Home  /  Electricity Act  /  Section 71

Section 71: Members not to have certain interest

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 70 All 185 Sections of Electricity Act Section 72

Legal Commentary & Landmark Judgments: Section 71

Section 71 of the Act strictly prohibits Members of the Central Electricity Authority from holding certain commercial interests, ensuring technical impartiality by requiring disclosure and divestment of financial interests in the power industry.

  • Conflict of Interest Disqualification Standard: Disqualifies any person from appointment as a Member of the Authority who holds any commercial share, debenture, or financial interest in any power generation, transmission, or trading company.
  • Mandatory Written Disclosure & Divestment: Obligates prospective members to execute written conflict-of-interest disclosures and completely divest commercial power assets prior to assuming office.
  • Maintenance of Institutional Integrity: Protects national technical planning from private commercial bias or corporate capture.
Key Landmark Precedents:
  • PTC India Ltd. v. CERC (2010) 4 SCC 603: Supreme Court affirmed that strict conflict-of-interest prohibitions across statutory electricity bodies are essential to preserve regulatory impartiality.
  • Tata Power Co. Ltd. v. Reliance Energy Ltd. (2009) 16 SCC 659: Affirmed that expert regulatory members must remain completely insulated from private sector commercial allegiances.
  • State of Gujarat v. Utility Users' Welfare Association (2018) 6 SCC 21: Supreme Court emphasized that statutory adjudicatory bodies in the power sector must maintain complete financial and institutional independence.
Courtroom Practice & Strategic Litigation Guidance:

In legal proceedings challenging technical guidelines or project approvals issued by the CEA, review the conflict disclosures of participating members; proven commercial conflicts can be grounds for quashing decisions on bias.

Section 70 All 185 Sections of Electricity Act Section 72