Suspension of distribution licence and sale of utility
Section 24 of the Electricity Act, 2003 deals with suspension of distribution licence and sale of utility. If at any time the Appropriate Commission is of the opinion that a distribution licensee-- (a) has persistently failed to maintain uninterrupted supply of electricity conforming to standards regarding quality of electricity to the consumers; The Act came into force on 10 Jun 2003.
(1) If at any time the Appropriate Commission is of the opinion that a distribution licensee--
(a) has persistently failed to maintain uninterrupted supply of electricity conforming to standards regarding quality of electricity to the consumers; or
(b) is unable to discharge the functions or perform the duties imposed on it by or under the provisions of this Act; or
(c) has persistently defaulted in complying with any direction given by the Appropriate Commission under this Act; or
(d) has broken the terms and conditions of licence,
and circumstances exist which render it necessary for it in public interest so to do, the Appropriate Commission may, for reasons to be recorded in writing, suspend, for a period not exceeding one year, the licence of the distribution licensee and appoint an Administrator to discharge the functions of the distribution licensee in accordance with the terms and conditions of the licence:
Provided that before suspending a licence under this section, the Appropriate Commission shall give a reasonable opportunity to the distribution licensee to make representations against the proposed suspension of license and shall consider the representations, if any, of the distribution licensee.
(2) Upon suspension of licence under sub-section (1) the utilities of the distribution licensee shall vest in the Administrator for a period not exceeding one year or up to the date on which such utility is sold in accordance with the provisions contained in section 20, whichever is later.
(3) The Appropriate Commission shall, within one year of appointment of the Administrator under sub-section (1) either revoke the licence in accordance with the provisions contained in section 19 or revoke suspension of the licence and restore the utility to the distribution licensee whose licence had been suspended, as the case may be.
(4) In a case where the Appropriate Commission revokes the licence under sub-section (3), the utility of the distribution licensee shall be sold within a period of one year from the date of revocation of the licence in accordance with the provisions of section 20 and the price after deducting the administrative and other expenses on sale of utilities be remitted to the distribution licensee.
Section 24, The Electricity Act, 2003 (Act 36 of 2003).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
This section refers to
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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Orissa Electricity Regulatory Commn vs Western Elect. Company of Orissa LTD
Court's Decision & Legal Precedent
A show cause notice issued by an Electricity Regulatory Commission under Section 24(1) of Electricity Act 2003 proposing suspension of a licence is a valid preliminary step in statutory proceedings and may not be set aside in entirety merely because incidental orders such as appointment of special officers are unjustified. The appellate forum should only annul the unauthorized incidental orders while preserving the main statutory proceeding, allowing the regulated entity to file representations before the Regulatory Commission on the substantive issue of licence suspension. The Regulatory Commission must strictly adhere to statutory procedure and the regulated entity's right to file representations remains unaffected by observations made in appellate orders.
On this section: Authority of Regulatory Commission to issue notice proposing suspension of licence and procedure to be followed; interpreted to authorize show cause notice but court emphasized strict adherence to statutory procedure
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Made under this section, and citing it
5 instruments state that it was made under this provision — the power to make it comes from here, so a change to any of them changes what this section requires in practice. Newest first.
- MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003- AMENDMENTSRule 2012
- MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003- AMENDMENTSRule 2012
- Modification in Madhya Pradesh Electricity Reform First Transfer Scheme Rule 2003Rule 2012
- MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003- AMENDMENTSRule 2005
- MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003Rule 2003
Another 1 instrument names this provision in its title or its text without being made under it.
Questions about Section 24
What have the courts held on Section 24 of the Electricity Act?
Orissa Electricity Regulatory Commn vs Western Elect. Company of Orissa LTD (05 Jan 2009) is the leading judgment on this section among those set out below: Authority of Regulatory Commission to issue notice proposing suspension of licence and procedure to be followed; interpreted to authorize show cause notice but court emphasized strict adherence to statutory procedure.
How do I find court cases under Section 24 of the Electricity Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: Electricity Act 2003 24, section 24 Electricity Act 2003, section 24 of the Electricity Act. People searching for it also type electricity act 1910 section 24. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with Orissa Electricity Regulatory Commn vs Western Elect. Company of Orissa LTD (05 Jan 2009).
What should I read with Section 24 of the Electricity Act, and has it changed?
Its own text turns on section 19 (Revocation of licence), section 20 (Sale of utilities of licensees), so none of them can safely be read on its own. 2 other provisions in this corpus refer back to it. The rules and notifications made under it are where it actually bites, and there are 5: most recently MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003- AMENDMENTS (2012), then MADHYA PRADESH ELECTRICITY REFORMS FIRST TRANSFER SCHEME RULES 2003- AMENDMENTS (2012), and 3 more.
When did Section 24 of the Electricity Act come into force?
Section 24 of the Electricity Act, cited as Electricity Act 2003 24, came into force on 10 Jun 2003, having been enacted on 26 May 2003. It is in force as at the date shown on this page.
Other sections of this Act
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 19 Oct 2026. This page is not a substitute for legal advice.