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23. Heard Mr. Harinder Toor, learned counsel on behalf of Appellant, Ms. Pratiti Rungta, learned counsel on behalf of State Commission and Mr. B.P Patil learned senior counsel on behalf of Respondent No 2-TPCL, pursued the written submissions filed by parties and relevant documents. Learned Counsel on behalf of BEST has raised contention with regard to approval of phased development of distribution network by TPCL over 7 years, mainly stating that it contravenes the universal service obligation under section 43 of Electricity Act, that it would result in cherry picking of customers by TPCL, non-level playing field, and about non addressing the concerns of BEST with regard to practical difficulty in migration protocol allowed by the State Commission. Per Contra, learned Counsel on behalf of MERC, at the outset, submitted that present Appeal is non maintainable and is an abuse of process of law and is barred by Principles of Res judicata as the issued involved in the present Appeal (i.e. phased development of distribution network by a parallel distribution licensee, grant of parallel license in the area where a local authority is licensed to supply electricity and switchover of consumers) has already been decided by the Hon'ble Supreme Court in its judgement dated 08.05.2014, in Civil Appeal No 4223 of 2012, and this Tribunal judgement dated 04.11.2016 in Appeal No 243 of 2014 Judgement in Appeal Nos. 279 of 2017 and this Tribunal judgement dated 25.11.2014 in No 216 of 2014, both these judgements pending adjudication before the Hon'ble Supreme Court in the civil appeal filed by BEST but no stay is operating. In addition, learned Counsel for the MERC has elaborately argued each of the points and submitted that the Impugned Order is perfectly justified and it does not suffer from any infirmity warranting interference by this Tribunal.

ISSUE NO 1 : Is phased development of distribution network over a period of seven years permitted to TPC contrary to Electricity act, 2003 and other related issue Judgement in Appeal Nos. 279 of 2017 Submissions urged on behalf of Appellant - BEST

28. It is submitted that the phased development/rollout of the distribution network over a period of seven years by the second licensee (viz. TPCL) is contrary to the Universal Service Obligation under Section 43 of the Electricity Act, 2003 (i.e. duty to supply on request), and facilitates cherry-picking or luring away of consumers. Phased and selective network development is not conducive to a level playing field or genuine competition and does not provide equal access to all categories of consumers, particularly low-end/slum consumers with consumption between 0-300 units. In addition the limited and phased nature of TPCL's network leads to lower maintenance costs, thereby enabling TPCL to offer lower tariffs, whereas BEST, being obligated to cater to all consumer categories and to maintain a comprehensive distribution network across its entire area of supply, necessarily incurs higher cost resulting in higher tariff. Further, the Sixth Proviso to Section 14 of the Electricity Act, 2003 mandates the requirement of an "own distribution system," which necessarily entails adequate and timely development and rollout of the distribution network.

Judgement in Appeal Nos. 279 of 2017 Submissions urged on behalf of State Commission

30. Without prejudice to the submissions made with regard to res-judicata, it is submitted that the State Commission in the impugned order has explained the rationale behind the directions given to TPCL for phased network development, inasmuch as the State Commission, has duly approved the principles and modalities for planning and development of TPCL network roll-out plan within the Appellant's area and has also issued specific directions to ensure fulfilment of the Universal Service Obligation. The planned network development approach in phased manner has been considered to be the optimal approach considering its cost-effectiveness and to avoid selective bias in the coverage of areas or consumers. The contention of Appellant that that phased development of the distribution network would result in cherry-picking by TPCL, is misconceived as State Commission, in the Impugned Order, has duly examined the option of a planned, phased roll-out vis-à-vis development of the network solely on the basis of consumer demand and has categorically observed that permitting network expansion only upon demand would not be an optimal approach, as it would lead to scattered and unplanned development across various areas, thereby increasing the likelihood of selective laying of network and consequent cherry- picking. As such distribution of electricity is a licensed activity under the Electricity Act, 2003, and prior existence of a distribution network is not a precondition for the grant of a distribution licence. Section 43 of the Electricity Act prescribes timelines for supply of electricity, which itself contemplates staged development of infrastructure.

39. With regard to specific contention of cherry picking, we have been informed by learned counsel of TPCL that on 29.02.2016, BEST filed Case No. 43 of 2016 before the MERC seeking to restrain Tata Power from laying its distribution network on the allegation of cherry-picking of high-end consumers, which was dismissed by MERC vide Order dated 22.01.2018 against which BEST had preferred Appeal No. 330 of 2018 which is pending adjudication before this Tribunal. As such, in the present appeal, no specific instances of Cherry picking has been indicated on behalf of BEST and only general reference has been made that such phased development shall lead to cherry picking. Having held above that permitted methodology of phased development is an optimal approach and would avoid selective bias in coverage of area, thus, avoid cherry picking, it is Judgement in Appeal Nos. 279 of 2017 unnecessary for us to deliberate the issue of Cherry picking in the absence of specific details. The same shall be dealt in the Appeal No. 330 of 2018, pending adjudication before this Tribunal, on its own merits,