The Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954

(1) This Act may be called the Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954. (2) It extends to the whole of the State of Tamil Nadu. (3) It shall come into force at once. (e) " Electricity Act" means the Indian Electricity Act, 1910 (Central Act IX of 1910) ; (f) " E1ec:tricity Supply Acr " means ,the Electricity (Supply) Act, 1948 (Central Act LIV of 1948) ; (g) " fixed assets " includes works, spare parts9 stores, tools, motor and other vehicles, office equipment and furniture ; (h) " Government " means the State Government ; (i) " intangible assets " means any amount paid on account of goodwill, under-writers' commission and such preliminary and promotional 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 I1 of the Electricity Act to supply t:lectrical 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 ve3ted 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, or his successor-in-interest ; (k) " prescribed " means prescribed by rules made under this Act ; (I) "Undertaking taken over" means an undertaking taken over by the Government after the 1st January 1951 and before the commencement of this Act ; (m) " vesting date " means, ir relation to . an undertaking, the date fixed ut~der ~ection 4, sub-section (1) as the date on which the undertaking shall vest in the Government or in the case of an undertaking taken over, the date on which it was taken over ; (n) " works " includes electric supply lir-0 and any lands, buildings, machinery or apparatus, required to supply energy and to carry into effect the objects of a licence or sanction for the supply of electricity, granted under the Electricity Act ; (0) other expressions shall have the meanings re P spectively assigned to them in the Electricity Act or the rule8 thereunder.

(1) In this Act, unless the context otherwise requires- (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 accounts 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; (d) "Board" means the Tamil Nadu Electricity Board constituted under section 5 of the Electricity Supply Act; (d) "document" in relation to an undertaking, includes its books, accounts, registers, maps and plans; (e) "Electricity Act" means the Indian Electricity Act, 1910 (Central Act IX of 1910); (f) "Electricity Supply Act" means the Electricity (Supply) Act, 1948 (Central Act LIV of 1948); (g) "fixed assets" includes works, spare parts, stores, tools, motor and other vehicles, office equipment and furniture; (h) "Government" means the State Government; (i) "intangible assets" means any amount paid on account of goodwill, under-writers' commission and such preliminary and promotional 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 electrical 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, or his successor-in-interest; (k) "prescribed" means prescribed by rules made under this Act; (I) "undertaking taken over" means an undertaking taken over by the Government after the 1st January 1951 and before the commencement of this Act; (m) "vesting date" means, in relation to an undertaking, the date fixed under section 4, sub-section (1) as the date on which the undertaking shall vest in the Government or in the case of an undertaking taken over, the date on which it was taken over; (n) "works" includes electric supply line and any lands, buildings, machinery or apparatus, required to supply energy and to carry into effect the objects of a licence or sanction for the supply of electricity, granted under the Electricity Act; (o) other expressions shall have the meanings respectively assigned to them in the Electricity Act or the rules thereunder.

The compnwiion payable to a licensee, on whom an order has been served und.er sect ion 4 or whose undertaking has been t hken a ver before t he commencemenl' of this Act, shall be determined 6nder any one of the Basis A, B, and C specified below, cas may be chosen under section 8. (1) Basis A--(i) The compensation payable under this basis shall be zn amount equel to twenty times the average net annual prcfit of the undertaking during a period of five consecutive account years immediztetely preceding the vesting date. Explanation.--Bor the purpose of this clause, the net annual profit shall be determined in t he mt,nner bid 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 fc r five consecutive account years imneciiately pr'eceding the vesl ing dg.te. (2) Basis B.-Tile cornpensat ion payable under this basis shall be the aggregal e wlue of all the shares consi itut - ing the share e.plta.1 of the und.erla,king, reckoned as shown below :- (a) In the case of shares issued on or before the 31st March 1946, the value of each shcre sh2.11 be reckoned at its average value as ~rrivcd at from the . quotalions for the.shstres as given in the offlcial list of the Madras Shere Market on the 15th dey of each month and where such market was closed on that day, t hie quotations on the next working dey, during the per icci cf three years commencing on the 1st Apl il 1946 and ending on the 31st March 1949 : Provided th8.t this clause sh?,ll not apply if eny one or -ore of the d.iff'erent cl~.sses of shares constituting the capital of the undertaking were not beingregulcxly quoted in such market during t he pericd of three years aforesaid, or if such quotetions c'xringl he whcle cf anyone cf those thee years were not based on actual transactions in such year. (b) In the case of shares issued on or before the 31st M~.rch 1946, if clause (a) does not apply but there h?.ve been bona fide transfers in each of the ditlerent classes of shares in every one of the three years aforesaid, and such transfers have been duly registered in the appro- priate hooks of the licensee, the value of each share of each suclz cl3.s~ tll:l.ll be 1-cckoned ;,t one-t hircf of the aggreg?!t: of its ,T~rce ktnt~unl p.vil*i:go v;~li.c.s for tlie I hrce yezrs, the avc;r:!ge v;:lri,e PI- eech yc-:.r being determined from the ~ T ~ I ~ S L " . C ~ ! U I I S in ihet yeas-. (c) Whcrc ! lu crnounts c2.Jled fc.1- in respect of any sh::rc ! e Torrcc! to in cIt:~isc (a) OJ- C~BLISC (b) 2re in arrezrs, rhe valtlo i.1' such sh::rt. sh:.li bc taken to be a sum which be:~.rs to it 5 vil.luc cs rcckoncd L! rider ckus-e (0) or cL?usc (b), ;l.s ;tls w.sc 1xw.y bc, 1 h ~ . sc?luc propoifion as the amounk paid up bars it? t hc i'iill :ruouiit pi>,yit.ble in respect of 1 he sh:~rc. (d) In the case of shares issued after the 31st March 1946, the aggregate value shall be taken to be the amount actually paid in respect thereof (including the premium, if any), together 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 years as shown in the licensee's books : Provided that no part of such amount shall be entitled to a solatium exceeding ten per cent. Explanation.-This basis shall not apply unless clause (a) or clause (b) is applicable. (3) Basis C.-The compensation payable under this basis shall ba the aggregate value of the amounts specified below :- (i) the book value of all completed works in beneficial 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 bcok i7a1ue of all stores including spare parts handed over to the Government; (iv) the book value of all furniture, office equipment, tools and other non-depreciable equipment, as 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 licensee less depreciation calculated in accordance with Schedule II; (vi) the book value of all intangible assets, the extent such value has not been written off in the books of the licensee; (vii) the amount due from consumers in respect of every hire-purchase agreement referred to in section 6 (2) (a) (ii) less a sum which bears to the difference between the total amount of the instalments and the original cost of the material or equipment, the same proportion 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); (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 of ten per cent on the value referred to in sub-clause (ii), at the rate of five per cent on the value referred to in sub-clause (iii) and 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 (iv) ; (b) in case the licensee is a person who has obtained sanction under section 28 of that Act to engage in the business of supplying electrical energy, at the rate of ten per cent on the values referred to in sub-clauses (i) and (iv) 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 costs, 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 attributable to the asset up to the date of bringing it into beneficial use, at a rate not exceeding six per cent per annum; (iii) cost of supervision 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 rendered under the Electricity Act, the book value of the assets shall be such sum as may be decided upon by mutual agreement between the Government and the licensee. 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 attributable to the asset up to the date of bringing it into beneficial use, at a rate not exceeding six per cent per annum; (iii) cost of supervision 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 rendered under the Electricity Act, the book value of the assets shall be such sum as may be decided upon by mutual agreement between the Government and the licensee.

(1) If compensation 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 vesting date, shall vest or shall be deemed to have vested in the Government: 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. 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 respect 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; (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 free 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 Government under this Act, 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. (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 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 be required for carrying it on.

(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 individual to act as his sole and accredited representative in connexion 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 the Indian Companies Act, 1913 (Central Act VII of 1913), the appointment of the accredited representative shall be made by the shareholders 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, to make a fresh appointment after the commencement of this Act; and the said representative shall be deemed for all purposes to be the accredited representative appointed under the foregoing sub-sections. (4) Where the accredited representative resigns or dies or becomes incapable of acting or is, in the opinion of the 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 individual as his accredited representative. (5) The remuneration of, and the expenditure incurred by, the accredited representative shall be, and shall be deemed always to have been, payable from the compensation deposited or deemed to have been 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 such representative (inclusive of a 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 under sub-section (1) or sub-section (4), the functions hereinafter assigned to the accredited representative shall be performed by the licensee; and all references in the rest of this Act to the accredited representative 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 reckoned from the last date on which such accredited representative could have been appointed.

(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. (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 will 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 which basis of compensation, A, B or C, should be adopted for the undertaking, such intimation shall be deemed to have been made under this section and is declared not open to revision except with the concurrence of the Government.

Where the Government are of opinion that any licensee has, on or after the 31st October 1947, disposed of any fixed assets otherwise than by way of sale, exchange, gift, lease or other bona fide transaction or has incurred capital expenditure otherwise than in the normal course of events with a view to benefit unduly the licensee or some other person and thereby caused loss to the Government as succeeding owners of the undertaking, 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 amount which they 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.

(1) The Government shall be and shall be deemed always to have been entitled to deduct the following sums from the compensation payable under this Act to a licensee :— (a) the amount, if any, already paid by way of compensation ; (b) the amount, if any, specified in section 9 ; (c) the amount due, if any, from the licensee to the Government [or the Board] for the energy supplied by the Government or the Board before the vesting date ; (d) all other amounts and arrears of interest, if any, thereon due from the licensee to the Government [or the Board] 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 amount of such loss being deemed to be— (i) in cases where compensation is payable under Basis A or Basis B, the market value on the vesting date of such property or rights, together with any income which might have been realized by 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, together with any income which might have been realized as aforesaid. (2) In addition to the deductions 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 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 the Board] and arrears of interest, if any, thereon ; (ii) a portion of the amount of solatium bearing the same proportion to the total amount of solatium, as the amount of all loans due to the Government [and the Board] from the licensee on the vesting date bears to the aggregate of— (a) the paid up share capital of the licensee not being a local authority, or the value of the capital assets shown in the capital account of the undertaking in the case of a local authority ; (b) the amount of all loans due to the Government [and the Board] as aforesaid ; (iii) such amount as the Government may, with the concurrence of the Board, determine as equivalent to the value of the energy supplied by the licensee to the consumers, before the vesting date, which 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, and all sums which have been or ought to be set aside to the credit of the consumers' fund in so far as such advances or sums have not been paid over by the licensee to the Government ; Explanation.—For the purpose of this clause, ‘consumers' fund’ shall, in the case of the undertaking of a licensee being a local authority, mean the amount referred to as such in the bulk supply agreement or, where no such reference has been made in the bulk supply agreement, the net profits of the undertaking remaining after effecting the appropriations to the general funds of the local authority in accordance with the terms of the said agreement. In the case of the undertaking of a licensee other than a local authority, for any account year prior to the date on which the Sixth Schedule to the Electricity Supply Act came into force, it shall mean the amount referred to as such in the bulk supply agreement and, for any account year on and from the said date, it shall mean the amount specified in paragraph I (1) of the said Schedule as the amount to be set apart for distribution to consumers ; (v) all deposits made by, and all amounts 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 (v), in so far as the deposits or sums aforesaid may be in the custody of trustees under a valid deed of trust. (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 all the securities and other properties, if any, in which the same may have been invested, to the Government, and the staff transferred to the Government shall be completely discharged in respect of all claims either against the Government or enforceable against the trustees, in respect of the funds, securities and other properties so transferred.

(1) The compensation due to a licensee under this Act shall be paid in cash, as hereinafter provided. (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-section (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 compensation payable to the licensee under this Act. (3) Three-fourths of the amount as so estimated shall be paid by the Government to the licensee, where it is a local authority after deducting any amount paid, whether before or after the commencement of this Act, as or towards the compensation payable and the amounts referred to in section 10. (4) In the case of any other licensee, the Government shall deposit with the Reserve Bank of India or any other bank approved by the Government for the purpose (which is hereinafter referred to as the Bank) three-fourths of the amount as estimated under sub-section (2) after deducting the amounts referred to in section 10. Explanation.—Where the amount to be paid or deposited under sub-section (3) or this sub-section is equal to or less than the amount to be deducted therefrom as aforesaid, no payment or deposit need be made under sub-section (3) or this sub-section. (5) Nothing in sub-section (2) or sub-section (4) shall require the Government to estimate roughly the compensation payable to a licensee under this Act or to 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 undertaking 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 the 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 compensation 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 (i) the amounts referred to in section 10, and (ii) the payment or deposit previously made under sub-section (3) or sub-section (4) as the case may be. (b) Nothing in clause (a) shall require the Government to determine the amount of compensation payable in respect of the undertaking or to make a deposit in a Bank in any case where in respect of an undertaking taken over, the Government have determined the amount of compensation payable in respect of the undertaking and have deposited in the Bank the balance left from the amount aforesaid after deducting therefrom the amounts referred to in section 10 and the deposit previously made or deemed to have been 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 representative claims or in the case of an undertaking taken over has claimed that compensation is or was due to the licensee over and above that as determined or deemed to have determined by the Government under clause (a), the amount, 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.

(1) Where any matter is required to be determined by an arbitrator under this Act, or where any matter is, by this Act, required to be determined by an arbitrator or where any dispute arises in regard to any matter which 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 retired 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 ; (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 supply electricity entered into by the licensee prior to the vesting date is of the nature referred to in section 6, sub-section (5), proviso ; (f) whether the Government are entitled to deduct any sum under section 9 or section 10. (2) Subject to the provisions of this section, the provisions of the Arbitration Act, 1940 (Central Act X of 1940), shall apply 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 appointed by the Government, such award is hereby declared to have been validly made.

(1) Any agreement between the licensee and his managing agent or managing director (by whatever name known) shall, notwithstanding 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 commission for such period of the agreement as may remain unexpired on the vesting date but shall be entitled only to compensation as determined under sub-section (2). (2) Where the agreement was in force on the 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 commission and office allowance) to which a managing agent of the licensee would have been entitled under paragraph XI of the Sixth Schedule to the Electricity Supply Act during a period of two complete account years immediately preceding the vesting date. (3) Any amount payable to a managing agent or managing director under sub-section (1) shall be payable from the compensation deposited or deemed to have been deposited under this Act.

Notwithstanding anything to the contrary in any contract or agreement or in any law for the time being in force, the following provisions shall apply and shall be deemed always to have applied in regard to the persons on the staff of the licensee immediately before the vesting date :-- (1) The Government shall have and shall be deemed always to have had power to terminate the services of any such person after giving him three calender months' notice in writing or paying him three months' pay in lieu of such notice. (2) Persons whose services are retained shall be governed by such rules as the Government may, from time to time, make in regard to them.

(1) Every licensee shall within three months from the date on which an order under section 1, sub-section (1), is served on him, or such further time as may be allowed by the Government, prepare and hand over to them an inventory of all the assets belonging to his undertaking and all 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 within 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 such information and particulars as may be required by the Government in regard to the documents 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 case falling under section 6, sub-section (2), all such documents as are necessary for ascertaining the assets of the undertaking, the rights, liabilities and obligations attaching thereto or the terms of employment of the staff and for determining the compensation payable for the undertaking under this Act. (5) Where the documents aforesaid have been taken possession of by the Government, the licensee or any person authorized in this behalf, shall have access to such documents at all reasonable times and shall also be entitled to take copies thereof or extracts therefrom.

Any officer or servant of the Government authorized by the Government in this behalf by general or special order may, at any time, after giving the licensee reasonable notice, enter upon any land or premises in his possession and make any survey, examination, or investigation incidental to the purposes of this Act.

(1) Whoever, being required to furnish any information or makes any statement under this Act, furnishes any information or makes any statement 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 handed over to the Government under section 16, sub-section (4), shall be punishable with imprisonment for a term which may extend to two years, or with fine which may extend to twenty thousand rupees or with both and in the case of a continuing offence with an additional fine which may extend to five hundred rupees, for every day after the first during which the offence continues. (2) Whoever fails, without reasonable cause, to comply with any of the provisions of this Act or the rules made thereunder, or any directions or order issued in pursuance thereof, shall, if the case be not governed by sub-section (1), be punishable with fine which may extend to twenty thousand rupees and in the case of a continuing offence, with an additional fine which may extend to five hundred rupees, for every day after the first during which the offence continues. (3) Notwithstanding anything contained in section 32 of the Code of Criminal Procedure, 1898 (Central Act V of 1898), it shall be lawful for any Magistrate of the First Class specially empowered by the Government in this behalf or for any salaried Presidency Magistrate, to impose a sentence of fine exceeding one thousand rupees when awarding punishment under sub-section (1) or (2). (4) No Court shall take cognizance of an offence punishable under this section except with the previous sanction of the Government or of an officer authorized by them in this behalf.

Where a person committing any offence punishable under this Act is a company or an association or a body of persons, whether incorporated or not, the manager, secretary, agent or other principal officer managing the affairs of such company, association or body shall be deemed to be guilty of such offence.

No suit, prosecution or other legal proceeding shall lie against the Government or any officer or servant of the Government or any person acting under the direction of the Government or an officer or servant of the Government or aiding or assisting the Government or an officer or servant of the Government, in respect of anything which is in good faith done or intended to be done in pursuance of this Act or any rule or order made thereunder or in respect of anything which was in good faith done or intended to be done in the exercise of the powers or jurisdiction purported to be conferred by the Madras Electricity Supply Undertakings (Acquisition) Act, 1949 (Madras Act XLIII of 1949), or any rule or order made thereunder.

(1) The Government may, after previous publication, make rules to carry out the purposes of this Act. (2) In particular and without prejudice to the generality of the foregoing power, such rules may provide for-- (a) all matters required or allowed by this Act to be prescribed ; (b) the manner of service of notices and orders under this Act ; (c) the obtaining of the particulars necessary for assessing the compensation under this Act ; (d) the appointment of auditors and their duties and remuneration ; (e) the inspection, checking and taking over of the assets and documents of an undertaking ; (f) the qualifications of, and the remuneration payable to, the accredited representative ; (g) the procedure to be followed by the Special Officer under section 11 ; (h) the remuneration payable to an arbitrator appointed under section 13 ; (i) the manner of obtaining the information and particulars referred to in section 16, sub-section (3). (3) All rules made under this section shall be published in the Fort St. George Gazette, and upon such publication shall have effect as if enacted in this Act.

(1) No provision of the Electricity Act or of the Electricity Supply Act or of the Madras City Municipal Act, 1919 (Tamil Nadu Act IV of 1919), or of the Tamil Nadu District Municipalities Act, 1920 (Tamil Nadu Act V of 1920), or of the Tamil Nadu District Boards Act, 1920 (Tamil Nadu Act XIV of 1920), or of the Tamil Nadu Village Panchayats Act, 1950 (Tamil Nadu Act X of 1950), or of any rule made under any of those Acts or of any instrument having effect by virtue of any of those Acts or any rule made thereunder shall, in so far as it is inconsistent with any of the provisions of this Act, have any effect. (2) Save as otherwise provided in this Act, the provisions of this Act shall be in addition to, and not in derogation of, the Electricity Act and the Electricity Supply Act.

If any difficulty arises in giving effect to the provisions of this Act, the Government may, as occasion may require, do anything which appears to them necessary for the purpose of removing the difficulty. A copy of every order passed under this section shall be laid before each House of the State Legislature.

Orders made, decisions or directions given, notifications issued, proceedings taken and acts or things done, in relation to any undertaking taken over, if they would have been validly made, given, issued, taken or done, had the Madras Electricity Supply Undertakings (Acquisition) Act, 1949, (Madras Act XLIII of 1949), and the rules made thereunder been in force on the date on which the said orders, decisions or directions, notifications, proceedings, acts, or things, were made, given, issued, taken or done, are hereby declared to have been validly made, given, issued, taken or done as the case may be, except to the extent to which the said orders, decisions, directions, notifications, proceedings, acts, or things are repugnant to the provisions of this Act.

The Madras Electricity Supply Undertakings (Acquisition) Act, 1949 (Madras Act XLIII of 1949), is hereby repealed.

Part A-Applicable to a licensee not being a local authority, 1. For the purposes of section 5 (1) ' net annual profit ' shall, in respect of any account year subsequent to the date on which section 57 of the Electricity Supply Act and the Sixth Schedule thereto came into force, means the excess of ' income ' over ' expenditure ' as defined below, less the sums referred to in paragraph 4 or, as the case may be, plus the sums referred to in paragraph 5. 2. For the purposes of foregoing paragraph, ' income' means income derived from- (i) gross receipts from sale of energy, less discounts applicable thereto ; (ii) rental of meters and other apparatus hired to consumers ; (iii) sale and repair of lamps and apparatus ; (iv) rents ; (v) transfer fees ; (vi) investments, fixed and call deposits, and bank balances ; (vii) other general receipts accountable in the assessment of Indian Income-tax and arising from and ancillary or incidental to the business of electricity supply. 5. The sums referred to in paragraph 1 as those to be added to the excess of ' income ' over ' expenditure ' are- (a) The appropriations from the Tariffs and Dividend Control Reserve to the extent necessary by virtue of paragraph 11 (2) of the Sixth Schedule aforesaid; and (b) the taxes paid or payable in respect of the appropriations aforesaid as taxes on income and profits. Part B-Applicable to a licensee being a local authority. For the purpose of section 5 (1) ' net annual profit ' in respect of any account year of a licensee being a local authority shall be : (i) the amount actually appropriated, or (ii) the amount which could have been appropriated, to the general funds of the local authority on account of the undertaking for that account year in accordance with the audited accounts of the undertaking.

For purposes of payment of compensation under section 5 (3), the depreciation shall be calculated at annual rates arrived at by dividing ninety per cent of the book-value of each asset by the number of years of life of the asset as specified in the table below. For the account year in which an asset was brought into beneficial use, the depreciation shall be calculated at half the annual rate and for the period after the last account year to the date of taking over, the depreciation shall be calculated pro rata. Depreciation shall not be calculated for any period beyond the life of the asset as prescribed herein. TABLE Description of asset. Number of years or period. A. Land owned under full title . . Infinite. B. Land held under lease :- (a) for investment in the land . . The period of the lease, or the period remaining unexpired on the assignment of the lease. (b) for cost of clearing site . . The period of the lease remaining unexpired at the date of clearing the site. C. Assets purchased new :- (a) Plant and machinery in generating stations, including plant foundations :- (i) Hydro-electric .. Thirty-five. (ii) Steam-electric .. Twenty-five. (iii) Diesel-electric .. Fifteen. (b) Cooling towers and circulating water systems. Thirty. (c) Hydraulic works forming part of a hydro-electric system, including- (i) dams, spillways, weirs, canals, reinforced concrete flumes and syphons. One hundred. (ii) reinforced concrete pipe-lines and surge tanks, steel pipe-lines, sluice gates, steel surge tanks, hydraulic control valves and other hydraulic works. Forty. (d) Buildings and civil engineering works of a permanent character, not mentioned above- (i) offices and show-rooms Fifty. (ii) Containing thermo-electric generating plant. Thirty. (iii) Containing hydro-electric generating plant Thirty-five. (iv) temporary erections such as wooden structures. Five. (v) others Fifty. (e) Transformer, Transformer kiosks, sub-station equipment and other fixed apparatus (including plant foundations) :- (i) transformers (including foundations) having a rating of 100 kilo-volt amperes and over. Thirty-five. (ii) others Twenty-five. (f) Switchgear, including cable connections. Twenty. (g) Batteries .. Ten. (h) (1) Underground cables, including joint boxes and disconnecting boxes. Forty. (2) Cable duct systems .. Sixty. (i) Overhead lines, including supports :- (i) lines on steel or reinforced concrete supports, operating at nominal voltages higher than 13.2 kilo volts. Thirty. (ii) other lines on steel or reinforced concrete supports. Twenty-five. (iii) lines on wood supports .. Twenty. (j) Meters .. Fifteen. (k) Self-propelled vehicles .. Seven. (l) Static machine tools .. Twenty. (m) Air-conditioning plants :- (i) Static .. Fifteen. (ii) Portable .. Seven. (n) (i) Office furniture and fittings .. Twenty. (ii) Office equipment .. Ten. (o) Apparatus let on hire :- (i) other than motors .. Seven. (ii) motors .. Twenty. D. Assets purchased second hand and assets not otherwise provided for in this table. Such reasonable period as the Government determine in each case, having regard to the life, condition, and value of the asset at the time of its acquisition.