Reorganisation of Government Electricity Industry

(1) The State Government may from time to time by notification in the Official Gazette, publish schemes to reorganise the Government Electricity Industry and to effect the transfer of such of the functions, duties, powers and obligations and such of undertaking of the Government Electricity Industry or such portion thereof consisting of assets, properties, interest in properties, proceedings and liabilities in the manner and on the terms and conditions as the State Government may provide in the transfer scheme.

(2) On and from the date the transfer scheme under sub-section (1) is notified in Official Gazette, or on and with effect from such further date as may be specified in such transfer scheme, (hereinafter referred to as the effective date), the State Government may provide that such of the undertakings of the Government Electricity Industry or portion thereof consisting of assets, properties, interest in properties, proceedings, liabilities, rights and obligations which immediately before the effective date belong to the Government Electricity Industry shall stand transferred to and vest in the State Government on the terms and conditions specified in the transfer scheme without any further act, deed or thing to be done by the Government Electricity Industry or any other person.

(3) The State Government may from time to time by notification in the Official Gazette, publish schemes to effect transfer of the undertakings which vest in the State under sub-section (2) to such Government companies or bodies corporate owned or controlled by the State Government (hereinafter called “the First Transferee”) on such terms and conditions and with such functions duties , powers and obligations as the State Government may provide in the transfer scheme and such transfer and vesting in the First Transferee shall take effect from the date specified in the transfer scheme without any further act, deed or thing to be done by any person.

(4) The State Government may, after consulting the First Transferee to whom the functions, duties, rights, powers, obligations and undertakings, as the case may be, have been transferred and vested in terms of the foregoing provisions by notification in the Official Gazette, publish schemes to transfer and vest in any other company or body corporate or person or authority (hereinafter called “the Second Transferee”) such part of the undertakings from the First transferee to the Second Transferee on such terms and conditions and with such functions, duties, powers and obligations as the State Government may specify and such transfer shall take effect from the date specified in the transfer scheme without any further act, deed or thing to be done by any person.

(5) Notwithstanding anything contained in this section or any other provision of this Act, in the case of any transfer or vesting of the ownership or control of any undertaking or portion thereof under sub-section (4) or the transfer of the controlling interest in the First Transferee or the Second Transferee to any Company, body corporate, person or authority other than that owned or controlled by the State Government, the same shall be given effect to only with the prior approval by a resolution of the State Legislature.

(6) The State Government may by notification provide that such of the functions, duties, powers and obligations exercisable by the Board under the Indian Electricity Act, 1910 or the Electricity (Supply) Act, 1948 or any rules framed there under shall be exercisable by the First Transferee or the Second Transferee or by other companies or bodies corporate or person or authority, as the State Government may specify.

(7) Notwithstanding anything contained in this section, where a transaction of any description is effected in pursuance of the transfer scheme under this Part, it shall be binding on all persons including third parties.

(8) A transfer scheme may- (a) define the property, interest in property, rights and liabilities to be transferred; (i) by specifying or describing the property, rights and liabilities in question; (ii) by referring to all the property, interest in property, rights and liabilities comprised in a specified part of the undertaking; (iii) partly in the one way and partly in the other; (b) provide that any rights or liabilities specified or described in the scheme shall be enforceable by or against the First Transferee or the Second Transferee; (c) provide for restructuring or re-organisation of the undertakings, including forming of subsidiaries, joint ventures, mergers and demergers; (d) impose on any licensee an obligation to enter into such written agreements with, or execute such other instruments in favour of, any other subsequent licensee as may be specified in the scheme; and (e) make such supplemental, incidental and consequential provisions as it is considered appropriate including provision specifying the order in which any transfer or transaction will be effective.

(9) All debts and obligations incurred, all contracts entered into and all matters and things engaged to be done by, with or for the Government Electricity Industry, or the First Transferee before the relevant transfer scheme becomes effective shall, to the extent specified in the relevant transfer scheme, be deemed to have been incurred, entered into or done by the First or the Second Transferee, as the case may be.

(10) All suits and other legal proceedings instituted or that may be instituted or pending involving the Government Electricity Industry or the First Transferee, as the case may be, before the relevant transfer scheme becomes effective shall in the manner specified in the relevant transfer scheme be continued or instituted by or against the First or the Second Transferee.

(11) If pursuant to a transfer scheme framed by the State Government a licensee is required to vest any part of its undertaking in another company or body corporate or person or authority, the Commission shall amend the licence granted and issue requisite licence to enable such other company or body corporate or person or authority to discharge the functions.

(12) The Government Electricity Industry shall cease to be charged with, and shall not perform, the functions, rights, powers and duties to the extent the same are transferred and vested in any other company or body corporate or person or authority in accordance with the provisions of this Act.

(13) The exercise by a licensee of any of the rights and powers of the Government Electricity Industry may be made on such conditions as shall be specified in the transfer scheme including a condition that they shall be exercised by the licensee only with the approval of the Commission.

Explanation.- For the purposes of this section and section 29, the expression “Government Electricity Industry” means the Board and any other electricity industry owned or controlled by the State Government.