This Writ Petition is filed seeking a writ of mandamus declaring the action of the respondents in reviewing the petitioner’s consumption deposit of Rs.69,45,700/-towards additional consumption deposit and also declaring the levy and collection of surcharge @ 18% p.a. and penal interest @ 25% on the additional consumption deposit, as illegal and contrary to Clauses 5 and 6 of the A.P.Regulatory Commission (Security Deposit) Regulation,2004 (for brevity ‘Regulation’) and for consequential reliefs.

2. With the consent of the learned counsel appearing for the petitioner and the learned standing counsel for the respondents-company, Writ Petition is taken up for final hearing. Arguments of both sides are heard.

3. Petitioner-company established an industrial unit in Sy.Nos.62 and 63 at Reddaylapalli village, Balanagar mandal, Mahaboobnagar and is engaged in the manufacture of mild steel ingots and for the said purpose obtained a H.T.service connection from the 1st respondent. Initially, 1st respondent released power supply to the petitioner on 16.02.2008. Respondents issued a bill for the month of March, 2008 to a tune of Rs.77,71,781/-for the period from 16.02.2008 to 21.03.2008 and the said amount was paid by the petitioner. It is not disputed that the consumers have to pay security deposit equivalent to two months’ consumption charges as per Clause 6 of the Regulation issued under Section 47 of the Act. It is also not disputed that initially the respondents have collected a sum of Rs.79,25,000/-towards initial consumption deposit. While so, petitioner received a letter, dated 20.05.2008, from the 2nd respondent, wherein it is stated that the petitioner’s consumption deposit was reviewed for the year, 2008-09 by taking the consumption in respect of March, 2008 alone. The contention of the petitioner is that as per Clause 6 of the Regulation, review of the adequacy of the security deposit has to be made once in a year based on the average consumption for a period of twelve months preceding such review. Petitioner would therefore assail the demand made by the respondent pursuant to the review on the ground that the said review is premature and is contrary to the provisions of the Regulation. Petitioner has also questioned the liability to pay the sum of Rs.1,59,562/-demanded by the respondents by way of surcharge at 18% p.a. for the belated payment of the additional consumption deposit and also a sum of Rs.1,54,330/-demanded towards penal interest @ 24% p.a. It is stated that usually the petitioner made certain payments pursuant to the demand made under protest and after realizing that the very demand for additional consumption deposit is itself illegal, the present Writ Petition is filed.

4. Respondents filed a counter-affidavit admitting that the amount of Rs.77,71,781/-was paid by the petitioner towards the consumption charges for the month of March, 2000.

5. The power supply was released to the petitioner on 16.02.2008 and a sum of Rs.77,71,781/-was paid towards the consumption charges for the month of March, 2008. It is also admitted that the petitioner has paid an amount of Rs.74,25,000/-towards initial consumption deposit. Respondents seek to justify the review of the consumption deposit and the demand made for the additional consumption deposit on the ground that as per Clause 5 (3) (1) of JTCS and the Regulation, the H.T. consumers have to keep security deposit equaling to two months consumption charges, whereas the amount of Rs.74,25,000/-paid as initial deposit is less than even one month’s consumption as noted for the month of March, 2008. Respondents also seek to justify the demand made for the surcharge and penal interest on the ground that the petitioner failed to pay the instalments as agreed to.

6. Clause 6 of the Regulation reads as follows:

“Review and payment of additional security deposit for the electricity supply (1) general review:-subject to the billing periods of three months or two months as spec