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Section 172: Transitional provisions

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 2003
Section 171 All 185 Sections of Electricity Act Section 173

Legal Commentary & Landmark Judgments: Section 172

Section 172 of the Act establishes transitional provisions, ensuring the uninterrupted continuation of State Electricity Boards, licenses, and existing tariffs during the initial phase of the Act's commencement.

  • One-Year Transitional Continuance of SEBs: Permitted State Electricity Boards to continue functioning as deemed transmission and distribution licensees for a maximum period of one year (extendable by agreement).
  • Transitional Grandfathering of Existing Tariffs: Provided that existing tariffs determined under repealed enactments remained valid until superseded by newly determined tariffs under Section 62.
  • Smooth Transition to Competitive Market Regime: Prevented regulatory vacuums and grid collapse during the transition from state monopolies to unbundled corporate structures.
Key Landmark Precedents:
  • Gujarat Urja Vikas Nigam Ltd. v. Essar Power Ltd. (2008) 4 SCC 755: Supreme Court affirmed that transitional provisions under Section 172 ensured administrative continuity while new regulatory authorities were established.
  • Brihanmumbai Electric Supply v. MERC (2013) 4 SCC 71: Affirmed that legacy distribution licenses and operational franchises were transitioned smoothly under Section 172.
  • PTC India Ltd. v. CERC (2010) 4 SCC 603: Affirmed the constitutionality of transitional grandfathering provisions in economic legislation.
Courtroom Practice & Strategic Litigation Guidance:

In disputes involving pre-2003 power purchase contracts, cite Section 172 to demonstrate that lawful agreements transitioned intact into the new statutory regime and remain enforceable before the Regulatory Commission.

Section 171 All 185 Sections of Electricity Act Section 173