SEZ Developer as deemed a power distribution licensee – conditions.
The appellant was notified as “Developer” in terms of Sections 3 and 4 of the Special Economic Zones Act, 2005, to establish a sector – specific Special Economic Zone unit for Information Technology & IT Enabled Services Sector in Madhapur Ranga Reddy District, Hyderabad.
The proviso to Section 14(b) of the Electricity Act was introduced vide Notification dated 3.3.2010 and accorded the status of a “deemed distribution licensee” on the “developer of a SEZ” .
By the judgment and order dated 15.2.2016, the TSERC accorded the status of a deemed licensee on the appellant on fulfilment of the requirements of Rule 3 of the Distribution of Electricity Licence (Additional Requirements of Capital Adequacy, Creditworthiness and Code of Conduct) Rules, 2005.
The appellant was directed to infuse an additional capital of Rs.26.90 crores as equity share capital by the promoters in its power distribution business.
The appeal of the appellant was dismissed by the APTEL.
Important question – Whether designation of SEZ developer ipso facto qualifies for “deemed distribution licensee” obviating the need for application under Section 14 of the Electricity Act? It was held that being a SEZ developer in terms of 2010 notification does not ipso facto confer upon the appellant the status of “a deemed licensee” without any scrutiny and without being under any requirement to apply. It is required to make an application in accordance with 2013 Regulations.
However, the condition stipulated in Rule 3(2) of 2005 Rules as imposed on the appellant with a direction to infuse additional capital of Rs.26.90 crores is not justified and contrary to the statutory scheme.
Judgment dated 17.5.2024 of the Supreme Court in Civil Appeal No.8978 of 2019 of M/s. Sundew Properties Ltd Vs. Telangana State Electricity Regulatory Commission and another
