FIRST SCHEDULE

(Section 138)

TRANSITIONAL PROVISIONS

State Electricity Boards to continue for six months

1. Any State Electricity Board constituted and functioning under the repealed laws may continue to function for upto six months from the appointed date or such earlier date as the State Government may notify, as if the repealed laws were still in force.

Other liences etc. to continue for one year

2. Notwithstanding anything to the contrary contained in this Act, all licences, authorisation, approvals, clearances and permissions granted under the provisions of the repealed laws may, for a period not exceeding one year from the appointed date, continue to operate as if the repealed laws were in force with respect to such licences, authorisations, approvals, clearances and permissions, as the case may be, and on the first anniversary of the appointed date, such licences, approvals, clearances and permission shall be deemed to be authorisations granted under section 5 subject to and in accordance with the conditions specified in this Act and the Rules and Regulations made thereunder.

Other Transitional Provisions for States

3. Notwithstanding anything to the contrary contained in this Act, the State Government may be notification declare that any or all the provisions contained in this Act, other than the provisions of Part VI, shall remain in abeyance within its territory for such period, not exceeding one year from the appointed date, as may be stipulated in the notification. Upon publication of such notification, the provisions, stipulated therein shall remain in abeyance in the territorial jurisdiction of the State Government and the matters contained therein shall be governed as if the repealed laws were in force.

Transitional Provisions relating to Transmission

4. The provisions of Part III with respect to interconnection, wheeling and pooling shall come into effect on the first anniversary of the appointed date or such earlier date as the Union Government may notify, and prior to such anniversary or the date so notified, as the case may be, provisions of the repealed laws in respect thereof shall continue to be in force as if such laws had bot been repealed.

Certain restrictions on setting up Transmission Services

5. The Competent Government may be notification direct that until such date as may be stipulated in the notification, no application for an authorisation to function as a Transmission Provider shall be entertained by the Competent Commission unless it has been recommended by the Central Transmission Utility or the State Transmission Utility, as the case may be, in such manner as may be notified in this behalf.

Constitution and functions of State Transmission Utility

6. (1) Not later than one hundred and twenty days from the appointed date, the State Government shall establish a corporation under the provisions of the Companies Act, 1956 (1 of 1956) to discharge the functions of the State Transmission Utility under this Act.

(2) The State Transmission Utility may be designated by the State Government as the successor entity in respect of all the agreements signed by the State Electricity Board for procurement, transmission and supply of electricity, and may be authorised to enter into fresh agreement for purchase of electricity subject to the approval of the State Commission.

Provided that no agreement for purchase of electricity shall be entered into after the third anniversary of the appointed date; and except to the extent of its rights and obligations arising out of agreements for purchase of electricity continuing to be in force on and after the third anniversary of the appointed date, the State Transmission Utility shall restrict itself solely to the business of transmission in accordance with the provisions of this Act.

Provided further that the State Transmission Utility may, with the consent of an Area Distributor or Distributors, as the case may be, transfer its rights and obligations in respect of any agreement for purchase of electricity to such Area Distributor or Distributors.

(3) Notwithstanding anything to the contrary contained in this Act, the State Transmission Utility may undertake the distribution of electricity in any or all parts of the State upto the first anniversary of the appointed date or such earlier date as the State Government may notify; and thereafter the distribution of electricity shall be undertaken by Area Distributors in accordance with the provisions of this Act.

(4) The State Transmission Utility shall, for a period of five years from the appointed date, be the principal company to undertake all planning and co-ordination in regard to transmission, undertaking the works connected with transmission, determining the electricity requirements in the State in co-ordination with the State Government, all Generating Companies, the State Commission and the central Electricity Authority, the operations of the electricity system.

(5) Subject to the provisions of sub-paragraphs (1), (2) and (3), a number of subsidiary, associated or independent Transmission Providers may be established in the State and the State Commission may grant authorisation under the provisions of this Act to such Transmission Providers.

Reorganisation of the State Electricity Boards

7. (1) With effect from the date on which a transfer scheme prepared by the State Government to give effect to the objects and purposes of this Act is published or such further date as may be specified by the State Government (hereinafter in this part refereed to as the effective date), any property, interest in property, rights and liabilities which immediately before the effective date belonged to the State Electricity Board (hereinafter referred to as the Board) shall vest in the State Government on such terms as may be agreed between the State Government and the Board.

(2) Any property, interest in property, rights and liabilities vesting in the State Government under sub-paragraph (1) shall be re-vested by the State Government in the State Transmission Utility and Generating Company or Companies, or Area Distributor or Distributors, in accordance with the transfer scheme so published along with such other property, interest in property, rights and liabilities of State Government as may be stipulated in such scheme, on such terms and conditions as may be agreed between the State Government and the State Transmission Utility or Generating Company or Companies, or Area Distributor Distributors, as the case may be.

Provided that the transfer value of any assets transferred hereunder shall be determined, as far as may be, based on the revenue potential of such assets at such terms and conditions as may be agreed between the State Government and the State Transmission Utility or Generating Company or Companies or Area Distributor or Distributors, as the case may be.

(3) Notwithstanding anything contained in this paragraph, where, -

(a) the transfer scheme involves the transfer of any property or rights to any person or undertaking not wholly owned by the State Government, the scheme shall give effect to the transfer only for fair value to be paid by the transferee to the State Government.

(b) A transaction of any description is effected in pursuance of a transfer scheme, it shall be binding on all persons including third parties and even if such persons or third parties have not consented to it.

(4) The State Government may, after consulting the State Transmission Utility (the "transferor company") or Generating Company or Companies, or Area Distributor or Distributors, as the case may be, require them to draw up a transfer scheme to vest in a further transferee (the "transferee company") or any Generating Company or Companies, or Area Distributor or Distributors, any of the functions including distribution and supply function, property, interest in property, rights and liabilities which have been vested in the transferor entity or Generating Company or Companies, or Area Distributor or Distributors, as the case may be, under this paragraph, and publish the same as Statutory Transfer Scheme under this Act. The Transfer Scheme to be notified under this sub-paragraph shall have the same effect as the Transfer Scheme under sub-paragraph (2).

Provided that the transfer of any assets transferred hereunder shall be determined, as far as may be, based on the revenue potential of such assets at such terms and conditions as may be agreed between the transferor company and the transferee company.

(5) A transfer scheme may; -

(a) provide for the formation of subsidiaries, joint venture companies or other schemes of division, amalgamation, merger, reconstruction or arrangements that twill promote the profitability and viability of the resulting units, ensure economic efficiency, encourage competition and protect consumer interests;

(b) Define the property, interest in property, rights and liabilities to be allocated -

(i) by specifying or describing the property, rights and liabilities in question;

(ii) by referring to all the property, interest in property, rights and liabilities comprised in a specified part of the transferor's undertaking; or

(iii) Partly in one way and partly in the other;

(c) Provide that any rights or liabilities stipulated or described in the scheme shall be enforceable by or against the transferor company or the transferee company;

(d) Impose on the transferor company an obligation to enter into such written agreements with or execute such other instruments in favour of, any other subsequent transferee as may be stipulated in the scheme;

(e) Make such supplemental, incidental and consequential provisions as the transferor company considers appropriate including provisions stipulating the order as taking effect; and

(f) Provide that the transfer shall be provisional for a specified period.

(6) All debts and obligations incurred, all contracts entered into, all matters and things engaged to be done by the Board, with the Board or for the Board, or the State Transmission Utility or Generating Company or Companies or Area Distributor or Distributors, before a transfer scheme becomes effective shall, to the extent specified in the relevant transfer scheme, be deemed to have been incurred, entered into or done by the Board, with the Board or for the State Government or the transferee and all suits or other legal proceedings continued or instituted by or against the State Government or concerned transferee, as the case may be.

(7) The Board shall cease to be charged with and shall not perform, the functions and duties with regard to transfers made on and after the effective date.

Use of the Proceeds of Privatisation

8. In the event that a Board or any utility owned or controlled by the Competent Government is sold or transferred in any manner to a person who is not owned or controlled by the Competent Government, the proceeds thereof shall be utilised in the following order;

(a) retirement benefits due to the officers and employees who have been affected by the aforesaid sale or transfer; and

(b) retirement of debt or other liabilities of the Transferor Company as required by the existing loan convenants.

Provisions relating to Personnel

9. (1) The State Government may by a transfer scheme provide for the transfer of the personnel to the State Transmission Utility, Generating Company or Companies, Area Distributor or Distributors, as the case may be, on the vesting of projects, rights and liabilities in such transferee utilities as provided under paragraph 7.

(2) Upon such transfer under a transfer scheme, the personnel shall hold office or service under the transferee utilities on such terms and conditions as may be determined in accordance with the transfer scheme.

Provided that such terms and conditions on the transfer shall not in any way be less favourable than those which would have been applicable to them if there had been no such vesting:

Provided further that the transfer can be provisional for a specified period.

Explanation:- For the purposes of this section as well as the transfer scheme the term "personnel" shall mean all persons who on the effective date are the employees of the Board.

Payment of compensation or damages on transfer

10. Notwithstanding anything contained in the Industrial Disputes Act, 1947 (14 of 1947) or any other law for the time being in force and except for the provisions made in this Act, the transfer of the employment of the personnel referred to in sub-paragraph (1) of paragraph 9 shall not entitle such personnel to any compensation or damages under this Act, or any other Central or State law, save as provided in the transfer scheme.

Special Provisions for North-Easter State

11. Notwithstanding anything contained in this Act, any Board, Department or other entity engaged in the business of generating, transmitting and distributing electricity in the State of Arunachal Pradesh, Meghalaya, Nagaland, Tripura, Manipur and Miazoram and in all Union Territories may continue to function as such upto the third anniversary of the appointed date or such earlier date as the State Government may notify.

SECOND SCHEDULE

(Section 139)

LIST OF SAVED ENACTMENTS

1. The Orissa Electricity Reform Act, 1995 (Orissa Act no. 2 of 1996)

2. The Haryana Electricity Reform Act, 1997 (Haryana Act no. 10 of 1998)

3. The Andhra Pradesh Electricity Reform Act, 1998 (Andhra Pradesh Act no. 30 of 1998)

4. The Uttar Pradesh Electricity Reform Act, 1999 (Uttar Pradesh Act no. 24 of 1999)

5. The Karnataka Electricity Reform Act, 1999 (Karnataka Act no. 25 of 1999)

6. The Rajasthan Electricity Reform Act, 1999 (Rajasthan Act no. 23 of 1999).