NEYVELI LIGNITE CORPORATION LIMITED (ACQUISITION AND TRANSFER OF POWER TRANSMISSION SYSTEM) A

THE NEYVELI LIGNITE CORPORATION LIMITED (ACQUISITION AND TRANSFEROF POWER TRANSMISSION SYSTEM) ACT,1994

ACT No. 56 OF 1994

14thSeptember, 1994

An Act to provide in the public interest for the acquisition andtransfer of the power transmission system of the Neyveli Lignite CorporationLimited and the right, title and interest of the company in the powertransmission system to the Power Grid Corporation of India Limited, with a viewto developing the National Power Grid to ensure transmission of power, withinand across the different regions of India, on a more scientific, efficient andeconomic basis and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Forty–fifth Year of the Republic of India as follows: –

CHAPTER I

PRELIMINARY

1.Short title extent and commencement: (1) This Act may be called theNeyveli Lignite Corporation Limited (Acquisition and Transfer of PowerTransmission System) Act, 1994.

(2) It extends to the whole of India except the State of Jammu and Kashmir.

(3) The provisions of section 8to 11 and section 13 to 16 shall come into force at once and the remainingprovisions of this act shall be deemed to have come into force on the 1st dayof April, 1992 and any reference to the commencement of this Act in anyprovision of this Act shall be construed as a reference to thecommencement of that provision.

2.Definitions: In this Act, unless the context otherwise requires,-–

(a) "appointedday" means the 1st day of April, 1992;

(b) "associatedpersonnel" means the employees of the company associated with its powertransmission system;

(c) "Company" meansthe Neyveli Lignite Corporation Limited, a company incorporated and registeredunder the Companies Act, 1956 (1 of 1956) having its registered office atNeyveli–607801, South Arcot District, Tamil Nadu.

(d) "Corporation"means the Power Grid Corporation of India Limited, being a company within themeaning of the Companies Act, 1956 (1 of 1956) and having its registered officeat Hemkunt Chambers, 89, Nehru Place, New Delhi–110019;

(e) "notification"means a notification published in the Official gazette;

(f) " powertransmission system", in relation to the company, means the maintransmission lines [including extra high voltage -alternative current (EHVAC)lines and high voltage direct current (DVDC) lines] and sub–stationsowned by the company;

(g) "prescribed"means prescribed by rules made under this Act;

(h) wordsand expressions used herein and not defined but defined in the Electricity(Supply) Act, 1948 (54 of 1948.) or, as the case may be, the Companies Act,1956 (1 of 1956.) shall have the meanings, respectively assigned to them inthose Acts.

CHAPTER II

ACQUISITION AND TRANSFER OF POWER TRANSMISSION SYSTEM

3.Acquisition of rights of company inrelation to the power transmission system: (1) On the appointed day, the power transmissionsystem and the right, title and interest of the company in relation to itspower transmission system shall, by virtue of this Act, be deemed to have beentransferred to, and vested in, the Central Government.

(2) The power transmissionsystem vested in the Central Government by virtue of sub–section (1)shall, immediately after it had so vested, be deemed to have been transferredto, and vested in, the Corporation.

4.General effect of vesting: (1) The power transmissionsystem shall be deemed to include all assets, rights, leaseholds, powers,authorities and privileges and all property, movable and immovable, relating tosuch system including lands, ,buildings, workshops, projects (whether completeor at any stage of completion or planning), stores, spares, instruments,machinery and equipment, construction equipment, unutilised long–termand short–term loans and all other rights and interests in, or arisingout of, such property as were, immediately before the appointed day, in theownership, possession, power or control of the company and all books ofaccount, registers and all other documents of whatever nature relating theretobut shall be deemed not to include –

(a) bookdebts due to the company, immediately before the appointed day;

(b) cashbalances and bank balances as on the appointed day;

(c) incomeand expenditure on revenue account relating to any period before the appointedday.

Explanation: For theremoval of doubts, it is hereby declared that rights in relation to the powertransmission system of the company which have been transferred to, and vestedin, the Corporation under sub–section (2) of section 3 and this sub–sectionshall include the right to collect transmission charges for transmission ofpower and any monies collected on or after the appointed day by the company astransmission charges (whether shown separately or not) shall be payable by thecompany to the Corporation.

(2) Unless otherwise expresslyprovided by this Act, all deeds, bonds, guarantees (other than guarantees givenby the Government of India), agreements, powers of attorney, grants of legalrepresentation and other instruments of whatever nature in relation to thepower transmission system of the company, subsisting or having effectimmediately before the appointed day, and to which the company is a party orwhich are in favour of the said company shall be of as full force and effectagainst or in favour of the Corporation and may be enforced or acted upon asfully and effectual as if in the place of the company, the Corporation had beena party thereto or as if they had been issued in favour of the Corporation.

(3) If, on the date ofcommencement of this Act, any suit, appeal or other proceeding of whatevernature, in relation to any property or assets which have been transferred to,and vested in, the Corporation under sub–section (2) of section 3,instituted or preferred by or against the company was pending, the same shallnot abate, be discontinued or be, in any way, prejudicially affected by reasonof the transfer of the power transmission system of the company or of anythingcontained in this Act, but the suit, appeal or other proceeding may becontinued, prosecuted or enforced, subject to the provisions of sub–section(1) of section 5, by or against the Corporation.

5.Corporation to be liable for certain priorliabilities: (1)Subject to the provisions of sub–section (2), every liability of thecompany in relation to its power transmission system, in respect of any periodprior to the appointed day, which has been transferred to, and vested in, theCorporation under sub–section (2) of section 3, shall be the liabilityof the Corporation and shall be enforceable against the Corporation and notagainst the company:

Provided that nothing containedin this sub–section shall apply to –

(a) theincome and expenditure on revenue account relating to any period before theappointment day and received or, as the case may be, incurred by the company onor after the appointed day;

(b) arrearsof depreciation, regarding contingent liabilities on capital account relatingto any period before the appointed day, arising on account of the decision ofany court, tribunal or other authority.

(2) Where any repayment of aloan or interest, or both, has been made, on or after the appointed day, by thecompany to any lending agency, such repayment shall be deemed to have been madeby the Corporation and the amount of such repayment shall be reimbursed by theCorporation to the company on adjustment of transmission charges or any otheramount due to the Corporation from the Company.

6.Corporation to be lessee ortenant: (1) Where any property is heldby the company in relation to its power transmission system under any lease orright of tenancy, the Corporation shall, on and from the appointed day, bedeemed to have become the lessee or tenant, as the case may be, in respect ofsuch property as if the lease or tenancy in relation to such property had beengranted to the Corporation and thereupon all the rights under such lease ortenancy shall be deemed to have been transferred to, and vested in, theCorporation.

(2) On the expiry of the termof any lease or tenancy referred to in sub–section (1), such lease ortenancy shall, if so desired by the Corporation, be renewed on the same termsand conditions on which the lease or tenancy was held by the companyimmediately before the appointed day.

7.Removal of doubts: (1) For the removal of doubts,it is hereby declared that the provisions of section 3, 4, 5 and 6 shall applyto the extent to which any property appertains to the business relating to thepower transmission system carried on by the company and to the rights andpowers acquired, and to debts, liabilities and obligations incurred, and tocontracts, agreements and other instruments made by the company and to legalproceedings relating to those matters pending in any court, tribunal or otherauthority in India.

(2) If any question arises asto whether any property appertained, on the appointed day, to any business ofthe company in relation to its power transmission system, or whether manyrights, powers, debts, liabilities or obligations were acquired or incurred orany contract, agreement or other instrument was made by the company for thepurposes of its said business, or whatever any document relates to thosepurposes, the question shall be referred to the Central Government which shall,after giving a reasonable opportunity of being heard to the persons interestedin the matter, decide it in such manner as it may think fit.

8.Payment of amount: (1) For the transfer to, andvesting in, the Central Government under section 3 and 4 of the powertransmission system and the right, title and interest of the company inrelation to its power transmission system there shall be paid, in theprescribed manner, by the Central Government to the company such amount as isequal to the book value of all the assets and properties after deduction ofliabilities (other than contingent liabilities) given in the audited statementof accounts of the company as on the 31st day of March, 1992.

(2) For the transfer to, andvesting in, the Corporation under sub–section (2) of section 3 of thepower transmission system and the right, title and interest of the company inrelation to its power transmission system, there shall be paid, in theprescribed manner, by the Corporation to the Central Government, the amountwhich is paid by that Government to the company under sub–section (1).

(3) In case of any disputerelating to the nature of any asset, property or liability or the amountpayable under sub–section (1), the dispute shall be referred by theCentral Government to such authority as it may point and the decision of thatauthority in the matter shall be final.

CHAPTER III

DELIVERY OF ASSETS, ETC., TO THE CORPORATION

9.Duty of persons to accountfor assets, etc., in their possession: (1) Any person who has, on the date of commencementof this Act, in his possession or under his control, any assets, books and anyother documents relating to the power transmission system which has beentransferred to, and vested in, the Corporation under sub–section (2) ofsection 3, shall be liable to account for the said assets, books and documentsto the Corporation and shall deliver them up to the Corporation or to suchperson or persons as the Corporation may specify in this behalf.

(2) The Corporation may take orcause to be taken all necessary steps for securing possession of the powertransmission system which has been transferred to, and vested in, theCorporation under this Act.

(3) The company shall, withinsuch period as the Corporation may allow in this behalf, furnish to theCorporation a complete inventory of all its property and assets as on theappointed day pertained to its power transmission system which has beentransferred to, and vested, in the Corporation under sub–section (2) ofsection 3.

CHAPTER IV

PROVISIONS RELATING TO ASSOCIATED PERSONNEL

10.Continuance of associatedpersonnel: (1) on the vesting of thepower transmission system of the company in the Corporation, the associatedpersonnel who have been, immediately on or before the 1st day of December,1992, employed in the company and have not already become employees of theCorporation shall become, on and from the date of commencement of this Act,employees of the Corporation and shall hold office or service under theCorporation on the terms and conditions which are not in any way lessfavourable than those which would have been admissible to them if there hadbeen no such vesting and shall continue to do so unless and until theiremployment under the Corporation is duly terminated or until their remunerationand other conditions of service are duly altered by the Corporation

(2) Notwithstanding any thingcontained in the Industrial Disputes Act, 1947 (14 of 1947), or any other lawfor the time being in force, the transfer of the services of the associatedpersonnel to the Corporation, shall not entitle such personnel to anycompensation under this Act or any other law for the time being in force and nosuch claim shall be entertained by any court, tribunal or other authority

11.Provident fund and otherfunds: (1) Where the company hasestablished a provident fund or any other fund for the benefit of the personsemployed by it, the monies relatable to the associated personnel who havealready become employees of the Corporation or whose service have becometransferred under this Act to the Corporation shall, out of the moniesstanding, on the date of transfer of the associated personnel, to the credit ofsuch provident fund or other fund, stand transferred to, and vested in, theCorporation.

(2) The monies which standtransferred under sub–section (1) to the Corporation shall be dealt withby the Corporation in such manner as may be prescribed.

CHAPTER V

MISCELLANEOUS

12.Act to have overridingeffect: The provisions of this Actshall have effected notwithstanding anything inconsistent therewith containedin any other law for the time being in force or in any instrument havingeffected by virtue of any law, other than this Act, in any decree or order ofany court, tribunal or other authority.

13.Penalties: Any person who, –

(a) havingin his possession, custody or control any property forming part of the powertransmission system of the company wrongfully withholds such property from theCorporation; or

(b) wrongfullyobtains possession of, or retains, any property forming part of the powertransmission system of the company; or

(c) wilfully withholds or failsto furnish to the Corporation or any person or body of persons specified by theCorporation, any documents or inventory relating to the power transmissionsystem of the company, which may be in his possession, custody or control, or

(d) fails to deliver to theCorporation or any person or body of persons specified by that Corporation, anyassets, books of account, registers or other documents in his possession,custody or control relating to the power transmission system of the company,

shall be punishable withimprisonment for a term which may extend to two years and also with fine whichmay extend to ten thousand rupees.

14.Offencesby companies: (1)Where an offence punishable under this Act has been committed by a company,every person who, at the time the offence was committed, was in charge of, andwas 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 shallbe liable to be proceeded against and punished accordingly:

Provided that nothing containedin this sub–section shall render any such person liable to anypunishment, if he proves that the offence was committed without his knowledgeand that he had exercised al due diligence to prevent the commission of suchoffence.

(2) Notwithstanding anythingcontained in sub–section (1), where any offence under this Act has beencommitted by a company and it is proved that the offence has been committedwith the consent or connivance of, or is attributable to any neglect on thepart of, any direction, manager, secretary or other officer of the company,such director, manager, secretary or other officer shall be deemed to be guiltyof that offence and shall be liable to be proceeded against and punishedaccordingly.(Offences by companies.)

Explanation: For thepurposes of this section:

(a) "company"means any body corporate and includes a firm or other association ofindividuals; and

(b) "director",in relation to a firm, means a partner in the firm.

15.Protectionof action taken in good faith: No suit, prosecution or other legal proceeding shall lie againstthe Central Government or the Corporation or the company or any officer of thatGovernment, Corporation or company or any other person authorised by thatGovernment, Corporation or company for anything which is in good faith done orintended to be done under this Act.

16.Powerto make rules: (1) TheCentral Government may, by notification, make rules for carrying out theprovisions of this Act.

(2) In particular, and withoutprejudice to the generality of the foregoing power, such rules may provide forall or any of the following matters, namely:—

(a) themanner in which the amount is to be paid under sub–section (1) or sub–section(2) of section 8;

(b) themanner in which the monies in any provident fund or other fund, referred to insub–section (2) of section 11, shall be dealt with;

(c) anyother matter which is required to be, or may be, prescribed.

(3) Every rule made by theCentral Government under this Act shall be laid, as soon as may be after it ismade, before each House of Parliament, while it is in session, for a totalperiod of thirty days which may be comprised in one session or in two or moresuccessive sessions, and if, before the expiry of the session immediatelyfollowing the session or the successive sessions aforesaid, both Houses agreein making any modification in the rule or both Houses agree that the ruleshould not be made, the rule shall thereafter have effect only in such modifiedform or be of no effect, as the case may be; so, however, that any suchmodification or annulment shall be without prejudice to the validity ofanything previously done under that rule.

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