Electricity Act • Official Statutory Text & Practice Guide
Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 16 of Electricity Act: Electricity Supply & Regulatory Procedure
Official Bare Act Text
Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary
The Appropriate Commission may specify any general or specific conditions to which a licence shall be subject, and the licensee shall strictly comply with all such conditions.
Legal Commentary & Landmark Judgments: Section 16
Section 16 of the Electricity Act, 2003 authorizes the Appropriate Commission to specify general or specific conditions of licence, mandating strict compliance with the Grid Code, operating norms, investment commitments, and consumer service standards.
Imposition of General and Specific Conditions: Empowers the Commission to attach general conditions applicable to all licensees or specific conditions tailored to an individual licensee's operational, geographic, or financial profile.
Binding Obligation to Comply with Grid Codes: Imposes a mandatory statutory condition requiring every transmission and distribution licensee to observe the Indian Electricity Grid Code or State Grid Code specified under Section 79(1)(h) or 86(1)(h).
Prudential Standards and Consumer Service Charters: Enables the Commission to condition licences upon maintaining debt-equity prudence, capital investment schedules, performance standards, and mandatory consumer grievance redressal frameworks.
Key Landmark Precedents:
PTC India Ltd. v. Central Electricity Regulatory Commission (2010) 4 SCC 603: The Constitution Bench held that the Commission's power to specify licence conditions under Section 16 operates concurrently with its regulatory rulemaking powers, providing wide latitude to enforce market discipline.
NTPC Ltd. v. Central Electricity Regulatory Commission (2007) 14 SCC 344: The Supreme Court held that regulatory conditions attached to licences must promote efficiency and consumer welfare without crippling the licensee's reasonable economic returns guaranteed under Section 61.
Courtroom Practice & Strategic Litigation Guidance:
When resisting onerous or unfeasible licence conditions imposed by a State Commission, demonstrate that the proposed condition infringes the statutory tariff principles of Section 61 or conflicts with CEA technical standards, and petition APTEL under Section 111 for modification.
Legal Commentary & Landmark Judgments: Section 16
Section 16 of the Electricity Act, 2003 authorizes the Appropriate Commission to specify general or specific conditions of licence, mandating strict compliance with the Grid Code, operating norms, investment commitments, and consumer service standards.
When resisting onerous or unfeasible licence conditions imposed by a State Commission, demonstrate that the proposed condition infringes the statutory tariff principles of Section 61 or conflicts with CEA technical standards, and petition APTEL under Section 111 for modification.