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The Electricity Act, 1910

( ACT NO. IX OF 1910 )


Provisions where license of licensee, not being a local authority, is revoked
5. Where the Government revokes under section 4, sub-section (1), the license of a licensee, not being a local authority, the following provisions shall have effect, namely:-
(a) the Government shall serve a notice of the revocation upon the licensee, and, where the whole of the area of supply is included in the area for which a single local authority is constituted, upon that local authority also, and shall in the notice fix a date on which the revocation shall take effect; and on and with effect from that date, all the powers and liabilities of the licensee under this Act shall absolutely cease and determine;
(b) where a notice has been served on a local authority under clause (a), the local authority may, within three months after the service of the notice, and with the written consent of the Government, by notice in writing, require the licensee to sell, and thereupon the licensee shall sell, the undertaking to the local authority on payment of the value of all lands, buildings, works, materials and plant of the licensee suitable to, and used by him for, the purposes of the undertaking, other than a generating station declared by the license not to form part of the undertaking for the purpose of purchase, such value to be, in case of difference or dispute, determined by arbitration:
Provided that the value of such lands, buildings, works, materials and plant shall be deemed to be their fair market-value at the time of purchase, due regard being had to the nature and condition for the time being of such lands, buildings, works, materials and plant, and to the state of repair thereof, and to the circumstance that they are in such a position as to be ready for immediate working, and to the suitability of the same for the purposes of the undertaking, but without any addition in respect of compulsory purchase or of goodwill or of any profits which may be or might have been made from the undertaking, or of any similar considerations:
Provided further that where a case has been referred to arbitration, the local authority shall subject to adjustment against the value that may be finally determined by Arbitration, make payment in advance of seventy five per cent. of the amount of such value estimated to be fair by such local authority:
Provided further that before making such payment, the local authority may, after giving the licensee an opportunity of being heard, deduct from such sum any debts and dues payable to Government by such licensee.
(c) where the public interest so requires the Government may, if it thinks fit, elect to purchase the under taking immediately after revoking the license of the licensee under section 4 and licensee shall sell the undertaking to the Government.
(d) where the Government elects to purchase the undertaking, it may take over work the undertaking pending completion of the sale upon terms and conditions similar to those set forth in clause (b) and the licensee shall make over the undertaking to the Government on the date and time fixed by it.
(e) where a purchase has been effected under any of the preceding clauses,-
(i) the undertaking shall vest in the purchasers free from any debts, mortgages or similar obligations of the licensee or attaching to the undertaking:
Provided that any such debts, mortgages or similar obligations shall attach to the purchase-money is substitution for the undertaking; and
(ii) the revocation of the license shall extend only to the revocation of the rights, powers, authorities, duties and obligations of the licensee from whom the undertaking is purchased, and, save as aforesaid, the license shall remain in full force, and the purchaser shall be deemed to be the licensee:
Provided that where the Government elects to purchase under clause (d), the license shall, after purchase, in so far as the Government is concerned, cease to have any further operation;
(f) where no purchase has been effected under any of the foregoing clauses, the licensee shall have the option of disposing of all lands, buildings, works, materials and plant belonging to the undertaking in such manner as he may think fit:
Provided that, if the licensee does not exercise such option within a period of six months from the date on which the same became exercisable, the Government may forthwith cause the works of the licensee in, under, over, along or across any street to be removed and every such street to be reinstated, and recover the cost of such removal and reinstatement from the licensee;
(g) if the licensee has been required to sell the undertaking, and if the sale has not been completed by the date fixed in the notice issued under clause (a), the purchaser may, with the previous sanction of the Government, work the undertaking pending the completion of the sale.

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Ministry of Law, Justice and Parliamentary Affairs