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Section 52: Provisions with respect to electricity trader

Electricity Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 2003
Section 51 All 185 Sections of Electricity Act Section 53

Legal Commentary & Landmark Judgments: Section 52

Section 52 of the Act regulates electricity trading, establishing the statutory framework for electricity traders who purchase electricity for resale, subject to licensing conditions and trading margin caps imposed by the Appropriate Commission.

  • Statutory Regulation of Power Trading: Defines the rights and duties of licensed electricity traders operating in bilateral wholesale and power exchange markets.
  • Enforceability of Trading Margin Ceilings: Empowers the Regulatory Commission to fix ceilings on trading margins to prevent speculative profiteering in wholesale power transactions.
  • Mandatory Duty to Maintain Technical & Financial Reserves: Obligates traders to maintain prescribed net worth benchmarks, credit support, and operational transparency.
Key Landmark Precedents:
  • PTC India Ltd. v. CERC (2010) 4 SCC 603: Constitution Bench upheld the statutory competence of the Central Commission under Section 79 read with Section 52 to fix trading margin caps on electricity traders by regulation.
  • Tata Power Co. Ltd. v. Reliance Energy Ltd. (2009) 16 SCC 659: Supreme Court affirmed that power trading is a licensed statutory activity designed to enhance market liquidity and resource optimization.
  • Energy Watchdog v. CERC (2017) 14 SCC 80: Supreme Court highlighted the distinction between generating companies, traders, and distribution licensees in long-term power purchase agreements.
Courtroom Practice & Strategic Litigation Guidance:

Electricity traders drafting bilateral power sale agreements must insert an express clause capping trading margins in accordance with CERC trading margin regulations to prevent contract invalidation or regulatory penalties under Section 142.

Section 51 All 185 Sections of Electricity Act Section 53