JAYPEE POWERGRID LIMITED Vs. JAIPRAKASH POWER VENTURES LIMITED AND ORS.
CENTRAL ELECTRICITY REGULATORY COMMISSION
Jaypee Powergrid Limited
Jaiprakash Power Ventures Limited And Ors.
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(1.) THE petitioner, Jaypee Powergrid Limited, has been granted transmission licence under Section 14 of the Electricity Act, 2003 ('Act'), to transmit electricity as a transmission licensee and for that purpose to construct, maintain and operate the transmission system associated with evacuation of power from Karcham -Wangtoo HEP located in the State of Himachal Pradesh to Abdullapur sub -station located in the State of Haryana (hereinafter referred to as 'the project'), the details of which are specified in the schedule attached to the licence dated 1.10.2007. The petitioner has filed the present petition with the following prayers:
"(a) Grant approval under Sub -sections (3) and (4) of Section 17 of Electricity Act, 2003 to Jaypee Powergrid Limited for creation and continuation of securities by way of Hypothecation and/ or Mortgage of assets and assignment of all Project related documents including Transmission Service Agreements, Licenses, permits, approvals, consents, contracts, rights, interests and all benefits incidental to the Project in favour of
(i) Security Trustee, presently IDBI Trusteeship Services Limited, (or any other Security Trustee to be appointed by the Lenders of Jaypee Powergrid Limited) for the benefit of Consortium Lenders as mentioned in the Instant Petition or the reconstituted consortium of lenders formed after addition/ deletion/ variation of one or more of the existing lenders; and
(ii) Working Capital Lender(s) presently being ICICI Bank Limited (or any Security Trustee to be appointed for the benefit of the Working Capital Lender(s)
(b) pass such further order or orders as this Hon'ble Commission may deem fit and proper in the circumstances of the case."
(2.) THE petitioner has submitted as under:
"(a) The petitioner had approached a banks/financial institutions consisting of ICICI Bank Limited, Punjab National Bank, Central Bank of India, Jammu and Kashmir Bank and United Bank of India (Original Lenders) for the grant of loan to the extent of Rs. 700 crore. For this purpose, on 17.6.2008, a 'Common Facility Agreement' was entered into with the Original Lenders, ICICI Bank Limited (Facility Agent) and IDBI Trusteeship Services Limited (Security Trustee).
(b) On 20.8.2008, a 'Security Trustee Agreement' was executed with IDBI Trusteeship Services Limited (Respondent No. 26) who had agreed to act as trustee for the lenders and hold the security pursuant to the Financing Agreements in accordance with the terms and conditions thereof for the benefit of the Original Lenders.
(c) Pursuant to the 'Common Facility Agreement' and other Financing Agreements, the petitioner created first charge on 18.9.2008 by way of hypothecation of the project assets in favour of Security Trustee as a security for the due repayment of facilities availed from the lenders (secured obligations) by way of Deed of Hypothecation executed in favour of Security Trustee.
(d) On 23.10.2008, 'Common Facility Agreement' dated 17.6.2008 was novated by Novation Notice due to joining of Indian Overseas Bank as a new lender. Through this novation, the existing lender i.e. ICICI Bank Ltd. who was the original security agent and one of the original lender for Rs. 180 crore has novated Rs. 120 crore to the new lender, Indian Oversees Bank. Consequently, the existing lender, ICICI Bank Ltd. continued as Original Lender with the balance loan facility amount of Rs. 60 crore.
(e) On 9.12.2011, a 'Rupee Term Loan Agreement' was executed between State Bank of India and the petitioner for grant of 'Rupee Term Loan' of Rs. 250 crore for the purpose of takeover of existing debts of ICICI Bank Limited, United Bank of India and Indian Overseas Bank under the 'Common Facility Agreement'. State Bank of India was appointed as the 'New Facility Agent', in place of ICICI Bank.
(f) On 2.5.2012, 'Supplemental and Amendatory Agreement to Common Facility Agreement dated 17.6.2008 was executed between the Consortium Lenders, Security Trustee and the Facility Agent after joining of State Bank of India. On 2.5.2015 the petitioner signed an amended deed of Hypothecation.
(g) On 28.12.2011, a 'Working Capital Facility Agreement' (WCF Agreement) was executed between ICICI Bank Limited (Working Capital Lender) and the petitioner for working capital facility of Rs. 25 crore and temporary additional standalone LC limit of Rs. 10 crore. Pursuant to the WCF Agreement, a Deed of Hypothecation was executed on 28.12.2011 between the petitioner and the Working Capital Lender to secure the Working Capital Facilities by way of first charge on the Assets ranking pari passu with the charge created in favour of the Security Trustee acting for the benefit of the Present Consortium Lender."
The petitioner has submitted that in view of the provisions of sub -sections (3) and (4) of Section 17 of the Act, the petitioner, as a licensee cannot assign the licence or transfer its utility or any part thereof to any person or enter into an agreement relating to any of these transactions without approval of the Commission. The petitioner has further submitted that it has not assigned its licence or transferred its utility but has merely created charge upon the assets relating to the Project, by virtue of execution of various Deed of Hypothecations. Accordingly, the present petition has been filed seeking approval of the Commission for creation and continuation of securities by way of hypothecation and/ or mortgage of assets of the Project.
(3.) VIDE letter dated 10.7.2015, the petitioner was directed to file the following clarifications:
"(a) The reasons for not seeking the prior approval of the Commission as required under Section 17 (3) of the Act;
(b) The reasons for not impleading the lenders/security trustees as co -petitioner or as the respondents in the petition; and
(c) The provisions of the TSA which authorizes the petitioner to create encumbrance on the transmission assets in the form of deed of hypothecation, etc.";
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