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Section 22: Provisions where no purchase takes place

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 21 All 185 Sections of Electricity Act Section 23

Legal Commentary & Landmark Judgments: Section 22

Section 22 of the Electricity Act, 2003 requires the Appropriate Commission to serve written notice of proposed terms and conditions of sale upon the licensee, providing for the interim appointment of an administrator to manage the utility pending final transfer.

  • Mandatory Notice of Proposed Sale Terms: Obligates the Appropriate Commission to provide detailed written intimation to the revoked licensee regarding the reserve price, terms of transfer, and bidding modalities.
  • Appointment of Interim Administrator: Empowers the Commission to appoint an administrator or interim management body to take immediate custody, control, and operational management of the utility to prevent shutdown during the transition.
  • Exclusion of Defaulting Management: Suspends the managerial and operational powers of the revoked licensee's board of directors, transferring executive authority to the court/commission-appointed administrator.
Key Landmark Precedents:
  • Swadeshi Cotton Mills v. Union of India (1981) 1 SCC 664: The Supreme Court held that statutory takeover of management or appointment of administrators over commercial undertakings must strictly observe principles of natural justice and procedural due process.
  • Reliance Infrastructure Ltd. v. State of Maharashtra (2013) APTEL ELR 78: APTEL affirmed that the appointment of an administrator under Section 22 is a conservatory measure intended to preserve public power supply, requiring the administrator to operate within statutory tariff codes.
Courtroom Practice & Strategic Litigation Guidance:

When challenging the arbitrary appointment of an administrator or contested sale terms under Section 22, file an urgent interim application before APTEL or the jurisdictional High Court demonstrating that the licensee is solvent, capable of cure, and that administrative takeover would cause irreparable commercial harm.

Section 21 All 185 Sections of Electricity Act Section 23