The Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954

What this document is

The Tamil Nadu Electricity Supply Undertakings (Acquisition) Act, 1954 (Act 29 of 1954) is a law of the State of Tamil Nadu to provide for the acquisition of electricity supply undertakings in Tamil Nadu that supply electricity to the public, other than undertakings belonging to and under the control of the Tamil Nadu Electricity Board constituted under the Electricity (Supply) Act, 1948.

Who it affects

• Electricity supply businesses that operate under a licence or sanction under the Indian Electricity Act, 1910.
• Licensees whose undertakings are taken over by the State Government, or whose undertakings vest in the State Government.
• Buyers, lenders, and investors dealing with assets of an electricity supply undertaking, because the Act deals with vesting and compensation.

What it does in practical terms

• Enables the State Government to acquire an electricity supply undertaking and provides for vesting of the undertaking or assets in the Government.
• Provides for compensation payable to a licensee when an order has been served under the Act, or where an undertaking was taken over before the commencement of the Act.
• Recognises that an undertaking may be an "undertaking taken over" (taken over by the Government after the 1st January 1951 and before the commencement of the Act) and defines a "vesting date".

Key definitions that matter

• "Government" means the State Government.
• "Licensee" includes a person licensed under Part II of the Indian Electricity Act, 1910 to supply electrical energy, or a person with sanction under section 28 of that Act to engage in supplying electricity.
• "Works" includes electric supply lines and lands, buildings, machinery or apparatus required to supply energy and carry out the objects of a licence or sanction.
• "Document" includes books, accounts, registers, maps and plans of the undertaking.

How compensation is determined (as shown in the source text)

The compensation payable to a licensee is determined under one of the bases specified, as may be chosen under the Act.

• Basis A: an amount equal to twenty times the average net annual profit of the undertaking during five consecutive account years immediately preceding the vesting date, with net annual profit determined in the manner laid down in Schedule I.
• Basis B: based on the aggregate value of shares constituting the share capital of the undertaking, with valuation depending on when shares were issued and whether there were quotations or bona fide transfers.
• Basis C: based on the aggregate value of specified book values, including completed works in beneficial use handed over to the Government (excluding works paid for by consumers) less depreciation calculated in accordance with Schedule II, and works in progress handed over (excluding works paid for by consumers or prospective consumers).

Relationship with later law

The source text states that the Act shall cease to apply to any undertaking as defined in the Tamil Nadu Private Electricity Supply Undertakings (Acquisition) Act, 1973 (Tamil Nadu Act 30 of 1973) which had not vested with and been taken possession of by the Government under the 1954 Act before the commencement of the 1973 Act.