CASE No. 43 of In the matter of

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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. 43 of 2016 In the matter of Petition of Brihanmumbai Electric Supply & Transport Undertaking to restrain Tata Power Co. Ltd. (Distribution) from laying its network and providing new supply to consumers in the common Licence area, and for investigation under Section 128 of the Electricity Act, 2003 And Miscellaneous Application No.6 of 2017 Application of Brihanmumbai Electric Supply & Transport Undertaking for early hearing of Case No. 43 of 2016 Coram Shri Azeez M. Khan, Member Shri Deepak Lad, Member Brihanmumbai Electric Supply & Transport Undertaking Petitioner V/s Tata Power Co. Ltd. (Distribution) Respondent No. 1 Reliance Infrastructure Ltd. (Distribution) Respondent No. 2 Appearance For the Petitioner: Shri Harindar Toor (Adv.) For the Respondent No.1: Smt. Deepa Chawan (Adv.) For the Respondent No.2: Shri Ghanshyam Thakkar (Rep.) Order in Case No. 43 of 2016 Page 1 of 28

2 ORDER Dated: 22 January, The Brihanmumbai Electric Supply and Transport Undertaking ( BEST ) has filed a Petition on 29 February, 2016 seeking investigation of the Tata Power Co. Ltd. (Distribution) (TPC-D) under Section 128 of the Electricity Act (EA), 2003 and restraining it from laying its distribution network and providing new supply in the Licence area common with BEST till the Order in Case No. 182 of 2014 is issued. 2. The prayers of BEST are as follows: i) To admit the Petition in accordance with the Section 128 of the Electricity Act, 2003 and the Regulation 81 of MERC (Conduct of Business ) Regulations, ii) To issue specific directions to TPC restraining it from rolling out its distribution network and providing electric supply thereof in the area of supply common with BEST till attainment of finality to the Order in the Case No. 182 of 2014 by the MERC. iii) Pending the hearing and final disposal of this Case. to restrain TPC by an Interim Order/ Injunction from (i) connecting on its distribution network any existing consumer of BEST and (ii) from connecting on it distribution network any new electricity consumer in the area of supply common with BEST 3. The Petition states as follows: 3.1 TPC-D was earlier a Licensee which supplied electricity in bulk to BEST, Indian Railways, certain Textile Mills and other bulk consumers in inter-alia the island city of Mumbai. It does not have any backbone distribution network as well as last mile connectivity for retail supply of electricity throughout the island city of Mumbai. 3.2 Only recently, due to the re-development of the Textile Mill lands, TPC-D has been or is attempting to selectively lay its network for retail residential /commercial distribution of electricity in these areas. It is an attempt by TPC-D to cherry-pick lucrative consumers in the newly re-developed Mill land areas and other parts of the island city of Mumbai undergoing re-developments and / or new development. 3.3 TPC-D has malafide and willfully failed to submit a Network Roll-out Plan in compliance of its Specific Conditions of Distribution Licence. Order in Case No. 43 of 2016 Page 2 of 28

3 3.4 The Network Roll-out Plan submitted in Case No. 182 of 2014 has been modified by TPC-D repeatedly during the pendency of the Case. TPC-D has made numerous submissions, pleadings and presentations in Case No. 182 of 2014 to effect modifications and in the revised Plan. 3.5 Even otherwise, despite the requirement of detailed Network Roll-out Plan, TPC-D has illegally adopted a trial and error and peace-meal approach in making numerous modifications in the plan. This demonstrates that the revised Plan is vague, tentative and uncertain. It is ex facie neither adequate nor timely and is, moreover, fundamentally contrary to its Universal Service Obligation (USO) under Section 43 of the EA, From 14 August, 2014, TPC-D has illegally indulged in cherry-picking of high-end consumers by selectively laying its network during the pendency of approval of the Network Roll-out Plan in Case No. 182 of TPC-D has already laid HV/LV distribution network in the Municipal Corporation of Greater Mumbai (MCGM) s F(South) Ward. TPC-D has commenced work of establishing sub-stations in the premises of BEST s high-end consumer ITC Hotel, Parel as well as Multi-Storied International School, Sewree for providing supply to their premises and also to nearby multi-storied residential / commercial towers. 3.8 The plot Developers who had approached BEST for the connections in developed plots and to whom BEST has informed the requirement of sub-stations in their plots in accordance with regulatory provisions and Development Control Rules are being approached by TPC-D with assurance of waiver of requirement of sub-station in such premises. 3.9 The Petition filed by TPC-D (Case No. 40 of 2015) for approval of the Switch-over Protocol is pending before the Commission. Further, the Commission, in Case No. 182 of 2014, has constituted a Committee for recommendations on TPC-D s Network Rollout Plan, which also includes the procedure for consumer migration. The recommendations of the Committee are yet to be accepted and the Order in Case No. 182 of 2014 is pending. Inspite of the pending Switch-over Protocol approval, TPC-D has unilaterally switched over 57 consumers of BEST till January, The concept of development of a parallel distribution network is fundamentally wrong as in future it would lead to stranded assets. The matter is under consideration of the Commission. TPC-D s activity of establishing a distribution network should be restricted for the time being. Further, the piecemeal development of the network and acquiring BEST s consumers is incorrect as BEST s assets get stranded and its business is also affected due to the unfairness involved. Whereas BEST is USO ready, the other parallel Licensee TPC-D is not, leading to unequal competition. Order in Case No. 43 of 2016 Page 3 of 28

4 3.11 There is no level playing field if TPC-D is allowed to cherry-pick high-end consumers by a selective laying of network during the pendency of Network Roll-out Plan approval in Case No. 182 of There is uncertainty as to whether the Network Roll-out Plan of TPC-D would ever be able to comply with the USO requirement. TPC-D should not be allowed to connect on its partial / selective network any existing consumer of BEST or any new consumer in the area of supply of BEST The Commission should investigate and ensure that TPC-D does not gain any illegal or undue commercial advantage over BEST in the island city of Mumbai by partial / selective laying of the network for high-end consumers during the pendency of approval of the revised Network Roll-out Plan of TPC-D by the Commission in Case No. 182 of The Commission ought to safeguard the interest of BEST, by investigating and averting the cherry-picking of high-end consumers by TPC-D in the island city of Mumbai TPC-D has not been able submit the Network Roll-out Plan in compliance of its Specific Conditions of Licence and hence failed to comply with its conditions. Hence, the Commission should direct an appropriate authority to investigate the affairs of TPC-D under Section 128 of the EA, Pending the hearing and final disposal of the Case, TPC-D should be restrained by an interim Order from connecting to its distribution network any existing consumer of BEST and new consumer in BEST s area of supply. Also, TPC-D should be directed by an interim Order to re-connect with the distribution network of BEST all electricity consumers which TPC-D has connected to its distribution network from 14 August, In its additional submission dated 10 June, 2016, BEST has stated as follows: 4.1 BEST has filed this additional submission to bring to the notice of the Commission certain developments which have occurred after filing of the Petition. 4.2 After filing of this Petition, the Committee constituted by the Commission in Case No. 182 of 2014 has submitted its Report. 4.3 The Committee has failed to specify the time period for roll-out of the entire and independent distribution network of TPC-D. On the contrary, the Committee has suggested that TPC-D may target to set up the LT distribution system in areas where its Distribution Sub-Station (DSS)/ Consumer Sub-Station (CSS) already exists in a specified period of time, say 2 years. Thus, the Committee Report suggests that TPC-D may roll out its network in a phased manner, and that too only in a limited area. Further, the Committee has failed to specify any time frame for roll-out of network in areas Order in Case No. 43 of 2016 Page 4 of 28

5 where TPC-D is yet to develop CSS/DSS. That is contrary to the EA, 2003 provisions, Rules and Regulations and, in particular, the USO. 4.4 The Committee should have required TPC-D to specify the minimum capacity of its distribution network for catering to at least 50% of total load of 1196 MW for the entire Licence area of BEST. 4.5 There can never be level a playing field if TPC-D is allowed to cater to consumers in a limited area, and that too in a phased manner of 2 years, whereas BEST has to bear the cost of an exhaustive network for its entire Licence area for serving all consumers. Compared to BEST, TPC-D would be bearing only a smaller maintenance cost. This would be detrimental to BEST and its consumers. 4.6 The Committee recommendations are yet to be accepted by the Commission. However, TPC-D has continued to illegally indulge in cherry-picking of high-end consumers by selectively laying its distribution network in the island city of Mumbai during the pendency of Case No. 182 of TPC-D has been laying and has laid HV/LV cable network in A, E and F/S Wards. It has commenced work for establishing sub-stations near BEST s high-end consumers such as Taj Wellington, Taj Mahal Hotel and ITC Maratha Hotel for providing connections to these Hotels and nearby multi storied residential/commercial towers. The Petition should be made absolute, with costs. 5. In its further submission dated 29 August, 2016, BEST has pointed out that one of the Developers in the Parel area, GRS Shelters Pvt. Ltd. ( GRS Shelter ), had approached it for an electricity connection and BEST had informed it of various requirements, including sub-station space. Sub-station space was offered by the Developer and the Lease Agreement was executed. Around 60% of the civil work was completed. However, thereafter the Developer informed BEST that the Agreement should be treated as cancelled as he was getting a better deal from TPC-D by giving connections, fire meter and sub-station free of cost. This act of TPC-D, when the Developer is already in an Agreement with BEST, is illegal and contrary to the provisions of the EA, In its Reply dated 16 September, 2016, TPC-D has stated as follows: 6.1 The present Petition is an abuse of process of law. The relief sought by BEST cannot be granted since it seeks to restrain TPC-D from performing its statutory obligations of supplying power to consumers on demand. 6.2 Granting such relief would be contrary to the findings of the Supreme Court in its Judgment dated 8 May 2014 in Civil Appeal No of 2012 (BEST v/s. MERC), Order in Case No. 43 of 2016 Page 5 of 28

6 where it held that there can be another Distribution Licensee in BEST s area of supply. In terms of Section 42(3), a special status is granted to BEST and hence it can refuse Open Access on its network. Unless BEST permits wheeling on its distribution network, TPC-D is required to honour consumers choice of supply of electricity by laying down its own distribution network. 6.3 It would also violate the Judgment dated 2 March,2016 of the Bombay High Court dismissing Writ Petition No of 2014 (MCGM v/s MERC &Ors.) filed by BEST. BEST s conduct seeking to perpetuate its monopoly and thwart competition in different proceedings was criticized by the Bombay High Court. 6.4 BEST seeks to invoke the powers of the Commission under Section 128 of the EA 2003, in effect asking the Commission to negate the Licence granted to TPC-D and its statutory obligations. Powers under Section 128 can only be invoked if a Licensee has not complied with its statutory obligations. Therefore, BEST cannot invoke Section 128 to ask TPC-D to stop laying down network for supplying to consumers. 6.5 Various proceedings have been filed by BEST to restrain TPC-D from supplying electricity to the consumers in the common area of supply. The present filing is yet another unfortunate attempt by BEST to maintain monopoly, deny competition and deny consumer choice, which is contrary to the statutory framework. 6.6 The underlying fundamental premise on which the present Petition has been filed by BEST is that TPC-D is required to lay down its network at one go and that there cannot be phased rolling out of the network. BEST had raised the issue of phased development of network before the Appellate Tribunal for Electricity (ATE) in Appeal No. 216 of 2014, which dismissed the Appeal. 6.7 Thus, phased development of network is permitted under the statutory framework. The ATE Judgment has been challenged by BEST in Civil Appeal No of 2015 before the Supreme Court. However, there is no stay on the operation of the ATE Judgment dated 25 November, 2014 in Appeal No. 216 of A special status has been given to a local authority (BEST in this case), whereby BEST cannot be forced to make its network available to allow Open Access on its network. However, if a consumer elects supply of electricity from the other Distribution Licensee, such Licensee would have to lay its network to supply electricity to him. 6.9 BEST s allegations qua selective laying of network and cherry-picking of consumers are baseless and without any supporting document/evidence. In any event, it is well settled that migration of consumers is dependent upon consumer choice and is not on account of the will of a Distribution Licensee. Order in Case No. 43 of 2016 Page 6 of 28

7 6.10 In any event, a Distribution Licensee is obligated to supply to a consumer on demand within the time frames prescribed under Section 43 of the EA, 2003, and the MERC (Standards of Performance of Distribution Licensees, Period for Giving Supply and Determination of Standards of Performance) Regulations, In BEST s area of supply, the supply can only be given by laying a network, unless BEST permits Open Access (which it has refused) During pendency of approval of the Network Roll-out Plan by the Commission, TPC-D is laying network in BEST s area only to comply with its USO and to provide supply to consumers who are seeking connection from TPC-D. TPC-D is not discriminating amongst any category of consumer in providing connections. Providing connection to consumers who approach TPC-D on its network cannot be considered as cherrypicking. In this regard, TPC-D confirms that it has not laid down any backbone network Granting any relief as sought by BEST would be contrary to the statutory mandate and the Licence conditions BEST has filed the present Petition seeking an inquiry against TPC-D under Section 128 of the EA, 2003 on the following grounds: (a) TPC-D s cherry-picking of lucrative high-end consumers by selective laying of network even when its Network Roll-out Plan and migration protocol has not been approved. (b) TPC-D has failed to submit Network Roll-out Plan in compliance to Part-II of its Distribution Licence No. 1 of Under Section 128, the Commission can initiate an inquiry only if it is satisfied that a Licensee has failed to comply with the provisions of the EA, 2003, Rules and Regulations made thereunder and/ or conditions of Licence. BEST has failed to primafacie demonstrate such failure by TPC-D BEST seeks initiation of enquiry against TPC-D merely on the apprehension that it is engaged in cherry-picking of high-end consumers. BEST ought to have placed sufficient material on record to demonstrate selective laying of network. Merely setting up a sub-station does not demonstrate that TPC-D is engaged in selective laying of network. No case has been made out fulfilling the requirement of Section 128 of EA, There is no restriction on TPC-D to lay its distribution network and to supply electricity to the consumers. In fact, in terms of the Supreme Court s Judgment dated 8 May, 2014 in C.A. No of 2012, under Sections 42(3) and 43 of the Act, TPC-D is mandated to supply electricity to consumers in the area of supply common with BEST only after Order in Case No. 43 of 2016 Page 7 of 28

8 laying down its own network, unless BEST permits wheeling of electricity on its network for such supply Network roll-out is driven by consumers choice and load demand. As such, no case is made out against TPC-D in the absence of any restriction on laying of network and connecting to consumers under the provisions of the EA, 2003 or the Rules and Regulations made thereunder BEST s submission that TPC-D has contravened its Licence condition by not providing an adequate Network Roll-out Plan is misleading. The objection pertains to Case No. 182 of 2014 and cannot be raised in the present Petition. Both BEST and TPC-D have made their extensive submissions on TPC-D s Network Roll-out Plan. A Public Hearing has been held and the Case is now reserved for Orders. BEST s objection on TPC-D s Network Roll-out Plan needs to be decided in Case No. 182 of Even otherwise and without prejudice to the above, in terms of the Commission s Order dated 14 August, 2014 in Case No. 90 of 2014 and the Distribution Licence No. 1 of 2014, on 9 October, 2014 TPC-D had duly submitted its Network Roll-out Plan for the Commission s approval, which was required to be revised in terms of the ATE Judgment dated 28 November, 2014 in its Appeal No. 246 of 2012.Thereafter, the Network Roll-out Plan was modified as per the directions issued by the Commission from time to time. In a nutshell, the modification to the Network Roll-out Plan was either to take into account the principles laid down in the ATE Judgment or as per the directions issued by the Commission. There was no willful or prolonged default on the part of TPC-D in complying with the terms of its Distribution Licence No. 1 of The present Petition is anti-competitive and yet another attempt to ensure that no other Distribution Licensee is able to supply electricity to consumers in BEST s area of supply By the present filing, BEST is also trying to re-agitate settled issues to deny TPC-D its right to perform its obligations as a Distribution Licensee, despite the Supreme Court s Judgment dated 8 May, 2014 in Civil Appeal No.4223 of 2012 in which it has held that BEST does not enjoy any privilege under law whereby it can claim monopoly for supplying power in its licensed area of supply Several failed attempts have been made by BEST to ultimately achieve its objective of securing its monopoly, under the garb of different reliefs/petitions: i. Appeal No. 149 of 2010 filed before the ATE and Civil Appeal 4223 of 2012 filed before Supreme Court stating that there can be no Distribution Licensee in BEST s area of supply, it being a local authority. Order in Case No. 43 of 2016 Page 8 of 28

9 ii. Case No. 37 of 2014 filed before the Commission challenging Expression of Interest for Distribution Licence invited by the Commission and Appeal No. 243 of 2014 before the ATE challenging the Commission s Order in Case No. 37 of iii. Appeal No. 216 of 2014 before the ATE challenging the Commission s Order in Case No. 90 of 2014 granting Distribution Licence to TPC-D. iv. Review Petition before ATE for review of its Judgment in Appeal No. 216 of v. Civil Appeals before the Supreme Court challenging the Judgments in Appeal No. 216 of 2014 and Judgment in review Petition (Civil Appeals pending and no interim relief). vi. Case No. 118 of 2014 filed before the Commission seeking charges upon the consumers who would migrate to TPC-D from BEST. vii. WP 2641 of 2014 filed before the Bombay High Court challenging The Standards of Performance Regulations notified by the Commission In its Petition, BEST has wrongly made Reliance Infrastructure Ltd. (Distribution) (RInfra-D) a party. RInfra-D is not concerned qua laying of network in the island city of Mumbai. It is the settled position of law that a person can be added as a party only if it has any direct or legal interest in the subject matter of the proceedings. RInfra-D does not have any legal or direct interest qua the issue raised in the present Petition. Consequently, RInfra-D is neither a necessary nor a proper party for the purpose of the adjudication of the present Petition. Accordingly, the Commission should delete RInfra- D as a party to the present Petition BEST has failed to demonstrate that there is a primafacie case is in its favour, that the balance of convenience is in its favour and that no irreparable harm would be caused to TPC-D if interim stay is granted, and thus no interim relief ought to be granted to BEST Since there was no restriction on TPC-D to lay its distribution network, TPC-D had submitted its Detailed Project Report (DPR) for carrying out the distribution activities in the Mumbai City Area for FY and FY , which has been in principle approved by the Commission on 18 May, 2016 with a capital expenditure of Rs crore. Order in Case No. 43 of 2016 Page 9 of 28

10 6.26 All submissions made by BEST qua laying of network are dealt with by TPC-D in Case No. 182 of BEST is once again raising the same issues herein, which is not permissible Till date, there is no stay on TPC-D to perform its statutory obligations (supplying to consumers on demand). In the meanwhile, TPC-D has laid down network in the BEST area of supply in conformity with the Supreme Court s Judgment dated 8 May, 2014 read with its statutory obligations laid down under Sections 43 and 42(3) of the EA, 2003 and the Rules and Regulations thereunder TPC-D has received applications from consumers in the erstwhile Mill land area for providing supply to them using its own distribution network. Accordingly, TPC-D has extended its distribution mains and provided supply to the intending consumers There is no deliberate attempt or intent on part of TPC-D to cherry-pick high-end consumers by laying network in only one particular area. TPC-D is ready and has proposed to develop its network in the entire island city of Mumbai. In fact, ATE in its Judgment in Appeal No. 246 of 2012 has held that it is not possible for a Distribution Licensee to cherry-pick consumers. The choice of consumer determines its migration Migration of consumers from one Distribution Licensee to another is mostly driven by differential tariff, quality of supply or quality of services provided by the Distribution Licensees. The Distribution Business of TPC-D is a regulated business where tariff is determined by the Commission. Therefore, migration of consumers, if any, is not within the control of TPC-D Till date, TPC-D has released power supply to 158 switch-over consumers. Of these, 151 consumers belong to LT Residential category, 5consumers to LT Commercial category, 1 consumer to LT Industrial and 1 to the Public Services category. Thus, TPC-D is not selectively laying its distribution network to connect only to high-end consumers. Contrary to this perception, TPC-D is providing supply to all consumers who approached it regardless of their tariff category. BEST s allegations in this regard are not only false but also baseless and unfounded With regard to BEST s contention that TPC-D is approaching consumers and providing them with a waiver of requirements such as sub-station space, etc., TPC-D had, by its letter dated 5 October, 2015 to Omkar Realtors & Developers Pvt. Ltd. ( Omkar Realtors ), accepted the application made by the Developer with certain pre-requisite requirements. In that letter, TPC-D had informed the Developer that the power supply could be released on LT without a sub-station. This was so done after TPC-D had carried out a technical feasibility study, the result of which demonstrated that supply could be released to it on LT line/cable from an existing CSS at a distance of 170 meters. Order in Case No. 43 of 2016 Page 10 of 28

11 6.33 On the one hand, BEST is not permitting wheeling of electricity on its network and, on the other hand, BEST does not want TPC-D to lay its distribution network. In effect, BEST is seeking that there should not be any competition in the area where it is licensed to supply electricity ATE has already decided that phased development of network is permitted under the EA, That decision is binding on the parties as well as the Commission. BEST cannot be permitted to raise this issue as it has been barred by the principle of resjudicata In order to optimise the cost of laying of network, TPC-D has considered using approximately 200 kms. of existing 22kV underground HT distribution cable network, which would cater to a load of 380 MVA available across Mumbai City. The network was laid to supply electricity in terms of the erstwhile Licences granted to TPC-D. Additionally, TPC-D has not considered a number of 33/11 kv DSS but instead proposes to install smaller 22/0.4 kv sub-stations which are significantly lower in cost, require less space and can be easily and quickly installed to meet consumer demand. This network, together with the network proposed in the Network Rollout Plan, would cater to an indicative load of at least 800 MVA in the area where TPC-D and BEST are licensed to supply electricity. TPC-D s Network Roll-out Plan is based on indicative Projections, and actual network development would be in terms of the consumer demand; and TPC-D is required to supply electricity as per the consumers demand in accordance with the timelines provided in the EA, 2003 and the Rules and Regulations made thereunder Present Petition is premised on BEST s assumption that TPC-D is engaged in cherrypicking of high-end consumers without corroborating this with any documentary evidence. TPC-D has developed the distribution network in order to honour consumer demand. TPC-D has not selectively laid any distribution network and/ or engaged in cherry-picking of consumers The Petition may be dismissed with costs due to the following reasons:- a. The issues raised in the Petition have been decided by the Judgments of various forums, including the Supreme Court, the Bombay High Court and the ATE; b. Section 128 of EA, 2003 is not attracted in the facts of the present case; c. There is no violation of any statutory provision/ Licence condition by TPC-D. 7. At the hearing on 16 September, 2016, BEST stated that TPC-D s Reply to the Petition has been received only the day before, and sought an adjournment since it needs two weeks time to file its Rejoinder. TPC-D had no objection. Order in Case No. 43 of 2016 Page 11 of 28

12 8. In its Rejoinder dated 6 October, 2016, BEST stated as follows: 8.1 The various legal proceedings referred to by TPC-D are not relevant to the present Case filed under Section 128, and in those proceedings the facts and issues arising in the present Case were never directly or substantially raised and adjudicated. 8.2 The present Case is maintainable as adequate documentary evidence has been placed on record in the Petition and subsequent submissions to substantiate the present matter under Section 128 of EA, TPC-D is required under inter alia under Sections 14 and 43 of the EA, 2003 and also under its Licence Conditions to provide for an adequate and timely Network Roll-out Plan and to meet its USO in compliance and in consonance with such Network Roll-out Plan. 8.4 In the guise of honouring consumer choice, TPC-D should not be allowed to cherrypick lucrative consumers by selectively laying its distribution network in the area of supply common with BEST. 8.5 Phased development of distribution network is contrary to Sections 14 and 43 of EA, 2003 and is as such not permissible under the statutory framework. Supremacy of consumer choice is not by violation of the indispensable provisions of Sections 14 and 43, and to the prejudice of the parallel Licensee by alluring or taking away or cherrypicking its consumers. 8.6 Reliance by TPC-D on the Judgment dated 28 November, 2014 of the ATE in Appeal Nos. 246 and 229 of 2012 is misconceived as it is neither applicable nor relevant to BEST or its area of supply. 8.7 TPC-D had submitted its DPR to meet the requirement for the first 2 years as against the planning of 7 years proposed in the Network Roll-out Plan. As the matter pertaining to the approval of the Roll-out Plan under Case No. 182 of 2014 is subjudice before the Commission and the ATE, the DPR submitted by TPC-D based on the Roll-out Plan should not have been approved and TPC-D should not, in the meanwhile, be allowed to lay partial or selective distribution network in the area of supply common with BEST till the approval of the Roll-out Plan and Switch-over Protocol. 8.8 TPC-D may state on affidavit the names and addresses of these 158 switch-over consumers to enable the Commission to ascertain whether it has selectively laid out its distribution network. Order in Case No. 43 of 2016 Page 12 of 28

13 8.9 A bare perusal of the correspondence between BEST and Omkar Realtors would exfacie substantiate the case of BEST. TPC-D may be asked to place on record by affidavit the complete correspondence exchanged between TPC-D and Omkar Realtors. TPC-D has illegally taken away Omkar Realtors from BEST when BEST had complied with and completed the work (70%) of laying of HV/LV cables, etc. in order to give supply to the proposed development. 9. In its response dated 21 October, 2016 to BEST s additional submission dated 29 August, 2016 and certain averments in its Rejoinder, TPC-D stated as follows: 9.1 BEST s submissions regarding GRS Shelters are patently incorrect. TPC-D denies that:- a. It is engaged in any unethical and illegal activities for supplying electricity to any consumer let alone GRS Shelters. b. It has established any sub-station or is presently supplying electricity to GRS Shelters. c. It has provided any concessions in any matter to the consumers, including GRS Shelters, with the intent of luring consumers and supplying electricity to them. 9.2 BEST must be put to strict proof to demonstrate that TPC-D has constructed a substation to supply electricity to GRS Shelters and/ or is engaged in any illegal practices to lure consumers. This is evident from the exchange of communications between TPC- D and GRS Shelters. 9.3 The factual matrix qua GRS Shelters is as under:- a. On 15 November, 2015, GRS Shelters made an application to TPC-D seeking supply of electricity from TPC-D. In terms of its obligation under Section 43 of the EA, 2003, on 30 December, 2015 TPC-D accepted GRS Shelters application for supply of electricity. TPC-D further informed GRS Shelters that it would have to construct a sub-station as per its specifications to supply electricity to it. b. On 10 February, 2016, GRS Shelters informed TPC-D that it had already constructed a sub-station and requested TPC-D to refund the amount spent by it in constructing the sub-station. c. Thereafter, TPC-D informed GRS Shelters that TPC-D would require the locational approved drawing along with the other requirements mentioned in its letter dated 30 December, 2015 to enable it to process the application. Till date, GRS Shelters has not provided the locational approved drawing and other information and documents to enable TPC-D to supply electricity to it. 9.4 As regards BEST s submissions that TPC-D is compromising the reliability requirements of fire-fighting service to lure GRS Shelters, the fact is that TPC-D has never compromised on the reliability requirements and is supplying electricity to the consumers in terms of the Indian Standards. TPC-D also recovers all the expenses Order in Case No. 43 of 2016 Page 13 of 28

14 incurred for supplying power, including releasing power supply of emergency load as per the Schedule of Charges approved by the Commission. TPC-D has not given any incentive to consumers to lure the consumers, as wrongly alleged by BEST. 9.5 As regards the interim relief sought by BEST, i.e., that all consumers who have connected to TPC-D s network after 14 August, 2014 be re-connected to BEST s network, that is not only contrary to the Supreme Court s Judgment dated 8 May, 2014 in Civil Appeal No of 2012 but is also contrary to the provisions of the EA, The Commission by its Order dated 30 October, 2013 in Case No. 85 of 2013 had directed transfer of 7.92 lakh low-end consumers from RInfra-D to TPC-D. That Order was challenged before the ATE. On 29 November, 2014, the ATE in its Judgment held that the EA, 2003 does not empower the State Commissions to give directions to transfer consumers from one Distribution Licensee to another. 9.7 As regards BEST s contention that TPC-D should provide the details of its 158 switchover consumers, a consumer can be switched-over to TPC-D s network only after getting disconnected from BEST s network. In this regard, a consumer is required to make an application to BEST seeking disconnection. In other words, BEST ought to have details/ knowledge of all the consumers who have disconnected from its network and sought switch-over to TPC-D. 9.8 The onus is on BEST to demonstrate that TPC-D is engaged in cherry-picking of consumers, which it has failed to do. 9.9 As regards BEST s contention that TPC-D should place all the communications with Omkar Realtors to demonstrate that it has not lured it away, the fact is that, presently, TPC-D is not supplying electricity to Omkar Realtors and TPC-D has provided the relevant details regarding that application in its consolidated Reply dated 15 September, On 14 February, 2017, BEST filed another additional submission states as follows: 10.1 TPC-D has illegally established a sub-station and is giving supply to GRS Shelters which is developing a plot at Dr. E. Borges Marg, Parel, Mumbai.GRS Shelters had approached BEST, which had already given a Letter of Requirement (LoR) dated 22 October, 2012 informing it about the requirement of single transformer distribution sub-stations. The Developer offered requisite space for the sub-station in May, 2012 and obtained NOC from the Executive Engineer, Building Proposal (Construction), MCGM and Chief Fire Officer for construction of the sub-station. The Developer entered into an Agreement to Lease with BEST for the plot for the sub-station in The Developer then commenced the scheduled work of the sub-station as per BEST s building drawing under the supervision of BEST and completed around 60% of the civil work. The Developer, vide letter dated 15 April, 2016, informed BEST that the Lease Agreement for the sub-station may be treated as cancelled as it was getting a better deal from TPC-D in giving connections, fire meter and sub-station free of cost. Order in Case No. 43 of 2016 Page 14 of 28

15 10.2 Thereafter, GRS Shelters intimated BEST about termination of the Agreement to Lease executed with BEST an alleging certain lapses on BEST s part. By letter dated 2 December, 2016, BEST has duly replied to the notice denying any breach of the terms and conditions of the Lease Agreement. In its reply, BEST had contended that the perceived lapses on the part of BEST could not be a ground for termination of the Lease Agreement and hence did not entitle GRS Shelters to terminate the Agreement The letter dated 10 February, 2016 from GRS Shelters Pvt. Ltd. to TPC-D clearly demonstrates the indulgence and unfair practice being followed by TPC-D wherein the bearing of the sub-station construction cost of Rs lakh was being negotiated with GRS Shelters BEST levies charges for separate service cable and meter intended for fire-fighting purposes as per the Schedule of Charges approved by the Commission. TPC-D s waiver of such charges or compromising the reliability requirement of fire-fighting service to lure the consumer is not conducive to a level playing field and genuine competition Omkar Realtors had approached BEST on 19 November, 2010 for electricity supply for its plot and to issue NOC to its Project at Bhoiwada, Parel. Vide NOC dated 11 January, 2011, BEST informed it about the sub-station requirement. Later on, the Developer merged its two Projects of Bhoiwada and Khaprideo and applied for electricity supply to the combined Projects. BEST issued a revised LoR dated 21 April, 2015 informing it of the requirement of Receiving sub-station (RSS)/DSS to meet the load. The Developer offered BEST the space for two transformers 33 kv RSS for its Projects at Bhoiwada and Khaprideo at Parel. Accordingly, site plan and sub-station building drawings were prepared. Omkar Realtors & Developers Pvt. Ltd., vide letter dated 4 March, 2013 submitted token approval of their architect and Developer on the site plan of 33 kv RSS. M/s Omkar Realtors also submitted the Slum Rehabilitation Authority (SRA) s approvals dated 16 May and 30 July, 2013 to the site plan and substation building drawings and also submitted the Chief Fire Officer (CFO) s NOC dated 1 January, 2015 for construction of the RSS. However, the Developer did not submit Agreement to Lease to BEST. As the space for the RSS was on open ground, as per the policy of BEST the construction of RSS would have been carried out by BEST at its own cost. However, the Developer, vide letter dated 27 November, 2014, proposed that the RSS would be constructed by it initially, the cost of which would be reimbursed by BEST. BEST requested the Developer to submit the Agreement to Lease, and the formalities of handing over / taking over of space were being discussed with it Accordingly, BEST had prepared the scheme of commissioning of 1 RSS with 5 downstream DSS for releasing permanent electric supply to its Projects and included it in the DPR for New Receiving Sub-stations Schemes. The DPR for commissioning of new Receiving Sub-stations at Jerbai Wadia premises was approved in principle by the Commission on 28 September, BEST has released the electric supply to the occupants of the rehabilitation buildings in the Bhoiwada Project by commissioning Order in Case No. 43 of 2016 Page 15 of 28

16 two DSS and one temporary DSS. Subsequently, BEST also started laying 33 kv cable for the proposed Omkar Jerbai Wadia Road RSS and completed 80% of the cable laying. Moreover, BEST has commenced the work of construction of DSS in the Bhoiwada Project and is in process of taking over the DSS site from the Developer. However, by letter dated 28 June, 2016, Omkar Realtors suddenly informed BEST that it had decided to avail electric supply to its free sale buildings from TPC-D Thereafter, the Developer intimated BEST that the 33kV RSS and DSSs near the free sale portion of its Project would be developed by TPC-D. BEST had taken all the required measures and efforts since 2010 in planning and designing the HT and LT network considering the overall development of the Project and gone ahead in compliance of the Developer and other statutory authorities. The negotiation at this stage on the part of TPC-D with the Developer for providing electric supply to the free sale building is a grave injustice. Hence, it is an unfair practice of TPC-D in connivance with the Developer which needs to be investigated in order to discourage unhealthy competition BEST has incurred expenditure, manpower and time for developing infrastructure in these two cases. If BEST is denied the opportunity to provide electric supply to the proposed load of entire combined plot and commissioning of the proposed 33 KV RSS at the proposed plot, BEST will be compelled to give HT supply from other RSS at longer distance which will result in unnecessary higher capital cost and higher distribution losses in order to meet the load of entire rehabilitation building having low-end residential consumers. The strength of BEST s network will also not get upgraded in view of the increased number of DSS without establishment of RSS. Grave prejudice will be caused to BEST if TPC-D is allowed to lure away Omkar Realtors and provide electricity supply to only high-end consumers of the Project TPC-D has already indulged in taking away lucrative high-end consumers in Colaba area like Hotel Taj Mahal and Hotel Taj Wellington Mews, for which cable laying work has been carried out. Recently, BEST has received a letter dtd.18 January, 2017 from Indian Hotels Co. Ltd. requesting to permanently disconnect supply to Taj Mahal Palace Hotel. 11. On 14 March, 2017, BEST filed a Miscellaneous Application (6 of 2017) seeking an early hearing. The Application states as follows: 11.1 TPC-D has laid cables to supply electricity to high-end consumers, such as Hotel Taj Mahal and Hotel Taj Wellington Mews in Colaba and ITC Grand Central Hotel in Parel. BEST has recently received letters from Indian Hotels Co. Ltd. and ITC Grand Central Hotel requesting it to permanently disconnect the supply of electricity. This clearly illustrates that TPC-D has been selectively laying cables and seeking to provide supply of electricity to the subsidizing high-end consumers of BEST, even though the Switch-over Protocol under Case No. 40 of 2015 is yet to be approved by the Commission. Order in Case No. 43 of 2016 Page 16 of 28

17 11.2 The illegal switch-over of such subsidizing consumers of BEST by TPC-D will have grave adverse impact on the tariff of subsidized consumers and also on the cash flow of BEST The Commission may expedite the hearing in the main matter and grant interim relief as already prayed sought in the Petition. 12. At the hearing held on 20 July, 2017: 12.1 BEST reiterated its submissions in its Petition and subsequent additional submissions and stated that:- i. Inspite of pending Switch-over Protocol approval, TPC-D is switching over consumers in an arbitrary manner. While doing so, TPC-D has breached the provisions of Sections 15(6), 16, 43 and 45 of the EA, 2003 by giving assurances of waiver of certain charges, which is not permitted under the Act. ii. iii. iv. In accordance with Clause 6.4 of its Distribution Licence, TPC-D is entitled to recover tariff and charges only in accordance with the Orders of the Commission. Further, Clause 8 of its Licence provides that TPC-D shall not show any undue preference to any person while undertaking distribution and supply of electricity. In its Reply, TPC-D has stated that migration of consumers is driven by differential tariffs. However, such migration should be in accordance the approved Switch-over Protocol. TPC-D has admitted that it has not laid any backbone network. This shows that TPC-D has laid its network in a selective manner to connect these high-end consumers. To a query of the Commission regarding why RInfra-D has been impleaded, BEST stated that TPC-D s Licence area overlaps both BEST s as well as RInfra-D s Licence areas and RInfra-D has been made a formal party to ensure that there is no legal issue while seeking relief In response, TPC-D stated that: i. In its first prayer, BEST has sought admission of the Petition under Section 128 of EA, 2003, which cannot be decided by the Commission without serving notice to TPC-D. BEST s second prayer is a specific one seeking directions to TPC-D restraining it from rolling out its distribution network and providing electricity supply till finalization of the Order in Case No. 182 of However, as the Commission vide its Order dated 12 June, 2017 has disposed of Case No. 182 of 2014, this prayer has become infructuous. ii. Bombay High Court, in its Judgment in WP No of 2014, has made its observations on the issue of cherry-picking. Order in Case No. 43 of 2016 Page 17 of 28

18 12.3 The Commission observed that the main issue is whether or not TPC-D was entitled to lay its network and release connections to consumers in BEST s area of supply during the pendency of approval of the Roll-out Plan and Switch-over Protocol TPC-D stated that : i. ATE, in its Judgment in Appeal No. 246 of 2012, had directed the Commission to approve a Switch-over Protocol. However, BEST s submission in Case No. 40 of 2015 was that the above Judgment is not applicable to it. ii. iii. iv. TPC-D s obligation under Section 43 of the Act is not curtailed due to the ATE Judgment. The Supreme Court in its Judgment dated 8 May 2014 in C.A. No of 2012 has held that another Distribution Licensee can operate in BEST s area of supply. TPC-D has not selectively chosen only high-end consumers, but has provided supply to all categories of consumers which had approached it. BEST is highlighting only the connections released to high-end consumers. Moreover, these consumers were connected by TPC-D only after BEST disconnected their electricity supply. v. Since the present Petition has become infructuous, BEST may initiate separate proceedings if it has any grievance regarding any particular connection released by TPC-D BEST responded that: i. BEST is seeking investigation under Section 128 of EA, 2003 with regard to the manner in which the connections were released by TPC-D during the period between grant of Licence to TPC-D and issue of the Order of the Commission in Case No. 182 of ii. iii. The Bombay High Court Judgment was on a different issue, and hence is not relevant to the present matter. During pendency of the Switch-over Protocol, TPC-D was not entitled to release any connection. To a query of the Commission, BEST responded that, for any power supply application, TPC-D should have sought BEST s permission pending approval of the Roll-out Plan and Switch-over Protocol rather than releasing the connections unilaterally The Commission observed that in the past, i.e. both before and after the grant of fresh Licence, switch-overs have been taking place even in the absence of a Switch-over Protocol. For switch-over, BEST has been disconnecting its supply and, therefore, cannot contend that TPC-D has switched-over BEST s consumers in a unilateral manner. Also, if TPC-D s contention about its obligation under Section 43 is accepted, then the question of any adjudication by the Commission, including Roll-out Plan Order in Case No. 43 of 2016 Page 18 of 28

19 approval, may not arise. TPC-D may show any Order of the Commission or ATE Judgment which allowed it to lay its network and switch over consumers during pendency of its Roll-out Plan approval. The Commission also asked BEST regarding its understanding on the issue of not resorting to cherry-picking. 13. In its submission dated 22 August, 2017 following the hearing, TPC-D has stated as follows: 13.1 By its Daily Order dated 20 July 2017, the Commission has, inter alia, directed TPC- D to demonstrate how it is permitted to lay down its distribution network and switchover consumers pending the approval of its Network Roll-out Plan (i.e. Case No. 182 of 2014) Throughout the proceedings in Case No. 40 of 2015, it has been BEST s contention that the principles laid down in the ATE Judgment dated 28 November, 2014 are not applicable to BEST and that TPC-D is required to lay its own distribution network to connect to consumers. However, contrary to this stand, BEST has now taken the position in the present Case that, in the absence of approval of Network Roll-out Plan and Switch-over Protocol, TPC-D is not permitted to connect to consumers by way of switch-over In support of its allegation of cherry-picking, amongst others, BEST has given the instance of ITC and Indian Hotels which are being connected by TPC-D. However, BEST has suppressed the material fact that these consumers have decided to migrate to TPC-D only to take advantage of Open Access on their distribution network, which BEST is not allowing. TPC-D has also connected to other consumers only based on their requests which have been honored by BEST also by duly disconnecting the connections within the stipulated time. As BEST has failed to even prima-facie establish the allegation of cherry-picking of consumers, an investigation under Section 128 of the EA, 2003 is not justified BEST s prayer for directions restraining TPC-D from laying down its distribution network and connecting to consumers till finality of Case No. 182 of 2014 does not survive since the Order has now been issued. The other prayers seeking interim relief also cannot be granted TPC-D has not been prevented by any Order of any adjudicating authority from performing its USO of supplying electricity to consumers on demand. In fact, the Supreme Court in its Judgment in Appeal No of 2012 has held that, in case BEST permits Open Access on its distribution network, TPC-D may supply electricity using BEST s network. However, if BEST declines Open Access, TPC-D would have to lay its own distribution network to comply with the USO. The grant of Distribution Licence No. 1 of 2014 to TPC-D does not render this Judgment otiose on the issue. Further, there is no condition either in the EA, 2003 or in the Licence which obviates the need to act in accordance with this Judgment. Order in Case No. 43 of 2016 Page 19 of 28

20 13.6 The choice of a consumer to seek supply of electricity on the network of the other Distribution Licensee (i.e. in terms of Section 42 of the EA, 2003) or the supply of electricity from a Distribution Licensee from its own distribution network (i.e. in terms of Section 43 of the EA, 2003) has been recognized by the Supreme Court in its Judgment dated 8 July, BEST is now estopped from contending that switch-over of consumers is illegal as BEST itself has disconnected the consumers supply for switch-overs. While BEST has impugned TPC-D s actions, it has failed to disclose the corresponding action of BEST in disconnecting the consumers The switch-over of consumers in the island city of Mumbai has continued with complete cooperation of BEST both prior to and after grant of Distribution Licence on 14 August, Any works undertaken by TPC-D to connect to consumers has been carried out in accordance with the DPRs approved in-principle by the Commission The ATE Judgment dated 28 November, 2014 and the consequential proceedings cannot be relied upon by BEST to seek investigation under Section 128 of the EA, 2003 as these proceedings do not deal with the area of supply where BEST is licensed to supply electricity. The Commission in its Order dated 14 August, 2017 in Case No. 50 of 2015 has also recognized that the principles of the ATE Judgment are not applicable to BEST s area of supply and that TPC-D is required to lay its distribution network to connect to consumers BEST s submissions ignore the Commission s Order dated 6 June, 2016 in Case No. 30 of 2011, wherein it has held that, till the Protocol is approved, TPC-D and BEST will coordinate and disconnect consumers in such a manner to minimize disruption of supply of electricity BEST has not pointed out any provision or Order which prohibits TPC-D from acting on consumers choice and supplying electricity to them On consumer s applications, TPC-D is duty bound to supply power by laying its own network, in terms of the 6th Proviso to Sections 14 and 42(1) of the EA, This statutory requirement cannot be overridden by any procedural protocol/or lack of it. A Licence cannot be made inoperative or put in abeyance for the lack of any Switchover Protocol, especially in light of the existing Supply Code and Standards of Performance Regulations. As observed in the Commission s Daily Order dated 20 July, 2017, switch-over of consumers was taking place and rightly so, in the absence of any such Protocol and with the consent of BEST for disconnecting the consumers. Hence, no grievance ought to be made by BEST about it A Distribution Licensee is duty bound to honour the choice exercised by the consumer and supply electricity to it in terms thereof. In its Judgment dated 8 May, 2014, the Supreme Court held as follows :- 27. Thus, on a conjoint reading of Sections 42 and 43 of the Act along with Order in Case No. 43 of 2016 Page 20 of 28

21 the objectives and purpose for which the 2003 Act is enacted, it becomes clear that there are two ways in which a consumer stated in a particular area can avail supply of electricity, as pointed out by the learned Senior Counsel for TPC and noted above. When an application is made by a consumer to a distribution licensee for supply of electricity, such a distribution licensee can request other distribution licensee in the area to provide its network to make available for wheeling electricity to such consumers and this open access is to be given as per the provisions of Section 42(3) of the Act. It is here only that local authority is exempted from such an obligation and may refuse to provide or make its network available. Second option is, under Section 43 of the Act, to provide the electricity to the consumer by the distribution licensee from its own network. Therefore, if in a particular area local authority has its network and it does not permit wheeling of electricity by making available its network, the other distribution licensee will have to provide the electricity from its own network. For this purpose, if it is not having its network, it will have to lay down its network if it requires in order to supply electricity to a consumer seeking supply While granting Distribution Licence to TPC-D on 14 August, 2014, the Commission stated that the Network Roll-out Plan submitted by TPC-D is inadequate and directed it to submit its revised Plan, which was duly submitted by TPC-D. That Order does not restrain TPC-D from operationalizing its Distribution Licence in its area of supply nor puts it in abeyance, nor does it restrict TPC-D from laying network to provide power supply to consumers in BEST's area BEST had filed an Appeal No. 216 of 2014 challenging the grant of Licence to TPC- D and Interim Application No. 335 of 2014 seeking stay on implementation of that Order and directions to restrain TPC-D from (i) any further development or roll-out of its distribution network, and (ii) any further distribution of electricity in retail, in the area of supply of BEST No stay was granted to BEST and its Appeal was also dismissed by the ATE on 25 November, BEST had filed a Review Petition, which was also rejected by the ATE on 12 March, BEST has preferred Civil Appeals before the Supreme Court against the ATE Judgments dated 25 November, 2014 and 12 March, 2015, where again no stay was granted to BEST Since there was no restriction on TPC-D to lay its distribution network and TPC-D had an approved DPR of Rs crore from the Commission for laying network in Mumbai City, TPC-D continued to lay its network for consumers. Thereafter, on 14 July, 2015, TPC-D submitted its DPR for carrying out distribution activities in Mumbai City Area for FY and FY which was approved in principle by the Commission on 18 May, 2016 with a capital expenditure of Rs crore As is evident from these Orders of the Commission, the ATE and the Supreme Court, TPC-D is not restricted in laying network to supply to consumers in the island city of Mumbai. In fact, TPC-D is obligated to do so in terms of the statutory framework. Order in Case No. 43 of 2016 Page 21 of 28

22 Also, BEST s multiple attempts to prevent any switch-over of its consumers to TPC- D have been strongly rejected right upto the Supreme Court TPC-D has laid its distribution network to supply electricity only to those consumers who have sought supply of electricity from it. Therefore, switch-over of consumers has taken place on account of consumer demand and in consumer interest. It is a classic case of healthy competition in a market where the consumers have exercised their choice to seek supply from a competing Licensee. TPC-D has not indiscriminately and/ or selectively laid its distribution network to connect to consumers in the absence of demand from them. Further, this network has been laid down in line with the DPR dated 14 July, 2015 approved by the Commission Pendency of the Network Roll-out Plan does not tantamount to a stay on the consumer exercising its choice to elect supply from TPC-D. Any interpretation to suggest that the pendency of the Network Roll-out Plan amounts to stay on supply electricity to consumers on demand in essence means a stay on the Supreme Court s Judgment dated 8 May, 2014 which cannot be permitted Even otherwise, a Network Roll-out Plan is a part of a Distribution Licensee s Business Plan. Approval of a Network Roll-out Plan cannot override the substantive obligations/ duties of the Distribution Licensees, as provided under the EA, BEST s submission that, pending the approval of TPC-D s Network Roll-out Plan, it could not have switched over consumers of BEST is wholly misplaced, as:- a. Switch-over has been permitted, both prior to and after grant of Distribution Licence No. 1 of 2014, even when there was no Protocol for migration of consumers or express permission or prohibition on switch-over of consumers. b. When consumers switch over, BEST has to first permanently disconnect power supply to them. Having disconnected power supply to these consumers, BEST is now estopped from taking a contrary stand and allege that, in the absence of an approved Switch-over Protocol, TPC-D is not permitted to switch-over the consumers and also that TPC-D has "cherry-picked" consumers. c. During the proceedings in Case No. 182 of 2014 and also in Case No. 40 of 2015, BEST has always taken the stand that the directions / principles laid down in the ATE Judgment dated 28 November, 2014 are not applicable to it and are binding only on the parties to Appeal No. 246 of 2012 and batch, i.e. TPC-D and RInfra-D. The Commission s Order dated 12 June, 2017 in Case Nos. 182 of 2014 and 40 of 2015 has been challenged by RInfra-D in Appeal No. 195 of BEST has filed its Reply to RInfra-D s Appeal. In its Reply, BEST has once again clarified that the ATE Judgment dated 28 November, 2014 is neither applicable nor relatable to BEST. On the one hand, BEST is making such submissions, and on the other hand, it is relying on the pendency of the approval of the Network Roll-out Plan in Case No. 182 of 2014 and Case No. 40 of 2015 to allege that TPC-D ought not to have Order in Case No. 43 of 2016 Page 22 of 28

23 switched over consumers in the island city of Mumbai. BEST cannot approbate and reprobate at the same time. d. During the proceedings of Case No. 40 of 2015, BEST had categorically submitted that a separate Case No. 30 of 2011 was pending before the Commission for determination of the Protocol for switch-over of consumers in the area of supply common to BEST and TPC-D. e. On 6 June, 2016, the Commission passed its Order in Case No. 30 of 2011 holding that, till the time the Protocol is approved, TPC-D and BEST will co-ordinate and disconnect consumers in such a manner to minimize disruption of supply of electricity. This Order was passed by the Commission when it was already seized of Case No. 40 of 2015, thereby meaning that the Commission had approved switch-over of consumers even in the absence of an approved Protocol. The relevant part of the Order is extracted below:- 34. The Supply Code and Standards of Performance Regulations already provide a framework and time-lines, along with certain caveats, for disconnection of supply and provision of new connections which require to be adhered to by the Licensees. The Commission will be separately considering any further protocol required to facilitate switch-overs from one Licensee to another in the same area of supply. In the meantime, the Commission expects that BEST and TPC-D will coordinate their disconnection and connection actions so as to minimise any disruption of supply to the concerned consumer.. f. Thus, during the pendency of the approval of the migration protocol, TPC-D is specifically permitted to switch-over consumers from BEST to TPC-D. g. The migration protocol merely covers the operational issues which could be faced due to immediate disconnection from one network and connection to another network. h. No restrictions/ prohibitions on switch-overs are contemplated under the governing legal framework and the various Orders passed by various fora. It is settled law that, where there is a statutory framework generally permitting a person to do something, unless it is specifically prohibited, as a matter of general principle prohibition cannot be presumed. In this regard, reference may be made to the Supreme Court s Judgment in Rajendra Prasad Gupta v. Prakash Chandra Mishra. Even otherwise, BEST has failed to demonstrate under which provision of law TPC-D is prohibited to lay its network and switch-over consumers in the island city of Mumbai in the absence of any approved protocol Vide its Daily Order dated 20 July, 2017, the Commission has observed that:- Order in Case No. 43 of 2016 Page 23 of 28

24 6. if TPC s contention about its obligation under Section 43 is accepted, then the question of any adjudication by the Commission, including rollout plan approval, would not arise. This observation of the Commission is erroneous as the approval of a Network Roll-out Plan is an executive / regulatory function of the Commission and not an adjudicatory function The present Petition is nothing but yet another attempt of BEST to achieve its objective of perpetuating monopoly, denying consumer choice and distorting competitive neutrality, contrary to the well settled statutory framework. 14. On 18 October, 2017, BEST filed a response to the above submission of TPC-D, which states that: 14.1 Due to cherry-picking of lucrative consumers, TPC-D has failed to comply with the provisions of Sections 15(6), 16, 43 and 45 of EA, The Additional Affidavit of TPC-D stating that the present Case is infructuous is misleading. The Commission should investigate the affairs of TPC-D under Section 128 of EA, 2003 and should restrict it from illegal switch-over and cherry-picking of lucrative commercial/residential consumers by a partial or selective roll-out of its distribution network from 14 August, 2014 until the common Order dated 12 June, 2017 in Case No.182 of 2014 and Case No. 40 of The reliance by TPC-D on the Commission s Order dated 6 June, 2016 in Case No. 30 of 2011 is misleading. In that Order, the Commission had directed the Distribution Licensees to co-ordinate their disconnection and connection actions so as to minimize any disruption of supply to the concerned consumer during the switch-over process. BEST has duly complied with that direction by disconnecting the consumers on receipt of their disconnection request. However, such disconnection by BEST neither condones the illegal alluring away and switch-over of and cherry-picking by TPC-D nor does it detract from or defeat the due exercise of legal rights and remedy of BEST to seek redressal before the Commission in the present Case It is denied that the issue of phased development of distribution network has been decided in the ATE Judgment dated 25 November, 2014 in Appeal No. 216 of The phased development of distribution network is contrary to Sections 14 and 43 of EA, 2003 and is not permissible under the statutory framework The supremacy of consumer choice is not by violation of the indispensable provisions of Section 14 and 43, as well as to the prejudice of the parallel Licensee by illegal alluring or switch-over or cherry-picking of its consumers. Commission s Analysis and Ruling 15. BEST seeks an investigation into the affairs of TPC-D under Section 128 of EA, 2003 for its failure to comply with the Specific Conditions of its Distribution Order in Case No. 43 of 2016 Page 24 of 28

25 Licence which required it to submit a revised Network Roll-out Plan within a stipulated time, and for its selective laying of network and provision of connections to high-end consumers in its Licence area common to that of BEST while the revised Network Roll-out Plan was awaiting approval in Case No. 182 of Section 128 of EA, 2003 reads as follows: 128. Investigation of certain matters (1) The Appropriate Commission may, on being satisfied that a licensee has failed to comply with any of the conditions of licence or a generating company or a licensee has failed to comply with any of the provisions of this Act or rules or regulations made thereunder, at any time, by order in writing, direct any person (hereafter in this section referred to as Investigating Authority ) specified in the order to investigate the affairs of any generating company or licensee and to report to that Commission on any investigation made by such Investigating Authority: 16. The Specific Conditions stipulated in the Distribution Licence of TPC-D, granted by the Commission on 14 August, 2014 in Case No. 90 of 2014, are as follows: 1. The Distribution Licensee shall submit a detailed Network Roll-out Plan in accordance with the observations and directions of the Commission in its Order dated 14 August, 2014 in Case No. 90 of 2014 and the relevant provisions of the Electricity Act, 2003, Rules and Regulations. 2. The plan should clearly bring out that it is cost effective; provides equal access to all categories of consumers; creates level playing field; and is optimal for the purpose of meeting the Universal Service Obligations in a time bound manner. 3. The plan shall be submitted to the Commission for approval within a period of 6 weeks from the date of commencement of this Distribution Licence. 17. The fact is that TPC-D first submitted its revised Network Roll-out Plan for approval on 10 October, 2014 (in Case No. 182 of 2014), i.e. within the stipulated period of 6 weeks. That being the case, it had complied with the Specific Conditions of its Licence in this regard. It is a different matter that, while that Plan was being considered, the ATE passed its Judgment on 28 November, 2014 in Appeal No. 246 of 2012 and batch which required TPC-D to submit a Plan for approval considering the principles enunciated in that Judgment. Accordingly, TPC-D submitted a further revised Roll-out Plan on 12 February, During the proceedings of Case No. 182 of 2014, BEST and others had furnished their responses, and further revisions were made by TPC-D in the proposed Roll-out Plan. In its Final Order dated 12 June, 2017, the Commission it set out the principles and manner of distribution network development by TPC-D. Order in Case No. 43 of 2016 Page 25 of 28

26 18. BEST has sought that TPC-D be restrained from laying its network in the BEST area till the final disposal of Case No. 182 of That prayer has become infructuous since the Final Order in that Case has been issued on 12 June, The Commission notes, however, that Case No. 182 of 2014 was initiated by TPC-D on 10 October, 2014, and that BEST filed its present Petition only on 29 February, 2016, nearly a year and a half later. 19. BEST has also contended that TPC-D was not entitled to lay any new distribution network during the pendency of Case No. 182 of 2014, and alleged that it was doing so and providing connections in a selective manner for high-end consumers. The questions that arise are: i. Whether, during the pendency of the Roll-out Plan approval in Case No. 182 of 2014 and Switch-over Protocol approval in Case No. 40 of 2015, TPC-D was not entitled to release new connections to applicants in the BEST Area, including to BEST s erstwhile consumers? ii. Whether TPC-D has indulged in cherry-picking, as contended by BEST? 20. As regards the first issue, in the context of the TPC-D Distribution Licence Order in Case No. 90 of 2014 and the Specific Conditions of Licence, submission by TPC-D of a revised Network Roll-out Plan and its approval were to be part of a process following the grant of the Licence, since the Commission found that the original Plan was inadequate. The Licence, read with the provisions of the EA, 2003, casts certain obligations on the Distribution Licensee. The discharge of these obligations was not waived until the approval of a revised Roll-out Plan. The Licence Order neither expressly restricted nor did it envisage a restriction on the laying of network or provision of new connections pending such approval. The Commission also notes that, as recorded by the Commission in its Order in Case No. 182 of 2014, the ATE Judgment in Appeal No. 246 of 2012 restricted TPC-D from laying a new network only in the Licence area overlapping that of RInfra-D till its Roll-out Plan was approved, except in certain cases. The context of that Judgment and the modalities of supply to consumers in the common area of TPC-D and RInfra-D are different from that of the BEST area (where TPC-D cannot supply consumers using BEST s wires), and both the ATE Judgment and the Commission s Interim Order dated 9 November, 2015 in Case No. 182 of 2014 also did not prevent TPC-D from laying its network or providing connections in the BEST area till approval of the Roll-out Plan. 21. BEST has also contended that, pending the approval of a Switch-Over Protocol in Case No. 40 of 2015, TPC-D was not entitled to provide connections to erstwhile consumers of BEST. The Commission notes that, in Case No. 40 of 2015, BEST had on the contrary contended that the ATE Judgment in Appeal No. 246 of 2012 was not applicable to BEST, and that its directive that the Order in Case No. 43 of 2016 Page 26 of 28

27 Commission decide the protocol for switch-over of consumers was specific to the common area of supply of TPC-D and RInfra-D. In those proceedings, BEST had also stated that a protocol for switch-over of consumers in the BEST area was being separately considered in Case No. 30 of Case No. 30 of 2011 was initiated by the Commission but kept in abeyance due to a stay granted by the Supreme Court. Thereafter, in its Order dated 6 June, 2016, the Commission disposed of it stating that the concerned consumers may take recourse to the Consumer Grievance Redressal Forum for any compensation due to delay on the part of TPC-D or BEST in disconnection or providing new connections. The Commission also stated as follows: 34. The Supply Code and Standards of Performance Regulations already provide a framework and time-lines, along with certain caveats, for disconnection of supply and provision of new connections which require to be adhered to by the Licensees. The Commission will be separately considering any further protocol required to facilitate switch-overs from one Licensee to another in the same area of supply. In the meantime, the Commission expects that BEST and TPC-D will coordinate their disconnection and connection actions so as to minimise any disruption of supply to the concerned consumer. The Commission notes that, on 18 May, 2016, the Commission approved in principle the DPR submitted by TPC-D for distribution works in the BEST area to enable it to respond to connection requests from consumers. 23. As regards the second issue of selective laying of network by TPC-D for supplying only high-end, cross-subsidising consumers, Annexure 3 of BEST s own Petition indicates that TPC-D has switched-over mostly LT category Residential consumers. According to TPC-D also, it had released power supply to 158 switch-over consumers, of whom 151 are from the LT Residential category, 5 from the LT Commercial category, and one each from the LT Industry and Public Services categories, which would show that it is not selectively laying its distribution network to connect only to high-end consumers. Moreover, the Commission notes that BEST has not shown that TPC-D has refused connections to low-end applicants, new or switch-over, whose tariff is cross-subsidised. 24. As regards the instances of Omkar Realtors and GRS Shelters cited by BEST, that grievance is distinct from the issue involved in this Petition and is to be raised separately by BEST in the appropriate manner. Besides, BEST has not stated whether it was taken up with TPC-D, and the response. Suffice it to say that Licensees are authorized to collect only such charges as are approved by the Commission. 25. Considering the foregoing discussion, the Commission is of the view that BEST s prayers are not tenable. Order in Case No. 43 of 2016 Page 27 of 28

28 The Petition of the Brihanmumbai Electric Supply and Transport Undertaking in Case No. 43 of 2015 and its Miscellaneous Application No. 6 of 2017 stand disposed of accordingly. Sd/- (Deepak Lad) Member Sd/- (Azeez M. Khan) Member Order in Case No. 43 of 2016 Page 28 of 28