Wednesday, November 29, 2006

Finally .. The TRUTH !!

Tamasoma jyotir gamaya (from darkness unto light).

Pretty ironic, since the issue is about light itself ! After struggling for 2 weeks .. here's the truth .. REL does not have the Licence to distribute electricity in Mumbai, in their own name !!

So technically, they are NOT the "Licencee" as per the law. I think they need to be SUED ..

Read on's lengthy, but I have tried to keep it simple..

The LAW:
1. Amongst other things, the distribution of electricity is governed by the Electricity Act 2003, which superceded the earlier Acts of 1910 and 1948.

2. This Licence cannot be transferred, sold, assigned, mortgaged, leased or otherwise given to any other company without express, prior, written permission of the authorities.

3. This Licence is always granted for a period of 25 years and then needs to be renewed, by formally applying to the authorities.

4. The electricity company CANNOT make a profit of more than 14% in the distribution of electricity.

5. The electricity company CANNOT enter OTHER BUSINESSES without PRIOR WRITTEN approval of the authorities.

6. The electricity company can only enter other businesses ONLY to leverage EXISTING assets.

7. Only a LICENCEE can disconnect supply to the user, after giving 15-days' notice in writing (VERY IMPORTANT, as you will see later).

8. In case of a dispute, Licencee will have to wait for 24-months before disconnecting supply to the consumer.

9. A change of name in a company generally implies that all rights automatically flow to the new company, as per the Companies Act.

10. The Companies Act also specifies that if there is any inconsistency with any other "Special" Acts, the sections of the "Special" Acts will prevail.

11. The Companies Act lists out Banking, Insurance and Electricity, being governed by "Special" Acts. Hence, provisions of Electricity Act prevail over Companies Act. Meaning, a mere change of user name cannot facilitate automatic transfer of Licence (MOST IMPORTANT).

12. The Electricity Act 1910 had granted the Mumbai distribution Licence to Killick Nixon for distributing electricity to Mumbai.

13. Later, the Licence was transferred by Killick Nixon, after due approval, in the name of The Bombay Suburban Electric Supply Limited.

14. The Bombay Suburban Electric Supply Limited last renewed their Licence on 15-8-1986 and this Licence is due to expire in 25 years, on 15-8-2011 (also admitted by REL, and which also means the Licence was in the name of Bombay Suburban Electric Supply Ltd, as neither BSES Ltd, nor REL were in existence in 1986).

15. The Bombay Suburban Electric Supply Limited officially changes its name to BSES Ltd in 1990s.

16. The BSES Ltd DOES NOT apply to either the Maharashtra Government or the MERC for change of user name of the Licence. (Yes, I have copies of the official letters !). Implying that the new company, BSES Ltd, does not own the Licence, as per Law.

17. The new company, BSES Ltd, is sold to REL in 2004.

18. REL does not apply for transfer of Licence. In any case they can't because even BSES Ltd is, technically, not the owner of the Licence.

19. The original Licence has been LOST (Ha!). REL failed to produce this in the Appellate Tribunal hearings in 2004. (I challenge REL to display it on its website).

20. REL's profits are more than 14% from electricity business (check its financials).

21. REL is into other businesses, without prior permission from the authorities (?).

22. REL has been BUYING fresh assets for its Mumbai Metro Rail projects, which it is legally not supposed to, if it has a Licence for distributing electricity - but since it doesn't, it is eating with both hands !

23. REL cannot disconnect supply as it is NOT the Licencee, in Law. (The earlier Bombay Suburban Electric Supply Ltd could disconnect the supply, as Licence existed in its OWN name, but not REL).

24. REL has unfair practices. Discount given for Prompt Payment is 1% only on ENERGY Consumed, while Delayed Payment Charges is on almost the WHOLE Bill. Look at your own bill and figure out what would be discount and what would be penal interest. Unilaterally, categories have been changed (50HP threshold has been brought down to 15HP). Arbitrarily, 300 units per month has been fixed as "higher consumption" users.

25. MERC and REL claim that rates for electricity is not more than Rs. 4-5 per unit. Bogus claim. Please check your own electricity bills and see the rate per unit (including all charges) for Sept 06 and for Oct 06 and divide by the number of units consumed in each month. That's the average rate per unit. Also, in subsequent bills, you will also be charged "Additional Energy Charge" (ALL users) and/or any "Time Of Day" charges (commercial/industrial users) !

Proposed Action:
# If we STOP paying our bills, REL cannot disconnect supply. Out of the lakhs of REL consumers, if even 5% people stop paying the bills, the Government will have to take cognizance of this injustice.

# If we write to MERC, enclosing copies of Sept 06 and Oct 06 bills (with average rate calculation), they will be forced to review the Tariff Order.

# PIL, anyone ?

# Today it is REL, tomorrow it will be someone else. Let's get the Government to remove this exclusivity/monopoly in the supply of electricity. Let's garner support for this by signing the online petition at

# Forward this information to as many, to create awareness.

Vidya param balam (knowledge is strength supreme) ... was my school's motto ...

Well ... and that's how I feel ...

1 comment:

pitfinder said...

This sounds almost as convoluted and crooked as the Credit Card industry over here.

Hope you get some satisfaction out of it all.