BEFORE THE ELECTRICITY REGULATORY COMMISSION AT

Petition No. 881/2006

“In the matter of: Petition under section17 of the Electricity Act, 2003

Petitioners : (1) AEC Limited, (TPAL) Electricity House, Lal Darwaja, Ahmedabad.

(2) Torrent Power SEC Limited,(TPSL) Torrent House, Station Road, .

(3) Torrent Power Generation Limited, (TPGL) Torrent House, Off: Ashram Road, Ahmedabad.

(4) Torrent Power Limited,(TPL) Torrent House, Off: Ashram Road, Ahmedabad.

Represented by : Learned Sr.Advocate Shri Mihir Thakore with Advocate Shri Harnish V.Darji for all petitioners. Shri Murali Ranganathan for TPAL Shri D.B.Shah for TPSL Shri Sudhir Shah for TPGL & TPL.

V/s

Objectors : 1) Dr.Arvind Gupta, K-60, Jal Vayu Vihar, Noida-201 301.

And

Shri Ramkumarsinhji Jadeja, B/1001.Bageshree, Opp: Fun Republic, Satellite Road, Ahmedabad-380015.

2) Consumer Education & Research Society Suraksha Sankool, Sarkhej-Gandhinagar Highway, Thaltej, Ahmedabad-3800054.

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Represented by : Dr.Arvind Gupta &. Shri Ramkumarsinhji Jadeja for objector no.1 ……………………………..(Parties in person) Shri Kirti Bhatt & Shri K.K.Bajaj for objector no.2

CORAM

Shri G.Subba Rao, Chairman Shri K.P.Gupta, Member Shri Manmohan, Member

JUDGMENT

[1] The petitioners have filed the present petition on 12th April,2006 with the following prayers:

(a) To grant the approval to the proposed Scheme of Amalgamation of the Applicant Companies TPAL, TPSL, TPGL and TPL in so far as such amalgamation results in the merger of the TPAL’s utility with the utility of TPSL and the transfer of the licences and utilities of TPAL and TPSL to TPL. (b) To approve the transfer of the licences granted to TPAL and TPSL so as to incorporate the name of TPL as the licensee in place of TPAL and TPSL in the licences granted to the them on the order of the High court of Gujarat passed under section 391(2) of the Companies Act, 1956 being filed with the Registrar of Companies.

[2] The facts mentioned in the petition are briefly as under:

2.1 Torrent Power AEC Limited (TPAL), one of the petitioners is an existing Company registered -under the Companies Act, 1956 and is a Distribution Licensee entitled to distribute electricity in the area specified in the license. The company also has its own generating station and is a 93-year old integrated power

Page 2 of 17 generation, transmission and distribution Company, distributing power to the twin cities of Ahmedabad and Gandhinagar, TPAL’s energy supply is expected to grow at the rate of 4% per annum.

2.2 Torrent Power SEC Limited (TPSL), the second petitioner, is an existing company registered under the Companies Act, 1956.TPSL is a distribution licensee entitled to distribute electricity in the area specified in the license. TPSL is a 85-year-old power distribution company. TPSL has a peak demand of more than 500 MW with almost 70% of sales to industrial and commercial customers. The energy demand of TPSL is expected to grow at 6-7% per annum.

2.3 Torrent Power Generation Limited (TPGL), the third petitioner, is a company incorporated under the Companies Act, 1956. TPGL is a company jointly promoted by TPAL, TPSL and Torrent Private Limited, and is setting up the 1100 MW SUGEN combined cycle power plant near Surat. The project has achieved all the major milestones and is scheduled to be commissioned by the third quarter of 2007, TPAL and TPSL have already signed power purchase agreements with TPGL for off-take of almost 75% of its power generation capacity and energy. The PPA has already been approved by the Commission. A petition has also been filed with the Honorable Central Electricity Regulatory Commission for in- principle approval of the capital cost of the said project.

2.4 The fourth petitioner, Torrent Power Limited (TPL), is a company incorporated under the Companies Act. The main object of TPL is to generate, transmit, distribute and trade in electricity. At present the company is not carrying on any activity.

2.5 The petitioners further stated that a Scheme of Amalgamation was proposed and approved by the Boards of Directors of TPAL, TPSL, TPGL and TPL . According to the proposed Scheme of amalgamation, it is envisaged that the TPAL, TPSL and TPGL will get merged into TPL. This Scheme will be submitted by TPAL,

Page 3 of 17 TPSL, TPGL and TPL to the Hon’ble High Court of Gujarat under Sections 391 - 394 and other applicable provisions of the Companies Act, 1956 for their sanction. The amalgamation would become effective upon the sanction of the Scheme by the Hon’ble High Court and TPAL, TPSL and TPGL would get merged into TPL.

2.6 The rationale for the proposed amalgamation has been spelt out in detail by the petitioners. Accordingly, they outlined the strategic, financial, organizational and operational benefits that would accrue to the merged entity. The petitioners contended that TPAL,TPSL and TPGL have unique strengths and distinctive competencies as mentioned in the petition and as reflected in their present activities and past track record. The petitioners will address the twin objectives of sustaining existing efficiency and securing future growth. It was also contended that the merged entity would be able to leverage its existing assets and human resources for enhancing the value to all stakeholders including those of consumers of the companies at large. This would also improve the merged entity’s ability to secure better terms from vendors/creditors and make it eligible for participation in the upcoming investment opportunities in the electricity sector of the country. The merger would not increase the area of the licensees as it is only an application for mere transfer of licenses.

2.7 The petitioners have submitted that the present petition may also be treated as an application under Section 25 of the Gujarat Electricity Industry (Re-organization and Regulation) Act, 2003, the provisions of which continue to apply to the State of Gujarat to the extent that they are not inconsistent with the provisions of Electricity Act, 2003.

[3] The Commission directed the petitioners on 8th May, 2006 to issue a public notice in two Gujarati and one English daily news papers with wide circulation in the distribution areas with a view to get comments/suggestions of the stakeholders within a period of thirty (30) days. The petitioners were also asked to upload their

Page 4 of 17 petitions along with annexures on their websites and also to make arrangement in their office for providing copy of the petition with annexures, if demanded by the stakeholders. Accordingly, the petitioners have given public notices in “Sandesh” and “Gujarat Samachar” (Gujarati daily newspapers) and in “The Times of ” (English daily). The petition was also kept on the websites of the petitioners for inviting comments/suggestions from the stakeholders. The Commission also kept the petition (along with annexures) on its website.

[4] In response to this, the Commission has received two objections: (1) from Dr.Arvind Gupta of Noida and Shri Ramkumarsinhji Jadeja of Ahmedabad; and (2) fromConsumer Education & Research Society, Ahmedabad. The main points made in there objections are briefly narrated below.

4.1 Dr.Arvind Gupta & Shri Ramkumarsinhji Jadeja have filed a common objection on 8th June,2006 contending inter alia, that the petitioners have suppressed the material fact that a Public Interest Litigation is pending before the Hon’ble High Court of Gujarat in the matter of SCA 8936 of 1998 questioning the legal validity of Torrent Group’s acquisition of 28.89% equity shares of the State Government in the Ahmedabad Electricity Company Limited. The other points raised in this objection include: improper procedure followed by the State Government for disinvestment of its share holding in A.E.C; submission of the license transfer applications by petitioners before securing the approval of the competent authorities for the proposed scheme of amalgamation of the companies; and proposing an arrangement which runs counter to the principles of unbundling power generation, transmission and distribution activities. Another point made in the objection is that the licenses of Ahmedabad Electricity Company Limited and Surat Electricity Company Limited have not been transferred in the name of TPAECL and TPSECL. These two objectors have proposed that the Commission should not entertain this petition at this stage.

Page 5 of 17 4.2 Consumer Education & Research Society has filed its objection on 8th June,2006 expressing inter alia, their opposition to the merger / amalgamation of these three companies on the only ground that the petition filed by the petitioners is completely silent on promoting and protecting the interests of consumers. They have no other objection regarding the scheme of amalgamation. The objector has further submitted that after merger of existing three companies into one company i.e. Torrent Power Limited, the electricity tariff will be of two types: one applicable to TPAECL and the other to TPSECL. The objector also mentioned that TPL should constitute two Distribution Companies as two separate tariffs cannot be applicable in one company. The model should be that of unbundled Gujarat Electricity Board with Gujarat Urja Vikas Nigam Ltd. and four DISCOMs. The objector has also urged that the Appellate Committee which has been discontinued by the petitioners should be revived/ reconstituted for resolving the complaints of the electricity consumers.

[5] The petitioners have filed replies to the objections filed by both the objectors before the Commission with copies to the objectors. The replies have been taken on record.

[6] The matter was kept for hearing on 1.7.2006. When the matter was called out, Learned Sr. Advocate Shri Mihir Thakore and learned Advocate Shri Harish V.Darji alongwith Shri Murali Ranganathan, (on behalf of TPAL), Shri D.B.Shah (on behalf of TPSL) and Shri Sudhir Shah (on behalf of TPGL & TPL) were present for the petitioners. The objectors Dr.Arvind Gupta, and Shri Ramkumarsinhji Jadeja were also present. S/Shri Kirti Bhatt & K.K.Bajaj remained present on behalf of CERS.

[7] During the hearing, Dr.Arvind Gupta and Shri Ramkumarsinhji Jadeja have submitted common objections and reiterated the contentions as stated in their common written objections. Dr. Gupta in his oral submission before the Commission has mainly argued on the following issues/ contentions:

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(a) A Public Interest Litigation regarding Government of Gujarat’s transfer of shares of Ahmedabad Electricity Company Limited to the Torrent Group is pending before the Hon’ble High Court of Gujarat. The question in that petition is yet to be resolved and hence, the present petition is premature.

(b) The proposed scheme of amalgamation/ merger is pending before the Hon’ble High Court of Gujarat and as such, application for transfer of licenses under section 17 of the Electricity Act, 2003 is premature as well.

(c) He has also pointed out that Torrent Group had shown MCN Energy US as a partner at the time of acquisition of shares of AEC from the Government in the year 1997-98. The petitioners have secured the transfer of shares from the State Government in their name by suppressing the material fact regarding this firm. As mentioned earlier, the transfer of shares by the State Government has been challenged in the High Court of Gujarat through a Public Interest Litigation (SCA No.8936/1998) and the matter is pending before the High Court of Gujarat. The Company Petitions No.219/2006 to 222/2006 are also pending before the High Court of Gujarat, and hence the petition before the Commission should not be entertained at this stage.

7.1 Shri Ramkumarsinhji Jadeja submitted that he is a consumer of TPAL and he feels that the aforesaid petition will lead to creation of a private monopoly which in his view would be worse than a public monopoly. He also argued that the licenses of the Ahmedabad Electricity Company Ltd. and the Surat Electricity Company Ltd. are still in the same name and not transferred to TPAECL or TPSECL. Unless and until the licenses are transferred in the name of these new entities, there is no question of further transferring the licenses in the name of TPL at this stage. Referring to para 3 of the reply given by the petitioners he stated that the scheme of Amalgamation is pending before the Hon’ble High

Page 7 of 17 Court of Gujarat and that the matter is listed on 5th July, 2006. He also submitted that the petitioners should have to file the application after the judgment of the Hon’ble High Court on the scheme of amalgamation/ merger.

[8] Shri Kirti Bhatt on behalf of CERS submitted that their organization is working for the interests of the consumers and that their objection to the petition is only on the limited ground of consumer interest and protection. He has advanced the following contentions during the hearing:

(i) The amalgamation may lead to increase in anti-consumer behaviour by the petitioners. (ii) CERS receives many complaints from the consumers against the petitioners and with the proposed amalgamation, such complaints will increase. (iii) The petition is silent on the measures the merged entity will take to protect consumer interest. Besides, it may increase the tariff. The petition makes no mention about efficiency of power supply system, tariff, and redressal of consumers grievances. As all these issues have not been addressed the petition should be rejected. During the hearing, Shri Kirti Bhatt mentioned that they would also like to make a written submission about the numerous complaints they are receiving from the consumers about conduct of TPAEC. In the written submission filed on 5/7/06, CERS mentioned that TPAEC is following an unfair approach with the consumers and collecting huge amounts of money in the name of settlement under threat of disconnection of power. CERS had to file 12 matters before Consumer Dispute Redressal Forum in Ahmedabad. CERS prayed that measures should be taken so that proposed merger does not adversely affect the interests of consumers.

[9] Learned Sr. Advocate Shri Mihir Thakore on behalf of the petitioners, elaborated the reasons for the proposed scheme of amalgamation and for filing of petition

Page 8 of 17 with the Commission. He submitted that during the month of April-May, 2006 petitioners have filed petitions u/s.391 of the Companies Act,1956 seeking approval of the scheme of amalgamation from the Hon’ble High Court of Gujarat. The present petition was filed before the Commission on 12.4.2006 under section 17 of the Electricity Act,2003. The permission of transfer of licenses is contemplated and necessary prior to amalgamation. Therefore, the petition was filed before the Commission earlier. He drew our attention to the prayer in para 10(B) of the petition which reads:

“To approve the transfer of the licenses granted to TPAL and TPSL so as to incorporate the name of TPL as the licensee in place of TPAL and TPSL in the licenses granted to the them on the order of the High court of Gujarat passed under section 391(2) of the Companies Act, 1956 being filed with the Registrar of Companies”.

He further submitted that TPAL and TPSL are separate entities and have separate licenses for separate areas of operation. Once the Hon’ble High Court approves the scheme of amalgamation, the TPAL and TPSL would be merged into TPL and hence, the licenses of both the companies need to be transferred in the name of TPL i.e. the TPL will have 2 separate licenses for 2 separate areas of operation.

He submitted that the name of AEC Ltd. is changed to Torrent Power AEC Ltd. (TPAL) and that of SEC Ltd. to Torrent Power SEC Ltd. (TPSL) by the Registrar of Companies u/s 21 of the Companies Act, 1956. Shri Thakore emphasized that the change of names has not affected the legal status of the companies in any way. He added that the Torrent Private Limited has 48.37% share holding in the TPSL and 49.97% share holding in the TPAL. TPGL is also proposed to be merged with the Torrent Power Limited (TPL): at present, in TPGL the share holding of Torrent Power Limited (TPL) is 13.28%; that of TPAL is 46.65%; and that of TPSL is also 40.07%. All these companies are being merged with the TPL which is under the same management of Torrent Group. Therefore, the resultant new

Page 9 of 17 entity will benefit from the combined experience of each of these companies. The management control of the new entity will also remain with Torrent Group. After the amalgamation and transfer of licenses, the management and manpower of the new company will remain the same. There will be two separate licenses for the two separate areas of license. Shir Mihir Thakore mentioned that Dr. Arvind Gupta had challenged (in O.J.Appeal No.60 to 63 of 2006 in Company Petition No.219/2006, 220/2006, 221/2006 & 222/2006) the meetings of companies held pursuant to the application of merger and amalgamation. The Hon’ble High Court has passed in this matter an Oral Order on 26.6.2006 in which it is stated that “in view of the statement made by the Ld. Counsel for the appellant, the appeal deserves to be disposed of as not pressed with certain clarifications. It is clarified that the disposal of this appeal would not affect the rights and contentions of the appellants in (1) CA No.6482/2006 in SCA No.8936/98 (2) SCA 8936/98 and (3) Company Petition No.67/2006 to 70/2006”. Shri Mihir Thakore further mentioned that Shri Gupta had filed an interim application in writ petitions which were filed before Hon’ble High Court for restraining the convening of the meetings (of Companies) for amalgamation. The said matter came before Single Judge (Vacation) and he had not granted any interim relief. After the vacation, OJ Appeals were heard and subsequent to hearing OJ Appeal No.60 to 63/2006, they were withdrawn by the objector. Shri Thakore added that the Commission has to approve the transfer of license in accordance with the decision of the High Court of Gujarat in the petitions seeking approval for the scheme of amalgamation.

Shri Thakore also submitted that no foreign company is holding any share of Torrent Private Limited. He submitted that the matter before the Hon’ble High Court of Gujarat is on different grounds and has no relevance to the present petition before the Commission. He submitted that the PPAs between TPGL and TPAL and between TPGL and TPSL were approved by the Hon’ble Commission. At present, there are separate tariffs for TPAL and TPSL areas of licensee. The tariff in any case is to be determined by the Commission in

Page 10 of 17 accordance with the provisions of the Electricity Act, 2003. When TPAL, TPSL and TPGL amalgamate into TPL, the combined expertise and experience of the three companies will lead to better services to the consumers.

Shri Thakore further submitted that TPAL and TPSL have constituted Consumer Redressal Forums as provided in section 42 (5) of the Electricity Act, 2003. There is no provision for Appellate Committee in the Electricity Act, 2003. Therefore, the submission made by the CERS for such a Committee is not sustainable.

He also submitted that merging of licenses is different from merging of companies. The two licenses are required to be transferred to the new company but will remain independent. There would be no change in the conditions of license or the areas of license. He further submitted that all major stakeholders like LIC, financial institutions, the overwhelming majority of shareholders and the Government of Gujarat have voted in favour of the scheme of merger /amalgamation in the specially convened meetings convened pursuant to the order of the Hon’ble High Court. The AGM reports have also been submitted to the Hon’ble High Court. On all these grounds, Shri Mihir Thakore pleaded that the petition should be allowed.

[10] Against the submissions made by the Learned Sr.Advocate, Shri Mihir Thakore, Dr. Arvind Gupta submitted that the basic issues of ownership of TPAL and the management control of TPAL are under challenge before the Hon’ble High Court. He thus again submitted that the present petition is premature.

[11] We have carefully considered the pleas advanced by the representatives of the petitioners and the main points raised by the objectors. We have to examine these issues in the light of the provisions of the Electricity Act, 2003. In the written objection and during the hearing Dr. Arvind Gupta raised matters connected with the Companies Act and disinvestment of State Government holdings in AEC. As

Page 11 of 17 brought out earlier in this order, Dr Arvind Gupta’s principal objection is that the State Government did not follow an appropriate procedure while divesting its share in AEC in favour of Torrent group. As already mentioned, he had challenged this matter through a Public Interest Litigation, (SCA No. 8936/1998) before the Hon’ble High Court. On this ground, he contended that the basic issues of Torrent group’s ownership and management control of AEC are yet to be finally settled. Our view on these issues is that it evidently falls exclusively within the jurisdiction of the Hon’ble High Court and that we cannot address it.

As again brought earlier, the petitioners have filed Company Applications No. 219/2006 to 222/2006 seeking the approval of the Hon’ble High Court for a Scheme of Amalgamation between TPAL, TPSL, TPGL and TPL. The Hon’ble High Court has directed that special meetings of the shareholders/creditors etc. should be convened, as provided in the Companies Act, in respect of the said Scheme of Amalgamation. The meetings have been held as directed and the proceedings of the meetings have been submitted to the Hon’ble High Court. Dr Arvind Gupta moved the Hon’ble High Court (O.J. No. 60/2006 to O.J. No. 63/2006) seeking to restrain the convening of the said meetings of the companies for discussing the Scheme of Amalgamation. The Hon’ble High Court by oral order dated 26.6.2006 disposed of the O.J. petitions as not having been pressed further by the appellant. According to this order, the objectors are free to raise issues in the Civil Application No. 6482/2006 in SCA No. 8936/1998, in SCA No.8936/1998 and in Company Petitions No. 67/2006 to 70/2006. The objections sought to be raised by Dr Arvind Gupta with regard to the Scheme of Amalgamation from the point of view of the Company Law provisions and on other such legal grounds will be decided in the Order/Judgement to be passed by the Hon’ble High Court of Gujarat u/s 391(2) of the Companies Act. Such orders will be binding on all the concerned parties. The Commission is, therefore, of the view that it should not address such questions. The Commission would of course have to examine the issues arising from the Electricity Act, 2003.

Page 12 of 17 Dr. Arvind Gupta further argued that the Commission should defer consideration of the present petition till the scheme of amalgamation is decided by the Hon’ble High Court. We are unable to accept this argument .The Commission will have to examine the issue of transferability of license under the provisions of Electricity Act,2003. In our view, there is no bar on us in deciding and disposing of this petition. Nor are there any legal grounds for holding up the petition. As has been made clear subsequently in this order, our decision is subject to the orders and directions that may be passed by the Hon’ble High Court on the scheme of amalgamation.

11.1 We now turn to the objections which purport to draw support from the provisions of the Electricity Act, 2003. The present petition seeking approval for transfer of licenses was filed u/s 17 of the Electricity Act, 2003. One of the points made by Dr Arvind Gupta is that the Electricity Act, 2003 provides for unbundling of State Electricity Boards u/s 131. In other words, State Electricity Boards which presently combine the functions of generation, transmission and distribution can be split up into distinct entities each of which will carry on exclusively the functions of generation, transmission and distribution of electricity. Dr. Gupta argued that the present petition proposes merging of activities of generation and distribution (by merging TPGL, TPAL and TPSL into TPL). Such a proposal, he argued, runs counter to the approach for unbundling State Electricity Boards. Section 17 is reproduced below for ready reference.

“17. Licensee not to do certain things – (1) No licensee shall, without prior approval of the Appropriate Commission, - (a) undertake any transaction to acquire by purchase or takeover or otherwise, the utility of any other licensee; or (b) merge his utility with the utility of any other licensee: Provided that nothing contained in this sub-section shall apply if the utility of the licensee is situate in a State other than the State in which the utility referred to in clause (a) or clause (b) is situate.

Page 13 of 17 (2) Every licensee shall, before obtaining the approval under sub-section (1), give not less than one month’s notice to every other licensee who transmits or distributes electricity in the area of such licensee who applies for such approval. (3) No licensee shall at any time assign his license or transfer his utility, or any part thereof, by sale, lease, exchange or otherwise without the prior approval of the Appropriate Commission.

(4) Any agreement relating to any transaction specified in sub-section (1) or sub-section (3), unless made with the prior approval of the Appropriate Commission, shall be void.”

It can be readily seen that Section 17 only provides that a licensee can not do certain things without prior approval of the Commission. However, the proposed transfer of licenses of TPAL and TPSL to TPL is not barred by Section 17. Such transfer, however, requires the approval of the Commission u/s 17.

11.2 It is difficult to accept the argument that the Scheme of Amalgamation presented by the Petitioners runs counter to the provisions of the Electricity Act, 2003. It is true that the said Act (Part XIII) contains enabling provisions for unbundling State Electricity Boards. In other words, it is open to the State Government to split up the Electricity Boards into separate functional units exclusively for generation, transmission and distribution of electricity. Such unbundling of the Electricity Boards is expected to improve their efficiency. Section 17 is a specific provision which inter alia provides for transfer of licenses and Section 131 is a provision for unbundling of State Electricity Boards. Section 131 and Section 17 of the Electricity Act, 2003 have to be read harmoniously. It can not be said that Section 131 negates the provisions of Section 17. We are thus, of the view that the provisions of the Electricity Act, 2003 dealing with unbundling of State Electricity Boards do not come in the way of assignment of license or transfer of utility.

Page 14 of 17 11.3 It was also argued that in the licenses the name of AEC Limited is not changed to TPAL and that of SEC Ltd is not changed to TPSL and that the petition is therefore not maintainable. We find that the Registrar of Companies has changed the name of the companies u/s 21 of the Companies Act. Moreover, the change of name does not alter the status of the legal entity.

11.4 Another objection to this petition was raised on the ground that the transfer of licenses to TPL would amount to creation of a private monopoly and that it would adversely affect the rights and interests of the consumers. Torrent Private Limited holds 48.37% shareholding in TPSL, 49.93% shareholding in TPAL and 13.28% shareholding in TPGL. At present, TPAL is holding a valid distribution license for the cities of Ahmedabad and Gandhinagar and TPSL is holding a valid license for the city of Surat (for the areas specified in the licenses). There are no other distribution licensees in these licenses areas. It was submitted during hearing that both TPAL and TPSL rank very high among distribution licensees in the country in terms of operational efficiency and low T & D losses. The Electricity Act, 2003 has provisions for promoting competition and protecting the interests of consumers. The said Act provides for multiple licensees in the same area and this would serve as a check even when there is only a single distribution licensee in an area. Section 60 of the Electricity Act, 2003 empowers the Regulatory Commission to issue appropriate directions to a generating company or licensee who (inter alia ) abuses its dominant market position. Further, as distribution of electricity is a regulated activity, the licensee is bound by the license conditions. And such conditions govern in numerous ways the licensees’ conduct of business. Hence the fears expressed about the likely enhanced monopoly powers of the new merged entity are unjustified.

11.5 The Electricity Act, 2003 has, as noted earlier, several provisions for consumer protection. It provides for the redressal of electricity consumer grievances. The Consumers Redressal Forums have already been established in the areas of all distribution licensees (including those of present petitioners in Gujarat) An

Page 15 of 17 Ombudsman’s office has also been established. The Commission has notified various regulations covering Distribution Licensees; Electricity Supply Code and Related Matters; Terms & Condition of Tariff; Licensee’s power to recover expenditure incurred in providing supply and other Miscellaneous charge; Standard of Performance of Distribution Licensee; Establishment of Ombudsman; and Establishment of Forum of Redressal of Grievances of Consumers. These Regulations (along with the provisions of the Electricity Act, 2003) have adequate mechanisms and procedures for redressal of consumer grievances and for protecting consumer interests.

11.6 One of the objections of CERS is about the likely upward revision of the tariff by the petitioners consequent upon the transfer of licenses. This contention is also not well founded. The determination of consumer tariff falls within the sole purview of the appropriate Commission under section 62 of the Act. No licensee can charge higher than the tariff fixed by the Commission. The Commission has also notified the regulations for determination of tariff and accordingly the whole process of determination of tariff is undertaken in the most transparent manner. Therefore, the Commission does not find any substance in this objection. As already noted, the Commission has powers under section 60 of the Electricity Act, 2003 to deal with issues arising from market dominance by a licensee or a utility. The Commission has the right to issue directions to the licensee as and when such need arises. As submitted by the petitioners the new merged entity will be owned and managed by the same business group. They also submitted that the combined experience and skills of these entities will add to efficiency of operation. No changes are being made in the conditions of licenses, their scope or in their geographic limits. The existing tariffs will continue in the respective areas of licenses, until such time as such tariffs are changed by the Commission in accordance with the provision of law. Therefore, the Commission is of the view that the transfer of licensee and the determination of tariff are separate matter. In view of above discussion, the Commission is of the view that the transfer of licenses will not affect the interest of the consumer.

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11.7 Another issue raised by CERS is that the proposed merger can lead to a situation where a single entity will operate two different areas of license with two different tariffs. At present, the consumer tariffs are not entirely uniform as between the license areas of TPAL, TPSL and the discoms of unbundled GEB. However, the minor differences in consumer tariffs as between different distribution companies are compatible with the provisions of the Electricity Act, 2003.

[12] In view of the above stated facts, circumstances and findings, the Commission approves the transfer/assignment of license granted to Torrent Power Ahmedabad Electricity Company Limited and Torrent Power Surat Electricity Company Limited so as to incorporate the name of TPL as licensee in place of TPAL and TPSL in the respective licenses. This approval is subject to the order and directions that may be issued by the High Court of Gujarat on the scheme of amalgamation/merger of TPAL, TPSL, TPGL and TPL.

[13] We order accordingly.

[14] With this order, the petition stands disposed of.

Sd/- Sd/- Sd/- (G. SUBBARAO) (K.P.GUPTA) (MANMOHAN) CHAIRMAN MEMBER(F) MEMBER (T)

Place : Ahmedabad Date: July 6, 2006

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