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2015 Supreme(Jhk) 397
IN THE HIGH COURT OF JHARKHAND AT RANCHI
SHREE CHANDRASHEKHAR, J.
Globe Steel and Alloys Private Limited – Petitioner
Versus
Jharkhand Urja Vikas Nigam Limited & Others – Respondents
W.P. (C) No. 596 of 2015
Decided On : 22.4.2015
For the Petitioners:Mr. Dhananjay Kumar Pathak, Mrs. Sweta Rani, Advocates.
For the Respondents:Mr. Ajit Kumar, Mr. Rahul Kumar, Advocates.
The central legal point established in the judgment is the requirement for a consumer to furnish 'reasonable security' as per Section 47 of the Electricity Act, 2003, and the interpretation of the mechanism for calculating security deposit under the Electricity Supply Code Regulations, 2005.
Headnote:
Security Deposit - Electricity Act - Section 47, Electricity Supply Code Regulations, 2005 - Summary: The court discussed the provisions of Section 47 of the Electricity Act, 2003 and the Electricity Supply Code Regulations, 2005, particularly Clause 10.2 and 10.4, and their interpretation in light of the demand for additional security deposit. The court highlighted the requirement for a consumer to furnish 'reasonable security' as per Section 47 and the mechanism for calculating security deposit under Clause 10.2 and 10.4 of the Regulations. The court also referenced the decision in Ferro Alloys Corporation Ltd. vs. A.P. State electricity Board & Another, 1993 Supp. (4) 136, which upheld the competence of electricity boards to prescribe conditions for security deposit by consumers.
Fact of the Case:
The petitioner sought quashing of a demand for additional security deposit and a direction to permit furnishing bank guarantee. The petitioner objected to the demand raised by the respondent-Nigam and filed an application for incorporating a prayer related to the provisions of Section 47 of the Electricity Act, 2003.
Finding of the Court:
The court found the demand raised by the respondent-Nigam to be just, legal, and proper, and dismissed the writ petition. The petitioner was directed to deposit the amount in six equal installments.
Issues: The issues revolved around the demand for additional security deposit, the reasonableness of the security amount required, and the interpretation of the provisions of Section 47 of the Electricity Act, 2003 and the Electricity Supply Code Regulations, 2005.
Ratio Decidendi: The court held that the demand for additional security deposit was in line with the provisions of Section 47 of the Electricity Act, 2003 and the Electricity Supply Code Regulations, 2005. It emphasized the mechanism for calculating security deposit under Clause 10.2 and 10.4 of the Regulations and referenced the decision in Ferro Alloys Corporation Ltd. vs. A.P. State electricity Board & Another, 1993 Supp. (4) 136, which upheld the competence of electricity boards to prescribe conditions for security deposit by consumers.
Final Decision: The writ petition was dismissed, and the petitioner was directed to deposit the amount in six equal installments.
1. Seeking incorporation of a prayer in the writ petition, the present application has been filed. Initially, the writ petition was filed objecting to the demand raised in letter dated 17.01.2015 and for a direction upon the respondent-Jharkhand Urja Vikas Nigam Limited to permit the petitioner to deposit the security amount by furnishing bank guarantee.
The learned counsel for the petitioner submits that in view of the arbitrary demand raised by the respondent-Nigam, the petitioner has filed I.A. No. 1806 of 2015 for incorporating the following prayer:
“For declaration that the quantum of security provided under Clause 10.2 and 10.4 of the Supply Code Regulations, 2005 is in the teeth of the provisions of Section 47 of the Electricity Act, 2003 and the amount of security required by the respondents cannot be said to be a reasonable security.”
It is stated that the foundational facts have been pleaded by the petitioner in the writ petition and the additional prayer for which the petitioner has filed I.A. No. 1806 of 2015 is a pure question of law. If the present application is allowed, it would not cause any prejudice to the respondent-Nigam.
Considering the above facts, I.A. No. 1806 of 2015 is allowed.
Aggrieved by demand for furnishing additional security in terms of Clause 10.2 of the Electricity Supply Code Regulations, 2005 whereby, the petitioner has been directed to deposit the balance security amount of Rs. 1,48,46,804/- the petitioner has sought quashing of letter dated 17.01.2015. A further prayer directing the respondent-Nigam to permit the petitioner to furnish bank guarantee for paying the additional security has also been made in the writ petition.
2. The petitioner is a HTSS consumer which has been sanctioned a contract demand of 2600 KVA. The petitioner has Ingot Manufacturing Unit at Marar, Ramgarh. Initially, the petitioner made payment of Rs. 51,25,075/- as security deposit and it is stated that the petitioner has been making regular payment of the electricity bills raised by the respondent-Nigam. Vide letter dated 19.04.2012, a demand for additional security of Rs. 1,10,20,358/- was raised, against which the petitioner submitted a representation on 07.05.2012 however, the respondent-Nigam reiterated the demand vide letter dated 28.05.2012. The action of the respondent-Board was challenged by the petitioner in Case No. 04 of 2012 which was dismissed vide order dated 10.09.2012. In the meantime, the respondent-Nigam permitted the HTSS consumers to furnish bank guarantee for the balance amount of security deposit however, the provision for furnishing bank guarantee was also subsequently withdrawn and therefore, batch of writ petitions were filed vide W.P. (C) No. 5802 of 2012 and batch cases. The Writ Court permitted the writ petitioners to deposit the additional security amount in six installments. The order passed in W.P. (C) No. 5802 of 2012 and batch cases was challenged in L.P.A. No. 24 of 2013 along with analogous cases which were also dismissed on 30.01.2013. The respondent-Nigam has now issued letter dated 17.01.2015 directing the petitioner to furnish additional security deposit as indicated above.
3. Heard the learned counsel for the parties and perused the documents on record.
4. The learned counsel for the petitioner submits that Section 47 of the Electricity Act, 2003 provides that a distribution licensee may require any person, who requires supply of electricity to give “reasonable security”. Stressing on the expression “reasonable security”, the learned counsel for the petitioner submits that the provision under Clause 10.2 of the Electricity Supply Code Regulations, 2005 whereunder, a consumer is required to deposit security amount equal to 3 months' average billing amount is unreasonable and arbitrary. It is further submitted that Clause 10.1 of the 2005 Regulations provides for prepayment meter to be provided to the consumer however, the respondent-Nigam has failed to provide a prepaym
