they applied KVL here, I'm not getting how they applied kvl here also of what Voltage did they wrote as zero here?

Solution: 
The picture with 1,2 and 3 is a two-way key. When 1 and 3 are connected the cell E₁ connects in the circuit and so the emf is equal to the $voltage gradient \times balancing length$
$$\begin{gathered} So applying KVL we have \\ \varphi l_1 +0-{\epsilon }_1=0 \\ or \varphi l_1 ={\epsilon }_1 \end{gathered}$$

Similarly When 2 and 3 are connected the cell E₂ connects in the circuit and so the emf is equal to the $voltage gradient \times balancing length$