Mumbai Urja Marg Limited

a) "admit and list the instant Petition for an urgent hearing;

b) approve the creation of the security interest by the Petitioner by way of hypothecation/ mortgage/ charge/ pledge/ assignment (as applicable) over all the assets including the movable and immovable assets, Project accounts, Project documents (including the transmission license) etc. of the Petitioner in favour of Respondent No. 15/ Debenture Trustee (or its replacement or successor) to secure the Petitioner's obligations towards the Debenture Trustee under the Debenture Trust Deed dated 27.08.2025 (read with the Debenture Documents);

c) approve the creation of Security Interest by way of hypothecation/ mortgage/ charge/ pledge/ assignment etc., over all the assets including the movable and immovable assets, Project accounts, Project documents (including the transmission license) etc. of the Petitioner in favour of Respondent No. 15/ Debenture Trustee (or its replacement or successor) to secure the Petitioner's obligations towards the Debenture Trustee under the Debenture Trust Deed dated 27.08.2025 (read with the Debenture Documents) and for their subsequent transferees, assigns, novatees and substitutes thereof in respect to the Project; and

d) pass any such other relief as the Hon'ble Commission deems fit and appropriate in the facts and circumstances of the case "

Background

3. The Petitioner, MUML, is a company incorporated under the Companies Act, 2013. Respondent Nos. 1 to 14 are Long-Term Transmission Customers (hereinafter referred to as "LTTCs") under the Transmission Service Agreement dated 7.12.2018 (hereinafter referred to as "the TSA"). Respondent Nos. 1 to 7 are constituents of the Western Region, and Respondent Nos. 8 to 14 are constituents of the Northern Region. Respondent No. 15, Catalyst Trusteeship Limited, is a company incorporated under the Companies Act, 2013, and is acting as the Debenture Trustee.

4. According to the Petitioner, for the purpose of financing the project, had earlier availed financial assistance from Respondent No. 15, by issuing senior, unsecured, redeemable, rated, and listed non-convertible debentures of the face value of Rs. 1,00,000 each for an aggregate amount not exceeding the limit of Rs. 2450 crores as Order in Petition No. 10/MP/2026 Page 4

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per the terms and conditions contained in the previous Debenture Trustee Agreement dated 28.11.2024, entered into between the Petitioner and the Debenture Trustee, and the previous Debenture Trust Deed dated 13.12.2024 entered into between the Petitioner and the Debenture Trustee for loan facility of Rs. 2450 crores. In connection therewith, the Petitioner approached this Commission seeking approval to create a security interest over its assets in favour of Debenture Trustee, Catalyst Trusteeship Limited. Accordingly, the Commission, vide Order dated 12.6.2025 in Petition No. 309/MP/2025, granted approval for the creation of such a security interest.

5. The Petitioner has further submitted that, with a view to refinancing the Project more efficiently, the Petitioner has availed financial assistance through Respondent No. 15, the Debenture Trustee, by raising funds via issuance of senior, unsecured, redeemable, rated, and listed Non-Convertible Debentures (hereinafter referred to as

"NCDs") of face value Rs. 1,00,000 each, aggregating up to Rs. 180 crores. The said issuance is governed by the terms and conditions of the Debenture Trustee Agreement dated 19.8.2025 ("Debenture Agreement") and the Debenture Trust Deed dated 27.8.2025 ("Debenture Trust Deed"), entered into between the Petitioner and the Debenture Trustee. In view of the above, the Debenture Holders, acting through the Debenture Trustee, currently have an exposure of Rs. 180 crores towards the Petitioner. As of 30.9.2025, a cumulative amount of Rs. 2630 crores has been disbursed to the Petitioner by the Debenture Trustee and has been duly utilized for the purposes of the Project.

6. As per the Debenture Trust Deed, the Petitioner has agreed to provide the following security to secure the Debenture-II:

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(i) a first ranking exclusive charge by way of hypothecation (in terms of the Deed of Hypothecation) in favour of Debenture Trustee of all Issuer's movables, including machinery, spares, tools and accessories, furniture, fixtures, vehicles, present & future in relation to the Project;

(ii) a first ranking charge by way of mortgage (in terms of the Mortgage Documents) in favour of Debenture Trustee on all of Issuer's immovable properties, including but not limited to civil structures, towers and cables, office buildings, present & future, including right of way/ land, if any, for the Project;

(iii) a first ranking charge by way of hypothecation (in terms of the Deed of Hypothecation) on all intangible assets of the Company, including but not limited to goodwill, uncalled capital, present & future in relation to the Project;

(iv) a first ranking charge by way of assignment or creation of security interest, present & future, of all the rights, title, interest, benefits, claims and demands whatsoever of the Company in the:

a) Project Documents duly acknowledged and consented to by the relevant counter parties to such Project Documents, if required, including the amended, varied or supplemented version of the same and any letter of credit, guarantee, performance bond, corporate guarantee, bank guarantee provided by any party to the Project Documents;

b) Approvals and Clearances; Order in Petition No. 10/MP/2026 Page 6

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c) Insurance Contracts and Insurance Proceeds (applicable only if the insured party for such policies is the Issuer).

(v) a first ranking charge on the Trust and Retention Accounts, including the monies lying thereunder, reserves and any other bank accounts of the Company by way of hypothecation (in terms of the Deed of Hypothecation) wherever maintained, present & future in relation to the Project;

(vi) a first ranking charge by way of hypothecation (in terms of the Deed of Hypothecation) on all book debts, operating cash flows, receivables, commissions, revenues of whatsoever nature and wherever arising, of the Issuer, present & future in relation to the Project;

(vii) Pledge of 51% Securities of the Issuer (subject to the provisions under the Banking Regulation Act, 1949) in terms of the Deed of Pledge.

7. The Petitioner has submitted that, in terms of Article 15.2 of the TSA, it is entitled to create an encumbrance over all or part of its receivables or transmission assets in favour of the Debenture Trustee, subject to obtaining prior approval from this Commission.

8. The Petitioner has further submitted that in view of the provisions of subsections

(3) and (4) of Section 17 of the Act, the Petitioner, as a licensee, cannot create a Security in favour of and/or for the benefit of the Debenture Holder pursuant to an amendment without the approval of this Commission. Accordingly, the Petitioner has filed the present Petition seeking approval of the Commission for the creation of security by the Petitioner over the Petitioner's Assets in favour of Respondent No. 15 Order in Petition No. 10/MP/2026 Page 7

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acting as the Debenture Trustee for the benefit of the Debenture Holders and for their subsequent transferees, assignees, novatees thereof by way of hypothecation/ assignment/ mortgage, to the extent described in this Petition to secure the Petitioner's obligations towards the Debenture Trustee under the Debenture Trust Deed dated 27.8.2025 aggregating to Rs. 180 crores.

Hearing dated 2.1.2026

9. The matter was admitted on 2.1.2026, and notices were issued to the parties to file their respective replies. However, no reply has been filed by the Respondents.

Hearing dated 10.2.2026

10. During the hearing, learned counsel for the Petitioner largely reiterated the submissions made in the Petition and further submitted that, vide Record of Proceedings (hereinafter referred to as "RoP") dated 2.1.2026, notice had been issued to all the Respondents; however, none of the Respondents had filed any reply, and the matter may be reserved for orders. Learned counsel for Respondent No. 6, i.e., DNH Power Distribution Corporation Limited (hereinafter referred to as "DNHPDCL"), submitted that creation of such security interest by the Petitioner ought not to affect the terms of the TSA in any manner and sought permission to file a brief reply to that effect. Learned counsel for the Respondent, MPPMCL, submitted that the Respondent does not wish to file any reply in the matter. In response, learned counsel for the Petitioner submitted that the Petitioner is seeking approval for the creation of a security interest over its assets under the TSA.

11. After hearing learned counsel for the parties, the Commission took note of the concern raised by learned counsel for DNHPDCL and observed that filing of a formal reply in this regard may not be necessary, which was fairly agreed to by learned Order in Petition No. 10/MP/2026 Page 8

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counsel for DNHPDCL. Upon consideration of the parties' submissions, the matter was reserved for orders.

Analysis and Decision

12. We have considered the submissions of the Petitioner and perused the documents available on record. The Petitioner had earlier availed financial assistance in the form of a loan facility from Catalyst Trusteeship Limited (Respondent No. 15) for an aggregate sanctioned amount of Rs. 2,450 crores towards financing the construction and development of the Project. In connection with the said facility, the Petitioner entered into a Debenture Trustee Agreement dated 28.11.2024 and a Debenture Trust Deed dated 13.12.2024. Pursuant to the said arrangement, the Petitioner approached this Commission seeking approval for the creation of a security interest over its assets in favour of Respondent No. 15. The Commission, vide order dated 12.6.2025 in Petition No. 309/MP/2025, granted such approval.

13. The Petitioner has submitted that, with a view to refinancing the Project, it has availed financial assistance by way of issuance of senior, unsecured, redeemable, rated, listed Non-Convertible Debentures NCDs, of face value Rs. 1,00,000 each, for an aggregate amount of Rs. 180 crores. The said issuance was undertaken pursuant to the Debenture Trustee Agreement dated 19.8.2025 and the Debenture Trust Deed dated 27.8.2025, entered into between the Petitioner and the Debenture Trustee, Catalyst Trusteeship Limited (Respondent No. 15). As on 30.9.2025, the entire amount of Rs. 2630 crores have been disbursed to the Petitioner by the Debenture Holders and has been utilized for the Project.

14. The Petitioner has further submitted that, in terms of sub-sections (3) and (4) of Section 17 of the Act, 2003, as a transmission licensee, it cannot create any security Order in Petition No. 10/MP/2026 Page 9

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interest over its assets in favour of the Debenture Trustee without the prior approval of this Commission. Accordingly, the present Petition has been filed seeking approval for creation of security over the Petitioner's assets, in favour of Respondent No. 15, acting as Debenture Trustee for the benefit of the Debenture Holders and their respective transferees, assignees, and novatees, by way of hypothecation, assignment, or mortgage, as detailed in the Petition, to secure the Petitioner's obligations under the Debenture Trust Deed dated 27.8.2025, for the loan facility aggregating Rs. 180 crores.

15. The Petitioner has submitted the Chartered Accountant (hereinafter referred to as "CA") certificate dated 14.10.2025, wherein the CA has certified that as on 30.9.2025, the total hard cost of the project was Rs. 2753.23 crores. The total project cost, including Interest During Construction (hereinafter referred to as "IDC") and financing charges, was estimated to be Rs. 3101.04 crores. A Statement of Project Cost, as certified by the CA, is as under:

16. The Petitioner has submitted that as on 30.9.2025, the promoters have brought in Rs. 556.10 crores, out of which Rs. 208.53 crores have been funded as equity and the remaining has been brought in as Compulsorily Convertible Debentures (hereinafter referred to as "CCDs") and unsecured loans. The details are as under:

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17. Further as on 30.9.2025, a total of Rs. 3708.41 crores have been utilized towards Project construction as stated above. The details are as under:

18. The Petitioner has submitted that under the Debenture Trust Deed and on enforcement of a security interest, it shall be lawful for the Debenture Trustee/lender and its assigns, transferees, and novates to enter into and take possession of the assets/properties mortgaged/hypothecated/charges assigned for their benefits and substitute themselves or any one of them or its nominees for the Petitioner under any or all of the project document(s). Article 15.2.2 of the TSA provides as under:

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"15.2.2. However, the TSP may create any encumbrance over all or part of the receivables, Letter of Credit or the other assets of the Project in favour of the Lenders or the Lenders' Representative on their behalf, as security for amounts payable under the Financing Agreements and any other amounts agreed by the Parties.

Provided that:

i. the Lenders or the Lenders' Representative on their behalf shall have entered into the Financing Agreements and agreed in writing to the provisions of this Agreement; and

ii. any encumbrance granted by the TSP in accordance with this Article 15.2.2 shall contain provisions pursuant to which the Lenders or the Lender's Representative on their behalf agrees unconditionally with the TSP to release from such encumbrances upon payment by the TSP to the Lenders of all amounts due under the Financing Agreements."

In accordance with the above provision, the Transmission Service Provider has been allowed to create an encumbrance over all or part of the receivables, Letters of Credit, or other assets of the Project in favour of the lenders or the lenders' representatives or their representatives, as security for amounts payable under the Financing Agreements and any other amounts agreed by the parties.

19. Article 15.3 of the TSA provides as under:

"15.3 Substitution Rights of the Lenders:

15.3.1 The TSP would need to operate and maintain the Project under the provisions of this Agreement and cannot assign the Transmission License or transfer the Project or part thereof to any person by sale, lease, exchange or otherwise, without the prior approval of the Nodal Agency. 15.3.2 However, in the case of default by the TSP in debt repayments or in the case of default by the TSP as per Article 13 of this Agreement during the debt repayments, the Commission may, on an application from the Lenders, assign the Transmission License to the nominee of the Lenders subject to the fulfilment of the qualification requirements and provisions of the Central Electricity Regulatory Commission (Procedure, terms and Conditions for grant of Transmission License and other related matters) Regulations, 2006 and as amended from time to time."

20. Sub-sections (3) and (4) of Section 17 of the Act provide as under:

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"17. (3) No licensee shall any time assign his licence or transfer his utility, or any part thereof, by sale, lease, exchange or otherwise without the prior approval of the Appropriate Commission.

(4) Any agreement relating to any transaction specified in sub-section (1) or subsection (3), unless made with the prior approval of the Appropriate Commission, shall be void."

As per the above provision, a licensee is required to obtain the Commission's approval before assigning his licence, transferring its utility, or any part thereof by way of sale, lease, exchange, or otherwise, and entering into an agreement relating to any of these transactions.

21. In the context of the present Petition, which pertains to the refinancing of the Project through issuance of Non-Convertible Debentures, the Petitioner has submitted that it has appointed Catalyst Trusteeship Limited (Respondent No. 15) as the Debenture Trustee for the creation of a Security Interest over its assets. It has been submitted that the Petitioner has raised funds aggregating to Rs. 180 crores by issuance of senior, unsecured, redeemable, rated, listed NCDs in accordance with the Debenture Trustee Agreement dated 19.8.2025 and the Debenture Trust Deed dated 27.8.2025. In our view, Catalyst Trusteeship Limited, acting as the Debenture Trustee for the benefit of the Debenture Holders and their successors, assignees, novatees, or transferees, needs to be given adequate comfort by permitting the creation of a Security Interest over the Project assets. We therefore accord in- principle approval allowing the Petitioner to create a Security Interest in favour of Catalyst Trusteeship Limited, by way of hypothecation, assignment, mortgage, or any other security document, in accordance with the terms of the Debenture Trust Deed. The Petitioner is directed to submit a signed copy of the Indenture of Mortgage and associated security documents immediately upon their execution. Order in Petition No. 10/MP/2026 Page 13

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22. This in-principle approval is being granted with the condition that the transmission licence granted by the Commission to the Petitioner shall not be assigned in favour of the Debenture Trustee or any nominee of the Debenture Holders without the prior approval of the Commission. In the event of any such proposal, the Commission shall assess the technical and financial capability of the proposed nominee with respect to the development, design, construction, operation, and maintenance of transmission systems and their ability to execute and operate the licensed transmission project. The Petitioner, the Debenture Trustee, the Debenture Holders, and the nominee shall be jointly required to approach the Commission to seek such prior approval. This will allow the Commission to satisfy itself of the circumstances necessitating such a transfer. This decision of ours is in accordance with Regulation 8 of the Central Electricity Regulatory Commission (Procedure, Terms and Conditions for grant of Transmission Licence and other related matters) Regulations, 2024, which reads as under:

"8. Assignment of Licence:

In case of default by the licensee in debt repayment, the Commission may, on an application made by the lenders, assign the licence to a nominee of the lenders."

23. Accordingly, in case of default by the licensee in debt repayment, the Commission may, on a joint application made by the Petitioner, the Debenture Trustee, the Debenture Holders, and their nominee, consider the assignment of the transmission licence to such nominee after conducting appropriate due diligence. Therefore, specific prior approval of the Commission for assigning the licence to the nominee of the Security Trustee or transferring any assets to them is a mandatory requirement. Lastly, the financial documents and statements are to be filed by the Petitioner as and when directed by the Commission.

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24. Petition No. 10/MP/2026 is disposed of in terms of the above.

Sd/- sd/- sd/- (Harish Dudani) (Ramesh Babu V.) (Jishnu Barua) Member Member Chairperson

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