1. This case was initiated on the basis of the Information filed under Section 19 of the Competition Act (the Act) on 01.02.2010 by Anila Gupta (the Informant) against the Brihan Mumbai Electric Supply & Transport Undertaking (BEST/the opposite party) alleging, inter alia, contravention of the provisions contained in Section 4 of the Act.

Facts and Allegations as Stated in information

2. The facts and allegations of the case, in brief, as stated in the information, are as under:

2.1 The Informant, a consumer of electricity of the opposite party, made an application to Tata Power Co. (hereinafter referred to as TPCL) on 20.10.2009 for supply of electricity which would entail migration from the current supplier BEST. TPCL responded by apprising that her request could not be acceded to on the ground that rules for changeover from one supplier to another were not applicable to BEST, BEST being a local government body.

2.2 The Informant subsequently filed a Case No. 86 of 2009 before the Maharashtra Electricity Regulatory Commission (MERC) against TPCL praying for an order for commencement of supply by TPCL.

2.3 During the course of hearing before MERC held on 21.10.2010, BEST opposed the informant's request on the ground that BEST, being a local authority, had exclusive territorial jurisdiction to supply electricity in its area and therefore, TPCL could not supply electricity within BEST'S area of supply. TPCL, on the other hand, expressed willingness to supply electricity to the informant.

2.4 It has been alleged by the Informant that the stand taken by BEST against its consumers, is illegal and BEST has blatantly indulged in gross and flagrant abuse of its dominant position.

3. The Commission, upon an appraisal of all aspects involved in the case including the prevailing situation in the electricity distribution market in Mumbai, passed an order under Section 26(1) of the Act on December 9, 2010 directing the Director General to investigate into the matter.

4. The DG submitted the investigation report on June 26, 2011. The investigation report was sent to the parties seeking their response on the same and further process of inquiry was undertaken in accordance with the provisions of the Competition Act, 2002 and relevant regulations thereunder.

Findings of DG's Investigation

5. The main findings of the investigation carried out. by the DG, as presented in the investigation report, are summarised below.

5.l In order to gather relevant facts and to understand the issues involved in the instant case from the perspectives of the concerned entities, probe letters were issued to the parties and statements of the parties and views of the MERC were recorded by the DG. The key submissions made by each entity, as reported by DG, are as under:

Submissions made by BEST

5.1.1 BEST is a statutory 'undertaking' of the Mumbai Municipal Corporation and is constituted under the Mumbai Municipal Corporation Act, 1888 (MMC Act, 1888). BEST is a public utility, which has been and is providing two essential services in the City of Mumbai namely, (i) mass public transportation in the City of Mumbai as well as the extended suburbs and (ii) the distribution or supply of electricity in the island city of Mumbai, that is the area from Colaba up to Mahim and Sion.

5.1.2 BEST was a statutory 'licensee' under the provisions of the erstwhile Indian Electricity Act, 1910 (i.e. the old Act) and is presently a statutory 'distribution licensee' under the provisions of the Electricity Act, 2003.

5.1.3 A local authority, such as BEST is placed on a different and separate footing compared to ordinary distribution licensees by the legislature as revealed in Section 42 (3) of the Electricity Act, 2003, which reads, "Where any person, whose premises are situated within the area of supply of a distribution licensee, (not being a local authority engaged in the business of distribution of electricity before the appointed date) requires a supply of electricity from a generating comp