Judicial Analysis Court Copy Headnote Facts Arguments Court observation

2026 Supreme(Online)(CERC) 364

CENTRAL ELECTRICITY REGULATORY COMMISSION
Jishnu Barua, Chairperson, Ramesh Babu V., Member, Harish Dudani, Member, Ravinder Singh Dhillon, Member
Petition under Section 17(3) and (4) of the Electricity Act 2003 read with Article 15 of the Transmission Services Agreement seeking approval for creation of security interest over all immoveable and movable assets of the Petitioner in favour of the Debenture Trustee. WRSS XXI (A) Transco Limited
Petition No. 207/MP/2026

Advocates:
For the Appellants/Petitioners: Akshat Jain, Sayan Ghosh
For the Respondents:

A transmission licensee requires prior approval from the Commission to create security interests over its assets under Section 17 of the Electricity Act, 2003; however, any subsequent assignment of the transmission license to a lender's nominee also requires separate prior approval to verify the nominee's capabilities.

Headnote:The matter involves a petition under Section 17(3) and (4) of the Electricity Act, 2003, and Article 15 of the Transmission Services Agreement. The transmission licensee sought approval to create a security interest over its movable and immovable assets in favor of a debenture trustee to refinance existing external commercial borrowings and hedging facilities through the issuance of non-convertible debentures. The court determined that the creation of such security is necessary to provide adequate comfort to the debenture holders. The central issue is whether a licensee can create a security interest over its assets without prior approval of the Commission. The court reasoned that while security creation is permissible for financing, any subsequent assignment of the transmission license to a nominee of the lenders requires separate prior approval to ensure the nominee's technical and financial capability, in accordance with Regulation 8 of the relevant CERC Regulations. Petition No. 207/MP/2026 is disposed of in terms of the above.

Parties present:

Shri Akshat Jain, Advocate, WRSSTL

Shri Sayan Ghosh, Advocate, WRSSTL

ORDER

The Petitioner, WRSS XXI (A) Transco. Limited (hereinafter referred to as “the Petitioner/ WRSSTL”), has been granted a transmission licence under Section 14 of the Electricity Act, 2003 (hereinafter referred to as ‘the Act’) to establish the “Western Region Strengthening Scheme-21 (WRSS-21) Part-A Transmission System Strengthening for relieving over loadings observed in Gujarat Intra-State System due to RE Injections in Bhuj PS” (hereinafter referred to as “the Transmission System” or “Project”), the details of which are specified in the schedule attached to the licence issued vide order dated 24.1.2020 in Petition No. 409/TL/2019. Further, vide Order dated 27.1.2020 in Petition No. 408/AT/2019, the Commission adopted the competitively discovered levelised tariff of Rs. 951.29 million per annum for the Project.

The Petitioner has filed the present Petition for approval for the creation and perfection of a Security Interest in terms of the Debenture Trust Deed through the mortgage, hypothecation, pledge, charge, or assignment over all movable and other immovable assets, rights, title, interest, claims, demands, benefits under, clearance, project documents, agreements, and approvals of the Petitioner in favour of the Catalyst Trusteeship Limited (Respondent No. 4). Additionally, the Petitioner has requested for the approval of documents that create security as well as other documents pertaining to the debenture facility. The Petitioner has made the following prayers:

(a) Approve the creation of Security Interest by way of hypothecation/mortgage/charge/pledge/assignment (as applicable), over all movable and other immovable assets (including over Petitioner’s benefits, rights, title and interest under the Transmission Service Agreement, the transmission license and other Transmission System documents) of the Petitioner, WRSS XXI(A) Transco. Ltd. by execution of relevant security creating documents in favour of Catalyst Trusteeship Ltd. acting as Debenture Trustee on behalf and for the benefit of the Debenture Holders, as per the Debenture Trust Deed dated 07.07.2025 and the Debenture Trustee Appointment Agreement dated 23.06.2025; and

(b) Pass such other and further orders as may be deemed fit under the facts and circumstance of the present case."

Background

The Petitioner, WRSSTL, is a company incorporated under the Companies Act, 2013. Respondent Nos. 1 to 3, i.e., Adani Wind Energy Kutchh One Limited, Adani Green Energy Limited and Netra Wind Pvt. Limited are Long-Term Transmission Customers (hereinafter referred to as “LTTC’s”) under the Transmission Service Agreement dated 23.4.2019 (hereinafter referred to as “the TSA”). Respondent No.4, i.e., Catalyst Trusteeship Limited, is a company incorporated under the Companies Act, 2013 and is acting as the Debenture Trustee.

The Petitioner had availed an external commercial borrowing (hereinafter referred to as “ECB”) on 28.10.2021 aggregating to USD 103,000,000 (hereinafter referred to as “ECB Facility”) from a consortium of lenders comprising Intesa Sanpaolo S.p.A (Singapore Branch), Mizuho Bank Ltd, MUFG Bank Ltd., Sumitomo Mitsui Banking Corp. (Singapore Branch), DBS Bank Ltd., Standard Chartered Bank (Hong Kong) Ltd., Siemens Bank GmbH (Singapore Branch) and Societe Generale (Singapore Branch) (collectively referred to as “ECB Lenders”) for part financing of the Project, in terms of the common Facility Agreement dated 28.10.2021 (“ECB Facility Agreement”).

The Petitioner and the ECB Lenders appointed Catalyst Trusteeship Limited as the Security Trustee in relation to the ECB Facility in terms of the Security Trustee Appointment Agreement dated 28.10.2021. In connection therewith, the Petitioner approached this Commission seeking approval for the creation of a security interest over its assets in favour of Catalyst Trusteeship Limited. Accordingly, the Commission, vide Order dat

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