The ODISHA ELECTRICITY REFORM ACT, 1995

Orissa Act No. 2 of 1996
*THE ORISSA ELECTRICITY
REFORM ACT, 1995
[Received the assent of the Governor on the 3rd January 1996, first published in an
extraordinary issue of the Orissa Gazette, dated the 10th January 1996.]
AN ACT TO PROVIDE FOR THE RESTRUCTING OF THE ELECTRICITY
INDUSTRY FOR THE RATIONALISATION OF THE GENERATION,
TRANSMISSION, DISTRIBUTION AND SUPPLY OF ELECTRICITY
FOR AVENUES FOR PARTICIPATION OF PRIVATE SECTOR
ENTREPRENEURS IN THE ELECTRICITY INDUSTRY AND
GENERALLY FOR TAKING MEASURES CONDUCIVE TO
THE DEVELOPMENT AND MANAGEMENT, OF THE
ELECTRICITY INDUSTRY IN THE STATE IN AN
EFFICIENT ECONOMIC AND COMPETITIVE
MANNER INCLUDING THE CONSTITUTION
OF AN ELECTRICITY REGULATORY
COMMISSION FOR THE STATE AND
FOR MATTERS CONNECTED
THEREWITH OR INCIDENTAL
THERETO.
BE it enacted by the legislature of the State of Orissa in the Forty Sixth
Year of the Republic of India as follows :
CHAPTER-I
Preliminary
1. Short title, extent and commencement. - (1) This Act may be called
the Orissa State Electricity Reform Act, 1995.
(2) It extends to the whole of the State of Orissa.
[(3) It shall come into force on such date as the State Government may by
* Published in Orissa Gazette Extraordinary No. 40 dated 10.1.1996.
The Odisha   Gazette
EXTRAORDINARY
PUBLISHED BY AUTHORITY
No. Date : 10th January 1996
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notification, appoint.]
2. Definitions. - In this Act, unless the context otherwise requires,-
(a) "area of transmission" means the area within which the holder of a
transmission licence is for the time being authorised by licence to transmit energy;
(b) "Commission" means the Orissa Electricity Regulatory Commission
constituted under Sub-section (1) of Section 3;
(c) "Gridco" means Grid Corporation of Orissa Limited as referred to in
Section 13;
(d) "Hydro Power Corporation" hereinafter referred to as the OHPC means
the Orissa Hydro Power Corporation Limited incorporated under the Companies
Act, 1956 (I of 1956) with effect from the twenty-first day of April, 1995;
(e) "licence" means a licence granted under Chapter VI;
(f) "Licensee" or "licence holder" means a person licensed under Chapter
VI to transmit or supply energy including Gridco.
(g) "prescribed" means prescribed by the rules or regulations.
(h) "Public Service Commission" means the Public Service Commission
for the State of Orissa established pursuant to Article 315 of the Constitution of
India;
(i) "regulations" means regulations made by the Commission under this
Act;
(j) "relative" means the relative as defined under Section 6 of the Companies
Act, 1956;
(k) "Rules" means rules made by the State Government under this Act;
(l) "selection committee" means the selection committee constituted under
Section 4;
(m) "State" means State of Orissa;
(n) "State Government" means the Government of the State;
(o) "supply licence" means a licence under Clause (b) of Sub-section (1)
of Section 15;
(p) "transmission licence" means a licence under Clause (a) of Sub-section
(1) of Section 15;
(q) "transmit" in relation to electricity, means transportation or transmission
of electricity by means of a system operated and controlled by a licensee which
consists, wholly or mainly, or extra high voltage and extra high tension lines and
electrical plant and is used for transforming and for conveying or transferring
electricity from a generating station to a sub-station, from one generating station
to another or from one sub-station to another or otherwise from one place to
another;
(r) words and expressions used but not defined in this Act and defined in
the Electricity (Supply) Act, 1948 shall have the meanings respectively assigned
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to them in that Act;
(s) words and expressions used but not defined either in this Act or in the
Electricity (Supply) Act, 1948 (54 of 1948) and defined in the Indian Electricity
Act, 1910 (9 of 1910) shall have the meanings respectively assigned to them in
that Act.
CHAPTER-II
Orissa Electricity Regulatory Commission
3. Establishment and constitution of the Commission. - (1) For the
purposes of this Act, the S tate Government shall, within 3 months of the
commencement of this Act, establish, by notification, a Commission to be known
as the Orissa Electricity Regulatory Commission, which shall be a body corporate
with perpetual succession and a common seal with power to acquire and hold
property, movable and immovable, and shall by the said name be entitled to sue
and be sued.
(2) The Commission shall consist of three members to be appointed by
the State Government from persons selected by the selection committee
constituted for the purpose.
(3) The State Government shall, as per the recommendation of the selection
committee, designate one of the members as the Chairman of the Commission
but, until such designation, the most senior member of the Commission shall
act as Chairman, such seniority being reckoned from the date of joining of the
Commission by the members.
(4) When the Chairman of the Commission is unable to discharge the
functions owing to absence, illness or any other cause, the senior most member
of the Commission shall discharge the functions of the, Chairman, until the day
on which the Chairman assumes the charge of his functions.
(5) No act or proceedings of the Commission shall be invalid by reason
why of the existence of any vacancy among its members or any defect in the
constitution thereof.
(6) The method and manner of selection and appointment of members of
the Commission and designation of one of the members as Chairman shall be
such as may be prescribed by rules.
4. Constitution of the Selection Committee. - (1) The State Government
shall expeditiously constitute a selection committee, as often as may be required,
to select persons for appointment as members of the Commission.
(2) The selection committee shall consist of three members, namely:
(a) the Chairman of the Public Service Commission, who shall be
the Chairman of the selection committee;
(b) the Secret ary in charge of the Dep artment of Energy , State
Government, who shall be the Convener of the selection
committee; and
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(c) the Chairman or any member of the Central Electricity Authority
designated for the purpose from time to time.
(3) The selection committee shall act expeditiously and shall generally
finalise the selection within a period of two months to enable the State Government
to make the final selection and appointment in time for the new member to take
effective charge at the expiry of the term of the retiring member.
(4) The selection committee shall select two suitable persons for each
vacancy in the Commission who have such qualification and experience as
provided in this Act and notify to the State Government of the persons short listed
by the selection committee.
(5) The decisions of the selection committee shall be by majority.
(6) The State Government shall appoint one of the two candidates shortlisted
by the selection committee as a member of the Commission.
5. Conditions for appointment as member of the Commission. - (1)
The members of the Commission shall be persons of ability, integrity and standing
who have adequate knowledge or experience of, or have shown capacity in,
dealing with problems relating to engineering, economics, commerce,
accountancy, law or administration and further that, at all times,-
(a) at least one member of the Commission shall be an electrical
engineer with experience of generation, transmission, distribution
or supply of electricity; and
(b) at least one member of the Commission shall have qualification
in, and experience of, any of the disciplines of economics,
commerce, accountancy, law or administration.
(2) The selection and appointment of the members of the Commission
shall at all times be made strictly in accordance with the qualification and
experience mentioned in this Section.
(3) A person shall be disqualified from being appointed as a member of the
Commission if he is a Member of Parliament or of any State Legislature or any
local authority or holds any post in a political party, or if he has any financial or
other interest, directly of indirectly, in any private company or undertaking dealing
with any of the business referred to in Clause (a) of Sub-section (4).
(4) The persons who are considered for appointment as members of the
Commission shall notify the covernor of the selection committee,-
(a) of any office, employment or consultancy agreement or
arrangement which he has in his own name or in any-firm,
association or persons or body corporate or in the names or in
any firm, association of persons or body corporate or in the names
of any relative carrying on any of the following businesses.
(i) generation, transaction, distribution of supply of electricity;
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(ii) manufacture, sale, or supply of any fuel for generation of
electricity;
(iii) manufacture, sale, lease, hire or otherwise supply of or dealing
in machinery, plant, equipment, apparatus or fittings for the
generation, transmission, distribution, supply or use of
electricity; and
(iv) any entity providing professional services to any of the
business referred to in Sub-clauses (i), (ii) and (iii) above.
(b) of such other details and information as may be prescribed in
the rules.
(5) All details received from the persons referred to in Sub-section (4) shall
be placed for consideration of the selection committee at the time of selection
and recommendation of the person for appointment as member of the Commission.
(6) Each member of the Commission shall, before taking charge of the
office as member divest, himself from the interest in all or any of the business
mentioned in Sub-section (4) as a condition of his appointment.
(7) If a person to be appointed as a member of the Commission holds any
office under the State Government or Central Government or in any public sector
corporation or Government body he shall submit his resignation or take voluntary
retirement from that service and shall not seek re-appointment in the service of
the State Government, the Central Government, any public sector corporation or
Government body at any time after he ceases to be a member of the Commission.
(8) So long as the person holds the office of a member of the Commission
and after he ceases to be a member of the Commission for any reason whatsoever,
he shall not acquire, hold or maintain, directly or indirectly any office, employment
or consultancy arrangement or business mentioned in Sub-section (4) and if he
acquire any such interest involuntarily or by way of succession or testamentary
disposition he will divest himself from such interest within a period of two months
of such interest being acquired.
(9) Before appointing any person as a member of the Commission, the
State Government shall satisfy itself that the person does not have any financial
or other interest as referred to in Sub-section (3).
6. Term of office and conditions of service of members of the
Commission. - Every member of the Commission shall hold office for a period of
five years from the date he assumes office and he shall not be eligible for re-
appointment at any time after the expiry of his term of appointment.
Provided that the first three members of the Commission shall be appointed
for varying period of three years, four years and five years respectively so as to
avoid the retirement of all the members of the Commission at the same time and
ensure continuity in the functioning of the Commission :
Provided further that no member of the Commission shall be appointed or
shall hold office after he has attained the age of sixty two years.
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(2) Subject to the provisions in the Schedule, the Chairman of the
Commission and other members of the Commission shall receive such
remuneration and other allowances and shall be governed by such conditions of
service as may be prescribed under the rules.
(3) The Chairman of the Commission and every other member of the
Commission shall, before entering upon his office, make and subscribe an oath
of office and of secrecy in such form, in such manner and before such authority
as may be prescribed by rules.
7. Removal of members. - (1) The State Government may, after giving
an opportunity of being heard, remove from office any member of the Commission,
subject to the provisions of Sub-section (2), who-
(a) has been adjudged insolvent, or
(b) has been convicted of an offence involving moral turpitude, or
(c) has become physically or mentally incapable of acting as such
member, or
(d) has without reasonable cause refused or failed to act continuously
for a period of three months or more, or
(e) ceases to fulfil any of the conditions of his appointment as member
or
(f) has acquired such financial or other interest that can affect
prejudicially his functions as a member, or
(g) has conducted himself in a manner or has so abused his position
as to render his continuance in office prejudicial to the public
interest or to the objects and purposes of the Act.
(2) Except where a member admits the charge, in writing, no member of
the Commission shall be removed from his office on the grounds specified in
Clauses (c), (d), (f) and (g) of Sub-section (1), until a sitting Judge of the High
Court of judicature of Orissa, as recommended by the Chief justice of the High
Court at relevant time, has carried out an investigation and submitted a report.
(3) The State Government shall communicate its decision to the member
concerned within a period of two months of the receipt of the report.
(4) A member who has been removed shall not be eligible for reappointment
as a member or in any other capacity in the Commission.
(5) If the member removed under this Section is the Chairman of the
Commission, he shall also cease to be the Chairman of the Commission.
(6) The vacancy caused by the removal of the member shall be filled in the
same manner as provided for the appointment of a member or designation of the
Chairman of the Commission.
8. Appointment of the Secret ary, st aff and consult ants of the
Commission. - (1) The Commission shall appoint a person as Secretary of the
Commission to assist the Commission to discharge its functions.
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(2) The Commission shall, with the approval of the S tate Government,
determine the number, nature and categories of other officers and employees
required to assist the Commission in the discharge of its functions.
(3) The salaries and allowances payable to members of the Commission
and the administrative expenses, including salaries, allowances and pensions
payable to or in respect of the Secretary, officers and other employees of the
Commission, shall be charged to the consolidated fund of the State.
(4) The method and manner of selection of the Secret ary, officers and
other employees of the Commission and the terms and conditions of their service
may be prescribed by the Commission by regulations with the previous approval
of the State Government.
(5) The Commission shall be entitled to appoint, from time to time,
consultants required to assist the Commission in the discharge of its functions
on terms and conditions to be decided by the Commission.
CHAPTER-III
Proceedings, Powers and Functions of the Commission
9. Proceedings of the Commission. - (1) The headquarters of the
Commission shall be at Bhubaneswar, but the Commission shall be entitled to
conduct its proceedings, consultations and hearings in other places in the State.
(2) The Commission shall have the power under Sub-section (1) of Section
54 to frame regulations for the conduct of its proceedings and discharge of its
functions.
(3) In case of a difference of opinion among the members of the Commission,
the opinion of the majority shall prevail and the opinion of the Commission shall
be expressed in terms of the views of the majority and, for this purpose, each
member of the Commission shall have one vote only and the Chairman shall
have no casting or second vote.
(4) The quorum for the meeting of the Commission shall be two, but in the
case of a meeting of the Commission to review any previous decision taken by
the Commission or for consideration of any issue which could not be decided on
account of equality of votes in favour of or against the resolutions proposed or
where the issue considered at a meeting in which only two members of the
Commission were present, the quorum for the meeting shall be all the three :
Provided that, in case of emergency, the Commission may decide any
matter by circulation to member or members.
(5) The Chairman of the Commission may instruct the Secretary to call a
meeting of the Commission to be held at such time at such place as the Chairman
may direct and also any member of the Commission may request a meeting of
the Commission at any time by sending a notice in writing to the other members
and with a copy to the Secretary.
(6) All decisions, directions and orders of the Commission shall be in
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writing and shall be supported by reasons and the decisions, directions and
orders of the Commission shall be available for inspection by any person and
copies of the same shall also be made available to such person in the manner
prescribed by regulations.
10. Powers of the Commission. - (1) The Commission shall, for the
purposes of any inquiry or proceedings under this Act, have the powers as are
vested in a Civil Court under the Code of Civil Procedure, 1908 while trying a suit
in respect of the following matters, namely :
(a) the summoning and enforcing the attendance of any witness
and examining him on oath;
(b) the discovery and production of any document or other material
object producible as evidence;
(c) the reception of evidence on affidavits;
(d) the requisition of any public record from any office;
(e) the issuing of any commission for examination of witnesses;
and
(f) the review of its decisions, directions and orders.
(2) The Commission shall have the power to require any person-
(a) to produce before, and allow to be examined and kept by an
officer of the Commission specified in this behalf, such books,
accounts, or other documents in the custody or under the control
of the person so required as may be specified or described in the
requisition, being documents relating to any matter concerning
the generation, transmission, distribution and supply or use of
electricity, the functioning of any undertaking involved in the above
areas and other matters, the examination of which may be required
by the Commission for the purpose of this Act; and
(b) to furnish to an officer so specified such information as may be
required for the purposes of this Act or such other information as
may be in his possession in relation to any activity carried on by
any other person.
(3) Where, during any inquiry or proceedings under this Act, the
Commission has any grounds to believe that any books or papers or documents
of, or relating to any unit or person in relation to which such inquiry is being made
or which the owner of such unit may be required to produce in such inquiry, are
being, or may be, destroyed, mutilated, altered, falsified or secreted, it may, by
a written order, authorise any officer of the Commission to exercise the same
powers of entry, search and seizure as may be exercised by an Inspector under
Sections 240 and 240-A of the Companies Act, 1956.
(4) Notwithstanding anything contained in any other law for the time being
in force, the Commission may , by a general or special order , call upon any
person including the generating companies or the licencees to furnish to the
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Commission periodically, or as and when required, any information concerning
the activities carried on by such person related to generation, transmission,
distribution and supply or use of electricity; the connection between such person
and any other person or undertaking including such other information relating to
the Organisation, business and cost of production to enable the Commission to
carry out its functions under this Act.
(5) In the discharge of its functions the Commission shall be entitled to,
and may consult to the extent the Commission considers appropriate from time
to time such persons or group of persons who may be affected or likely to be
affected by the decisions of the Commission.
(6) The Commission may call for information, details, accounts and other
documents from any person or licensee and make inquiry for the purposes of
providing the same to the Central Electricity Authority, the Central Government
and the State Government when so required by them.
(7) All persons to whom notices may be issued pursuant to this Act shall
duly, faithfully and effectively furnish the information, details, books, accounts
and other documents, which the Commission considers relevant in connection
with its functions under this Act or which may be required to be obtained at the
directions of the Central Electricity Authority, the Central Government or the
State Government and shall be proceeded with and punishable under Section 41
for any failure to comply with such requirement.
(8) Notwithstanding anything contained in Sections 12, 13, 14, 15, 16, 18
and 19 of the Indian Electricity Act, 1910 (9 of 1910) the Commission may by
order in writing confer upon licenses or any other person engaged in the business
or transmission, distribution or supply of energy under this Act, subject to such
conditions and restrictions as the Commission may think fit to impose, any of
the powers which the telegraph authority possesses under the Indian Telegraph
Act, 1885 with respect of placing of telegraph lines and posts for the purposes of
a telegraph established or maintained by the Government or to be so established
or maintained.
11. Functions of the Commission. - (1) Subject to provisions of this Act,
the Commission shall be responsible to discharge, amongst others, the following
functions, namely :
(a) to aid and advise, in matters concerning generation, transmission,
distribution and supply of electricity in the State;
(b) to regulate the working of licensees and to promote their working
in an efficient, economical and equitable manner;
(c) to issue licenses in accordance with the previsions of this Act
and determine the conditions to be included in the licenses;
(d) to promote efficiency, economy and safety in the transmission,
distribution and use of the electricity in the State including and in
particular in regard to quality, continuity and reliability of service
so as to enable all reasonable demands for electricity to be met;
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(e) to regulate the purchase, distribution, supply, and utilisation of
electricity, the quality of service, the tariff and charges payable
keeping in view both the interest of the consumer as well as the
consideration that the supply and distribution cannot be
maintained unless the charges for the electricity supplied are
reasonably levied and duly collected;
(f) to promote competitiveness and progressively involve the
participation of the private sector, while ensuring a fair deal for
the customers;
(g) to collect date and forecast on the demand for and use of
electricity and to require the licensees to collect such data and
make such forecasts.
(h) to require licenses to formulate perspective plans and schemes
in coordination with others for the promotion of generation,
transmission, distribution and supply of electricity; and
(i) to undertake all incidental or ancillary things.
(2) Notwithstanding the provisions of Section 52 of the Indian Electricity
Act, 1910 or the provisions of Clause (ii) of Sub-section (1) of Section 3 and
Section 76 of the Electricity (Supply) Act, 1948, the Commission shall have the
power to act as arbitrator or to nominate arbitrator or arbitrators to adjudicate and
settle the disputes arising between the licensees in accordance with the provisions
of this Act and the regulations to be prescribed and this shall be a condition of
the grant of licences.
CHAPTER-IV
Powers of the State Government
12. General powers of the S tate Government. - (1) The S tate
Government shall have the power to issue policy directives on matters concerning
electricity in the State including the overall planning and coordination and all
such policy directives shall be consistent with the objects sought to be achieved
by this Act.
(2) If any dispute arises between the Commission and the State Government
as to whether a question is or is not a question of policy, it shall be referred to the
Central Electricity Authority whose decision thereon shall be final and binding
and for this purpose the Central Electricity Authority may appoint one or more of
its members to act on behalf of the said authority.
(3) The State Government shall be entitled to issue policy directives,
concerning the subsidies to be allowed for supply of electricity to any class or
classes or persons or in respect of any area in addition to the subsidies permitted
by the Commission while regulating and approving the tariff structure Provided
that the State Government shall pay the amount to compensate any concerned
body or unit affected by the grant of subsidies by the State Government to the
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extent the subsidies granted.
CHAPTER-V
Gridco
13. Constitution and functions of the Gridco. - (1) The Grid Corporation
of Orissa Limited incorporated under the provisions of the Companies Act, 1956
with effect from the 20th day of April, 1995 with the main objects of engaging in
the business of procurement, transmission and bulk supply of electric energy,
shall subject to the powers of the State Government under Section 12, be the
principal company to undertake planning and coordination in regard to transmission
and to determine the electricity requirements in the State in coordination with the
Generating Companies, State-Government, contiguous States, the Commission,
the Regional Electricity Board and the Central Electricity Authority.
(2) Gridco shall own the extra high voltage transmission system, shall be
responsible for transmission system operations and shall operate the power
system in an efficient manner.
(3) Gridco shall undertake the functions specified in this Section and such
other functions as may be required under the licence to be granted to it by the
Commission under this Act.
(4) Upon the grant of licence to Gridco under Section 15, Gridco shall
discharge such powers, duties and functions of the Board including those under
the Indian Electricity Act, 1910 and the Electricity (Supply) Act, 1948 or the rules
framed thereunder as the Commission may specify in the licence and it shall
undertake and duly discharge the powers, duties and functions so assigned.
(5) Subject to Sub-section (1) and the overall supervision and control of
Gridco, subsidiary or associated Grid companies may be established in the
State and the Commission may grant licenses under the terms of this Act to
such grid companies, in consultation with Gridco.
CHAPTER-VI
Licensing of Transmission and Supply
14. Licensing. - (1) No person, other than those authorised to do so by
licence or by virtue of exemption under this Act or authorised or exempted by
any other authority under the Electricity (Supply) Act, 1948 shall engage in the
State in the business of-
(a) transmitting; or
(b) supplying electricity.
(2) Where any differences or dispute arises as to whether any person is or
is not engaged or about to engage in the business or transmitting or supplying
electricity as mentioned in Sub-section (1), the matter shall be referred to the
Commission for decision which shall be final.
(3) The Commission shall have the power to order any unlicensed person
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to cease operating and disconnect its apparatus.
(4) Notwithstanding anything contained in the other provisions of this Act,
until the est ablishment of the Commission in terms of Section 3, the S tate
Government shall, for a period of six months from the date this Act comes into
force, have the power to grant provisional licences under this Section having a
duration not exceeding twelve months to any person or persons to engage in the
State in the business or transmission or supply of electricity, on such terms and
conditions as the State Government may determine consistent with the provisions
of this Act, subject however to the following conditions, namely :
(a) upon the establishment of the Commission, each of the provisional
licences so granted shall be placed before the Commission and
shall be deemed to constitute an application for grant of a licence
by the Commission under the provisions of this Act; and
(b) each provisional licence granted under this Section shall cease
to be valid and effective on the date on which the decision of the
Commission on the application is communicated.
15. Grant of licences by the Commission. - (1) The Commission may
on an application made in such form and on payment of such fee as may be
prescribed by regulations, grant a licence authorising any person to-
(a) transmit electricity in a specified area of transmission; and/or
(b) supply electricity in a specified area of supply.
(2) in respect of the grant of licence under Sub-section (1), the following
provisions shall apply, -
(a) any person applying for a licence shall publish a notice of his
application in such manner; and with such particulars as may be
prescribed by the Commission within 14 days after making the
application;
(b) the Commission shall not grant a licence until, -
(i) all objections received within three months from the date of
publication relating to the application for the licence have
been considered by the Commission;
(ii) no objection has been obtained from the Central Government
in the case of an application for a licence to supply or transmit
in an area which includes the whole or any part of an
cantonment, aerodrome, fortress, arsenal, dockyard or camp
of any building or place in the occupation of the Central
Government for defence purposes,
(c) where an objection is received from any local authority concerned,
the Commission shall, if in its opinion the objection is insufficient,
record in writing and communicate to such local authority its
reasons for such opinion; and
(d) no application for a licence shall be made by any local authority
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except pursuant to a resolution passed at a meeting of such
authority held after one month's previous notice of the same
specifying the purpose thereof has been given in the manner in
which notices of meetings of such local authority are usually
given.
(3) A licence may prescribe the extent to which, and the terms and
conditions under which the transmission or supply of energy is to be made and
contain such other conditions as the Commission may consider appropriate for
achieving the purposes of the Act.
(4) Without prejudice to the generality of Sub-section (3), conditions included
in a licence may require the licensee to,
(a) enter into agreements on specified terms with other persons for
the use of any electric lines, electrical plant and associated
equipment operated by the licensee;
(b) comply with any direction given by the Commission;
(c) refer all disputes arising under the licence for determination by
the Commission;
(d) furnish information, documents and details which the Commission
may require for its own purpose or for the purposes of the Central
Government or the State Government or the Central Electricity
Authority.
(e) comply with the requirements of the Indian Electricity Act, 1910
and the Electricity (Supply) Act, 1948 and rules framed thereunder
in so far as they are applicable;
(f) undertake such functions and obligations of the Board under the
Indian Electricity Act, 1910 and Electricity (Supply) Act, 1948.
(g) obtain the approval of the Commission of such things that are
required under the licence conditions or for deviation from the
same;
(h) rectify the Commission of any scheme that it is proposing to
undertake including the schemes in terms of the provisions of
the Electricity (Supply) Act, 1948;
(i) purchase power in an economical manner and under a transparent
power purchase procurement process;
(j) supply in bulk to other licensees or to customers; and
(k) establish a tariff or to calculate its charges from time to time; in
accordance with the requirements prescribed by the Commission.
(5) The provisions contained in the Schedule to the Indian Electricity Act,
1910, shall be deemed to be incorporated with and to form part of, every licence
granted under this Chapter, save in so far as they are expressly varied or excepted
by the licence and shall, subject to any such additions, variations or exceptions
which the Commission is empowered to make having regard to the purposes of
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the Act, apply to the undert aking authorised by the licence in relation to it s
activities in the State ;
Provided that where a supply licence is granted by the Commission for
the supply of energy to other licences for distribution by them, then in so far as
such licence relates to such supply, the provisions of Clauses IV, V, VI, VII, VIII
and XII of the said Schedule shall not be deemed to be incorporated within the
supply licence.
(6) The conditions included in a licence may contain provision for the
conditions to cease to have effect or be modified at such times, in such manner
and in such circumstances as may be specified therein.
(7) Any provisions included by virtue of Sub-section (6) in a licence shall
have effect in addition to the provision made under Sub-section (5) of Section 18
and Section 19.
(8) The grant of a licence under this Section to a person shall not in any
way hinder or restrict the grant of a licence to another person within the same
area of supply or transmission for a like purpose and accordingly, the licensee
shall not claim any exclusivity.
(9) Any licence granted by the Commission under this Act may provide
that the licensee shall have the powers and authorities to take appropriate actions
for revenue realisation, prosecution for theft, meter tampering, diversion of electricity
and all such similar matters affecting the distribution and supply of electricity to
the consumer.
(10) The Commission may authorise licensees and other persons to exercise
such power and authority as the licensees and other persons could be given
under the provisions of the Indian Electricity Act, 1910 and the Electricity (Supply)
Act, 1948.
16. Exemption from the requirement to have a licence. -  (1) The
Commission may make regulations to grant exemption from the requirement to
have a licence, but subject to compliance with such conditions, if any, as may
be specified in the regulations :
Provided that the Commission shall not, under any such regulations, grant
any exemption with the consent.
(i) in any case where electricity is to be supplied in any area for
which a local authority is constituted, of that local authority;
(ii) in any case where electricity, is to be supplied in any area forming
part of any cantonment, aerodeone fortress, arsenal, dockyard
or camp or any building or place in the occupation of the Central
Government for defence purposes, of the Central Government;
(iii) in any area falling within the area of supply of a licence of that
licensee;
Provided further that, except in a case falling under Sub-clause (ii) no
15
such consent shall be necessary if the Commission is satisfied that such consent
has been unreasonably withheld.
(2) An exemption may be granted to a particular person or to a particular
category of persons and for a definite period and every such exemption shall be
published in such manner as the Commission considers appropriate for bringing
it to the attention of that person or persons of that category of the public in
general.
(3) The exemption granted may be revoked, by the Commission at any
time for reasons to be recorded in writing.
(4) All exemption, unless previously revoked, shall continue in force for
such period as may be specified in or determined by or under the exemption.
17. General duties and powers of the licensees. - (1) It shall be the
duty of the holder of a supply license or a transmission licence in respect of a
particular area of supply or transmission, as the case may be, to develop and
maintain an efficient, coordinated and economical system of electricity or
transmission in the area of supply or area of transmission, as the case may be.
(2) Each licensee and Generating Company in discharge of its duties
shall comply with the provisions of the regulations framed from time to time
governing the terms and conditions for the operation and maintenance of the
power system and electric supply lines.
(3) Subject to Sub-section (4) Sections 12, 13, 14, 15, 16, 17, 18 and 19
of the Indian Electricity Act, 1910 shall have effect in relation to a person authorised
by a licence to transmit or supply electricity, as if it were a licensee under the
said Act.
(4) Where any of the Sections mentioned in Sub-section (3) is applied to
a licence holder by its licence, it shall have effect subject to such restrictions,
exceptions and conditions as may be included in the licence.
18. Revocation of licence. - (1) The Commission may enquire into the
conduct of functioning of any licensee in carrying out the obligations under this
Act, rules and regulations framed thereunder and the terms and conditions of its
licence in the following circumstances :
(a) upon receiving a complaint from any consumer or consumer
association or any trade association; or
(b) upon a reference made to it by the State Government, the Central
Government or Central Electricity Authority; or
(c) upon receiving a complaint from any company or person involved
in the generation, transmission, distribution or supply of electricity;
or
(d) upon its own knowledge or information derived from any source.
(2) Upon making such inquiry the Commission may, if in its opinion the
public interest so requires, revoke a licence in any of the following cases, namely:
(a) where the licensee, in the opinion of the Commission, has
16
committed a wilful or unreasonable default in doing anything
required of him by or under this Act, or the Indian Electricity Act,
1910 or the Electricity (Supply) Act, 1948 the rules or regulations
made thereunder;
(b) where the licensee commits a breach of any of the terms and
conditions of his licence, the breach of which is expressly
declared by such licence to render it liable to revocation;
(c) where the licencee fails within the period specified in his licence
or any longer period which the Commission may allow by order -
(i) to show, to the satisfaction of the Commission, that he is in
a position to fully and efficiently discharge the duties and
obligations imposed on him by his licence; and
(ii) to make the deposit or furnish the security required by his
licence; and
(d) where in the opinion of the Commission the financial position of
the licensee is such that he is unable to fully and efficiently
discharge the duties and obligations imposed on him by his
licence.
(3) Notwithstanding the provisions of Sub-sections (1) and (2) the
Commission may, where in it s opinion the public interest so requires, on the
application or with the consent of the licence, and if the licencee is not a local
authority, af ter consulting the local authority concerned, if any , revoke a
transmission or supply licence as to the whole or any part of the area of
transmission or supply upon such terms and conditions as it thinks fit.
(4) No licence shall be revoked under Sub-section (2) or (3) unless the
Commission has given to the iicensee not less than three months, notice in
writing stating the grounds on which it is proposed to revoke the licence and has
considered revocation.
(5) The Commission may, instead of revoking a licence, permit it to remain
in force subject to such further terms and conditions so as it thinks fit to impose
and any further terms or conditions imposed shall be binding upon, and be observed
by, the licensee, and be of like force and effect as if they were contained in the
licence.
19. Amendment of licence. - (1) The Commission may, where in it s
opinion the public interest so permits or requires, on the application of the licensee,
and if the licensee is not a local authority, on the application of the local authority
concerned or otherwise on its own, make such alterations and amendments to
the terms and conditions of a licence as it thinks fit taking into account the
object and purposes of this Act :
Provided that no such alterations or amendments, other than an alteration
or amendment pursuant to a licence condition referred to in Sub-section (6) of
Section 15 or Sub-section (5) of Section 18 shall be made except with the consent
17
of the licensee.
(2) Where the licensee has made an application under Sub-section (1)
proposing any alterations or amendments to its license, the following provisions
shall apply -
(a) the licensee shall publish a notice of the application in the manner
and with the particulars as may be prescribed by regulations.
(b) the Commission shall not make any alterations or amendments
until all objections received by it with reference to the application
within three months from the date of first publication of the notice
have been considered; and
(c) in the case of an application proposing alterations or amendments
in an area of transmission or supply comprising the whole or any
part of the cantonment, aerodrome, fortress, arsenal, dockyard
or camp or of any building or place in the occupation of the Central
Government for defence purposes, the Commission shall not
make any alterations or amendments except with the consent of
the Central Government.
(3) Before making any alterations or amendments in a licence otherwise
than on the application of the licensee, the Commission shall publish the proposed
alterations or amendments and consider all objections received by it with reference
to the proposed alterations or amendments within three months from the date of
the first publication of the notice.
20. Provisions where licence is revoked. - (1) Notwithstanding the
provisions of Sections 6 and 7 of the Indian Electricity Act, 1910 where the
Commission revokes a licence, under Section 18 the following provisions shall
apply -
(a) the Commission shall serve a notice of revocation upon the
licensee and shall fix a date on which the revocation shall take
effect;
(b) the Commission shall invite applications for acquiring the
undertaking of the licensee whose licence has been revoked and
determine the terms and conditions of the sale of the undertaking;
(c) the Commission may by notice in writing require the licensee to
sell, and thereupon the licensee shall sell the undertaking to the
person whose application has been accepted by the Commission
hereinafter referred to in this Section as the "Purchaser";
(d) on and with ef fect from the date of revocation, or , where the
undertaking of the licensee is sold to a purchaser earlier in
pursuance of any of the provisions of this Act, on and with effect
from the date, all the rights, duties, obligations and liabilities of
the licensee under this Act shall absolutely cease and determine
except for any liabilities that have accrued prior to that date; and
18
(e) the Commission may make such interim arrangement in regard
to the undertaking of the licensee for maintaining the electricity
transmission and supply as may be considered appropriate
including the appointment of administrators and special directors
for the undertaking.
(2) Where an undertaking is sold under Sub-section (1), the purchaser
shall pay to licensee the purchase price of the undertaking determined in
accordance with the application submitted by the purchaser.
(3) Where the Commission issues any notice under Sub-section (1) requiring
the license to sell the undertaking, it may by such notice require the licensee to
deliver, and thereupon the licensee shall deliver on a date specified in the notice,
the undertaking to the designated purchaser pending the payment of the purchase
price of the undertaking :
Provided that in any such case, the purchaser shall pay to the licensee
interest at such rate not less than the Reserve Bank lending rate ruling at the
time of delivery of the undertaking as the Commission may decide, on the purchase
price of the undertaking for the period from the date of delivery of the undertaking
to the date of payment of the purchase price.
(4) Where before the date fixed in the notice issued under Clause (a) of
Sub-section (1) as the date on which the revocation of the licence shall take
effect, no notice has been issued to the licensee requiring him to sell the
undertaking or where for any reason no sale of the undertaking has been effected
under that Sub-section, the State Government may acquire the undertaking on
the date of revocation of the licence and shall perform all the obligations of the
licensee until such time as the State Government is able to sell the undertaking
to a new licensee, and thereafter, shall pay to the licensee the amou

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