LICENSE (Sections twelve to twenty-four)
Section twelve. (Authorized persons to transmit, supply, etc., electricity):
Which activities need a license (Section twelve)
Section thirteen. (Power to exempt):
Who can supply in rural areas without license?
Why is government involvement needed?
Two. Who grants a license (Section fourteen)
Authority: Licenses are granted by the Appropriate Commission (Regulator).
Why regulator (commission) grants licenses
"Deemed Licensee" - what it means (Provisos of section fourteen)
Simple meaning of "deemed"
b. Central Transmission Utility and State Transmission Utility
c. Appropriate Government as a participant in the sector
d. Damodar Valley Corporation
e. Government companies formed through unbundling of State Electricity Boards
f. Parallel licensing in distribution: a pathbreaking feature
g. Franchisee of a distribution licensee
h. Distributed generation for rural electrification
i. Distribution licensee engaging in trading
Section fifteen: Procedure for grant of licence
Fifteen two - Applicant must publish notice within seven days
Fifteen two ii - Central Government's no-objection in defence-sensitive areas
Fifteen three - Special rule for a transmission licence applicant
Fifteen four - CTU or STU can give recommendations within thirty days
Fifteen six - Commission should decide within ninety days
Fifteen seven - After licence is issued, copies must be sent
Fifteen eight - Duration of licence
Section sixteen: Conditions of licence
What is the meaning of "general or specific conditions"?
Proviso to Section sixteen
Simple meaning of this proviso
SECTION SEVENTEEN - LICENSEE NOT TO DO CERTAIN THINGS
Seventeen (one) - No acquisition or merger without prior approval
Proviso to Section Seventeen (one) - Exception for utilities in different States
Seventeen (two) - One month's notice to other licensees in the area
Seventeen (three) - No assignment of licence or transfer of utility without prior approval
Seventeen (four) - Agreement without prior approval is void
The important legal doubt: can a deemed licensee's licence be revoked?
Section Eighteen - Amendment of licence
Eighteen (one) - Commission may amend licence in public interest
Proviso to Eighteen (one) - Consent of licensee normally needed
Section Eighteen (two) - Procedure before amendment
Eighteen (two) (a) - If the licensee applies for amendment, it must publish notice
Eighteen (two) (b) - Central Government consent for defence- sensitive areas
Eighteen (two) (c) - If Commission proposes amendment on its own, it must publish notice
Eighteen (two) (d) - Suggestions and objections within thirty days must be considered
Section Nineteen - Revocation of licence
Nineteen (one) - When can the Commission revoke a licence?
Nineteen (one) (a) - Wilful and prolonged default
Nineteen (one) (b) - Breach of licence conditions
Nineteen (one) (d) - Weak financial position
Nineteen (two) - Revocation with application or consent of the licensee
Nineteen (three) - Minimum three months' written notice before revocation under Nineteen (one)
Nineteen (four) - Instead of revocation, Commission may impose further conditions
Nineteen (five) - Notice of revocation and effective date
Nineteen (six) - Licensee may sell utility after notice, with prior approval
Difference between cancellation and revocation
Section Twenty - Sale of utilities of licensees
Twenty (one) (a) - Commission invites applications to acquire the utility
Twenty (one) (b) - Commission may direct the licensee to sell
Twenty (one) (c) - Rights and obligations cease
Twenty (one) (d) - Interim arrangements
Twenty (one) (e) - Administrator's powers
Twenty (two) - Purchaser pays purchase price
Twenty (three) - Delivery of utility
Twenty (four) - Purchaser may operate utility even before sale is formally completed
Section twenty-one - Vesting of utility in purchaser
twenty-one (a) - Utility passes to the purchaser free from old debts
twenty-one (b) - Purchaser becomes the licensee
Section twenty-two - What happens if no purchase takes place
twenty-two (one) - Commission may issue directions or make a scheme
twenty-two (two) - If Commission does nothing, licensee may dispose of utility
Proviso to twenty-two (two) - If utility is not disposed of within six months
Section twenty-three - Directions to licensees
The Commission can step in and regulate how electricity is supplied or distributed if needed for three major goals:
Easy example of Section twenty-three
The importance of "equitable distribution"
Section twenty-four - Suspension of distribution licence and sale of utility
twenty-four (one) - When can distribution licence be suspended?
Proviso to twenty-four (one) - Reasonable opportunity must be given
twenty-four (two) - Utility vests in the Administrator
twenty-four (three) - Within one year, Commission must choose one of two paths
twenty-four (four) - If licence is revoked, utility must be sold within one year
Difference between suspension and revocation
Sixteen. Reasonable opportunity before suspension
This links the lecture back to principles of natural justice.
One full example covering Sections twenty-one to twenty-four
Step one - Commission considers suspension under Section twenty-four
Step two - Administrator is appointed
Step three - Commission must decide within one year
Step four - Sale process begins under Section twenty
Step five - Utility vests in purchaser under Section twenty-one
Step six - If sale does not happen
Then under Section twenty-two, the Commission may:
Step seven - Separate example of Section twenty-three
Case law: two thousand six Odisha distribution case
Case law: two thousand seventeen follow-up Odisha case
Case law: transmission licence revoked due to project delay
Case law: NTPC Vidyut Vyapar Nigam and deemed licence
Case law: SI Electrical Power and rural area notification
Case law: Section twenty-three directions do not extend to generating companies
Case law: Railways and the special status under the Railways Act