The Neyveli Lignite Corporation Limited (Acquisition and Transfer of Power Transmission System) Act, 1994

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The Neyveli Lignite Corporation Limited (Acquisition and Transfer of Power Transmission System) Act, 1994 (Act No. 56 OF 1994) dated 14th September, 1994, was enacted for the purpose of acquiring and transferring the ‘Power Transmission system’ of ‘Neyveli Lignite Corporation Limited’. Such transfer and acquisition is expected to done along with company’s right, title and interest connected with Power Transmission System and further the development of National power Grid is intended with such acquisition and transfer, in order to ensure effective power transmission in both within and across the different Indian regions.

The Act under its Chapter-I provides for preliminary provisions as to short titling the Act, extension and commencement of this Act, wherein the Act was named as aforesaid, and it is given that the same should be extended to the entire India, however, the State of Jammu and Kashmir is excluded from the applicability of this Act. Further, the provision of Section 1(3) of the Act explains that the provisions of this Act should be brought into force on particular dates, especially, the sections (i.e. from sections 8 to 11 and sections 13 to 16 of the Act) to be brought into force or commenced to effect at once. However, remaining other provisions of the Act should be commenced effect as on 1st April, 1992. Further, Section 2 of the Act defines several important terminologies which specifically used or provided under the provisions, for interpreting those provisions of the Act.

Further, the next Chapter i.e. Chapter-II of this Act (from Section 3 to 8 of the Act) makes similar provisions as to the purposes of this Act, wherein Section 3 is explaining that the Power Transmission System and the connecting right, title, etc. of company i.e. ‘The Neyveli Lignite Corporation Limited’, is required to be transferred under the authority of the Central Government on such appointed day. And after such transfer of the Power Transmission System of this company, the same is required to be vested with the Corporation. So far as the effect of such transfer and acquisition is concerned, the Section 4 of the Act says that all the assets, rights, leaseholds, powers, etc. attached with such system and all other relevant stuffs including books of accounts, and civil suits liability etc. to be included under such transfer. On such transfer of Power Transmission system the fifth section requires that all the liability of the concerned company before such transfer should also be transferred to that Corporation as the same is of Corporation’s liability and not of such Company. But the expenditure on revenue and depreciation’s arrears in respect of contingent liabilities on capital account should not be included under those liabilities which are required to be transferred under this provision.

Moreover, the provisions of section 6 requires that whatever properties held by the Company prior to transfer, in connection with its Power Transmission System as lessee or tenant of those properties, then after such transfer the Corporation should acquire the same characters along with all rights thereof even the right to renewal of such lease or tenancy is provided under sub section (2) of Section 2, as it is to be transferred therewith. Even the provisions of the Section 3 to 6 of the Act should be made applicable to the property attached to the business relating to the power transmission system carried on by the Company; also to the rights and powers acquired; to debts, liability and obligations incurred; to contracts, agreements and other instrument made by company and to the legal proceedings pending in Indian Courts. Any question relating thereto should be referred to the Central Government for its decision.

Further, the Section 8 of the Act requires the Central Government to pay as consideration for the amount equivalent to that of book value of all assets, etc. excluding liabilities (except contingent liability) as against transfer of such power transmission system. And after such amount paid by the Central Government, it should be reimbursed to it by Corporation under the subsequent relevant provisions. However, any question as to such amount payable should be decided by the Central Government.

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Similarly, the third Chapter is dealing with provisions for delivery of connected assets, books, etc. to the Corporation on such transfer taking place. The possession of such power transmission system should be taken by the Corporation.  Similarly, complete inventory of all properties and assets of company pertaining to such power transmission system, to be furnished to the Corporation within given period.

The employees of company prior to the transfer of its Power Transmission system, should even after such transfer taken place continue to be employees but of Corporation and not of Company and all conditions as to their service and other relevant conditions which were applicable to them under the employment of company should be same in case of their employment in Corporation. But there should not be any claim by such employees or officers as to compensation under any law. As required under Section 11 of the Act, the fund connected provided fund and other benefits of company’s employees should also be transferred as on such transfer and vesting.

The miscellaneous provisions are given under Chapter V of the Act, including the provisions as to penalty for certain specified Offences explained under different clauses. The highest punishment is given up to ten thousands rupees.

Certain acts of the Central Government or Corporation done in good faith are provided with immunity as the doing of which will not be held as offence. The last provision of the Act is empowering the Central Government as to making of rules similar to the purposes of the Act and on certain matters given under separate clauses under this provision.

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by Faim Khalilkhan Pathan.