LexThe Telangana Electricity Supply Undertakings (Acquisition) Act, 1954.
Telangana · state statute
Open in Lexace · Ask the AI about this actTHE TELANGANA ELECTRICITY SUPPLY UNDERTAKINGS
(ACQUISITION) ACT, 1954.
(ACT NO. XV OF 1954.)
ARRANGEMENT OF SECTIONS
Sections
1. Short title, extent and commencement.
2. Definition and Interpretation.
3. Application of Act.
4. Power of Government to take over any
undertaking.
5. Compensation payable to a licensee.
6. Vesting of the undertaking or assets.
7. Appointment of a sole representative.
8. Choice of basis of compensation.
9. Effect of transactions bonafide.
10. Deductions from the compensation.
11. Manner of payment or deposit of compensation.
12. Repayment of debentures, loans, etc.
13. Arbitration.
14. Termination of Managing agency.
15. Provisions for existing staff of licensees.
16. Inventory of assets and information in regard to
documents maintained by the licensee.
17. Power of entry.
18. Penalties.
19. Offences by Corporation.
20. Protection of action taken under the Act.
2 [Act No. XV of 1954]
21. Power to make rules.
22. Effect of other laws.
23. Power to remove difficulties.
24. Saving and validation.
25. Omitted.
Schedule I.
Schedule II.
THE TELANGANA ELECTRICITY SUPPLY UNDERTAKINGS
(ACQUISITION) ACT, 1954.1
ACT No. XV OF 1954.
1. (1) This Act may be called 2[the Telangana Electricity
Supply Undertakings (Acquisition) Act, 1954].
(2) It extends to the whole of the 2State of Telangana.
(3) It shall come into force at once.
2. (1) In this Act, unless there is anything repugnant in the
subject or context—
(a) „account year‟ means the licensee‟s financial year;
(b) „accredited representative‟ means the
representative appointed or deemed to have been
appointed under section 7;
(c) „annual account‟ means the account of the
undertaking rendered to the Government annually under
and in accordance with the Electricity Act, or where no such
account has to be rendered under that Act, the account of
the undertaking normally made up for the account year of
the undertaking and audited by a certified auditor;
1. The Andhra Pradesh (Andhra Area) Electricity Supply Undertakings
(Acquisition) Act, 1954 (Act No. XV of 1954) as extended to the
Telangana Area by Act No.6 of 1972 and in force in the combined State,
as on 02.06.2014, has been adapted to the State of Tel angana, under
section 101 of the Andhra Pradesh Reorganisation Act, 2014 (Central
Act 6 of 2014) vide. the Telangana Adaptation of Laws Order, 2016,
issued in G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
2. Substituted by G.O.Ms.No.45, Law (F) Department, dated 01.06.2016.
Short title, extent
and
commencement.
Definition and
interpretation.
2 [Act No. XV of 1954]
(d) „document‟ in relation to an undertaking, includes
its books, accounts, registers, maps and plans;
(e) „Electricity Act ‟ means 3the Indian Electricity Act ,
1910 (Central Act 9 of 1910);
(f) „Electricity Supply Act ‟ means 3the Electricity
(Supply) Act, 1948 (Central Act 54 of 1948);
(g) „fixed assets‟ includes works, spare parts, stores,
tools, motor and other vehicles, office equipment and
furniture;
(h) „Government‟ mean the State Government;
(i) „intangible assets ‟ means any amount paid on
account of goodwill, under -writers‟ commission and such
preliminary and promotiona l expenditure shown as a debit
in the capital account of the undertaking, as has fairly arisen
in promoting electricity supply;
(j) „licensee‟ means a person licensed under Part II of
the Electricity Act to supply electricity energy, or a person
who has obtained sanction under section 28 of that Act to
engage in the business of supplying electricity and in
relation to an undertaking taken over or an undertaking
which has vested in the Government under section 4 the
person, who was the licensee at the time the undertaking
was taken over or vested in the Government, as the case
may be, and includes the successor -in-interest of any such
person;
(k) „prescribed‟ means prescribed by rules made
under this Act;
3. This Act has been repealed by the Electricity Act, 2003 (Central Act
No.36 of 2003.)
[Act No. XV of 1954] 3
(l) „undertaking taken over ‟ means an undertaking
deemed to have vested in the Government under the 1949
Act before the commencement of this Act and includes an
undertaking taken over by the Government otherwise than
under the 1949 Act before such commencement, and
cognate expressions with all grammatical variations shall be
construed accordnngly;
(m) „vesting date ‟ means, in relation to an under -
taking, the date fixed under section 4, sub-section (1), as the
date on which the under taking shall vest in the Government
or in the case of an undertaking taken over, the date on
which it is deemed to have vested or was taken over, as the
case may be;
(n) „work‟ includes electric supply lines and any
lands, buildings, machinery or apparatus, required to supply
energy and to carry into effect the objec ts of a licence or
sanction for the supply of electricity, gr anted under the
Electricity Act;
(o) „the 1949 Act ‟ means the 4[Madras Electricity
Supply Undertakings (Acqu isition) Act, 1949 (Madras Act
XLIII of 1949);
(p) other expressions shall have the meanings
respectively assigned to them in the Electricity Act or the
rules thereunder.
(2) Any reference in this Act to the vesting of an
undertaking in the Government shall, in the case referred to
in section 6 (2) (a), be con strued as a reference to the
vesting in the Government of the proper ty, rights, liabilities
and obligations specified in that section.
4. Repealed by this Act XV of 1954.
4 [Act No. XV of 1954]
3. This Act shall apply to all under takings of licensees,
including undertakings taken over.
4. (1) The Government may, in respect of any unde rtaking
not taken over by them before the commencement of this
Act, by order in writing, declare that it shall vest in them on
the date specified therein, such date not being earlier than
four months from the date of the declaration:
Provided that the Government may, from time to time,
postpone such date, so how ever that the postponed date
shall not be later than one year from the date originally fixed.
(2) Every order under sub-section (1) shall be served on
the licensee in the prescribed manner and shall also be
published in such manner as the Government think fit.
5. The compensation payable to a licensee on whom an
order has be en served under section 4 or whose
undertaking has been taken over by the Government before
the commencement of this Act, shall be dete rmined under
any one of the Basis A, B and C specified below, as may be
chosen under section 8.
(1) Basis A. —(i) The compensation payab le under this
basis shall be an amount equal to twent y times the average
net annual profit of the undertaking during a period of five
consecutive account years i mmediately preceding the
vesting date.
Explanation.- For the purpose of this clause, the net
annual profit shall be determined in the manner laid down in
Part A or Part B, as the case may be, of Schedule I.
(ii) This basis shall not apply to an undertaking which
has not been supplying electricity for five consecutive
account years immediately preceding the vesting date.
Application of Act.
Power of
Government to
take over any
undertaking.
Compensation
payable to a
licensee.
[Act No. XV of 1954] 5
(2) Basis B. — The compen sation payable under this
basis shall be the aggregate value of all the shares
constituting the share capital of the undertaking, reckoned
as shown below:-
(a) In the case of shares issued on or before the 31st
March 1946, the value of each share shall be reckoned at its
average value as arrived at from the quotations for the
shares as given in the official list of the Madras Share Market
on the 15th day of each month and where such market was
closed on that day, the quotations on the next working day,
during the period of three years commencing on the 1st
April 1946 and ending on the 31st March 1949:
Provided that this clause shall not apply if any one or
more of the different classes of shares constituting the
capital of the undertaking were not being regularly quoted in
such market during the period of three years aforesaid , or of
such quotations during the whole of any one of those three
years were not based on actual transactions in such year.
(b) In the case of shares issued on or before the 31st
March 1946, if clause (a) does not apply but there have
been bonafide transfers in each of the different classes of
shares in everyone of the three years aforesaid and such
transfers have been duly registered in the appropriate books
of the licensee , the value of each share of each such class
shall be reckoned at one -third of the aggregate of its th ree
annual average values for the three years, the average value
for each year being determined from the transactions in that
year.
(c) Where the amounts called for in respect of any
share referred to in clause (a) or clause (b) are in arrears,
the value of such share shall be taken to be a sum which
bears to its value as reckon ed under clause (a), or clause
(b) as the case may be, the same proportion as the amount
6 [Act No. XV of 1954]
paid-up bears to the full amount payabl e in respect of the
share.
(d) In the case of shares issued after the 31st March
1946, their aggregate value shall be taken to be the amount
actually paid in respect thereof (includ ing the premium, if
any), togeth er with an additional sum by way of solatium,
calculated at the rate of two per cent for every completed
year preceding the vesting date on the amount so paid
which was in existence during the whole of such year as
shown in the licensee‟s book:
Provided that no part of such amount shall be entilled
to a solatium exceeding ten per cent thereof.
Explanation. — This basis shall not apply unless clause
(a) or clause (b) is applicable.
(3) Basis C —The compensation payable under this
basis shall be the aggrega te value of the amoun ts specified
below:—
(i) the book value of all completed works in beni ficial
use pertaining to the undertaking and handed over to the
Government (excluding works paid for by consumers) less
depreciation calculated in accordance with Schedule II;
(ii) the book value of all works in progress handed
over to the Government excluding works paid for by
consumers or prospective consumers;
(iii) the book value of all stores including spare parts
pertaining to and usable in the undertaking handed over to
the Government and in the case of used stores and spare
parts, such sum as may be d ecided upon by mutual
agreement between the Government and the licensee;
[Act No. XV of 1954] 7
(iv) the book value of all other fixed ass ets in use on
the vesting date and handed over to the Government less
depreciation calculated in accordance with Schedule II;
(v) the book value of all plant and equipment existing
on the vesting date 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 license e less
depreciation calculated in accordance with Schedule II;
(vi) the book value of all intangible assets to the
extent such value has not been written off in the books of
the licensee;
(vii) the amount due from consumers in r espect of
every hire -purchase agreement referred to in section 6 (2)
(a) (ii) less a sum which bears to the differ ence between the
total amount of the instalments and the original cost of the
material or equipmen t, the same propor tion as the amount
due bears to the total amount of the instalments;
(viii) any amount paid actually by the licensee in
respect of every contract referred to in section 6(2)(a)( iii);
and
(ix) an additional sum by way of solatium—
(a) in case the licensee is a person licensed under
Part II of the Electricity Act, at the rate specified in the
licence in respect of compulsory purchase, or where no rate
is specified in the licence, at fifteen per cent on the values
referred to in sub -clauses (i) and (v) at the rate of ten per
cent on the value referred to in sub-clause (ii) and at the rate
of five per cent on the value referred to in sub clause (iii);
(b) in case the licensee is a person who has
obtained sanction under section 28 of that Act to engage in
8 [Act No. XV of 1954]
the business of supplying electrical energy, at the rate of ten
per cent on the values referred to in sub -clauses (i) and (v)
and at the rate of five per cent on the values referred to in
sub-clauses (ii) and (iii).
Explanation.—(1) For the purposes of Basis C, the
book value of any fixed asset means its original cost, and
shall comprise—
(i) the purchase price paid by the licensee 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;
(ii) interest charges on capital expenditure incurred
from borrowed money and shown in the books of the
undertaking as properly attributab le to the asset up to the
date of bringing it into beneficial use at a rate not exceeding
six per cent per annum; and
(iii) cost of supervis ion actually incurred, but not
exceeding fifteen per cent of the amount referred to in
paragraph (i).
(2) Where any asset was acquired after the expiry of the
period to which the latest annual account relates, or where
no annual account has to be rendere d under the Electricity
Act, the book value of the asset shall be such sum as may
be decided upon by mutual agreement between the
Government and the licensee.
6. (1) If compension is payable in respect of an
undertaking under Basis A or Basis B, all property
belonging to the undertaking including fixed assets, cash,
securities, investments, documents, and the like and all its
rights, liabilities and obligations as on the ve sting date, shall
vest or shall be deemed to have vested in the Government:
Vesting of the
undertaking or
assets.
[Act No. XV of 1954] 9
Provided that liabilities and obligations not incurred in a
bonafide manner shall not vest or be deemed to have
vested in the Government—
(i) in so far as they are in excess of the value on the
vesting date of the corresponding assets, if any, vesting or
deemed to have vested in the Government; or
(ii) where there are no corresponding assets which
vest or are deemed to have vested in the Government:
Provided further that liabilities and obligations in
respect of any amount (other than a loan) payable to the
Government shall not vest or be deemed to have vested in
the Government but shall attach or shall be deemed to have
attached to the compensa tion payable under this Act in
respect of the undertaking.
Explanation.- For the purposes of this sub -section,
“undertaking” includes every business carried on by the
licensee, the funds of which form part of the funds of the
licensee.
(2) (a) If compensation is payable in respe ct of an
undertaking under Basis C, only the property, rights,
liabilities and obligations specified herein shall vest or be
deemed to have vested 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;
10 [Act No. XV of 1954]
(iii) all the rights, liabilities and obligations of the
licensee under any other contract entered into bonafide
before the vesting date, not being a contract relating to the
borrowing or lending of money.
(b) All the assets specified in clause (a) (i) shall vest
or shall be deemed to have vested in the Government fre e
from any debts, mortgages or similar obligations of the
licensee or attaching to the undertaking:
Provided that such debts, mortgages or obligations
shall attach or shall be deemed to have attached to the
compensation payable under this Act for the assets.
(3) In the case of all undertakings which vest or are
deemed to have vested in the Governmen t, the licence
granted or the sanction given for the supply of electricity
shall be deemed to have been terminated on the vesting
date and all the rights, 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 or shall be deemed to have
been voidable at the option of the Government:
Provided further that the Government may, if they deem
necessary, revise the rates and conditions of supply at any
time after a period of one year from the vesting date.
(4) In respect of any undertaking to which section 4
applies or any undertaking taken over it shall be, and shall
be deemed always to have been, lawful for the Government,
after removing any obstruction that may be or might have
[Act No. XV of 1954] 11
been offered, to take possession of the entire undertaking
or, as the case may be, of the fixed assets and of all
documents relating to the undertaking which the
Government may require, or required, for carrying it on.
7. (1) Every licensee may , within three months of the
receipt of an order under section 4, sub -section (1),
intimating the vesting date or, in the case of an undertaking
taken over, within three months of the commencement of
this Act, appoint an individual who may be the managing
agent or a director or an officer of the licensee or any other
person to act as his sole and accredited representative in
connection with the handing over of the undertaking or the
fixed assets, as the case may be, to the Government and
performing on behalf of the licensee the functions
hereinafter specified.
(2) Where the licensee is a company registered under
5[the Companies Act, 1956 (Central Act 1 of 1956)] the
appointment of the accredited representa tive shall be made
by the shareholde rs of the company at a meeting specially
convened for the purpose.
(3) Nothing in the foregoing sub -sections shall be
deemed to require a licensee of an undertaking taken over,
who has appointed an individual as his sole and accredited
representative before the commencement of this Act, to
make a fresh appointment after the commencement of this
Act; and the said accredited representative shall be deemed
for all purposes to be the accredited representative
appointed under the foregoing sub-sections.
(4) Where the accredited representa tive resigns or dies
or becomes incapable of acting or is, in the opinion of the
5. Substituted by Act No.6 of 1972. Please refer to the provisions of the
Companies Act, 2013 (Central Act No.18 of 2013).
Appointment of a
sole
representative.
12 [Act No. XV of 1954]
Government, incompetent or dishonest, or where the
appointment of such representative is set aside, or declared
void by competent authority, the Government shall call upon
the licensee to appoint, within six weeks, another person as
his sole and accredited representative.
(5) The remuneration of, and the expenditure incurred
by, the ac credited representa tive shall be and shall be
deemed always to have been payable from the
compensation deposited under this Act and shall have and
shall be deemed always to have had priority over all other
debts and liabilities.
(6) All assurances conveyed, and all statements made
by any accredited representative, (inclusive of an accredited
representative whose appointment is subsequently set aside
or declared void by competent authority) shall be binding on
the licensee.
(7) Where the licensee does not appoint an individual to
act as his sole and accredited representative und er sub -
section ( 1) or sub -section (4), the functions hereinafter
assigned to the accredited representa tive shall be
performed by the licensee; and all refer ences in the rest of
this Act to the accredited representa tive shall be construed
as references to the licensee and any reference to a period
of time to be reckoned from the date of appointment of the
accredited representative shall, in such a case, be reckon ed
from the la st date on which such accredited representative
might have been appointed.
8. (1) Within one month of his appointment, or such further
time as may be granted by the Government, the accredited
representative shall intimate to the Government in writing
which basis of compensation, A, B or C, shall be adopted in
respect of the undertaking.
Choice of basis of
compensation.
[Act No. XV of 1954] 13
(2) The choice of the basis of compensation once
intimated to the Government shall not be open to revision
except with their concurrence.
(3) Where no choice has been intimated on behalf of the
undertaking within the time allowed by sub -section (1), the
Government shall declare the basis under which
compensation will be paid for the undertaking and that basis
shall be binding on the licensee as if the choice had been
duly made in accordance with the foregoing provisions.
(4) Where in respect of an undertaking taken over, the
accredited representative has intimated to the Government
in writing which basis of compensation, A, B or C, should be
adopted in respect of the undertaking, such intimation shall
be deemed to have been made under this section and shall
not be open to revision except with the concurrence of the
Government.
9. Where the Government are of opinion that any licensee
has on or after the 1st October 1947 , disposed of any fix ed
asset whether by way of sale, exchange, gift, lease or
otherwise or incurred capital exp enditure, otherwise than in
the normal course of events with a view to benefit unduly the
licensee or some other person and ther eby caused loss to
the Government as succeeding owners of the undetaking,
the Government shall be and shall be deemed always to
have been entitled to deduct from the compensation
payable to the licensee under this Act, an amout which th ey
consider or considered to be the loss sustained by them:
Provided that notice of the intention to make such
deduction shall be or shall have been given to the licensee
within one year from the vesting date.
Effect of
transactions
bonafide.
14 [Act No. XV of 1954]
10. (1) The Government shall be and shall be deemed
always to have been entitled to deduct the following sums
from the compensation payabl e under this Act to a
licensee:-
(a) the amount, if any, alr eady paid in advance by
way of compensation;
(b) the amount, if any, specified in section 9;
6[(c) the amoun t, if any, due from t he licensee to the
Government or the Andhra Pradesh State Electricity Board
for energy supplied by them before the vesting date;]
(d) all other amoun ts and arrears of interes t, if any,
thereon due from the licensee to the Government except
loans and arrears of interest, if any, thereon;
(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 having been handed over
to the Government, the amou nt of such loss being deemed
to be-
(i) in cases where compensation is payable under
Basis A or Bas is B, the market value on the vesting date of
such property or rights, togeth er with any income which
might have been realised b y the Government if the property
or rights had been handed over on the vesting date; and
(ii) in cases where compensation is payable under
Basis C, the amount by which the market value of such
property or rights exceeds the compensation payable
therefor under this Act, togeth er with any income which
6. Substituted by Act No.6 of 1972 w.e.f.01.04.1959.
Deductions from
the
compensation.
[Act No. XV of 1954] 15
might have been realised by the Government if the property
or rights had been handed over on the vesting date.
(2) In addition to the dedu ctions specified above, the
Government shall also be and be deemed always to have
been entitled to make the following deductions:—
(a) in cases where the compensation is payable
under Basis A or Basis B, any sum which during a period
not exceeding three consecutive account years immediately
before the vesting date, has been distributed as profits, but
is not correctly so distributable;
(b) in cases where the compensation is payable
under Basis C—
(i) the amount of all loans due from the licensee to
the Government and arrears of interest, if any, thereon;
(ii) a portion of the amount of solatium bearing the
same propor tion to the total amount of solatium, as the
amount of all loans due to the Government from the
licensee on the vesting date bears—
(a) in the case of a licensee not being a local
authority, to the aggregate of (i) the paid up share capital of
the licensee, (ii) his debenture capital and ( iii) the amount of
all loans due to the Government as aforesaid; and
(b) in the case of a licensee being a local
authority, to the value of the capital assets as shown in the
capital account of the undertaking;
(iii) all sums paid by consumers by way of security
deposit and arrears of interest du e thereon on the vesting
date in so far as they have not been paid over by the
licensee to the Governmen t, less the amounts which
16 [Act No. XV of 1954]
according to the books of the licensee are due from the
consumers to the licensee for energy supplied by him
before that date;
(iv) all advances from consumers and prospective
consumers in so far as such advances have not been paid
over by the licensee to the Government;
(v) all sums which have been or ought to be set
aside to the credit of the consu mers‟ funds constituted
under the bulk supply agreement or under the provisions in
the licence relating to distribution of profits or under
paragraph II (1) of the Sixth Schedule to the Electricity
Supply Act in so far as such sums have not been paid over
by the licensee to the Government and in cases where there
is no bulk supply agreement or the licence does not contain
provisions relating to distributi on of profits or paragraph II
(1) of the Sixth Schedule to the Electricity Supply Act does
not apply, the amounts, if any, which have been contributed
to the consumers ‟ fund account in the annual accounts, in
so far as such sums have not been paid over by the
licensee to the Government;
(vi) all deposits made by, and all sums due to the
staff transferred to the Government, on account of Provident
Fund or other beneficial schemes, in so far as such deposits
or sums have not been paid over by the licensee to the
Government, less the amounts which the Government are
satisfied are due to the licensee from the members of the
staff so transferred:
Provided that no deduction shall be made in pursuance
of paragraph (vi), in so far as the deposits or sums aforesaid
may be in the custody of trustees under a valid deed of
trust.
[Act No. XV of 1954] 17
(3) In the case referred to in the foregoing proviso, the
Government shall have and shall be deemed always to have
had power to require the trustees to transfer the funds with
them, and the securities and other proper ties, if any, in
which the same may have been invested, in so far as they
may relate to the staff transferred to the Governmen t; and
the trustees shall be completely discharged in respect of all
claims to, or enforceable against , the funds, securities and
other properties so transferred.
11. (1) The compensation due to a licensee under this Act
shall be paid or deposited in cash, as hereinafter provided in
this section.
(2) Within four months from the vesting date in the case
of an undertaking which vests in the Government in
pursuance of an order under section 4, sub -scction (1), and
as soon as may be after the commencement of this Act in
the case of an undertaking taken over, the Government shall
estimate roughly the compensa tion payable to the licensee
under this Act.
(3) Three-fourths of the amount as estimated under sub-
section (2) shall be paid by the Government to the licensee,
where it is a local authority, after deducting therefrom the
amounts referred to in section 10 and the amounts, if any,
paid before the commence ment of this Act, as or towards
the compensation payable.
Explanation.- Where the amount to be paid under this
sub-section is equal to or less than the amount to be
deducted therefrom as aforesaid, no payment need be
made under this sub-section.
(4) In the case of any other licensee, the Government
shall deposit in the Reserve Bank of India or any other Bank
chosen by the Government for the purpose (which Reserve
Manner of
payment or
deposit of
compensation.
18 [Act No. XV of 1954]
or other Bank is hereinafter referred to as the Bank) three -
fourths of the amount as estima ted under sub-section (2),
after deducting therefrom the amounts referred to in section
10.
Explanation.— Where the amount to be deposited
under this sub-section is equal to or less than the amount to
be deducted therefrom as aforesaid, no deposit need be
made under this sub-section.
(5) Nothing in sub -section (2) and sub -section (4) shall
require the Gover nment to estimate roughly the
compensation payable to a licensee under this Act and
deposit in the Bank three -fourths of the amount as so
estimated after deducting therefrom the amounts referred to
in section 10, in a case where, in respect of an undertaki ng
taken over, the Government have, before the
commencement of this Act, estimated roughly the
compensation payable to the licensee and have deposited
in the Bank three fourths of the amount as so estimated after
deducting therefrom the amounts referred to in section 10;
and the estimate and deposit made by the Government in
any such case shall be deemed for all purposes to be an
estimate and a deposit made under sub -section (2) and
sub-section (4), respectively.
(6) (a) Within one year from the date on which the
compensation was estimated under sub -section (2), the
Government shall determine the amount of compensa tion
payable in respect of the undertaking and pay to the
licensee or deposit in the Bank the balance left from the
amount aforesaid after deducting therefrom (a) the amounts
referred to in section 10, (b) th e amount, if any, paid before
the commencement of this Act, as or towards the
compensation payable and (c) the payment or deposit
previously made under sub-section (3) or sub-section (4), as
the case may be.
[Act No. XV of 1954] 19
(b) Nothing in clause (a) shall requ ire the Govern -
ment to determine the amount of compensaiion payable in
respect of the undertaking and to deposit in a Bank in a
case where, in r espect of an undertaking taken over, the
Government have, before the commencement of this Act,
determined the amount of compensa tion payable in respect
of the undertak ing and have deposited in the Bank the
balance left from the amount aforesaid after deducting
therefrom the amount referred to in section 10 and t he
deposit previously made under sub -section (4), and the
determination and the deposit shall in such a case be
deemed to have been made under clause (a).
(c) Where the accredited representa tive claims or, in
the case of an undertaking taken over has cl aimed, that
compensation is or was due to the licensee over and above
that as determ ined or deemed to have been determined by
the Government under clause (a), the amoun t, if any, to
which it is finally decided in pursuance of this Act that the
licensee is entitled, shall be paid to the licensee or
deposited in the Bank, as the case may be, within one
month from the date on which such final decision is arrived
at.
(d) All amounts liable to be paid or deposited in
pursuance of clause (a) or clause (c) shall bear interest at
three per cent per annum from the date of expiry of four
months from the vesting date.
(7) In the case referred to in Explanation to sub -section
(3) and sub-section (4), that is to say, where no payment or
deposit has been previous ly made, the Government shall
pay to the licensee or deposit in the Bank the amount of
compensation determined under clause (a) of sub -section
(6), after deducting therefrom (a) the amounts referred to in
section 10 and (b) the amoun t, if any, paid before the
commencement of this Act, as or towards the compensa tion
20 [Act No. XV of 1954]
payable, together with interest on the amount to be paid or
deposited, at three per cent per annum from the date of
expiry of four months from the vesting date.
(8) (a) The amount of compensation as estimated under
sub-section (2) and the amount of compensation as finally
determined under sub -section (6) shall be intimated
forthwith to the accredited representative and he shall within
two weeks of such intimation or such further time as may be
allowed by the Governmen t, state in writing whether the
amount as determined by the Government is agreed to by
him acting on behalf of the licensee.
(b) Nothing in clause (a) shall require the
Government to intimate to the accredited representa tive the
amount of compensa tion as estimated and finally
determined in a case where, in respect of an undertaking
taken over, the Government have intimated to the
accredited representa tive the amount of compensation as
estimated and the amount of c ompensation as fi nally
determined.
(9) Every person claiming any amount deposited in the
Bank under the foregoing sub -sections or any portion
thereof, shall apply to the Special Officer appointed by the
Government in this behalf, within three months from the date
of the deposit or within such further time as the Special
Officer may allow.
(10) (a) The Special Officer shall, as expeditiously as
possible, inquire into all claims made under sub -section (9)
and determine the persons who, in his opinion, are entitled
to the amount deposited and the sum to which each of them
is entitled and disburse the same to him.
(b) The Special Officer shall have the same powers
as are vested in a Civil Court under the Code of Civil
[Act No. XV of 1954] 21
Procedure, 1908 (Central Act 5 of 1908), when trying a suit
in respect of the following matters:
(i) enforcing the attendance of any person and
examining him on oath;
(ii) compelling the production of documents; and
(iii) issuing commissions for the examination of
witnesses.
The Special Officer shall also have such further
powers as may be prescribed.
(c) Any person deeming himself aggrieved by any
decision of the Special Officer under clause (a) may appeal
to the High Court, within three months from the date of such
decision or within such further time as the High Court may
grant.
(11) Where in respect of an undertaking taken over, the
Government have appointed a Special Officer for the
purpose stated in sub -section (9), such appointment shall
be deemed to have been validly made and confirmed. Every
Special Officer so appointed is hereby declared to have and
to have always had the jurisdiction, powers and duties
conferred and laid on the Special Officer by sub -sections (9)
and (10). Applications presented to such Special Officer,
and judgments and orders pronounced by him, and action
taken by him or by others under his direction or in the
course or for the purpose of or in relation to application s
presented to him, if they would have been validly presented,
pronounced, or taken had sub-sections (9) and (10) been in
force when they were presented, pronounced or taken, shall
be deemed to have been validly presented, pronounced or
taken.
22 [Act No. XV of 1954]
(12) All acts done and judgments and orders
pronounced by the High Court in any appeal or other
proceeding arising out of any decision of a Special Officer
appointed by the Government in relation to an undertaking
taken over, are hereby declared to have been validly done
or pronounced and any appeal or other proceeding arising
out of a decision of such Special Officer may be disposed of
by the High Court as an appeal or other proceeding arising
out of a decision of such Special Officer appointed by the
Government under sub-section (9).
12. Notwithstanding anything to the contrary in any contract
or agreement or in any law for the time being in force, all
loans, debentures, mortgages and the like outstanding
against the licensee on the vesting date may be repaid and
shall be deemed always to have been repaya ble by the
Government, or the licensee, or the Special Officer,
although the time for their repayment may or might not have
arrived.
13. (1) Where any dispute arises or is pending between the
accredited representative and the Government in respect of
any of the matters specified below or such other matter as
may be prescribed, it shall be determined by an arbitrator
appointed by the Government who shall be a District Judge
or a person who is a re tired High Court Judge or a retired
District Judge:-
(a) the amount of the compensation payable in
respect of the undertaking as a whole or any component
part thereof;
(b) whether any property belonging or any right,
liability or obligation attaching to the undertaking vests in
the Government;
Repayment of
debentures,
loans, etc.
Arbitration.
[Act No. XV of 1954] 23
(c) whether any fixed asset forms part of the
undertaking;
(d) whether any contract or hire -purchase agreement
or other contract referred to in section 6 (2) (a) (ii) or (iii) has
been entered into bona fide or not;
(e) whether any agreement to su pply electricity
entered into by the licensee prior to the vesting date is of the
nature referred to in section 6, sub-section (3) first proviso;
(f) whether the Government are entitled to deduct any
sum under section 9 or section 10.
(2) Subject to t he provis ions of this section, the
provisions of the Arbitra tion Act, 1940 (Central Act 10 of
1940) shall apply and shall be deemed always to have
applied to all arbitrations under this Act.
(3) The Arbitrator may, if he thinks it expedient to do so ,
call in the aid of one or more qualified assessors and hear
the whole or any part of the reference with the aid of such
assessor or assessors.
(4) Where, in respect of an undertaking taken over, an
award in a dispute of the nature referred to in sub -section
(1) has been made by an arbitrator app ointed by the
Government, such award is hereby declared to have been
validly made.
14. (1) Any agreement between the licensee and his
managing agent or managing director (by whatever name
known) shall, notwithstand ing anything to the contrary in
such agreement, be deemed to have been terminated on
the vesting date in so far as it relates to the undertaking; and
the managing agent or managing director shall not be
entitled to any remuneration or comm ission for such period
Termination of
Managing
agency.
24 [Act No. XV of 1954]
of the agreement as may remain une xpired on the vesting
date but shall be entitled only to compensation as
determined under sub-section (2).
(2) Where the agreeme nt was in forc e on th e 1st
November 1949, and continued to be in force until the
vesting date, without having been renewed or replaced by a
fresh agreement for a further period, the managing agent or
managing director shall, for such period of the agreement
as may remain unexpired on the vesting date or for a period
of two years, whichever is less, be entitled to compensation
calculated at the following rate per annum, namely:-
The average annual ordinary remuneration (including
purchasing comm ission and office allowance) to which a
managing agent of the licensee would have been enti tled
under paragraph XIII of the Sixth Schedu le to the Electric ity
Supply Act during a period of two complete account years
immediately preceding the vesting date.
(3) Any am ount payable to a manag ing agent or
managing director under sub -section ( 1) shall be payable
from the com pensation deposited or deemed to have been
deposited under this Act.
15. Notwithstanding anything to the contrary in any contract
or agreement or in any law for the time bein g in force, the
following provisions shall apply and shall be deemed always
to have applied in regard to the p ersons on the staff of the
licensee immediately before the vesting date:—
(1) The Gov ernment shall have and shall be deemed
always to have had power to terminate the s ervices of any
such person after giving him thre e calendar months‟ notice
in writing or paying him three mo nths‟ pay in lieu of such
notice.
Provisions for
existing staff of
licensees.
[Act No. XV of 1954] 25
(2) Persons whose services are or have been retained
shall be governed or shall be de emed to have been
governed by such rules as the Government may, from time
to time, make in regard to them.
16. (1) Every licensee shall within three months from the
date on which an order under section 4, sub -section (1), is
served on him, or such further time as may be allowed by
the Government, prepare and hand over to them a complete
inventory of all the assets belonging to his undetaking and
of its documents.
(2) The licensee shall also write up the accounts of his
undertaking up to the vesting date, get them audited and
submit them to the Government not later than three 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 su ch
information and particulars as may be required by the
Government in regard to the documen ts relating to the
undertaking.
(4) The licensee shall not destroy any document relating
to the undertaking and shall hand over to the Government
on the vesting date all such documents in cases falling
under section 6, sub -section (1) and in cases falling under
section 6, sub -section (2), all su ch documents as are
necessary for ascertaining the assets of the undertaking, the
rights, liabil ities and obligations attach ing thereto or the
terms of emplo yment of the staff and for determining the
compensation payable for the undertaking under this Act.
(5) Where the docum ents aforesa id have been taken
possession of by th e Government, the licensee or any
person authorised in this beha lf, shall have access to such
Inventory of
assets and
information in
regard to
documents
maintained by the
licensee.
26 [Act No. XV of 1954]
documents at all reasonable times and shall also be entitled
to take copies thereof or extracts therefrom.
(6) Where an y documents aforesa id have not been
handed over by the licensee, the Governmen t may cause
such documents to b e prepared after collecting the
necessary particulars and the ex penses incurred therefor
shall be chargeable to the licensee.
17. Any officer or servant of the Government authorised by
the Government in this beha lf by general or special order
may, at any time, after giving the licensee reasonable notice,
enter upon any land or prem ises in his possession and
make any survey, examination or invest igation preliminary
or incidental to the purposes of this Act.
18. (1) Whoever, being requ ired to furnish any inform ation
or make any stateme nt under this Act, furnish es any
information or makes any stateme nt which he knows to be
false, or whoever wilfully fails to hand over to the
Government any fixed asset belonging to the undertaking or
wilfully suppresses or destroys any document which is to be
hanExcerpt shown. Open the full act in Lexace.