DARBHANGA-MOTIHARI TRANSMISSION COMPANY LIMITED AND ORS. Vs. MAITHAN POWER LIMITED AND ORS.
LAWS(ET)-2015-3-1
CENTRAL ELECTRICITY REGULATORY COMMISSION
Decided on March 18,2015

Darbhanga -Motihari Transmission Company Limited And Ors. Appellant
VERSUS
Maithan Power Limited And Ors. Respondents

JUDGEMENT

- (1.) THE first petitioner herein, Darbhanga -Motihari Transmission Company Limited, has been granted transmission licence under Section 14 of the Electricity Act, 2003 (hereinafter referred to as "the Act") to transmit electricity as a transmission licensee and for that purpose to undertake the business of establishing the transmission system for 'Eastern Region System Strengthening Scheme -VI (hereinafter referred to as "Transmission System")' on Build, Own, Operate and Maintain? (BOOM) basis, the details of which are specified in the schedule attached to the licence issued vide order dated 30.5.2014. Darbhanga -Motihari Transmission Company Limited and IDBI Trusteeship Services Limited have filed a combined petition for creation of security in favour of IDBI Trusteeship Services Limited as Security Trustee for the benefit of the banks/financial institutions/non -banking financial companies led by IDBI Bank Limited, including its successors transferees, Novatees and assignees, as security for the financial assistance of an aggregate amount of Rs. 605 crore provided by IDBI Bank Ltd., India Infrastructure Finance Company Limited, PTC India Financial Services Limited and Union Bank of India (lenders) for part financing the project and performance bank guarantee facility of an amount of Rs. 22 crore from IDBI Bank Limited. The petitioners have made the following prayers: "(a) Grant the approval to create security interest over the TSA, the project assets, clearances, approvals and the Transmission License in favour of Security Trustee, including recognition of the right to appoint Hon'ble Commission's approved nominee in the event of enforcement of security interest in the TSA and Transmission License; (b) Approve the Security Documents execution, for creation and/or perfection of aforesaid Security Interest annexed at Annexure IV hereto in favour of IDBI Trusteeship Services Limited, in its capacity as the Security Trustee, for the benefit of the Lenders; (c) Pass such other order/orders, as may be deemed fit and proper in the facts and circumstances of the case;"
(2.) ACCORDING to the first petitioner, in relation to financing of the project, financial assistance of Rs. 605 crore was sanctioned by IDBI Bank Ltd., India Infrastructure Finance Company Limited, PTC India Financial Services Limited and Union Bank of India on 13.6.2014, 19.8.2014, 15.10.2014 and 11.11.2014 respectively for part financing the project and performance bank guarantee facility of Rs. 22 crore was received on 13.6.2014 from IDBI Bank Limited. For this purpose, the petitioner and the lenders have appointed IDBI Trusteeship Services Limited as Security Trustee who has agreed to act as Security Trustee for the lenders and has entered into Security Trustee Agreement and other financing/security agreement with lenders on 3.12.2014. The first petitioner has submitted that in terms of the sanction letters of the lenders, the petitioner is required, amongst others, (a) to create security over all the movable and immovable assets of the first petitioner Including all movable and immovable assets of the project; (b) to assign by way of security the petitioner's rights, benefits, interest under the transmission licence and the TSA; and (c) to create pledge of shares held by Essel Infraprojects Limited in the first petitioner to the extent of fifty one percent of the issued and paid up equity share capital of the petitioner, in favour of the Security Trustee for the beneficial interest of the lenders. The first petitioner has submitted that it is also required to create some of the above security interest prior to the first disbursal of funds and in the event such security interest is not created within the stipulated time, the petitioner would be required to pay an additional one percent interest per annum (compounded quarterly) over and above the applicable interest rate.
(3.) ACCORDING to the petitioners, Article 15.2 of the Transmission Service Agreement provides that the first petitioner is free to create any encumbrance over all or part of the security package or the other assets of the project in favour of the lenders or the representatives of the lenders as security. However, in terms of Article 15.2.4 of the TSA, the petitioner is required to take permission from this Commission prior to assignment of its rights, benefits, interests and obligations in the TSA. Accordingly, the present petition has been filed seeking prior approval of the Commission for creation and enforcement of security interest by the first petitioner over the TSA, the assets of the first petitioner and all assets in relation to the project and on its transmission licence in favour of Security Trustee for the benefit of the lenders. The petition was heard after notice to the petitioner and the respondents. No reply has been filed by the respondents. None was present on behalf of the respondents despite notice.;


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