(1)The Trading Licensee shall, from the second year of his operation, demonstrate his creditworthiness duly certified by an auditor to the satisfaction of the Commission.
(2) The applicant shall not be a defaulter as notified by RBI or other relevant authority.
(3) Where an applicant has one or more borrowal accounts with Bank(s) all such, accounts shall be classified as ‘Standard’ by each of its bankers.
(4) The electricity trader, whose annual trading is above 500 MU, shall make endeavor to maintain investment grade credit rating from an independent Credit Rating Agency throughout the period of Licence.
(5) All trading transactions shall be done through proper payment security mechanism.
1 [6 Disqualifications: The applicant shall not be qualified for grant of licence if-
(a) the applicant, or any of his associates, or partners, or promoters, or Directors is an un-discharged insolvent; or
(b) the applicant, or any of his associates, or partners, or promoters, or Directors has been convicted of an offence involving moral turpitude, fraud, or any economic offence during the year of making the application or three years immediately preceding that year and a period of six months has not elapsed since his release from imprisonment, if any, consequent to such conviction; or 1 Sub. vide Not. No. HPERC/382 dated 9 th August, 2011 published in R H.P. dated 12 th August, 2011 at p. 2297-2298. Before its substitution, it read as under:- “Disqualifications.- The applicant shall not be qualified for grant of licence for intra-State trading if.-
(a) the applicant, or any of his partners, or promoters, or Directors or Associates is declared insolvent and has not been discharged; or
(b) the applicant, or any of his partners, or promoters, or Directors or Associates is involved in any legal proceedings, and in the opinion of the Commission grant of licence in the circumstances, may adversely affect the interest of the electricity sector and/or the consumers; or
(c) the applicant, of any of his partners, or promoters, or Directors or Associates has at any time in the past been convicted of an offence involving moral turpitude or any economic offence; or
(d) an order canceling the licence of the applicant, or any of his partners, or promoters, or Directors or Associates, has been passed by the Commission on the grounds of his indulging in fraudulent and unfair trade practices or market manipulation or activities involving moral turpitude; or
(e) the applicant, has in the past been-
(i) refused a licence on the grounds which continue to remain valid; or
(ii) subjected to any proceedings for contravention of any of the provisions of the Act or the rules or the regulations made thereunder; or
(f) the applicant is not considered a fit and proper person for the grant of licence for any other reason to be recorded in writing.
Explanation: For the purpose of determining as to whether the applicant is a ‘fit and proper person’, the Commission may take account of any consideration, as it deems fit, including but not limited to the following, namely:-
(i) financial integrity of the applicant;
(ii) his competence;
(iii) his reputation and character; and
(iv) his efficiency and honesty.” 4 Compendium of HPERC Regulations, March 2021
(c) an order canceling the licence of the applicant, or any of his associates, or partners, or promoters, or Directors, has been passed by the Commission; or
(d) the applicant holds a licence for transmission of electricity; or
(e) the applicant, or any of his associates, or partners, or promoters, or Directors has in the past been –
(i) refused a licence on the grounds which continue to remain valid, or
(ii) found guilty in any proceedings for non-compliance of any of the provisions of the Act or the rules or the regulations made thereunder or an order made by the Appropriate Commission, during the year of making the application or five years immediately preceding that year.]