Case Note & Summary
The dispute arose from the Haryana State Electricity Board's unilateral decision to enhance security deposits from consumers for electricity supply. The petitioners, consumers of electric energy, challenged this increase, arguing it was unjustified and contrary to the provisions of the Indian Electricity (Supply) Act, 1948. The Board had been collecting security deposits since 1968, initially set at Rs. 30 per KW for industrial consumers, which was raised to Rs. 100 per KW effective April 1, 1981. The petitioners contended that the Act and its rules did not authorize such a demand for security and that the unilateral increase violated contractual norms. The court analyzed the statutory powers of the Board under Section 49(1) of the Act, which allows the Board to set terms for electricity supply. It referenced previous judgments that supported the Board's authority to revise tariffs and security deposits as necessary. The court noted that while the Board's management had faced criticism, the demand for security equivalent to two months' energy bills was deemed reasonable. The court also suggested an increase in interest on security deposits to 10% per annum, which the Board accepted. Ultimately, the court dismissed the petitions, affirming the Board's right to amend conditions of supply and enhance security deposits, provided such actions were not arbitrary (Paras 171-175).
Headnote
A) Electricity Law - Security Deposit - Unilateral Enhancement - Indian Electricity (Supply) Act, 1948, Sections 39(1), 49(1) - The Board has the authority to unilaterally enhance security deposits for electricity supply as per the terms of the contract and statutory provisions. The court held that the Board's demand for increased security was not arbitrary or unreasonable, provided it followed due process (Paras 171-175).
Issue of Consideration
Whether the Haryana State Electricity Board's unilateral enhancement of security deposits for electricity supply was justified under the Indian Electricity (Supply) Act, 1948.
Final Decision
The Supreme Court dismissed the petitions, affirming the Board's authority to enhance security deposits under the Indian Electricity (Supply) Act, 1948, provided such actions were not arbitrary or unreasonable.
Law Points
- Electricity supply
- security deposit
- unilateral amendment
- statutory authority
- consumer rights
