In Brief
M/s Sundew Properties Limited sought recognition as a deemed distribution licensee under section 14(b) of the Electricity Act, 2003, based on its status as a Special Economic Zone developer notified by the Ministry of Commerce & Industry. The Telangana State Electricity Regulatory Commission granted this status but imposed a condition requiring the company to infuse Rs. 26.90 crore in additional equity capital in compliance with rule 3(2) of the 2005 Capital Adequacy Rules and regulation 12 of the 2013 Regulations. The Supreme Court partly allowed the appeal, holding that while a SEZ developer must apply for recognition as a deemed licensee (not automatic), once recognized, it is exempt from regulations 4 to 11 and consequently from regulation 12 and rule 3(2), which apply only to regular applicants. The Court struck down the capital adequacy condition as an impermissible extension of subordinate legislation beyond the primary Act's scope.
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