- (1.) M/s Adani Power Maharashtra Ltd. (APML), a Transmission Licensee, has filed an Application on 17 October, 2014 under Sections 17(3) and 86(1) (d) of the Electricity Act (EA, 2003) for assignment of the Transmission Licence No. 2 of 2009 granted to it by the Commission, to M/s Adani Transmission (India) Ltd. (ATIL).
(2.) APML's prayers are as follows: " a) to approve the transfer of the Transmission Licence No. 2 of 2009 and all rights and obligations associated therewith from the Applicant to ATIL with effect from the date of the Scheme becoming effective following final approval of the Hon'ble High Court of Gujarat; b) Allow ATIL to operate and maintain the Transmission system under license during the pendency of this Application..."
(3.) The Application states that: a) Adani Power Ltd. (APL), a subsidiary of Adani Enterprises Ltd., was incorporated under the Companies Act, 1956 in Ahmedabad, Gujarat in 1996. Its name was changed to Adani Power Pvt. Ltd. in 2002, and again to Adani Power Ltd. in 2007. APL leads the power sector initiatives of the Adani group in power generation and transmission line projects. b) The Applicant, APML, a wholly owned subsidiary of APL, was incorporated in 2007 as Adani Power Maharashtra Pvt. Ltd., and changed to its present name from 16 May, 2008. APML is developing a 3,300 MW thermal power plant at Tiroda, Maharashtra. c) Adani Transmission (Gujarat) Ltd. was incorporated on 2 December, 2013 to carry out the business of establishing, commissioning, setting up, operating and maintaining electric power transmission systems under the Companies Act, 1956. Its name was changed to Adani Transmission (India) Ltd. from 13 February, 2014. The main object of ATIL as stated in Memorandum of Association is to carry out the business of establishing, commissioning, setting up, operating and maintaining electric power transmission systems in India and abroad. d) The authorised, issued, subscribed and paid up capital and share holding of APML as on 31 August, 2014 is as below: Particulars Amount in Rs. Authorised : 425,00,00,000 Equity Shares of Rs. 10 each 4250,00,00,000 75,00,00,000 compulsorily convertible preference shares of 750,00,00,000 Rs. 10 each 5000,00,00,000 Total Issued, Subscribed and Paid up 285,47,31,240 Equity shares of Rs. 10 each, fully paid up 2854,73,12,400 Total e) In order to achieve synergy and efficiency of operations and management of power transmission business and to pursue growth opportunities in the power transmission business, APML has decided to restructure its power transmission business. To ensure such reorganization, the APML and ATIL had sought approval from the High Court of Gujarat for a Scheme of Arrangement. Under the Scheme, it is proposed that the APML's transmission business shall be transferred to ATIL, including the Transmission Licence No. 2 of 2009. f) The overview of the Scheme is as follows: i. The Scheme has been filed before the High Court by APML as Company Petition No. 204 of 2014 connected with Company Application No. 171 of 2014, and by ATIL as Company Petition No. 205 of 2014 connected with Company Application No. 172 of 2014, under Sections 391 to 394 and other relevant provisions of the Companies Act, 1956 and Rules and Regulations thereunder to obtain the sanction of the High Court for inter alia the demerger of the licensed transmission assets of the APML applicant (referred to as 'Transferred Undertaking 2', and as defined in the Scheme of demerger) and their vesting to ATIL and for matters consequential, supplemental and/or otherwise integrally connected therewith. ii. The relevant provisions of the Scheme concerning the Transferred Undertaking 2 of APML are as follows: (a) Upon the coming into effect of this Scheme and with effect from the Appointed Date and subject to the provisions of the Scheme in relation to the mode of transfer and vesting, inter alia, the Transferred Undertaking 2 shall, without any further act, instrument, deed, matter or thing, be demerged or be deemed to have been demerged from APML and transferred to and vested in ATIL as a going concern, so as to become, as and from the Appointed Date, the estate, assets, rights, title, interests and authorities of ATIL, pursuant to Section 394(2) of the Companies Act, 1956 subject, however, to the subsisting charges thereon in favour of banks and/or financial institutions in relation to the liabilities/borrowings being transferred to ATIL under the Scheme. (b) In respect of such assets of the Transferred Undertaking 2 which are movable and/or otherwise capable of transfer by manual or constructive delivery and/or by endorsement and delivery, the same shall stand transferred by the APML upon coming into effect of the Scheme without requiring any deed or instrument of conveyance for their transfer, and shall become the property of ATIL as an integral part of the Transferred Undertaking 2. (c) In respect of assets other than those dealt with in clause (b) above, including but not limited to sundry debts, actionable claims, earnest monies, receivables, bills, credits, loans, advances and deposits, if any, whether recoverable in cash or in kind or for value to be received, bank balances, etc., the same shall stand transferred to and vested in ATIL without any notice or other intimation in pursuance of the provisions of Sections 391 to 394 read with other relevant provisions of the Companies Act to the end and intent that the right of APML to recover or realize the same stands transferred to ATIL. ATIL shall, at its sole discretion but without being obliged, give notice in such form as it may deem fit and proper, to such person, as the case may be, that the said debt, receivable, bill, credit, loan, advance or deposit stands transferred to and vested in ATIL and that appropriate modification should be made in their respective books/records to reflect the aforesaid changes. (d) For the avoidance of doubt and without prejudice to the generality of the foregoing, it is clarified that upon the coming into effect of the Scheme, all permits, licenses, permissions, right of way, approvals, clearances, consents, benefits, registrations, entitlements, credits, certificates, awards, sanctions, allotments, quotas, no objection certificates, exemptions, concessions, issued to or granted to or executed in favour of APML, and the rights and benefits under the same, in so far as they relate to the Transferred Undertaking 2 and all quality certifications and approvals, trademarks, trade names, service marks, copy rights, domain names, designs, trade secrets, research and studies, technical knowhow and other intellectual properties and all other interests relating to the goods or services being dealt with by the Transferred Undertaking 2, shall be transferred to and vested in ATIL and the concerned licensors and grantors of such approvals, clearances, permissions, etc., shall endorse, where necessary, and record, in accordance with law, ATIL on such approvals, clearances, permissions so as to empower and facilitate the approval and vesting of the Transferred Undertaking 2 of APML in ATIL and continuation of operations pertaining to the Transferred Undertaking 2 of APML in ATIL without hindrance and that such approvals, clearances and permissions shall remain in full force and effect in favor of or against ATIL, as the case may be, and may be enforced as fully and effectually as if, instead of APML, ATIL had been a party or beneficiary or obligee thereto. (e) All assets, estate, rights, title, interest and authorities acquired by APML after the Appointed Date and prior to the Effective Date for operation of the Transferred Undertaking 2 shall also stand transferred to and vested in ATIL upon coming into effect of the Scheme. (f) Upon the coming into effect of the Scheme, all debts (whether secured or unsecured), borrowings including loans and borrowings from banks and/or financial institutions (to the extent of the said loans/borrowings that may be allocated/demarcated by the concerned banks and/or financial institutions to be transferred to ATIL), obligations, duties and liabilities (including contingent liabilities) of APML relating to the Transferred Undertaking 2 shall without any further act, instrument or deed be and stand transferred to ATIL and shall thereupon become the debts, borrowings, obligations, duties and liabilities of ATIL which it undertakes to meet, discharge and satisfy to the exclusion of APML and to keep APML indemnified at all times from and against all such debts, duties, obligations and liabilities and from and against all actions, demands and proceedings in respect thereto. It shall not be necessary to obtain the consent of any third party or other person who is a party to any contract or arrangement by virtue of which such debts, obligations, duties and liabilities have arisen in order to give effect to the provisions of this clause. (g) In so far as the assets of the Transferred Undertaking 2 are concerned, the security, existing charges and mortgages, over such assets, to the extent they relate to any loans or borrowings of the Remaining Business of APML shall, without any further act, instrument or deed be released and discharged from the same and shall no longer be available as security in relation to those liabilities of APML which are not transferred to ATIL. (h) In so far as the existing security in respect of the loans of APML and other liabilities relating to the remaining business of APML are concerned, such security shall, without any further act, instrument or deed be continued with APML only on the assets remaining with APML. (i) APML and ATIL have also agreed to enter into and execute such other deeds, instruments, documents and/or writings and/or do all acts and deeds as may be required, including the filing of necessary particulars and/or modification(s) of charge, with the Registrar of Companies, Gujarat at Ahmedabad to give formal effect to the provisions of this clause and foregoing clauses, if required. (j) Upon coming into effect of the Scheme, ATIL alone shall be liable to perform all obligations in respect of the liabilities being transferred under the Scheme and APML shall not have any obligations in respect of the same. (k) Upon the coming into effect of the Scheme, APML alone shall be liable to perform all obligations in respect of all debts, liabilities, duties and obligations pertaining to the remaining business and ATIL shall not have any obligations in respect of the remaining business. (l) Upon the coming into effect of the Scheme, all employees of APML employed/engaged in the power transmission business shall stand transferred to ATIL. g) APML had filed an application with the High Court for convening the meeting of the stakeholders for approval of the Scheme. The High Court had ordered the meeting to be convened on 14 August, 2014. All stakeholders approved the Scheme of Demerger with requisite statutory majority. Thereafter, APML on 22 August, 2014 had filed Company Petition No.204 of 2014 with the High Court of Gujarat, and ATIL had filed Company Petition No. 205 of 2014 for approval of the Scheme. The High Court of Gujarat has approved the Scheme on 26 September, 2014. h) The Scheme was approved by the Boards of Directors of APML and of ATIL on 28 December, 2013. i) Section 17(3) of EA, 2003 requires approval of the Commission for assignment or transfer of the Utility: "3) No licensee shall at any time assign his licence or transfer his utility, or any part thereof, by sale, lease, exchange or otherwise without the prior approval of the Appropriate Commission." APML is thus required to obtain approval of the Commission for implementation of the proposed Scheme whereby the Transmission Licence No. 2 of 2009 and all allocated assets, liabilities, contracts, privileges, rights and benefits of APML in the transmission business shall stand transferred and vested in ATIL. j) The corporate details of ATIL are as below; i. Name: Adani Transmission (India) Limited ii. Incorporation date: 2 December, 2013 iii. Constitution: Public Limited Company (Proposed) iv) Registered Office: Adani House, Nr. Mithakhali six roads, Navrangpura, Ahmedabad 380009 v) Industry: Power Transmission vi) Promoter Group: Adani Group vii) Management and Organisation: list of Board of directors submitted to the Commission. viii) Shareholding and Capital Structure: Shareholding of ATIL pre demerger is 100% by Adani Power Limited ix) Group Support: Adani Group has satisfactory track record in implementation and operation of power plants as well as transmission lines. Being a group company of APML, ATIL shall have necessary support in terms of management support and would also have benefit of creditworthiness of ATIL. k) The Commission may allow ATIL to step in the shoes of APML and take over the operation and maintenance the transmission line during the pendency of this Application. ;