Project

on
“Public Utility Laws on Railways, Electricity, Gas and Petroleum
and Fire Extinguishing Services”

For the Subject

“PUBLIC UTILITY LAWS, NATIONAL SECURITY AND RULE
OF LAW”
(as a part of assesment scheme)

LL.M. IInd Semester

Sardar Patel Subharti Institute of Law
2017-18

Project submitted to: Project Prepared

by: Ms. Afreen Almas
Shivani Sharma Asst. Professor
LL.M.
Subharti University, Meerut IInd Semester
1|
 ACKNOWLEDGEMENT

At the very outset, I would like to pay thanks to the almighty God. It gives me immense
pleasure to acknowledge and pay thanks to the persons who helped me throughout the course of
my work. I am really thankful to the subject teacher, Ms. Afreen Almas, who has given me a
topic of high relevance under who’s learned and scholarly guidance the present work has been
completed. She helped me in a passive way, gave me moral support and guided me in different
matters regarding the topic. She had been very kind and patient while suggesting me the outlines
of this Project and correcting my doubts.

I thank her for her overall support, constructive suggestions which have always been
soothing and had desired effects, hence it my duty to express my gratitude for her constant
support and encouragement.

I want to pay my sincere thanks to Faculty of Law, all the teachers of Sardar Patel
Subharti Institute of Law, Swami Vivekananda Subharti University. Last but not the least, my
thanks to all who have helped me directly or indirectly in the completion of my work.

Shivani Sharma
LL.M.
IInd Semester

2|
 CONTENTS
“Public Utility Laws on Railways, Electricity, Gas and Petroleum and Fire Extinguisher”

Sr. No. Title Page No.

1. Introduction 4-7

2. Public Utility Laws: Railways 8-11

 Introduction to Indian Railways

 Indian Railways Legislations

3. Public Utility Laws: Electricity 12-14

 Introduction to Indian Electricity Sector

 Indian Electricity Legislations

4. Public Utility Laws: Oil and Gas Industry 14-18

 Introduction To Indian Oil And Gas Industry

 The Indian Oil and Gas Legislations:

5. Public Utility Laws: Fire Safety 19-22

 Introduction To Indian Fire Safety Industry:

 The Indian Fire Safety Legislations:

6. Conclusion 23

7. Bibliography 24

3|
 INTRODUCTION

A public utility is a business or service, which may be publicly or privately owned, engaged in
supplying the public generally with some commodity or service, such as electricity, gas, water,
transportation, or telephone or telegraph service. Privately owned public utilities most often
operate within a designated area through an exclusive franchise granted by the legislature,
public service commission, or other regulatory agency, and their operation is strictly regulated
by the franchisor. Public utilities are subject to forms of public control and regulation ranging
from local community-based groups to statewide government monopolies.1

The term utilities can also refer to the set of services provided by these organizations consumed
by the public:-

electricity, natural gas, water, sewage, telephone, and

transportation. Broadband internet services are increasingly being included within the
definition.2

However, because of the lack of definition, the economist Murray Rothbard wrote in his
book Power and Market3 that:

“The very term “public utility,” furthermore, is an absurd one. Every good is useful “to the
public,” and almost every good, if we take a large enough chunk of supply as the unit, may be
considered “necessary.” Any designation of a few industries as “public utilities” is completely
arbitrary and unjustified.

1
https://definitions.uslegal.com/p/public-utilities/
2
"Public utility - Definition". Merriam-Webster Dictionary. Retrieved 2011-10-11.
"public utility definition". Investorwords.com. Retrieved 2011-10-11.
"California Public Utilities Commission". Cpuc.ca.gov. 2007-03-23. Retrieved 2011-10-11.
https://www.nytimes.com/2015/02/27/technology/net-neutrality-fcc-vote-internet-utility.html
3
Rothbard, Murray. "Power and Market". Mises Institute. Retrieved March 2, 2018.

4|
Public utilities are often natural monopolies because the infrastructure required to produce and
deliver a product such as electricity or water is very expensive to build and maintain.4

As a result, they are often government monopolies, or if privately owned, the sectors are
specially regulated by a public utilities commission.5 Private utilities, also called investor-
owned utilities, are owned by investors,6 and operate for profit, often referred to as a rate of
return.

Though they are governed by statutory rules, the government regulation fails to be completely
effective. Therefore, recent tendency is towards government ownership, control and
management of these undertakings.

The following reasons have prompted the State ownership of public utilities:7

(i) “Difficulties in effective regulation” can be removed by direct government

ownership and management.
(ii) The “need for co-ordination” can be met more effectively if all these undertakings
are under government ownership, management and control.
(iii) Substitution of profit motive by service motive is practicable only when these
undertakings are owned and managed by the government.
(iv) In a planned economy, the key services which are clothed with public interest should
necessarily be in Public or State sector. The Industrial Policy Resolution of 1956
declares that the public utility service will, as far as possible, be under State
ownership and management.

Public utilities under state ownership are generally organized in one of the following
forms:8

(i) Departmental undertakings, i.e., run by a department of Central, State or Local

Government.
(ii) Public corporation created under a special Act passed by the Legislature.

4
https://en.wikipedia.org/wiki/Public_utility
5
"Where Growth Centers". The Salina Evening Journal. Salina, Kansas. November 6, 1922. p. 13.
Retrieved March 17, 2015 – via Newspapers.com.
6
Energy Dictionary
Investor Owned Electric Utilities
Investor-Owned Utilities: Asleep at the Switch or Above the Law?
7
http://www.businessmanagementideas.com/notes/management-notes/public-utilities-meaning-characteristics-and-
problems-business-management/8950
8
http://www.businessmanagementideas.com/notes/management-notes/public-utilities-meaning-characteristics-and-
problems-business-management/8950

5|
 (iii) Government company registered under the Companies Act.

Developments in technology have eroded some of the natural monopoly aspects of traditional
public utilities. For instance, electricity generation, electricity retailing, telecommunication,
some types of public transit and postal services have become competitive in some countries and
the trend towards liberalization, deregulation and privatization of public utilities is growing.
However, the infrastructure used to distribute most utility products and services has remained
largely monopolistic.9

The following are the characteristics of public utilities:10

1. Supply of essential goods and services

Public utilities produce and supply goods and services which are indispensable for human life.
Society would be put to severe hardship if these services are not made available. Public utilities
provide goods and services which are essential for human life. They provide goods and services
relating to water supply and sewerage, electricity, transport, gas supply etc.

2. Local in character

Public enterprises are local in character. They operate in specified local areas. Each particular
locality would have a public utility serving its needs.

3. Organized as monopolies

Public utilities provide essential goods and services to the common man. They operate with a
service motive keeping in mind the primary objective of social welfare. If competition is
allowed it may lead to unfair practices and wastage of resources in marketing. Therefore public
utilities are organized as monopolies under government control.

4. Strict regulation

Public utilities are organized as monopolies under government control. They provide essential
goods and services to satisfy the essential needs of the consuming public. Any deficiency in
service would lead to serious social problems.

9
https://en.wikipedia.org/wiki/Public_utility
10
https://accountlearning.com/public-utility-meaning-characteristics-rights-duties/

6|
For e.g. if the water supplied is contaminated, it may lead to diseases or even an epidemic, if
power supply is erratic it may lead to stoppage of production in industries, if there is leakage in
gas cylinders supplied, it may lead to loss of human life.

Considering this aspect, public utilities are regulated strictly with regard to their quality, prices
charged, services provided etc.

5. Large investment

Public utilities require huge capital outlay. Setting up a public utility calls for heavy capital
investment. Investment cannot be made in stages. The entire amount of funds needs to be
invested, before a public utility can commence its operations.

6. Inelastic demand

The demand for goods and services provided by public utilities is inelastic in nature. They
provide essential goods and services which are required by every member of the society. Any
disruption in production would lead to shortages and severe problems. Considering the fact that
demand is inelastic and if left to the private sector there is possibility of large scale exploitation,
the government undertakes the responsibility of running public utilities.

7. Non-transferability of demand

A consumer of a public utility cannot transfer his demand to any another. It is because, public
utilities operate as monopolies, and therefore transfer of demand is not possible.

For e.g. if any consumer of electricity in Tamil Nadu is dissatisfied with the service provided by
TamilNadu Electricity Board he does not have the option of switching over to any other service
provider. It is because TNEB enjoys monopoly rights for generating and distributing electricity
to the public of Tamil Nadu. The consumer can have a choice only if he moves to some other
State.

8. Lower risk

There is significantly lower risk in operating public utilities. There is no competition as they are
organized as monopolies. There is no fear of change in consumer tastes and preferences as they
supply goods and services indispensable for human life.

7|
 PUBLIC UTILITY LAWS: INDIAN RAILWAYS

Introduction to Indian Railways:

The first railway on Indian sub-continent ran over a stretch of 21 miles from Bombay to Thane.
The idea of a railway to connect Bombay with Thane, inclines first occurred to Mr. George
Clark, the Chief Engineer of the Bombay Government, during a visit to Bhandup in 1843.

Indian Railways is India's national railway system operated by the Ministry of Railways. It
manages the fourth-largest railway network in the world by size, with 121,407 kilometres of
total track over a 67,368-kilometre route11. IR runs more than 13,000 passenger trains daily, on
both long-distance and suburban routes, from 7,349 stations across India12.

Indian Railways is headed by a seven-member Railway Board whose chairman reports to

the Ministry of Railways. It is divided into 17 zones, headed by general managers who report to
the Railway Board.13 The zones are further subdivided into 68 operating divisions, headed by
divisional railway managers.14 In addition, there are a number of Production Units, Training
Establishments, Public Sector Enterprises and other Offices working under the control of
Railway Board15.

11
"Indian Railways Statistical Publications 2016-17: Statistical summary - Indian Railways" (PDF). Ministry of
Railway. Retrieved 22 February 2018.
12
"Indian Railways Budget Documents 2018-19" (PDF). Ministry of Railway. Retrieved 22 February 2018.
13
"Indian Railways Report" (PDF). Indian Railways. 2015. Retrieved 2 March 2017.
14
Singh, Vijay Pratap (27 February 2010). "SMS complaint system: A Northern Railway brainwave
spreads". Indian Express. Retrieved 19 January 2012.
15
Indian Railways Statistical Publications 2016-17. "stats-network" (PDF).

8|
Indian railways have two UNESCO World Heritage Sites: the Chhatrapati Shivaji Maharaj
Terminus, Mumbai16 and the mountain railways of India.17 The participation of both private and
public sectors in developing rail infrastructure has gone up. A joint venture company was
formed with Pipava Port authorities to provide broad gauge connectivity to Pipava Port. MoUs
have been signed between Ministry of Railways and the State governments of Andhra Pradesh,
Karnataka, Maharashtra, West Bengal, Tamil Nadu and Jharkhand in developing rail
infrastructure in these States.18

The Indian Railway Legislations:

The first legislation to govern the Railways was the Indian Railways Act of 189019 which was
enacted by the British. It mainly controlled the Railways for the work of the British and was
completely focused on it. Then in the year 1989 the Act was repealed by The Railways Act
1989.

The old Act had to be changed due to many reasons including:20

 The constitution of new railway zones, appointment of GMs as heads of these

railway administrations.
 Power has been given to the central government to fix the rates for the carriage of
passengers and goods.
 Statutory recognition of the railway receipt as a negotiable instrument. - Limiting the
monetary liability of railways in respect of payment of compensation for loss, damage
etc. of goods.
 The offenses included in the Act have been rationalized and a few offenses included.
Important features of the Railways Act, 1989
 All the amendments have been consolidated, and the layout and presentation have been
rearranged and rationalized in 16 chapters.

16
"Chhatrapati Shivaji Maharaj Terminus (formerly Victoria Terminus)". World Heritage List. World Heritage
Committee. 2004. Retrieved 5 January 2009.
17
"Mountain Railways of India". World Heritage List. World Heritage Committee. 1999. Retrieved 5 January 2009.
18
http://indianrailways.gov.in/railwayboard/view_section.jsp?lang=0&id=0,1
19
https://www.scribd.com/doc/46520476/The-Indian-Railways-Act-1890
20
http://indianrailwayemployee.com/content/need-change-railway-act-1890-and-changes-brought-ra-1989

9|
The following are the changes brought in the old Act:21

1. Rail land Development Authority :

 Chapter II A has been in inserted in 2005 and provides institutional framework for
development of railway land for commercial purposes.
 Chapter II gives legal status to the Zonal Railways as Railway Administrations, as
distinct from central government.

2. Commission of Railway safety

 A new section has been added in Chapter III which makes it obligatory on Chief
Commission of Railway safety to prepare for an annual report which is to be laid by the
Government before the Parliament.
3. Construction and maintenance of Works:
 The Railway Administration is empowered to erect, operate, maintain or repair any
telegraph and telephone connection in connection with the working of the Railway, and
also to erect, operate, maintain or repair any electric traction equipment, power supply
and distribution installations in connection with the working of the Railway.22
 The procedure for payment of compensation for damage caused to the private property
in the course of construction or maintenance of the Railways has been simplified.
 A new provision has been added under which Central Government has been empowered
to issue directions to any person to close, regulate or prohibit any work which is likely to
alter or impede the natural course of water flow or cause an increase in volume of such
flow, endangering any cutting, embankment or other work on Railway.
4. Land acquisition for a Special Railway Project
 In order to enable the Railways to acquire land for Infrastructure projects quickly chapter
IV A has been inserted in the year 2008.23
5. Fixation of Rates

21
http://indianrailwayemployee.com/content/need-change-railway-act-1890-and-changes-brought-ra-1989
22
Section 11 f and g
23
- Section 30 and 32

10 |
  Under this chapter, the Central Government is empowered to fix standard rates for the
carriage of passangers and goods, classify or reclassify any commodity, and increase or
reduce the class rates and other charges.24
6. Railways Rates Tribunal
 RRT has been empowered not only to fix a rate or a charge as it considers reasonable but
also direct refund on an amount in excess of rates fixed by the Tribunal.25
7. Carriage of Goods
 A new provision has been added regarding the Railway Receipt shall be the prima facie
evidence of weight and number of packages stated therein.
 A new section regarding penal charge for overloading of goods in a wagon.
 The Railway Receipt has been made negotiable.
 Under the previous act unclaimed goods must be disposed of by public auction only.
Under new Act, for special reasons to be recorded in writing goods can be sold in any
any other manner prescribed under the rules.26
8. Responsibility of Railway Administration as carriers
 The concept of “Excepted articles” has been done away with. At the same time the
monetary liabilty of the Railways for loss of or damage to booked goods of all
descriptions has been limited to a rate on the basis of the weight of the consignment.27
 Under the previous Act where in goods which normally has to be carried in covered
wagons carried in open wagon at consignor’s request Railways are fully exempted
from liablity for any damage. 28
9. Accidents
 Commisssioner of Railway Safety, who conducts an enquiry into an accident has been
given the powers of the civil court in respect of summoning and enforcing the attendance
of persons , requiring the recovery and production of documents , receiving evidence on
affidavit and requiring production of any public record from any court or office. 29
10. Liability of Railway Administration for Death and Injury to Passenagers

24
Chapter IV
25
Section 44 (ii)
26
Chapter IX
27
Section 103
28
Section 104
29
Section 114 to 120

11 |
  The word “dependant” has been redefined so as to include the parents in the case of a
minor deceased passenger. 30
 Under the previous Act the maximum amount of compensation was fixed at Rs.
One lakh. Under the new provision, it has been left to the Central Government to
prescribe the amount of compensation. Thus it will not be necessary to amend the Act to
increase the maximum liability from time to time. 31

Further the Railway Act of 1989 has been amended recently in the year 2005 by the Railway
Amendment Act, 2005 to implement the reforms, it is imperative to have the right policy in
place and to ensure utilization of technology.

PUBLIC UTILITY LAWS: ELECTRICITY

Introduction to Indian Electricity Sector:

The utility electricity sector in India has one National Grid with an installed capacity of
334.40 GW as on 31 January 2018.32 Renewable power plants constituted 32.2% of total
installed capacity. During the fiscal year 2016-17, the gross electricity generated by utilities in
India was 1,236.39 TWh .33 India is the world's third largest producer and fourth largest
consumer of electricity.34 In order to address the lack of adequate electricity supply to all the
people in the country by March 2019, the Government of India launched a scheme called
“Power for All”.35 This scheme will ensure continuous and uninterrupted electricity supply to
all households, industries and commercial establishments by creating and improving necessary
infrastructure. It is a joint collaboration of the Government of India with states to share funding
and create overall economic growth.36

The first demonstration of an electric light in Calcutta was conducted on 24 July 1879 by P.W.
Fleury & Co. On 7 January 1897, Kilburn & Co secured the Calcutta electric lighting license as

30
Section 123
31
Section 124
32
"All India Installed Capacity of Utility Power Stations" (PDF). Retrieved 5 January2018.
33
"BP Statistical Review of World Energy June 2017" (PDF).
34
"IBEF Power" (PDF). IBEF. Retrieved 28 October 2016.
35
"India can achieve 1,650 billion units of electricity next year, Piyush Goyal". Retrieved 9 July 2016.
36
"Government decides to electrify 5.98 crore unelectrified households by December 2018". Retrieved 20
June 2016.

12 |
agents of the Indian Electric Co, which was registered in London on 15 January 1897. The
control of the company was transferred from London to Calcutta only in 1970.37

India's electricity sector is dominated by fossil fuels, and in particular coal, which in 2016
produced about two thirds of all electricity. However, the government is pushing for an
increased investment in renewable energy. The Draft National Electricity Plan of 2016 prepared
by the Government of India states that the country does not need additional non-renewable
power plants in the utility sector until 2027, with the commissioning of 50,025 MW coal-based
power plants under construction and achieving 275,000 MW total installed renewable power
capacity.38

The Indian Electricity Legislations:

Regarding energy sector there are no such holistic regulators. Indian Constitution adds
electricity in Concurrent list, which comes under both union and state level governments,
authorised to frame policies regarding electricity supply industry, except for nuclear power
which is under the control of Union Government. The industrial structure remained
monopolistic till the reforms were undertaken in 1991. There is a recent legislation, Electricity
Act, 2003, that has guided the creation of reform, restructuring and regulation of electricity
industry in India.

The Indian Electricity Act, 1910 was the first legislation regarding the regulation of the
Electricity sector in India. It had the following features:
 Provided basic framework for electric supply industry in India.
 Growth of the sector through licensees. License by State Govt.
 Provision for license for supply of electricity in a specified area.
 Legal framework for laying down of wires and other works.
 Provisions laying down relationship between licensee and consumer.
After the act of 1910, came the act The Electricity (Supply) Act, 1948 which consisited of the
following salient features:
37
"Let there be light". The Telegraph. 26 April 2009.
38
"Government decides to electrify 5.98 crore unelectrified households by December 2018". Retrieved 20
December 2016.,
"Draft National Electricity Plan, 2016, CEA" (PDF). Retrieved 11 December 2016."Let there be light". The
Telegraph. 26 April 2009.

13 |
  Mandated creation of SEBs.
 Need for the State to step in to extend electrification across the country.

The Electricity Act, 2003 repealed the above mentioned Acts and mandates that Regulatory
Commissions shall regulate tariff and issue of licenses and that State Electricity Boards will
no longer exist in the existing form and will be restructured into separate generation,
transmission and distribution entities. Regulatory function has been taken away from the
purview of the government. 39

The Electricity Act, 2003 mandates licensee-free thermal generation, non-discriminatory

open access of the transmission system and gradual implementation of open access in the
distribution system which will pave way for creation of power market in India.

The main features of the Electricity Act 2003 are as follows: 40

(i) Generation has been delicensed and captive generation freely permitted. Hydro
projects would, however, need concurrence from the Central Electricity Authority.
No licence required for generation and distribution in rural areas.

(ii) Transmission Utility at the Central as well as State level, to be a government

company – with responsibility for planned and coordinated development of the
transmission network. Provision for private licensees in transmission.

(iii) Open access in transmission with provision for surcharge for taking care of
current level of cross subsidy with the surcharge being gradually phased out.

(iv) Distributing licensees would be free to undertake generation, and generating

companies would be free to take up distribution.

(v) The State Governments are required to unbundle the SEBs. However, they may

39
http://www.drishtiias.com/upsc-exam-gs-resources-Electricity-Act-2003
40
http://www.drishtiias.com/upsc-exam-gs-resources-Electricity-Act-2003

14 |
 continue with them as distribution licensees and State Transmission Utilities.
(vii) Setting up of the State Electricity Regulatory Commission (SERCs) made
mandatory.

(vi) An Appellate Tribunal to hear appeals against the decision of the CERC and
SERCs.

(vii) The SERCs are required to permit open access in distribution in phases with
surcharge for current level of cross subsidy to be gradually phased out along with
cross subsidies and obligation to supply.

(viii) Metering of electricity supplied, made mandatory.

PUBLIC UTILITY LAWS: OIL & GAS

Introduction To Indian Oil And Gas Industry:

The oil and gas industry in India dates back to 1889 when the first oil deposits in the country
were discovered near the town of Digboi in the state of Assam.41 The natural gas industry in
India began in the 1960s with the discovery of gas fields in Assam and Gujarat. As on 31 March
2015, India had estimated crude oil reserves of 763.48 million tonnes and natural gas reserves of
1488.49 billion cubic meters.

India imports 82% of its oil needs and aims to bring that down to 67% by 2022 by replacing it
with local exploration, renewable energy and indigenous ethanol fuel.42 India was the fourth top
net crude oil importer of 163 Mt in 2015.43

Oil and Natural Gas Commission was formulated in 1956. The liberalized economic policy,
adopted by the Government of India in July 1991, sought to deregulate and de-license the core
sectors with partial disinvestments of government equity in Public Sector Undertakings and

41
"Digboi: The First Oil Well in India". EduGreen. The Energy and Resources Initiative. Retrieved 23 July 2012
42
India launches first auction of exploration blocks under new licensing policy, Economic Times, 18 Jan 2018.
43
"BP Statistical Review of world energy 2016" (PDF). Retrieved 17 June 2016.

15 |
other measures. The Indian oil and gas sector is one of the six core industries in India and has
very significant forward linkages with the entire economy.

Gas is an important source for electricity generation in India. As on 23 October 2015, the
installed capacity of gas-based power plants in India was 25,057.13 MW, accounting for 7.9%
of the total installed capacity. Diesel is a minor source for electricity generation in India. The
total installed capacity of diesel-based power plants in India is 927.89 MW accounting for a
mere 0.3% of total installed capacity.44

Oil and Gas sector is divided into 3 parts:

1. Upstream
2. Midstream
3. Downstream

1. Upstream:
The upstream oil sector is a term commonly used to refer to the searching for and the
recovery and production of crude oil and natural gas. The upstream oil sector is also known
as the exploration and production sector. The upstream sector includes the searching for
potential underground or underwater oil and gas fields, drilling of exploratory wells, and
subsequently operating the wells that recover and bring the crude oil and/or raw natural gas
to the surface.
2. Midstream:
The midstream industry processes, stores, markets and transports commodities such as
crude oil, natural gas, natural gas liquids and sulphur. Generally midstream is clubbed with
downstream industry.
3. Downstream:
The downstream sector includes oil refineries, petrochemical plants, petroleum product
distribution, retail outlets and natural gas distribution companies. The downstream industry
touches consumers through thousands of products such as petrol, diesel, jet fuel, heating oil,
asphalt, lubricants, synthetic rubber, plastics, fertilizers, antifreeze, pesticides,
natural gas and Propane.

44
"All India Installed Capacity of Utility Power Stations" (PDF). Retrieved 19 October2016.

16 |
The Indian Oil and Gas Legislations:

Over the years various policies have been implemented by the Government to regulate and
develop the oil and gas sector. The Petroleum Act, 1934 to control issues relating to import,
transport, storage, production, refining and blending of petroleum was already in place since
1934. Further, the Oil Fields (Regulation and Development) Act, 1948 and the Petroleum and
Natural Gas Rules, 1959 provided regulatory framework for domestic exploration and
production of Oil & Gas.

 The Petroleum Act, 1934:

The act deals with import, transport, storage, production, refining, and blending of petroleum.
The Act is one of the oldest acts in the oil and gas sector. Earlier to this act the rules regarding
the above specified activities were separate for separate States. This Act brought about
uniformity in this field.

 The Petroleum Minerals Pipelines (Acquisition of Right of users in Land) Act,

1962:

It is an Act to provide for the acquisition of right of user in land for laying pipelines for the
transport of petroleum and minerals, Publication of notification for acquisition, 45 Hearing of
objections46

 Oilfields (Regulation and Development) Act, 1948:

It is basic enabling statute for licensing and leasing of petroleum and gas blocks by the
appropriate government. It covers mineral oils which are defined as including natural gas and
petroleum.47 Under the Act mining lease is defined exhaustively to cover all forms of exploring
and exploiting mineral oils and all purposes connected thereto48. Further it empowers central

45
Section 3
46
Section 5
47
S.3(c)
48
S.3(d)

17 |
government to make rules with regard to mining leases 49 and also empowers central government
to make rules for the development of mineral oil.50

 Petroleum and Natural Gas Rules, 1959:

Rules provide framework for grant of exploration licenses and mining leases
Salient features of the Rules are:
1. Prohibition on prospecting and mining except under a license or lease granted under the
rules51
2. Central Government has the power to grant licenses or leases in respect of any land
vested with it or minerals underlying the ocean within the territorial waters or the
continental shelf52
3. State government has power to grant license or lease over lands vested with it53
4. Person obtaining exploration license obtains the exclusive right to a lease for producing
oil/gas over any part of area covered in license
Territorial Waters, Continental Shelf, Exclusive Economic Zone And Other Maritime
Zones Act, 1976
5. Article 297 of the Constitution vests resources found in these areas with Central
government. No exploration in the Continental shelf and exclusive economic zone
permitted without Central Government's permission

 Petroleum and Natural Gas Regulatory Board Act, 2006:

The Petroleum and Natural Gas Regulatory Board Act, 2006 was enacted in April, 2006.
Consequently, Government has set up in October, 2007, the Petroleum and
Natural Gas Regulatory Board to regulate the refining, processing, storage, transportation,
distribution, marketing and sale of petroleum, petroleum products and natural gas, excluding
production of crude oil and natural gas. The aim is to protect the interest of consumers and

49
S.5
50
S.6
51
Rule 4
52
Rule 5(i)
53
Rule 5(ii)

18 |
entities engaged in specific activities relating to petroleum, petroleum products and
natural gas and to ensure uninterrupted and adequate supply of these products in all parts of the
country and to promote competitive markets and for matters connected therewith or incidental
thereto.

PUBLIC UTILITY LAWS: FIRE SAFETY

Introduction To Indian Fire Safety Industry:

On an average, in India, every year, about 25,000 persons die due to fires and related causes.
Female accounts for about 66% of those killed in fire accidents. It is estimated that about 42
females and 21 males die every day in India due to fire. According to the statistics released by
the National Crime Records Bureau, fire accounts for about 5.9% of the total deaths reported
due to natural and un-natural causes during the year 2012. Probably many of these deaths could
have been prevented, had we taken enough fire protection measures.54

According to one estimate the major losses reported by the Indian Insurance Companies in the
year 2007-2008 indicate, that about 45% of the claims are due to fire losses. 55 According to Fire
Risk Survey (FRS) 2013, carried out by Pinkerton & Federation of Indian Chambers and

54
Accidental Deaths and Suicides in India 2012 – National Crime Records Bureau, New Delhi, 2013.
55
Hegde Patil, S.B. and Nair, R.R. – Management of Industrial Hazards (CEP Publications) Bangalore, All India
Council for Technical Education, 1997.

19 |
Industry, in India, fire accounted for 8.45% of the overall ranking of risks. FRS also revealed
that fires has been rated as the 5th highest risk in industry in 201356.

An effective fire prevention strategy is an essential feature of fire protection. There exists large
number of different types of firefighting equipment and suppression systems like CO2, FM 200,
and NOVEC, to suit specific requirements. Automatic fire sprinklers coupled with detection are
the most effective fire protection system found in High Rise buildings which can, not only
detect the fires, but also extinguish the fires in the initial stage itself. Application of Water Mist
in various situation is gaining momentum every day. Passive fire protection system is also
becoming more and more popular in India.57

The Indian Fire Safety Legislations:

Fire prevention and fire services in India are primarily provided by the government agencies.
Every state and union territory of India is equipped with a separate department for fire services.
Most of the state fire departments in the country come under the administrative ambit of the
home department in that respected state. The Ministry of Home Affairs (MHA) also known as
Home Ministry often provides suggestions to states and union territories on fire prevention, fire
protection and fire legislation.

The legislations, standards and codes have a vital role in forcing the occupiers to provide the
required fire protection system, both active and passive. The National Building Code of India,
2005, is the basic model code in India on matters relating to building construction and fire
safety. Many of the code provisions have been incorporated by various State Governments and
Local Bodies in their own building regulations.58

56
Hegde Patil, S.B. and Nair, R.R. – Management of Industrial Hazards (CEP Publications) Bangalore, All India
Council for Technical Education, 1997.

57

58
Nair, R.R. and Joshi, D.K. – Safety Audit (CEP Publications) Bangalore, All India Council for Technical
Education, 2001.

20 |
The Maharashtra Fire Prevention and Life Safety Measures Rules 2009, framed under the
Maharashtra Fire Prevention and Life Safety Measures Act 2006, is an example to this, and is
aimed to improve the status of fire safety measures in Maharashtra. Often a question has been
raised by many that who will be responsible for providing the required fire protection and
prevention system in a building or in an occupancy.59

The acts and rules enacted by the State of Maharashtra has well defined on these points.
According to Section 3 of the Maharashtra Fire Prevention and Life Safety Measures Act, 2006,
the developer, owner, occupier or whatever name called shall comply with all the fire and safety
measures adhering to the National Building Code of India, 2005, and as amended from time to
time, failing which it shall be treated as a violation of the Act. It means that the onus of
maintaining the fire safety installations in a building or in occupancy is the responsibility of the
owner or occupier.

In India, although there are many rules and regulations, codes and standards related to fire
safety, these are seldom followed. Laxity in following fire safety measures caused major fires in
many buildings. Some of the fire authorities in India even felt that in the absence of heavy fines
and penalties, occupiers or societies do not bother to conduct regular maintenance of the fire
prevention systems installed in their buildings.

Upto 1925, Uttar Pradesh had Fire Services were only in its KAVAL towns under the Municipal
Boards. KAVAL is the abbreviated form of the prominent cities of Uttar Pradesh namely
Kanpur, Agra, Varanasi, Allahabad and Lucknow. By the end of 1939 the beginning of Second
World War triggered the need for well-organized fire services throughout India. The fire
services of the Five KAVAL towns of U P with the Municipal Boards were taken over by the
State Government on 26th July 1944 and thus Uttar Pradesh Fire Services was established.
Till 1952 these Fire Stations catered to services for the Municipal Board area. Uttar Pradesh
Fire Services Act of 1944 was amended in 1952 and Fire Service was extended to the entire
state.60

59
Ramesh Babu, J. – Learning from Losses, Cholamandalam MS Risk Services Ltd.

60
http://upfireservice.gov.in/fire_act.php

21 |
Uttar Pradesh Fire Services started functioning in 1944 with 8 Fire Stations and 198 Fire Service
Personnel and presently it has 242 Fire Stations in 75 districts with more than 7730 Fire Service
Personnel. Previously Uttar Pradesh Fire Services had 166 Fire Service Stations at the time of
formation of the new state Uttaranchal. The Uttar Pradesh Fire Services is presently equipped
with more than one thousand Fire Engines and attends to fire incidents and fire related
calamities.61

Fire Safety Audit is found to be an effective tool for assessing fire Safety standards of an
organization or occupancy. In other words, it is aimed to assess the building for compliance with
the National Building Code of India, relevant Indian Standards and the legislations enacted by
State Governments and Local Bodies, on fire prevention, fire protection and life safety
measures.

Though a comprehensive fire safety audit can address the inherent fire hazards associated with
the day to day activities in an occupancy and recommend measures to reduce the potential fire
hazards, there is no clear cut provisions in any of the safety legislations in India regarding the
scope, objectives, methodology and periodicity of a fire safety audit.62

However, NBC of India recommends for periodical fire safety inspection by the key personnel
of the occupants of the building to ensure fire safety standards. In case of industrial building, the
statutory authorities insist for fire safety audit by external agencies depending on the type of
activity and the nature of the materials handled in the building.

The Standing Fire Advisory Committee was constituted by the Ministry of Home Affairs on the
recommendation of the Conference of Chiefs of Fire Services in India. The constitution was
revised by the Ministry of Home Affairs and the membership of the Committee enlarged, to
include all State Government’s representatives and representatives of all Union Territories and
other Central Ministries. With the appointment of a Fire Adviser in the Ministry of Home
Affairs in the year 1968, he was nominated as the Member Secretary of the Committee.
61
http://upfireservice.gov.in/fire_act.php
62
Safety and Fire Protection Handbook, 2nd Edition, – Edited by R. Veeraraghavan. Safe Technology, Mumbai,
2009

22 |
 CONCLUSION

The term public utility implies a public use of an article, product or service carrying with it the
duty of the producer or manufacturer or one attempting to furnish the service to serve the public
and treat all persons alike, without any discrimination. Public utilities production, transmission
and distribution to the final customers. Garuham Roper defines a public utility as “any
undertaking that meets the needs or inconveniences of a considerable section of the public and
that places the undertakings in a position justifying the imposition of the control in return for

monopolistic or other special privileges.”

Public utilities are subject to various forms of public control and regulations, ranging from local
community based groups to State wide government monopolies. Public utilities are those
business undertakings which provide necessary services to the society at large. Public Utility
Services are a set of services provided for large numbers of citizens in which there are
potentially significant market failures that justify government involvement, whether in
production, finance or regulation. Among the core areas for which there is a consensus in favour
of government responsibility are: law and order, infrastructure i.e., major irrigation works,

23 |
transport services, water resources, road construction and maintenance, education, health, tax
collection, sanitation and social safety nets. Business or service which is engaged in regularly
supplying the public with some commodity or service which is of public consequences and need
based public utility services. Public Utilities always serve as monopolies which can exploit
customers by charging high prices, producing sub-standard products, providing poor quality
service etc.
Therefore, to avoid such undesirable practices, the government maintains a constant observation
over the operations of public utility services. Further, any deficiency in products and quality of
service manufactured by public utility agencies would have far reaching
negative impact on the society. Therefore strict rules and regulations have been laid down with
regard to their accountability, transparency, performance and functioning.

BIBLIOGRAPHY

 WEBSITES REFERED:
1. www.definitions.uslegal.com
2. www.Investorwords.com.
3. www.Cpuc.ca.gov.
4. www.nytimes.com
5. www.businessmanagementideas.com
6. www.wikipedia.org
7. www.accountlearning.com
8. www.indianrailways.gov.in
9. www.scribd.comwww.indianrailwayemployee.com
10. www.drishtiias.com
11. www.upfireservice.gov.in

24 |
 12. www.newspapers.com

 ARTICLES REFERED:
1. Rothbard, Murray. "Power and Market". Mises Institute.
2. Hegde Patil, S.B. and Nair, R.R. – Management of Industrial Hazards (CEP
Publications) Bangalore, All India Council for Technical Education, 1997.
3. Nair, R.R. and Joshi, D.K. – Safety Audit (CEP Publications) Bangalore, All India
Council for Technical Education, 2001.
4. "Digboi: The First Oil Well in India". EduGreen. The Energy and Resources Initiative.
5. Singh, Vijay Pratap (27 February 2010). "SMS complaint system: A Northern Railway
brainwave spreads". Indian Express.
 BOOKS REFERED:
1. Safety and Fire Protection Handbook, 2nd Edition, – Edited by R. Veeraraghavan. Safe
Technology, Mumbai, 2009
2. Ramesh Babu, J. – Learning from Losses, Cholamandalam MS Risk Services Ltd.

 DICTIONARY REFERED:
1. Merriam-Webster Dictionary.
2. Energy Dictionary
 PUBLICATIONS REFERED:
1. "Let there be light". The Telegraph.
2. "All India Installed Capacity of Utility Power Stations" (PDF).
3. "BP Statistical Review of World Energy June 2017" (PDF).
4. "IBEF Power" (PDF). IBEF.
5. "India can achieve 1,650 billion units of electricity next year, Piyush Goyal".
6. "Government decides to electrify 5.98 crore unelectrified households by December 2018".
7. "Let there be light". The Telegraph.
8. "Government decides to electrify 5.98 crore unelectrified households by December 2018".
9. Indian Railways Statistical Publications 2016-17. "stats-network" (PDF).
10. "Chhatrapati Shivaji Maharaj Terminus". World Heritage List. World Heritage Committee.
2004.

25 |
11. "Mountain Railways of India". World Heritage List. World Heritage Committee. 1999.
12. "Indian Railways Statistical Publications 2016-17: Statistical summary - Indian
Railways" (PDF). Ministry of Railway.
13. "Indian Railways Budget Documents 2018-19" (PDF). Ministry of Railway.
14. "Indian Railways Report" (PDF). Indian Railways. 2015.
15. "Where Growth Centers". The Salina Evening Journal. Salina, Kansas. November 6, 1922.
16. "BP Statistical Review of world energy 2016" (PDF).
17. "All India Installed Capacity of Utility Power Stations" (PDF).

26 |