Case No. 38 of Shri Vijay L. Sonavane, Member Smt. Chandra Iyengar, Member

Transcription

1 Before the MAHARASHTRA ELECTRICITY REGULATORY COMMISSION World Trade Centre, Centre No.1, 13th Floor, Cuffe Parade, Mumbai Tel /65/69 Fax Website: Case No. 38 of 2013 In the matter of Petition filed by M/s. Quadron Business Park Ltd. for taking on record deemed distribution licensee status and for issuing specific conditions of Distribution Licence applicable to M/s Quadron Business Park Ltd. thereby specifying area of supply and period of Licence. Shri Vijay L. Sonavane, Member Smt. Chandra Iyengar, Member M/s. Quadron Business Park Ltd Petitioner (Formerly DLF Ackruti Info Parks (Pune) Ltd), Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune Petitioner Present during the hearings: For the Petitioner: Shri. M. Palaniappan (Rep.) Shri. S.K. Singhal (Rep.) ORDER Date: 31 October, 2013 M/s. Quadron Business Park Ltd. (formerly DLF Ackruti Info Parks (Pune) Ltd), submitted a Petition under affidavit on 15 March, 2013, under Section 14 of the Electricity Act, 2003 and MERC (General Conditions of Distribution Licence) Regulations, 2006, for taking on record the Deemed Distribution Licensee status of the Petitioner for IT & ITES Special Economic Zone at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune and for issuing the Specific Conditions of Distribution Licence applicable to them. Order [Case No. 38 of 2013] Page 1 of 11

2 2. The prayers of the Petitioner are as under: i. Take on record the deemed Distribution Licensee status of the petitioner, M/s Quadron Business Park Ltd, under Section 14 of EA 2003 in terms of notification dated March 3, 2010 issued by the Ministry of Commerce & Industry (Department of Commerce), Govt of India. ii. To issue specific conditions of Distribution Licence applicable to M/s Quadron Business Park Ltd thereby specifying area of supply and period of Licence. iii. Condone any inadvertent omissions/errors/shortcomings and permit M/s. Quadron Business Park Ltd to add/change/modify/alter this filing and make further submissions as may be required at a future date. iv. Pass such Orders as the Hon ble Commission may deem fit in the facts of the present case. 3. The Petitioner, in its Petition, has submitted as under: a. The Petitioner, M/s. Quadron Business Park Ltd (formerly DLF Ackruti Info Parks (Pune) Ltd.) is a registered company under the Companies Act, b. With effect from 20 September, 2011, the registered office address of the company has changed to Plot No. 28, Rajiv Gandhi Info Tech Park, Phase II, Hinjewadi, Pune. With effect from 4 April, 2012, name of the company has been changed from DLF Ackruti Info Parks (Pune) Ltd. to Quadron Business Park Ltd. c. M/s. DLF Limited and M/s. Hubtown Limited (formerly Ackruti City Limited) and others have transferred their equity shareholding of M/s. Quadron Business Park Ltd. to BRE /Mauritius Investments II and others. d. The Petitioner, under the Section 3 of the SEZ Act, 2005, proposed to set up a sector specific SEZ for Information Technology and Information Technology Enabled Services (IT/ITES SEZ) at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase II, Hinjewadi, Pune, Maharashtra. e. The Petitioner has been granted letter of approval in the name of M/s. DLF Akruti Info Parks (Pune) Ltd. for development, operation and maintenance of the SEZ for IT and ITES vide approval letter dated June 20, f. M/s. DLF Akruti Info Parks (Pune) Ltd. has been notified as the Developer of the SEZ by the Ministry of Commerce & Industry (Department of Commerce) vide Notification No. S.O (E) dated September 14, Order [Case No. 38 of 2013] Page 2 of 11

3 g. The Ministry of Commerce & Industry (Department of Commerce), Government of India vide its Notification under clause (b) of sub-section (1) of Section 49 of the SEZ Act, 2005 dated March 3, 2010, specified that the Developer of the SEZ is deemed to be a distribution licensee under the provisions of the Electricity Act h. With the amendment in the Electricity Act 2003, Petitioner is a deemed distribution Licensee in aforesaid SEZ area. i. The Petitioner has developed the IT/ITES SEZ over an area of approx hectares. The area overlaps the MSEDCL area and MSEDCL has provided supply at 22kV under HT-1 Industrial category. j. The Petitioner has submitted the SEZ area map certified by MIDC, Pune. k. As per the Section 16 of the Electricity Act, the Commission is empowered to issue any General or Specific Conditions of Licence to a Licensee or a class of Licensee and such conditions shall be deemed to be the condition of such licence. The MERC (General Conditions of Distribution Licence) Regulation, 2006 also provides in Regulation for the issue of Specific Conditions applicable to a Specific Distribution Licensee. l. The Petitioner has requested to notify the SEZ area as the area of supply in the Specific Conditions of Distribution Licence. m. Further, the Petitioner has requested to specify the period of licence as 25 years period from 14 September, 2007 to 13 September, 2032 in the Specific Condition of Licence. 4. The Commission, vide, its Notice dated 2 April, 2013 scheduled the hearing in the matter on 15 April, 2013 in presence of Authorized Consumer Representatives. 5. During the hearing, the Petitioner made a presentation on its IT/ITES SEZ at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune detailing the SEZ status, various approvals received and power supply provisions etc. The Commission noted that SEZ has been notified in the name of M/s. DLF Akruti Info (Park) Pune and there has been transfer of ownership from M/s. DLF Akruti Info (Park) Pune to M/s. Quadron Business Park Ltd.. Accordingly, the Commission directed the Petitioner to submit detailed documents for due diligence of the transfer of ownership from DLF Akruti Info Parks (Pune) Ltd. to Quadron Business Park Ltd. including shareholding details, fulfilment of requirement under code of conduct, entire process of change of name etc. Apart from above, the Petitioner was directed to submit following details:- I) Map of the SEZ Area II) Details of existing power demand and escalation of demand in future. Order [Case No. 38 of 2013] Page 3 of 11

4 III) IV) Details of facilities provided to ensure 24x7x365 uninterrupted power supply Considering the fact that IT/ITES industry requires a reliable supply of quality power, the Petitioner was directed to identify and submit the details of the world class practices followed for ensuring quality and reliability of power provided to IT & ITES industry. 6. In compliance with the above directives, the Petitioner, vide its letter dated 10 June 2013, submitted a detailed report enclosing necessary documents for the consideration of the Commission which are elaborated as under. I) Map of the SEZ Area:- The Petitioner submitted the Map approved by the Assistant Development Commissioner, Ministry of Commerce and Industry (Department of Commerce), Government of India, showing the notified area alongwith its demarcation. II) Details of existing power demand and escalation of demand in future:- The existing power demand is MW and it is estimated that it will remain the same for next five years as SEZ is fully leased out and no further space is available for additional units. III) Details of facilities provided to ensure 24x7x 365 uninterrupted power supply:- For ensuring 24x7x365 uninterrupted power supply, the Petitioner has strived to provide state of the art distribution system which has the following features: N+1 capacity of DG sets with 200% back up capacity and with automatically switching on facility to restore load within 30 sec. UPS system for emergency services IV) Details of the world class practices followed for ensuring quality and reliability of power provided to IT & ITES industry:- The Petitioner submitted detailed report wherein it is mentioned as follows: a. The Commission has suggested that the Petitioner should visit IT establishments located at Bangalore etc. However, despite best efforts from the Petitioner, the Petitioner experienced reluctance of these IT companies to share the data. The Petitioner has therefore relied on the recommendations of design consultant for establishing the power distribution infrastructure. Order [Case No. 38 of 2013] Page 4 of 11

5 b. As submitted by the Petitioner, there are dedicated facilities for IT and ITES offices such as 24x7x365 power availability, fail safe reliability and continuous monitoring, power management and earthing, c. Apart from above, following systems are in place for ensuring quality and reliability of the Power supply:- a. Lightning protection system b. Grounding of lightening system c. Protective circuit breakers d. Round the clock manning by qualified staff e. Electrical system and equipments complying the relevant IS/IEC standards f. 100% redundancy of transformers and maximum 80% loading of transformers g. N+1 capacity for DG sets for 200% backup with PLC system for auto switching h. Dual LT source to UPS system i. OLTC arrangement in Distribution Transformers j. APFC panels for power factor improvement k. Harmonic filters built in UPS systems l. Separate feeders for lightning and power load m. Earthing as per IS n. Entire underground cabling o. UPS for emergency services 6.1 Regarding transfer of ownership, the Petitioner has submitted the sequence of events since the inception of M/s. Akruti Info Parks Limited which is as follows:- a. M/s. Akruti Info Parks Limited was incorporated as public Company by erstwhile shareholders of Akruti City Ltd. on 1 October, (Incorporation certificate submitted). b. Name of the company was changed from M/s. Akruti Info Parks Limited to M/s. DLF Akruti Info Parks Limited (Pune) on 28 February, (Change of name certificate submitted). c. Formal approval for SEZ in the name of M/s. DLF Akruti Info Parks Limited (Pune) on 20 June, 2007 (Letter from Ministry of Commerce and Industry submitted). d. IT/ITES SEZ notified for M/s. DLF Akruti Info Parks Limited (Pune) on 14 September, 2007 (SEZ notification submitted). Order [Case No. 38 of 2013] Page 5 of 11

6 e. Name of the company was changed from to M/s. DLF Akruti Info Parks Limited (Pune) to M/s. DLF Ackruti Info Parks Limited (Pune) on 18 December, (Change of name certificate submitted) f. BRE/Mauritius investments II acquired 99.99% of voting capital from M/s. DLF Ltd. and M/s. Hubtown Ltd. g. Ministry of Commerce and Industry (Department of Commerce), Government of India issued a letter granting approval of transfer of equity to BRE/Mauritius investments II on 28 November, (Copy of the letter submitted). h. Name of the company was changed from to M/s. DLF Ackruti Info Parks Limited (Pune) to M/s. Quadron Business Park Ltd. on 4 April, 2012 (Change of name certificate submitted). i. Letter of approval for change of name was issued by the Ministry of Commerce and Industry (Department of Commerce), Govt. of India on 17 July, It was observed from the submissions of the Petitioner that the direction of the Commission, for submitting the details regarding fulfillment of the requirements under Code of Conduct, was not complied with by the Petitioner. 8. The Commission also observed that the original developer of the SEZ is M/s. DLF Akruti Info Parks Ltd. (PUNE) and there has been change of ownership to M/s. Quadron Business Park Ltd. While according the approval for the change of ownership, the Ministry of Commerce and Industry (Department of Commerce), Govt. of India, stipulated few conditions: a. Seamless continuity of the SEZ activities with unaltered responsibilities and obligations for the altered developer entity. b. Fulfillment of all eligibility criteria applicable to developers, including security clearances etc. by the altered developer entity and its constituents. c. Applicability of and compliance with all Revenue/ Company Affairs/ SEBI etc. rules which regulate issues like capital gains, equity changes, transfer, taxability etc. d. Full financial details relating to transfer of equity shall be furnished immediately to the Member (IT), CBDT, Dept. of Revenue, Govt. of India. e. The assessing officer under the Income Tax Act, 1961 shall have the right to assess taxability of the amount arising out of the transfer of equity. Order [Case No. 38 of 2013] Page 6 of 11

7 f. The applicant shall comply with the relevant State Government Laws, including those relating to lease of land, as applicable. 9. The Commission directed the Petitioner to submit the status of the compliance of aforesaid conditions and details regarding fulfillment of the requirements under Code of Conduct. In response, the Petitioner, on affidavit dated 8 August, 2013, submitted that all those conditions to the extent applicable to the Company have been complied with and the Company has not received any communication from the Deputy Development Commissioner, Ministry of Commerce and Industry, regarding non-compliance or revocation of the approval for the transfer / change of equity. 10. Further, the Petitioner submitted a declaration on affidavit stating that neither any case has been filed against the Company nor has the Company been found guilty or disqualified under the statutory provisions specified in the Distribution of Electricity Licence (additional requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, Next hearing in the matter was held on 3 October, During the hearing, the Petitioner briefed the Commission on the compliance of the directions of the Commission and requested the Commission to issue specific conditions of distribution licence applicable to it. 12. Having heard the Petitioner and after considering all the documents available on record, the Commission notes that Ministry of Commerce & Industry, Govt. of India, vide its letter dated 20 June, 2007, accorded approval to M/s. DLF Akruti Info Parks Ltd. (PUNE) for setting up of sector specific Special Economic Zone for IT/ITES sector at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune. 13. Further, Ministry of Commerce and Industry, Govt. Of India, vide its Gazette Notification dated 14 September 2007, notified the area admeasuring hectors at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune as SEZ for Information Technology and Information Technology enabled services. The said Notification is reproduced below: S.O. 1876(E) Whereas M/s DLF Akruti Infopark (Pune) Limited in the State of Maharashtra, has proposed under Section 3 of the Special Economic Zone Act, 2005 (28 of 2005), hereinafter referred to as the said Act, to set up a sector specific Special Economic Zone for information technology and information technology enabled services at Plot No. 28, Maharashtra Industrial Development Corporation, Rajiv Gandhi Infotech Park, Hinjewadi, Phase III, District Pune in the State of Maharashtra; Order [Case No. 38 of 2013] Page 7 of 11

8 And whereas, the Central Government is satisfied that requirements under sub-section (8) of Section 3 of the said Act, and other related requirements are fulfilled and it has granted letter of approval under sub-section (10) of Section 3 of the said Act for development, operation and maintenance of the Special Economic Zone for information technology and information technology enabled services at Rajiv Gandhi Infotech Park on 20th June, 2007; Now, therefore, in exercise of the powers conferred by sub-section (1) of Section 4 of the Act and in pursuance of rule 8 of the Special Economic Zones Rules, 2006, the Central Government hereby notifies the following area at Plot No. 28, Maharashtra Industrial Development Corporation, Rajiv Gandhi Infotech Park, Hinjewadi, Phase III, District Pune, in the State of Maharashtra, comprising of the Survey number and the area given below in the Table, as a Special Economic Zone:- TABLE Serial number Plot Number Area in hectares Further, vide its notification dated 3 October, 2007, the Ministry of Commerce and Industry (Department of Commerce), Government of India amended its earlier notification thereby replacing the word Phase III with Phase- II 15. The Petitioner has submitted a map, certified by the Assistant Development Commissioner, Ministry of Commerce and Industry, showing boundaries of above said SEZ area located Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune. 16. The Petitioner has submitted the detailed documents showing the transfer of ownership form M/s. DLF Akruti Info Parks Ltd. (PUNE) to M/s. Quadron Business Park Ltd. Also, the Ministry of Commerce and Industry (Department of Commerce), Govt. of India, has conveyed its approval for changing of name of the Company from M/s. DLF Akruti Info Parks Ltd. (PUNE) to M/s. Quadron Business Park Ltd. 17. The SEZ has been fully leased out and various IT units such as Tata Consultancy Services, Eclerx Services Limited, Cognizant, Barclays etc. are in operation in the SEZ. 18. Section 14 of the Electricity Act 2003 has been amended through notification dated 3 March 2010 issued under Special Economic Zones Act, The relevant part of the said notification is reproduced below: Order [Case No. 38 of 2013] Page 8 of 11

9 In clause (b) of Section 14 of the Electricity Act, 2003 (36 of 2003), the following proviso shall be inserted, namely:- Provided that the Developer of a Special Economic Zone notified under sub-section (1) of Section 4 of the Special Economic Zones Act 2005, shall be deemed to be a licensee for the purpose of this clause, with effect from the date of notification of such Special Economic Zone. 19. Accordingly, Section 14 of the Electricity Act, 2003 stand amended. The Section 14 of the Electricity Act, 2003 reads as under:- 14. Grant of licence The Appropriate Commission may, on an application made to it under section 15, grant a licence to any person a. To transmit electricity as a transmission licensee: or b. To distribute electricity as a distribution licensee; or : Provided that the Developer of a Special Economic Zone notified under subsection (1) of Section 4 of the Special Economic Zones Act 2005, shall be deemed to be a licensee for the purpose of this clause, with effect from the date of notification of such Special Economic Zone;.. Commission s Rulings:- 20. In view of the amendment to the Electricity Act 2003, SEZ notification dtd. 14 September 2007 from Ministry of Commerce & Industry, Govt. of India and various approvals granted to M/s. Quadron Business Park Ltd. who is a developer of sector specific Special Economic Zone for IT/ITES sector at Plot No. 28, Rajiv Gandhi Info Tech Park, Phase-II, Hinjewadi, Pune, the Commission hereby confirms the status of Petitioner as the deemed Distribution Licensee under Section 14 of the Electricity Act 2003 for the aforesaid SEZ area. 21. The Petitioner, being the deemed Distribution Licensee has to adhere to the following:- (1) The Electricity Act 2003 ; (2) Rule 5A of SEZ Rules, 2006 which provides as follows: Order [Case No. 38 of 2013] Page 9 of 11

10 5A. INFRASTRUCTURE REQUIREMENTS RELATING TO INFORMATION TECHNOLOGY a) In case of a Special Economic Zone relating to information technology, the following facilities shall be ensured, namely:- b) Twenty four hours uninterrupted power supply at stable frequency in the Zone; c) Reliable connectivity for uninterrupted and secure data transmission; d) Provision for central air-conditioning system; and e) A ready to use, furnished plug and play facility for end users (3) The Regulations notified by the Commission from time to time including the following to the extent of their applicability : (1) Maharashtra Electricity Regulatory Commission (General Conditions of Distribution Licence) Regulations, 2006; (2) Maharashtra Electricity Regulatory Commission (Electricity Supply Code and Other Conditions of Supply) Regulations, 2005 (3) Maharashtra Electricity Regulatory Commission (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Compensation) Regulations, 2005; (4) Maharashtra Electricity Regulatory Commission (State Grid Code) Regulations, 2006; (5) Maharashtra Electricity Regulatory Commission (Fees and Charges) Regulations, 2004; (6) Maharashtra Electricity Regulatory Commission (Distribution Open Access) Regulations, 2005 as amended from time to time (7) Maharashtra Electricity Regulatory Commission (Consumer Grievance Redressal Forum & Electricity Ombudsman) Regulations, (8) Maharashtra Electricity Regulatory Commission (Multi Year Tariff) Regulations, Order [Case No. 38 of 2013] Page 10 of 11

11 22. The Commission has confirmed the Deemed Distribution Licensee status of the Petitioner. However, the Petitioner has prayed for issuing specific conditions of distribution licence applicable to it. Under Section 16 of the Electricity Act 2003, the Commission may specify any general or specific conditions which shall apply either to a licensee or class of licensees and such conditions shall be deemed to be conditions of such licence. 23. However, the Commission observes that the word specified has been defined under the Electricity Act 2003 as follows: (62) specified means specified by regulations made by the Appropriate Commission or the Authority, as the case may be, under this Act; 24. Specific conditions as prayed by the Petitioner cannot be made under this Order and same need to be specified by way of Regulations after following the process of previous publication. Hence, the Commission directs the Secretariat of the Commission to initiate the process of preparing draft Regulations for specific conditions of licence applicable to the Petitioner. With the above, Case No. 38 of 2013 stands disposed of. Sd/- (Chandra Iyengar ) Member Sd/- (Vijay L. Sonavane) Member Order [Case No. 38 of 2013] Page 11 of 11