LexThe ELECTRICITY (SUPPLY) ACT, 1948
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THE ELECTRICITY (SUPPLY) ACT, 1948
CONTENTS
CHAPTER I
INTRODUCTORY
1. Short title, extent and commencement
2. Interpretation
CHAPTER II
THE CENTRAL ELECTRICITY AUTHORITY
3. Constitution of the Central Electricity Authority
4. Power to require accounts, statistics and returns
4-A. Directions by Central Government to the Authority
4-B. Power of Central Government to make rules
4-C. Power of Authority to make regulations
CHAPTER III
STATE ELECTRICITY BOARDS, GENERATING COMPANIES,
STATE ELECTRICITY CONSULTATIVE COUNCILS AND
LOCAL ADVISORY COMMITTEES
5. Constitution and composition of State Electricity Boards
6. Inter-State agreement to extend Board's jurisdiction to another
State
7. Effect of inter-State agreement
8. Term of office and conditions for re-appointment of members
of the Board
9. Members not to hold interest in certain concerns
10. Removal or suspension of members
10-A. Power of State Government to declare certain transactions
void
11. Temporary absence of members
12. Incorporation of Board
12-A Board may have capital structure
13. Authentication of orders and other instruments of the Board
14. Meetings of the Board
15. Appointment of staff
15-A. Objects, jurisdiction, etc. of generating companies
16. State Electricity Consultative Council
17. Local Advisory Committee
CHAPTER IV
POWERS AND DUTIES OF STATE ELECTRICITY BOARDS AND
GENERATING COMPANIES
18. General duties of the Board
18-A. Duties of Generating Company
19. Powers of the Board to supply electricity
20. Power to Board to engage in certain undertakings
20-A. Leasing out, etc. of generating stations
21. Powers of Board in relation to water power
22. Power to Board to conduct investigations
23. Loans by Board to licensees
24. Power to Board to contribute to certain associations
25. Consulting engineers
26. Board to have powers and obligations of licensee under Act IX
of 1910
26-A. Applicability of the provisions of Act 9 of 1910 to Generating
Company
27. Other functions of the Board or a generating company
CHAPTER V
THE WORKS AND TRADING PROCEDURE OF THE BOARD AND
THE GENERATING COMPANY
28. Preparation and sanctioning of schemes
29. Submission of schemes for concurrence of Authority, etc.
30. Matters to be considered by the Authority
31. Concurrence of Authority to scheme submitted to it by Board
or Generating Company
32. Power to alter or extend schemes
33. Provisions applicable to scheme prepared by State
Governments
34. Controlled stations
35. Supply by the Board to licensees owning generating stations
36. Power to Board to close down generating stations
37. Purchase of generating stati ons or undertakings or main
transmission lines by the Board
38. [Repealed]
39. Operation of Board's generating stations
40. Provision regarding connections with main transmission lines
purchased by the Board
41. Use of transmission lines
42. Powers to Board for placing wires, poles, etc.
43. Power to Board to enter into arrangements for purchase or
sale of electricity Certain conditions
43-A. Terms, conditions and tariff for sale of electricity by
Generating Company
4 4 . Restriction on establishment of new generating stations or
major additions or replacement of plant in generating
stations
45. 45.
Power to Board to enter upon and shut
down generating stations in certain circumstances
46. The Grid Tariff
47. Power to Board to make alternative arrangements with
licensees
48. Power to licensee to carry out arrangements under this Act
49. Provision for the sale of electri city by the Board to persons
other than licensees
50. Board not to supply electricity in certain circumstances
51. Provisional payments
52. Lower limit of power factor in supply by Board
53. Provision of accommodation and right of way
54. Power to Board to connect me ters, etc., to apparatus of
licensees
55. Compliance of directions of the Regional Electricity Board etc.
by licensees or Generating Companies
56. Leases of generating stations
57. Licensee's charges to consumers
57-A. Rating Committees
57-B. Power of rating committee to call for information, etc.
58. Power to direct amortisation and tariffs policies of licensees
being local authorities
CHAPTER VI
THE BOARD'S FINANCE, ACCOUNTS AND AUDIT
59. General principles for Board's finance
60. Board to assume obligations of State Government in respect
of matters to which this Act applies
60-A. Period of limitation extended in certain cases
61. Annual financial statement
62. Restriction on unbudgeted expenditure
63. Subventions to the Board
64. Loans to the Board
65. Power of Board to borrow
66. Guarantee of loans
66-A. Conversion of amount of loans into capital
67. Priority of liabilities of the Board
67-A. Interest on loans advanced by State Government to be paid
only after other expenses
68. Charging of depreciation by Board
69. Accounts and audit
CHAPTER VII
MISCELLANEOUS
70. Effect of other laws
71. [Repealed]
72. Water-power concessions to be granted only to the Board or a
Generating company
73. Co-ordination between the Board's schemes and multipurpose
schemes
74. Powers of entry
75. Annual reports, statistics and returns
75-A. Annual reports and accounts of Generating Company
76. Arbitration
77. Penalties
77-A. Source from which fines may be paid
77-B. Offences by companies
77-C. Cognizance of offences
78. Power to make rules
78-A. Directions by the State Government
79. Power to make regulations
79-A. Laying of notification before the State Legislature
80. 80. Provision relating to income tax and super-tax
81. 81.
Members, officers and other employees of the Board to
be public servants.
82. 82. Protection to persons acting under this Act
83. Saving of application of Act
THE FIRST SCHEDULE
THE SECOND SCHEDULE
THE THIRD SCHEDULE
THE FOURTH SCHEDULE
THE FIFTH SCHEDULE
THE SIXTH SCHEDULE
THE SEVENTH SCHEDULE - [Omitted]
THE EIGHTH SCHEDULE
THE NINTH SCHEDULE
THE ELECTRICITY (SUPPLY) ACT, 1948
(Act 54 of 1948) 1
An Act to provide for the rationalisation of the production and
Supply of electricity, and generally for taking measures
Conducive to 2[Electrical development.]
[10th September, 1948]
Whereas it is expedient to provide fo r the rationalisation of the production and
supply of electricity, for taking measures conducive to 2[electrical development]
and for all matters incidental thereto;
1. For Statement of Objects a nd Reasons see Gazette of India
1947, Pt. V. p. 514; and for Report of Select Committee. see
ibid., 1948, pp. 201-03. The Act has been extended to Dadra
and Nagar Haveli by Reg. 6 of 1963, Sec. 2 and Sch. I (w.e.f. 1
st
July 1965).
2. Subs. by the A.0. 1950, fo r the words “the electrical
development of the Provinces of India”
It is hereby enacted as follows:-
The preamble makes it clear that the Act provides for-
(i) Rationalization of producti on and supply of electricity;
(ii) Taking measures conducive to electrical development; and
(iii) Matters incidental thereto.
STATE OF OBJECTS AND REASONS
“The coordinated development of electric ity in India on a regional basis is
a matter of increasingly urgent impor tance for post-war re-construction
and development. The absence of coordinated system, in which
generation is concentrated in the most efficient units and bulk supply of
energy centralized under the direction and control of o ne authority is one
of the factors that impedes the healthy and economical growth of electrical
development in this country. Besides, it is becoming more and more
apparent that if the benefits of electricity are to be extended to semi-urban
and rural areas in the most effici ent and economical m anner consistent
with the needs of an entire region, the area of development must
transcend the geographical limits of a municipality, a cantonment board or
notified area committee, as the case may be. It has, therefore, become
necessary that the appropriate Go vernment should be vested with the
necessary legislative powers to link together under one co ntrol electrical
development in contiguous areas by the establishment of what is generally
known as the 'Grid System'. In the circumstances of this country such a
system need not necessarily involve inter-connection throughout the
length and the breadth of a province; regional co-o rdination inclusive of
some measures of interconnection may be all that is needed. An essential
pre-requisite is, however, the acquisition of necessary legislative power
not only to facilitate the establishment of this system in newly licensed
areas but also to control the operat ion of existing licensees so as to
secure fully coordinated development.
Government feels that it is not possibl e to legislate for this purpose within
the frame-work of the Indian Electricity Act, 1910, which was conceived for
a very different purpose. In thei r view what is needed is specific
legislation, on the broad lines of the Electricity (Supply) Act, 1926, in force
in the United Kingdom, which will enable Provincial Governments to set up
suitable organizations to work out 'Grid System' within the territorial limits
of the Provinces. Although execut ive power under the proposed bill will
necessarily vest in the provinces, two considerations indicate necessity for
Central legislation-
(i) The need for uniformity in the organization and development of the
‘Grid System', and
(ii) The necessity for the consti tution of semi- autonomous bodies like
Electricity Boards to administer the 'Grid System'. In the view of the
Government it is bodies like t hese which are likely to be most
suitable organisations for working the 'Grid Systems' on quasi-
commercial lines. Such Board cannot, however, be set up by
Provincial Governments under the exis ting Constitution Act as they
would be in the nature of trading corporation within the meaning of
entry 33 of the Federal Legislative List.”
1
1. Vide Statements of Object s and Reasons. Published in the
Gazette of India, 1947, Pt.V, p. 514.
STATEMENT OF OBJECTS AND REASON TO ACT 50 OF 1991. –
1. Indian Electricity Act, 19 1 0, deals with the supply and use of
electrical energy and the rights and obligations of the licensees.
The Electricity (Supply) Act, 1948 deals with the st atutory powers
and functions of the Central Electric ity Authority. State Electricity
Boards and Generating Companies.
2. It is proposed to widen the scope of private sector participation in
power generation, supply and dist ribution by suitably amending the
aforesaid Acts. The main amendments are as follows:-
(a) Section 6 of The Indian El ectricity Act, 1910, which deals
with the period of licence is Sought to be amended to
enhance the said period of licen ce to 30 years followed by
subsequent extensions for 20 years at a time. This ensures
reasonable stability in the operation of the licence.
(b) Section 2 of The Electricit y (Supply) Act, 1948 (hereinafter
referred to as the said Act), which defines various
expressions, is proposed to be amended to give effect to
certain changes in the definiti ons and also to define certain
new expressions. Clause (4-A) is proposed to be substituted
to remove the exclusion of priv ate sector from the definition
of “Generating Company”, as it permits only the companies
formed by the Central Government or by any State
Government or jointly by the Central Government and one or
more State Governments.
(c) Section 15-A of the said Ac t, which deals with the formation,
objects, etc., of Generating Companies is proposed to be
amended so as to provide for a establishment of Generating
Companies in the private sector as well as in the joint sector.
(d) Section 29 of the said Act which deals with the submission of
schemes involving capital expenditure exceeding rupees five
crores to the Central Electricit y Authority is proposed to be
amended in the interest of flexib ility, keeping in view the
escalation in the cost of proj ects and to provide for revision
from time to time of the pr escribed limit of project cost
requiring such clearance.
(e) A new Sec. 43-A is proposed to be inserted to the said Act to
provide for the terms and conditions and tariff for sale of
electricity by the Generating Companies.
(f) Section 55 of the said Ac t which provides for licensee
companies with the Board's dire ctions is proposed to be
amended to ensure that the licen sees as well as Generating
Companies shall comply with the directions issued by the
designated coordinating agencies in the matter of generation
and supply of power.
(g) Paragraph XVII (10) (b) of Sc h. VI to the said Act is
proposed to be amended to raise the standard rate from the
existing level of 2 per cent. over the Reserve Bank of India
rate to 5 per cent. over the Reserve Bank of India rate to
motivate investment in the power projects set up by
licensees companies.
3. The Bill seeks to achieve the above objects.
LIST OF AMENDING ACTS AND ADAPTATION ORDER
1. The Electricity (Supply) Am endment Act, 1949 (57 of 1949).
2. The Adaptation of Laws Order, 1950.
3. The Part B States (Law s) Act, 1951 (3 of 1951).
4. The Electricity (Supply) Amendment Act,
5. The Indian Electric ity (Amendment) Act,
6. The Electricity (Supply) Amendment Act,
7. The Electricity (Supply) Amendment Act,
8. The Electricity (Supply) Amendment Act,
9. The Electricity (Supply) Amendment Act,
10. The Electricity (Supply) Amendment Act,
11. The Delegated Legislat ion Provisions (Amendment) Act, 1983 (20
of 1983).
12. The Electricity (Supply) Am endment Act, 1984 (48 of 1984).
13. The Repealing and Amending Act, 1988 (19 of 1988).
14. The Electricity (Supply) Am endment Act, 1991 (50 of 1991).
15. 15.
The Electricity Laws (Amendment) Act, 1998 (22 of 1998).
CHAPTER I
INTRODUCTORY
1. SHORT TITLE, EXTENT AND COMMENCEMENT. -
(l) This Act may be called The Electricity (Supply) Act, 1948.
(2) It extends to the whole of India 1[except the State of Jammu and
Kashmir].
2[(3) This section and Sees. 2, 3, 4, 4-A, 4-B, 4-C, 15-A, 18-A, 26-A, 28
to 34 (both inclusive), subsection (2) of Sec. 39, Sec. 42, sub-
section (3) of Sec. 43 and Sees. 57, 57-A, 57-B, 58, 75-A, 76, 77,
77-A, 77-B, 77-C, 82 and 83 a nd the provisions of the 3[Sixth
Schedule] shall come into force at once. ]
(4) The remaining provisions of this Act shall come into force in a State
on such date, not later than two year s from the coming into force of
sections, Schedule and Table mentioned in sub-section (3), as the
State Government may, by notif ication in the Official Gazette,
appoint:
Provided that the Central Governm ent may, as respects any State
extend the said period of two years and in such event the remaining
provisions of the Act shall come into force in that State on such
date, not later than the extended per iod, as the State Government
may, by notification in the Official Gazette, appoint.
4
5[(5) Notwithstanding anything contained in sub-section (4),-
(a) where any provisions of this Act, to which sub-section (4)
applies, is in force in any State immediately before the
commencement of the Electricity (Supply) Amendment Act,
1978 (23 of 1978) that prov ision as amended by the
Electricity (Supply) Amendment Act, 1978 (23 of 1978),
shall, on and from such comm encement, be in force in that
State;
(b) The provisions of this Act, to which sub-section (4) applies,
which are not in force in any State on the commencement of
the Electricity (Supply) Am endment Act, 1978, shall come
into force in that State on such date as the State
Government may, with the c oncurrence of the Central
Government, by notification in the Official Gazette, appoint.]
1 . Subs. by Act 3 of 195 1, S ec. 3 and Schedule for the words
“except Par-t B States” (w.e.f. 1st April, 195 1).
2. Subs. by Act I 1 5 of 1976, Sec. 2, for sub-section (3) (w.e.f. 8th
October, 1976).
3. Subs. by Act 23 of 1978, Sec. 2, for “Sixth and Seventh
Schedule” (w.e.f. 3rd June, 1978).
4. The Act has come into force in the State of Sikkim, w.e.f. 1st
January, 1984, (vide S.O. 7(E). dated 30th December, 1983).
5. Ins. by Act 23 of 1978, Sec. 2.
STATE AMENDMENT
PONDICHERRY.-Substitution of sub-section (4):-
“(4) The remaining provisions of this Act shall come into force in the
State the State Governm ent may, by notificat ion in the official
Gazette appoint.”
1
1. Vide French Establishment A.LO.,1954 as modified by S.R.O.
2168-A, dated 29th June, 1957.
2. INTERPRETATION. - In this Act, unless there is anything repugnant in the
subject or context, -
(1) “Authority” means t he Central Electricity Authority constituted under
Sec. 3;
(2) “Board” means a State Electricit y Board constituted under Sec. 5;
(3) “Bulk-licensee” means a licensee who is authorized by his licence
to supply electricity to other licensees for distribution by them;
1[(3-A) “Competent government” m eans the Central Government in
respect of a Generating Company wh olly or partly owned by it and
in all other cases the Governm ent of the State in which the
generating station of a Generating Company is located or proposed
to be located;]
(4) (4)
“Controlled station” means a generating station designated in
a scheme sanctioned under Chapter V as a controlled station;
2[(4-A)”Generating Company” means a company registered under The
Companies Act, 1956 (I of 1956), and which has among its objects
the establishment, operation and maintenance of generating
stations;]
(5) “Generate station” or “station” means any station for generating
electricity, including any building and plant 3[with step-up
transformer switch-gear, cables or other appurtenant equipment, if
any] used for that purpose and the si te thereof, a site intended to
be used for a generating station, and any buildings used for
housing the operating st aff of a generating station, and where
electricity is generated by water-power, includes penstocks, head
and tail works, main and regulating reservoirs, dams and other
hydraulic works, but does not in any case include any sub-section
4[* * *];
(6) “Licensee” means a person licens ed under Part 11 of The Indian
Electricity Act, 19 10 (9 of 19 1 0) to supply energy or a person who
has obtained sanction under Sec. 28 of that Act to engage in the
business of supplying energy 5[but the provisions of Sec. 26 or Sec.
26-A of this Act notwithstanding, does not include the Board or a
Generating Company]-,
(7) “Main transmission lines” means all high pressure cables and over-
head lines (not being an essential part of the distribution system of
a licensee) transmitting electricit y from a generat ing station to
another generating stati on or to a sub-secti on, together with any
step-up and step down transformers, switch-gears and other works
necessary to and used for the contro l of such cables or over-head
lines, and such building or part thereof as may be required to
accommodate such transformers, switch-gears and other works
and the operating staff thereof,
6[(8) “Maximum demand” in relation to any period shall, unless otherwise
provided in any general or special orders of the State Government
mean twice the largest number of kilowatt-hours or kilo-volt-
ampere-hours supplied and taken dur ing any consecutive thirty
minutes in that period;]
7[(8-A) “Power system” means all aspects of generation,
transmission, distribution and suppl y of energy; and includes the
following or any combination thereof-
(a) Generating stations;
(b) Transmission or main transmission lines;
(c) Sub-stations;
(d) Tic-lines;
(e) Load dispatch activities;
(f) Mains or distribution mains;
(g) Electric supply-lines;
(h) Overhead lines;
(I) Service lines;
(j) Works,]
(9) “Prescribed” means prescribed by rules
8[made under this Act];
9[(9-A)”Regional Electricity Board” means a Board constituted by
resolution of the Central Governm ent for a specified region for
facilitating the integr ated operation of the pow er system in that
region;
(9-B) “Regional Load Dispatch Center” means the Center so designated
for a specified region where the operation of the power system in
that region and the in tegration of the pow er system with other
regions and areas (within the terri tory of India or outside) are
coordinated;
(9-C) “State Load Dispatch Center”, in relation to a State, means the
Center and designated where the operation of the power system in
that's State and integr ation of such State power system with other
power system are coordinated;]
(10) “Regulations” inseams regulatio ns made by the Board under Sec.
79;
(11) “Reserve Bank” means the Reserve Bank of India;
10[(l1-A) “Sub-section” means a stat ion for transforming or converting
electricity for the transmission or distribution ther eof and includes
transformers, converters, switch-gear, capacitors, synchronous
condensers, structures, cables and other appurtenant equipments
and any buildings used for that pur pose and the site thereof, a site
intended to be used for any such purpose and any buildings used
for housing the staff of the sub-section;
(11-B) “Tie-line” means a line for the transfer of electricity between
two, power system “ means all wo rks mentioned in sub-section (7)
used wholly or partially for t he purposes of distribution or
transmission of energy;
9[(12) “Transmission lines” means all wo rks mentioned in sub-section(7)
used wholly or partially for the purposes of distribution or
transmission of energy;]
(13) “Year” means, in relation to the Board 10[or a Generating
Company], the year commencing on the lest day of April;
(14) “Year of account” means, in re lation to a licensee, his financial
years;
(15) Other expression has the meani ngs respectively assigned to them
in The Indian Electricity Act, 1910 (9 of 19 1 0).
1. Ins. by Act 50 of 1991, S ec. 3 (w.e.f. 15th October, 1991).
2. Ins by Act 50 of 1991, Sec. 3 (w.e.f. 15th October, 199 1).
3. Ins by Act 115 of 1976, Sec. 3 (w.e.f. 8th October, 1976).
4. The words “for transformi ng, converting, distributing
electricity” omitted by ibid., Sec. 3, (w.e.f . 8th October 1976).
5. Subs by ibid., for the words and figures “but the provision of
Sec. 26 of this Act notwithstanding, does not include the
Board” (w.e.f. 8th October, 1976).
6. Subs by Act 101 of 1956, Sec. 3. for Cl. (8) (w.e.f. 30th
December, 1956).
7. Subs by Act no. 22 of 1998, Sec. 9, dated 10
th August 1998.
8. Ins. by Act 50 of 199 1, Sec. 3 (w.e.f. 15th October, 199 1).
9. Subs. by Act No. 22 of 1998, S ec. 9, dated 10th August, 1998.
10. Ins. by Act 11 5 of 1976, S ec. 3 (w.e.f. 8th October, 1976).
CHAPTER II
THE CENTRAL ELECTRICITY AUTHORITY
3. CONSTITUTION OF THE CENT RAL ELECTRICITY AUTHORITY. -
(1) The Central Government shall constitute a body called the Central
Electricity Authority generally to exercise such functions and
perform such duties under the Act and in such manner as the
Central Government may prescribe or direct, and in particular to-
(i) Develop a sound adequate and uniform national power
policy, 1[formulate short-term and perspective plans for
power development and co-ordinate the activities of the
planning agencies] in relation to the cont rol and utilisation of
national power resources;
(ii) Act as arbitrators in ma tters arising between the State
Government or the Board and a licensee or other person as
provided in this Act;
2(iii) Collect and record the data concerning the generation,
distribution and utilisation of power and carry out studies
relating to cost, efficiency, losses, benefits and such like
matters;]
(iv) Make public from time to ti me information secured under this
Act and to provide for the publication of reports and
investigations;
3[(v) Advise any State Govern ment, Board, Generating Company
or other agency engaged in th e generation or supply of
electricity on such matters as will enable such Government,
Board, Generating Company or agency to operate and
maintain the power system under its ownership or control in
an improved manner and where nec essary, in co-ordination
with any other Government, B oard, Generating Company or
other agency owning or having t he control of another power
system;
(vi) Promote and assist in the timely completion of schemes
sanctioned under ChapterV;
(vii) Make arrangements for advancing the skill of persons in the
generation and supply of electricity;
(viii) Carry out, or make arrangem ents for, any investigation for
the purpose of generating or tran smitting electricity; (ix)
promote research in matter affecting the generation,
transmission and supply of electricity
(x) Advise the Central Govern ment on any matter on which its
advice is sought or make recommendation to that
Government on any matter if, in the opinion of the Authority,
the recommendation would help in improving the generation,
distribution and utilisation of electricity, and
(xi) Discharge such other functions as may be entrusted to it by
or under any other law.]
(2) The Authority shall consist of
4[not more than fourteen members of
whom not more than eight shall be full-time members] appointed by
the Central Government 5[* * *]
2[(2-A) A full-time member shall be a person who has experience of', and
has shown capacity in,-
(a) Design, construction, operation and maintenance of
generating stations;
(b) Transmission and supply of electricity;
(c) Applied research in the field of electricity;
(d) Applied economics; or
(e) Industrial, commercial or financial matters.]
(3) The Central Government shall appoint
6[one of the full-time
members] to be the Chairman of the Authority.
(4) All the members of the Author ity shall hold office during the
pleasure of the Central Government.
7[(4-A) The Chairman of the Author ity and the other full-time members
shall receive such salaries and allowances as may be determined
by the Central Government and t he other members shall receive
such allowances and fees for attending the meetings of the
Authority, as the Central Government may prescribe.
(4-B) The other terms and conditions of service of the members of the
Authority [including, subject to t he provisions of sub-section (4),
their terms of office] shall be su ch as the Central Government may
prescribe.]
(5) No full-time member of the Authority shall
8[have any share or
interest for his own benefit, whether in his own name or
otherwise,] in any company or other body corporate or an
association of persons (whether incorporated or not), or a firm
engaged in the business of suppl ying electrical energy or 9[fuel, in
whatever form for the generation of el ectricity or in the manufacture
of electrical equipment].
(6) The Authority may appoint a Secr etary and such other officers and
10[employees] as it considers nece ssary for the performance of its
functions under this Act on such te rms as to salary, remuneration,
fee, allowance, pension, leave and gratuity as the Authority may, in
consultation with the Central Government, fix:
Provided that the appoi ntment of the Secretar y shall be subject to
the approval of the Central Government.
11[(7) The Chairman of the Authority may, by order, appoint any two or
more members of the Authority to act on behalf of the Authority in
relation to any matter referred to in Cl. (ii) of sub-section (1).
(8) No act or proceeding of the Author ity shall be invalid merely on the
ground of the existence of any vacancy in, or any defect in the
constitution of, the Authority.]
1. Subs by Act II 5 of 1976, Sec. 4, for “and particularly to co-
ordinate the activities of the planning agencies” (w.e.f. 8th
October, 1976).
2. Subs. by Act 115 of 1976, Sec. 4, for Cl. (iii) (w.e.f. 8th October,
1976).
3. Ins. by ibid..
4. Subs. by ibid. for the words “not more than six members (w.e.f.
8th October,1976)
5. The words “of whom at least th ree shall be full-time members”
omitted by Act 57 of 1949, Sec. 3.
6. Subs. by Act 115 of 1976, Sec. 4, for the words “one of the
members” (w.e.f. 8th October, 1976).
7. Ins. by ibid., (w.e.f. 8th October, 1976).
8. Subs. by Sec. 4. ibid., for the words “be directly or indirectly
concerned or interested in or have any share or interest”
(w.e.f. 8th October, 1976).
9. Subs. by Sec. 4, ibid., for the word “fuel solid or liquid, for the
generation of electricity” (w.e.f. 8th October. 1976).
10. Subs. by Act 23 of 1978, Sec. 3, for the word “servants” (w.e.f.
3rd June, 1978).
11. Subs. by Act 115 of 1976, Sec. 4, for sub-section (7) (w.e.f. 8th
October, 1976).
4. POWER TO REQUIRE ACCOUNT S, STATISTICS AND RETURNS.- It
shall be the duty of each
1[State Electricity Boar d, Generating Company,]
State Government Electricity Depar tment or other licensee or person
supplying electricity for public or privat e purposes, or generating electricity
for its or his own use 2[for consuming electricity] to furnish to the Authority
such accounts, statistics, 3[returns or other information] relating to the
generation, supply and use of electricity as it may require and at such time
and in such form and manner as it may direct.
1. Subs. by Sec. 5, ibid., for th e words “State Electricity Board”
(w.e.f. 8th October, 1976).
2. Ins. by Sec. 5, ibid- (w.e.f. 8th October, 1976).
3. Subs. by Sec. 5, ibid, for th e words “and returns” (w.e.f. 8th
October, 1976).
1[4-A.DIRECTIONS BY CENTRAL GOVERNMENT TO THE AUTHORITY. –
(1) In the discharge of its functions , the Authority shall be guided by
such directions in matters of poli cy involving public interest, as the
Central Government may give to it in writing.
(2) If any question arises as to whether any such direction relates to a
matter of policy involving public inte rest, the decision of the Central
Government thereon shall be final.
1. Ins by Act 115 of 1976, Sec. 6, (w.e.f. 8
th October, 1976).
4-B. POWER OF CENTRAL GO VERNMENT TO MAKE RULES.-
(l) The Central Government may, by notification in the Official Gazette,
make rules for carrying out the purposes of this Chapter.
(2) In particular and without prejudice to the generality of the foregoing
power, such rules may provide fo r all or any of the following
matters, namely:
(a) The functions and duties of the Authority and the manner in
which such functions and dutie s shall be exercised and
performed, under sub-section (1) of Sec. 3;
(b) The terms and conditions of service of the Chairman and
other members of the Authority (including the allowances
and fees payable to members, but not including the salaries
and allowances payable to the Chairman and other full-time
members, of the Authority) under sub-section (4-A) and sub-
section (4-B) of Sec. 3;
(c) Any other matter which is required to be, or may be,
prescribed by the Central Government.
(3) Every rule made by the Centra l Government under this Chapter
shall be laid, as soon as may be after it is made, before each
House of Parliament whil e it is in session for a total period of thirty
days which may be, comprised in one session or in two or more
successive sessions, and if, before the expiry of the session
immediately following the sessi on or the successive sessions
aforesaid, both Houses agree in ma king any modification in rule or
both Houses agree that the rule should not be made, the rule shall
thereafter have effect only in such m odified form or be of no effect,
as the case may be, so, however, that any such modification or
annulment shall be without prejudice to the validity of anything
previously done under that rule.].
4-C. POWER OP AUTHORITY TO REGULATIONS.-
1[(1)] The Authority may 2[by notification in the Official Gazette] make
regulations, not inconsistent with t he provisions of this Act and the
rules made by the Central Govern ment there under, to provide for
all or any of the following matters, namely:
(a) Summoning and holding of meet ings of the Au thority, the
times and places at which such meetings shall be held, the
conduct of business thereat and the number of members
required to constitute a quorum;
(b) Any other matter arising out of the functions of the Authority
under this Act for which it is necessary or expedient to make
regulations.]
3[(2) The Central Government shal l cause every regulation made under
this section to be laid, as soon as may be after it is made, before
each House of Parliament, while it is in session, for a total period of
thirty days which may be comprised in one session or in two or
more successive sessions, and if, bef ore the expiry of the session
immediately following the sessi on or the successive sessions
aforesaid, both Houses agree in making any modification in the
regulation, or bot h Houses agree that the regulation should not be
made, the regulation shall thereafter have effect only in such
modified form or be of no effect, as the case may be; so, however,
that any such modification or annul ment shall be without prejudice
to the validity of anything previously done under that regulation.]
1. Re-numbered by Act 20 of 1983, Sec. 2 and the Schedule.
2. Ins. by ibid.
3. Ins. by Act 20 of 1983. Sec. 2 and the Schedule.
CHAPTER III
1[STATE ELECTRICITY BOARDS, GENERATING COMPANIES,
STATE ELECTRICITY CONSULTATIVE COUNCILS
AND LOCAL ADVISORY COMMITTEES]
1. Subs. by Act 115 of 1976, S ec. 7, for the words “State
Electricity Board” (w.e.f. 8th October 1976).
5. CONSTITUTIONS AND COMP OSITION OF STATE ELECTRICITY
BOARDS. –
(1) The State Government shall, as soon as may be after the issue of
the notification under sub-section (4 ) of Sec. 1, constitute by
notification in the Official Gazette , a State Electric ity Board under
such name as shall be specified in the notification.
(2) The Board shall consist of not less than three and not more than
seven members appointed by the State Government.
1[ * * * * *]
2 [(4) Of the members, -
(a) One shall be a person who has experience of, and has
shown capacity in, commercial matters and
administration;
(b) One shall be an electrical engineer with wide experience;
and
(c) One shall be a person who has experience of accounting
and financial matters in a public utility undertaking,
preferably electricity supply undertaking.]
(5) One of the members possessing any of the qualifications specified
in subsection (4) shall be appointed by the State Government to be
the Chairman of the Board.
(6) A person shall be disqualified from being, appointed or being a
member of the Board if he is
3[* * *] a Member of 4[Parliament] or of
any State Legislature or any local authority.
(7) No act done by the Board shal l be called in question on the ground
only of the existence of any va cancy in, or any defect in the
constitution of, the Board.
1. Sub-section (3) omitted by Ac t 57 of 1949, Sec. 4 (w.e.f. 21
st
December, 1949).
2. Subs. by Act 101 of 1956, Sec. 4, for sub-section (4) (w.e.f. 30 th
December, 1956).
3. The words “or within the tw elve months last preceding was”
omitted by Act 30 of 1966, Sec. 2 (w.e.f. 16th September 1966).
4. Subs. by the A.0. 1950, fo r the words “the Central”.
STATE AMENDMENT
HIMACHAL PRADESH. -In sub-section 6 of Sec. 5 for the words “if he is
a member of Parliament”, the words “if he has attained the age of 65 years
or is a member of Parliament” shall be substituted.1
1. Vide H.P. Act No. 10 of 1990, Sec. 2 (w.e.f. 13th July, 1990).
6. INTER-STATE AGREEMENT TO EXTEND BOARD'S JURISDICTION
TO ANOTHER STATE. -
(1) Subject to the provisions of th is section, the Government of any
State may, after it has issued a no tification under sub-section (4) of
Sec. 1, in lieu of constituting a Board under Sec. 5 enter into an
agreement with the Govern ment of a contiguous State to provide
that the Board constituted for t he latter State shall exercise the
functions of a Board under this Act in the former State
(2) Subject to such modifications ( being of a character not affecting the
general operation of t he agreement) of the te rms of the agreement
as may from time to time be agreed upon by the State
Governments concerned, an agreem ent entered into under this
section shall be for a period of not less than twenty-five years but
may be determined earlier by mutual consent.
(3) An agreement under this section may, -
(a) Make such financial arrangem ents between the participating
State Governments as may be necessary for the purposes of
the agreement;
(b) Provide for consultation be tween the participating State
Governments either generally or with reference to particular
matters arising under this Act;
(c) Generally make such incident al, supplementary or ancillary
provisions, not inconsistent with this Act, as may be deemed
necessary or expedient for giving effect to the agreement.
STATE AMENDMENT
PONDICHERRY.-In Sec, q (2) and (3)for the words “State Governments”
substitute the word “Governments”.1
1. Vide French Establishment A.L.O. 1954 as amended by S.R.O.
2168-A. dated 29th June, 1957.
7. EFFECT OF INTER-STATE AGREEMENT.- Where an agreement is
entered into under Sec. 6, the partici pating State Governments shall, by
notification in the Official Gazettes, declare a date on which the agreement
shall come into force, and on and after that date-
(a) The Board constituted for the o ne State shall have all the powers
and duties of a Board under this Act in respect of both States as if
they constituted a single State;
1[(b) References in this Act to-
(i) The State,
(ii) The State Electricity Consultative Council, and
(iii) The State Legislature,
Shall, unless the context other wise requires, be construed as
references respectively to-
(A) Both States,
(B) Where more than one State El ectricity Consultative Council
has been constituted under Sec. 16, to all such Councils,
and
(C) The Legislatures of both States;]
(c) The provisions of Sec. 60 in relation to the assumption by the.
Board of the rights and liabilities of the Stat e Government arising
before the first constitution of the Board shall apply to the
assumption by the Board of t he rights and liabilities of the
Government of the State to whic h the exercise of its functions
under this Act is extended under the agreement, as if in that section
for the words “before the first cons titution of the Board” there were
substituted the words and figures “before the date on which the
agreement under Sec. 6 came into force”.
1. Subs. by Act 30 of 1966, Sec. 3. For Cl. (b) (w.e.f. 16th September,
1966).
STATE AMENDMENT
PONDICHERRY.-In Sec. 7 (I)for the words “State Governments”
substitute the word “Government”.1
1. Vide French Establishment A.L.O. 1954 as amended by S.R.O.
2168-A, dated 29th June, 1957.
1[8. TERM OF OFFICE AND CONDITIONS FOR RE-APPOINTMENT OF
MEMBERS OF THE BOARD.- The Chairman and other members of the
Board shall hold office for such per iod, and shall be el igible for re-
appointment under such conditions, as may be prescribed-]
1. Subs. by Act 57 of 1949, Sec. 5, for Sec. 8 (w.e.f. 21st
December, 1949).
STATE AMENDMENT
KARNATAKA. -In Sec. 8 of the principal Act, -
(1) After the words “the Chairm an and other members of the Board
shall”, a comma and the words “subjec t to the pleasure of the State
Government” shall be deemed always to have been inserted:
(2) At the end, the followi ng shall be inserted, namely, -
“They shall exercise such powers and perform such functions and
be paid such remuneration and allowances and be governed by
such conditions for service as the State Government may, from
time to time, by general or special order, determine”
1
1. Vide Knt. Act No. 46 of 1986, Sec. 2.
9. MEMBERS NOT TO HOLD INTE REST IN CERTAIN CONCERNS. --.
(l) A member of the Board shall, prior to his appointment, give to the
State Government intimation of, and shall, before taking charge of
his office, sell or divest himself of, any interest which he may have
for his own benefit whether in his own name or otherwise in any
firm or company carrying on the busi ness of supplying electricity or
any fuel for the generation of electric ity, or of the manufacture, sale
or hire of machinery, plant, equ ipment, apparatus or fitting for the
generation, transmission, distribution or use of electricity, or any
interest in the managing agency or shares or securities of any such
company; and it shall not be lawful for a member of the Board, so
long as he holds office, to acquire or purchase any such interest in
any such firm or company and it' he, under any will or by
succession or gift becomes entitled for his own benefit to any such
interest, he shall sell the same within three months after becoming
so entitled thereto; and he shall also, within three months, sever
any connection he may have and ceas e to have any interest, direct
or indirect, in any such concern.
(2) Nothing contained in-sub-section (1) shall prevent a member from
acquiring or holding any share or interest in any firm or company
other than a firm or company mentioned in sub-section (1):
Provided that if the B oard has entered into, or is about to enter into
any contract or agreem ent with any such firm or company in which
a member holds any share or interest, he shall disclose the fact and
nature of such interest and he shall not be entitled to vote on any
decision of the Board relating to such contract or agreement.
(3) A disclosure referred to in the proviso to sub-section (2) shall
forthwith be recorded in the minutes of the Board and
communicated to the State Govern ment and the State Government
may thereupon give such directions as it may deem proper.
10. REMOVAL OR SUSPENSION OF MEMBERS. -
1[(1)] The State Government may sus pend from office for such period as
it thinks fit or remove from office any member of the Board who, -
(a) Is found to be a lunatic or becomes of unsound mind; or
(b) Is adjudged insolvent; or
(c) Fails to comply with the provisions of Sec. 9; or
(d) Becomes or seeks to become a Member of
2[Parliament] or
any State Legislature or any local authority; or
3[(e) In the opinion of the State Government-
(i) Has refused to act; or
(ii) Has become incapab le of acting; or
(iii) Has so abused his position as a member as to render
his continuance on the B oard detrimental to the
interest of the general public; or
(iv) Is otherwise unfit to c ontinue as a member: or] (j) is
convicted of an offence involving moral turpitude.
4[(2) The State Government may suspend any member pending an
inquiry against him.
(3) No order of removal shall be made under this section unless the
member concerned has been given an opportunity to submit his
explanation to i lie State Government, and when such order is
passed, the seat of the member removed shall become vacant anExcerpt shown. Open the full act in Lexace.