?Madhyanchal discom pact with CESS untenable? | india | Hindustan Times
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?Madhyanchal discom pact with CESS untenable?

india Updated: Sep 11, 2006 01:16 IST

LEGAL ADVISOR to the UP Electricity Regulatory Commission (UPERC) Justice IS Mathur, has found legally untenable the agreement signed by the Madhyanchal discom with the Cooperative Electric Supply Society (CESS) for latter’s appointment as a franchisee for distributing power to villages under 6 blocks of Lucknow district.

On the other hand, the Madhyanchal (Lucknow) discom is likely to submit the agreement related papers to the UPERC tomorrow for its perusal.

The UPERC had stayed the execution of the agreement signed on September 2 after the UP Rajya Vidyut Upbhokta Parishad filed a petition to it raising many objections. In his petition, Parishad president, Avdhesh Kumar Verma argued that it appeared from the agreement the discom had completely absolved itself of any responsibility and had placed the entire responsibility on the franchisee and it was not clear where the consumer would go when he had a complaint.
He also pointed out that there was provision in the agreement for the safeguards of consumers’ interests.

After staying the execution of the agreement, the UPERC referred the matter to its advisor, Justice IS Mathur for a detailed legal opinion.

In his five-page report submitted to the Commission, Justice Mathur has found force in the Upbhokta Parishad arguments. He opined that the last sentence of paragraph 13 saying that the licensee would not have any responsibility “Is legally not sound and be directed to be deleted directed.”

He further said that the agreement appointing franchisee was in the nature of assignment or transfer of at least part of the licensee, which could not be done without the prior approval of the Commission in view of Sub-Section (3) of Section 17 of the Electricity Act, 2003. “An agreement of this nature, without prior approval of the Commission is void as per Section (4) of Section 17 of the Act.” 

He further observed that CESS was not a person who would ‘generate’ electricity and as such, would not be covered by the 8th proviso to Section 14 of the Act under which the area for which a franchisee was appointed had to be declared a rural area. He said in any case, any agreement between the discom and the CESS required a prior approval of the UPERC.