(The update is at the end of this post)
While the heated discussion on MERC/REL’s unjustified tariff hike in Mumbai, continues .. here’s more food for thought.
Technically, REL may not even be the owner of the "licence" for distributing electricity to Mumbai !!
If this is true, Boy, … what a FRAUD !
Here’s how, read on …
Point 2.5 (Page 24) of the MERC Tariff Order dated 3-10-2006 mentions this issue of actual validity of REL’s "ownership" of the licence.
It seems that the original licencee was the "Bombay Suburban Electric Supply Ltd" This later changed its name to "BSES Ltd" as it probably entered into some broadband / telephony business also.
Now there is a small, but important, technicality here – the old company (Bombay Suburban Electric Supply Ltd) needs to formally apply to the Government for transfer of licence to the new entity (BSES Ltd) – which apparently, DID NOT happen.
REL, please correct me here, if I’m wrong !
Meanwhile, the Reliance group bought over the new entity, BSES Ltd and changed its name to REL – and thereby has claimed that the licence of Mumbai distribution is now automatically with them !
Interestingly, an objection had been raised even in 2004 on this issue, which was dismissed by at that time, as REL had submitted that a "…mere change in name in terms of the provisions of the Companies Act, 1956 has no other legal implication and that, the entity remaining otherwise the same, no fresh issue of the licensee by the Commission is required."
However, this was NOT verified or ratified by MERC.
Now, there are three main points in REL's stand:
1. Mere change in name
2. Provision of the Companies Act
3. Entity otherwise remaining the same
However, a detailed reading of the provisions of the Companies Act, 1956 will tell you that the Act applies to all companies EXCEPT Electricity, Insurance and Banking Companies. Section 616 (c) mentions that in case of any inconsistencies, the provisions of the Electricity Act will prevail.
The Electricity Act has clearly laid down that licence once granted cannot be transferred or sold, without permission.
Also, maybe in 2004, what REL stated may have well been true as it was probably not involved in other businesses.
Today, however, the scenario is very different. REL is admittedly, not a mere distributor of electricity in Mumbai. It has several other interests also, extending to beyond supply of electricity – Mumbai Metro rail, etc.
In view of this the MERC should probably review the situation in a new light and again deliberate whether REL’s status as licencee is really valid or not !!
The reason I am raising this issue is just simple – since REL is trying to show all of us the rule book, someone needs to slam the same book into their face.
After all they are a public entity supplying a basic utility and cannot be expected to be above the purview of the law.
Let us Mumbai consumers benefit from fair competition by ending REL's MONOPOLY.
I have created an online petition at http://www.petitiononline.com/oct2006/petition.html
This (I hope) will help us address the much larger issue of removal of exclusivity for supply of electricity to Mumbai.
Today it is REL, tomorrow it may be someone else, the issue remains that if EXCLUSIVITY continues, consumers WILL be arm-twisted, so the long term solution lies in removing the exclusivity !
Trust you will agree and sign the petition.
Well ... and that's how I feel !
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