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DAMODAR VALLEY CORPORATION ACT, 1948
14 of 1948
27th March, 1948
OBJECTS AND REASONS "The Damodar river rises in Western Bihar and flows generally in a South-easternaly direction into Bengal. It is a seasonal river having a large flow of water during the rains which, apart from being generally wasted, at times causes great damage to life and property. It is now proposed to harness the water of this river and some of its tributaries and utilise it in multiple development of the Damodar Valley and the adjoining area. This Bill seeks to set up a Corporation, called the Damodar Valley Corporation on the lines of the Tennessee Valley Authority in the U.S.A. It will be an autonomous body within the framework of the enactment. Its objects, constitution and powers are laid down in the Bill. Briefly, its main function will be to control flood in the Damodar, generate electric power for distribution and provide water for irrigation and other purposes. In addition, the Corporation will, endeavou to promole economic development of the Damodar Valley and the adjoining areas. It will consist of three members including the Chairman. These three members and the secretary and treasurer will be appointed by the Central Government. The Corporation will have power to acquire land and construct or cause to be constructed such dams, barrages, reservoirs, power-houses and power structures, electrical transmission lines, irrigation and navigation works as may be necessary. The capital required by the Corporation will be provided by the Central Government and the Governments of Bihar and West Bengal. The profits and losses will be distributable between these three Governments in certain agreed proportions. The provisions of this Bill are designed to give effect to the broad outlines of the agreement reached between the three Governments concerned." - Gazette of India. 1947 Part V. page 595.
All Act to provide for the establishment and regulation of a Corporation for the development of the Damodar Valley in the
2[States] of Bihar and West Bengal WHEREAS it is expedient to provide for the establishment and regulation of a Corporation for the development of the Damodar Valley in the (States) of Bihar and West Bengal: AND WHEREAS in pursuance ofsection 103 of the Government of India Act, 1935, resolutions have been passed by all the Chambers of the3[State] Legislatures of the said2[States] to the effect that certain matters dealt with in this Act which are enumerated in the3[State] Legislative List should be regulated in those2[States] by Act of the Dominion Legislature; It is hereby enacted as follows :
SECTION 01: SHORT TITLE, EXTENT AND COMMENCEMENT
(1) This Act may be called The Damodar Valley Corporation Act 1948.
(2) It extends to the4[States] of Bihar and West Bengal.
(3) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint in this behalf.
SECTION 02: INTERPRETATION
- In this Act, unless there in anything repugnant in the subject or context, -
(1) "Corporalion" means the Damodar Valley Corporation;
(2) "Damodar Valley" includes the basin of the Damodar river and its tributaries;
(3) "Members" means a member of the Corpoiration and includes the Chairman;
(4) "participating Government" means the Central Government, the State Government of Bihar and the State Government of West Bengal;
(5) "prescribed" means prescribed by rules made undersection 59-;
(6) "6[State] Government" means the Government of Bihar or as the case may be of West Bengal, and "6[State] Governmenls" means the Governments of Bihar and of West Bengal:
(7) "regulations" means the regulations made by the Corporation undersection 60-.
SECTION 03: INCORPORATION
(1) With effect from such date7as the Central Government may, by notification in the Official Gazette, appoint in this behalf, there shall be established a Corporation by the name of the Damodar Valley Corporation.
(2)The said Corporation shall be a body corporate having perpetual succession and a common seal, and shall by the said name sue and be sued.
SECTION 04: CONSTITUTION OF THE CORPORATION
(1) The Corporation shall consist of a Chairman and two other members appointed by the Central Government after consultation with the8[State] Governments.
(2) A person shall be disqualified for being appointed, or for continuing as, a member of the Corporation-
(a) if he is a member of9[Parliament] or any8[State] Legislature; or
(b) If he has, directly or indirectly, any interest in a subsisting contract made with, or in any work being done for, the Corporation except as a shareholder (other than a director) in an incorporated company provided that, where he is a shareholder, he shall disclose to the Government the nature and extent of shares held by him in such Company.
(3) No act or proceeding of the Corporalion shall be invalid by reason only of the existence of any vacancy amongst its members or any defect in the appointment of a member thereof.
SECTION 05: CONDITIONS OF SERVICE OF MEMBERS
10[(1) * * * *].
(2) The remuneration and other conditions of service of the members shall be such as may be prescribed.
SECTION 06: APPOINTMENT OF OFFICERS AND SERVANTS
(1) The secretary and the financial adviser of the Corporation shall be appointed by the Central Government.
(2) The secretary shall be the chief executive officer of the Corporation.
(3) The Corporation may appoint such other officers and servants as it considers necessary for the efficient performance or its functions.
SECTION 07: CONDITIONS OF SERVICE OF OFFUCERS AND SERVANTS
- The pay and other conditions or service of the officers and servants or lhe Corporation shall -
(a) as respects the secretary and financial adviser, be such as may be prescribed; and
(b) as respects the other officers and servants, be such as may be determined by regulations.
SECTION 08: FUNCTIONS AND DUTIES OF THE FINANCIAL ADVISER
- The functions and duties or the financial adviser shall be such as may be prescribed.
SECTION 09: GENERAL DISQUALIFICATION OF ALL OFFICERS AND SERVANTS
- No person who has directly or indirectly, by himself or his partner or agent, any share or interest in any contract, by or on behalf of the Corporation, or in any employment under, by or on behalf of the Corporation otherwise than as an officer or servant thereof, shall become or remain an officer or servant or the Corporation.
SECTION 01:0 APPOINTMENT OF ADVISORY COMMITTEE
- Subject to any rules11made undersection 59-the Corporation may from time to time appoint one or more Advisory Committees for the purpose of securing the efficient discharge of the functions of the Corporation, and in particular for the purpose ol securing that those functions are exercised with due regard to the circumstances and requirements of particular local areas.
SECTION 11: LIMITS OF DAMODAR VALLEY AND AREA OF OPERATIONS
(1) The Central Government shall, by notification'12in the Official Gazette specify the limits of the Damodar Valley.
(2) The Corporation shall carry out all or any of its functions and exercise all or any of' its powers within the Damodar Valley.
(3) The Central Government may, after consultation with the13[State] Governments by notification12in the Official Gazette, direct that the Corporation shall carry out such function and exercise such power in such other area as may be specified therein and the area so specified shall be called the "area of operation" of the Corporation.
SECTION 12: FUNCTIONS OF THE CORPORATION
- The functions of the Corporation shall be-
(a) the promotion and operation of schemes for irrigation, water-supply and drainage,
(b) the promotion and operation of schemes for the generation, transmission and distribution of electrical energy, both hydro-electric and thermal,
(c) the promotion and operation of schemes for flood control in the Damodar river and its tributaries and the channels, if any, excavated by the Corporation in connection with the scheme and for the improvement of flow conditions in the Hooghly river,
(d) the promotion and control of navigation in the Damodar river and its tributaries and channels, if any,
(e) the promotion of afforestation and control of soil erosion in the Damodar Valley, and
(f) the promotion of public health and the agricultural, industrial, economic and general wellbeing in the Damodar Valley and its area of operation.
SECTION 13: PROVISION FOR IRRIGATION AND WATER-SUPPLY
- The Corporation may, with the approval of the14[State] Government concerned which shall not be unreasonably withheld, construct canals and distributaries and maintain and operate them: Provide that the14[State] Government may, after giving notice and subject to the payment of fair compensation, take over the maintenance and operation of any such canal or distributary.
SECTION 14: RATES FOR SUPPLY OF WATER FOR IRRIGATION
(1) The Corporation may, after consultation with the15[State] Government concerned determine and levy rates for the bulk supply of water to that Government for irrigation, and fix the minimum quantity of water which shall be made available for such purpose.
(2) The rates16at which such water shall be supplied by the15[State] Government to the cultivators and other consumers shall be fixed by that Government after consulation with the Corporation.
SECTION 15: RATES FOR SUPPLY OF WATER FOR INDUSTRIAL AND DOMESTIC PURPOSES
- The Corporation may determine and levy rates for bulk supply and retail distribution of water for industrial and domestic purposes and specify the manner of recovery of such rates.
SECTION 16: SUPPLY OF WATER TO THOSE WHOSE SUPPLY HAS BEEN STOPPED OR REDUCED
- If, with a view to operating its schemes, the Corporation has slopped or reduced the supply of water to any person for agricultural, industrial or domestic purposes which such person was. prior to such stoppage or reduction, enjoying by virtue of any prescriptive right, the Corporation shall arrange such supply of water on the same terms as before.
SECTION 17: CONSTRUCTION OF DAM, ETC., PROHIBITED EXCEPT WITH THE APPROVAL OF THE CORPORATION
- Save as otherwise prescribed, no person shall construct, operate or maintain in the Damodar Valley any dam or other work or any installation for the extraction of water without the consent of the Corporation.
SECTION 18: SUPPLY AND GENERATION OF ELECTRICAL ENERGY
- Notwithstanding anything contained inthe Indian Electricity Act, 1910-or any licence granted thereunder-
(i) No person shall, without the permission of the Corporation, -
(a) sell electrical energy to any consumer in the Damodar Valley where the energy is taken by the consumer at a pressure of 30,000 volts or more;
(b) transmit electrical energy in the Damodar Valley at a pressure of 30,000 volts or more:
(c) generate any electrical energy at an installation having an aggregate capacity of more than 10,000 kilowatts in any part of the Damodar Valley lying to the north of a straight line drawn east to west passing through a point at latitude twenty -two degrees, fourteen minutes and forty -seven second and longitude eighty-seven degrees, fifty- one minutes and forty -two seconds except such portion of the municipal area of Burdwan as may lie to the north of such straight line:
Provided that nothing in sub-clause (c) shall apply to any person who was at the commence- ment of this Act, generating electrical energy at an installation having an aggregate capacity of more than 10,000 kilowatts, so long as the capacity of such installation is not increased: Provided further that nothing in sub-clause (c) shall apply to the power station installation of the fertilizer factory at Sindri having an aggregate capacity of 80,000 kilowatts so long as the capacity of such installation is not increased beyond 80,000 kilowatts.
(ii) The Corporation may sell electrical energy to any consumer in the Damodar Valley but no such sale shall, except with the permission of the17[State] Government concerned, be made to any consumer requiring supply at a pressure of less than 30,000 volts.
(iii) The Corporation may, with the permission of the17[State] Government concerned, extend its transmission system to any area beyond the Damodar Valley and sell electrical energy in such area.
SECTION 19: EFFECT ON EXISTING LICENCES
(1) Where any licence granted underthe Indian Electricity Act, 1910-, becomes inoperative wholly or partly by virtue of the provisions ofSection 18-, the licence shall be deemed to have been revoked or modified so as to be consistent with those provisions.
(2) Where a licence is deemed to have been revoked under sub-section (1), the Corporation shall purchase the undertaking of the licensee, and where a licence is modified under that sub- section, the Corporalion shall, at the option of the licensee, either purchase the undertaking or pay fair compensation to the licensee.
(3) The purchase price or the amount of compensalion payable by the Corporation under subsection (2) shall be such as may be agreed to between the Corporation and the license or, in the event of disagreement, as may be determined by arbitration.
SECTION 20: CHARGES FOR SUPPLY OF ELECTRICAL ENERGY
- The Corporation shall fix the schedule of charges for the supply of electrical energy, including the ratos for bulk supply and retail distribution, and specify the manner of recovery of such charges: Provided that the Corporation may in any contract for bulk supply of electrical energy impose- such terms and conditions including a retail rate schedule as it may deem necessary or desirable to encourage the use of electrical energy.
SECTION 21: OTHER ACTIVITIES OF THE CORPORATION
(1) The Corporation may establish, maintain and operate laboratories, experimental and research stations and farms for conducting experiments and research for -
(a) utilising the water, electrical energy and other resources in the most economical manner for the development of the Damodar Valley;
(b) determining the effect of its operations on the flow conditions in the Hooghly river;
(c) making improvements in navigation conditions in the port of Calcutta; and
(d) carrying out any other function specified undersection 12-.
(2) The Corporation may set up its own planning, designing, construction and operating agencies, or make arrangements therefor with the participating Governments, local authorities, educational and research institutions or any person carrying on the business of an architect, an engineer or a contractor.
SECTION 22: GENERAL POWERS OF THE CORPORATION
(1) The Corporation shall have the power to do anything which may be necessary or expedient for the purposes of carrying out its functions under this Act.
(2) Without prejudice to the generality of the foregoing provision, such power shall include the power -
(i) to acquire and hold such movable and immovable property as it may deem necessary and to lease, sell or otherwise transfer any such properly;
(ii) to construct or cause to be constructed such dams, barrages, reservoirs, power-houses, power structures, electrical transmission lines and sub-stations, navigation works, irriga- tion, navigation and drainage canals and such other works and structures as may be required;
(iii) to prevent pollution of any water under its control and to take all measures to prevent discharges into such water effluents which are harmful to water-supply, irrigation, public health or fish life ;
(iv) to stock its reservoirs or water-courses with fish and to regulate or prohibit taking out fish18from the water under its control;
(v) to undertake resettlement of the population displaced by the dams, acquisition of land for reservoirs and protection of watersheds;
(vi) to aid in the establishment of co-operative societies and other organisations for the better use of facilities made available by the Corporation;
(vii) to undertake measures for the prevention of malaria.
SECTION 23: POWER TO CLOSE ROADS AND OPEN SPACES
(1) The Corporation may, after giving notice to the persons concerned or to the public generally.
(a) turn, divert or discontinue the public use of, or permanently close, any road or any part thereof, or
(b) discontinue the public use of, or permanently close, any open space or any part thereof.
(2) Whenever the Corporation discontinues the public use of, or permanently closes, any road or open space, the Corporation shall pay reasonable compensation to every person -
(a) who was entitled, otherwise than as a licensee, to use such road or open space or part thereof as a means of access, or
(b) whose immovable property was receiving air and light on account of such open space or part. and who has suffered damage-
(i) in any case falling under clause (a) from such discontinuance or closure, and
(ii) in any case falling under clause (b) from the use to which the Corporation has put such open space or part.
(3) In determining the compensation payable to any person under sub -section (2), the Corporation may take into consideration any benefit accruing to such person from the construc - tion, provision or improvement of any other road, or open space at or about the same time that the road or open space or part thereof, on account of which the compensation is to be paid, is discontinued or closed.
(4) When any road or open space or any part thereof is permanently closed under sub-section (1 ), the Corporalion may sell or leave such part of it as is not required for its purposes.
SECTION 24: POWERS UNDER CERTAIN OTHER ENACTMENTS
(1)Notwithstanding anything contained in the Acts specified in column one of Part I of the Schedule, the Corporalion may carry out all or any of the functions and exercise all or any of the powers of19[State] Government in the Damodar Valley under the provisions of such Acts specified in column two thereof against each item of column one.
(2) Notwithstanding anything contained in the Acts specified in column one of Part II of the Schedule, any officer authorized by the Corporation may carry out all or any of the functions and exercise all or any of lhc powers of a Canal Officer, Collector, or Forest Officer, as the case may be, in the Damodar Valley under the provisions of such Acts specified in column two thereof against each item of column one.
SECTION 25: CO-OPERATION WITH OTHER AUTHORITIES TO MINIMISE INCONVENIENCE CAUSED BYSUBMERSION
- The Corporation shall co-operate with the participating Governments, railway authorities and local authorities and bodies, with a view to minimising the inconvenience likely to be caused by the submersion of roads and communications and shall bear the cost of any realignment thereof or resettlement of any population renederd necessary by such submersion.
SECTION 26: SUBMERSION OF COAL MINES TO BE AVOIDED BY THE CORPORATION
- The Corporation shall make every endeavour to avoid submersion of coal or mineral deposits and shall co-operate with the coal-mining industry and the bodies set up by the participating Governments to ensure the maintenance of supplies of sand for stowing purposes in coal mines and in other ways to minimise the inconvenience to the coal mining industry.
SECTION 27: EXPENDITURE TILL THE CORPORATION IS ESTABLISHED
- All expenditure incurred by the Central Government for and in connection with the establishment of the Corporation up to date of its establishment shall be treated as the capital provided by the Central Government to the Corporation and such capital shall be adjusted between the participating Governments in accordance with the provisions ofsections 30-to36-
SECTION 28: VESTING OF PROPERTY IN THE CORPORATION
- All property acquired and works constructed for the purposes of the Damodar Valley Scheme before the establishment of the Corporation shall vest in the Corporation and all income derived and expenses incurred in this behalf shall be brought into the books of the Corporation.
SECTION 29: FUND OF THE CORPORATION
(1) The Corporation shall have its own fund and all receipts of the Corporation shall be curried thereto and all payments by the Corporation shall be made therefrom.
(2) Except as otherwise directed by the Central Government, all moneys belonging to that fund shall be deposited in the Reserve Bank of India or the Agents of the Reserve Bank of India or invested in such securities as may be approved by the Central Government.
SECTION 30: LIABILITIES OF PARTICIPATING GOVERNMENTS TO PROVIDE CAPITAL TO THE CORPORATION
- The participating Governmenls shall, as hereinafter specified, provide the entire capital required by the Corporation for the completion of any project undertaken by it.
SECTION 31: PAYMENT BY PARTICIPATING GOVERNMENT ON SPECIFIED DATE
- Each participating Govern- ment shall provide its share of the capilal on the date specified by the Corporation and if any Governmenl fails to provide such share on such dales, the Corporation may raise loan to make up the deficit at the cost of the Government concerned.
SECTION 32: EXPENDITURE ON OBJECTS OTHER THAN IRRIGATION, POWER AND FLOOD CONTROL
- The Corpora- tion shall have power to spend such sums as it thinks fit on objects authorized under this Act other than irrigation, power and flood control and such sums shall be treated as common expenditure payable out of the fund of the Corporation before allocation undersection 32-
SECTION 33: ALLOCATION OF EXPENDITURE CHARGEABLE TO PROJECT ON MAIN OBJECTS
- The total capital expenditure chargeable to a project shall be allocated between the three main objects, namely, irrigation, power and flood control as follows, namely: -
(1) expenditure solely attributable to any of the objects, including a proportionate share of overhead and general charges, shall be charged to that object, and
(2) expenditure common to two or more of the said objects, including a proportionate share of overhead and general charges, shall be allocated to each of such objects in proportion to the expenditure which, according to the estimates of the Corporation, would have been incurred in constructing a separate structure solely for that object, less any amount determined under clause (1) in respect of that object.
SECTION 34: CAPITAL ALLOCATED TO IRRIGATION
- The total amount of capital allocated to irrigation shall be shared between20[State] Governments as follows, namely:-
(1) the Government concerned shall be responsible for the capital costs of the works constructed exclusively for irrigation in its20[State]; and
(2) the balance of' capital cost under irrigation for both the20[States] of Bihar and West Bengal shall be shared by the State Governments in the proportion to their guaranteed annual off-takes of water for agricultural purposes:
Provided that the divisible capital cost under this clause shall be provisionally shared between them in accordance with their previously declared intentions regarding their respective guaran- teed off-takes and any payments made accordingly shall be adjusted after the determination of the guaranteed offtakes.
SECTION 35: CAPITAL ALLOCATED TO POWER
- The total amount of capital allocated to power shall be shared equally between the three participating Governments.
SECTION 36: CAPITAL ALLOCATED TO FLOOD CONTROL
- The lotal amounts of capital up to fourteen crores of rupees allocated to flood control shall be shared equally between the Central Government and the Government of West Bengal and any amount in excess thereof shall be the liability of the Government of West Bengal.
SECTION 37: DISPOSAL OF PROFITS AND DEFICITS
(1) Subject to the provisions of sub-section (2) ofsection 40-, the net profit, if any, attributable to each of the three main objects, namely, irrigation, power and flood control, shall be credited to the participating Governments in proportion to their respective shares in the total capital cosl attributed to that object.
(2) The net deficit, if any, in respect of any of the objects shall be made good by the Governments concerned in the proportion specified in sub- section (1): Provided that the net deficit in respect of flood control shall be made good entirely by Government of West Bengal and the Central Government shall have no share in such deficit.
SECTION 38: PAYMENT OF INTEREST
- The Corporation shall pay interest on the amount of capital provided by each participating Government at such rate as may, from time to time, be fixed, by the Central Government and such interest shall be deemed to be part of the expenditure of the Corporation.
SECTION 39: INTEREST CHARGES AND OTHER EXPENSES TO BE ADDED TO AND RECEIPTS TAKEN FORREDUCTION OF CAPITAL COST
- For a period, not exceeding fifteen years, from the establishment of the Corpora- lion. if the Corporation runs in deficit, the interest charges and all other expenditure shall be added to the capital cost and all receipts shall be taken in reduction of such capital cost.
SECTION 40: PROVISION FOR DEPRECIATION AND RESERVE AND OTHER FUNDS
(1) The Corporation shall make provision for depreciation and for reserve and other funds at such rates and on such terms as may be specified by the Auditor-General of India in consultation with the Central Government.
(2) The net profit for the purposes of.Section 37-shall be determined after such provision has been made.
SECTION 41: CORPORATION'S SHARE IN BETTERMENT LEVY BY STATE GOVERNMENTS
- In the event of any betterment levy being imposed by a21[State] Government, the proportionate proceeds thereof in so far as they are attributable to the operations of the Corporation shall be credited to the Corporation.
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