Prohibition against business of transmission, distribution or supply of electricity

(1) No person shall carry on business of transmitting, distributing or supplying (whether in bulk or not) electricity in the State except-

(a) the Board constituted under section 5 of the Electricity (Supply) Act, 1948,

(b) a Government company or a body corporate owned or controlled by the State Government to which undertakings vested in the State alongwith functions, duties, powers and obligations, are transferred under sub-section (3) of section 28 by schemes published in the Official Gazette, hereunder,

(c) under a licence granted under section 20 or exemption granted by the Commission under section 26 or under a sanction granted by the State Government under section 27,

(d) under a licence granted by the State Government under section 3 of the Indian Electricity Act, 1910 before the commencement of this Act or under sanction given by the Government under section 28 of that Act before such commencement so long as such licence or sanction is subsisting: Provided that the Board referred to in clause (a) and the Government company or body corporate owned or controlled by the State Government referred to in clause (b) shall carry on business of transmitting or supplying (whether in bulk or not) electricity subject to such terms and conditions as the Commission may, by notification in the Official Gazette, specify:

Provided further that the persons to whom a licence or sanction referred to in clause (d) has been granted or given shall -

(i) be deemed to be licensees or exemption holders under this Act on the terms and conditions on which the licence or sanction had been granted;

(ii) the provisions of this Act applicable to a licensee shall mutatis mutandis apply to such deemed licensees or exemption holders; and (iii) the licence, or sanction granted to the deemed licensees or exemption holders shall be subject to such modification as the Commission may make consistent with the objective and purpose of the Act.

(2) Where any difference or dispute arises as to whether any person is or is not engaged or about to engage in the business of transmitting or supplying or distributing electricity, the matter shall be referred to the Commission and the decision of the Commission thereon shall be final.

(3) No licensee shall, on or after the date of the commencement of this Act, supply electricity to any consumer unless a meter is installed for ascertaining the quantity of electricity supplied to the consumer: Provided that a licensee who on the date of the commencement of this Act supplies electricity without installation of a meter to an occupant of land assessed or held for the purpose of agriculture in the specified area of supply of the licensee may continue to supply till 30th June, 2006 electricity to such occupant without installation of a meter: Provided further that the licensee shall before the said date install meters for ascertaining the quantity of electricity supplied to such occupants in a specified area of supply of the licensee in accordance with a scheme for progressive installation of meters formulated by the Commission.

(4) No licence to distribute or supply electricity in a specified area of distribution or supply shall be granted to a generating company-

(a) if grant of such licence is likely to adversely affect the operation of the power system or organised development of electricity industry or is not in public interest or in the interest of the consumers in the specified area of distribution or supply, or

(b) unless the generating company undertakes to charge such tariff to the consumers in a specified area of distribution or supply of an existing licensee as is equal to or less than the 3tariff charged by such licensee in such area.