 8m no 93 of 1976 the electricity (supply) amendment bill, 1976 a billfurther to amend the electricity (supply) act, 1948 bb it enacted by parliament in the twenty-seventh year of the republic of india as follows:-1 (1) this act may be called the electricity (supply) amendment short act, 1976 title and ctml-5 (2) it shall be deemed to have come into force on the 8th day of mence-october, 1976 ment 54 of 1141 % in section 1 of the electricity (supply) act, 1948 (hereinafter \ amendreferred to as the principal act), for su~section (3), the following subment of section shall be substituted, namely:-ection l "(3) this section and sections 2, 3, 4, 4a, 4b, 4c, 15a, 18a, 26a, 28 to 34 (both inclusive), sub-section (2) of section 39, section 42, sub-section (3) of section 43 and sections 57, 57a, 57b, 58, 75a, 76, 77, 77a, 77b, 77c, 82 and 83 and the provisions of the sixth and seventh schedules shall come into force at once", 3 in section 2 of 'the principal act,-~   tol akaa2 (a) after clause (4) the following clause shall be inserted, namely:-'(4a) "generating company" means a company formed-(0) either by the central government or by any state s goverrunent; ot (b) jointly by the central government and one or more state governments or by two or more state governments, and registered under the companies act, 1956;'; 1 of lui (b) in clause (5),-10 (i) after the words "including any buuding and plant", the brackets and words "(with step-up transformer, switchgear, cables or other appurtenant equipment, if any)" shall be inserted; (ii) the words "for transforming, converting or distributing electricity" shall be omitted; is (c) in clause (6), for the words and figures "but, the provisions of section 26 of this act notwithstanding, does not include the board", the words, figures and letter "but, the provisions of section 26 or 26a of this act notwithstanding, does not include the board or a generating company" shall be substituted; ao (d) after clause (8), the following clause shall be inierted, iwilely:-- (8a) "power system" means a system under the control· ot the government or any board or generating company or other agency and having one or more-3s (i) generating stations; or (ii) main transmission lines and su~stations; or (iii) generating stations and main trammtlillod lbiea and su~stations;'; (e) in clause (9), for the warda and figures "made under section 30 78", the words iimade under this act" shall be substituted; (f) after clause (11), the following clauses shall be inierted, namely:-'(lla) "sub-station" means a station for transforming or converting electricity for the transmission or distribution thereof 3$ and includes transformers, convertors, switchgear, capacitors, synchronous condensors, structures, cables and other appurtenant equipments and any buildings used for that purpose and the iilte thereof, a site intended to be used for any such purpose and any buildings used for housing the staff of the su~stat1on: 40 (11b) "tie-line" means a line for the transfer of electricity between two power systems together with switehgear and ether works necessary to, and used for, the control of such uae;'; (9) in clause (13), after the words "the board", the wol'da "  generating company" shall be inserted  to lamction 3 of the principal act,-(1) in sub-section (1),-(a) in clause (i), for the words "and particularlyto __ jrdinate the activities of the planning agencies", the words "formulate short-term and perspective plads for power development and co-ordinate the activities of the planning agencies" shall be substituted; 10 (b) for clause (iiil), the following clause shall be substituted, namely:-"(iii) collect and record the data concernin,g the generation, distribution and utilisation of power and carry out studies relating to cost, efficiency, losses, benefits and such like mattersj"; (0) after clau$e (iv), the following clauses shall be inserte4, ll8iilely: -"(v) advise any state government, board, generating company or other agency engaged in the generation or ~pply of electricity on such matters as will enable such govemment, board, generating company or agency to operate and maintain the power system, under its ownership or control, in an improved manner and, where necessary, in co-ordination with any other government, board, generating company or other agency owning or having the control ot another power system; (vi) promote and assist in the timely completion of schemes sanctioned under chapter v; (vii) make arrangements for advancing the skill of persons in the generation and supply of electricity; 30 (viii) carry out, or make arrangements for, any investigation for the purpose of generating or transmitting e1eo-~ricity; (il) promote research in matters aff~idg the genera·-tion, transmission and supply of electricity; 35· (%) advise the central government on any matter on which its advice is sought or make recommendation to that government on any matter if, in the opinion of the authority, the recommendation would help in improving the semeration, distribution and utilisation of electricity; and (,ti) discharge such other :functions as  may be entrusted to it by or wlder any other law"; (2) in sub-section (2), for the words "not more than six: members", the  s '~t more tban fourteen members of whom not more tbail eipt thall  full-time memlters" shall be substituted; (3) after subaection (2), the following sub-aection shall be ~ed, n~y:--"(2a) a full-time member shall be a person who has e~ri­~nc of and has shown capacity in,-(a) design, construction, operation and maintenance of generating stations; (b) transmission and supply of electricity; (c) applied research in the field of electricity; (d) applied economics; or (e) industrial, commercial or financial matters"; (4) in sub-section (3) for the words "ode of the members", the words "ode of the full-time members" shall be substituted; 10 (5) after sub-section (4) the following sub·section ahan he inserted namely:-if (4a) the chairman of the authority and the other full-time members shall receive such salaries and allowadces as may be determined by the central government and the other members is shall receive such allowances and fees for attendijl& the meetidp of the authority, as the central government may prescribe (4b) the other terms and conditions of ernee of the members of the authority [iddudin, subject to the provisiodl of  hsection (4), their terms of ofticej shall be such as the centrai2q governmedt may prescribe"; (6) in sub-section (5),-(i) for the words "be directly or indirectly concerned or interested in or have any share or interest", the words "have any share or interest for his own benefit, whether in his own name or 2s otherwise," shall be substituted; (ii) for the words "fuel, solid or liquid, for the generation of electricity", the words "fuel, in whatever form, for the generation of electricity or in the manufacture of electrical equipment" shall be iubstituted; 30 (7) for sub-section (7) the following sub-sections shall be substituted, namely:-"(7) the chairman of the authority may, by order, appoint any two or more members of the authority to act on behalf of the authority in relation to any matter referred to in clause (ii) 3' of sub-section (1) (8) no act or proceeding of the authorit1 shall be invalid merely on the ground of the existence of any vacancy in, or any,· defect in the constitution of, the authority   i in section 4 of the principal act,-amendmentof pelton 4 (ii) for the words "state electricity board", the words "state electricity board, generating company," shall be substituted; (b) after the words "or his own use", the words "or consuibijl electricity" shall be inserted: (c) for the words "and returns", the words u, returns or other information" shan be substituted 6 after section 4 of the principal act, the followini sections shall be inserted, namely:-"4a (1) in the discharge of its functions, the authority shall be guided by such directions in matters of policy involving public interest as the central government may give to it in writing (2) if any question arises as to whether any such direction relates to a matter of policy involving public interest, the decision of the cen-10 tra! government thereon shall be final lnaertion of new aectioa oia,d and4c i)kec tiona by central government to the authprity power of central governmeat to make rules 4b (1) the central government may, by notification in the official gazette, make rules for carrying out the purposes 0 t this chapter (2) in particular and without prejudice to the generality of the is foregoing power, such rules may provide for all or any of the following matters, namely:-(a) the functions and duties of the authority and the manner in which such functions and duties shall be exercised and performed, wlder sub-section (1) of section 3; (b) the terms anq conditions of service of the chairman and other members of the authority, (including the allowances and fees payable to members, but not including the salaries and allowances payable to the chairman and other full-time members, of the authority) under sub-section (4a) and sub-section (48) of section 3; (c) any other matter which is required to be, or may be, prescribed by the central government 3s (3) every rule made by the central government under this chapter shall be laid, as soon as may be after it is made, before each house of parliament while it is in session for a total period of thirty days which may be comprised in one session or in two or more sucees  sive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both housel agree in making any modification in the rule or both houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule 4c the authority may make regulations, not inconsistent with the provisions of this act and the rules made by the central government thereunder, to provide for all or any of the following matten, namely:-power ot authority to make regula tiodl (4) summoning and holding of meetings of the authority, the times and places at which such meetings shall be held, the eo-duct of business thereat and the number of members requirei  constitute a quorum; (b) any other matter arising out of the function of the authority under this act for which it is ll8ceiiaty <lr expedieqt te make reeulations" 7 in chapter iti of the principal act, for the heac:utw "&raft ~ triclty boards", the following heading shall be substituted, namely:-s "sta'l'b electricity boards generating compands statz elecrriclty ooratmta'rft councilb and lrx1at advj80ry cimmuius·' substitution of new beadinl for beadin& under ch~jit :i after aeetion 16 of the principal act, thefol»winl aeetiou shall be mnted, namely:-u15a (1) the ceatral govenameat or any state government, 01' 10 the centraj·gcrftnuneut an4 one 01' more state gevei'llllledu, or two or'mojle'8iiitelgovennneats, jeibtly may fol'lll geil  tidt'o'- y with such name as may be specified in the memorandum of  tioa t dlec  r (2) the main objects of a generating company shall be-is insertion of new aectloil 15a formation, objects jurisdictjoq, etc of general idl companies (i) establishing, operating and maintaining generating aathmaand tie-jides, sub-!stationsand main trabsmission unes connected therewith; (ii) operating and maintaining such generating stations, tielines, sub-stations and main transmission lines as are assigned to 30 it by the government or governments forming the generating company (hereinafter referred to as the promoting government) (3) the generating company shall carry on ita agihitles wltblll suc:hareas as the promotingpvemll'mmt or :prometillg governments may, from time to time, lpic'fy in iiiia mbalt 2s ~4) such 'ruzaber of the jdeidbers of tlaebeard , ~inetors of - ~idg·co"""7·88tbe pjoiileting pyel'dlll8llttlabaks  , where ·tiaee-are '8101'8 plolllllttidg pv8l'd1lleote tbaa  as  may ita·  1ijiioii , liieil premetiag fovemments, may lie - ,  fidwime __ 5 daaeof 30 (5) a full-time member of the board of directors of a generating company shall be a person who has experience of, and bas shown capacity in,-(4) design, construction operation and maintenance of generating stations; 35 (b) transmission and slipply ot electdcity; (e) applied economics; (d) organising workers; (e)  industrial, commercial or financial matters; or (1) administratioft in a govemmedt ·j!)epar ttilent nr otlutr 40 establishment (6) the provisions of section 9 shall so far as may be, apply to every member of the board of directors of a generating company as they apply to a member of the board 10 (7) a company within the meaning of section 3 of the companies act, 1956, formed before the commencement of the electricity (su{::ply) amendment act, 1976, by the central government or any state government or the central government and one or more state governments, or two or more state governments, jointly and functioning on such commencement, having as ita main objeets all or any of the matters specifted in sub-section (2), shall be deemed, for ad purposes, to' be a 'generating company under this act" t in section 16 of the principal act,-amendmeat!tif' aectloq,l e is (1) in sub'section(2), for the words "the member& of the board", the word's "the members of the board and if there are any generating company or generating companies operating in the state, one representative of the generating company or each of the generating companies, to be nominated by the generating company concerned," shall be substituted: (2) in sub-section (5),-(g) in clause (i) and clause (ii) , for the words cthe board" the words "the board and the generatil:lg ccnnpay or generating companies, i~ any, operating in the state" shall be substituted; (b) in clause (iii), for the words "the board", the words 'ithe boani or the generating company or generating companies, if ~s any, operating in the state" shall be substituted 1'0 in chapter iv of the principal act, in the headillg for thf:' words "state elec'l'ricity bo~, the words "state elecnucrrv boards and cdiilating companil!'s" shall be substituted 11 for section 18 of the principal act, the following sections shall be 30 substituted, narnely:-amendmentof heading under chapter iv subtltution ot new aectloill tor section 18 "18 subjeet to the provisions of this act the board shall be charged with the following general duties, namely:-general duties otthe board 3s (a) to arrange, in co-ordination with the generating company or generating companies, if any, operating in the state, for the supply of electricity that may be required within the state and for the transmission and distribution of the same, in the most efficient and economical manner with particular reference to those areas which are not for the time being supplied or adequately supplied with electricity; (b) to supply electricity as sogn -practicable to a licensee or other person requiring such supply if the board is competent under this act so to do; i < (c:) to exercise such control in relatiell to the generation, ctistrfbution and utiusatien of electricity wiilfllin the state u ie jft'6~ed for by or under this "-t; (d) to collect data on the demand for, and the use of, electricity and to formulate perspective plans in co-ordination with the generating company or generating companies, if any, operating in the state, for the generation, transmission and supply of electricity within the state; s (e) to prepare and carry out schemes for transmislion, distribution and generally for promoting the use ot electricity within the state; and (1) to operate the generating stations under ita control in co-ordination with the generating company or generating com- 10 panies, if any, operating in the state and with the govemment or any other board or agency having control over a power synm 18a (1) subject to the provisions of this act, a generating company shall be charged with the following duties, namely:-dutte 01 genera-unc compadj (a) to establish;, operate and maintain such generating is stations and tie-lines, sub-stations and main transmission lines connected therewith, as may be required to be established by the promoting government or promoting governments in ~lation to the generating company; (b) to operate and maintain in the most efficient and economi- 20 cal manner the generating stations, tie-lines, sub-stations and main transmission lines, assigned to it by the promoting government or promoting governments in co-ordination with the board or boards, as the case may be, and the government or agency having control over the power system, if any, connected therewith; 2s and (c) to carry out subjt"-t't to the provisions of section 21, detailed investigations and prepare schemes, in co-ordination with the board or boards, as the case may be, for establishing generating stations and tie-lines, sub-stations and transmission lines con- 30 nected therewith, in such manner as may be specifted by th~ authority (2) without prejudice to the generality of its duties under section 18, the board shall, until a generating company begins to operate in any state, perform the duties of a generating company under this 35 section in that state" 12 for section 20a of the principal act, the following section shall be substituted, namely:-substi'utionof new section for  aectlon 20a leasing out, etc, of generatin, btatiou "20a the state government may, in respect ot any generating station owned by it (including transmission lines and other worb 40 connected therewith) make arrangements with the board or a generating company for its operation and maintenance on such terms and conditions as may be agreed upon between the state governmarit and the board or the generating company, as the case may be" d in section 21 of the principal act, in the opening paragraph,- 4s (a) for the words "the board may", the words uthe board or a generating company may" shajl be substituted; amendulent of sectioa  j (b) for the words "in the opinion 01 the board", the words "in thie opinion of the board or the generating company, as the case may be," shall be substituted; (~) the words "and in such manner as the authority may, from ~ time to time, specify" shall be inserted at the end 14 after section 26 of the principal act, the f~lowing section shall be inserted, namely:-9 of 1910 10 "26a (1) notwithstanding anything contained in sub-section (2), nothing in the indian electricity act, 1910, shall be deemed to require' a generating company to take out a licence under that act, or to obtain sanction af the state government for the purpose of carrying on any of its activities 8 of 1910 insertion of new section 20a applicabilityor the'provisiona of act 9 ot 1910 to geileratoingcompadil' is (2) subject to the provisions of this act, sections 12 to 19 (both inclusive) of the indian electricity act, 1910 and clauses xiv to xvii (both inclusive) of the schedule thereto, shall, as far as may be, apply in relation to a generating company as they apply in relation to a licensee under that act (hereafter in this section referred to as the licensee) and in particular a generating company may, in connection with the performance of its duties, exercise-20 9 of 1910 (a) all or any of the powers conferred on a licensee by subsection (1) of section 12 of the indian electricity act, 1910, as if-(i) the reference therein to licensee were a reference to the generating company; (ii) the reference to the terms and conditions of licence were a reference to the provisions ~ this act and to the articles of association of the generating company; and (iii) the reference to the area of supply were a reference to the area specified under sub-section (3) of section 15a in relation to the generating company; 30 9 of 1910 (b) all or any of the powers conferred on a licensee by subsection (1) of section 14 of the indian electricity act, 1910, as if-(i) the references therein to licensee were references to the generating company; and 35 (ii) the generating company had the powers of a licensee under the said act :j of 1910 (3) the provisions of section 30 of the indian electricity act, 1910, shall not~ply to the transmission or use of energy by a generating company 40 p of 191\) (4) for the removal of doubts, it is hereby declared that sections 31 to 34 (both inclusive) of the indian electricity ac't, 1910, shall apply to a generating company" ls in section 27 of the principal act, for tne words "the board", the 4~ wqrds "the board qr ~ g~neratin8 company" shall b~ substituted amendment of sec tion 27 16 in chapter v of the principal act, for the heading, the following heading shall be substituted, namely:- lithe works and trading procedure of the board and the genera'r- ing company"17 for sections 28 and 29 of the principal act, the following sections s shall be substituted, namely:-substi_ tution of new heading for heading under chapter v substitutionof new 8ec-tiona for sectiona 28 and 29 preparation and sanctioning of schemes 1'28 (1) for the efficient performance of its duties under this act, the board or a generating company, as the case may be, may prepare one or more schemes, relating to the establhhment or acquisition of generating stations, tie-lines, sub-stations or transmission lines as are 10 referred to in clause (e) of section 18 or clause (e) of sub-section (1) of section 18a, as the case may be (2) the board 'or, as the case may be, the generating company, which has prepared a scheme, may sanction such scheme either generally or in respect of any part of the area specified in the scheme and is where a scheme has been sanctioned in respect of any part of the area, such scheme may subsequently be sanctioned in respect o£ any other part of that area: provided that where the scheme is of the nature referred to in sub-section (1) of section 29, the scheme shall not be sanctioned 20 (generally or for part of an area) by the board or the generating company except with the previous concurrence of the authority (3) every scheme sanctioned under this section shall be published in the official gazette and in such local newspapers as the  board or, as the case may be, the generatii'lg company may consider 25 necessary 29 (1) every scheme estimated to involve a capital expenditure exceeding one crore of rupees shall, as soon as may be after its preparation, be submitted to the authority for its concurrence submia-8iol101 schemes for concurren~ of authority, etc (2) before finalisation of any scheme of the nature referred to 30 in sub-section (1) and the submission thereof to the authority for concurrence, the board or, as the case may be, the generating company shall cause such scheme, which among other things shall contain the estimates of the capital expenditure involved, salient features thereof and the benefits that may accrue therefrom, to be pub1i~hed 35 in the official gazette of the state concerned and in such local newspapers as the board or the generating company may consider necessary along with a notice of the date, not being less than two montha after the date of such publication, before which licensees and other persons interested may make representations on such scheme (3) the board or, a's the case may be, the generating company may, after considering the representations, if any, that may have bet"n received by it and after maldng suc:h inquhies ~~ \~ ~hinks tit modify the scheme and the scheme so finally prepared (with or without modifications) shall be submitted by it to the authority along with the representations (4) a copy of the scheme finally prepared by the board or, as 5 the case may be, the generating company under sub-'sectioll: (3) shall be forwarded to the state government or state governments concerned: provided that where the scheme has been prepared by a generating company in relation to which the central government is the 10 promoting government or one of the promoting governments, a copy of the scheme finally prepared shall be forwarded also to the central government (5) the authority may give such directions as to the form and contents of a scheme and the procedure to be followed in, and any 15 other matter relating to, the preparation, submission and approval of such scheme, as it may think fit (6) in respect of any scheme submitted to the authority for its concurrence under sub-section (1), the board or, as the case may be, the generating company shall, if required by the authority so to 20 do, supply any information incidental or supplementary to the scheme within such period, being not less than one month, as may be specified by the authority" 18 in section 30 of the principal act,-amend-(a) for the opening paragraph, the following shall be substituted, ment ot ection namely:-30 "the authority shall, before concurring in any scheme submitted to it under sub-section (1) of section 29, have particular regard to, whether or not in its opinion-"; (b) in clause (a),-(i) the words "by the board" shall be omitted; 30 (ii) for the words "shall satisfy itself", the words "shall satisfy itself, after consultation with the state government, the central government, or such other agencies as it may deem appropriate," shall be substituted; 35 (c) after clause (e), the following clauses shall be inserted, namely:-"(1) in the case of a scheme in respect of thermal power generation, the location of the generating station is best suited to the region, taking into account the optimum utilisation of fuel resources, the distance of load centre, transportation facilities, water availability and environmental considerations; (g) the scheme conforms to any other technical, economic or other criteria laid down by the authority in accordance with the national power policy evolved by it in pursuance of the provisions contained in clause (i) of sub-section (1) of section 3  19 for sections 31, 32 and 33 of the principal act, the following sections shall be substituted, namely:-substitution of new ections for sections 31, 32 and 33 concurrence of authority to scheme submitted to it by board or generating company "31 (1) where a scheme is submitted to the authority under sub-section (1) of section 29, the authority may, having regard to the matters referred to in section 30, either concur in the scheme s without modification or require the board or, as the case may be, the generating company to modify the scheme in such manner as the authority specifies in the requisition so as to ensure that the scheme conforms to the national power policy evolved by the authority in pursuance of the provisions contained in clause (i) of sub-section 10 (1) of section 3 and in either case the authority shall also communicate its decision to the state government or state governments concerned: provided that where the scheme was submitted for concurrence by a generating company in relation to which the central govern- 15 ment is the promoting government or one of the promoting governments, the decision shall be communicated also to that government (2) where under sub-section (1) the authority requires that a scheme may be modified, the board or, as the case may be, the generating company may prepare a revised scheme in accordance with 20 such requisition and submit it to the authority for concurrence and' thereupon the authority shall, if satisfied that the revised scheme compli~ with the requisition, concur in the same power to alter or extend schemes 32 the board or, as the case may be, the generating company may, from time to time, alter or extend a scheme by a supplemen- 25 tary scheme prepared and sanctioned in the manner hereinbefore provided: provided that any alterations or extensions of a scheme which are, in the opinion of the board or, as the case may l}e, the generating company, minor in character may be made without preparing 30 a supplementary scheme: provided further that where any alteration or extension of the nature referred to in the first proviso is made in respect of a scheme concurred in by the authority, details of such alteration or extension shall be intimated to the authority as soon as may be after such 3s alteration or extension is made 33 the provisions of sections 28 to 32 (both inclusive) shall, so far as may be, apply also in relation to a scheme prepared by a state government for the generation, transmission or distribution of electricity" 40 provisions applicableto scheme prepared by state government amendment of section 34 20 section 34 of the principal act shall be re-numbered as sub-section (1) thereof and after sub-section (1), as so re-numbered, the followfng sub-section snail be inserted, namely:-"(2) notwithstanding anything contained in this act or any scheme made thereunder, no generating station owned by a generat- 4s ing company shall be designated as a controlled station" 11 section 38 of the principal act shall be omitted 22 section 39 of the prijicipal act shall be re-nuntberd iii sub-section (1) thereof and after sub-section (1), as so re-numbered, the following sub-section shall be inserted, namely:-~iutm of section 38 amendment of section 39 s "(2) where a generating company has been established having its activities wholly or partly in a state, the state government may direct the board to make over any generating station established or acquired by the board to the generating company subject to such terms and conditions as may be specified in the direction and the 10 'board shall comply with such direction: provided that where the central government is the promoting government or one of the promoting governments in relation to the generating company, no direction shall be made by any state government under this sub-section without the concurrence of t"le cen-is tral government" 23 in section 41 of the principal act,-amendmento! section 41 (a) in sub-section (1), for the words "the board", wherever they occur, the words "the board or a generating company" shall be substituted; 20 (b) in sub-section (2), for the words "the board may", the words "the board or a generating company may" shall be substituted 24 section 42 or the principal act shall be re-numbered as sub-section (1) thereof and after sub-section (1), as so re-numbered, the following 25 sub-section shall be inserted, namely:-amendmentof section 42 "(2) a generating company may, for the placing of wires, poles, wall-brackets, stays, apparatus and appliances for the transmission of electricity, or for the transmission of telegraphic or telephonic communicatior\s necessary for the proper co-ord'ination of the war,ks 30 of the generating company, exercise all or any of the powers which the board may exercise under sub-section (1) and subject to the conditions referred to therein" 25 in section 43 the principal act, after sub-section (2), the follow· ing sub-section shall be inserted, namely:-amendmentof iection 41 35 "(3) a generating company may, on such terms as may be agreed upon, enter into arrangements for the sale of electricity generated by it-(a) with the board constituted for the state or any of the states wherein such generating company is oper~tingj or  (b) with any other persod with the consent of the government or governments which, in relation to that generating company, is the promoting government or promoting governments"  16 in section 44 of the principal act,-amendmentof section 44 (a) in sub-section (1), in the opening paragraph, after the words "created by a central act", the words "or any generating company" shall be inserted; (b) after sub-section (2), the following sub-section shall be in-5 berted, namely:-"(2a) the board shall, before giving consent under subsection (1), to the establishment or acquisition of a new generating station or to the extension or replacement of any major unit of plant or works, consult the authority, in cases where the 10 capacity of the new generating station or, as the case may be, the additional capacity proposed to be created by tlle extension or replacement exceeds twenty-five thousand kilowatts"  27 in section 72 of the principal act,-amendment of section 72 (a) for the words "the board", the words "the board or a gene- 15 rating company" shall be substituted; (b) for the words, "or that the board is unable so to develop", the words "or the generating company so to develop" 'shall be substituted 28 in section 73 of the principal act, for the words "the board shall 20 co-ordinate its activities", the words "the board and the generatin~ company shall co-ordinate their activities" shall be substituted • in section 74 of the principal act,-amendment of section 73 amendment of section 74 (a)  for the words "servant of the board", the words "servant of the board or of a generating company" shall be substituted; 2s (b) for the words "authorised by the board", the words "authorised by the board or by the generating company i as the case may be," shall be substituted; (e) for the words "duties by the board", the words "duties by the board or by the generating company, as·the case may be," shall 30 be substituted 30 in section 75 of the principal act, in sub-section (3),-amendment of section 75 (a) for the words "or person", the words "or person or agency" shall be substituted; (b) the following proviso shall be inserted at the end, namely:- 35 "provided that nothing in this sub-section shall be deemed to empower the board to require a generating company to furnish it with any information or accounts" 31 mter section 75 of the principal act, the following sectit:>n shall be inserted, namely:-40 "75a (1) a generating company shan, before the expiry of the 31st december of each year, submit to the promoting government, or where there are more than one promoting government to all such promoting governments, a report giving an account of the activities, if any, which are likely to be undertaken by such gene- 45 rating company in the ensuing year together with a statement of tnaertionof new section 75a annual reports anel account of generating company the estimated capital and revenue receipts and expenditure for that year in such form as may be specified by the promoting government or, as the case may be, the promoting governments 5 10 (2) a generating company shall, as soon as may be after the end of each year, prepare a report giving an account of its activities during the previous year and shall, within six months from the date of closure of the year, forward to the promoting government, or where there are more than one promoting government, to all such promoting governments, the report together with a statement of accounts, in such form and containing such particulars as may be specified by the promoting government or the promoting governments, as the case may be, a copy of the balance-sheet and profit and loss account and the auditor's report, in relation to the accounts of the year aforesaid 15 (3) for the purpose of preparing the statement of accounts referred to in 'sub-section (2), the depreciation to be ,lrovided every year shall be calculated in accordance with the same method as laid down by or under this act for calculating depreciation in relation to the board 20 lot 1956 (4) the provisions ot sub-sections (1) and (2) shall be in addition to and not in derogation of the provisions contained in the companies act, 1956, in relation to reports, statement of accounts and other documents required to be prepared or kept or submitted by a company within the meaning of section 3 of that act" 32 in the fifth schedule to the principal act,-25 amendmentol fifth schedule (a) in the heading, for the words "by board", the words "by board or generating company" shall be substituted; (b) in paragraph i and paragraph ii, for the words "the board", wherever they occur, the words "the board or the generating c~m-30 pany" shall be substituted  33 in the sixth schedule to the principal act, in paragraph ii, after sub-paragraph (3), the following sub-paragraph shall be inserted, namely:-amendment olsixth schedule 35 "(4) on the purchase of the undertaking, after the expiry, or on the revocation, of its licence or otherwise, all amounts of rebate lying undistributed to the consumers on the date of such purchase shall be handed over to the purchaser who, in turn, shall enter the same in his books of account, under the heading consumers' rebate reserve and any amount lying undistributed in that reserve shall be carried forward for distribution to the consumer concerned: provided that the share of money in the consumers' rebate reserve payable to the con'sumers who are not traceable or who have ceased to be consumers in relation to that undertaking, may be utilised in the development works of the purchaser" 34 (1) the electricity (supply) amendment ordinance 1976, is hereby repealed repeal and savini (2) notwithstanding such repeal, anything done or any action taken under the principal act, as amended by the said ordinance, shall be deemed to have been done or taken under the principal act as amended 5 by this act the country experienced serious power shortages during the last few years affecting the overall economy a study in depth revealed that it was necessary to restructure and reorganise the electricity supply industry the electricity (supply) act, 1948 forms the basis for the organisational structure of the electricity supply industry in the country it was, therefore, considered necessary to,) amend c~rtain provisions of that act and the electricity (supply) amendment bill, 1976, was introducad in the rajya sabha mainly to achieve the following objectives 2 it wa's proposed to enlarge the scope and functions of the central electricity authority in the interest of overall power development and to strengthen the central electricity authority to unjertake much larger responsibilities in evolving a national power policy, preparation of perspective and rolling plans, assisting in the timely completion of the power project3, maximising output from the existing power plants, developing a national grid and initiating programmes for research, development and training of personnel, etc 3 with a view to develop expertise in the construction and operation of power generating stations, it was considered necessary to provide for creation of generating companies both by the centre and the states mainly for p')wer generation provisions were, therefore, proposed to be made in the act for the establishment of generating companies by the central and state governments, individually or jointly, which would be responsible for the construction and operation of power stations, as well as for the allocation of functions and duties in relation to the generation and supply of electricity between the generating companies and the state electricity boards 4 certain modifications also were proposed to be made as to the existing procedure relating to the preparation and sanctioning of schemes for the establishment, and the acquisition of generating stations, tielines, sub-station's or transmission lines it was proposed to provide that every scheme prepared by a state electricity board or generating company and estimated to involve a capital expenditure exceeding one crore of rupees shall be submitted to the central electricity authority for its concurrence so that the scheme may conform to the national power policy evolved by the authority 5 since the bill was not passed before both the houses of parjiament were prorogued' and as the matter was of great urgency, an ordinance, namely, the electricity (supply) amendment ordinance, 1976, was promulgated for the same purpose the bill seeks to replace the ordinance k c pant ~ t" new delhi, the 23rd uctobet, 1976 §ub-section (2) of section 3 of the electricity (supply) act, 1948, provides that the central electricity authority shall consist of not more than six members clause 4(2) of the bill seeks to amend this sub~ section so as to provide for the appointment of not more than fourteen hlembers of whom nbt more than eight shall be fuii-time members under sub-section (3) o~ section 3 of t~e act, as amende~ by clause 4(4) bf the bill 6ne of the full-tiine members shall be the chairman of tht'! central electricity authority sub-sections (4a) and (413) newly proposed to be insetted in section 3 by clause 4 (5) of the bill provides :fbt the payment of salary and lillowahces tb the chairman and other full· time membets &lhd allowances ~nd fees to the part-time members, as well as to prescr:/be theit terms and conditions of service at present, under the existing provisions of the act, for the six members (including th~ chairman) the expenditure on pay and allowances, office expenditure, etc, works out to rs 375 lakhs approximately per annum with the increase in the number of members including eight full-time members, the total annual expenditure on pay and a:llowances, etc, would go up to about rs 50 lakhs thus, the increase in annual expenditure on account ()f members' salary, etc, would be of the order of about rs 125 lakhs when eight full-time members are in position 2 clause 8 of the bill seeks to insert a new section 15a sub-section (1) of this section envisages the formation of generating companies by the central government either by itself or jointly with one or more states there are already three generating companies formed by the central government apart from that, there are no immediate plans to form other such generating companies further expenditure in this regard will arise only as and when a decision is taken in that behalf and the expenditure on that account cannot now be estimated 3 there is do other recurring or non-recurring expenditure envisaged in the bill  memorandum regarding delegated legislationthe new section 4b proposed to be inserted in the electricity (supply) act, 1948 (hereinafter referred to as the principal act), by clause 6 of the bill, empowers the central government to make rules for carrying out the purposes of the act the various matters which may be provided for in such rules have been referred to in detail in sub-section (2) of that section these mainly relate to the functions and duties of the central electricity authority, the manner of exercise of such functions and duties and terms and conditions of service of the chairman and other members of that authority 2 the new section 4c proposed to be inserted in the principal act by clause 6 of the bill empowers the central electricity authority to make regulations to provide for the summoning and holding of meetings of that authority, the conduct of business at such meetings and for other matters arising out of the functions of the central electricity authority for which it may be necessary or expedient to make regulations 3 the matters which the central government may provide for in rules are matters of detail necessary for the effective administration of the provisions of the principal act and· the matters regarding which the central electricity authority is empowered to make regulations' are matters of procedure delegation of legislative power is therefore, of a normal character 1 (1)  extracts from the electricity (supply) act, 1948 (54 of 1948) - • - • •short title, extent and commencement (3) this section and sections 2, 3, 4, 57, 57a, 57b, 58, 76, 77, 77a, 77b, 77c, 82 and 83 and the provisions of the sixth and the seventh schedules shall come into force at once - - - - - interpretation 2 in this act, unless there is anything repugnant in the subject or context,-- - - - - (5) "generating station" or "station" means any station for generating electricity, including any building and plant used for that purpose and the site thereof, a site intended to be used for a generating station, and any buildings used for housing the operating staff of a generating station, ~nd where electricity is generated by water-po~er, inclunes penstocks, head and tail works, main and regulating reservoirs, dams and other hydraulic works, but does: not in any case include any subostation for transforming, converting or distributing electricity; (6) "licensee" means a person l'lcensed under part ii of the indian electricity act, 1910 to supply energy or a person who has 9 of 1910 obtained sanction under section 28 of that act to engage in the business of supplying energy but, the provisions of section 28 of this act notwithstanding, does not 'include the board; - - - - - 78; (9) "prescribed" means prescribed by rules made under section - - - - - (11) "year" means, in relation to the board, the year commencing on the 1st day of april; - - - - - 3 (1) the central government shall constitute a body callen the central electricity authority generally to exercise such functions and perform such duties under the act and in such manner as the central government may prescribe or direct, and 'in particular to-constitution of the central electriclty authority (i) develop a sound, adequate and uniform national power policy, and particularly to co-ordinate the activities of the planning agenciesi in relation to the control and util'isation of national power resources;  r - - - - (iii) carry out investigations and to collect and record the data concerning the generation, distribution anrt utilisation of power and the development of power resources; and - - - - - (2) the authority shall consist of not more than six members appointed by the central government (3) the central government shall appoint one of the members to be the chairman of the authority - - - - - (5) no full-time member of the authority shall be directly or indirectly concerned or interested in or have any share or interest in any company or other body corporate or an aslsociation of persons (whether incorporated or not), or a firm engaged in the business of supplying electrical energy or fuel, solid or liquid, for the generation of electricity - - - - - (7) the authority may act by two of its members in all matters power to require counts, statistics and returns 4 it shall be the duty of each state electricity board, state government electricity department or other licensee or person supplying electricity for public or private purposes, or generating electrllcity for its or his own use, to furnish to the authority such accountll, statistics and returns relating to the generation, supply and use of electricity as it may require and at such l1imes and in such form anrt manner as it may direct  chapter iii state electricity boards16 (1) - - - - - (2) the state electricity consultative council shall consist of the state electri city consultative council ~embers of the board and such other persons bein'g, not less than eigb' and not more than fifteen as the state government or the state governments concerned may appoint after consultation with such representatives or bodies representative of the following interests as the state government or the state governments concerned thinks or think fit, that is to say, local self-government, electricity supply industry, commerce, industry, transport, agriculture, labour employed in the electricity supply industry and consumers of electrllcity, but so that there shall be at least one member representing each such interest in the council - - - - - (5) the furdions of the state electricity consultative counch shall be as follows:-(i) to advise the board on major questions of policy nd major schemes; (ii) to review the progress and the work of the board from time to time; (1ii) to consir\er such other matters as the board may place before it; and - - - - -  chapter iv powers and dunes of state electricity goardsgeneral duties of the board 18 subject to the provisions of this act the board shall be charged with the general duty of promoting the co-ordinated develojpment of the generation, supply and ctstribution of electricity within the state in the most efficient and economical manner, with particular reference to such development in areas not for the time being served or adequately served by any licensee, and without prejudice to the generality of the foregoing provisions 'it shall be the duty of the board-(a) to prepare and carry out schemes sanctioner\ under chapter v· j (b) to supply electricity to owners of controlled stations and to licensees whose stations are closed down under this act; (c) to supply electricity as soon as practicable to any other licensees or persons requiring such supply and whom the board may be competent under this act 90 to supply  power to acquire projects, etc, on lease 20a without prejudice to the generality of the power of the board to acquire any property, the board may acquire from the state government on lease any project relating to the generation of electricity and all transmission lines ann other works connected with such project or any part of such project, transmission lines or other works on such terms and conditions, including terms and conditions relating to the operation and maintenance thereof as may be agreed upon between the state government and the board :?owers of board in relation to waterpower 21 the board may, with the previous approval of the state government, take such measures as in the opinion of the board are calculated to advance the development of water-power in the state, and may organise ann carry out power and hydrometric survey work and cause to be made such maps, plans; sections and estimates as are necessary for any of the said purposes: provided that where any such measures relate to a source of waterpower already operated upon by a licensee under a licence the board shall g\ve the licensee notice of sttch measure and an opportunity to be heard on any representations he may desire to make in that behalf and may consider such representation  - - - - - 27 'the board shall have sqch furth~r :power~ an4 duties as are provide4 in thi~ l\ct, other tunctiodi of the ljoml  chapter v the board's works and traj>ing procedurepreparationof schemes 28 with a view to rationalising the production and supply of eiectri· city in any area the board may from time to time prepare a scheme, not inconsistent with this act, for that area, in which provision may be made for all or any of the following matters, namely:-(11) the establishment of the board's own generating stations; (h) the designation of generating stations, whether existing stations or new stations, as controlled stations at which electricity shall be generated for the purposes of the board; (c) the interconnection, by means of main transmission lines to be constructed or acquired by the board, of any generating stations with any others and with any systems of licensees; (d) where a scheme relates to a specified area, the interconnection of the system of the board in that area with the system of the board in any other area with respect to which a scheme is in being or may subsequently be made; (e) the construction or acquisition of such other main transmission lines as the scheme may require; (f) the use by the board of any transmission lines or main transmission lines of any licensee; (g) such supplemental, incidental and consequential provisions as may appear necessary or expedient for any of the purpose's aforesaid': provided that no scheme or a part of a scheme which is estimated to result in a capital expenditure exceeding fifteen lakhs of rupees shall be prepared by the board without prior consultation with the state government: provided further that a scheme shall not, without the consent of the owner,-(i) designate as a controlled station any generating station belonging to a person other than a licensee; (ii) authorize the use or acquisition of a transmission line or a main transmission line belonging to a person other than a licensee pubucationand sanction ingof 8chemes 29 (1) a scheme prepared for any area under section 28 may, subject to the provisions of this section, be sanctioned by the board either generally or in respect of any part of the area and' where a scheme has been sanctioned in respect of part of the area, it may subsequently be sanctioned in respect of other parts of that area (2) every scheme sanctioned under this section shall be published in the official gazette and in such local newspapers as the board may consider necessary: provided that it shall not be neces'sary to so publish any scheme which is estimated to result in a capital expenditure not ej«:eeding twenty-five lakhs of rupees (3) before sanctioning any scherrte which is estirrtated to result in a capital expenditure exceeding 'one crore of rupees the following llrocedure shall be adopted, namely:-(i) the board shall send a copy of the scheme to the state government and to the authority and cause such scheme to be published in the official gazette and in such local newspapers as: the board may consider necessary; and the board shall give public: notice of the date, not being less than two months after the date' of the notice, by which licensees and other persons interested may' make representations thereon and when publishing such a scheme! the board shall show estimates of the capital expenditure involvedi and of the initial and ultimate revenues anticipated from the sale: of energy, meter rentals and other services (ii) the board, after considering any such representations and! after making such inquiries, if any, as it thinks fit, may sanction the scheme either without modification or subject to such modifications as it thinks fit, and either generally or in respect of any  part of the area specified in the published scheme: provided that no such scheme shall be sanctioned by the board without prior consultation with the authority and until any recommendations which the authority may, in accordance with the provisions of this act, make upon such consultation have received due consideration by the board: provided further that where the recommendatioil! of the authority in regard to any scheme are not accepted by the board, the board shall not sanction the scheme without the previous consent of the state government (4) in respect of any scheme to which the provisions of sub-section (3) apply, the board shall, within one month after being requested by the authority so to do, supply the authority with all such information incidental or supplementary to the scheme as may be specified in the request 30 the authority shall, before making any recommendations in respect of a scheme upon which it has been consulted under the first proviso to clause (ii) of sub-section (3) of section 29, have particular regard to whether or not in its opinion-matters to-be consideredby the authority (a) any river-works proposed by the board will prejudice the prospects for the best ultimate development of the river or its tributaries for power-generation, consistent with the requirements of irrigation, navigation and fiood-control, and for this purpose the authority shall satisfy itself that an adequate study has been made of the optimum location of dams and other river-works; recommendations of the authority carrying out of schemes 31 where the authority has been consulted under the first proviso to clause (ii) of sub-section (3) of section 29 in respect of a scheme, it shall forward its recommendations thereon to the board, sending a copy thereof to the state government, within six months from the date of the receipt by it of the scheme: provided that if the board fails to supply in due time any information requested under sub-section (4) of section 29, the period within which the authority shall forward its recommendations shall be correspondingly ~creased 32 the board shall carry out and give effect to a scheme as soon as reasonably practicable after it has been sanctioned and where so required published  power to alter or extend schemel provision of new generating stations use by board of transmission lines 33 the board may from time to time alter or extend a scheme by a supplementary scheme made and sanctioned in the manner hereinbefore provided: provided that any alterations or extensions of a scheme which are in the opinion of the board and the authority m~or in char&cter may be made without preparing a supplementary scheme - - - - - 38 the board shall itself establish a new generating station in any area in which it is required by any sanctioned scheme to be situated, but the board may, with the sanction of the state government, make arrangements with any licensee or other person for the establishment of a new generating station required by a sanctioned scheme, if in the opinion of the board it is desirable so to do - - - - - 41 (1) where the board considers it necessary to use for any of its purposes any transmission lines or main transmission lines of a licensee, the board shall have power to use such lines to the extent to which the capacity thereof is or thereafter remains surplus to the requirements of the licensee for the transmission of electricity, on payment of charges calculated in accordance with the provisions of the fifth schedule (2) the board may by agreement with any licensee or other person, use any transmission line or main transmission line of that licensee or person for such time and upon such terms as may be agreed - - - - - 44 (1) notwithstanding anything contained in any other law for the time being in force or in any licence, but subject to the provisions of this act, it shall not be lawful for a licensee, or any other person, not being the central government or any corporation created by a central act except with the previous consent in writing of the board, to establish or acquire a new generating station or to extend or replace any major unit of plant or works pertaining to the generation of electricity in a generating station: restric tion on establishment of new gene rating stations it"major additions or replacementof plant in generating stations provided that such consent shall not, except in relation to a controlled station, be withheld unless within three months from the date of j:eceipt of an application-(a) for consent to the establishment or acquisition of a new generating station, the board-(i) gives to the applicant being a licensee an undertaking that it is competent to, and will, within twenty-four mlnthi from the said date, afford to him a supply of electricity sutji·· cient for his requirements pursuant to his application; or (ii) shows to the applicant that the electricity required by him pursuant to his application coul4 be more economically obtained within a reasonable time from another appropriate source; (b) for consent to the extension of any major unit of plant, or works as aforesaid, the board-(i) gives to the applicant being a licensee an undertaking that within twenty-four months from the said date either the station to which the application pertains will become a controlled station in terms of section 34, or the board will make a declaration to the applicant in terms of section 35 offering him a supply of electricity sufficient for his requirements pursuant to his application or the board will make a declaration to him in terms of section 36; or ' (ii) shows to the applicant that the electricity required by him pursuant to his application could be more economically obtained within a reasonable time from another appropriate source or by other appropriate means; (c) for consent to the replacement of any major unit of plant or works, the board-(i) gives to the applicant being a licensee an undertaking that within eighteen months from the said date either the station to which the application pertains will become a controlled station in terms of section 34 or the board will make a declaration to him in terms of section 36; or (ii) shows to the applicant that the electricity required by him pursuant to his application could be more economically obtained within a reasonable time from another appropriate source or by other appropriate means  - - -  - 72 the state government shall not grant any concession for the development or use of water-power for any electrical purpose to any person other than the board, unless the state government is of opinion that it is rtot expedient for the board or that the board is unable so to develop or use the water-power concerned 73 where a multipurpose scheme for the development of any river in any region is in operation, the board shall co-ordinate its activities with the activities of the persons responsible for such seheme in so far as they are inter-related 74 any officer or servant of the board generally or specially authorized by the board in this behalf may at any reasonable time after waterpower concessions to be granted only to the board co-or41ill'" tion between the board's schemes and multipurpose schemes powers or entry giving the owner or occupier reasonable notice enter upon any land or premises and there do such things as may be reasonably necessary for the purposes of lawfully using any transmission lines or main transmission lines, or of making any survey, examination or investigation preliminary or incidental to the exercise of powers or the performance of duties by the board under this act annual reports, atatisticlil and returns - 7~ - - - - - (3) the board may at any time by notice in writing require any licensee or person supplying electricity for public or private purposes or generating electricity for his own use to furnish it with such information and accounts relating to such supply or generation and in such form and manner as the notice may specify  - - - - the fifth schedule  (see section 41) charges for use by board of transmission lines and m"in transmission linesi the following charges and allowances shall be made in respect of a year of account for the use by the board of main transmission lines or transmission lines (hereafter in this schedule referred to as lines), namely:-(a) the actual cost of maintenance of the lines, including renewals thereof not chargeable to capital account; (b) sums paid in respect of the lines for insurance and as rents, rates and taxes (including all taxes payable on income and profits): (c) the proporti':>n of management and general establishment charges properly attributable to the lines; (d) any other expenses on revenue account properly attributable to the lines; (e) interest on the depreciated cost of the lines shown in the books of the undertaking and properly attributable to the lines (whether defrayed out of capital or revenue) and interests on such working capital as is properly attributable to the lines: provided that for the purpose of ascertaining the principal on which interest is payable within the meaning of this clause, there shall be left out of account any part of principal interest on which is charged to capital; (f) an allowance for depreciation of an amount determined in respect of the lines in accordance with the provisions of paragraph vi of the sixth schedule ii if the lines are used partly by the board and partly by the licensee o'wning them, or if the arrangement for their use comes into force or determines otherwise than at the beginning or end of a year of account, the charges and allowances referred to in paragraph i shall be the proper proportion thereof having regard to ~e use made of the lines hy ~he board and the period of such use dunng the year and with the addttion of the cost of such additional transmission losses as may have been incurred by the licensee as a result of the board's user of the lines - -  a billfurther to amend the electricity (supply) act, 1948 (shlri k c pant, minister of energy) 