CHANDURKAR, Ag. C.J.:- This appeal filed by the Municipal Corporation of Greater Bombay and the General Manager of the Bombay Electric Supply and Transport Undertaking is directed against the judgment and decree passed by the learned single Judge in Suit No. 630 of 1967 (reported in AIR 1980 Bom 154) by which the learned single Judge held that the Municipal Corporation and the B. E. S. T. Undertaking were not entitled to demand from the plaintiffs-respondents any security deposit of the amount equal to the value of three months' bills of the electric energy consumed by the plaintiffs as and by way of security deposit for the payment of the electric bills. By the decree a permanent injunction was also granted restraining the appellants-defendants from taking any action under Section 24 of tile Indian Electricity Act of 1910 (hereinafter referred to as "the Act").

2. Since the power of the Municipal Corporation of Greater Bombay and the B. E. S.T. Undertaking to demand a security deposit like the one demanded from the plaintiffs-respondents was questioned by several other consumers of electricity, to whom electricity was being supplied by the B. E. S.T. Undertaking, we have also allowed the petitioners in those petitions to intervene, in this appeal, the Tata Power Company Ltd, had also taken out a Notice of Motion asking for permission to intervene and earlier they were also granted permission to intervene in appeal. Mr. R.J. Joshi appearing on behalf of the Tata Power Co. Ltd. was also heard and he has adopted the arguments advanced by the learned Counsel for the appellants in this appeal.

3. The facts in this case are not in dispute. The B. E. S.T. Undertaking, which is an Undertaking of the Bombay Municipal Corporation, is admittedly a licensee under Section 3 of the Act. On 21st July 1959, the Government of Bombay by a resolution sanctioned the conditions and miscellaneous charges for the supply of electrical energy by the B.E. S.T. Undertaking. There have been some amendments to the original conditions of supply, which were sanctioned by the Government of Maharashtra on 25th April 1961, but nothing turns on those amendments. Clause 12 of the conditions of supply deals with 'Deposits'. That clause provides as follows:-

"12. The consumer may be required by the Undertaking to enter into a contract in the form of Annexure 'B' hereto appended and to make a cash deposit or to give security in Government Promissory Notes or other approved securities for the payment of his monthly bills for energy supplied and for the value of the meter and other apparatus installed on his premises. In the event of no contract having been entered into between the Undertaking and the consumer, the latter, after the supply of energy has once commenced, shall be bound by the terms and conditions of supply herein set forth."

4. There was an agreement on 9th July 1964 between the B. E. S.T. Undertaking and the plaintiffs for the supply of electrical energy. The general conditions and technical regulations, which form a part of the agreement, contain Clause 13. The validity of this clause being in dispute, we reproduce the said clause.

"13. Deposits:- Consumer shall deposit whenever required by the Corporation in cash or Government securities such sum as shall represent the value of three months' previous consumption as security for the due payment for energy supplied under this agreement and of any sum which may become payable to the Corporation under this agreement.

The said Corporation will allow interest at the rate equal to post Office Savings Bank in force from time to time on the cash deposits of Rs. 50/- and more and will credit the interest received on Government Securities after deducting the collection charges of 2% of the amount collected."

5. Admittedly when the supply was commenced in accordance with the agreement between the plaintiffs and the B. E. S.T. Undertaking, no Security, as contemplated by Clause 13, was furnished. On 15th Dece