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29/02/2024
Laws of Bangladesh

The Electricity Act, 1910

( ACT NO. IX OF 1910 )

Licenses

Purchase of undertaking
7. (1) Where a license has been granted to any person not being a local authority, and the whole of the area of supply is included in the area for which a single local authority is constituted, the local authority shall, on the expiration of such period, not exceeding fifty years, and of every such subsequent period, not exceeding twenty years, as shall be specified in this behalf in the license, have the option of purchasing the undertaking, and, if the local authority, with the previous sanction of the Government, elects to purchase, 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:
 
 
Provided also that there shall be added to such value as aforesaid such percentage, if any, not exceeding twenty per centum on that value as may be specified in the license, on account of compulsory purchase.
 
 
(2) Where-
 
 
(a) the local authority does not elect to purchase under sub-section (1), or
 
 
(b) the whole of the area of supply is not included in the area for which a single local authority is constituted, or
 
 
(c) a licensee supplies energy from the same generating station to two or more areas of supply, each controlled by its own local authority, and has been granted a license in respect of each area of supply,
 
 
the Government shall have the like option upon the like terms and conditions.
 
 
(3) Where a purchase has been effected under sub-section (1) or sub-section (2),-
 
 
(a) 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 in substitution for the undertaking; and
 
 
(b) 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 sub-section (2), the license shall, after purchase, in so far as the Government is concerned, cease to have any further operation.
 
 
(4) Not less than two years' notice in writing of any election to purchase under this section shall be served upon the licensee by the local authority or the Government, as the case may be.
 
 
(5) Notwithstanding anything hereinbefore contained, a local authority may, with the previous sanction of the Government, waive its option to purchase and enter into an agreement with the licensee for the working by him of the undertaking until the expiration of the next subsequent period referred to in sub-section (1), upon such terms and conditions as may be stated in such agreement.

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