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Section 12: Authorised persons to transmit, supply, etc., electricity

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 2003
Section 11 All 185 Sections of Electricity Act Section 13

Legal Commentary & Landmark Judgments: Section 12

Section 12 of the Electricity Act, 2003 establishes the fundamental statutory prohibition barring any person from transmitting, distributing, or undertaking trading in electricity without possessing a valid licence granted under Section 14 or an express statutory exemption under Section 13.

  • Absolute Statutory Prohibition on Unlicensed Operations: Explicitly forbids any corporate entity or individual from engaging in transmission, distribution, or trading of electricity without prior regulatory authorization.
  • Three Distinct Regulated Functional Categories: Exhaustively categorizes the activities requiring regulatory authorization into electricity transmission, retail distribution, and commercial power trading.
  • Statutory Exemptions and Deemed Authorization: Carves out narrow legal exceptions exclusively for entities exempted by the Commission under Section 13 or conferred deemed licensee status under the provisos to Section 14.
Key Landmark Precedents:
  • PTC India Ltd. v. Central Electricity Regulatory Commission (2010) 4 SCC 603: The Constitution Bench held that electricity trading was introduced as a distinct, regulated commercial activity under Section 12, requiring traders to hold specific licenses subject to statutory margin caps and prudential norms.
  • Gajendra Haldea v. Central Electricity Regulatory Commission (2008) APTEL ELR 102: APTEL held that the prohibition in Section 12 is absolute and penal; any unlicensed intermediary brokering or trading electricity without statutory authorization acts ultra vires and is liable to statutory penalties.
Courtroom Practice & Strategic Litigation Guidance:

When structuring power procurement, private micro-grids, or industrial energy-sharing agreements, ensure that the contracting structure does not constitute unlicensed distribution or illegal trading under Section 12, structuring intermediaries strictly as non-brokering service facilitators or captive partners.

Section 11 All 185 Sections of Electricity Act Section 13