 the electricity (supply) amendment bill, 1977;-th be/as :1ntroduced in iok sabha 7 1 page 2, in the marg~nal heading to clause 7,-for "section 57" ~ "section 57 a" 2 page 3, line 34,-for "so to ~o" ~ "so to do" 3 page 4, line 9,-' after "aggregate" insert "of"  clause 15, page 5' tl in the marginal heading to 'bhe 'proposed seetion-68,-4 for "depreciaton" ma!l "depr&ciat1on n 5 page 5, line 19,-for "servants" ~ "servant" , page', line 19,-for "(vi) (b)" ~ "(vib) " 7 page 11, lines 19 ali 20,-for "accordinly" ~ "!lccordingly" 8 page 11, line 23,-fo r ''purpo se " ~ "purpo se s" ', page 11, :1n the marginal heading to section 60,-3,:fter "obligations of m ~ "of''' 10 page 12, line 20,-for "~ction 63" ~ "section'·'l)" 11 page 15, line 18,-for "dissatified n ~ '''d1gpjati~fied'' 1£ page 16, against line 12, insert the marginal ci:t'3tion,-"11 of 1922"  agrahayaila 26, 1 ~ (saka) 'bill no 151 of 1977 ra_ _____ _  the electricity (supply) amendment bill, 1977 a billfurther to amend the electf'icity (supply) act, 194'8 be it enacted by parliament in the twenty-eighth year of the republic of india as follows:-54 of 1948 1 this act m9y be called the electricity (sup'ply) amendment act, short 1977 title s z in section 1 of the electricity (supply) act, 1948 (hereinafter ar1endre'ferred to as the principal act), after sub-section (4), the following :~~n°:' sub-section shall be inserted, namely:-"(5) notwithstanding anything contained in sub-section (4),-(a) where any provision of this act, to which sub-section 10 (4) applies, is in force in any state immediately before the commencement of the electricity (supply) amendment act, 1977, that provision as amended by the electricity (supply) amendment act 1977, shall, on and from such commencement, be in force in that state; is (0) the provisions of this act, to which sub-section (4) applies, which are not in force in any state on the commencement of the electricity (suwly) amendment act, 1977, shall come into force in that state on such date as the state government may, with the concurrence of the central government, by doti-30 fication in the official gaze1te! appoi~t,1' amendment of ection 3 3 in section 3 of the principal act, in sub-section (6), in the opening paragraph for the word "servants", the wot'd "employees" shall be substituted 4 after section 12 of the principal act, the following section shall be inserted, namely:-"12a (1) the state government may, if it considers expedient so to do, by notification in the official gazette, direct that the board shall, with effect from such date as may be specified in the notification, be a body corporate with such capital, not exceeding ten ci'ores insertion of new section 12a board may have capital structure of rupees, as the state government may specify from time to time 10 (2) the state government may from time to time, with the approval of the state legislature, increase the maximum limit of the capital referred to in sub-section (1) to such extent a3 that government may deem fit, so, however, that the increased maximum limit of capital aforesaid shall not exceed the amount representing the aggregate of the outstanding loans of the board is (3) such capital may be provided by the state government, from time to time, after due appropriation made by the state legislature by law for the purpose and subject to such terms and conditions as may be determined by that government" 20 5 in section 15 of the principal act, in the opening paragraph, for the word "servants", the word "employees" shall be substituted am~nd­ment of section 15 6 in section 57 of the principal act,-(a) the words "and the seventh schedule" shall be omitted; amendment of section 57 (b) for the words "the said schedules" in both the places where 2s they occur', the words "the said schedule" shall be substituted amend-7 in section 57a of the principal act, in sub-section (1), the words :~~:s7 "and the seventh schedule" shall be omitted 8 for section 59 of the princip'al act, the following section shall be substituted, namely:-substitution of new aection for seclion 59 general principles for boarc18 finance "59 (1) the board shall, <'iter taking credit for any subvention from the state government under section 63, carryon its operations under this act and adjust its tariffs so as to ensure that the total revenues in any year of account shau, after meeting all expenses prop'erly chargeable to revenues, including operating maintenance 3s and management expenses, taxes (if any) on income and profits, deptreciation and interest payable on all debentures, bonds and loans, leave such surplus, as the state government may, ft'om time to time, specify (2) in specifying the surplus under sub-section (1), the state 40 government shall have due regard to the availability of amounts accrued by way of depreciation and the liability foj: loan emortization and leave-(4) a reasonable sum to contribute towards the cost of capital works; and 5 (b) where in respect of the board, a notification has been dssued under sub-section (1) of section 12a, a reasonable sum by way of return on the capital ptovided by the state government under sub-section @) of that section, and the amount of the loans (if any) converted by the state government into capital under sub-section (1) of section 66a" 9 in section so of the principal act, in sub-section (2),-amend-10 ment of (4) for the words "two months", the words "one year" shall be sectioh 80 substituted; (b) the words, brackets and figures "before the issue of the notification under sub-section (4) of section i" shall be omitted 10 in section 61 of the principal act, in sub-section (2), for the words amend-is "members, oftlcers and servants", the words "members and oftlcers and ment of {)ther employees" shall be substituted section 81 amend_ ment of bection82 11 in section 62 of the principal actl in sub-section (2), after tre words "extreme urgency", the words ci , it shall be expended in accordance with the regulations made by the board with the previous approval of 20 the state government and" shall be inserted 12 in section 65 of the principal act,-amend_ ment of section 65 ocr:) in sub-section (-2), for the words "issue of bonds or stook", the words "issue of debentures or bonds" shall be substituted; cb) in sub-sectioll, (4), for the words "stock issued", the words 25 "debentures or bonds issued" shall be substituted 13 after section 66 of the principal act, the following section shall be inserted, namely:-30 insertion ot new section 86a conversion of a!nowlt of loana into capital  3s"66a (j) notwithstanding anything contained in section 12a, where any loan has been obtained from the state government by a board, in respect of which board a notification has been made unde;r· 8ub-sectioll gl) of that section, or any loan is deemed to be advanced to such board by the state government under sub-section (2) of section 60, the state government may, if in its opinion it is necessary in the public interest so to so, by order, direct that the amount of such loan or any part thereof shall be converted into capital provided to the board on such terms and conditions as appear to that government to be reasonable in the circumstances of the case,  even if the terms of such loan do not include a term providlng for an option for such conversion (2) in determining the terms and conditions of such conversion, the  state government shall have due regard to the following circumstances, that is to say, the financial position of the board, the terms of the loan, the rate of interest payable on the loan, the capital of" the board, its loan liabilities and its reserves 45 (3) notwithstanding anything contained in this act, where the state government has, by an order made under sub-section (1), di-rected that any loan or any part thereof shall be converted into capital, and such order has the effect o~ increasing the capital of the board, the capital of the board shall stand increased by the amount by which the conversion increases the capital of the board in excess of the capital specified under sub-section (1) of s section 12a: provided that the amount of the loan so converted together with the capital provided under sub-section (3) of section 12a shall not exceed the amount representing the aggregate the outstanding loans of the board after such conversion" 10 14 (1) for section 67 of the principal act, the following section shall be substituted, namely:-subatltl,ltion of new section for section 67 priority olllabilitieaof bovd "67 v) if in any year, the revenue receipts ate not adequate to enable compliance with the requirements ·of section 59, the board shall, after meeting its operating, maintenance and management is expenses and after provision has been made for the payment of taxes (if any) on income and profits, distribute the revenue receipts, as far as they are available, in the following order, namely:-(i) payment of interest on loans not guaranteed under section 66; 20 (;iri) teptayment of principal of any loan raised (including redemption of debentui'es or bonds issued) under section 65 which becomes due for payment in the year; (om) payment of interest on loans guaranteed under section ~ ~ (:iu) payment of interest on sums paid by the state government in pursuance of guatantees under section '66; (v) payment of interest on loans advanced to the board by the state government under section 64 or deemed to be advanced under sub-section (2) of section 60; 30 (vi) repayment of principal of any loan guaranteed by the state government under section 66 which becomes due for payment in the year; (viii) repayment of principal of any loan advanced to the board· under section 64 which becomes due for payment in the 3s year, and if any balance amount is left thereafter, the same shall be utilised for the other purposes specified in section 59 in such manner as the board may decide  (2) if for any reason beyond the control of the board, the re- 40 venue receipts in any year ate not adequate to meet its operating, maintenance and management expenses, taxes (if any) on incomes and profits and the liabilities referred, to in clauses (i) and (iii) ra sub-section (1), the short fall shall with the previous sanction of the state government, be paid out of its capital" 15 for section 68 of the principal act, the following section shall be substitusubstituted, namely:-tion of new section for section 68 s charging of depreciaton by board "68 (1) subject to the provisions of section 67, the board sha11 provide each year for deprecia,tion such sum calculated in accordance with such principles as the central government may, after consultation with the authority, by notification in the official gazette, lay down from time to time (2) where in any particular year depreciation cannot be adjusted against revenues, the same may be carried over to subsequent years 10 (3) the provisions of this section shall apply to the charging of depreciation for the year in which the electticity (supply) amendment act le77, comes into force" amendment of section 69 16 in section 69 of the principal act, ill sub-section (4), for the words "forwarded annually to the state government", the words "forwarded is to the authority and to the state government within six months of the close of the year to which the accounts and audit report relate" shall be substituted 17 in section 74 of the principal act for the words "officer or servants", the words uofficer or other employee" shall be substituted 20 :18 in section 75a of the principal act, after sub-section (3), the fohowing sub-section shall be inserted, namely:-amendment of section 7 •• amendment of section 75a u(3a) (a) the generating company shall carryon its operations under this act and adjust its tarifts so as to ensure that the total revenues in any year of account shall, after meeting all the expenses properly chargeable to revenues including operating, maintenance and management expenses, taxes (if any) on income and profits, depreciation and interest payable on all debentures, bonds and loans, leave such surplus as the promoting government or promoting governments, as the case may be, may, from time to time, specify 30 ('b) in specifying the surplus under clause (a) the promotiug government or promoting governments, as the case may be, shall have due regard to the availability of amounts accrued by way of depreciation and the liability for loan amortization and leave a reasonable amount to contr'ibute towards the cost of capital works and for payment of dividend on shares" 3s 18 in section 79 of the principal act,-amendment of section 79 (a) in clause (c), for the words "officers anfl servants", the words "officers and other employees" shall be substituted; (0) after clause u), the following clause shall be inserted, namely:-" (jj) expending sum not included in statement submitted under sub-section (1) or sub-section (5) of section 61 under sub-section (2) of section 62;"; (c) in the proviso, for the word, brackets and letter "and (d)", 4s the brackets, letters and word ", (d) am w)" shall be substituted amendmentof section 81 zoo in section 81 of the principal act, for the words "members, officers and servants", the words "members and officers and other employees!" shall be su!bstituted 21 in section 82 of the principal act, for the words "member, ofllcer or servant", the words "member or officer or other employee" shall be s substituted amendment of s'ection 82 22 in the fourth schedule to the principal act,-amendment of fourth schedule (a) in paragraph ii, for the words and figure "on the scale s;t oult in paragraph iii", the words and figure "calculated in accordance with the provisions of paragraph vi of the sixth schedule", shall be 10 substituted; (b) paragraph iii shall be omitted 23 in the sixth schedule to the principal adt,-(1) in paragraph v a,-amendment of sixth schedule is (a) in sub-paragraph (1) ,-(i) for the words "amount of development rebate", the ''words "amount of investment allowance" shall be substituted; (ii) for the words, brackots, figures and letter "under clause ('"i) (b) of sub-section (2) of section 10 of the indian 11 of 1922 income·tax act, 1922,", the words, figures and letter "under 20 section 32a of the income-tax act 1961" shall be substituted' 43 of 1961 , , (b) in the proviso to sub-paragraph (4), after the words "amount of the reserve", the brackets and words "(whether such amount is in the form of cash or o~her assets)" shall be inserted; (2) for paragraphs vi, vii, vill, jx, x and xi, the following 2s paragraph shall be substituted, namely: ~ "vi (a) the licensee shall provide each year for depreciation such sum calculated in accordance with such principtes as the ce-ntral government may, after consultation with the authority, by notification in the oftlcial gazette, lay down from time 30 ,to time (b) where in any particular year depreciation cannot be adjusted against revenues, the same may be carried over to subsequent years (e) the provisions of this paragraph shall apply to the charg- 35 ing of depreciation for the year in which the electricity (supply) amendment act, 1977, comes into force"; (3) ·in paragraph xvii, clause (8) shall be omitted 24 the seventh schedule to the principal act shall be omitted omission tjf seventh rchedule 25 in clause (a) of paragraph 1 of the eighth schedule, and clause (f> 40 of paragraph 1 of the ninth schedule to the principal act, for the words "ofllcers and servants" the words "oftleers and other employees" 'shalt be substituted amendment of eighth schedule and ninth schedule in orde!' to en&ure that the electricity boards are able to function on sound commercial principles, the financial provisions of the electricity (supply) act, 1948, are proposed to be amended by the bill the main changes proposed to be made in that act by the bill are the following 2 with a view to make the electricity boards financially viable, it is proposed that a state government may provide f,unds tp the state electricity board in the form of equity, if the state government so desires this ts necessary because the interest liabm,ty devolving on the state electricity boards makes it difficult for them to present a picture of financial stability for this purpose, a new section 12a is propsed to be inserted in the act by clause 4 of the bill 3 section 59 of the electricity (supply) act is proposed to be amended 'by clause 8 of the bill to give a pos~t~ve direction to the electri«'ty boards that after meeting all their expe-nses, there should be provision for a surplus for contribution towards immediate investment needs a similar amendment is also proposed to be made in regard to the generating companies by inserting a new sub-section (3a) in section 7sal bly clause 18 of the bill 4 a new section 66a is proposed to be inserted in the e1ectricllt~ (supply) act by clause 13 of the bill so as to enable the state government to convert any loan advanced by it to the state electricity boai'd into share capital 5 the amount of capi:tai provided by a state government under section 12a (3) or that capital together with the amount converted into :capital under section 66a should not exceed the aggrega~e of the oiu~ standing loans of the electricity board, 6 clause 14 of the bill seeks to amend section 67 of the act to rearrange the priorities for distribution of the revenues of the state electricity boards after meeting the operation, maintenance and management expenses and the liabilities, if in any year the revenue receipts are not adequate to enable compliance with the requirements of section 59 this is being done to ensure that the boards discharge their liability towards interest on loans from financial institutions as well as repayment of principal amount before the opera~ing surplus is appropriated towards depreciation and general reserve 7 section 68 of the act is proposed to be am~nded by clause 15 of the bibi to provide that the method of calculating depreciation shouldl be in accordance with the principles laid down by the central government in consultation with the central electricity authority a similar provision is proposed to be made in regard to licenrees by the amendment of the sixth schedule by clause 23 (2) of the bill 8 the bill seeks to achieve the aforesaid objects new delhi; p ramachandran 'the 12th decem'be,o, 197'7, sub-clause (b) of clause 19 of the bijil seeks to insert a new clause (jj) in section 79 of the electricity (supply) act, 1948, to enable the making of regulations to provide for the expending of sum not included in statement submitted under sub-section (1) or sub-section (5) of section 61 this is a matter ofi detail which cannot be provided in the act itself the delegation of legislative power is therefore of a nonnal character  extracts from the electricity (supply) ac'l', 1948(54 of 1948) - - - - - 3 (1) - - , - - - - , - - constitution of the con-, tral electjicity autho rity (f» the authority may appoint 'a secretary and such other officel's! and servants as it considers necessary for ,the perfonnance of its functions under this act on such terms as to salary, remuneration, fee, allowance, pension, leave and gratuity, as the authority may, in consultation with the central government, fix: appointment of t;taff provided that the appointment of the secretary shall ,be subject to the approval of the central government - - - - - 15 the board may appoint a secretaory and such other officers and servants as may be required to enable the board to carry out its functions under this act: provided that the appointment of the secretary shall be subject to the approval of the state government - - - - - licensee's charges to ('onsur:'ier~ 9 of 1910 rating c')m mittees 57 tl}e provisions of the sixth schedule and the seventh schedu1~ shall be deemed to be incorporated in ,the licence of every licens~ 'dot being a local authority-(a) in the case of a licence granted ,before the commencement of this act, from the date of the commencement of the lb,'ensee's nexrt - succeeding year of account; and (b) in 'the case of a licence granted after the commencement of this act, from the date of the commencement of supply, and as from the said date, the licensee shall comply with the provisions of the said schedules accordingly, and any provisions of the indian electri-city act, 1910, and the licence gran,ted to him thereunder and of any other la,w, agreement or instrument applicable to the licensee shall, )n" relation to the licensee, be void and of no effect in so far as they are inconsistent with the provisions of section 57a and the said schedules s7a (1) where the provisions of, the sixth schedule and the seventh slchedule are under section 57 deemed to be incorporated in the licenae of any licensee, the following provisions shall have effect in relation to the said licensee, namely:-(a) 'the boaro or where no board is constituted under this act, the state government-(i) may, if satisfied that the licensee has failed to comply with any of the provisions of the sixth schedu]e; and (ii) shall, when so requested by the licensee in writing, constitute a ratmg comnuttee to examine the licensee's charges foil" the supply of electricity and to make recommendations in that! behalf to the state government: provided that whel'e it is p,l'oposed to constitute a rating committee under this section on account of the failure of the licensee to comply with any provisions of the sixth schedule, such committee shall not be constituted unless the licensee has been given a notice in writing of thirty clear days (which period, if the circumstances so w~rant may ·be extended from time to time) to show cause against the action proposed to be taken: provided further ,that no such rating committee shall be constituted if the alleged failw'e of the licensee to comply with any provisions of the sixth schedule raises any dispute or djtfererice as to the interpretation of the said provisions or any matter arising therefrom and such diffe'ence or dispute has been referred by the licensee to the arbitration of the autlwl'ity under paragraph xvi of that schedule before th~ notice referred to in the preceding proviso was given or is so refencd within the period of the said' notice: provided ludher that no rating committee ~hall be constituted in respect of a licensee within three years from the date on which such a commit lee has reported in respect of that licensee, unless the state governm~nt declares that in its opinion ciroum:,tances have arisen renderin g the orders passed on the recommenuatiolls of the previous ratint: committee unfair to the licensee or any of his consumers: (b) a rating committee under clause (a) shall,-(i) wh, ·re such committee is to be constituted under sub-" clause (i) ul that clause, be collstttuted not later than three months after the expiry of the notice referred to in the first proviso to that clause: (ii) where such committee is to be constituted at the request of t~ licensee, be constituted within three months of the4 date of such request; (c) a rating committee shall, after giving the licensee a reasonable opportunity of being heard and after taking into consideration the efficiency of operation and management and the potentialities of his undertaking report to the state government within three months from the· date of its constitution, making recommendations with reasons theraf<>r, regarding the charges for electricity which the iucensee may make to any class or classes of consumers so, however, that the recommenda,tions are not likely to prevent the licensee from earning clear profit sufficient when taken with the sums available in the tariffs and dividends control reserve to afford him a reasonable return as defined in the sixth schedule during his next succjeeding three years of rccount provided that the state government may, if it so deems necessary, extend the said period of three months by a further period not exceeding three months within which the report of the rating committee may be submitted to it; (d) within one month after tl\e receipt of the report under clause (c), the state government shall cause the report ·~o be published in the offici91 gazette, and may at the same time make an order in accordance therewith fixing th~ jicensee's charges for the supply of electrid~y with effect from such (bte, not earlier than two months or later than three months, after the date of puiblication of the reportt as may be specified in the order and the lie~nsee shal1 forthwith give effect to such order; (e) ·the charges for the r11pp1v ri elect:icitv fixed under clause (d) shall be in operation for such period not exceeding three years as the state government rna, r-pet:!ify in the order: provided that nothing in this 1'1aupe shall be d~med to prevent a licensee from reducing at an~ time' any charges so fixed - - - - - 59 ,the board shall not, as far as pl'acticab1e and after taking credit for any subventions from the state government under section 63, carry on its operations under this aet at a loss, and shall adjust its char~es aecorcunly from time to time: genera] prinriples for board's financ't' provided that where necessary any amounts due for meeting the operating maintenanc(> and management expenses of the board or for the purpose of clauses (i) and (ii) of section fv1 mav to !ruch extent as may be sanctioned by the state governme"nt, be paid ont of capital 60 (1) - - - - - | board      | to    ||------------|-------|| assume     |       || obliga-    |       || tions      |       || of         |       || of         |       || state      |       || govern-    |       || ment       | in    || respect of |       || matters    |       || b          |       || wh!ch      |       || this       |       || act        |       || appjips   |       |(?) all exppdditure which the shtte government may not later than two months af1:el- the first con'!':titutio'l of the hoard nechre to h'lve fleen incurred befotf> the is~e of the notification under suh-section (4) of section ] on capiit'a1 account in l'onnection with th~ pumo~es of thi!; act shall he neemcd to be 8 1mn ar'lvanr~ to the board under sedinn r4 on the date of the !!laid det'1lrration and r11 thf' fl!1'rets 8cf!l1ired bv auan expenriiture shall thereupon vest in the board - - - - - 61 (1)                       -                                     -                                                    -                                                                   -                                                                                 - annual financial statement     (2) the sam rtatement sha11 inrlu"lr a shtement of the salaries of members, officers and servanta of fhp board and ,,f such other p'!rtl-cutars as may be prescribed               -                               -                                               -                                                               -                                                                               - 62 (1)                    -                               -                                           -                                                      -                                                                  - (2) 'where any such sum i~ pxpended under circumstances of extreme restric-tion on unbudget-ed expen-diture ul'~encv a redort thereon indicatinl! the source from which it ia pro-posed to meet the expend;ture shan he mrde as soon 8a practicable to thl' state government            -                         -                                      -                                                   -                                                                - power of board to borrow 9 of 1914 (2) rules made by the state government for the purposes of this section may· empower the board to boo-ow by the issue of bonds or stock or otherwise and to make arrangements with bankers, and may apply to the board with such modifications as may be necessary to be consistent with this act the provisions of the local authorities loans act, 1914, and the rules made thereunder as if the board were a local authority - - - - - (4) stock issued by the board under this section shall be issued, transferred, dealt with and redeemed in such manner as may be prescribed - - - - - priorities of liabilities of the board 67 the revenues of the board shall, after meeting its operating, maintenance and management expenses and after provision has been made for the payment of taxes on its income and profits be distributed as far as they are available in the following order, namely:-(i) interest on bonds not guaranteed under section 66; (ii) interest on stock not so guaranteed; (iii) credits to depreciation reserve under section 63; (i~) interest on bonds guaranteed under section 66; (~) interest on stock so guaranteed; (m) interest on sums paid by the state government under guarantees under section 66; (vii) the write-down of amounts paid from capital under the proviso to section 59; (viia) the write-down of amounts in respect of intangible assets to the extent to which they are actually appropriated in any year for the purpose in the books of the board; (viii) contribution to general reserve of an amount not exceeding one-half of one pet centum per cinnum of the original cost of fixed assets employed by the board so however that the total standing to the credit of such reserve shall not exceed fifteen pet' centum of the original cost of such fixed assets; (iz) interest on loans advanced or deemed to be advanced to the board under section 64, including arrears of such interest; (z) the balance to be appropriated to a fund to be called the development fund to be utilised for-(0) purposes beneficial, in the opinion of the board, to electrical development in the state; (b) repayment of loans advanced to the board under section 64 and required to be repaid: provided that where no such loan is outstanding, one-half of the balance aforesaid shall be credited to the consolidated fund of the state de;preclation reserve 68 the board shall create a depreciation reserve and as far as compliance with the provisi)ns of section 67 makes it p;acticable, shall, at the end of every yea", credit to such reserve from its revenue an amount calculated in accordance with the straight line method of depreciation, that is to s"y, such an amount as is arrived at by dividing ninety per cent of the original cost of the assets, after taking fnb eccount the sums already written off and set aside in the books of the board, by the prescribed perion in respect of such assets: provided that the contribution in respect of any asset to the depreciation reserve under this section shall cease at the end of the prescribed period or when the asset ceases to be u'led by the board, whichever is earlier: provided further that if in any year it is not practicable fully to comply with the provisbns of this section the amount by whfch the sums actually credited falls short of the amount required under this section in respect of that year, shl:lll be carried forward and togethet' with simple interest thereon at the reserve bank rate ruling at the beginnin~ of that year, shall be credited to the said reserve as soon ae; it is found p,ssible in accordanre with section 67, so to do: providen further that the accumulations in the depreciation reserve may be invested in the business of the board, or utilised for repayment of the principal of any loan raised under section 65 or for repayment of sums paid by the st"'lte g'lvernment under guarantees under section 66  - • - ! i  ,'--",-~ expzanation-in this section, "prescribed period"-(i) in relation to an aaset which became available to the boarn for its use in its husiness before thp commencement of the electri· city (supply) amp,nment act, 1966 means the pre~cribed perion 30 of 1966 a~ defined in the sixth schedule reducen by the number of year~ durin~ which such asset was used or capable of being used, such years being commlted from the beginning of the vear next following that in which th'lt asret became so available to thp 'roard anti up to the end of the year endinv, on ot" after such commencement: (iil in relation to any other asset, means the prescribed period as so defined 1n the said schedule ft (1) - - - - - account and audit - (4) the accounts of the board as certified by the comptroller and auditor-general of india or any other person authorized by him in thiq behalf together with the audit report thereon shall be forwarden annually to the state government and thqt government mav issue sue!' instructions to the board in respect thereof ae; it deems fit and the boarrl shall comply with such instructions - - - - - '14 any officer or servant of the board or of 8 gf'neratin~ cbm-powert of pany generally or specially authorised by the board or by the entry generating company, rs thp rq!'lp' m'lv be, in this behalf may at any reasonable time after 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 or by the generating company, as the case may be, under this act  -  - - power to make regulations 79 the board may make regulations not inconsistent with this act and the rules made thereunder to provide for all or any of the following matters, namely:-- - - - - (c) the duties of officers and servants of the board, and their salaries, allowances and other conditions of service;  - - - - provided that regulations under clauses (a) "and (d) shall be made only with the previous approval of the state govei'!liuent and regulations under clauses (h) and (i) shall be made with the concurrence of the authority - - - - - 45 of 1860 81 all members, officers and servants of the board shall be deemed, when acting or purporting to act in pursuance of any of the provisions of this act, to be public servants within the meaning of section 21 of the indian penal code members, officers and servants of the board to be public servants 82 no suit, prosecution or other legal proceeding shall lie against any member, officer or servant of the board for anything which is in good faith done or intended to be done under this act protection to persons acting under this act - - - - -  price for undertakings, generating stations and main transmissionlines puiic'hasq> by the board - - - - - ii the price to be paid for any undertaking, generating station or main transmission line as the case may be purchased by the board under this act shall be such sum as may be certified by an auditor appointed by the state government in this behalf to have been the amount properly incurred on and incidental to the establishment of the undertaking, station or main transmission line, as the case may be, lss depreciation there~n on the scale set out in paragraph iii: provided that there shall be added to such sum as aforesaid on account of such purchase of the generating station or main transmission line such reasonable compensation as may be determined by the board having due regard to the fact that a portion of the undertaking is to be acquired: provided further that if the board or the licensee is dissatified with the sum so certified, the matter shall, in default of agreement between them, be determined by arbitration as provided in section 76 iii the scale of depreciation referred to in paragraph ii shall be in respect of the portion of the prescribed period prior to the date of vesting,-(a) for land owned under full title, including the cost of clearing the site, nil; (b) for other assets specified in the table appended to the seventh schedule, the amount which would be produced by the end of the said portion of the prescribed period if during that portion an allowance were made annually on account of depreciation in accordance with the provisions of paragraph vi of the sixth schedule - - - - - financial principles and their application - - - - - va (1) there shall be created a reserve to be called the development reserve to which shall be appropriated in respect of each accounting year a sum equal to the amount of income-tax and supertax calculated at rates applicable during the assessment year for which the accounting year o£ the licensee is the previous year, on the amount of development rebate to which the licensae is entitled for the accounting year under clause (vi) (b) of sub-section (2) of section 10 of the indian income-tax act 1922: provided, that if in any accounting year, the clear profit [excluding the special appropriation to be made under item (va) of clause (c) of sub-paragraph (2) of paragraph xvii] together with the accumulations, if any, in the tariffs and dividends control reserve less the sum calculated as aforesaid falls short of the reasonable return, the sum to be appropriated to the development reserve in respect of such accounting year shall be reduced by the amount of the shortfall  - - - - - (4) on the purchase of the undertaking, the development reserve shall be handed over to the purchaser and maintained as such development reserve: provided that where the undertaking is purchased by the board or the state government, the amount of the reserve may be deducted" from the price payable to the licensee vi (1) there shall be allowed in each year in respect of depreciation of fixed assets employed in the business of electricity supply such an amount as would, if set aside annually throughout the prescribed period and accumulated at compound interest at 4 pe, centum pe, annum, produced by the end of the prescribed period an amount equal to 90 per cent of the original cost of the asset after taking into account the sums already written off or set aside in the books of the undertaking annual interest on the accumulated balance will be allowed as an expense from revenue as well as the annual incremental deposit: provided that, within 3 months from the date upon which these principles are enacted, a licensee may elect to adopt the straight-line method of depreciation accounting in lieu of the compound interest method above prescribed straightline method of depreciation accounting means the method whereby an allowance is made in each year in respect of depreciation of fixed assets employed in the business of such an amount as is arrived at by dividing ninety per- cent of the original cost of the asset by the prescribed period in respect of such asset (2) the year in which any asset becomes available for use in the business and the relative cost thereof shall, in the absence of satisfactory record, be determined by the state government all sums credited to depreciation account shall be invested only in the business of eiectrieitympply· of  the undertaking or where it· is not -practicable·w",· so btwlt ·them in' investments approved by the' state &vermnent!-  ", ( ~ (3) any sums invested in investments approved by the state gov:':"" ernment under sub-paragraph (2) shall, as soon as practicable; ,'be utilised in the business of electricity supply of the undertaking and if such sums are not so utilised they shall not form part of tjle· capital base~'qnderclause {d) of sub-paragraph (1) of paragraph xvii  - ,' ," j w: (1) where any fixed asset ceases to be available for uie through ob  ence, inadequacy, superfluity or for any· other reason; ·it shall be -described in the books of the licensee as no longer in use add no further depreciation in respect thereof shall be allowed 8s  a· charge ag~t r~yenue (2) the" written down cost of such fixed asset including expenses incurted ·on the dismantling thereof shall be charged' against the cont~gericf~ reserve: " ',' ~ that where the accumulations in the contlnge~ raser\''' an· not sufficient to permit the charging of the entire written down cost of the asset and the dismantling expejuje& the excess amount may be included in the capital base for the purpose of claulie (4) of sub-paragraph (1) of paragraph xvii (3) the amount for which any such fixed asset is sold or the amount of its scrap value when actually realised shall be credited to the contingencies reserve viii when any asset has been written down in the books of ute undertaking to 10 per cent or less of its original cost, no further depre· ctation shall be allowed in respect of that asset ix when any fixed asset is sold for an amount exceeding its written down cost the excess after deducting all taxes payable thereon shall be credited to the contingencies reserve x except with the previous consent of the state government, no sums shall be carried forward to a reserve and no dividend in exceas of 3 per cent shall be paid on share capital and no other distribution of profits shall be made to the shareholders in respect of any year of account so long as any of the following sums remain to be written off in the books of the undertaking, namely:-(i) normal depreciation due for that year ofi account calculated in accordance with the provisions of paragraph vi; (ii) equated instalment in respect of arrears of depreciation, computed in accordance with the provisions at paragraph xi, for that year of account; (iii) arrears,if any, in respect of normal depreciation referred to in clause (i), accumulated after the date of application of the provisions of the sixth schedule to the licensee; (iv) arrears, if any, in respect of equated instalments referred to in clause (ii) xi arrears of depreciation calculated in accordance with paragraph vi may be written off by equated payments over the remainder of the pnlcribed period and the amount 80 set aside in the books of the undertaldn may be taken into account in any year as a apeclal appropriatiod for  purposes of assessing the clear profit xvii for the purposes of this schedule-(8) "preaeribed period" meansin respect of each of the assets specified in the table appended to the seventh schedule, the number o~ years or period specified therein, in relation to such asset running in each case from the beginning of the year of account next followilll that in which the particular asset became available for use in the business: provided that, on the application of the ucensee, the state government may vary the prescribed period in respect of any assets in use on the date when this sch~ule comes into foree if, having regard to the physical condition of such assets the application of the table to such assets would be unreasonable any question arising out of the decision of the state government on any such application shall be referred to the authority tor arbitration - - - - - -------------------__------~ription of allet number or yean or period -----------------__-- -------)--------infinity a land owned under full title b land held under lc'aje-(ii) for invetment in th~ land t flo! period of the 'eme, ar the period mnaiaing unelq)ired on -lftidou of the ie  (h) for cost of drring ~itr the period of the euc l'm1aldinr \lllexpired at the date of cieanllll tbe i~~; r: aue  purchll/lc"d n('w-| (ii)                                   | ""at           ||----------------------------------------|----------------|| and                                    |                || machinery                              |                || in generating llatiom, including plant |                || touodationa-                           |                || (i)                                    |                || hydro-electric                        |                || (ii)                                   |                || iteam-electri<:                        |                || (iii)                                  |                || dieael-electrk                        |                || thirty-five                           |                || twenty-five                           |                || fiftecl1                              |                || (b)                                    |                || cooling                                |                || towen                                  |                || and circulating                        |                || water                                  |                || sy~tell1l!                             |                || thirty                                |                || (c)                                    |                || hydraulic                              |                || works fomling                          | part           || induding-                              |                || (i)                                    |                || dams,                                  |                || spilwayb                              | wein,          || canall, r('inforced                    |                || concrete                               |                || f1umea                                 |                || and                                    |                || ~yphon                                |                || onc"                                   | hundrrcl      || (ii)                                   |                || reinjorced                             |                || concrete                               |                || pipe-line                             |                || and                                    |                || surge                                  |                || taw,                                   |                || teel pipe-                            |                || linea,                                 |                || lluicc"                                |                || gate~,                                 |                || st('c"iurge                           |                || tanka,                                 |                || hydraulic                              |                || control valve                         |                || and                                    | other          || (ii)                                   |                || buildings                              |                || and                                    |                || civil                                  |                || engin~ring                             |                || worlu of                               |                || ii                                     |                || permanent                              | character,     || not                                    | mentioned      || abovl'--                               |                || '                                     |                || flity                                 |                || thirty                                |                || thlrty-fivf                          |                || five                                  |                || one                                    |                || hl1jldftd                             |                || fifty                                 |                || (i)                                    |                || offier                                 |             || (ii)                                   |                || containing thermo-electric             |                || perabng                                |                || plant                                 |                || (iii)                                  |                || containing                             | hydro-electric || (ill)                                  |                || temporary                              |                || erectiodiluch                          |              || ~ooden                                 | itruct~       || (illll)                                |                || roacb                                  |                || other                                  | than           || roada                                  | _             || (u)                                    |                || otben                                  |                |i') truuformers, tranformer kiaalu, ub-atation equipment and other fixed apparatus (including plant {oundaticma)- (i) tranaformers (includidi fowldatioa) havm, - rating of 100 kiloyo\t ampera add over - - - •• thirty-fin, (ii) othen _twaaty-fiw (f) switclifar, including cable coddecuoilli twenty (jf) lilhtning arrestors-twenty yan- (i) ,tatiod type - - eli) pole type   (iii) lynchrol101ii coudenten 'i'hirty-fi~  | (,)                                 | batteries           | ten             ||-------------------------------------|---------------------|------------------|| (h)                                 |                     |                  || (i)                                 |                     |                  || undefll'ound cabltl inc1ud1llljoidt |                     |                  || bolita                              |                     |                  || and dilconnect·                     |                     |                  || idl                                 |                     |                  || boxa                                |                    |                 || forty                              |                     |                  || (a>                                 |                     |                  || cable                               |                     |                  || duct                                | sytem -            | sixty           || (i)                                 |                     |                  || overhead lintl includill(          |                     |                  || iupporta-                           |                     |                  || (i)                                 |                     |                  || unea                                | on fabricated steel |                  || iupport                            |                     |                  || operatidl                           | at                  | nominal          || voltaps                             | biper               | than             || 66                                  |                     |                  || iwovolu                            | ••                  |  11iirty-fivf' || (ii)                                |                     |                  || line~                               |                     |                  || onteehupports                      |                     |                  || operatiq                            |                     |                  || at                                  |                     |                  || nominal voltagei                   |                     |                  || higher                              |                     |                  || than                                | 13'                 |                  || !l                                  |                     |                  || kilovolt,                           |                     |                  || but                                 |                     |                  || not exceedida 66                    | 1ruovolt         | -                || thirty                             |                     |                  || (iii)                               |                     |                  || unci                                |                     |                  || on                                  |                     |                  || ateel                               |                     |                  || or                                  |                     |                  || reinforced concrete supports       |                     |                  || twenty                             |                     |                  || (i)                                |                     |                  || 1m                                  |                     |                  || on                                  |                     |                  || treated                             |                     |                  || wood                                |                     |                  || 5uppt"t5                            |                     |                  || (j)                                 |                     |                  || meters -                            |                     |                  || fifteen                            |                     |                  || (t)                                 |                     |                  || self-propelled                      | vehicle&           |                  || seven                              |                     |                  || (i)                                 |                     |                  || static                              |                     |                  || machine toob -                      |                     |                  || twenty                             |                     |                  ||                                   |                     |                  || (iii>                               |                     |                  || air-conditioning                    |                     |                  || plant-                              |                     |                  || (i)                                 |                     |                  || italic                             |                     |                  || pifteen                            |                     |                  || (ii)                                |                     |                  || portable                            |                     |                  || (ii)                                |                     |                  || (i)                                 |                     |                  || 081ce                               | rurniturc           | and              || 6tddl~                             |                     |                  || &even                              |                     |                  || twcat,                            |                     |                  || (ii)                                |                     |                  || office                              |                     |                  || equipment                           |                     |                  || ten                                |                     |                  || fifteen                            |                     |                  || (iii)                               |                     |                  || intc:mal wirilll indudin«          |                     |                  || fitlil'                             |                     |                  || 1\'1                                |                     |                  || 1i"c1i1jlfflrlltu~                  |                     |                  ||                                   |                     |                  || (id)                                |                     |                  || itreeflight                       |                     |                  || fittings                           |                     |                  || fifteen                            |                     |                  || (0)                                 |                     |                  || apparatullet                        | on                  |                  || hire-                               |                     |                  || (i) other                           |                     |                  || than                                |                     |                  || motol'll                           |                     |                  || twenty                             |                     |                  || (ii)                                |                     |                  || moton                              |                     |                  || e,}                                 |                     |                  || communication                       |                     |                  || equipmellt-                         |                     |                  || fifteen                            |                     |                  || (ii)                                |                     |                  || telephone linei and                 |                     |                  || telephodcl                          | ••                  |                  || twenty                             |                     |                  |d aueu purc:bued lecolld hand and &lletll not othe~'iie providtd for iothb table  such rl"8llr:l'ck period  the state go~­~ ;deeermine ;ri eatcil cue hmiij r:9ard to the utuft ~ a'nd coddid on of tq kt at the time 0i·1&'  doa by ttae owner ---------------i for the purposes of the first and third schedules, the colt of production of electricity at a generating station shall be ucertaimcl by calculating and taking into accowlt the following costs, char, net a)jowances in respect of the year of account, namely:-(0) sums expended for fuel, oil, water and stores consumed, for salaries and wages, and any contribution by the ucel\he for pad-sions, provident fund, superannuation and insurance of oftleennd servants1 for repairs and maintenance and for ren~wals not ehargeable to capital account;   -  the ninth schedule(see the r~rst schedule) ",~ ~' '' allocatjo"n of c08t8 of p'moovctjon at qzjcbila'l'lno station i for the purposes of this schedule-- -  - (j) "cost of repairs, maintenance and renewala" means th sums expended for repairs and maintenance anti for renewals not chargeable to capital accowlt, together with the proportion at salaries and wages and any contrlbutiona made by the owd8r' of the station for pensions, provident fund, superannuation and insurance at oftlcers and servants properly attributable to repairs, main-~nce and renewsm ' • ", ~ i "',' , ;:: ":i       ~;i,j:;,;' ,                      ~ :::" j                                -                                    "                                       r"                                                                                                                                                                                                                                                                ~ -                                                                                                                                    ~  ;; a bill "', to a~ the electriritll (""iii) act, 1841 i' ,' : i i 