Chapter VI Chapter VI

Licensing of Transmission and Supply

1. (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. (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 electricity as mentioned in sub-section (1), the matter shall be referred to the Commission for decision which shall be final.
3. (3) The Commission shall have the power to order any unlicensed person to cease operating and disconnect its apparatus.
4. (4) Notwithstanding anything contained in the other provisions of this Act, until the establishment of the Commission in terms of section 3, the State 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 of 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 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.

1. (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. (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 applica- tion 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 any cantonment, aerodrome, fortress, arsenal, dockyard or camp or 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 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. (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. (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) notify 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. (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 the Act, apply to the undertaking authorised by the licence in relation to its activities in the State : Provided that where a supply licence is granted by the Commission for the supply of energy to other licensees 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 IX of the said Schedule shall not be deemed to be incorporated within the supply licence.
6. (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. (7) Any provisions included by virtue of sub-section
8. (6) in a licence shall have effect in addition to the provision made under sub-section
9. (5) of section 18 and section 19.
10. (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.
11. (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.
12. (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.

1. (1) The Commission may make regulation 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 regulation, grant any exemption except 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, aerodrome, 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 such consent shall be necessary if the Commission is satisfied that such consent has been unreasonably withheld,
2. (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 and of the public in general.
3. (3) The exemption granted may be revoked by the Commission at any time for reasons to be recorded in writing.
4. (4) An exemption, unless previously revoked, shall continue in force for such period as may be specified in or determined by or under the exemption.

1. (1) It shall be the duty of the holder of a supply licence 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 supply or transmission in the area of supply or area of transmission, as the case may be.
2. (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. (3) Subject to sub-section
4. (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.
5. (4) Where any of the sections mentioned in sub-section
6. (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.

1. (1) The Commission may enquire into the conduct or functioning of any licensee 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. (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 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 licensee fails within the period specified in his licence or 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. (3) Notwithstanding the provisions of sub-sections
4. (1) and
5. (2) the Commission may, where in its opinion the public interest so requires, on the application or with the consent of the licensee, and if the licensee is not a local authority, after 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.
6. (4) No licence shall be revoked under sub-section
7. (2) or
8. (3) unless the Commission has given to the licensee not less than three months notice in writing, stating the grounds on which it is proposed to revoke the licence and has considered any cause shown by the licensee within the period of that notice, against the proposed revocation.
9. (5) The Commission may, instead of revoking a licence, permit it to remain in force subject to such further terms and conditions as it thinks fit to impose and any further terms or conditions so 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.

1. (1) The Commission may, where in its 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
2. (6) of section 15 or sub-section
3. (5) of section 18 shall be made except with the consent of the licensee.
4. (2) Where the licensee has made an application under sub-section
5. (1) proposing any alterations or amendments to its licence, 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 the 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.
6. (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.

1. (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 effect 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
   • (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. (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. (3) Where the Commission issues any notice under sub-section
4. (1) requiring the licensee 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.
5. (4) Where before the date fixed in the notice issued under clause
   • (a) of sub-section
6. (1) as the date on which the revocation or 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 amount determined in accordance with sub-sections
7. (1) and
8. (2) of section 7-A of the Indian Electricity Act, 1910.
9. (5) The licensee shall duly implement the orders of the Commission, notwithstanding that the licensee may be aggrieved by the orders of the Commission.

1. (1) No licensee or Generating Company shall, at any time, without the consent in writing of the Commission, acquire by purchase or otherwise the licence or the undertaking of, or associate himself with, so far as the business of generating, transmitting, distribution or supply of energy is concerned, any other licensee or person generating, transmitting, supplying or intending to generate, transmit or supply electricity: Provided that before applying for such consent, the licensee shall give not less than one month notice of the application,-
   • (a) to the Commission; and
   • (b) if the licensee holds a supply licence, to every local authority both in the licensee's area of supply and also in the area, if any, in which such other person supplies, or intends to supply energy.
2. (2) The licensee shall not, at any time, assign his licence or transfer his undertaking, or any part thereof, by sale, mortgage, lease exchange or otherwise without the previous consent in writing of the Commission.
3. (3) Any person to whom the provisions of section 44 of the Electricity (Supply) Act, 1948 applies shall be required to obtain consent from the Commission instead of from the Board as provided under that section.
4. (4) A holder of a supply or transmission licence may, unless expressly prohibited by the terms of its licence, enter into arrangements for the purchase of electricity from-
   • (a) the holder of a supply licence which permits the holder of such licence to supply energy to other licensees for distribution by them; and
   • (b) any person or Generating Company with the consent of the Commission.
5. (5) Any agreement relating to any transaction of the nature described in sub-sections (1), (2),
6. (3) or
7. (4) unless made with, or subject to such consent as aforesaid, shall be void.

1. (1) Every licensee shall, unless expressly exempted by its licence, prepare and render to the Commission, on or before the date in each year specified in its licence, an annual statement of accounts of its undertaking and of each separate business unit specified in its licence made up to such date, in such form and containing such particulars, as may be set out in its licence. It shall be a term of its licence that such statements shall be published in the manner prescribed in the regulations.