Sri Ram Tubes Pvt Ltd and Ors v. State of Haryana and Ors

INoTHEoHIGHoCOURToOFoPUNJABo&oHARYANAo AToCHANDIGARHo o o 222o(TenoCases)o o o o o o o o o CWP-24704-2018o(O&M).o o o o o o o DateoofoDecision:o14.02.2023.o o o o SRIoRAMoTUBESoPVToLTDoANDoOTHERSoo o o o o o o o...Petitionerso o o o o o o Versuso o o STATEoOFoHARYANAoANDoOTHERSo o o …Respondentso o o o CORAM:oo HON'BLEoMR.oJUSTICEoVINODoS.oBHARDWAJo o *****o o Present:ooo Mr.oAmanoBansal,oAdvocate,oo o o o o o o forotheopetitioner(s).o o o Mr.oVivekoChauhan,oAddl.oA.G.oHaryana,o o o o o fororespondentoNo.1/State.oo o o o o o Mr.oRajeshoK.oSheoran,oAdvocate,oando o o Mr.oSamiroMalik,oAdvocate,oo RespondentsoNo.2oando3.oo o o o o o *****o VINODoS.oBHARDWAJ.ooJo(ORAL).oo o ooooooooAobatchoofotenopetitionsoareobeingodecidedobyoaocommonoordero aso theo counselo foro theo partieso areo ado idemo thato issueo involvedo ino theo presento batcho ofo petitionso iso common.o Theo detailso ofo theo caseso areo tabulatedoasounder:-o

o Sr.o Writo Petitiono Titleoo No.oo Numberoo 1o CWP-24704-SRIoRAMoTUBESoPVToLTDoANDoORSoV/So 2018o(O&M)o STATEoOFoHARYANAoANDoORSo o 2o CWP-3509-HSoSTRIPSoPVToLTDoANDoORSoV/SoSTATEo 2019o(O&M)o OFoHARYANAoANDoORSo o 3o CWP-3478-THEoSURYAoINDUSTRIESoANDoANOTHERo 2019o(O&M)o V/SoSTATEoOFoHARYANAoANDoOTHERSoo o o 4o CWP-5960-SANJAYoKUMARoANDoORSoV/SoSTATEoOFo 2019o(O&M)o HARYANAoANDoOTHERSoo o o 5o CWP-8546-BALAJIoAGROoSYSTEMSoPVT.oLTD.oV/So 2019o(O&M)o STATEoOFoHARYANAoANDoOTHERSoo o o 6o CWP-17698-PARTAPoSPINTEXoPVT.oLTD.oV/SoSTATEo 2019o(O&M)o OFoHARYANAoANDoORSo o 7o CWP-17860-RAMAoCOTSPINoPVT.oLTD.oV/SoSTATEoOFo 2019o(O&M)o HARYANAoANDoORS.o o o 8o COCP-1717-BARKHAoINDUSTRIESoANDoOTHERSoV/So 2019o(O&M)o PoKoDASoANDoORSo o o 9o CWP-17951-PARTAPoFABRICSoPVT.oLTDoV/SoSTATEo 2019o(O&M)o OFoHARYANAoANDoORS.oo o o 10o CWP-5131-BALAJIoAGROoSYSTEMSoPVT.LTDoV/So 2019o(O&M)o STATEoOFoHARYANAoANDoOTHERSo o o o ooooooooooo Forotheofacilityooforeference,ofactsoareobeingoreferredotoofromo CWPoNo.24704-2018otitledo'SrioRamoTubesoPrivateoLimitedoandootherso Vs.oStateoofoHaryanaoandoothers.'o o o

o o Theo aboveo saido writo petitiono raiseso ao challengeo too theo demando noticeso datedo 06.09.2018o (Annexureso P-5o too P-8)o wherebyo respondento No.3o i.e.o Dakshino Haryanao Bijlio Vitrano Nigamo Limitedo (hereinaftero too beo referredo aso 'DHBVNL')o haso revisedo itso demando ofo AdvanceoConsumptionoDeposito(hereinafterotoobeoreferredoaso'ACD').o TheopetitionersocontendothatotheyoareotheoCompaniesoregisteredowithotheo RegistraroofoCompaniesoandoareocarryingoonomanufacturingoactivitiesoforo lasto moreo thano twoo decades.o Theyo haveo beeno regularlyo payingo theiro electricityoconsumptionochargesowithoutoanyodefault.oRespondentoNo.4-HaryanaoElectricityoRegulatoryoCommissiono(hereinafterotoobeoreferredo aso 'HERC')o hado notifiedo Regulationo No.HERC/34/2016o datedo

11.07.2016otooprovideoforosupplyoofoelectricityoonorequestoandopowerotoo recoveroexpenditureoincurredoandorequireosecurityoetc.oHeocontendsothato Regulationo 5.6o ofo theo aforesaido Regulationo No.HERC/34/2016o datedo

11.07.2016oprohibitsotheorespondentsofromoraising/demandingoACD,oaso suchodemandocanoonlyobeoraisedofromotheonewoclientsoorotheoconsumersotoo whomo theo additionalo loado iso sanctioned.o Theo relevanto Regulationo iso reproducedoasounder:-o o "5.6oAdvanceoConsumptionoDeposito o5.6.1o Newo applicantsoshallodeposito consumptiono securityo (Advanceo Consumptiono Deposit)o ato theo flato rateso giveno hereunderooroasorevisedobyotheoCommissionofromotimeotoo time.oo

o Sr.No.o CategoryoofoConsumero Consumptiono Securityo Amounto (Rs./KWo oro parto thereofo ofo theo ConnectedoLoad)o 1o AgricultureoSupplyo 100o 2o DomesticoSupply/BulkoSupplyo 750o (Domestic)o 3o oLToIndustrialoSupplyoo 1000o 4o HToIndustrialoSupplyoo 1000o 5o NonoDomesticoSupplyo 1000o 6o BulkoSupplyoo 1000o 7o MITCoo 1000o 8o LiftoIrrigationoo 1000o 9o PublicoWateroWorksoo 1500o 10o StreetoLightoo 2000o 11o Railwayo tractiono ando Delhio 1500o MetrooRailwayoCorporationoo 12o Independento 2000o Hoarding/Decorativeo Lightningoo 13o TemporaryoMeteredoSupplyo SupplyoFourotimeso ofo theo rateo ofo categoryoinowhicho theo temporaryo supplyoisorequiredo o o

5.6.2oInocaseoofoconsumersowhooareosanctionedoadditionalo connectedoload,otheoadditionaloconsumptionosecurityoshallo beogotodepositedoforotheoadditionaloconnectedoload."o o o o InoviewoofotheoaforesaidoRegulation,oitoisoarguedothatoACDo couldo onlyo haveo beeno demandedo fromo ao newo consumero oro fromo ao consumerotoowhomoadditionaloloadohadobeenosanctionedoandonotofromoano

o o WrittenostatementoonobehalfooforespondentsoNo.2oando3ohado beenofiledowhereinoitohasobeenoaverredothatotheodemandonoticesohaveobeeno raisedoinoaccordanceo withotheo Regulationo notifiedo byo theo Appropriateo Commission.oTheorelevantoextractoofotheiroreplyoisoextractedoasounder:-o "Inothisoregardoitoisosubmittedothatodemandonoticeso wereo issuedo ino viewo ofo clauseo 5.5o ofo (Dutyo too supplyo electricityo ono request,o Powero too recovero expenditureo incurredoinoprovidingosupplyoandoPowerotoorequireosecurityo Regulationso2016)o(theocopyoofotheoHERCoNotificationodatedo 11thoJulyo2016oisoalreadyoannexedowithotheowritopetitionoaso AnnexureoP-4o)sinceoasoperoclauseo5.5o(1)oAosecurityodeposito shallobeomadeobyoallotheoconsumersotoocoverotheoestimatedo poweroconsumptionoforo2obillingocyclesoexpectoHToindustrialo supplyo consumers.o Ino caseo ofo HTo industrialo supplyo consumers,oitowouldobeoestimatedopoweroconsumptionoforo oneoandohalfobillingocycle.oItohasobeenofurtheroprovidedoino theo thiso clauseo thato ino caseo ofo enhancemento ofo loado additionalosecurityo too coveroadditionalo consumptionoshallo needotoobeodeposited,ofurtherothereoisoaoprovisionooforevisiono ofoACDoannually.oSooinothisoclauseocompleteoprocessohaso definedo regardingo ACD.o Byo theseo noticeso answeringo respondento iso noto demandedo theo fresho ACDo buto it'so ao revisionoofoACDoasoperoclauseo5.5(3)oofonotification.oTheo CalculationosheetoisoattachedoasoAnnexure-R-1otooR-4oonotheo basisoofowhichotheorevisionoofoACDowasosoughtofromotheo petitioners.o Theo Clauseo 5.5o ofo regulationo 2016o iso reproducedohereunderofororeadyoreferenceoofothisoHon'bleo court;-o o

5.5oSecurityoDeposito

(1)oInopursuanceoofoRegulationo5.1,oaosecurityodepositoshallo beomadeobyoallotheoconsumersotoocover:o

(a)oTheoestimatedopoweroconsumptionoforotwoobillingocycleso foro allo categorieso ofo consumerso excepto theo HTo industrialo supplyo consumers.o Ino caseo ofo HTo industrialo supplyo consumers,oitowouldobeoestimatedopoweroconsumptionoforo oneo ando halfo billingo cycles.o Initiallyo theo applicanto shallo deposito theo consumptiono securityo ato theo flato rateso aso mentionedounderoRegulationo5.6.oSubsequentlyotheosecurityo shallo beo revisedo annuallyo aso pero theo procedureo definedo underoRegulationo5.9o(1).o o

(b)o Theo costo ofo electrico metero thato iso too beo providedo foro supplyingoelectricityotooaopremises.o o

(2)oInocaseoofoenhancementoofoload,oonlyoadditionalosecurityo too covero theo additionalo consumptiono shallo needo too beo deposited,oestimatedoasoperotheomethodologyogivenoundero Regulationo5.9o(1).o o

(3)o Aso statedo undero Regulationo 5.5o (1),o theo consumptiono securityo deposito shallo beo revisedo annuallyo aso pero theo procedureo definedo undero Regulationo 5.9o (1).o Anyo excess/deficiento amounto shallo beo adjustedo withino threeo subsequentobillsoofotheoconsumer.o o

(4)oTheoconsumptionosecurityodepositoshallobeoreturnedotoo consumero upono terminationo ofo Agreemento ando withino 30o daysoofoadjustmentoofoallodues.oInocaseoofodelay,ointeresto equivalentotootheoStateoBankoofoIndiaobaseorateoasoonotheo1sto ofo Aprilo ofo theo financialo yearo shallo beo payableo too theo consumer.o o Fromo bareo perusalo ofo aboveo saido regulationso itso crystalo clearothatolicenseeocanorevisedoconsumptionosecurityodeposito annually,o So,ogroundo takenobyopetitionersothato regulationo

wouldoapplyoprospectivelyoisonototenableoinoeyesoofolawosinceo itso revisiono ofo ACDo ando byo wayo ofo thiso demando noticeo answeringorespondentsoareonotodemandingotheonewoACD.o Eveno otherwiseo earliero alsoo answeringo respondento haso servedo noticeo foro revisedo ACDo ino viewo ofo prevalento regulationsoandotheoACDsohaveobeenorevisedosubsequentlyo onotheobasisoofoconsumptionopatternoandotheosameowereodulyo paidobyotheopetitioners.o o ThereoisoaoprovisionoofopaymentoofointerestoonoACDotootheo consumeroonoannualobasisoatotheobankorateoasodeterminedobyo theoReserveoBankoofoIndiaoono1stoApriloofoeachoyearooromoreo asospecifiedobyoHERC,oasoperotheoprovisionoofoclauseo5.8oofo HERCoNotificationo11thoJuly,o2016.oInoviewoofotheoaboveo clause,otheointerestowasopaidotootheopetitionerofirmsobyotheo respondento Nigamo ono theo actualo ACDo depositedo byo theo petitionerotimeotootime.oTheodetailsoofotheointerestohaveobeeno adjustedoinotheoenergyobillsoofotheopetitionerofirmsothrougho sundries.oTheocopiesoofotheosundriesoattachedoasoAnnexure-R-5otooR-8owithowritopetition.o o

2.oThatopresentowritopetitionoisonotomaintainableoinoviewoofo clauseo 5.9o ofo Notification.o Clauseo 5.9o iso reproducedo hereunderoforotheoreadyoreferenceoofothisoHon'bleocourt;-o o

5.9o Reviewo ofo Securityo Deposito foro powero consumptiono

(ACD)o o

(1)oAtotheobeginningoofotheofinancialoyear,oreviewotheo consumptionopatternoofotheoconsumeroforotheoadequacyo ofo theo securityo deposito fromo Aprilo too Marcho ofo theo previouso year.o Ao consumero excepto theo HTo Industrialo supplyo consumero iso requiredo too maintaino ao sumo equivalentotoohisoaverageopaymentoforotheoperiodoofotwoo

billingo cycles.o HTo Industrialo supplyo consumero iso requiredotooaosumoequivalentotoohisoaverageopaymentoforo theo periodo ofo oneo ando halfo billingo cycles.o Whereo "payments"oshallobeoequalotootheoaverageoofoactualobillso paidoinotheolastofinancialoyear.o o Providedo thato foro consumero whoseo electricityo connectiono iso lesso thano oneo yearo old,o theo securityo deposito shallo noto beo revisedo ato theo beginningo ofo theo ensuingofinancialoyear.o o Providedo furthero thato averageo paymentso shallo noto includeotheoarrearsoofoanyokindorecoveredoinotheolastlyo financialoyearopertainingotootheoprioroperiod.o o

(2)oTheosecurityodepositoavailableowithotheolicenseeoino respecto ofo eacho consumero shallo beo showno ino theo billo issuedo ino theo billo issuedo too theo consumer.o Refundo ofo excessosecurityotootheoconsumerobyotheolicensee,oasoando wheno arises,o shallo beo madeo byo wayo ofo adjustmento ino subsequentoenergyobillsoshowingonegativeoamountowhereo necessary.o o So,ofromotheoaforesaidoclausesoofotheoregulationo2016,oitoiso crystaloclearothatotheoNigamoisowithinoitsorightotoodetermine,o demando andorevisedo theo securityo deposito ofo eveno existingo consumersoandothatosoohappenedoInotheopresentocase.oTheo revisionoofotheoACDoofotheoconsumeroisoonlyotoosafeguardo theointerestoofotheoNigamoasoinocaseotheoconsumerobecameo defaulter,otheobilloamountomayobeorecoveredofromotheoACD.o Theo sameo haso beeno clearlyo describedo ino theo HERCo RegulationoNotificationo11thoJuly,o2016,oClauseo2.3o(2)othato "AdvanceoConsumptionoDeposito(ACD)"omeansodepositoasoao securityotoocoverotheoconsumptionochargesoforotheoperiodoaso

specifiedo ino theseo regulations.o So,o ino viewo ofo aboveo theo respondentoNigamohasorightlyoassessedoandodemandedotheo revisedoACDofromotheopetitionersoandotheopetitionersoareo legallyoliableotoomakeopaymentoofotheosame."o o o o Supplementaryo replyo waso alsoo filedo byo theo respondentso DistributionoLicenseeoono25.05.2019oraisingovariousoissuesoregardingotheo maintainabilityoofotheowritopetitionoinotheolightoofoefficaciousoalternativeo remediesoprovidedounderotheostatutoryoschemeoitself.oItoisoaverredothatotheo StatuteoprovidesoforoefficaciousoremedyobeforeotheoConsumeroGrievancesoo RedressaloForumo(hereinafteroreferredotooaso'CGRF')oasoalsootheoForumo ofo Electricityo Ombudsmano undero Sectiono 42o (5)o ando 42o (7)o ofo theo Electricityo Act,o 2003o ando regulationso framedo thereunder.o Ao persono iso requiredotoofirstoexhaustohisoremediesoprovidedounderotheoStatuteobeforeo approachingoHighoCourtounderoaowritojurisdiction.oo o o Yeto anothero replyo waso alsoo filedo byo theo Distributiono Licenseeoinowhichoallotheoaboveoobjectionsowereoreiterated.oo o o AoshortoreplyowasofiledobyorespondentoNo.4-HERCoasowello foro disposalo ofo theo writo petitionso ino lighto ofo theo authoritativeo pronouncementsoofothisoCourtoasowelloasotheoHon'bleoSupremeoCourt.oo o o Theorelevantoextractoofotheoshortoreplyoreadsoasounder:-o o

4.o Thato theo Commissiono haso beeno empoweredo undero theo ElectricityoAct,o2003oforotheopurposesoofomakingolawsoforo achievingotheoobjectsoenshrinedounderotheoElectricityoAct,o 2003.oTheopoweroofotheoAppropriateoCommissionotooframeo RegulationsoisowellosettledoinotheoElectricityoAct,o2003.oAso pero Sectiono 47o ofotheo Electricityo Act,o theo appropriateo

Commissionoprescribedoreasonableosecurityoforotheopaymento ofoallomoniesowhichomayobecomeodueotooanyopersonowhoo requiresoaosupplyoofoelectricityoinopursuanceoofosectiono43oofo theoElectricityoAct,o2003:-omayo o

(a)oInorespectoofotheoelectricityosuppliedotoosuchoperson;o oroo o

(b)oInorespectoofoelectricolineooroplantooroelectricometero toobeoprovidedoforosupplyingoelectricityotoosuchoperson.oo o TheoCommissionoinopursuantotootheoaboveomadeoaoprovisiono ofoadvanceoconsumptionodepositothatomayobeorequiredotoobeo depositedowithotheodistributionolicenseeobyotheoconsumeroaso aosecurityoforotheosuppliedoElectricity.oNeedlessotoopointoouto thato theo underlyingo principleo too beo understoodo ino propero contexto i.e.o billo iso generatedo byo theo distributiono licenseeo bimonthlyo foro mosto categorieso ofo consumerso duringo thiso period,o theo Consumero consumeso theo electricity.o Hence,o wheno theo billo iso raised,o theo sameo iso ino relationo too theo Electricityothatohasoalreadyobeenoconsumedooveroaoperiodoofo 2omonths.oInoorderotoosecureotheofinancialointerestoofotheo distributiono licenseeo lesto theo Consumero runso awayo oro refusesotoopay,oaoprovisionohasobeenoincorporatedounderotheo ElectricityoAct,o2003owhichoempowersotheoStateoRegulatoryo Commissionotoodetermineoreasonableosecurityorequiredotoo beopaidobyoaoConsumerotooaoDistributionolicensee.oInolieuoofo theo amounto soo too beo depositedo aso advanceo consumptiono deposit,o theo Regulatoryo Commissiono iso mandatedo too prescribeoaorateoofointerestothatoisorequiredotoobeopaidoonotheo amountosoodepositedobyotheoConsumerowithotheodistributiono licensee.oAccordingly,oasoperotheomandateoofoSection-47o(4)o ofo theo Electricityo Act,o 2003,o theo Haryanao Electricityo Regulatoryo Commissiono haso prescribedo rateo ofo interesto

whichoisorequiredotoobeopaidobyotheodistributionolicenseeoono theoamountodepositedowithoitoasoanoadvanceoconsumptiono deposit.oTheosaidorateoofointerestoisoequivalentotoobankorateo asodeterminedobyoReserveoBankoofoIndiaoono1stoApriloofoeacho yearoorosuchohigherorateoasotheoCommissionomayofixofromo timeotootime.o o

5.oThatotheorequirementotoosubmitotheoadvanceoconsumptiono depositoandoreviewoofosecurityodepositoisodulyocontemplatedo undero theo provisionso ofo Electricityo Act,o 2003.o Theo Commissionohasoprescribedotheomethodologyotoodetermineo theoadvanceoconsumptionodepositoforowhichosecurityoisotoobeo furnishedoandotheomodeoofosecurityothatoisoacceptableotootheo distributiono licensee.o Invariably,o aso theo provisionso ofo Section-47o itselfo contemplateso theo determinationo ofo theo reasonableosecurityoinorespectoofosuppliedoelectricity,ohence,o theoactionoofotheoRegulatoryoCommissionoinomandatingotheo requiremento foro ao consumero too provideo advanceo consumptiono deposito witho theo distributiono licenseeo thuso cannotobeosaidotoobeoinoconflictowithotheoregulatingoStatuteo i.e.otheoElectricityoAct,o2003.oFurther,otheoCommission,owitho aoviewotoosafeguardotheointerestsoofotheoConsumersohasoalsoo prescribedothatotheodistributionolicenseeoshallobeoobligatedo too payo interesto ato theo rateo ato theo Banko rateo oro moreo aso specifiedo byo theo Commissiono payableo annuallyo ono theo consumer'sosecurityodeposit.oTheointerestoaccruedoduringotheo yearoshallobeoadjustedoinotheoconsumer'sobilloforotheofirsto billingocycleoofotheoensuingofinancialoyearoonotheoamountoofo advanceoconsumptionodeposit,otootheoconsumers.oHence,otheo substantiveo rightso ofo botho theo partieso i.e.o distributiono licenseeoandotheoconsumersohaveobeenobalanced.oWhileotheo fearso ofo theo distributiono licenseeo stando addressedo ino theo formoofohavingoadvanceoconsumptionodepositowhichoruleso outo theo possibilityo ofo theo consumero abscondingo aftero

consumptiono ofo Electricityo ando alsoo compensateo theo consumerobyoawardingointerestoonotheoamountodepositedobyo themo witho theo distributiono licenseeo aso Advanceo ConsumptionoDeposito(ACD).o o

6.oThatotheoHaryanaoElectricityoRegulatoryoCommissionohaso actedo withino theo provisiono ando fouro cornerso ofo theo Electricityo Act,o 2003o ando theo relevanto Regulationso i.eo Regulationo Noo HERC/29/2014o Haryanao Electricityo Regulatoryo Commissiono (Electricityo Supplyo Code)o Regulations,o2014oandoRegulationonooHERC/34/2016o(Dutyo too Supplyo electricityo ono request,o Powero too recovero expenditureoincurredoinoprovidingosupplyoandostatuteoi.e.otheo ElectricityoAct,o2003."o o o ooooooo o o Learnedocounseloforotheorespectiveopartiesohaveoreiteratedo theirosubmissionsonoticedoabove,oduringotheocourseoofotheiroarguments.oo Whileocounseloforopetitionersoprayedothatotheodemandonoticesowereoliableo toobeosetoaside,otheorespondentsoarguedothatotheowritopetitionsooughtotoobeo dismissedo ino viewo ofo HERCo (Dutyo too Supplyo Electricityo ono request,o powerotoorequireosecurity)oRegulationo2016.oWhileopetitionersoreliedoono Regulationo 56.1o ando Regulationo 5.6.2,o theo respondentso reliedo ono Regulationo5.5oandoRegulationo5.9.oAdditionalopleaoofomaintainabilityo wasoalsooraisedoinoviewoofoalternativeoremedies.oo o o Iohaveoheardolearnedocounseloforotheopartiesoandohaveogoneo throughotheopleadingsoasowelloasodocumentsoonocaseofileoandojudgmentso citedobyothem.oo o o Theo preliminaryo objectiono quao maintainabilityo iso beingo

o o Availabilityoofoalternativeoefficaciousoremediesoasoaogroundo toorefuseoentertainingoaowritopetitionohasobeenowellorecognizedoasoaovalido principle.o Ao writo Courto mayo thuso electo noto too exerciseo itso writoo jurisdiction.oCertainoexceptionsoareohoweverorecognizedobyolawowhenoao writocanobeoentertainedodespiteoexistenceoofoalternativeoremedies.oHence,o ordinarily,otheomatterowouldonotobeoentertainedoinoaowritoandoaolitiganto mustoexhaustohisostatutoryoremedies,otheopositionoofolawoinothisoregardoiso wellosettled.oTheobaroisonotoabsolute.oo o o TheocaseoinohandohasoremainedopendingoinothisoCourtoforolasto 5o years.o Dismissingo theo petitionso too directo theo petitionerso too availo alternativeoremediesoatothisostageomayoactuallyobeoaotravestyoofojustice.o Moreo so,o theo questiono revolveso purelyo ono theo interpretationo ando applicabilityoofoStatutoryoRegulationoandowhetherotheodemandoisowello foundedo thereino oro not.o Theo questiono beingo purelyo legalo ando noto involvingoanyoquestionoofofactocanobeolookedointoobyotheoHighoCourt.o Relegatingo themo too alternativeo remedieso wouldo onlyo delayo theo adjudicationoonotheoissueostillofurther.oHence,oIohaveodecidedotooproceedo too examineo theo caseo ono merits.o Theo objectiono ofo respondentso iso thuso declinedoatothisostage.oLongopendencyoofo matteroisoaogoodogroundotoo examineotheoissueofurther.ooooo o o Whileoexaminingotheoissueoonomerits,olearnedocounseloforo theopetitionerohasoheavilyoplacedorelianceoonoRegulationo5.6.1otoocontendo thatotheoACDocouldonotobeodemandedofromoexistingoconsumersoandothato suchodemandowasosustainableoonlyoagainstotheonewoclientsooroagainstotheo consumersowhooareosanctionedoadditionaloload.oo

o o Pero Contra,o learnedo counselo foro theo respondentso haveo submittedo thato theo provisiono ofo Regulationso 5.9o empowerso reviewo ofo Securityo deposito foro powero consumptiono ando thato Sectiono 47o ofo theo Electricityo Act,o 2003o necessitateso ao consumero too deposito reasonableo securityoand/orotoomakeopaymentoofoallomoniesowhichomayobecomeodueo afterodeterminationoinoaccordanceowitholaw.oo o o Ao referenceo iso madeo too Regulationo 5o toocontendo thatotheo sameoempowersoaoDistributionoLicenseeotoocallouponoaoconsumerotoomakeo goodotheodeficiency/insufficiencyoorooasowell.ooo o o TheorelevantoprovisionoofotheoRegulationsoreliedouponobyotheo respectiveopartiesoareoextractedoasounder:-o 5oPOWERoTOoREQUIREoSECURITYoo

5.1o oInopursuanceoofoSectiono47oofotheoAct,otheolicenseeo mayorequireoanyoperson,owhoorequiresoaosupplyoofoelectricityo ino hiso premises,o too giveo himo reasonableo securityo foro theo paymentoofoallomonies,owhichomayobecomeodueotoohim:-o

(a)k ino respecto ofo theo electricityo suppliedo too sucho person;oo

(b)o whereo anyo electrico lineo oro electricalo planto oro electrico metero iso too beo providedo foro supplyingo electricityotoosuchoperson,oinorespectoofotheoprovisiono ofosucholineooroplantoorometer;oo o andoifothatopersonofailsotoogiveosuchosecurity,otheodistributiono licenseeomay,oifoheothinksofit,orefuseotoogiveotheosupplyoofo electricityoorotooprovideotheolineooroplantoorometeroforotheo periododuringowhichotheofailureocontinues.oo o

5.2o Whereo anyo persono haso noto giveno sucho securityo aso iso mentionedoinoRegulationo5.1oorotheosecurityogivenobyoanyo personohasobecomeoinvalidooroinsufficient,otheodistributiono

licenseeomay,obyonotice,orequireothatoperson,owithinothirtyo daysoafterotheoserviceoofotheonotice,otoogiveohimoreasonableo securityoforotheopaymentoofoallomoniesowhichomayobecomeo dueo too himo ino respecto ofo theo supplyo ofo electricityo oro provisionoofosucholineooroplantoorometer.oo o

5.3oIfotheopersonoreferredotooinoRegulationo5.2ofailsotoogiveo suchosecurity,otheodistributionolicenseeomay,oifoheothinksofit,o discontinueotheosupplyoofoelectricityoforotheoperiododuringo whichotheofailureocontinues.oo o

5.4oTheodistributionolicenseeoshallonotobeoentitledotoorequireo securityoinopursuanceoofoclauseo(a)oofoRegulationo5.1oifotheo personorequiringotheosupplyoisopreparedotootakeotheosupplyo throughoaopre-paymentometer.oo o

5.5oSecurityoDepositoo

(1)oInopursuanceoofoRegulationo5.1,oaosecurityodepositoshallo beomadeobyoallotheoconsumersotoocover:oo

(a)o Theo estimatedo powero consumptiono foro twoo billingo cyclesoforoallo categoriesoofoconsumerso exceptotheo HTo industrialosupplyoconsumers.oInocaseoofoHToindustrialo supplyo consumers,o ito wouldo beo estimatedo powero consumptionoforooneoandohalfobillingocycles.oInitiallyotheo applicantoshallodepositotheoconsumptionosecurityoatotheo flato rateso aso mentionedo undero Regulationo 5.6.o Subsequentlyotheosecurityoshallobeorevisedoannuallyoaso perotheoprocedureodefinedounderoRegulationo5.9o(1).oo o

(b)oTheocostoofoelectricometerothatoisotoobeoprovidedoforo supplyingoelectricityotooaopremises.oo o

(2)oInocaseoofoenhancementoofoload,oonlyoadditionalosecurityo too covero theo additionalo consumptiono shallo needo too beo

deposited,oestimatedoasoperotheomethodologyogivenoundero Regulationo5.9o(1).o o

(3)o Aso statedo undero Regulationo 5.5o (1),o theo consumptiono securityo deposito shallo beo revisedo annuallyo aso pero theo procedureo definedo undero Regulationo 5.9o (1).o Anyo excess/deficiento amounto shallo beo adjustedo withino threeo subsequentobillsoofotheoconsumer.oo o

(4)oTheoconsumptionosecurityodepositoshallobeoreturnedotoo consumero upono terminationo ofo Agreemento ando withino 30o daysoofoadjustmentoofoallodues.oInocaseoofodelay,ointeresto equivalentotootheoStateoBankoofoIndiaobaseorateoasoonotheo1sto ofo Aprilo ofo theo financialo yearo shallo beo payableo too theo consumero o

5.6oAdvanceoConsumptionoDepositoo

5.6.1o Newo applicantso shallo deposito consumptiono securityo (Advanceo Consumptiono Deposit)o ato theo flato rateso giveno hereunderooroasorevisedobyotheoCommissionofromotimeotoo time.o o Sr.No.o CategoryoofoConsumero Consumptiono Securityo Amounto (Rs./KWo oro parto thereofo ofo theo ConnectedoLoad)o 1o AgricultureoSupplyo 100o 2o DomesticoSupply/BulkoSupplyo 750o (Domestic)o 3o oLToIndustrialoSupplyoo 1000o 4o HToIndustrialoSupplyoo 1000o 5o NonoDomesticoSupplyo 1000o 6o BulkoSupplyoo 1000o 7o MITCoo 1000o 8o LiftoIrrigationoo 1000o

9o PublicoWateroWorksoo 1500o 10o StreetoLightoo 2000o 11o Railwayo tractiono ando Delhio 1500o MetrooRailwayoCorporationoo 12o Independento 2000o Hoarding/Decorativeo Lightningoo 13o TemporaryoMeteredoSupplyo SupplyoFourotimeso ofo theo rateo ofo categoryoinowhicho theo temporaryo supplyoisorequiredo o o

5.6.2oInocaseoofoconsumersowhooareosanctionedoadditionalo connectedoload,otheoadditionaloconsumptionosecurityoshallo beogotodepositedoforotheoadditionaloconnectedoload."o o o o xxxo xxxo xxxo o "5.9oReviewoofoSecurityoDepositoforopoweroconsumptiono

(ACD)oo

(1)oAtotheobeginningoofotheofinancialoyear,otheolicenseeoshallo reviewo theo consumptiono patterno ofo theo consumero foro theo adequacyoofotheosecurityodepositofromoAprilotooMarchoofotheo previousoyear.oAoconsumer,oexceptotheoHToindustrialosupplyo consumer,oisorequiredotoomaintainoaosumoequivalentotoohiso averageopaymentoforotheoperiodoofotwoobillingocycles.oAnoHTo industrialosupplyoconsumer,oisorequiredotoomaintainoaosumo equivalentotoohisoaverageopaymentoforotheoperiodoofooneoando halfobillingocycles.oWhereo'averageopayment'oshallobeoequalo tootheoaverageoofoactualobillsopaidoinotheolastofinancialoyear:oo o Providedothatoforoaoconsumerowhoseoelectricityoconnectiono isolessothanooneoyearoold,otheosecurityodepositoshallonotobeo revisedoatotheobeginningoofotheoensuingofinancialoyear.oo o

Providedofurtherothatoaverageopaymentoshallonotoincludeotheo arrearso ofo anyo kindo recoveredo ino theo lasto financialo yearo pertainingotootheoprioroperiod.oo o

(2)o Theo securityo deposito availableo witho theo licenseeo ino respectoofoeachoconsumeroshallobeoshownoinotheobilloissuedo tootheoconsumer.oRefundoofoexcessosecurityotootheoconsumero byotheolicensee,oasoandowhenoarises,oshallobeomadeobyowayoofo adjustmento ino subsequento energyo billso showingo negativeo amountowhereonecessary."o o o o Ito iso evidento fromo ao perusalo ofo theo aboveo Clauseso thato Regulationo5.1o mandateso aopersonotoodeposito security.o Regulationo 5.2o furtheroempowersotheodistributionolicenseeotoogiveosuchosecurityoasomayo beo invalido oro insufficient.o Thus,o theo saido Regulationo alsoo perceiveso demandoofoadditionalosecurityoifosecurityoalreadyotenderedoisoinsufficient.o Further,oRegulationo5.5o(3),otheoconsumptionosecurityodepositomayobeo revisedo annuallyo aso pero procedureo undero Regulationo 5.9,o whicho empowersoaodistributionolicenseeotooreviewotheosecurityodepositoonotheo basisoofoconsumptionopatternoandoaverageobills.oo o o Hence,otheoRegulationowhenoreadowithoSectiono47oofotheo Electricityo Act,o 2003o empowerso revisiono ofo ACDo byo theo distributiono licensee.oo o o TheoaforesaidoaspectohasoalsoobeenoconsideredobyoaoDivisiono BenchoofothisoCourtoinotheomatteroofoGargoInoxoLimitedoVs.oStateoofo Haranao ando others,o reportedo aso 2017o (1)o R.C.R.o (Civil)o 131.o Theo relevantoextractoofotheoaforesaidojudgmentoreadsoasounder:-o o

13.oBeforeoweoproceedotooconsiderotheocontentionsoraisedobyo learnedocounseloforotheoparties,oitowouldobeoappropriateotoo referotootheorelevantoprovisionsoandotheoschemeoofotheoAct.o Theosameoareoextractedobelow:oo Sectionso47,o61(c)oando(d),o181o(2)(v)(w)oando(zd)oofotheo Actoo

47.oPowerotoorequireosecurity.-o(1)oSubjectotootheoprovisionso ofo thiso section,o ao distributiono licenseeo mayo requireo anyo person,owhoorequiresoaosupplyoofoelectricityoinopursuanceoofo Sectiono 43,o too giveo himo reasonableo security,o aso mayo beo determinedobyoregulations,oforotheopaymentotoohimoofoallo moniesowhichomayobecomeodueotoohim-oo o

(a)oinorespectoofotheoelectricityosuppliedotoosuchoperson;o oro (b)o whereo anyo electrico lineo oro electricalo plantooro electrico metero iso too beo providedo foro supplyingo electricityotoosuchoperson,oinorespectoofotheoprovisionoofo sucholineooroplantoorometer,oandoifothatopersonofailsotoo giveosuchosecurity,otheodistributionolicenseeomay,oifoheo thinksofit,orefuseotoogiveotheosupplyoofoelectricityoorotoo provideotheolineooroplantoorometeroforotheoperiododuringo whichotheofailureocontinues.oo o

(2)o Whereo anyo persono haso noto giveno sucho securityo aso iso mentionedoinosub-sectiono(1)oorotheosecurityogivenobyoanyo personohasobecomeoinvalidooroinsufficient,otheodistributiono licenseeomay,obyonotice,orequireothatoperson,owithinothirtyo daysoafterotheoserviceoofotheonotice,otoogiveohimoreasonableo securityoforotheopaymentoofoallomoniesowhichomayobecomeo dueo too himo ino respecto ofo theo supplyo ofo electricityo oro provisionoofosucholineooroplantoorometer.oo o

(3)oIfotheopersonoreferredotooinosub-sectiono(2)ofailsotoogiveo suchosecurity,otheodistributionolicenseeomay,oifoheothinksofit,o

discontinueotheosupplyoofoelectricityoforotheoperiododuringo whichotheofailureocontinues.oo o

(4)oTheodistributionolicenseeoshallopayointerestoequivalentotoo theobankorateooromore,oasomayobeospecifiedobyotheoconcernedo StateoCommission,oonotheosecurityoreferredotooinosub-sectiono

(1)oandorefundosuchosecurityoonotheorequestoofotheopersono whoogaveosuchosecurity.oo o

(5)oAodistributionolicenseeoshallonotobeoentitledotoorequireo securityoinopursuanceoofoclauseo(a)oofosub-sectiono(1)oifotheo personorequiringotheosupplyoisopreparedotootakeotheosupplyo throughoaopre-paymentometer.oo xxoxxoxxoo

61.oTarifforegulations.-oTheoAppropriateoCommissionoshall,o subjectotootheoprovisionsoofothisoAct,ospecifyotheotermsoando conditionsoforotheodeterminationoofotariff,oandoinodoingoso,o shallobeoguidedobyotheofollowing,onamely:-oo xxoxxoxxoo

(c)o theo factorso whicho wouldo encourageo competition,o efficiency,o economicalo useo ofo theo resources,o goodo performanceoandooptimumoinvestments;oo o

(d)o safeguardingo ofo consumers'o interesto ando ato theo sameo time,o recoveryo ofo theo costo ofo electricityo ino ao reasonableo manner.oo xxoxxoxxoo

181.oPowersoofoStateoCommissionsotoomakeoregulations.-oo xxoxxoxxoo

(2)oInoparticularoandowithoutoprejudiceotootheogeneralityoofo theo powero containedo ino sub-sectiono (1),o sucho regulationso mayo provideo foro allo oro anyo ofo theo followingo matters,o namely:-oo

(v)oreasonableosecurityopayableotootheodistributionolicenseeo underosub-sectiono(1)oofoSectiono47;oo

(w)opaymentoofointerestoonosecurityounderosub-sectiono(4)oofo Sectiono47;oo xxoxxoxxoo

(zd)o theo termso ando conditionso foro determinationo ofo tariffo underosectiono61;oo xxoxxoxxoo Clauseo5oofotheoRegulationso5.oo

5.oPowerotoorequireosecurityoo o

5.1o Theolicenseeomayorequireoanyoperson,owhoorequiresoao supplyoofoelectricityotoohisopremisesoinopursuanceoofosectiono 43oofotheoAct,otoogiveohimosecurity,oforotheopaymentoofoallo monies,owhichomayobecomeodueotoohimoinorespectoofo5.1.1o theo electricityo supplied/o too beo suppliedo too sucho persono (ConsumptionoSecurity):oo o

5.1.2oanyoelectricoline/oplant/ometerotoobeoprovidedobyotheo licenseeoforosupplyingoelectricityotoosuchoperson;oo o

5.2oIfotheopersonofailsotoogiveosuchosecurity,oreferredotooino regulationo5.1,otheolicenseeomay,oifoheothinksofit,orefuseotoo giveotheosupplyoofoelectricityoorotooprovideotheoelectricoline/o plant/o metero foro theo periodo duringo whicho theo failureo continues.oo o

5.3oConsumptionoSecurityo5.3.1oTheoLToconsumersoshalloato allotimesomaintainowithotheolicenseeoanoamountoequivalentotoo consumptionochargesoofofouromonthsowhereverobi-monthlyo billingoisoinovogueoandotwoomonthsoinotheocaseoofomonthlyo billingo cycle,o aso consumptiono securityo towardso theo electricityo supplied/o too beo suppliedo too himo againsto anyo

defaulto ino paymento duringo theo periodo theo Agreemento foro supplyoofoenergyoisoinoforce:oo Providedothatoasoandowhenotheobi-monthlyocycleoiso replacedo witho monthlyo billingo cycle,o theo licenseeo shallo refundo theo excesso amounto ifo any,o overo theo twoo monthso chargesobyoadjustmentoagainstotheoexistingoduesoorothoseo becomingodueoimmediatelyothereafter.oo o

5.3.2oTheoHToconsumersoshalloatoallotimesomaintainowithotheo licenseeoanoamountoequivalentotooconsumptionochargesoofo twoomonthsoasoconsumptionosecurityotowardsotheoelectricityo supplied/o too beo supplied,o againsto anyo defaulto ino paymento duringotheoperiodotheoAgreementoforosupplyoofoelectricityoiso inoforce.oo o

5.3.3o Ifo anyo persono requiringo supplyo undero LTo oro HTo iso preparedotootakeotheosupplyothroughoaopre-paymentometer,o theo licenseeo shallo noto beo entitledo too collecto consumptiono securityo fromo sucho person.o Providedo thato ino theo caseo ofo existingo consumerso (LTo oro HT)o whoo opto foro theo supplyo througho pre-paymento meter,o theo balanceo amounto ofo consumptiono securityo ofo sucho consumerso aftero adjustingo againstopre-paymentoamountsopayableobyothem,oifoany,oshallo beorefunded.oo o

5.3.4oTheoconsumptionosecurityoamountoshallobeopaidoeithero inocashoorolocalocheque(s)o(outstationocheque(s)owillonotobeo accepted)oorothroughodemandodrafto(DD)odrawnoinofavouroofo theolicensee.oo xxoxxoxxoo Clauseo5.7oofotheoRegulationsoo

5.7oInterestoonoConsumptionoSecurityoandoMeteroSecurityo Theo licenseeo shallo payo interesto ono Consumptiono Securityo andometerosecurityodepositedobyotheoconsumeroatotheoSavingo

BankorateonotifiedobyoStateoBankoofoIndiaoorosuchohighero rateo aso theo Commissiono mayo fix,o fromo timeo too time.o Theo interesto accruingo too theo credito ofo theo consumero shallo beo adjustedoinoenergyobillsoofoAprilooroMayoofoeveryoyearooroino theofinalobilloifopermanentodisconnectionoisosoughtobyotheo consumeroduringotheoyear."oo o

14.oSectiono47oofotheoAct,oasoreferredotooabove,oempowerso theo licenseeo too asko anyo persono whoo requireso supplyo ofo electricityo too giveo himo reasonableo security,o aso mayo beo determinedobyotheoRegulations.oTheosecurityoisoonoaccounto ofotheopayment,owhichomayobecomeodueofromotheoconsumero onoaccountoofosupplyoofoelectricityoorowhereoanyoelectricolineo oroelectricaloplantooroelectricalometeroisotoobeoprovidedoforo supplyingoelectricityotoosuchoperson.oInocaseoofofailureoofo thato persono too giveo security,o theo licenseeo mayo refuseo too supplyoelectricityooroprovideoanyootherofacility.oInocaseotheo securityo soo giveno byo anyo persono becomeso invalido oro insufficient,otheolicenseeomay,obyonotice,orequireothatopersono toogiveoreasonableosecurityoforotheopaymentoofotheomoneyo dueofromohim.oOnofailureotoogiveosecurity,otheolicenseeocano discontinueo theo supplyo ofo electricityo foro theo periodo theo defaulto continues.o Sub-sectiono (4)o thereofo mandateso theo licenseeo too payo interesto ono sucho securityo ato theo rateo equivalentotootheobankorateooromore,oasomayobeospecifiedobyo theoStateoCommissionoinothisoregard.oRefundoofosecurityoiso permissibleo ono requesto ofo theo persono concerned.o Theo licenseeo cannoto asko securityo fromo ao persono ino caseo thato personoisopreparedotootakeosupplyothroughoaopre-paidometer.oo o

15.o Sectionso 181(2)o (v),o (w)o ofo theo Acto empowerso theo Commissiono too frameo Regulationso witho referenceo too theo provisionsoofoSectiono47oofotheoAct.oInoexerciseothereof,otheo impugnedoRegulationsowereoframedowayobackoinotheoyearo

2005,owhichoareosoughtotoobeochallengedonowoafteromoreo thano ao decade,o thougho thereo mayo haveo beeno deposito ofo securityo ono releaseo ofo newo connectionso oro additionalo demandoofosecurityoonoaccountoofoincreasedoloadooropowero tariffoandotheoamountomayohaveobeenopaidoatothatotime.oo o

16.oBeforeotheoenactmentoofotheoAct,otheoelectricityosupplyo wasobeingoregulatedobyotheoElectricityo(Supply)oAct,o1948.o Sectiono49othereofoenabledotheoElectricityoBoardotooframeo Regulations.oTheoRegulationsowereoframedoatothatotimeoforo demando ofo securityo deposit.o Theo sameo wereo undero considerationobeforeoHon'bleotheoSupremeoCourtoinoFerroo Alloyso Corpn.o Ltd.'so caseo (supra).o Hon'bleo theo Supremeo Courtoopinedoonotheonatureoofoconsumptionosecurityodeposito ando theo objecto foro demando thereof.o Ito waso opinedo thato securityodepositoisoinofactoadjustableoadvanceopaymentoofo consumptionocharges.oItoisorevisableofromotimeotootimeoono theo basiso ofo averageo consumptiono charges.o Theo normalo periodo ofo consumption,o timeo foro raisingo theo bills,o timeo grantedo foro payment,o noticeo foro disconnectiono etc.o wereo takenocareoofoandoitowasoopinedothatoconsumptionocycleoforo aoperiodoofothreeomonthsoisoreasonableoforodemandingotheo security.oTheoconsumeroisosuppliedoenergyoonocreditoasotheo billingoisoperiodic.oForogeneration,opurchaseoandosupplyoofo energy,otheoBoardoneedsofunds,owhichoareoinotheoformoofo capitalooroloansotakenofromovariousofinancialoinstitutions.o Workingo capitalo iso requiredo foropurchasingoinputs.o Ifotheo powerogenerationoisothroughothermaloplantooroifoitoisotoobeo purchasedo fromo centralo projects,o ino mosto ofo theo cases,o advanceo paymento iso made.o Theseo transactionso doo noto materialiseoonlyobyofurnishingobankoguaranteeooroletteroofo credit.oTheorelevantoparasothereofoareoextractedobelow:oo o

"100.o Theo nexto questiono willo be:o whato iso theo objecto ino demandingosecurity?oo o

101.oTheodepositothoughocalledosecurityodepositoisoreallyoano adjustableoadvanceopaymentoofoconsumptionocharges.oTheo paymento iso ino termso ofo theo agreemento interpretingo theo conditionsoofosupply.oThisosecurityodepositoisorevisableofromo timeotootimeoonotheobasisoofoaverageoconsumptionochargeso dependingouponotheoactualoconsumptionooveroaoperiod.oThiso iso theo positiono undero theo termso ofo supplyo ofo energyo witho referenceotooallotheoBoards.oo o

102.o Aso ao mattero ofo fact,o electricityo iso suppliedo ino anticipationoofopayment.oInoalmostoeveryocaseoitotakesonearlyo 2½oomonthsoforotheorecoveryoofotheoamountobeforeoactionoforo disconnectionocouldobeotaken.oWeowillogiveooneoillustrationo asoisoinotheocaseoofoRajasthan.oTheofollowingoisotheobillingo cycle:oo

(a)oo Consumptionoperiod.oo o o 30odaysoo

(b)oo Periodoconsumedoafterotakingotheometeroreadingsotoo issueobills.oo o o o o o 10odaysoo

(co)oo Periodoallowedoforopayment.oo o 17odaysoo

(d)oo Noticeoforodisconnectingosupplyoifoconsumerofailsotoo depositoenergyobilloinotime.oo o o 7odaysoo

(e)o Periodo takeno ino actualo disconnectiono aftero expiryo ofo notice.oo o o o o o 10odaysoo Total:oo o o o 74odaysoo o

103.oInopractice,osomeotimeoisoalsootakenobetweenotheoperiodo allowedoforopaymentoandotheonoticeoofodisconnection.oAtotheo sameotime,othereoisonooobligationothatotheoconsumeromusto useoonlyoaoparticularoquantumoofoelectricity.oHeocouldoeveno consumeomoreothanotheoaverageoconsumption.oTheoBoardo aftero 2-1/2o monthso recoverso amounto foro theo electricityo

suppliedobyoit.oItocouldochargeolateosurchargeoinocaseoofohigho tensionotariffoafterotheoexpiryoofotheosaidoperiod.oo o

104.o Thus,o ito willo beo clearo thato theo trueo natureo ofo theo transactiono ino theseo caseso iso oneo ofo advanceo paymento ofo chargeso foro consumptiono ofo electricityo estimatedo foro ao periodoofoapproximatelyothreeomonths.oSuchoanoadvanceoiso liableotoobeomadeogoodoandokeptoatotheostipulatedolevelofromo montho too month.o Ito iso openo too theo consumero too permito adjustmentoofotheoadvanceoinotheofirstoinstance.oThereafter,o heocouldomakeogoodotheoshortfalloinoconsumptionochargeso ando theo securityo deposito beforeo actualo disconnection.o Actuallyo speaking,o ito iso onlyo aftero threeo monthso theo disconnectiono takeso place.o Hence,o ito iso likeo ao runningo currentoaccount.oo o

105.oTheocycleoofobillingobyotheoBoardodemonstratesothatoino theoveryonatureoofothings,otheoconsumeroisosuppliedoenergyo onocredit.oTheocompulsoryodepositoinotheocontextoofobillingo cycleoisohardlyoadequateotoosecureopaymentsotootheoBoardobyo theo timeo theo formalo billo byo theo Boardo iso raisedo ono theo consumer.oInooneosense,otheoconsumptionosecurityodeposito representsoonlyoaopartoofotheomoneyowhichoisopayableotootheo Boardoonotheobillobeingoraisedoagainstotheoconsumer.oThus,o theo Boardo secureso itselfo byo resortingo too sucho deposito too coveropartoofotheoliability.oo o

106.oForosupplyoofoelectricityotheoBoardoneedsofinanceoforo production,osupplyoandoother-chargesonecessaryoforosupplyo ofoelectricity.oForothisopurpose,oitotakesoloansofromovariouso financialoinstitutions.oThisoisobestoillustratedoifooneolooksoato theotransactionsoofoPunjaboElectricityoBoardowhereoelectrico energyoisogeneratedothroughohydrooasowelloasothermaloplantso foro ultimateo saleo too theo consumers.o Ofo theo totalo powero

generatedoabouto50operocentoisothroughohydrooplants.oTheo remainingo energyo iso generatedo througho thermalo powero plantsowhichoareooperatedoonocoal/ooil.oDueotoolimitedohydroo resourceso withino theo Stateo ofo Punjabo theo dependencyo ono powero ono thermalo plantso iso ono theo increase.o Theo presento requirementoforoworkingoofothermaloplantsoisomoreothano52o lakhotonnesoofocoaloperoannum.oInoaddition,o60othousando kiloo litreo ofo furnaceo oilo iso required.o Theo Coalo Companies/Coalo Indiao Limitedo togethero witho majoro suppliersoofopoweroplantolikeoM/s.oBHELodemandocostoofo coal/ospares/projectsoinoadvanceoforotheosupplyoofomaterial.o TheoBoardoisoalsoorequiredotoopurchaseopowerofromoCentralo projectsoN.T.P.C.,oN.H.P.C.oinoorderotoomeetotheodemandoforo powerobyotheoconsumers.oForopurchaseoofosuchopoweroagaino advanceopaymentoareomadeobyotheoBoard.oOnosuchoadvanceso theoBoardoisonotopaidoanyointerest.oTheoeffectois,otheoBoardoiso obligedotoobearotheoliabilityoofohundredsoofocroresooforupeeso peroannum.oItohasonoooptionobutotoopayotheochargesoando depositsoinoorderotookeepotheopoweroavailableoatoaolevelotoo meetowithotheodemandoofotheoconsumers.oItoisotheocaseoofotheo Boardo thato ito haso openedo letterso ofo credito byo makingo advanceo depositso ino favouro ofo Nationalo Thermalo Powero Corporationoandotheosuppliers.oCoaloIndiaoLimitedohasoalsoo askedotheoBoardotooopenorevolvingolettersoofocreditoinofavouro ofoCoalocompanies/CoaloIndiaoLimited.oDespatchoofocoaloiso onlyoagainstotheoletteroofocredit.oo o

107.oFromotheoabove,oitoisoclearothatowhileotheoElectricityo Boardoisorequiredotoomakeocolossaloadvancesotoogenerateo electricityoandosupplyotooconsumers,otheoconsumersouseoando consumeoelectricityoonocreditorangingofromo2otoo3omonthso dependingouponotheocategoryoofoconsumers.oToooff-setoparto ofotheoamountotheoconsumeroowesotootheoBoardocontinuallyo too ensureo timelyo paymento ofo billso byo theo Boardo too itso

suppliers,otheoadvanceoconsumptionodepositoisorequiredotoo beokeptowithotheoBoardobeforeocommencingosupplyotootheo consumer.o Theo clauseso ino theo contracto ino relationo too conditionsoofosupplyoofoelectricoenergyoenableotheoBoardotoo adjustotheobilloagainstosuchodeposits.oTherefore,othisoisonotoao caseo ofo mereo deposito ofo moneyo aso ino commercialo transaction......oo [Emphasisosupplied]oo xxoxxoxxoo

109.oInotheseocircumstances,oweoconcludeothatotheoobjectoofo securityodepositoisotooensureoproperopaymentoofobillsoo xxoxxoxxoo

17.oFollowingoparaofromotheojudgmentoofoK.oC.oWorksov.o Secretary,o A.P.S.E.B.,o Vidyuto Soudha,o AIRo 1979o APo 291o wasoreferredoto:oo "Asoaomatteroofofactoitomayobeothatotheowritoappellanto ando theo writo petitionero beforeo uso areo prompto ino payingotheiroelectricalodues,obutotheoBoardodealsowitho lakhsoandolakhsoofoconsumersoandoitoshouldohaveoao uniformopolicyoinodemandingosecurity.oItocannotomakeo aodistinctionoorodiscriminationofromooneoconsumerotoo another.oThatoisowhyoaouniformopolicyohasobeenolaido downobyoincorporatingoitoinotheoconditionsoaforesaid.o Foro theseo reasonso weo areo satisfiedo thato theo requiremento ofo securityo foro threeo months'o averageo consumptiono chargeso byo wayo ofo casho deposito iso reasonable."oo

18.oTheoaforesaidoparagraphosuggestsothatoanyolicenseeoiso requiredo too takeo ano over-allo viewo ofo differento typeso ofo consumerso ando frameo ao uniformo policyo foro demando ofo security.oThereocannotobeodifferentoparaometersoforodifferento consumers.o Securityo foro averageo consumptiono ofo threeo monthsoforocashodepositowasofoundotoobeoreasonable.oo o

19.o Ino Mandio Gobindgarho Inductiono Furnaceo Association'socaseo(supra),oaoDivisionoBenchoofothisocourto upheldo similaro Regulationso framedo byo Punjabo Stateo Electricityo Regulatoryo Commissiono witho referenceo too demandoofosecurity.oInoM/soAniloSpinners'ocaseo(supra)oaso well,otheoRegulationsoinoquestionowereoupheld,othoughotheo issueoregardingotheosecurityobeingoinocashooroinotheoformoofo bankoguaranteeowasonotoraised,owhichoisosoughtotoobeoraisedo ino theo presento petitions,o termingo theo sameo too beo unreasonableoandounfairotootheoconsumer.oTheoissueoraisedo thereino waso regardingo theo amounto ofo securityo demanded,o whichowasoupheld.oo o

20.oTheovalidityoofoanyoRegulationoisotoobeoexaminedoinotheo lighto ofo theo provisionso ofo theo statute,o undero whicho thoseo Regulationsohaveobeenoframed.oTheoscopeoofopoweroinotheo caseoinohandoisoSectiono47oofotheoAct.oFromoaobareoperusalo thereofounderotheoschemeoofotheoAct,oitoisoplainoandoevidento thato securityo haso too beo ino casho aso theo licenseeo haso beeno mandatedo too payo interesto equivalento too theo banko rateo oro more,oasomayobeospecifiedobyotheoStateoCommission,oonosucho securityo deposit.o Noo securityo iso too beo demandedo fromo ao consumer,owhooisopreparedotootakeosupplyothroughoaopre-paidometer.oo o

21.oAsofaroasosafeguardingotheointerestoofotheoconsumersoiso concerned,o ino ouro opinion,o thato haso beeno appropriatelyo takeno careo ofo byo theo provisionso ofo theo Acto ando theo Regulationsoframedothereunder.oFirstly,otheosameoisobyowayo ofo paymento ofo interesto ono sucho deposito ato theo rateo too beo determinedobyotheoCommission,owhichoinotheoyearo2015-16o waso statedo too beo @o 8.5%o pero annum,o whicho iso quiteo reasonableo ando apparentlyo maximumo rateo ofo interesto foro

o

22.o Further,o aso haso beeno discussedo ino theo judgmento ofo Hon'bleotheoSupremeoCourtoinoFerrooAlloysoCorpn.oLtd.'so caseo (supra)o thato theo licenseeo requireso moneyo foro theo purposeoofogeneration,opurchaseoandosupplyoofoelectricityotoo theoconsumersoinoadvanceoandotheobillsoareoraisedolateroon.o Itoisoaokindoofoworkingocapital.oAfteromajororeformsowereo carriedooutoinoelectricosupplyosystem,otheoCommissionowaso constitutedowithoanoobjectotooover-seeofixationoofotariffoforo supplyoofoelectricity.oTheoexerciseoisodoneoafteroaffordingo dueoopportunityotootheoconsumersoasowell.oForotheopurpose,o theo Commissiono framedo Haryanao Electricityo Regulatoryo Commissiono (Termsoando Conditionso foroDeterminationoofo Tariffo foro Generation,o Transmission,o Wheelingo ando Distributiono ando Retailo Supplyo undero Multio Yearo Tariffo Framework)o Regulations,o 2012.o Clauseo 22.1o thereofo providesoforocomponentsoofoworkingocapitaloandooneoofotheo componentso ofo workingo capitalo foro retailo supplyo ofo electricityoisotheoconsumerosecurity/oadvanceoconsumptiono deposit.o Meaningo thereby,o theo amounto ofo advanceo consumptiono deposito depositedo byo theo consumero witho theo licensee,o ono whicho provisiono foro paymento ofo interesto haso beeno made,o iso takeno careo ofo byo theo Commissiono foro consideringo theo requiremento ofo workingo capitalo ofo ao licensee.oTheotariffoisofinallyodeterminedokeepingoinoviewotheo costotoobeoincurredoforogeneration,opurchaseoandosupplyoofo electricity.oo o

23.o Anyo relaxationo giveno byo theo Stateo ofo Maharashtrao cannotobeoaogroundotoostrikeodownotheoRegulationsoinotheo StateoofoHaryana,owhichohaveobeenoframedoinoexerciseoofo powersoconferredounderotheoAct.oTheoargumentoisomerelyotoo beonoticedoandorejected.oo o

24.oSectiono61oofotheoActohasorelevanceoforodeterminationoofo tariffoandoforoadvanceoconsumptionodepositoseparateoSectiono 47oofotheoActoisothere.oo o

25.oItocannotobeoopinedobyoanyostretchoofoimaginationothato theoRegulationsoareobeyondotheoprovisionsoofoSectiono47oofo theoAct,owhichoitselfosuggestothatosecurityohasotoobeoinocash.o TheoRegulationsoareoinolineothereof,ohence,ocannotobeosaidotoo beobeyondotheoprovisionsoofotheoAct."o o o o Itoisothusoevidentothatotheoissueoregardingotheoentitlementoofo theoDistributionoLicenseeotooreviseotheoACDoandotoodemandotheosameo fromotheoconsumersoisowellofoundedoinotheoStatuteoandohasoalreadyobeeno consideredobyotheoDivisionoBenchojudgmentoofothisoCourtoandoitowasoheldo toobeowithinotheodomainoofotheoDistributionoLicensee.oo o o TheoRegulationo5.6oreadowithoRegulationo5.9oandoSectiono47o ofo theo Electricityo Act,o 2003o conjointlyo empowero theo Distributiono Licenseeo too reviewo theo consumptiono patterno ofo theo consumero foro adequacyo ofo theo securityo deposito ando thereaftero too reviseo theo securityo depositoforopoweroconsumption.oTheointerestoofotheoConsumeroisowello protectedobyocompensatingotheoconsumerobyoawardoofointerestoonotheo ACD.oo o o Itoisonototheocaseoofotheopetitionersothatotheocomputationoofo theodemandoisonotoinoaccordanceowithotheoRegulations.oConsequently,otheo assessmentoofotheoamountodemandedoremainsoundisputed.oResultantlyotheo presentopetitionsoareodismissedoandotheoCOCPostandsodisposedoofoasonoto

oo Theo respondent-Distributiono Licenseeo iso heldo entitledo too raiseotheodemandoofoACDoafteroreviewingotheosameoinoaccordanceowitho theo Provisionso ofo theo Electricityo Act,o 2003o reado witho Regulationo No.HERC/34/2016odatedo11.07.2016o(supra).o o Pendingomisc.oapplication,oifoany,oshalloalsoostandodisposedo ofoaccordingly.oo o Ao photocopyo ofo theo ordero beo placedo ono theo fileo ofo eacho connectedocase.o o o Februaryo14,o2023.o o o oooo(VINODoS.oBHARDWAJ)oo rajoarorao o o o o o o JUDGEo o Whetherospeaking/reasonedoo :oYes/Noo Whetheroreportableoo o :oYes/Nooo