 the e1ectricity (supply) amendment bill, 1955(b) one shall be an electrical engineer with wide ex· perience; and , (c) one shall be a person who has experience of accounting and financial matters in a pu'blic utility undertaking, preferably an electricity supply undertaking" , amen~t 5 section 10 of the principal act shall be re-numbered as subof section 10 - section (1) thereof, and-(a) in the sub-section as so re-nu~bered, for clause (e), the following clause shall be substituted, namely:-10 "(e) in the opinion of the state govemment-(i) has refused to act; or (ii) has become incapable of acting; or (iii) has so abused his position as a member as to render his continuance on the board detrimental to the interests of the general public; or j, (iv) is otherwise unfit to continue as a member; or"; - (b) after the sub-section as so re-numbered, the following sub-sections shall be inserted, namely:-"(2) the state government may suspend any member pending an inquiry against him 20 (3) no order of removal shall be made under this section unless the member concerned has been given an' opportunity to submit his explanation to the state government, and when such order is passed, the seat of the member removed shall become vacant and another member may be appointed 2s under section 5 to fill up the vacancy (4) a member who has been removed shall not be eligible for reappointment as member or in any other capacity to the board (5) if the board fails to carry out its functions, or 30 refuses or fails to follow the directions issued by the state government under this act, the state government may remove the chairman and the members of the board and appoint a chairman and members in their places" laaertion of 6 after section 10 of the principal act, the following section shall 3s ::lection be inserted, namely:-power of stall! g0-vernment to declare certain transactions vuid "loa (1) the state government may declare void any transaction in connection with which' a member has been removed under sub-clause (iii) of clause (e) of sub-section (1) of section 10 after consjdering the report on the facts of the case made 40 to it by a district judge nominated by it in this behalf (2) a district judge nominated under sub-section (1) shati, before making his report under that sub-section to the state government in relation to any transaction, give all parties interested in the transaction a reasonable opportunity of being sheard ix of 18tz 10 (3) where a transaction is declared void under this section, it shall not be enforceable by any party to the transaction but the provisions· of section 65 of the indian contract act, 1872 shall, so far as may be, apply to such transaction as they apply to an agreement which is discovered· to be void or a contract which becomes void (4) the decision of the state government declaring any transaction void under this section shall be final and shill not be called in question in any court" is 7 to section 15 of the principal act, the following proviso shall :r~~; be added, namely: - "provided that the appointment of the secretary shall be subject to the approval of the state government" 8 in section 16 of the principal act, for the words 'state electri- af~dmen~ 20 city council', wherever they occur, the words 'state electricity 0 o~ i - consultative council' shall be substituted  9 in section 23 of the principal act, in sub-section (2), the words =:e:~ 'on terms similar to the terms offered by the board' shall be omitted 10 in section 26 of the principal act,-:t:a~ 2s (a) in the proviso, for the words and figures 'clauses i to xii', the words and figures 'clauses i to v, clause vn and clauses ix to xii' shall be substituted; (b) after the existing proviso, the following proviso shall be inserted, namely:-30 "provided further that the provisions of clause vi of the schedule to that act shall apply to the board in respect of that area only where distribution mains have been laid by the board and the supply of energy through any of them has commenced" 3s 11 in section 28 of the principal act in the existing proviso, after amen~t the word 'provided' the word 'further' shall be inserted and before of section 28 the said proviso, the following proviso shall be inserted, namely:-"provided that no scheme or a part of a scheme which is estimated to result in a capital expenditure exceeding ten lakhs of rupees shall be prepared by the board without prior consultation with the state government" 12 in section 29 of the principal act,-(a) in sub-section (1), for the words and figures 'the board shall cause every scheme prepared under section 28', the words s and figures 'the board shall send a copy of every scheme prepared under section 28 to the state government and to the authority and shall cause every such scheme' shall be substituted; i (b) in the first proviso to sub-section (2j, for the words 10 'fifty lakhs of rupees', the words 'one crore of rupees' shall be substituted i\mcndment 13 in section 55 of the principal act, for the words 'the station', of 1ccti0d sse the words 'his undertaking or any· part thereof' shall be substituted substitution 14 for section 57 of the principal act, the following sections 15 ~ 'to': shall be substituted, namely:-- acc:tiod " licediicci's charges to mdm'djcn "57 the provisions of the sixth schedule and the seventh schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authorityi (a) in the case of a licence granted before the com- 20 mencement of this act, 'ft/6m the date of the commencement of the licensee's next succeeding year of account; and (b) in the case of alicence granted after the commencement of this act, from the date of the commencement of supply, 2s ,  and as from the said date, the licensee shall comply with the p;rovisions of the said schedules accordingly, and any provisions of the indian electricity act, 1910 and the licence ix of 1910 granted to him thereunder and of any other law, agreement or instrument applicable to the licensee shall, in relation to the 30 licensee, be void and of no effect in so far as they are inconsistent with the provisions of the said schedules" ratin$  coldldlt~s • 57 a (1) where the provisions of the sixth schedule and the seventh schedule are under section 57 deemed to be incorporated in the licence of any licensee, the following provisions 3s shall have eft~ct in relation to the said licensee, namely:-· (a) the board or where no board is constituted under this act, the state government-5 (i) may, if satisfied that the licensee has failed to comply with any of the provisions of the sixth schedule; and 10 (ii) shall, when so requested lsy the licensee in writing or when the licensee has given notice to the state government for the enhancement of rates for the supply of electricity under paragraph i of the sixth schedule and such enhanced rates are not approved by the state government, 15 constitute a rating committee to examine the licensee's charges for the supply of electricity and to make recommendations in that behalf to the state government: 20 provided that where it is proposed 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 warrant may be extended from time to time) to show cause against the action proposed to be taken: 25 provided further that no such rating committee shall be constituted if the alleged failure of the licensee to comply with any provisions of the sixth schedule raises any dispute or difference as to the interpretation of the said provisions or any matter arising therefrom and such difference or dispute is referred by the licensee to the arbitration of the authority under paragraph xvi of that schedule within the period of the notice referred to in the preceding proviso: 30 35 provided further that no rating com'mittee shall be constituted in respect of a licensee within three years from the date on which such a committee has reported in respect of that licensee, unless the state government declares that in its opinion circumstances have arisen rendering the orders passed on the recommendations of the previous rating committee unfair to the licensee or any of his consumers; (b) a rating committee under clause (a) shall,-(i) where such committee is to be constituted under sub-clause (i) of that clause, be constituted 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 the licensee, be constituted within three months of the date of such request, and (iii) where such committee is to be constituted as a result of the state government refusing to approve the s enhanced rates, notice whereof has beed given by the licensee, be constituted before the expiry of the period of such notice; (e) the rating committee shall, after giving the licensee' a reasonable opportunity of being heard and after taking 10 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 therefor, regarding the charges for electricity \!hich the licensee may is make to any class or classes of consumers so, however, that the recommendations are-not likely to prevent the licensee from earning clear prouts 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 20 schedule during his next succeeding three years of account: provided that the state government may, if it so deems necessary, extend the said period of three months within wbtch the report of the rating committee may be submitted to it: 25 (d) within one month after the receipt of the report under clause (c), the state government shall cause the report to be published in the ofbcial gazette, and may at the same time make an order in accordance therewith ftxing the lieensee's charges for the supply of electricity with effect 30 from such date, not earlier than two months or later than three months after the date of publication of the report as may be specified in the order and the licensee shall 1orthwith give effect to such order; (e) the charges for the supply of electricity fixed under 3s clause (d) shan be in operation for such period not exceedids three years as the state government may specify in the order: provided that nothing in this clause shall be deemed to prevent a licensee from reducing at any time any charges 40 80 ftxed s (2) where a board is constituted under this act, the rating committee shall consist of three members, two of whom shall de members of the board (one such member of the board !laving experience of accounting and financial matters) and one shall be a representative co-opted by the said two members of the board from an association of licensees of which the licensee concerned is or is eligible to be a member or, if there is no such association, from such chamber of commerce or similar body as the board may direct 10  (3) the board shall appoint one of its two members on the rating committee to be the chairman of the committee is (4) where no board is constituted under this act, the rating committee shall consist of five members of whom the chairman and two other members shall be nominated by the state government, one member shall be nominated by the licensee and one member shall be nominated by the association referred to in sub-section (2) or if there is no such association, by such chamber of commerce or similar body as the state government may direct ;20 |   xxxviii  ||------------||     19490  ||        25  |(5) of the three members to be nominated by the state government under sub-section (4), one shall be a person who is or has been a judicial officer not below the rank -of a district judge, one shall be a registered accountant within the meaning of the chartered accountants act, 1949 having' at least t~ years' experience and one shall be a person with administrative experienee (6) the expenditure incuned in conpection with a rating committee as certified by it shall be payable,-(4) where the rating committee was constituted ,at the request of a licensee, or where the rating committee has held that the licensee has failed to comply with any of the provisions of the sixth schedule, by the licensee from his reasonable return as defined in the sixth schedule or from his distributable profits, as the case may be; 3' (b) in any other case, by the board or the state government, as the case may be (7) where a licensee makes default in paying any amount which he is liable to pay under sub-section ·(6), such amount may, on application to a civil court having jurisc!liction, be 40 recovered from· the licensee by the distress and sale of any movable property of the licensee power of rating committee to call for information, etc 57b a rating committee constituted under section 57a may, for the purpose of discharging its functions, by notice in writing, require the licei]see to give such information, or to furnish such accounts and other documents in his possession or power, as may be specified in the notice" s amendment ofeec:tion s8 •• 15 to section 58 of the principal act, the following proviso shall be added, namely:-"provided that the board shall not issue any directions under this section except after obtaining the prior approval of the state government" 10 16 in section 60 of the principal act, after sub-section (1), the following sub-section shall be inserted, namely:-amendment of kction 60 - • amendment of aec:tion 67 "(ia) all schemes sanctioned by the state government and transferred to the board shall for the purposes of this act, be deemed to have been sanctioned by the board", 15 n in section 67 of the principal act,-'! (a) in clause (vi), the words 'repayment of principal and' shall be omitted; (b) after clause (vii), the following clauses shall be inserted, ~ely:-20 "(viia) the write-down of amounts in respect of intangible assets to the extent to which they are actually appropriat-!d in any year for the purpose in the books of the board; (viib) all taxes on income and profits;"; (c) in clause (viii), after the words 'not exceeding', the 2s words 'one-half or shall be inserted; (d) for clause (x), the following clause shall be substituted, namely:-"(x) of the balance remaining, one-half in the reduction of tariffs or for such other purposes beneficial to electrical 30 development in the state, as the board may think fit, and the remaining one-half to the consolidated fund of the state  ~ubstitutiod 18 for sections 68 and 69 of the principal act, the following :: s;;- sections shall be substituted, namely:-iectiona 68 and 69 dapreciation rnene "68 the board shall cr~ate a depreciation reserve 35 and, as far as compliance with the provisions of section 67 makes it practicable, shall, at the end of every year, credit to such reserve from its revenue, such amount as would if made annually throughout the prescribed period of assets specined in the table appended to the seventh schedule and accumulated at compound interest at the rate of three per centum per  annum produce by the end of the prescribed period an amount equal to 90 per centum of the original cost of the assets: 5 provided that if in any year it is not practicable fully to comply with the provisions of this section, the amount by which the sums actually credited falls short of the amount required under this section in respect of that year, shall be carried forward and together with compound interest thereon at the aforesaid 10 rate, shall be credited to the said reserve as soon as it is found possible in accordance with section 67, so to do: provided further that the accumulations in the depreciation reserve may be invested in the business of the board, or utilised for repayment of principal not guaranteed under section 66 or for is repayment of sums paid by the state government under guarantees under that section· 69 the board shall cause proper accounts and accounts other records in relation thereto to be kept, includand audit ing a proper system of internal check and prepare an annual 20 statement of accounts, including the profit and loss account and the balance sheet in such form as may be prescribed by the state government in consultation with the comptroller and auditor-general of india (2) the accounts of the board shall be audited by the 25 comptroller and auditor-general of india or by such person as he may authorize in this behalf and any expenditure incurred by him in connection with such audit shall be payable by the board to the comptroller and auditor-general of india (3) the comptroller and auditor-general of india and any 30 person authorized by him in connection with the audit of the accounts of the board shall have the same rights, privileges and authority in connection with such audit as the comptroller and auditor-general of india has in connection with the audit of government accounts an!! in particular shall have the right to 3~ demand the production of books, accounts, connected ~ ouchers and other documents and papers, and to inspect any of the oftlces of the board (4) the accounts of the board as certified by the comptroller and auditor-general of india or any other person authorized by 40 him in this behalf together with the audit report thereon shall be forwarded annually to the state government and that government may issue such instructions to the board in respect thereof as it deerps fit and the board shall comply with such instructions (5) the state government shall-(a) cause the accounts of the board together with ·the audit report thereon forwarded to it under sub-section (4) to be laid annually before the state legislature; and (b) cause the accounts of the board to be published in 5 the prescribed manner and make available copies thereof on sale at a reasonable price" 19 in section 76 of the principal act, after sub-section (3), the following sub-section shall be inserted, namely:-:-amendment of section 76  "3a where any question or matter is referred to the authority 10 for arbitration under this section,-x of 194(\, (a) the authority shall be deemed to enter on the reference for the purposes of paragraph 3 of the first schedule to the arbitration act, 1940 on the date on which the parties appear before the authority for is the first time: provided that where the parties or any of them fail to appear before the authority on the date fixed for the first hearing of the case and the authority decides either on that date or any subsequent date to proceed 20 with the case in the absence of the parties or any of them, as the case may be the authority shall be deemed to enter on the reference on the date of such decision; (b) the authority may, having regard to the circumstances 25 of each case, charge such arbitration fee as it may deem reasonable  substitution 20 for section 77 of the principal act, the following sections shall ~f new scc- be substituted namely:-tlons for ' section 77 penalties "77: if any licensee or other person, not being the 30 board, fails without reasonable excuse to comply with, or give effect to, any direction,' order or requirement made under any of the following provisions, namely:-(a) section 4; or (b) section 55; or 3s (c) c1ause (d) of sub-section (1) of section 57a; or (d) section 57b; or (e) section 58; or (f) sub-section (3) of section 75; he shall be punishable with fine which may ectend to five 4q if hundred rupees, and in the case of a continuing offence with a further fine which may extend to fifty rupees for each day after the first during which the offence continue& s 77a all fines payable by a licensee under this act or under souhl-'7 ftrjold - •  w lell u:s any other law for the time being in force m respect of any may be offence committed by the licensee, shall be _payable by him paid from his reasonable return as defined in the sixth schedule or from his distributable profits, as the case may be ie> 77b (1) if the person committing an offence under this act offci'ce • by is a company, every person who at the time the offence was companlc"& committed was in charge of, and was responsible to, the company for the conduct of the business of the company as well as the company, shall be deemed to be guilty of the offence and shall be-liable to be proceeded against and punished accordingly: is provided that nothing contained in this sub-s(!ction shall render any such person liable to any punishment, if he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of sucn offence -20 (2) notwithstanding anything contained in sub-section (1), where an offence under this act has been committed with the consent or connivance of, or is attributable to any neglect on the part of, any director or manager, secretary, or other officer of the corppany, such director, manager, secretary or other officer shall also be deemed to be guilty of that offence and shall be liable to be proceeded against and punished accordingly explanation-for the purposes of this section,-30 (a) 'company' means any body corporate and includes a firm or other association of individuals; and (b) 'director' in relation to a firm means a partner in the firm 77c no court shall take cognizance of an -offence under co~izance section 77, except on the complaint of,- 0 offences 3s (a) in the case of an offence relating to iection 4, by an officer of the authority authorised in that behalf by the authority; (b) in the case of any other offence,~ (i) where a board is constituted, by an officer of ,the board authorised by the board in that behalf; (ii) where no board is constituted, by an officer of the state government authorised by the state government in that behalf" 21 in section 78 of the principal act, in sub-section (2),-amendment of aection 78 (i) in clause (a), after the words 'term of office', the words 'and the powers' shall be inserted; (ii) in clause (b), for the words 'state electricity councils', the words 'state electricity consultative councils shall be sub- s stituted insenion  of 22 after section 78 of the principal act, the following section ~m lectton ball be inserted, namely:-diteotiors "78a (1) in the discharge of its functions, the board shall by the state be guided by such directions on questions of policy as may 'be 10 goftl1ldlcrt given to it by the state government (2) if any dispute arises between the board and the state government as to whether a question is or is not a question of policy, it shall be referred to the authority whose decision thereon shall be final" is amendment of fint schedule 23 in sub-paragraph (2) of paragraph i of the first schedule to the principal act, the words 'on terms similar to the terms offered dy the board' shall be omitted amendment of third schedule 24 in sub-clause (i) of clause (b) of paragraph v of the third schedule to the principal act, after the words 'the station', the words 20 'or the entire undertaking' shall be inserted 25 in the fifth schedule to the principal act, in paragraph 1,-amendment of fifth schedule (i) in clause (b), for the words and brackets '(including super-tax payable by the licensee as a company, but excluding other taxes on profits)', the words and brackets '(including all zs taxes on income and profits)' shall be substituted; (ii) in clause (e), for the words and brackets from 'interest on rooney' to 'attributable to lines' the following words and brackets shall be substituted, namely: - ~'interest on the depreciated cost of the lines shown 30 in tl\e books of the undertaking and properly attributable to the lines (whether defrayed o\1t of capital or revenue) and interest on such working capital as is properly attributable to the lines" amendment of sixth schedule 26 in the sixth schedule to the p'l'incipal act,-35 (a) for the words, brackets and figures '(see section 57)" the words, brackets, figures and letter' (see sections 57 and 57a) , shall be substituted; (b) for paragraph i, the following paragraph shall be iubsu-tuted, namely:-"1 notwithstanding anything contained in the indian electricity act, 1910 and the provisions in the licence of a ix of 1910 licensee, the licensee shall be entitled to so adjust his rates for the sale of electricity whether by enhancing or reducing them (not more than once in each year) that his clear profit in any year of account shall not, as far as possible, exceed the amount of reasonable return: 10 provided that the licensee shall not be deemed to have failed so to adjust his rates if the cle~r profit in any year of account has not exceeded the amount of reasonable return by fifteen per centum of the amount of reasonable return: provided further that the licensee shall not be entitled is to enhance the rates for the supply of electricity until after the expiry of a notice in writing of not less than sixty clear days of his intention to so enhance the rat~s, given by him to the state government and to the board, unless during the period of the said notice the state government has com-20 municated to him i13 approval to the enhanced rates: provided further that the licensee shall not be entitled to so enhance the rates under this paragraph if during the period of the notice referred to in the preceding proviso, a rating committee has been constituted under section 57a 2s for determining whether he is justified in enhancing the rates as proposed by him; (c) for sub-paragraph (1) of paragraph ii, the following lub-paragraph shall be substitutea, namely:-"(1) where the dear profit of a licensee in any year of account is in excess of the amount of reasonable return-3s (a) if the excess does not exceed fifteen per centum of the amount of reasonable return, one-half of such excess shall be at the disposal of the undertaldng and the remaining one-half shall be appropriated to a reserve which shall be called the tariffs and dividends control reserve; 40  (b) if the excess exceeds fifteen per centum of the amount of reasonable return, the excess up to fifteen per centum shall be distributed as provided in clause (a) and the remaining amount of the excess shall eithei be distributed to the consumers in the form of a proportionate rebate on the amounts collected from the sale of electricity ~nd meter rentals or carried forward in the accounts of the licensee for distribution in future to the consumers in such manner as the state government may direct"; (d) paragraph v shall be re-numbered as sub-paragraph (1) s thereof and after the sub-paragraph as so re-numbered, the fol- lowing sub-paragraph shall be inserted, namely:-"(2) on the purchase of the undertaking, the balance remaining in the contingencies reserve shall be handed over to the purchaser and shall be maintained by the purchaser 10 as such contingencies reserve"; (e) after paragraph v, the following paragraph shall be inserted, namely:-xi of 19u "v a(1) there shall be created a reserve to be called the development reserve to which shall be periodically is appropriated the amount of the difference between the income-tax and super-tax which would have been payable by the licensee if the development rebate referred to in clause (vib) of sub-section (2) of section 10 of the indian income-tax act, 1922, had not been allowed and the 20 income-tax and super-tax actually paid by the licensee after making an allowance for such development rebate (2) the development reserve shall be available only for investment in the business of electricity supply of the undertaking 2s (3) the development reserve shall be deemed to be a part of the assets of the undertaking and where the undertaking is transferred, any balance remaining in the reserve together with any assets financed from such reserve shall stand transferred to the transferee along with other assets 30 of the undertaking and no consideration shall be payable in respect thereof"; 'hi (i> in paragraph vi, after sub-paragraph (2), the following sub-paragraph shall be inserted, namely:-"(3) any sums invested in investments approved by the 3s state government under sub-paragraph (2) shau, 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 the capital base under clause (d) of sub-paragraph (1) of paragraph xvii"; (9) in paragraph ix, after the words 'the excess', the worda 'afftrr cmductmg all ta:xes paid thereon' shall be insertedj (h) for patagraph x, the following paragraph shall be su"" stituted, namely:-10 "x except with the consent of the state government, no sums shall be carried to a reserve and no dividends in excess of 3 per cent shall be paid on share capital and no other distribution of profits shall be made to the shareholders, so long as any sums allowed in respect of depreciation for the year of account or any arrears of depreciation or any previous losses remain to be written oft in the books of the undertaking"; • (i) to paragraph xiii, the following explanation shall be added at the end, namely:-"exptanation-for the purposes of this paragraph, the expression 'managing agent' shall include every person, by is whatever name called, who is in charge of the management of the undertaking and where more persons than one are placed in charge of the management of the undertaking, the total remuneration payable to all such persons shall not in the aggregate exceed the limits specified in this paragraph"; 20 (j) to paragraph xvi, the following proviso shall be added, damely:-"provided that where a rating committee has been constituted under section 57a, no such dispute or difference shall be referred to the arbitration of the authority during 25 the period between the date of the constitution of such committee and the date of the order of the state government made on the recommendations of the committee"; (k) in paragraph xvii,-(a) in sub-paragraph (1),-(i) in clause (a), after the word 'assets', the words 'available for use and necessary for the purposes of the undertaking' shall be inserted; (ii) for clause (d), the following clause shall be substituted, namely: -- 35  (d) the amount of investments compulsorily made under paragraph iv of this schedule together with the amount of such investments made after the conimencement of this act from contributions tbwards depreciation as in the opinion of the authority could not be utilised for the purpose of the business of electricity supply of the undertaking"; (iii) in clause (e)(i) (which provides for deduc-, tion of certain amounts), the word 'and' at the end shall be omitted; (iv) in clause (e)(ii) (which provides for deduction of certain amounts), the words, figures and brackets 'under the provisions of sub-paragraph (2) of paragraph i!) i of the first schedule' shall be omitted; (v) after the said clause (e)(ii), the following subclauses shall be inserted, namely:-"(iii) the amount of security deposits of consumers held in cash; 15 (iv) the amount drawn from the tariffs and dividends control reserve for capital purposes; and (v) the amount set apart for the development reserve"; 20 (b) in clause (b) of sub-paragraph (2) ,-' (i) for the words 'expenditure incurred on', the words 'expenditure properly incurred on' shall be substituted; (ii) in sub-clause (iv), the words, brackets and figures 25 'under sub-paragraph (2) of paragraph i of the first schedule' shall be omitted; (iii) in sub-clause (x), for the word 'hereinafter, the word 'hereinbefore' shall be substituted; (iv) in sub-clause (xi), after the words 'other ex- 30 penses', the words and brackets 'excluding interest on debentures and loans)' shall be inserted; (v) after sub-clause (xii), the following sub-clause shall be inserted, namel~:-"(xiii) bonus paid to the staff with the approval3s of the state government or where there is any dispute about such bonus, the amount of the bonus as determined under the industrial disputes act, 1947"; ,xiv of 15141, (c) in clause (c) of sub-paragraph (2),-(i) in sub-clause (i), for the words 'actually appropriated for the purpose in the books of the undertaking', the words 'permitted by the state government' shall be substituted; (ii) in sub-clause (iv), for the word 'hereinafter', theword 'hereinbefore' shall be substituted; (iii) after sub-clause (v), the following sub-clause shall be inserted, namely:-10 "(va) contributions towards the development reserve referred to in paragraph va;"; (d) in sub-paragraph (6), clause (b) shall be omitted; (e) in sub-paragraph (9),-is (i) for clause (b), the following clause shall be substituted, namely:-"(b) the income derived from investments other than those included in the capital base under the provisions of clause (d) of sub-paragraph (1)"; (ii) in clause (c), the words, figures and brackets 'under sub-paragraph (2) of paragraph i of the first schedule' shall be omitted; (f) for sub-paragraph (10), the following sub-paragraph shall be substituted, namely:-"( 10) 'standard rate' in respect of any year of account means the reserve bank rate ruling at the beginning of that year, plus two per centum" 21 in the seventh schedule to the principal act,-amee  fa seftadi (a) for the words, figures and brackets '(see section 68 and sc:beduie the fifth and eighth schedules)" the following shall be substi-30 tuted, namely:-"(see sections 57, 57a and 68 and the fourth and the sixth schedules)"; (b) in paragraph ii, in sub-paragraph (1), for the words 'the fourth and sixth schedules', the word and figures 'section 68' js shall 'be substituted; (c) the heading of the table, namely, the words, figures and brackets «(see also section 57 and the :fourth ~nd sixth ~he-: dules)' shall be omitted;  (d) in the table, in item c,-(i) after sub-item (d) (iv), the following sub-item shall be inserted, namely: - "(iva) roads other than kutcha roads--one hundred"; (ii) after sub-item (f), the following sub-item shall be 5 inserted, namely:-"(0) lightning arrestors-(i) station type-twenty (ii) pole type-fifteen (iii) synchronous condensers-thirty-five"; 10 (iii) for sub-item (i), the following sub-item shall be substituted, namely:-"(i) overhead lines, including supports-(i) lines on fabricated steel supports operating at nominal voltages higher than 66 ·kilovolts- 15 thirty-five (ii) lines on steel supports operating at nominal voltages, higher than 13·2 kilovolts but not exceeding 66 kilovolts-thirty (iii) lines on supportssteel or reinforced concrete 20 twenty-five (iv) lines on treated wood supports-twenty"; (iv) in sub-item (n), after clause (ii), the following clauses shall be inserted, namely:-u (iii) internal wiring, including fittings and appa- 25 ratus-fifteen (iv) street light fittings-fifteen"; }v) after ·sub-item (0), the following sub-item shall be inserted, namely:-"(p) communication equipment-(i) radin and high frequencv carrier system-fifteen (ii) telephone lines and telephones- twenty";  is in the eighth scheduie to the principal act, in paragraph 1,- :ren=~(a) in clause (b), for the words and brackets' (including schedule super-tax payable by the licensee as a company but excluding other taxes on profits)', the words and brackets' (including all 5 taxes on income and profits)' shall be substituted; (b) in clause (e), for the words and brackets from 'interest on money', to 'the production of electricity therein', the following words 'and brackets shall be substituted, namely:-"interest on the depreciated cost of the station shown in 10 the books of the undertaking and properly attributable to the station (whether defrayed out of capital or revenue) and interest on working capital properly attributable to the station and the production of electricity therein"  statement of objects and reasonsthe object of this bill is to remove anomalies and difficulties which have come to notice in the working of ~he electricity (supply) act since its enactment in 1948 2 the amendments proposed in the bill have been under prolonged deliberation and are largely the result of decisions taken at the inter-state conference held in february this year at which the representatives of the electricity supply industry were also heard 3 to ensure the co-ordination of development policbs of the state electricity boards with those of government departments, it is necessary to vest certain supervisory powers in the state governments accordingly, it is proposed to empower the state governments to exercise control over the activities of the boards in matters of policy and to require the boards to consult state governments in the preparation of schemes estimated to cost oyer rs 10 lakhs because of the interest of state governments in the financial policies of local authorities, it is proposed also to subject to the approval of the state governments the directions that may be given by the boards to local authority licensees in connection with their amortisation and tariff policies l when the principal act was passed in 1948, the reserve bank rate was 3 per cent and the standatd rate of "reasonable return" for electricity supply licensees was fixed at 5 per cent ie 2 per cent over the bank rate the bank rate rose to 31 per cent in 1951 and, therefore, an increase in the standard rate by i per cent is justified it is proposed to link the standard rate with the bank rate at 2 per cent above the latter to enable its automatic adjustment with the money market , the working of the act has shown that some of the provisions of t-he sixth schedule to the act enable the licensees to earn return in pxcess of that intended under the scheme of the schedule these entitle the 1icens~es to earn interest as well as "reasonable return" on assets created out of debenture and loan capital and from amounts invested out of accruals in' the depreciation reserve outside their business of electricity supply the licensees are also able to earn return on capital assets acquired from consumers' money such as consumers' security deposits 'and amounts invested in business out of tariffs and dividends control reserve the licensees can klso charge the pay of a managing director or manager as an item of business expense in addition to the remuneration and office allowance paid to the managing agents it is proposed to make suitable provisions to close these loopholes 6 it is further proposed to prevent licensees from paying dividends on share capital in excess of 3 per cent or distributing other profits so long as any arrears of depreciation or previous losses remain to be written off in their books and to require them to reduce their rates when their clear profits exceed the amount of "reasonable return" by 15 per cent as against the existing limit of 30 per cent 7 it is also proposed to provide for the electricity supply industry to avail of the benefits of the development rebate permitted under the provisions of s~ction b of the finance act, 1955, by allowing the creation of the development reserve the accumulations in this reserve will be utilised for the development of the undertakings licensees, hoyever, are not to be permitted to earn "reasonable return" on the assets financed from this reserve 8 under the existing provisions of the act, interest-free loans granted to the board by the state government are repayable out of its revenues with a view to reducing the' financial liabilities of the board, such loans are proposed to be treated on the same footing as interest-bearing loans advanced by the state government and they will not be repayable out of the revenues of the board with the same object, provision is proposed to be made to enable the board to repay the loans borrowed from sources other than the state government out of the accumulations in the depreciation reserve instead of its revenues 9 with a view to tightening, control over the financial operations of the boards, it is proposed to subject their accounts to the audit of the comptroller and auditor-general of india 10 the bill also provides for some consequential and minor amendments and clarifications g l nanda new delhi; the 31st august, 1955_ clause 2-5ections 2, 76 and 82 which are connected with those provisions of the act which came into force at once and which also should have been brought into force along with those provisions are now being brought into force certain new sections which are being added by the bill are also being brought into force atonce clause 3-the existing definition of "maximum demand" has been amplified to empower the state government to vary the period for which such demand may be determined by any undertaking clause4-the qualifications of the accounts member are being relaxed to include persons who have experience of accounting and financial matters clause 5-the provisions relating to removal and suspension of members of the board are being brough' in line with the analogous provisions in section 5] of the damodar valley corporation act 1948 clause 6-this clause layli down the procedure to be followed by the state government for declaring void any transaction in connection with which a member of the board is removed under subel l 'l clause (e) of sub-section (1) of section 10 clause 7-this clause provides that the appointment of the secretary of the board shall be made with the approval of the state government ! clause b-the state electricity councils are in fact consultative councils only the amendment makes this position clear clause 9-this clause liberalises the terms and conditions under which a licensee could raise his own capital in preference to a loan advanced by the electricity board for financing the works to be carried out under the directions of the board clause lo-this clause imposes the same obligations on the board as are imposed on a ~icensee under clauses vi and viii of the schedule to the indian electricity act, 1910, in connection with the requisitions for the supply of electricity for general purposes and for street lighting clause ll-this clause provides that the board shall consult the state government before preparing any scheme which is estimated to involve a capital expenditure exceeding rs 10 lakhs ,clause 12-(a) this requires the board to send a copy of every scheme prepared by it to the state government and to the central electricity authority (b) this raises the limit of capital expenditure of the schemes which can be sanctioned by the board without consulting the central electricity authority from rs 50 lakhs to rs 1 crore clause l3-in order to ensure economy and efficiency in the operation of the undertaking of a licensee, the state electricity board is being empowered to issue directions to ii licensee in respect of the working of the undertaking or any part thereof clause l4-licensees' charges to consumers-the existing provisions of sub-section (1) of section 57 of the act are being retained and in addition it is being made clear that the provisions of the sixth and seventh schedules shall apply to licences granted after the commencement of the act rating committees-the existmg !jlovisions of sub-sections (2), (3), (4) and (5) of section 57 have been retained a time limit has however been fixed both for the constitution of the rating committee and for the making of recommendations by the rating committee a rating committee is not to be constituted where a licensee has referred 'any dispute to the arbitration of the central electricity authority provision has also been m'ldc for the recovery of the expenditure incurred in connection with the rating committee from the party liable for it a rating committee has been empowered to call for any information, accounts or other documents from a licensee for the purpose of any enquiry befcre it clause i5-this clause provides that any directions, issued by " the board to a licensee, being a local authority, shall be subject to the approval of the state governm£'nt clause l6-this clause provides that all schemes sanctioned by the state government and transferred to the board shall be deemed to be the sanctioned' schemes of the board clause l7-"taxes on income and profits" and "writing down of amounts in respect of intangible assets" have been added to the priority list of liabilities of the board repayment of interest-free loans out of the revenue of the board is being omitted from such ltst clau8e l8'-sectlon 68 of the act has been redrafted so as to remove '~ertain ambiguity in the section the newly drafted section' 69 provides that the accounts of the board shall be audited by the comptroller and auditor-general of india or by a person authorised by him in this behalf clause 19-this clause is intended to remove certain diftlcultiea which the central electricity authority has experienced in dealing with arbitration cases clause 20-the penal section 77 has been revised so as to include a penalty for contravention of certain new provisions added by the bill express provision is also being made in respect of offences by companies on the lines of a similar provision in other acts clause 21-this clause makes certain clarificatory amendments clause 22-this clause empowers the state government to issue directions to the board on questions of policy clause 23-the reasons for the amendment are the same as those for the amendment made by clause 9   clatls~ 24-this clause entitles a licensee to require the board to purchase his undertaking in the event of his generating station having been closed down by the board clause 25-this clause entitles a licensee to take into account-(i) certain proportion of the taxes on income and profits paid by him; and (ii) interest on the depreciated cost of the transmission lines, for the purpose of computation of the amount to be recovered by him from the board for the use of his transmission lines clause 26-(a) this amendment is consequential on the amendment made by clause 14 (b) paragraph 1 of the sixth schedule has been redrafted so as to make the intention clear a, licensee is required to give notice to the state government and the board before increasing his rates the excess of clear profit over the amount of "reasonable return" which would warrant revisinn of rates by the licensee has been reduced from 30 per cent to 15 per cent of the reasonable return (c) this prescribes the manner for the utilisation of the excess of clear profit over the amount of reasonable return (d) this provides that, in the event of the undertaking changing hands, the balance remaining in the contingencies reserve shall be transferred to the purchaser without any additional consideration (e) 'the amendment made is consequential on the deveiopment rebate permitted under the provisions of section 8 of the finance act, 1955 (f) this provides that the funds invested by a licensee from his depreciation reserve outside the business of electricity supply should be utilised in the business as soon as it is practicable so to do (g) this provides for payment of taxes on the amounts received by a licensee from the sale of his fixed assets· (h) this provides that until the arrears of depreciation or the previous losses of the licensee are written off, the licensee shall not pay dividend beyond 3 per cent of the share capital or distribute other profits without the consent of the state government (i) the amendment restricts the aggregate remuneration that may be paid to the managing agents or other persons employed for managing the undertaking (j) this provides that a licensee shall not he entitled to claim arbitration during the period between the date of appointment of a rating committee and the date of the orders passed by the state government on the recommendation of the rating committee  (k) (a) (i) this makes it clear that the licensee shall include in the' "capital base" the original cost of only those assets which are actually available for use (ii) this prevents the licensee from including in the 'capital base' investments made by him out of his depreciation fund before the coming into force of the act (iii) this is a formal amendment (iv) this amendment is related to the amendment made by subclause (b) (ii) (v) provision is being made for the deduction of certain deposits and reserves from the 'capital base'   (b) (i) this prevents the licensee from charging to revenue the expenses which have not been properly incurred by him (ii ) this permits the charging to revenue of interest on all loans advanced to the licensee by the board, whether under section 23 or under paragraph 1 of the first schedule to the act earning of reasonable return on such loans is not being allowed [vide sub-clause (a) (iv)]  (iii) this is a formal amendment (it,) this makes it clear that interest on loans and debenture other than those advanced by the state eleevici~beuclis iiot to be charged to revenue (v) this provides for payment of bonus to staff (c) (i) this permits the writing off of previous losses to the extent permitted by the state government (ii) this amendment is formal (iii) this amendment is consequential on the amendment made by clause 26 (e) (d) this prevents the charging to capital account of interest on capital expenditure incurred from borrowed money during "the period of construction of an asset (e) (i) this permits the earning of dividend by the licensees only on those investments which are not permitted to earn 'reascmabl return' (ii) this is consequential on the amendments made by clause 26 (k) (b) (ii) <f) this links the "standard rate" of "reasonable return" to the prevailing bank rate and fixes it at 2 per cent 'above the latter clawe 27-(a) the amendment is consequential on the amendment made by clause 14 (b) and (c) these amendments are formal (d) this enlarges the table of assets and their pl1eecribed periods clause 28, sub-clawe (a) -this entitles the board to take into account a proper proportion of all taxes on income and profits paid by it, for the purposes of determining the cost of production of electricity sub-clawe (b)-this entitles the board to take into account interest on the depreciated cost of the generating station, for the purposes of determining the cost of production of electricity  annexure fttuc'l's bom the electricity (supply) act, 1948 (act no liv of 1948) '" '" '" 1 shof't title, utmlt and commencement-til lit - - (3) this section and sections 3, 4, 57, 58, 77 and 83 and the sixth schedule and the table appended to the seventh schedule of this act shall come into force at once '" - '" - 2 interpretation-in this act, unless there is anything repugnant in the subject or context,-- '" - '" '" (8) "maximum demand" means, in respect of any period twice the largest number of kilowatt-hours supplied and taken during any consecutive thirty minutes (calculated from either the commencement or the middle of an hour) in the period; - - -  chapi'er m state electricity boor485 con3titution and co'rj'q)osition of state electricity boards-- - - - (4) of the members, one shall be a person of proved administrative ability and commercial experience; one shall be an electrical engineer with wide experience; and one shall be an accountant with experience of the electricity supply industry or other public utility - '" '" '" 10 removal' or 3uspension of members-'" '" -  (e) in the opinion of the state government has failed or is unable to carry out his duties so as to render his suspeleion or removal, as the case may be, necessary; or ·   -16 state electricity council-(l) the state government shall constitute a state electricity council for the state, and in cases to which sections 6 and 7 apply, the state governments concerned shall constitute such one or more state electricity council or councils and for such areas as they may by agreement determine  (2) the state electricity council shall consist of the members of the board and such other persons being not less than seven 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 and labour employed in the electricity supply industry, 'but so that there shall be at least one member representing each such interest in the council (3) the chairman of the board shall be ex-officio chairman of the state electricity council (4) the state electricity council shall meet at least once in every three months (5) the functions gf the state electricity council shall be as fol1ows:-(i) to advise the board on major questions of policy and major , schemes; (ii) to review the progress and the work of the board from time to time; (iii) to consider such other matters as the board may place before it; and (iv) to consider such matters as the state government may by rules prescribe (6) the board shall place 'before the state electricity council the annual financial statement and supplem~tary statement, if any, before submitting such statement to the state government under section 61 together with copies of the report and proceedings  - - - - %3 loans by board to licensees - - - - (2) the board in the discharge of its functionfl may call upon a licensee to expand his undertaking and offer to advance to him a loan on such terms and conditions as it may deem proper for such expansion, and if the licensee refuses, fails or neglects to accept the ioan from the board on the terms and conditions offered or to raise a loan from other sources or to employ his own funds on terms similar to the terms offered by the boarci for purposes of such expansion and to carry out such expansion, the board may, after giving the licensee six months' notice in writing, purchase his  undertaking  - - - - 26 board to have powers and obligations of licensee under act ix oj 19l0-subject to the provisions of this act, the board shall, in respect of the whole state, have all the powers and obligations oi a licensee under the indian electricity act, 1910 (ix of 1910), and this act shall be deemed to be the licence of the board for the purposes of that act: provided that nothing in sections 3 to 11, sub-sections (2) and (3) of section 21 and sections 22, 23 and 27 of that act or in clauses i to xii of the schedule to that act relating to the duties and obligations of a licensee shall apply to the board - -  - 29 publication and sanctioning of schemes-(l) the b9ard shall cause every scheme prepared under section 28 to be published in the official gazette and in such local newspapers as it may consider necessary, and 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 involved and of the initial and ultimate revenues anticipated from the sale of energy, meter rentals and other services (2) 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, and shall publish the scheme as sanctioned by it; and where the scheme has been sanctioned in respect of part of the said area, it may subsequently 'be sanctioned in respect of other parts of that area: provided that no sanction shall be accorded by the board to any scheme or part of a scheme estimated to result in a capital expenditure exceeding fifty lakhs of rupees 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:   -  55 licensees to comply with board's directidns-e:very licenset! shall comply with such directions as the board may from time to time give him for the purpose of achieving the maximum of economy and ehiciency in the operation of the station - -  - 57 licensees' charges to consumers-(1) the provisions of the sixth schedule and the table appended to the seventh schedule shall be deemed to be incorporated in the licence of every licensee, not being a local authority, from the date of the commencement of the licensqe's next succeediug year of account, and from such date the licensee shall comply therewith accordingly and any provisions of such licence or of the indian electricity act, 1910 (ix of 1910), or any other law, agreement or instrument applicable to the licensee shall, in relation to the licensee, be void and of no effect in so far as they are inconsistent with the provisions of this section and the said schedule and table (2) where the provisions of the sixth schedule and the table appended to the seventh schedule are under sub-section (1) deemed to be incorporated in the licence of any licensee, the following provisions shall have effect in rp lation to the said licensee, namely:-(a) the board, or where no boarn is constituted under this act the state government, may, if it is satisfied that the licensee has failed to comply with any provision of the sixth schedule, and shall when requested so to do by the licensee constitute a rating committee to examine the licensee's charger for thp loupply of electricity and to recommend thereon to the state government: provided that no rating committee shall be constituted in respect of a licensee within three years from the date on which such a committee has reported in respect of that licensee, unless the state government declares that in its opinion circumst~ces have arisen rendering the orders passed on the recommendations of the previous rating committee unfair to the licensee or any of bis consumers (b) the \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 making recommendations (and giving reasons therefor) regarding the charges for electricity which the licpnree may make to any class or classes of consumers so however that the recommendations are not likely to prevent the licensee from earning clear profits sufficient when taken with the sums available in the tariffs and dividends control reserve to afford him a reasonable return during his next succeeding three years of accounts if the potentialities of the undertaking of the licensee, with· efficient operation and management, so permit (c) within one month after the receipt of the report under clause (b) the state government shall cause the report to be published in the official gazette, and may, at the same time make an order in accordance therewith fixing the licensee's charges for the supply of electricity with effect from such date, not earlier than two months or later than three months after the date of publication of the report, as may be specified in the order; and the licensee shall forthwith give effect to such order: provided that nothing in this clause shall be deemed to prevent a licensee from reducing at any time any charge~ so fixed (3) where a board is constituted under this act, the rating committee shall consist of three members, two of whom shall be members of the board and one shall be a repre~entative, co-optedby the two members of the board from a licensees' association of which the licensee concerned is or is eligible to be a member or, if there is no such association, from such chamber of commerce or similar body as the board may direct; one of such members of the board shall be experienced in accounting and financial matters and one of the members of the board shall be the chairman of the committee (4) where no board is constituted under this act, the ratin/! committee shall consist of five members of whom the chairman and two other members shall be nominated by the state government, one member shall be nominated by the licensee and one member shall be nominated by the local electric licensees' association, or if there is no such association, by such chamber of commerce or similar body as the state government may direct (5) of the three members to be nominated by the state government under sub-section (4), one shall be a person who is or has been a judicial officer not below the rank of a district judge, one shall be a registered accountant having at least ten years' experience and one shall be a person with administrative experience  - - - 61 priotity of liabilities of the board-- - - - (vi) repayment of principal and interest on sums paid by the state government under guarantees under section 66; - - - - - -  (viii) contribution to general reserve of an amount not exceeding one per centum per annum 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 eight per centum of the original cost of such fixed assets, - -  - (x) of the balance remaining, one-half in the reduction of tariffs or for such other purposes beneficial to el~ctrical development in the state, as the board may think fit, and the remaining one-half as far as available in the following order, namely:-(a) repayment of interest-free loans; (b) to state revenues 68 depreciation reserve-the broad shall create a depreciation reserve and, as far as compliance with the provision of section 67 makes it practicable, shall at the end of every year credit to such reserve from its revenues-(i) sums ascertained in accordance with the seve~th sc'ledule, and (ii) interest at the rate of three per centum per annum on all sums at credit of the depreciation reserve on i:h  first day of thp said year: provided that if in any year it is not practicable fully to comply with the provisions of this section, the amount by which the sums actually credited falls short of the amount required under this section in respect of that year shall be carried forward and, together with compound interest thereon at the aforesaid rate, shall be credited to the said reserve as soon as it is found possible in 'accordance with section 67 so to do 89 accounts and audit-(l) the- broad shall cause to be maintained such proper books of account and other books in relation to its accounts as the regulations may require, and shall prepare in accordance with the rules an annual statement of accou~ts, (2) the accounts of the board shall be audited concurrently and annually by a person who shall 'be qualified under the provisions of section 144 of the indian companies act, 1913 (vii of 1913), to act as an auditor of companies and who shall be appointed by the state government (3) as soon as the accounts of the board have been audited, the board shall send a copy thereof together with a copy of the report of the auditor thereon to the state government, and shall cause the accounts to be published in the prescribed manner and place copies thereof on sale at a reasonable price (4) the board shall comply with such orders and instructions, as the state government may, upon perusal of the "eport of the auditor, think fit to issue - - - - 77 penalties and p1'ocedure-(l) if any licensee or other person fails without reasonable excuse to comply with or give effect to any direction, order or requirement made under section 55 or under clause (c) of sub-section (2) of section 57 or under section 58 or under sub·section (3) of section 75, he shall be deemed to have committed an offence under this section and shall be punishable with fine which may extend to five hundred rupees, and in the case of continuing offence with an additional fine which may extend to fifty rupees for every day after the first during which the offence continues (2) where any licensee or other person is a firm, company or other body corporate, every partner, managing director, manager, secretary or other responsible officer thereof shall, unless he proves that an offence under this section was committed without his knowledge or that he exercised all due diligence to prevent its commission, be deemed to be guilty of the offence (3) no court shall take cognizance of an offence under this section except on the complaint of an officer of the board, or where no board is constituted under this act on the complaint of an officer of the state government, authorised by the board or as the case may be by the state government in this behalf 18 power to make rules-- - - - (2) in particular, and without prejudice to the generality of the foregoing power, such rules may provide for-(a) the term of office of the chairman and other members of the board, the conditions under which they shall be eligible for re'appointment and their remuneration, allowances and other conditions of service; - - - -  the· first schedule[see sections 34 and'25] attunge7mnt in terpect of conttolled ,toticml  part iassumption of control - - - - (2) to enable a licensee to comply with any direction under sub· paragraph (1) requiring extension of the station or any part thereof for purposes of the ltgatd, 'the board may, if it considers it expedient and practicable so to do, offer to advance to him a loan upon such terms and conditions as it may deem proper andtheucensee shall accept the 'loan from the board on the terms and conditions offered,  uniess he raises a loan from other sources or employs his own ,funds 'for purpeses of su¢h extension on terms similar to the terms offered 'ey rthe board: - - - -  tile third schedule[see section36j cloling down of generating stations othef' than controlled stations         -                               -                                                     -    v 'the licensee shall have theop~i'on, to be exercised by a datto not l'aterthan three months prior to the (date of 'closing                                                                            down, ei'ther-          -                                         -                                                                      - -     (b) (i) to require the board to purchase the station at the:date of closing down at a price determined under the fourth schedule, and           -                                        -                          the :rifth ~hedule [see section 41] char{la fot use by' board of transmission line, and main traurnillion                                   line,          -                                     -                                                                -    (b) sums paid in respect of ' the' lines' for insurance and as rents, ra~es and taxes '(including super-tax payable by !the licenpee sa a company but exebldtng otbertaxes !0n profttl);                                     -                                                                -                                      ts    (e) interest on money pt'op81'ly- ,xpeaded for capital purposes (whether defrayed out of capital or revenue) and attributable to the lines, and interest on such working capital as is properly attribut-aljle to the lines:           -                                      -                                                                  -  the sixth schedule[see section 57] - - - l t~licensee uall so ,adjust his rates for the sale of electricity by pteriodical  revision that hib clear pfodtin aay year shall not as far, as possible ejreeed the amount of reasonable return: pi'o¥ided that· the lieensee shall not be considered to have failed so to adjust his' rates if the clear profit in any year of account has not ~eeeded the 'amouat of the reasollable retum by more than thirty per centum of the amount of the reasonable return ii; (1) if·the clear profit of a licensee in any year of account is in excess of the amount of reasonable return, one-third of such excess, not exceeding '1i per cent of the amount of reasonable return, shall· be at the-dispmal of the amdertakiug of the balance of the tm:es6,  oae-aau, saul be appll'opriatedto a i1esejtye which shall be called the tariffs ,anddividedds cootrol,beaenre and the remaining balfshall either, be distributed in the ferm of a proportional rebate oil the amounts couectel!l, from the sde of electricity and meter rentals or carried forwarciiin,tae accounts·ofthe licensee for distribution to tbe consumers in future in such manner as the state government may direct - - - - ix when any, fixed asset is sold fw all amolult exceeding its written down cost the excess shall be credited to the contingencies reserve x except with the consent of the state government no sums shall be carried to a reserve, and no dividends in exc~s of 3 per cent on share capital and no other distribution of profits shall be made tomueaolciers while any sum allowed, in respect of depreciation for~e 1or:ef aaeount·o!r illy instaiments·,due in respect of any arrears of depreciatio,n as provided ig paragraph xi remains to be written-off in the books of the undertaking - - - -  definitions xvn for the purposes of this schedule-(1) "capital base" means the sum of-(8) the original cost of fixed assets, subject to the provision of para xii in respect of service lines; - - - - (d) the amount of investments compulsorily made, under paragraph iv of this schedule, together with such investments made before or after the commencement of this act from contributions towards depreciation 8s may be shown to the reasonable satisfaction of the authority as being amounts which could not be or could not have been utilised by the undertaldn( undet clauses (a) and (b) of this sub-paragraph; (e) an amount on account of working capital equal to the sum of-(i) on~twelfth of the sum of the book cost of stores, materials and supplies including fuel on hand at the end of each month of the year of account; (ii) on~twelfth of the sum of cash and bank balances and call and short term deposits at the end of each month of the year of account, not exceeding in the aggregate an amount equal to one quarter of the expenditure under sub-paragraph 2(b)'of this paragraph excluding clauses (i), (iv) and (x);  ' 1 - (2) "clear profit" meansthe difference between the amount of income and the sum of expenditure plus specific appropriations, made up in each case as follows:-- ;  (b) expenditure incurred on--  - - (tv) interest on loans advanced by the board under subparagraph (2) of paragraph i of the first schedule; - - - - (x) depreciation, computed as hereinafter set out; (xi) other expenses admissible under the law for the tint being in force in the assessment of indian incometax and arising from and ancillary or incident81 to the business of electricity supply; - -      (c) special appropriations sufficient to cover- - (i) previous losses (that is to say excess of expenditure over income) which have arisen from the business of electricity supply to the extent in any year actually appropriated for the purpose in the books of the undertaking;  - (iv) contributions to the contingency reserve, computed as hereinafter set out;  - (6) "original cost" means in respect of any asset the sum of--   - (b) interest charges on capital expenditure incurred from borrowed money and properly attributable to the asset upto the date of bringing it into use at a rate not exceeding average reserve bank rate ruling at that tiple plus one per cent      (9) "reasonable return" means-- -   (b) the income derived from investments other than those made under paragraph iv of this schedule; (c) an amount equal to one-half of one per centum on any loans advanced by the board under sub-paragraph (2) of paragraph i of the first schedule (10) "standard rate" means-5 per centum   - -  the seventh schedule[see section 68 and the fifth and eighth schedules]   - \ - ii (1) save as provided in the fourth and sixth schedules, the bcale of depreciation applicable to the assets specified in the table appended to this schedule in any financial year, and proportionately for any portion of a financial year, shall be an allowance of such amount as would if made annually throughout the prescribea period and accumulated at compound interest at the rate of 4 per centum per annum produce by the end ·of the prescribed period an amount equal to 9q per centum of the original cost of the asset description of asset - - - number of years or period - c assets purchased new-- - - - (i) overhead lines, including supports-(i) lines on steel or reinforced concrete supports, operating at nominal voltages higher than 132 kilovolts thirty (ii) other lines on steel or reinforc ed concrete supports twenty-five (iii) lines on wood supports - - - twenty -  the eighth schedule[see the first and third schedules] determination of cost of production of electricity at generating stations i for the purposes of the first and third schedules, the cost of production of electricity at a generating station shall be ascertained by calculating and taking into account the following costs, charges and allowances in respect of the year of account, namely:-- - - - (b) sums paid in respect o~ the station for insurance and as rents, rates and taxes (including super-tax payable by the licensee as a company but excluding other taxes on profits) j - - (e) interest on money properly expended for capital purposes (whether defrayed out of capital or revenue) and attributable to the station, and interest on working capital properly attributable to th~ station and the production of electricity thereiii: provided that for the puj;;j?ose 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 on which interest is payable out of capital; - - - -  a billfurther to amend the electricity (supply) act, 1948 (shri gulzarilal nanda, minister of irrigation and power) 