A licensee under the Electricity Act, 2003 may create a security interest over project assets to secure financing, provided that prior approval is obtained from the appropriate commission to ensure such encumbrance does not facilitate an unauthorized assignment of the transmission licence or transfer of utility assets.

In the matter of

Petition under Section 17(3) and 17(4) of the Electricity Act, 2003 seeking approval for creation of security interest over the assets of Navinal Transmission Limited in favour of Catalyst Trusteeship Limited for the benefit of Power Finance Corporation Limited (including its Assignees, Transferees, Novatees) in respect of the Network Expansion Scheme in Navinal (Mundra) area of Gujarat for drawl of power in the area.

And

In the matter of

Navinal Transmission Limited,

C-105, Anand Niketan,

New Delhi- 110021 …Petitioner

Versus

1. Central Transmission Utility of India Limited,

Plot No. 2, Sector-29,

Gurgaon - 122001

2. Power Finance Corporation Limited,

Urjanidhi, 1-Barakhamba Lane,

Connaught Place, New Delhi - 110001

3. Catalyst Trusteeship Limited,

GDA House, First Floor,

Plot No. 85, S. No. 94 & 95,

Bhusari Colony (Right), Kothrud,

Pune – 411038 …Respondents

Parties Present:

Shri Anand Shrivastava, Advocate, NTL

Shri Rishabh Dua, Advocate, NTL

Shri Ekshat Punwani, Advocate, NTL

ORDER

1. The Petitioner, Navinal Transmission Limited (hereinafter referred to as ‘the Petitioner/NTL’), has been granted a transmission licence under Section 14 of the Electricity Act, 2003 (hereinafter referred to as ‘the Act’) to develop the Inter-State Transmission System, viz. “Network Expansion Scheme in Navinal (Mundra) area of Gujarat for drawal of power in the area” (hereinafter referred to as ‘the Transmission System’ or ‘the Project’) on a Build, Own, Operate and Transfer basis, the details of which are specified in the schedule attached to the licence issued vide Order dated 19.11.2025 in Petition No. 426/TL/2024. The Commission adopted the competitively discovered levelised tariff of Rs. 2987.14 million per annum for the Project vide Order dated 18.1.2025 in Petition No. 427/AT/2024.

2. The Petitioner has filed the present Petition for approval for the creation of security interest over the Petitioner’s assets, including all movable and immovable assets, in favour of Respondent No. 3, Catalyst Trusteeship Limited (“Catalyst”/ “Security Trustee”) and for the benefit of Respondent No. 2, Power Finance Corporation Limited (“PFCL”/ “Lender”) including its successors, transferees, novatees, and assigns for a sum of Rs. 2,028.00 crore. The Petitioner has made the following prayers:

“(a) Admit the present Petition;

(b) Approve the creation of Security Interest by way of hypothecation/ mortgage/ charge/ pledge/ assignment (as applicable), over all assets including all the movable and immovable assets, Transmission Project accounts, Project Documents (including assignment of transmission licence) etc., both present and future, of Petitioner in terms of the Financing Documents, or as may be agreed between the Petitioner and the Lender from time to time, in favour of Lender / Security Trustee to secure the financial assistance availed / to be availed from the Lender and its subsequent transferees, assigns, novates and substitutes thereof and any refinancing lenders to the Project, by executing deed of hypothecation and power of attorney in relation thereto, Indenture of Mortgage, Mortgage by deposit of title deeds and such other security documents as per law or as may be required by the Lender from time to time through which a charge can be created.

(c) Pass any or such further orders as may be deemed fit and proper in the facts and circumstances of the case.”

Background

3. The Petitioner has mainly submitted as under:

(a) The Petitioner is a wh