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Karnataka High Court
West Coast Paper Mills Ltd. - Appellant
Versus
State of Karnataka - Respondent
Decided On : 08-10-89
W.P. : 10729 of 1989
Regulations - Cash Security - Electricity Supply Regulations, 1988 - 31. 02, 31. 03 - The court upheld the validity of Regulations 31. 02 and 31. 03, which required consumers to furnish cash security three times the highest consumption charges in any single month between January to October. The court found that the regulations were not retrospective and did not violate Article 14 of the Constitution. The court also clarified that the dismissal of the writ petitions would not prevent the petitioners from furnishing cash security in five monthly equal installments as per the concession made at the time of consideration of the interim order.
Fact of the Case:
The petitioners challenged the validity of Regulations 31. 02 and 31. 03 of the Electricity Supply Regulations, 1988, which required consumers to furnish cash security three times the highest consumption charges in any single month between January to October. The petitioners argued that the regulations were arbitrary, unreasonable, and violative of Article 14 of the Constitution of India. They contended that the demand for cash security was in addition to a hike in tariffs and had no rational basis.
Finding of the Court:
The court found that the regulations were valid and not retrospective. It held that the Board had the statutory power to demand security deposit from consumers and that the regulations had a rational nexus with the object and purpose of the Electricity Supply Act. The court also clarified that the dismissal of the writ petitions would not prevent the petitioners from furnishing cash security in five monthly equal installments as per the concession made at the time of consideration of the interim order.
Issues: 1. Whether Regulations 31. 02 and 31. 03 were illegal and void. 2. Whether the regulations violated Article 14 of the Constitution. 3. Whether the failure to place the regulations on the floor of the state Legislature made them inoperative and ineffective. 4. Whether the Board had given retrospective effect to the regulations by demanding cash security based on the highest unit consumption in the preceding year.
Ratio Decidendi: The court held that the regulations were valid and not retrospective. It found that the Board had the statutory power to demand security deposit from consumers and that the regulations had a rational nexus with the object and purpose of the Electricity Supply Act. The court also clarified that the dismissal of the writ petitions would not prevent the petitioners from furnishing cash security in five monthly equal installments as per the concession made at the time of consideration of the interim order.
Final Decision: The writ petitions were dismissed, and the court upheld the validity of Regulations 31. 02 and 31. 03 of the Electricity Supply Regulations, 1988. The court also clarified that the dismissal of the writ petitions would not prevent the petitioners from furnishing cash security in five monthly equal installments as per the concession made at the time of consideration of the interim order.
( 1 ) PETITIONERS in these series have challenged the validity of Regulations framed by the respondent-Board providing for furnishing of cash security three times' the highest bill amount in a single month between January to October during a calendar year as ultra vires including the demands.
( 2 ) PETITIONERS mainly depend upon power supplied by respondent to run their industry in the State of Karnataka, some are high-tension consumers, some lowtension consumers and a few others for commercial purposes. They have made certain initial deposits at the time of securing power connection as per Regulations then in force. Under Regulation 55 of electricity Supply Regulations, 1948 as amended and adopted by the respondent- board could require a consumer to deposit security amount equivelant to two months average bill or two months minimum charges whichever was higher. This was later on amended enhancing it to three months. Regulation 31. 03 prior to its amendment in March 1989, provided for furnishing cash security up to Rs. 1,00,000/- and exceeding Rs. 1,00,000/- 50 per cent to a limit of Rs. 10,00,000/- dy cash and balance by Bank Guarantee. The enhancement to three months security was the subject matter in Karnataka electricity Board v Gadag Mining company (I. L. R. 1986 Kar. 503 ).
( 3 ) THE old Regulations have been replaced by the Karnataka Electricity supply Regulations, 1988. Tariffs have undergone revision from time to time. Regulations 31. 01 to 31. 03 of the amended Regulations which is relevant for these cases read thus : - "31. 01. Initial Security Deposit (ISD ).- All prospective consumers shall pay, unless exempted, security towards power consumption charges to cover three months' power supply bills, worked out on the basis of the estimated consumption as per the table given below or the three months. Line minimum charges, whichever is higher. The estimated power supply charges shall include fixed charges, if any, for LT installations and Demand Charqes on 100 per cent contract demand for HT installations. Type of installation. Estimated consumption per month lt installations: (a) non-commercial lighting 10 units for every 250 watts or part-thereof of sanctioned load. (b) non-commercial Combined lighting, heating and Power. 100 units per KW. or part thereof of sanctioned load. (c) commercial Lighting 20 units for every 250 Watts or part thereof of sanctioned load. (d) commercial heating and/or Motive power. 135 units for every KW. or part thereof of sanction load. (e) irrigation Pump Sets yearly minimum charges as per tariff in force from time to time. (f) public Lighting as per prevailing tariff. (g) others 135 units per KW. or part thereof of sanctioned load per shift. HT INSTALLATIONS : (h) All HT Insta- 200 units per KVA. Nations of Contract Demand. Note.- xxxxx xxxxx xxxxx 31. 02. Additional Security Deposit (ASD ).-After the installation is serviced, if the deposit held falls short of three times the highest bill amount during any single month during January to october of the calendar year, the difference shall become payable by the consumer as additional security deposit, within 30 days from the date of notice. Note.- (i) The bill amount for the above purpose shall exclude taxes, arrears audit short claims, interest, back billing charges, penal charges for excess consumption/demand. (ii) If any bill amount is for a period of more than one month, the bill will be calculated for a single month on prorata basis. OLD REGULATIONS amended REGULATIONS 30. 03- Payment of Initial Security Deposit and Additional Security Deposit. 31. 03- Payment of Initial Security Deposit and Additional Security Deposit. The Security Deposit (ISD and ASD) shall be payable as indicated hereunder : the Security Deposit (ISD and ASD) shall be payable as indicated hereunder : a) Upto Rs. 1,00,000/-Cash only. The entire amount of initial Security Deposit and additional Security Deposit shall be payable in the form o
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