Section 128. (Investigation of certain matters)

Section 128. (Investigation of certain matters): —- (1) The Appropriate

Commission may, on being satisfied that a licensee has failed to comply with any

of the conditions of licence or a generating company or a licensee has failed to

comply with any of the provisions of this Act or rules or regulations made

thereunder, at any time, by order in writing, direct any person (hereafter in this

section referred to as “Investigating Authority”) specified in the order to

investigate the affairs of any generating company or licensee and to report to

that Commission on any investigation made by such Investigating Authority:

Provided that the Investigating Authority may, wherever necessary,

employ any auditor or any other person for the purpose of assisting him in any

investigation under this section.

(2) Notwithstanding anything to the contrary contained in section 235 of the

Companies Act, 1956, the Investigating Authority may, at any time, and shall, on

being directed so to do by the Appropriate Commission, cause an inspection to

be made, by one or more of his officers, of any licensee or generating company

and his books of account; and the Investigating Authority shall supply to the

licensee or generating company, as the case may be, a copy of his report on

such inspection.

(3) It shall be the duty of every manager, managing director or other officer of

the licensee or generating company, as the case may be, to produce before the

Investigating Authority directed to make the investigation under sub-section (1),

or inspection under sub-section (2), all such books of account, registers and other

documents in his custody or power and to furnish him with any statement and

information relating to the affairs of the licensee or generating company, as the

case may be, as the said Investigating Authority may require of him within such

time as the said Investigating Authority may specify.

(4) Any Investigating Authority, directed to make an investigation under subsection

(1), or inspection under sub-section (2), may examine on oath any

manager, managing director or other officer of the licensee or generating

company, as the case may be, in relation to his business and may administer

oaths accordingly.

(5) The Investigating Authority, shall, if it has been directed by the

Appropriate Commission to cause an inspection to be made, and may, in any

other case, report to the Appropriate Commission on any inspection made under

this section.

(6) On receipt of any report under sub-section (1) or sub-section (5), the

Appropriate Commission may, after giving such opportunity to the licensee or

generating company, as the case may be, to make a representation in

connection with the report as in the opinion of the Appropriate Commission,

seems reasonable, by order in writing—

(a) require the licensee or the generating company to take such action

in respect of any matter arising out of the report as the Appropriate

Commission may think fit; or

(b) cancel the licenece; or

(c) direct the generating company to cease to carry on the business

of generation of electricity.

(7) The Appropriate Commission may, after giving reasonable notice to the

licensee or the generating company, as the case may be, publish the report

submitted by the Investigating Authority under sub-section (5) or such portion

thereof as may appear to it to be necessary.

(8) The Appropriate Commission may specify the minimum information to

be maintained by the licensee or the generating company in their books, the

manner in which such information shall be maintained, the checks and other

verifications to be adopted by licensee or the generating company in that

connection and all other matters incidental thereto as are, in its opinion,

necessary to enable the Investigating Authority to discharge satisfactorily its

functions under this section.

Explanation.- For the purposes of this section, the expression “licensee or the

generating company” shall include in the case of a licensee incorporated in

India—

(a) all its subsidiaries formed for the purpose of carrying on the

business of generation or transmission or distribution or trading

of electricity exclusively outside India; and

(b) all its branches whether situated in India or outside India.

(9) All expenses of, and incidental to, any investigation made under this

section shall be defrayed by the licensee or the generating company, as the case

may be, and shall have priority over that debts due from the licensee or the

generating company and shall be recoverable as an arrear of land revenue.