Petition No. 216/PX/2011. Case: Marquis Energy Exchange Limited, Ahmedabad Vs. Central Electricity Regulatory Commission
| Case Number | Petition No. 216/PX/2011 |
| Counsel | For Appellant: Shri Devendra Jain, MEX, Shri Neminath Patil, MEX, Shri Mohmmed Zaki, MEX, Shri Winston Christian, MEX and Shri S.K. Sinha, MEX |
| Judges | Dr. Pramod Deo, Chairperson, Shri S. Jayaraman, Member, Shri V.S. Verma, Member and Shri M. Deena Dayalan, Member |
| Issue | Companies Act, 1956 - Section 19(3) |
| Judgement Date | January 16, 2013 |
| Court | Central Electricity Regulatory Commission |
Order:
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The petitioner, Marquis Energy Exchange Limited (MEX for short) has filed the instant petition under Central Electricity Regulatory Commission (Power Market) Regulations, 2010 seeking permission for setting up and operation of a Power Exchange. As per the Power Market Regulations, the following criteria are required to be fulfilled by the applicant for registration for setting up and operation of the Power Exchange:
(a) A company limited by shares incorporated as a public company or a consortium of companies having an agreement to set up a special purpose vehicle incorporated as a public company limited by shares is eligible to apply for registration under Power Market Regulations. (Regulation 19(i)(a) &(b) of Power Market Regulations).
(b) The main object of the company shall be to set up and operate the power exchange, though it may have other incidental objects relating to power sector. In that event, the company needs to maintain separate accounts for other businesses. (Regulation 19(ii) of PMR).
(c) The Company shall have minimum networth of Rs. 25 crore and maintain the same throughout the operation of the power exchange after its registration. For calculation of networth of an applicant, the minimum of networth for the preceding three years or for such lesser period for which the applicant may have been registered or formed or incorporated shall be taken into account. In case the power exchange separates its clearance function to a Clearing Corporation, it shall be required to have a minimum networth of ` 5 crore {Regulation 18(i) & (ii) of PMR}.
(d) The shareholding pattern of equity in the power exchange shall be as follows: (i) Any shareholder other than a member can have 25% maximum shareholding whether directly or indirectly; (ii) A member of the power exchange can have a maximum of 5% of shareholding directly or indirectly; (iii) All members shall have a maximum of 49% of the shareholdings directly or indirectly. {Regulation 19(1)(i) to (iii) of PMR}
(e) There shall be clear demarcation between ownership, management/operations and participation in trading. The total strength of the Board of Directors of the company shall be in accordance with the Companies Act, 1956. One third of the directors subject to a minimum of two shall be Independent Directors. Not more than one fourth of the Board of Directors shall be represented by members of the power exchange. {Regulation 22 (i) to (iv) of PMR}
(f) The Managing Director of Power Exchange shall be responsible for day to day operation of the Power Exchange. The Managing Director shall be a professional with adequate qualification and at least 10 years of experience in the relevant field. {Regulation 22(v) of PMR}. The senior management of the Power Exchange shall comprise of at least two full time professional having proficiency in Power System Operations and finance/commerce/accounts. {Regulation 25(i) of the PMR}
(g) The Power Exchange shall function according to the Bye-laws and Rules as approved by the Commission. {Regulation 24 of PMR}
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The Power Market Regulations provides for the following procedure to be complied with by an applicant for registration of the Power Exchange by the Commission:
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Procedure for filing Application
(i) Application for grant of registration to establish and operate a Power Exchange shall be filed in the form of a petition to the Commission in accordance with the Central Electricity Regulatory Commission (Conduct of Business) Regulations, 1999 and as amended from time to time.
(ii) The salient details of the applicant, proposed transaction platform and website address where the full application is accessible shall be published in all editions of at least two national daily newspapers including one economic daily newspaper within 7 days of filing of the application inviting public comments/objections, if any, upto a period of 30 days.
(iii) The application as filed and the information as sought by the Commission shall be posted and kept on the web site of the applicant at least for a minimum period of 30 days from the date of publication of notice in newspapers.
(iv) The applicant shall file before the Commission its reply to the objections or suggestions received in response to the public notice within 45 days of its publication in the newspaper.
(v) The Commission after consideration of the objections or suggestions received in response to the notice published by the applicant and his reply may propose to grant registration to the applicant.
(vi) When the Commission proposes to grant registration, it shall publish a notice of its proposal in two daily newspapers, as the Commission may consider appropriate, stating the name and address...
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