Common use of ACTIVITIES OF DISTRIBUTION FRANCHISEE Clause in Contracts

ACTIVITIES OF DISTRIBUTION FRANCHISEE. 5.1 ‘Right of Use’ to DISCOM Distribution Assets 5.1.1 The Distribution Franchisee shall be entitled to use the DISCOM Distribution Assets to perform its obligation under this Agreement. DISCOM shall, however, continue to be the owner of such assets. 5.1.2 The Opening Asset Register of the Franchise Area shall be verified and signed by both the parties in compliance to the provisions of Article 2.2.1.1. 5.1.3 Distribution Franchisee shall use and maintain such assets at its own cost to keep them in good working condition as per Prudent DISCOM Practices. 5.1.4 Distribution Franchisee shall not dispose off or alienate or in any way encumber such assets without prior written approval of DISCOM 5.1.5 If any such asset is scrapped, the same shall be deposited at the designated store of the DISCOM by the Distribution Franchisee at its cost. DISCOM shall duly identify the scrap against its Asset register and update the Asset Register. 5.1.6 On termination/ expiry of this agreement, the Distribution Franchisee shall, without demur, hand over physical possession/custody of DISCOM Distribution Assets in same condition, subject to normal wear and tear as per Article 5.1.5 of this agreement. 5.1.7 Any shortfall in the quantity of DISCOM Distribution Assets verified and recorded in the joint audit report shall be recovered from the Distribution Franchisee at the cost of replacement of such asset. The Distribution Franchisee will have the option to replace such missing or lost equipment (shortfall) with comparable equipment. 5.1.8 If the Distribution Franchisee uses DISCOM assets that have not been transferred as a part of DISCOM Distribution Assets, separate charges, as specified by DISCOM, for the use of the same shall be payable to DISCOM. 5.2 Inventory of O&M Spares 5.2.1 DISCOM will hand over the inventory of O&M spares available in the Franchise Area as is there basis to the Distribution Franchisee on the Effective Date of this Agreement. Further, for the period of first three months from Effective Date DISCOM may arrange to issue O&M spares to the Distribution Franchisee at its request, subject to availability, and at rates decided by DISCOM. 5.2.2 Upon termination/expiration of this Agreement, Distribution Franchisee shall return the inventory of O&M spares to DISCOM in the same form and quantity as specified in Article 5.2.1. In case of non availability of similar specification of material, Distribution franchisee shall submit the material with specification as accepted by DISCOM. 5.2.3 Distribution Franchisee shall compensate DISCOM for the difference between the inventory levels in quantity terms on Effective Date and that on date of termination/expiration, to eliminate any risk with respect to inflation. 5.2.4 DISCOM shall compensate the Distribution Franchisee for the inventory of O&M spares at termination / Expiry of Agreement at latest price ledger of the DISCOM for the particular item acquisition price as may be applicable provided that, the maximum inventory that shall be taken over by DISCOM shall not be more than the minimum inventory norms of DISCOM from time to time.