Power Tariff - Objections on ARR - 09-10

Preliminary Objections

A.1 The Petitioner is not a DISCOM as provided under the Delhi Electricity Reforms Act 2000 read with Rules notified vide notification no. F.11(99)/2001-Power/2867 dated 20thNovember 2001 on the grounds appearing herein below:-

(i) Rule 2 (d): Date of Transfer – "date of transfer' means the date to be notified by the Government as the effective date of transfer to the successor entities in accordance with these rules of such of the undertakings, assets, liabilities, proceedings or personnel as may be specified in the notification published in the official gazette
(ii) Rule 2(e) : "DISCOM 1" means "Central –East Delhi Electricity Distribution Company Ltd" a company incorporated under the Companies Act 1956 with principal object of engaging in the business of distribution and supply in the areas specified in Part 1 of the schedule "H" of the Central & East Delhi Electricity Distribution Company Ltd";
(iii) Rule 2 (f) :"DISCOM 2" - means South –West Delhi Electricity Distribution Company Limited" a company incorporated under the Companies Act 1956 with principal object of engaging in the business of distribution and supply in the areas specified in Part 1 of the schedule "H" of the South and West Delhi Electricity Distribution Company Limited"
(iv) Rule 2(g) – DISCOM 3 : means "North North-West Delhi Distribution Company Ltd., a company incorporated under the Companies Act 1956 with principal object of engaging in the business of distribution and supply in the areas specified in Part 1 of the schedule "H" of North North-West Delhi Distribution Company Ltd.
(v) DISCOMS mean and include DSICOM 1, DISCOM 2 and DISCOM 3 collectively.

A.2 The aforesaid notification prescribes procedure for transfer of employees and assets. Further the DISCOMS 1, 2 and 3 were to be notified as joint Ventures by the GNCT of Delhi. In view of the fact that till date so called DISCOMS are only companies registered under Companies Act and no joint venture having been formed and notified the submission of ARR is w2ithout authority of Law as such the Hon'ble Commission cannot take cognizance of the ARR filed by the Companies and entertain the same. Theses submissions are based on the provisions of the Delhi Electricity Reforms Act 2001 (Act) and regulations. For better appreciations of the facts, the texts of relevant Sections are reproduced as under:-
2(d) - Government means Lieutenant Governor of NCT of Delhi appointed by President under Article- 239.
14(1) The Government may, as soon as may be after the commencement of this Act, cause one or more companies to be incorporated and set up under the provisions of the Companies Act, 1956 for the purpose of generation, transmission or distribution of electricity, including companies engaged in more than one of the said activities, in the National Capital Territory of Delhi and may transfer the existing generating stations or the transmission system or distribution system or any part of the transmission system or distribution system, to such company or companies.
14(3) The companies incorporated and set up under sub-section (1) shall under take the functions specified in this section and such other functions as may be assigned to them by the Government.
14(6) The Government may convert the companies set up under this Act to joint venture companies through a process of disinvestments, in accordance with the transfer scheme prepared under the provisions of this Act.
"Sec. 16 of the Act, 2000 - Provisions relation to personnel: - (1) The Government may by a transfer scheme provide for the transfer of the personnel from the Board to a Company or Companies established as the case may be, under section 14 and distribution companies (herein after referred to as "transferee company or companies")on the vesting of properties, rights and liabilities in a Company or Companies established as the case may be, under section 14 or the distribution companies. Therefore, the position can be summed up as under:-
As per Sub-Section 2(r) of section 2 of Transfer scheme 2001- Transferee "means the GENCO, TRANSCO, DISCOMS and PPCL.
As per Sub-Section 2(e,f,g,h) of Section 2 of Transfer Scheme 2001- DISCOMS" means and includes DISCOM-1, DISCOM-2 and DISCOM-3 collectively. DISCOM-1 means The Central-East Delhi Electricity Distribution Company Limited, DISCOM-2 means South-West Delhi Distribution Electricity Company Limited and DISCOM-3 means North North-West Delhi Distribution Company Limited.
As per transfer scheme clause 2(d) "Date of the Transfer" means the date to be notified by the Government as the effective date of transfer to the successor entities in accordance with these rules of such of the undertakings, assets, liabilities, proceedings or personnel as may be specified in the notification published in the Official Gazette;.
A.3 It is a matter of record that till date the conversion of DISCOMS to Joint Venture Companies namely BYPL, BRPL & NDPL have not been approved and notified by Government, the Government means Lieutenant Governor of NCT of Delhi in terms of section 2(d) of Act which has already been highlighted in CAG and PAC reports. In view of foregoing discussions, the following position emerges :-

- BYPL, BRPL and NDPL cannot be named as Joint Venture companies in accordance with 14(6) section of Act as no approval obtained from Lt. Governor and can not under take the function as prescribed under section 14(3). As per record of ROC, the BYPL, BRPL and NDPL are registered as Government Companies under the provision of Companies Act, 1956.
- BYPL, BRPL and NDPL as Joint Venture companies cannot be termed as "transferee companies" for the purpose of transfer of DVB assets and employees under section 15 &16 of Act. Even till date effective date of transferor of assets and personnel of erstwhile DVB to Joint Venture companies namely BYPL, BRPL and NDPL has not been notified.
A.4 Therefore, in view of the aforesaid it is not open for the Hon'ble Commission to accept ARR as they lack locus standi. Therefore, in view of the aforesaid the Hon'ble Commission may please reject the ARR filed by unauthorized entity which is in violation of the provisions of the Act. The Apex Court in the case of Union of India vs. Wood Papers Ltd 1990 (47) E.L.T. 500 (S.C.) has held that

"Liberal and strict construction of an exemption provision are to be invoked at different stages of interpreting it. When the question is whether a subject falls in the notification or in the exemption clause then it being in nature of exception is to be construed strictly and against the subject but once ambiguity or doubt about applicability is lifted and the subject falls in the notification then full play has to be given to it and it calls for a wider and liberal construction. A notification has to be read in its entirety and construed as a whole. But a construction which results in inequitable results and is incongruous is to be avoided."

A.5 Since the DISCOMS do not satisfy the basic condition of being a notified Joint Venture, it is not open for the Hon'ble Commission to take a liberal view and admit the Petition filed by the DISCOMS, entertain the same and fix tariff thereafter. Therefore, the Petition filed by the DISCOMS may be summarily rejected.


B.1 CARTELISATION: It is respectfully submitted that once we go through the Petitions filed by the BRPL and BYPL, it can be easily observed that both the Petitions have been drafted and finalized by the same person as common /identical submissions have been made by both the DISCOMS except for change of tables depending on the requirement. Therefore, this is a classic case of cartelization and hence leading to monopolistic practices thus is diametrically opposite to the basic intent and purpose of the Reform process that advocates competition and open access. In view of

C.1 Non disclosure of other businesses: The Petitioner has not disclosed its other businesses that are being promoted by them in by using the assets and properties being held in trust. The first step taken by the BRPL is to disconnect all MTNL phones and subscribe to reliance connections with twin purposes i.e. first that the business of Reliance Telecom would be promoted and secondly the consumer cannot reach the enquiry and find out the telephone numbers of the responsible officers.

Further, some of the flats of erstwhile DVB have either been converted into Guest Houses or have been rented out by the DISCOM and are being used by the Officers of Reliance Group, which is not permitted. Thirdly in some of the sub stations the Reliance Communication towers have been installed so as to facilitate better connectivity by of Reliance Network. We are reproducing details of some of which in the following table:-



Sr.No Location Occupant Organisation
1. 23-A Hemkunt Colony Dr. Meena Khera MCD
2. S/Stn. Flt No.(s) 3 & 4 Guest House BSES
3. East of Kailash opp. B-142Mr. Sumesh Tangri DGM Transco
4. Maharani Bagh Near E-6 Guest House BSES
5. Giri Nagar Sub Station F. No. 2 Mr. V.K.MalikFitter Transco
6. MIG Saket – T/FloorGeneral Pool- Mange Ram NCT of Delhi
7. S/Stn Flt No. 2, Sec.1 Pushp Vihar DERC NCT of Delhi
8. S/Stn, Flat No. 4 Lodi RoadCommandant CISF
9. S/Stn, Flt No. 10, Sec.4 Pushp Vihar BYPL
10. C-5, Safdarjang Dev Area Sh. Rajiv Verma, IASNCT Delhi
11. Sec.2 R K Puram Naveen Jain Manager Civil (Genco)
12. S/Stn Flt No. 1, Sec.5 RKP Mr. Abhijit Sarkar PS to Power Minister
13. S/Stn Flat No.1, Sec 12 R K Puram K.R.Meena, IAS NCT of Delhi
14. A Block , Vasant Vihar Guest House
15. S/Stn Flat No.3, Lodi Road CISF Office
16. A-9, New Friends Colony Bachelor Accommodation Rented out
17. C-52A, New Friends Colony Rajinder Kumar TRANSCO
18. S/Stn. Flt No.2, Sec 12 RKP Kanak Raj, Med Off TRANSCO


This is just a representative sample of the misuse of assets of the erstwhile DVB and may be tip of ice berg. Once investigated properly, we are sure it would open Pandora 's Box.

The aforesaid activities are not permitted and the DISCOM is not supposed to indulge in any of the aforesaid activities. The DISCOMS have violated conditions of the agreement and the Act. Further, the DISCOM has failed to report the income earned out of such arrangement in the ARR. Since this is a material Breach of the conditions and concealment the ARR may please be dismissed summarily on this ground alone.



D. Non disclosure of issues before the Electricity Appellate Tribunal:-

The Hon'ble Commission has filed counter affidavit before the Appellate Tribunal wherein it has been submitted that the DISCOM has not only fudged the records but also purchased materials from sister concerns at inflated rates. No disclosure has been made by both the DISCOM as well as by the Hon'ble Commission in this regard. Further, since the subject matter is pending before the Appellate Tribunal, no disclosure has been made about the issues pending before the Tribunal. Since the Tariff determination order has been challenged before the Tribunal for last year on certain grounds and the tariff determination order has not been stayed by the Tribunal, it is not open for the Hon'ble Commission to consider such claims in the ARR particularly when serious allegations of fudging records and purchases at inflated rate are involved. Therefore, before proceeding with the determination the Hon'ble Commission should place the facts before the Consumers and the impact the consumers shall have to bear by way of increase in tariff.


E. Submissions on Admission Order passed by the Commission

E.1 Preliminary submissions:-

Before proceeding further in the matter it would be appropriate to refer to the National Electricity Policy relevant text of which is reproduced as under:-


The aims and objectives of the NEP are as under:

1. Access to electricity –available to all households in next five years;
2. Availability of power – Demand to be fully met by 2012. Energy and peaking shortages to be overcome and adequate spinning available;
3. Supply of Reliable and Quality power of specified standards in an efficient manner and at reasonable rates;
4. Per capita availability of electricity to be increased to over 1000 units by 2012
5. Minimum lifeline consumption of 1 unit/household/day as a merit good by year 2012
6. Financial turn around and commercial viability of Electricity Sector
7. Protection of Consumer's interest.

D.2 Our Observations: It has been our experience that the objective of supply of reliable and quality power of specified standards in an efficient manner and at reasonable rate has been thrown to winds by the DISCOMS. Further, the Commission is under an obligation to protect the interests of the consumers but unfortunately the facts speak otherwise as is borne out from the following facts:

(i) Purchases by the DISCOMS at inflated rates from sister/associate concerns;


(ii) Supply of sub-standard quality of power by not maintaining the power factor and voltage;

(iii) Unreasonably high T & D Losses which are nothing but Dishonest Abstraction of Energy in the pockets patronized by the Vote Bank hungry politicians;

(iv) Booking of frivolous cases against the honest consumers

(v) Resorting to arm twisting and installation of sub-standard Electronic meters.


F. Submissions on other issues:


F.1 Power Procurement: It appears that the Hon'ble Commission by stating that the DISCOMS are purchasing power at a higher price due to increase in consumption during peak hour has completely ignored the fact first and foremost requirement is to justify such an increase and in view of the economic slow down when the power consumption has gone down substantially. It appears while taking up this issue it appears that the Hon'ble Commission has completely ignored the details of Power Purchase Cost submitted by the DISCOM in table 37 at page No. 86 of ARR which are reproduced as under:-

FY 08FY 09FY 10
2.492.562.79


F.2 Average Billing rate: The DISCOM has stated average billing rate in Table 23 of ARR which is reproduced as under:-

FY 08FY 09FY 10
4.514.564.56



F.3. Distribution Losses: Further the DISCOM has submitted in table No. 22 has submitted details of Distribution losses gist of which is as under:-

FY 08- ActualFY 09FY 10
30.89%22.88%19.83%


F.4 Submissions: In view of the aforesaid facts and abnormally high Distribution losses it is not open for the Hon'ble Commission to project additional requirement and recommend Time differential tariff with a view to unjustifiably enrich the DISCOM that without explaining the steps taken either by the DISCOM or by the Hon'ble Commission in compliance of the Paras 5.4 and 5.5 of the National Electricity Policy dealing with Distribution and Recovery of Cost of Services and targeted subsidies respectively . The abnormally high distribution losses are nothing but:-

(a) Inefficiency on the part of the DISCOM;
(b) Theft either by active connivance of DISCOM staff or with tacit approval of DISCOM with a view to protect political vote banks. Therefore, the DISCOMS are liable for action under Section 150 of the Electricity Act 2003 (hereinafter referred to as the Act) on account of abetment while permitting theft of electricity punishable under section 135 of
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