The court emphasized the importance of adhering to the principles of natural justice in issuing demand notices for security deposits.

Y. BHASKAR RAO, J.

( 1 ) THIS writ petition is filed by the petitioner questioning the demand notice dt. 7-9-1988 issued by the respondents demanding Rs. 10,000/- as security deposit.

( 2 ) THE facts of the case are that the petitioner is a holder of telephone no. GVA - 611. She was paying the bills regularly. She has not received any bill exceeding Rs. 1,500/ -. Originally, her husband was the telephone holder and after that she is holding the telephone. She is a widow as her husband died in the year 1986 and after the death of her husband, the telephone is not used very much at all. While so, the impugned notice is issued without any notice to the petitioner. The Counsel for the respondents contended that under Rule 445 of the Rules for Indian Telephones, the respondents have got power to collect security charges whenever such an occasion arises. Accordingly, as the petitioner was making number of calls, demand notice demanding Rs. l0,000/-assecurity deposit was issued. There is nothing wrong in this and the respondents are authorised by the Rules and the same is within their powers and jurisdiction. There are no merits in the writ petition and it is liable to be dismissed.

( 3 ) IN view of the above contentions, the only point to be considered is whether the demand notice is valid or not. The petitioner is the holder of the telephone and the demand notice is issued demanding Rs. 10,000/- as security deposit. Rule 445 of the Rules for Indian Telephones reads as follows:"rule 445. Security for charges: The Telegraph Authority may at any time before or during the period for which a telephone or other like service is provided require a subscriber to deposit as security such amount as it may consider necessary and if the subscriber fails to comply with such demand within such period as it may specify, the Telegraph authority may withdraw the service and remove any Telephone or other apparatus belonging to the Telegraph Authority. Where the security deposit is paid, any amount due from the subscribers by way of fee or other charges under these rules may be adjusted against the amount so deposited,"

( 4 ) AS per the Rule 445, there is power in the respondents to issue notice for collection of security deposit. But, in this case, before issuing the demand notice no opportunity was given to the petitioner to show cause why additional security cannot be demanded and straightaway she was asked to deposit the security deposit. Similar question arose before the Karnataka High Court in a judgment reported in K. Chankappa and others vs. The Union of India and others wherein the Karnataka High Court has held in para 3 as follows:"3. It is no doubt true that Rule 445 has the force of law. But the question is whether the Telegraph Authority is justified in enhancing the security deposit and that too after a lapse of 5 years and increase the burden on the consumer or the subscriber without affording a reasonable opportunity of hearing to the subscribers so that possibilities of arbitrariness in increasing the security deposit are eliminated. If the telegraph Authority enjoys an unfettered power of demanding and collecting increased security deposits from time to time from the subscribers, it is reasonably probable that on account of exercise of unfettered power the subscribers would be put to undue and unjustified burden. Whether enhancement of the security deposit from time to time is reasonable and fair is a point to be considered. In order to decide whether it is reasonable and fair, it is necessary bearing in mind the principles of natural justice that the subscriber should be heard or at least have a say in the matter. Otherwise, on the one hand, the right of the subscriber to be heard is jeopardised and on the other arbitrary and unbridled power would be in the hands of the Telegraph Authority. The circumstances and reasons in support of the demand are not clearly forthcoming from the impugned orders and notice either in regard to the al

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