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PETITIONER: FERRO ALLOYS CORPN.  LTD.  AND ORS.  ETC.  ETC.

       Vs.

RESPONDENT: A.P. STATE ELECTRICITY BOARD AND ORS ETC.  ETC.

DATE OF JUDGMENT15/04/1993

BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) REDDY, K. JAYACHANDRA (J)

CITATION:  1993 AIR 2005            1993 SCR  (3) 199  1993 SCC  Supl.  (4) 136 JT 1993 (3)    82  1993 SCALE  (2)593

ACT: Electricity Supply Act, 1948: Sections 2(b) (v), 49, 59, 79, Schedule VI-Clause 14. Section  49-Whether unconstitutional for want of  guidelines for terms and conditions of supply of electricity. Indian Electricity Act, 1910: Indian Electricity  Rules, 1956: Rule 27. Interest Act, 1978: Section 4(2). Electricity Boards-General terms and conditions of supply of electricity-Condition    of   Consumption    Deposit-Whether arbitrary-Whether  Board  has power to make  Regulations  to demand  security  deposit-Nature and object  of  consumption deposit-What  is  Electricity Board-Whether  liable  to  pay interest on Consumer Deposit-Rate of Interest on Consumption Deposit-Whether  should be same as paid by  Scheduled  Bank- Clause  in  General Terms and Conditions providing  for  non payment   of   interest   on   Consumption   Deposit-Whether unconstitutional and arbitray-Demand for additional Consumer Deposit-Reasonableness  of-Electricity Board-Whether  should give reasons for additional demand. Indian Trusts Act, 1882: Section 90. Relationship between Electricity Board and Consumers-Whether of Trustee and Beneficiary. Practice and Procedure-Interlocutory order passed by a Bench of 3 Judges-Whether binding on a Bench of 2 Judges. 200 Constitution of India, 1950: Article 12. Electricity Boards are State. Words and Phrases: ’Unconscionability’-’Deposit’-’Interest’-Meaning of.

HEADNOTE: Under  the  General  Terms  and  Conditions  for  supply  of electricity notified by the Andhra Pradesh State Electricity Board, under Section 49(1) of the Electricity (Supply)  Act, 1948,   the  consumers  were  obliged  to  keep   with   the Electricity  Board  an amount equivalent  to  three  month’s demand  and energy charges as consumption deposit  on  which Interest  at  the rate of 3% per annum was  payable  by  the Board.   In  the event of delay in  payment  of  consumption deposit within the stipulated period not only surcharge  was

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payable  by  consumer but also the supply was liable  to  be disconnected.   Various petitions were riled  before  Andhra Pradesh  High  Court challenging the validity of  terms  and conditions contending that the consumption deposit should In no  event exceed two months average consumption charges  and that  In  view  of the judgment of  Supreme  Court  In  M/s. Jagdamba Paper Industries v. H.S.E.B. Board, [1983] 4 S.C.C. 508,  the Board was liable to pay Interest at the game  rate as  Is paid by a Scheduled Bank on fixed deposit.  The  High Court dismissed the petitions. In appeals to this Court, It was contended on behalf of  the consumers  that: (1) Section 49 of the Electricity  (Supply) Act  is ,unconstitutional since there are no guidelines  for framing  the terms and conditions of supply of  electricity; (2)  in  view of the fact that in case  of  power  intensive consumers the cost of Electricity is very high the condition requiring  3  months’  security  deposit  is  arbitrary  and illegal  for power intensive consumers; and (3) there is  no power  under the Electricity Supply Act to enable the  Board to raise revenue or to cover its capital cost etc. except by way  of adjusting tariffs as seen from under Section  59  of the Supply Act, 1948.  Therefore, consumption deposit cannot be used for the purpose of revenue or raising revenue. On  behalf of the Electricity Board it was  contended  that: (1)  In  view  of the fact that the  object  of  consumption deposit (which is In the nature of advance payment and not a security deposit) Is to ensure prompt payment of electricity supply, It cannot be contended that 3 201 month’s  consumption deposit Is arbitrary; (2)the fact  that some   of  the  consumers  pay  large  amounts  by  way   of electricity  charges  has nothing to do with the  nature  of deposit.  Merely because a unit Is power based it cannot  be treated  separately  for  the terms of  supply  relating  to consumer deposit must be uniform. In  the  case  of Rajasthan Electricity  Board  the  General Conditions expressly provided that no Interest will be  paid by  the Electricity Board on security deposit.  Futher,  the Electricity Board issued notices requiring the consumers  to deposit the enhanced amount of cash security as well as bank guarantee  on the basis of maximum power  consumption.   The consumers  flied  petitions  In  the  Rajasthan  High  Court contending that provision for no Interest was bad In law and that the enhanced security deposit must he calculated not on three months maximum consumption but on the basis of minimum power consumption.  A Single Judge of the High Court allowed the petitions.  On appeal, the Division Bench held that  the clause   relating   to  nonpayment  of  interest   was   not reasonable.   Relying  on Section 4 of the Interest  Act  as well  as on the Model Form of draft conditions contained  In Schedule  VI of the 1948 Act, the Division Bench  held  that interest was payable on the security deposit. In appeals to this Court, it was contended on behalf of  the Rajasthan  State  Electricity Board that: (1)  there  is  no statutory  provision which casts an obligation on the  Board to  pay Interest on the security deposit; nor even  Interest is payable under common law or in equity; (2) the High Court erred In relying on the Model Form conditions as well as  on the Interest Act; (3) the security deposit for three  months is  neither  unreasonable  nor arbitrary; (4)  even  if  the contract   between  the  Board  and  consumer  is   adhesion contract,  it  is  not  necessarily  unconsciable;  (5)   in Jagdamba  Paper  Industries case the right of  Interest  was based  on  the concession of parties and the  Court  had  no occasion to decide the rate or interest.

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On  behalf  of the consumers it was contended  that:  (1)the scheme  of the Electricity Act and Supply Act together  with the  Rules  suggest the payment of interest; (2)  since  the money  is  deposited  but the consumers with  the  Board  to secure  the Board against default In payment of  bills,  the Board Is in the position of a trustee in respect of 202 this money; (3) even under English Law, interest was payable on security for electricity. For  the  intervenor on behalf of the Electricity  Board  of Orissa,  it  was submitted that Regulation 7 of  the  Orissa State   Electricity  Board  General  Conditions  of   Supply Regulations 1981 providing that no interest would be payable on  security  deposit  is just and  reasonable  and  is  not arbitrary or violative of Article 14 of the Constitution. The Uttar Pradesh State Electricity Board was also paving 3% interest  on consumption deposit.  The  consumers  preferred writ petitions before the Allahabad High Court claiming  12% interest ,but the same were dismissed. In  appeals to this Court it was contended on behalf of  the consumers  that in a number of matters this Court  has  also ordered interest at the rate of 12% on security deposit  and the  same  principle  should  apply to  this  case;  (2)  if interest is not paid, security deposit cannot be demanded as this  will  amount to unconscionable bargain;  and  (3)  the security deposit does not contemplate appropriation. On  behalf of the Electricity Board it was  contended  that: (1)  in cases where 12 per cent interest was awarded it  was only  by way of ad interim measure.  Therefore,  orders  are not conclusive on this aspect; (2) under Article 226 of  the Constitution,  the  court is to conduct a  limited  scrutiny whether by imposing a condition the Board has not acted as a private  trader  and  thereby shed off  its  public  utility character.   If the Court comes to the conclusion  that  the Board  has not acted as a private trader and the  nature  of deposit  has  a rational relationship, the issue  will  fall outside the scope of judicial purview. The Bihar State Electricity Board was paying 5 % interest on the security deposit.  The consumers claimed interest at the rate payable on fixed deposit by a nationalised bank and the High  Court allowed the same.  The Electricity  Board  filed petition in this court contending that the High Court  erred in awarding a higher rate of interest. On  behalf  of  the  consumers it  was  contended  that  the increase  in security deposit without assigning  any  reason was had in law. 203 In  the  connected writ petition, the challenge  is  to  the validity of Sections 49 and 79 of the Supply Act. According  to the Punjab State Electricity Board, while  the Electricity  Board is required to make colossal advances  to generate  electricity and supply to consumers the  consumers also use and consume electricity on credit ranging from 2 to 3 months depending upon the category of consumers.  To  off- set  part of the amount that the consumer owes to the  Board constantly and also to ensure timely payment of advances  by the Board to its suppliers an advance consumption deposit is insisted upon before commencing supply to the consumer.   If this  is not so taken the Board will be left with  no  other option  than to increase the tariff.  Thus  advance  deposit cannot be termed as a fixed deposit as the amount cannot  be utilised   against  nonpayment  of  dues   from   consumers. Besides,  the  consumers  can  also  ask  for  the   refund. Therefore,  Sections  49(1) and 79 (j) cannot be  termed  as arbitrary.

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It  was  also  contended  on  behalf  of  the  Punjab  State Electricity  Board  that  the  amendment  to  clause  23  of abridged  conditions  of supply requiring consumers  to  pay advance consumption deposits is perfectly reasonable. For the intervenor on behalf of Calcutta Electricity  Supply Corporation, it was submitted that the deposit though called security deposit is really an adjustable advance payment  of consumption  charges.  The amount is revisable from time  to time  depending upon the average consumption charges on  the basis of actual consumption over a period.  In short, it  is in  the nature of a running account.  The  security  deposit does  not  remain  in tact like a  fixed  deposit  but  gets depleted   day  after  day  depending  on  the   extent   of consumption.   More often than not. the consumption  charges and   other   dues  exceed  the  security   deposit.    That necessitates  calling  for additional advance to make  up  a shortfall.  In the absence of any usage or contract or an,*, provision  of  law  requiring payment  of  interest  is  not payable  for  wrongful detention of money.   In  this  case, there  is no wrongful detention [of even.] Section  4(2)  of the Interest Act has no application to this deposit. 204 Disposing the petitions, this Court, HELD:1. Section 49 of the Electricity (Supply) Act, 1948  is valid  Sub-section(1)  of the said section starts  with  the words  "Subject  to  the  provisions  of  the  Act  and  all regulations,  if any, made in this behalf".  Therefore,  the Board  has to conform to the various provisions of  the  Act and the regulations.  Section 49 contains two powers; (1) to prescribe  terms and conditions of supply; and (2)  fix  the tariff.   No guidelines are required in this regard.  [278A- 248CE] Hindustan  Zinc  Ltd. v. A.P.S.E.B., 1991  (3)  S.C.C.  299; Mysore  State Electricity-Bought v. Bangalore Woolen  Cotton and  Sill  Mills Ltd. A.I.R. 1963S.C. 1128,  Jagdamba  Paper Industries  Pvt.  Ltd. v. Haryana State  Electricity  Board, 1983 (4) S.C.C. 508, referred to. Roberts  v. Hopwood, 1925 A.C. 578; Pyx Granite v.  Minister of  Housing  and Local Government, 1958 (1)  All  E.R.  625, cited. 1.1.Where  regulations are made under Section 49 read  with Section  79  (j), the validity of the regulations  could  be examined  by the court, whether they are reasonable or  not. [249-D] Southern Steel Ltd., Hyderabad v. The Andhra, Pradesh  State Electricity  Board, A.I.R. 1990 Andhra Pradesh 58, and  M/s. B.R.  Oil  Mills.   Bharatpur  v.  Assistant  Engineer   (D) R.S.E.B.. Bharatpur, A.I.R 1981 Rajasthan 108, referred to. 1.2The terms and conditions notified under Section 49 must relate to the object and purpose for which they are  issued. Certainly,  that power cannot be exercised for a  collateral purpose.  In this Section 49 is valid. [251-C] 2.The  nature of consumption deposit is to secure  prompt payment  and  is intended for  appropriation.   The  deposit though  called  security  deposit is  really  an  adjustable advance  payment of consumption charges.  The payment is  in terms  of  the  agreement  interpreting  the  conditions  of supply.This security deposit is revisable from time to  time on  the basis of average consumption charges depending  upon the actual consumption over a period.  This is the  position under the 205 terms of supply of energy with reference to all the  Boards. [278 A, 252 D-E] 2.1The cycle of Billing by the Board demonstrates that  in

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the  very nature of things, the consumer is supplied  energy on credit.  The compulsory deposit in the context of billing cycle is hardly adequate to secure payments to the Board  by the  time  the  formal hill by the Board is  raised  on  the consumer.   In one sense, the consumption  security  deposit represents only a part of the money which is payable to  the Board on the bill being raised against the consumer.   Thus, the  Board  secures itself by resorting to such  deposit  to cover part of the liability. [253 F-G] 2.2The deposit made cannot be equated to a fixed  deposit. In  the  case  of daily supply of electricity,  there  is  a consequential liability to pay for each day’s consumption of electricity.  To ensure that payment the security deposit is furnished.  Hence, it cannot he equated to a deposit at all. It is in the nature of a running current account. [262-A] 2.3The argument that the deposit does not contemplate appro- priation is not correct because in the nature of contract it is  liable  to be appropriated for the satisfaction  of  any amount  liable to be paid by the consumer to the  Board  for violation  of  an), conditions of supply in the  context  of wide  scale  theft of energy tempering with the  meters  and such other methods adopted by the consumers.  Therefore, the said consumption security deposit serves not only too secure the interest of the Board for any such violation but  should serve  as  a deterrent on the consumer  in  discharging  his obligations towards the Board. [264 F-6) Union  of  India v. A.L. Rallia Ram, [1964]  3  S.C.R.  164; Riches  v.  West minister Bank Ltd. 1947 Appeal  Cases  390, held inapplicable. 2.4While the Electricity Board is required to make  colossal advances  to generate electricity and supply  to  consumers, the consumers use and consume electricity on credit  ranging from 2 to 3 months depending upon the category of consumers. To off-set part of the amount the consumer owes to the Board continually to ensure 206 timely  payment of bills by the Board to its suppliers,  the advance consumption deposit is required to he kept with  the Board before commencing supply to the consumer.  The clauses in  the  contract  in relation to conditions  of  supply  of electric energy enable the Board to adjust the bill  against such  deposits.   Therefore,  this is not  a  case  of  mere deposit of money as in commercial transaction.  In demanding security  deposit, it is open to the court to take  note  of pilferage. [254 F-H] Ashok  Soap Factory v. Municipal Corporation of Delhi,  J.T. 1993 (1)  S.C. 128, referred to. Corpus  Juris  Secundum,  Vol.26A,p.194,Davidson  v.   U.S., C.C.A. Pa., 292 F. 750, 752, referred to. 2.5Three  month’s security deposit cannot  be  characterised either unreasonable or arbitrary. 1255-F] Jagdama   Paper   Industries  P.  Ltd.  v.   Haryana   State Electricity   Board,  [1993]  4S.C.C.508;  K.C.   Works   v. Secretary  A.P.S.E.B.,  Vidyut Soudha,  A.I.R.  1979  Andhra Pradesh 291; Municipal Corporation for Greater Bombay v. M/s D.M. Industries, A.I.R. 1984 Bombay 242; Haryana Ice Factory v.  Municipal  Corporation of Delhi, A.I.R. 1986  Delhi  78, referred to. Southern Steel Ltd., Hyderabad v. The A.P. State Electricity Board, A.I.R. 1990 Andhra Pradesh 58, approved. Indian Aluminium Company v. Karnataka Electricity Board 1992 (3)  S.C.C. 580, cited. 2.6Under the regulations framed by the Board in exercise  of powers  of Section 49 read with Section 79 (j) the  consumer

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is  only entitled and the Board has an obligation to  supply energy  to  the consumer upon such terms and  conditions  as laid   down   in  the  regulations.   If,   therefore.   the regulations prescribed a security deposit that will have  to be complied with.  In cases where regulations have not  been made  Rule  27 of the Rules made under the  Electricity  Act enables  the adoption of model form of draft  conditions  of supply. 207 Annexure  VI  in  clause 14 states  that  the  licensee  may require any consumer to deposit security for the payment  of his  monthly bills for energy supplied and for the value  of the  meter  and other apparatus installed in  his  premises. Thus, the Board has the power to make regulations to  demand security from the consumers. [251F-H, 252A-B] 2.7Under Section 59 the Board is obligated to carry on its operation as to ensure that it generates a surplus of 3  per cent or as specified by the State Government.  The Board  is obligated  to adjust its tariffs for ensuring such  surplus. The  condition  of supply requiring a  consumption  security deposit has a direct bearing on the operations of the  Board which  are to be conducted in such a manner as to  ensure  a surplus.   The language in Section 59 of the Supply  Act  is "carry  on  its  operations under this Act  and  adjust  its tariffs."  The  language  of  the said  Section  is  not  by adjusting  tariff.   Therefore, the argument that  the  only manner in which the Board can achieve a surplus is to adjust its  tariffs does not flow from the language of Section  59. So  read,  in the context of the insistence  of  a  security deposit  which has direct bearing on the operations  of  the Board is per se reasonable and constitutional. [266 E-6] Kerla State Electricity Boaed v. S.N. Govinda Prabhu & Bros. JUDGMENT: 3.There  is no liability on the Electricity Board  either under the statute or common law or equity to pay interest on security deposit. [278-B] 3.1There   is  no  statutory  provision  which  casts   an obligation on the Board to pay interest on security deposit. Model  form of draft conditions of supply containing  Clause 14  relating  to interest on security deposit) as  found  in Annexure  VI.  traceable to Rule 27  of  Indian  Electricity Rules, 1956, is applicable only to a licensee as defined  in Section  2 (4) of the Electricity Act.  Even for a  licensee it is not compulsory to adopt the model condition of supply. These  is an option available to adopt the model  conditions of  supply with such modifications as the  circumstances  of each case require. [259G-H, 260 A-C] 208 3.2Schedule VI has been framed in exercise of powers under Sections  57 and 57A.  In defining "clear profit"  paragraph (2)of  clause XVII, Item (v) makes a reference, as  interest on security deposits which is a part of expenditure properly incurred by the licensee.From this, it is impossible to hold that  this clause imposes an obligation on the  licensee  to pay  interest on security deposits, All that would when  is, if  interest,  is  paid  then it qualifies  as  an  item  of expenditure  properly incurred.  This is the  position  with regard  to  licensee.  But this cannot apply to  the  Board, which  is not a licensee.  For the same reason Item L 1  (c) of  Form  IV of the Electricity Rules relating  to  interest paid  and accrued on consumers’ security deposits is  of  no avail because that relates to the manner of keeping accounts by   the  licensee,  not  being  applicable  to   a   Board. Therefore, there is nothing to indicate under the scheme  of the  Electricity Act or Schedule VI of the Supply  Act  that

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interest must be paid on the security deposit.   Accordingly the  Division  Bench of Rajasthan High Court  has  erred  in holding that Interest Act is applicable. [260 F-H, 261-A-B] 3.3Section   4(2)  of  the  Interest  Act,  1978  has   no application to a case where on account of a contractual term or  a  statutory  provision  payment  of  interest  is   not permitted.  A careful reading of Section 4(2) would disclose that  it merely enlarges the category of cases mentioned  in Section 4(1).  Even otherwise, there is nothing to  indicate that Section 4(2) could override other statutory  provisions or  a contract between the parties.  No doubt, Section  4(2) contains  a  non-obstante  clause.  But, such  a  clause  is restricted  to  the provisions of Interest  Act  and  cannot extend to other laws or a contract between the parties. [261 F-6]               Civil  Special Appeal No. 83 of 1987,  decided               on 30th July, 1991 by a Division Bench of  the               Rajasthan High Court, overruled. 3.4The  word  ’interest’ would apply only to  cases  where there is a relationship of debtor and creditor.  A lender of money who allows the borrower to use certain funds  deprives himself  of the use of those funds.  He does so  because  he charges  interest which may be described as a kind  of  rent for  the use of the funds.  For example, a bank or a  lender lending  out  money on payment of interest.  In  this  case, there   is   no  relationship  of   debtor   and   creditor. Accordingly, the claim for 209 interest  cannot be legally founded either on common law  or equity. [262-G, 265-A] Halshury’s  Vol.  32  para  108:  (Discussing  cases   where interest  is payable under common law) para 109  (Discussing cases  where  there is equitable rights to  interest),  held inapplicable. Bengal  Nogpur Railway v. Ruttanji Ramji, A.I.R.  1939  P.C. 67, referred to. 3.5The  object of the deposit is to secure the payment  of consumption charges.  These charges may vary depending  upon the daily consumption, depending on the level of supply .The amount  due  by  way of consumption charges  would  also  be liable  to he appropriated.  Therefore, it is  incorrect  to state that the Board is a trustee.  The relationship between the  Board  and  consumer is not that of  a  trustee  and  a beneficiary but a depositor and deposits.  This is not event case of a constructive trust under Section 90 of the  Indian Trust  Act, since no advantage is gained by the  Electricity Board in derogation of the rights of the consumer. 1262 D-F] 4.The  clause  not  providing for  interest  on  security deposit  is neither arbitrary nor palpably unreasonable  not even unconscionable for the following reasons:               (a)The  consumer made the security deposit  in               consideration   of  the  performance  of   his               obligation for obtaining the service which  is               essential to him.               (b  The  electricity  supply is  made  to  the               consumers on credit.               (c)The  billing time taken by the Board is  to               the advantage of the consumer.               (d)Public revenues are blocked in  generation,               transmission  and distribution of  electricity               for  the  purpose of supply.  The  Board  pays               interest  on the loans borrowed by the  Board.               This is in order to perform               210               public service.  On those payments made by the

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             Board it gets no interest from the consumers.               (e)   The  Board needs back its blocked  money               to carry               out   public    service    with     reasonable               recompense.               (f)   The   Board   is   not   essentially   a               commercial organisation to which the  consumer               has furnished the secu- rity to earn  interest               thereon. [269 F-H, 270 A-C] 4.1The   argument  that  the  Board  is  monopolistic   in character and therefore, the consumers have no other  option but  to  enter  contract appears to  be  misconceived.   The consumption  security  deposit  whether or  not  it  carries interest is a condition precedent for the supply of electric energy.  The scrutiny by the Court In determining the uncon- stitutionality  of  a provision not providing  for  interest must be tested on the touchstone whether in imposing such  a condition  the  Board  has acted as  a  private  trader  and thereby shed off Its public utility character?  In  imposing such  a  condition  the Board has not  acted  as  a  private trader.   The nature of deposit has a rational  relationship to  the object which is Incorporated a condition of  supply. [266 A-D,] Jagdamba  Paper  Industries (Pvt. ) Ltd.  v.  Haryana  State Electric in  Board, [1983] 4 S.C.C. 508, referred to. 4.2Assuming  that  the contract Is an  adhesion  contract, still it is not unconscionable.  Conditions and the terms of supply  providing  for  non-payment of interest  is  not  so unconscionable  as  to shock the conscience  of  the  Court. [266-H] Central  Inland  Water Transport Corporation v.  Brojo  Nath Ganguly  [1986] 3 S.C.C. 156; Bihar State Electricity  Board v.  Green Rubber Industries, [1990] 1 S.C.C.  731,  referred to. Farmsworth  on  Contracts,  2nd  Edn.  319.320,  para  4.27, referred to. Gillespie Brothers Ltd. v. Roy Bowles Ltd. (1973) 1 A. E. R. 193; 211 G.B Mahajan and Ors. v. Jalalgaon Municipal Council and Ors. [1991] 3 S.C.C. 91 cited. 4.3In Jagdamba Papers the question of Interest on security was  not raised before the Court.  Therefore, the Court  had no  occasion to decide this issue of interest.That  part  of the judgment is sub-silentio. [271-E, 272 A-C] Jagdamba  Paper  Industries  (Pvt.) Ltd.  v.  Haryana  State Electricity.  Board, [1983] 4 S.C.C 508, explained and  held inapplicable. 4.4This  Court never Intended to adjudicate upon the  rate of   interest  or  render  a  decision  on  that   question. Therefore,  it cannot be contended that the disposal of  the Writ  Petition  though  by a Bench of  3-  Judges  would  be binding  on  a Bench of two Judges because it  was  entirely based on interlocutory order.  Therefore, this Court is free to decide the question on Its merits. [273 F-6] 4.5The Division Bench of the Rajasthan High Court erred in striking down condition No. 20 of the General Conditions  of the  Rajasthan Electricity Board as violative of Article  14 of the Constitution of India. [271-D] 4.6The  rate  of interest on security  deposit  cannot  be equated  with  the rate of interest on  the  fixed  deposit. Firstly,  if the consumption charges are to be  appropriated the  moneys  accrued by way of deposits cannot  be  held  in fixed  deposits.   Nor all deposits need carry  Interest  In every  transaction.  Secondly, the nature and  character  of

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the  security  deposit is essentially different  from  fixed deposit. [270 D-E] 5.It  may be that the consumers of electricity, where  it is  raw material, would be prompt in their payment in  their own  interest.  On that basis, it cannot be  contended  that they  cannot be treated in the same way as defaulters.   The test,  in  Court’s  considered opinion, is  whether  in  the general  application  of law there  is  any  discrimination. Merely  because  some  of the  consumers  are  prompt  those isolated cases cannot render the provision unconstitutional. [273 H, 274-Al 212 The Collector of Customs Madras v, Nathella Sampathu Chetty, [1962] 3 S.C.R. 786; Vivian Joseph v. Municipal Corporation. Bonmbay  [1972] 2 S.C.R. 257, Fatehchand Himmatlal v.  State of Maharashtra, [1977]2 S.C.R. 828 and; B. Banerjee v. Anita Pam, [1975]2 S.C.R. 774, referred to. 6.No  reason need be given for enhancement of  additional security  deposit.  It stands to reason that if there  is  a revision  in  the  rate of tariff there must  he  an  upward revision  in the consumption security deposit since  it  has direct  hearing  to the level of supply  in  consumption  of electricityThis  being a condition of supply  no  reason need be given at the timeof  upward  revision.  [278-C, 277 A-C]

& CIVILAPPELLATE JURISDICTION: Civil Appeal Nos. 2117 to 2122 of 1993 etc. etc. From  the Judgment and Order dated 28.4.1989 of  the  Andhra Pradesh  High  Court  in W.  P.  Nos.   11162/84,  18968/87, 12007/84, 15131/87, 5050/82 and 15746/87. Altaf Ahmed, V.R. Reddy, Addl.  Solicitor General, Narasimha murthy,  K. Parasaran, Anil B. Divan, Harish N. Salve,  Soli j.  Sorabjee,  G. Ramaswamy, P.P. Rao, Gobind  Mukhoty,  Dr. Shanker  Ghosh,  Shanti Bhushan, G.L. Sanghi,  Pawan  Kumar, P.S. Poti, B.M. Patnaik.  Sanjay Parikh, P. Niriop,  Kailash Vasdev,  S.  Khaitan, K. K. Khaitan, Darshan  Singh,  Sushi] Kumar  Jain, A.P. Dhamija, S. Atreya.  E.C. Agarwal,  A.  V. Palli.  Atul Sharma, Ms Reena Aggarwal, A. K. Mehta, R.   K. Gupta, P.C Kapur, T.V.S.N Chari, B. Reddy, Ms. Pramila, Anil K.   Sangal,  Ajay K. Tayal.  Koka Raghava.  B.  Kanta  Rao, Shiv  Prakash  Pandey,  Ms Rekha  Pandey.   R.K.  Priyokumar Singh,  T.V. Ratlinain, K.R. Chowdhary, K. Ram Kumar,  Ashok Kr.   Gupta, R.B. Misra , Pradeep Misra, Mrs.  Sheil  Mohini Seth, Jain Hansaria & Co, R.P. Gupta, Ms. Sarla Chandra, M/s Mitter  Mitter & Co. Ms Abha Jain, Ranjit Kumar,  M.P.  Jha, S.K.  Jain,  Vinoo  Bhagat, Surva  Kant,  Aruneshwar  Gupta, Badridas  Sharma,  Prabhu  Dayal, Sudarshan  La]  Aneja,  R. Venkataramani,  Y.P.  Rao,  D.K  Garg,  K.C.  Agarwals,  O.P Khaitan,  P.B.  Agarwala,  Mohinder  Rupal,  Mrs.   Kamakshi Mehllwal,  Ms  Archna  Kau]  (For  Gagrat  &  Co.  ),  Vijay Hansaria,  R. S. Sodhi , D.A. Dave, Raian  Karanjwala,  Mrs. Manik  Karanjawala, Rajesh mar, Ms. Suruchi  Aggarwal,  K.J. John, Ms. Deepa Dixit (For 213 Swarup  John  & Co.), A. T. Patra, S.R.  Agarwal,  Ms.  Bina Gupta,  Prashant Bhushan, K. Rajendra Choudhary,  Rakesh  K. Sharma,  Shivi  Shamia,  Anil  K.  Chopra,  Pallav  Sisodia, Ravinder  Narain  (For JBD & Co. ) Praveen  Kumar,  Virender Kaushal, Bimal Rao Jad, Ms Malini Poduval, K.K. Lahri and S. Sukumaran for the appearing parties. The judgment of the Court was delivered by

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MOHAN,J.  Leave granted. These civil appeals are directed against the judgment of the Division  Bench  of Andhra Pradesh High  Court  reported  in Southern  Steel  Ltd.  v. A.  P.  State  Electricity  Board, Hydrabad AIR 1990 Andhra Pradesh 58.  The facts briefly  are as under: The  Andhra Pradesh State Electricity Board  is  constituted under  Section  5  of  the  Electricity  Supply  Act,   1948 (hereinafter  referred  to as the Act).  The said  board  is engaged   in   generation,  distribution   and   supply   of electricity in the State of Andhra Pradesh.  Electric energy is  supplied  for industrial, commercial,  agricultural  and domestic  purposes.   To  such of  these  industries,  using energy about a particular level, it is supplied at a  higher voltage.   They  are classified as  high  tension  consumers (H.T. consumers).  All the appellants herein belong to  that category. Section 49 of the Act empowers the Board to notify the terms and  conditions upon which it will supply electricity  to  a person.   It is also empowered to frame uniform  tariffs  in that behalf.  Sub-section 2 specifies in fixing the  uniform tariff,  the  Board shall have regard to all or any  or  the following factors, namely-               a)    the   nature  of  the  supply  and   the               purposes for which it     is required;               b)    the   coordinated  development  of   the               supply and distribution of electricity  within               the State in the most efficient and economical               manner,  with  particular  reference  to  such               development in areas not for the time               214               being  served  or  adequately  served  by  the               licensee;               c)    the  simplification and  standardisation               of  methods  and  rates of  charges  for  such               supplies;               d)    the extension and cheapening of supplies               of electricity to sparsely developed areas. Sub-section  3  empowers the Board to enter into  a  special agreement with any consumer any prescribe different  tariffs for Wm.  Under Section 4, an obligation is cast on the Board not to show undue preference to any person while fixing  the tarrif   and  terms  and  conditions  for  the   supply   of electricity.  In all these cases, the appellants are covered by  the general terms and conditions notified under  Section 49  (1) of the Act.  The terms and conditions were  notified by  the  Board  and  the B.P.M.S.  No.  690  dated  17th  of September, 1975.  It is not necessary to refer in detail  to the various terms and conditions.  However, what requires to be noticed is the terms and conditions oblige every consumer executing  an agreement in the prescribed form,  undertaking to  abide by the term and conditions prevailing on the  date of  agreement and also agreed to be bound by the  terms  and conditions  as  may be notified from time to  time.   It  is important to note under Section 25, the Board has unilateral right to vary the term from time to time under clause  25.1. The  terms  and  conditions for  supply  of  electricity  by special or general proceedings. Condition  32.  1.  provides  "the Board  shall  as  far  as possible  within  15  days  after  the  expiration  of  each calendar  month  cause to be delivered to every  consumer  a bill of charges stating the amounts payable by the  consumer towards  charges  for energy supplied and any other  sum  in connection with supply of energy by the Board." Conditions 32.2. 1. obliges the consumers to pay the  amount

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shown  in the bill, within 15 days of the date of  the  bill in,  default ’whereof they are liable to pay "an  additional charge  of  2% per month or part thereof for the  period  of delay"  in  paying the bill.  Condition  32.3  empowers  the Board to disconnect the supply in case of default in  paying the  bill,  without prejudice to its right  to  recover  the amount due.  Condition 24.3 also lays down that the consumer shall pay to the Board 215 every  month the charges for electrical energy  supplied  to him  during the preceding month at the tariff in force  from time to time.  Condition 28 obliges the consumers to deposit an  amount  equivalent to three months  consumption  charges with  the  Board.   It  would  be  appropriate  to  set  out condition No. 28 as far as it is necessary for our purposes, committing what is not relevant as under:               28.Consumption    deposits:-   28.1    Initial               consumption  deposit. 28. 1. 1.  The  consumer               shall  deposit  with the Board a sum  in  cash               equivalent   to   estimated   three    month’s               consumption  charges.   The  consumer   coming               under  the  L.T.  category  ’domestic’   shall               however pay at Rs. 30.00 per Kilowatt or  part               thereof connected load.               "Provided  that the Board may, in the case  of               industrial   consumers,  accept  by   way   of               consumption  deposit a sum equivalent  to  two               months consumption charges during a period  of               three years from the date of first release  of               supply of electricity".               28.1.2In the event of the consumer failing  to               pay  to the Board any sum that may become  due               for  payment to the Board on the  dates  fixed               for   payment  thereof,  the  Board  may,   in               addition to and without prejudice to the other               rights  of  the Board, appropriate a  part  or               whole of such deposit towards the sum due from               the consumer.               28.2Additional     Consumption     Deposit-All               consumers  other  than  those  L.T.   Domestic               consumers  whose monthly bills are  less  than               Rs. 500 for a continuous period of six months,               shall keep with the Board an amount equivalent               to charges for three months demand and  energy               charges as consumption deposit.  The aduacy of               the consumption deposit shall be reviewed  by.               the  Board usually once in every year and/  or               at  any time during the year if  so  warranted               dur to upward revision of tariffs, enhancement               of the con-               216               tracted demand by the consumer charges in  the               pattern   of  consumption  by   the   consumer               relaxation of power restrictions or such other               factors  which  in the opinion of  the  Board,               warrant   review  of  the,  adequacy  of   the               existing  consumption  deposit.   The   review               shall   take   into  account   the   following               factors:-               (i)In the case of consumers where there is  no               change  in the contracted demand, the  average               consumption  for the preceeding twelve  months               after  taking into consideration  the  quantum               and  nature of restrictions imposed,  if  any,               during that period shall be the basis.

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             (ii)in   the  case  of  consumers   who   were               sanctioned  additional demand and  availed  it               during a part of the period, average  recorded               consumption for the period of review shall  be               from  the  date of  utilisation  of  increased               demand to the date of review after taking into               consideration   the  nature  and  quantum   of               restrictions  imposed,  if  any  during   that               period.               (iii)The demand shall be contracted demand  of               the consumer at the time of review.               (iv)The  rates, at which the demand or  energy               charges  shall be calculated, will  be               tariff  rates  prevailing as on  the  date  of               review.                Based  on  such review,  if  the  consumption               deposit of the consumer is found inadequate or               has  fallen  short on account  of  adjustments               made as indicated in clause 28.1.2hereof the               consumer  shall  deposit  within  30  days  of               receipt   of  notice  in  this   regard   such               additional amountas may be required by the               Board or replenish the required amount as  the               case may be.               28.3  Interest   on   consumption    deposit:-               Interest  shall  be  paid  by  the  Board   on               deposits  of more than Rs. 60 made in cash  at               the rate of 3% per annum or such other               217               rate as may be fixed by the Board from time to               time.   Full  calender months  only  shall  be               taken   into  account  for  the   purpose   of               calculating  interest  and interest  shall  be               calculated   to  nearest  five   paisa.    The               interest   accruing  to  the  credit  of   the               consumer  shall be adjusted every year in  the               month  of  April  in  the  Electricity  Supply               bills.               28.4  Disconnection    or    non-payment    of               consumption deposit:- If the consumer does not               make payment of amount of consumption  deposit               or additional consumption deposit or where the               deposit  is  given in Government  security  or               National  Saving  Certificate  Bank  guarantee               etc.,  he fails to replace them by deposit  in               cash  when  so demanded by  Board  within  the               notice  period of 30 days supply  of  consumer               shall be liable for disconnection.               28.5  "The  Consumption Deposit so  calculated               as  per  the Clause 28.1 and  /or  28.2  above               shall not be less than three times the monthly               minimum  charges, applicable to  the  consumer               under the category to which he belongs".               28.6  "All consumers shall pay the Consumption               Deposit or additional consumer deposit  within               thirty days from the date the demand notice if               there  be any delay in payment,  the  consumer               shall  pay surcharge thereon equal to  1  1/2%               per month or such other percentage to be fixed               by  the  Board  from  time  to  time,  of  the               demanded  amount  for each month of  delay  or               part thereof.  This will be without  prejudice               to the Board’s right to disconnected supply of               electricity". Clause (1) of condition 28 is general in nature.  It applies

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to   all  consumers.   Cl.  (1.2)  enables  the   Board   to appropriate a part or whole of the said deposit towards  any amount  due to the Board and not paid within the  prescribed period.  Cl. (2) applies to all consumers, except those L.T. Domestic consumers whose monthly bills are less than Rs. 218                  . 500  per month for a continuous period of six months.   Such consumers  are  obliged  to keep with the  Board  an  amount equivalent  to three months’ demand and energy  charges,  as consumption  deposit.  The deposit is liable to be  reviewed by the Board from time to time, having regard to the factors mentioned  in the said clause.  Cl. (3) prescribes  interest which  the Board has, to pay on such deposit.  It is 3%  per annum.   Clause  (4) empowers the Board  to  disconnect  the supply   if  consumption  deposit/  additional   consumption deposit is not made, or is not replaced whenever called upon to do so.  Clause (5) prescribes a certain floor below which consumption deposit shall not go.  Clause (6) says that  the consumption  deposit  or additional deposit  shall  be  paid within thirty days of the notice demanding such deposit.  In default, not only interest is payable but the supply also is liable to be disconnected. The  attack  before  the High Court was  that  according  to Condition  No. 32. 1, the bill is served within 15  days  of the  expiration of each calendar month.  The amount  covered by  the  bill is payable within 15 days of the date  of  the bill.   The period of 15 days for payment is calculated  not from  the date of service of the bill but from the  date  of the bill.  A bill could be served even on the very first day of  the  succeeding  month in which  event  it  will  become payable  within 15 day of the date of the bill.  In  such  a situation, it is not correct to say that a consumer goes  on availing  and enjoying energy for a period of  three  months without  paying for it.  Invariably it does not  exceed  six weeks  or  at any rate, two months.  In the  event  of  non- payment  under Condition No. 32.3, supply of energy  can  be disconnected without seven days notice as contemplated under Section 24 of the Indian Electricity Act, 1910.  Therefore: (1)It was urged that the consumption deposit should in  no event exceed two months average consumption charges. (2)The second attack was the payment of 3% interest by the Board  on such consumption deposit is no longer good law  in view  of  the  judgment of Supreme  Court  rendered  in  M/s Jagdamba Paper Industries (p) Ltd. v. H.S. E. Board,  [1983] 4  SCC  508, since this Court had taken the ’view  that  the interest on such deposit should be paid at the same rate  as is paid by the schedule bank on fixed deposit. 219 It  was generally urged that the Electricity Board  being  a State;  within  the  meaning of Article 12, it  has  to  act fairly.  Any term of condition will have to answer the  test of reasonableness.  On the contrary, if it is arbitrary,  it would be violative of Article 14. The  High Court after analysing the object behind  Condition No,.  28  relating  to the  consumption  deposit  held:  The condition  requiring the consumer to pay the charges  within 15  days from ‘the date of the bill and on such  failure,  a right  is conferred on the Board to disconnect  the  supply. The  condition  merely  refer to the  power  of  the  Board. Existence of power is distinct from exercise of power.   The Board cannot blindly act upon Condition 32.3 and  disconnect the  supply  the moment 15 days time (from the date  of  the bill)  expires.   It  has to take a realistic  view  of  the situation.   After  all,  these industries  are  engaged  in production of goods essential to the community.  A blind and

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mechanical    adherence   to   Condition    32.3    (instant disconnection) may indeed prove counter-productive in larger sense.  It was also not possible for the Board to notice the non  payment  immediately  in view of the  large  number  of consumers   and  the  extensive  nature   of   organisation. Besides, huge sums are required by the Electricity Board  as rotating   capital.    It   borrows   large   amounts   from organisations  like  L.I.C.  and Banks,  on  which  it  pays interest to them.  Hence, it is well entitled to require the consumer  to co-operate by paying their bills regularly,  by furnishing security deposits and by conforming to the  terms and  conditions of supply.  Under these  circumstances,  the requirement of three months deposit could not be said to  be unreasonable and unjustified. As regards, the payment of 3 % interest, the High Court  was of  the  view that the decision of this  Court  in  Jagdamba Paper  Industries  (P) Ltd. (supra) could not be read  as  a decision of the Supreme Court on the basis of which it could be  declared  that the earlier Bench decisions of  the  High Court were no longer binding, Accordingly, it dismissed  the writ petitions. Aggrieved by this decision, the present S.L.Ps. have come to be preferred. Mr.   R.N.  Narasimha  nmurthy,  learned  counsel  for   the appellant 220 after  drawing  our  attention to clauses 28  and  32  would submit that if there is any laxity on the part of the  Board in  preparing  the bill that cannot be a ground  to  make  a consumer to pay three months deposit. The tariffs of 1974 provided for the payment of bills within 14  days  from  the date of the bill while  the  quantum  of deposit  is three months consumption  charges.   Originally, the time for payment was 30 days from the date of the  bill. That has been reduced to 15 days which is a drastic  change. The security deposit is a provision for continued default of the consumer.  The quantum of such a deposit is reckoned  on the  basis  of  the lapse of time  between  the  consumption charges  that become due after expiry of time  required  for reading  of  meter,  billing, delivery of the  bill  to  the consumer;  grace  time  allowed  and  the  reasonable   time required   for   disconnecting   the   consumer’s    service connection.  The reduction to 15 days has great relevance on the  quantum of deposit as the deposit is intended to  cover the defaulted amount by the time of disconnection.  However, considering that the bills of power intensive industries are prepared within 3 days of meter reading and also considering the  close  monitoring that is feasible in  verification  of payments of bills of these consumers and the small number of these consumers distributed among the several Circle Offices of  the Board, any default is detectable within 20  days  of the  bill  for appropriate action to be  taken  immediately. The purpose of consumption deposit is only to safeguard  the actual  consumption charges that become payable by the  time penal  action could be initiated.  Even the judgment of  the High  Court indicates that a time lapse of 37 days from  the date  of  the meter reading without considering the  7  days notice prescribed under Section 24 of the Indian Electricity Act.  The balance time of 23 days to make up for 90 days  is provided  for the laxity in the Board administrative  system which justifiably cannot be passed on to the consumer by way of consumption deposit. In  view  of the high stakes involved in the case  of  power intensive  consumers,  the Board should  evolve  a  suitable system of payments and must keep the security deposit to the

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minimum instead of three months. It  is further submitted that the security deposit could  be in the form of bank guarantee.  There is no justification to require cash deposit.  As a matter of fact, as noted in  M/s Haryana Ice Factory v. Municipal 221 Corporation  of  Delhi and Another AIR 1986  Delhi  78,  the security in the form of Government Bond is permissible. In  Jagdamba Paper Industries Case (supra), paragraph 11  of the  judgment deals with rate of interest.  That is  a  case where 8% was increased to 10% by consent.  If really, it  is in the nature of a deposit, there is no Justification as  to why  bank  rate  should not be awarded.  It  seen  from  The Chairman  Karnataka  Electricity Board and Others  v.  Gadag Mining Co. & Ors. etc.  AIR 1986 Karnataka 252, 10% interest had been awarded. Mr.  Anil  B. Divan, learned counsel for  the  appellant  in S.L.P. (c) No. 2564/92 would submit is under: Power  intensive units like the appellant’s form a  distinct class  of consumers.  The Ferro Silicon plant of  petitioner No. 1 is a power intensive one where the cost of electricity constitutes  about  55% of the price of  the  ferro  silicon produced.  Electricity, thus is the basic raw ’material  for this  industry.  On an average, the appellant  is  consuming electricity  worth Rs. 1.6 crores per month.  If  there  was full  supply  of electricity (without there  being  a  power cut),  the monthly bill would be approximately Rs. 4  crores at a present tariff. The power intensive plant of the appellant maintains a  very high load factor of 0.9%. Ordinary H.T. consumers work at  a load  factor of only 60% and the units consumed at  only  50 per  KVA  demand.   The HT-111 tariff  for  power  intensive consumers requires a minimum consumption of 403.3 units  per KVA  demand.   This  means more than 8 times  that  of  H.T. consumers.   The  Electricity Board  has  always  classified power  intensive units as a separate category.  At  present, there  is a special tariff called HT-III tariff with a  fist of  power  intensive  industries  specified  in  the  tariff notification. The  appellant No. 1 had deposited Rs. 1.07 crores  in  cash towards  the  security deposit.  A bank  guarantee  for  Rs. 53.64 lacs had also been furnished.  A further demand of Rs. 96.5  lacs prompted the filing of the writ petition  in  the High  Court.  As per the order of this Court in  S.L.P.  No. 12077/84  it was directed on 6.2.1987 that a sum of  Rs.   1 crore  be  paid by the 3rd of every month  and  the  balance within 7 days of the 222 presentation of the bill-This order came to be modified that Rs.1  Crore was to be paid on the 30th of the month and  the balance  within  one week of the receipt of the  bill.   The said arrangement has been working satisfactorily.  There has not  been  any  default in  payment  of  electricity  bills. Therefore,  the  entire dispute is a theoretical one  as  to what  the quantum of the security deposit can, or  ought  to be.   A deposit in cash of an amount equal to  three  months average  bills at full supply at the present tariff  without any  power cut will amount to Rs. 12 cores on the  basis  of tariff  revised  in  October  1992.   With  ever  increasing tariffs,  the  deposit demanded will also  keep  increasing. Under  these  circumstances, the condition  requiring  three months  security deposit is arbitrary and illegal for  power intensive consumers.  The paid up share capital of appellant No.  1 is Rs. 3.8 crores.  The gross value of the plant  and machinery  of the power intensive unit is Rs.  7.94  crores.

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The  total  advances made by the consortium of  bankers  for working capital is Rs. 4.25 crores.  The total net worth  of all  the  divisions  of  appellant  No.  1  that  is  Merine products,  Sugar  & Engineering, Machine  Building  and  the power intensive Ferro Silicon Plant is Rs. 14.6 crores.  The security   already  furnished  namely  Rs.  5.7  crores   is crippling  the  Ferro Silicon Plant division.  A  demand  of three  months cash deposit would be in the range of  Rs.  12 crores.   It  is  arbitrary  and  unjustifiable  to  require appellant  No. 1 to deposit several times its share  capital by  way of security.  If this demand is  enforced  strictly, the plant of the appellant will become sick and  ultimately, will have to be wound up.  In other States, the provision is not so harsh. If  the security deposit is ’consumption deposit’ and it  is for  meeting  the  cost  of  supply  in  advance,  then  the Electricity  Board  cannot charge penal interest at  2%  per month for non-payment of bills within the stipulated period. The deposit, first must be appropriated against the dues and the  interest  charged only if there is  balance  due.   The Stand  of  the Electricity Board is  perverse  and  illegal. Equally,  there can be no question of ’supply on credit’  if deposit is adjusted against consumption all the time. The  consumer has got a right to negotiate.  In  The  Indian Aluminum  Co.  v. Karnataka Electricity Board [1921]  3  SCC 580,  this Court directed the Electricity Board to  adopt  a realistic  policy.   Here  also Condition  No.  28  must  be altered. 223 There is no power under the Electricity Supply Act to enable the Board to raise revenue or to cover its capital cost etc. except  by  way  of adjusting tariffs  as  seen  from  under Section 59 of the Supply Act, 1948.  Therefore,  consumption deposit cannot be used for the purpose of revenue or raising revenue.  In this case, the Electricity Board had not placed any material to give interest only at 3%. Mr.  K. Parasaran, learned counsel appearing in  S.L.P.  No. 13004/  89 after referring to the passage occurring at  page 66  of  Haryana Ice Factory case (supra)  submits  that  the security  deposit  cannot  go  to  buildup  the  capital  or fixation or tariff.  Under Sections 49 and 59 of the  Supply Act,  finance  is  required to  be  adjusted  including  the payment  of  interest.  Demand of three  months  consumption deposit   cannot  be  resorted  to.   In  support   of   his submission,  reliance is placed on Hindustan Zinc Ltd.  etc. etc. v. Andhra Pradesh State Electricity Board & Ors. [1991] 3 SCC 299. Mr. Kailash Vasudev. learned counsel for appellant in S.L.P. 13004/89 submits that under Section 49 of the Supply Act, it is enjoined upon the Board to adjust its tariffs by  keeping the factors detailed in the said Supply Act.  Therefore, the Board  cannot have recourse methods not provided  under  the said  Act.   The  demand for a deposit  to  ensure  the  due payment of the bills for electrical energy consumed  amounts to  framing  an  additional tariff.   The  Board  cannot  do indirectly what it cannot do directly. The Board being ’a state monopoly’ has to act reasonably and not arbitrarily.  The terms and conditions of supply  cannot be unfair and oppressive. Mr. R. Venkataramani, learned counsel in his written submis- sions in Writ Petition Nos. 1293/89 & 1353/89 and S.L.P. (c) Nos.  4791-92/90 & 4793-94/90 would urge that Section 49  of the  Supply  Act  is unconstitutional  since  there  are  no guidelines for framing the terms and conditions of supply of electricity.   The said Section does not specifically  spell

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out  fairness  of  action.   Clause  28  of  the  terms  and conditions   of   supply   is  a   clear   illustration   of arbitrariness and subordinate legislation. 224 The words as the Board thinks fit ought to be interpreted so as to be consistent with the fairness of State action.  They are  to be construed as "reasonably thinks fit" as  held  in Roberts v. Hopwood, 1925 AC 578 and     Granite v.  Minister of Housing and Local Government, (1958) 1 All ER 625.    Clause 28 of the terms and conditions of supply  relation to  fixation  of  3% interest  and  additional  charges  are vitiated due to non-application of mind.  Under clause  28.6 of  the  terms  and conditions, in the  event  of  delay  in payment  of  consumption deposit or  additional  consumption deposit  within  the  stipulated  period,  the  consumer  is obliged  to  pay surcharge at 18%.  The  obligation  to  pay surcharge and the power of the Board to vary the  percentage from time to time would constitute draconian provision.  Money, wherever it is held in deposit could only be used to earn  some interest.  Therefore, paying 3% interest  on  the consumer  deposit  is  not  at  all  justified.   A   public institution cannot be allowed to get excessive interest.  In   meeting  these  arguments,  the   learned   Additional Solicitor General submits that under Electricity Supply Act, the  finances  of the Board are controlled to  the  minutest detail. Originally, prior to 1978, Section 59 required the Board  as far   as  practicable  and  after  taking  credit  for   any subvention  from  the State Government not to carry  on  its operation  on loss.  For this purpose, it was  empowered  to adjust  its charges accordingly from time to time.   Section 59 was amended by Act 23 of 1978.  After the amendment,  the Board after taking credit for any subvention from the  State Government  was required to carry on its operations  and  to adjust  its tariffs so as to ensure that the total  revenues in any year after meeting of the expenses left such  surplus as  state  government may specify from time to  time.   This Court  has taken the view in Kerala State Electricity  Board v.  S.N. Govinda Prabhu & Bros. & Ors [1986] 4 SCC 198  that even  if  the Government had, not  prescribed  surplus,  the Electricity Board could generate surplus. After the amendment by Act 16 of 1983 which came into  force on 225 1.4.1985, the Board was to create a minimum surplus of 3% or such higher percentage as the State Government would specify in this behalf.  It is in this background., the matter  will have to adjuged. The reason why three months security deposit is demanded is, for  two  months, the consumer gets free  electricity.   For supply of such electricity, the Board has to borrow and make payment of interest.  If there are no consumer deposits, the tariff shall have to be increased.  That will effect all the consumers.   Interest  at 2% is charged in case  of  default only  in  order to ensure proper payment.  It  is  penal  in character.   In  the judgment under appeal, the  High  Court held  that the burden relating to interest can be  reflected either in the tariff or could be set off by calling upon the consumer  to make deposit.  In fact, this Court  has  upheld the  tariff revision effected by Andhra Pradesh  Electricity Board as seen from Hindustan Zink Ltd.  Etc.  Etc. v, Andhra Pradesh  State Electricity Board & Others [1991] 3 SCC  299. It  cannot  be contended that the three  months  consumption deposit  is arbitrary.  This argument ignores the  following important factors:

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i)This is not a security deposit but a consumption deposit. ii)  It in the nature of an advance payment. iii)In  the event of failure to pay, it could be  proceeded against as seen from clause 28.1.2. (iv) Consumption deposit is variable as per clause 28.2 (iv) If therefore, the object of consumption deposit is to ensure proper  payment with reference to electricity supply,  there is  nothing arbitrary or unjustifiable.  The fact that  some of  the appellants pay large amounts by way  of  electricity charges will have nothing to do with the nature of  deposit. Merely  because  it  is a power based  unit,  it  cannot  be treated separately.  Nor can the appellant make a virtue out of  necessity.   The terms of supply  relating  to  consumer deposit  must  be uniform, therefore, it is not  correct  to contend   that  the  power  based  unit  must   be   treated separately. As regards payment of interest at 3%, electricity supply  is made on 226 credit  basis.  Therefore, it is a matter of  adjustment  of Board finances.  Strictly speaking, the consumer deposit  is in the nature of fidelity guarantee to ensure proper payment by  consumer.  The consumer may not be entitled to  interest at  all.  However, where the Board has so adjusted  finances and pay 3% interest, the Board cannot be defaulted. Jagdamba Paper Industries case (supra) cannot be said to  be a  decision  as  to  the rate of  interest  payable  by  the Electricity  Board.   Upon  reading  paragraph  11  of   the judgment, it will be clear that it proceeded on the  consent of the counsel.                          RAJASTHAN The  writ  petitioners applied to appellant  Board  for  the supply of high tention power for their factories.  After the execution  of  the  necessary agreement  and  furnishing  of security    deposit,   power   connections    were    given. Subsequently,   the  Board  issued  notice   requiring   the consumers to deposit the enhanced amount of cash security as well  as  the bank guarantee on the basis of  maximum  power consumption of three months. With  regard  to security deposit, Part 11  of  the  General Conditions  of Supply and Scale of Miscellaneous Charges  in Note-II stated that no interest will be paid by the Board on the  security deposit.  Two contentions were raised  in  the petitions, (i) Note II providing for no interest was bad  in law,  (ii) the enhanced security must be calculated  not  on three months maximum consumption but on the basis of minimum power consumption.  These two contentions found favour  with the  learned Single Judge.  The Rajasthan Electricity  Board filed  special  appeals  while  the  consumers  filed  cross appeals.  The Division Bench held as under: i)The  Board has power to demand additional security  but the  average consumption of three months should be taken  as the basis for calculating the amount of such security. ii)The clause relating to non-payment of interest was  not reasonable.   Interest must be allowed on the entire  amount of  cash security from the date of the writ  petition.   The appeals  by the Board were dismissed while cross-appeals  by the consumers were allowed.  Ag- 227 grieved  by this judgment, the present S.L.Ps. have come  to be preferred by the Rajsthan Electricity Supply Board. Mr.  Soli  J. Sorabjee, learned counsel  appearing  for  the appellant argued as follows: There  is no legal obligation to pay interest on  a  deposit made  by the consumer with the Board in terms of  Clause  20

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(a)  &  (c) of the General Conditions of Supply.   Nor  even interest is payable under common law or in equity.  In  this connection,  the  learned  counsel draws  our  attention  to Halsbury’s 4th Edition, volume 32 pages 54-55.  There is  no legal or equitable obligation to pay interest for  detention of  monies.   In support of this argument,  learned  counsel relies   on   Bengal   Nagpur   Railway-company   Ltd.    v. RuttanjiRamji, (1937) L.R. 65 I.A. 66 and Union of India  v. A.L. Rallia Ram [1964] 3 SCR 164, pages 187, 189-190. There is no contract or agreement which provides for payment of  interest.   On the contrary, Clause 9 (b)  (ii)  of  the General Conditions expressly provides that no interest  will be  paid  by  the Board on security deposit.   There  is  no statutory  provision which casts an obligation on the  Board to  pay  interest on the security deposit.  The  High  Court erred  in relying on the model form of draft  conditions  of supply  because  the said model form is applicable  to  only licensee as defined under Section 2 (h) of Electricity  Act. It  is  not applicable to a Board which is not  a  licencee. Further,  it  is not necessary on the part of the  Board  to adopt  model form.  Schedule VI of 1948 Act again cannot  be pressed into service as the Board is not a licencee clause 2 (b) (v) of Schedule VI merely specifies interest on security deposit  as  properly incurred item of expenditure  for  the purpose  of determining the ’clear profit’ of the  licencee. The  said  clause does not and cannot by  itself  impose  an obligation  on  the  licencee to pay  interest  on  security deposit.   Should interest be paid, then it qualifies as  an item of expenditure properly incurred. The High Court also erred in relying on Section 4 (2) of the Interest Act, 1978.  Section 4 (2) has no application  where on  account  of contractual term or a  statutory  provision, payment of interest is not permitted.  Section 4 (2) of  the Interest Act, 1978 merely enlarges the 228 categories of cases mentioned under Section 4 (1).  The said Section  cannot  override other statutory  provisions  or  a contract between the parties.  The non-obstante clause under Section  4  (2)  is restricted only  to  the  provisions  of Interest Act, 1948.  It is submitted that under the  billing practice prevalent with the Rajasthan Electricity Board  the consumer  has  free  use of electricity  during  the  period between  consumption  of electricity and  expiry  of  period after  notice.  During this period which varies from 2 to  2 1/2 months, the consumer in effect enjoys a credit facility. Therefore, if security deposit is demanded for three months, it  is neither unreasonable nor arbitrary.  As a  matter  of fact, the security demanded by the appellant Board is in the form  of cash for one month and bank or insurance  guarantee for  two months.  Therefore, it is all the more  reasonable. In  support  of this, reliance is placed  on  Kistna  Cement Works  Tadepalli v. The Secretary APSEB, Vidyut  Soudha  AIR 1979  A.P.  291,  B.R. Oil  Mills,  Bharatpur  v.  Assistant Engineer   (D)  R.S.E.B.,  Bharatpur,  AIR  1981   Rajasthan 108,  .Municipal  Corporation  for  Greater  Bombay  v.  M/s Devidayal Metal Industries, AIR 1984 Bombay 242, Haryana Ice Factory v. Municipal Corporation of Delhi, AIR 1986 Delhi 78 and Southern Steel Ltd. v. The A.P. State Electricity Board, Hyderabad, AIR 1990 A.P. 58. On  the question of the constitutionality of the  provisions regarding   non-payment  of  interest  and  whether  it   is violative of Article 14, it is submitted: i)Article 14 does not mandate mathematical exactitude  or scientific precision; ii)The  mode and period of security should be  related  to

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the  billing  practice prevailing in  Rajasthan  Electricity Board. iii)The  consumer  with  open eyes  has  entered  into  the agreement  and  has  solemnly undertaken  to  abide  by  the condition  regarding  nonpayment  of  interest.   He  cannot resile  from  that condition.  There is  nothing  inherently objectionable,  nor  is  the condition illegal  or  void  as opposed  to  public  policy.  Even  assuming,  the  contract between  the consumer and the Board is an adhesion  contract it  is not necessarily unconscionable.  In this  connection, reference  is  invited  to  Black’s  Law   Dictionary,   6th Edition, page 40.  That passege has been cited with 229 approval  in Central Inland Water Transport Corpn. v.  Brojo Nath Ganguly. [1986] 3 SCC 156.  In such matters, relief  is given  to the party only if the contract is so  unreasonable as  to  be unconscionable.  In this connection  reliance  is placed on Gillespie Brothers Ltd. v. Roy Bowles Ltd.  [1973] 1  A.E.R.  193  at 200 (g),  Farmsworth  on  Contracts,  2nd Edition,  319  &  320 para 4.27. The  rate  of  interest  on security deposit cannot be equated with the rate of interest payable on fixed deposit because the nature and character of a  security  deposit  is  basically  different  from   fixed deposit.   This  is  clearly brought out  by  the  Companies (Acceptance  of  Deposits)  Rules,  1975.   The  said  Rules expressly  exempt security deposit in definition of Rule  2, clause  (v)  &  (vi),  In  Jagdamba  paper  Industries  case (supra).  the rate of interest was based on a concession  by the  parties.  The Court had no occasion to decide the  rate of  interest.   That  part  of  the  judgment  proceeds  sub silentio. The  argument based on surcharge levied for delayed  payment is  a  non sequitur.  If the provision  for  non-payment  of interest  is  valid and not arbitrary, it  does  not  become arbitrary  and unconstitutional because surcharge is  levied at   2%  per  month.   In  fact,  surcharge  has  not   been challenged.  Surcharge is attracted only if the bill is  not paid within the due date.  The submissions based on Sections 57  & 59 of the Supply Act in relation to  security  deposit proceed  on a misconception of the nature and  character  of payment  as  a  security deposit.  The  object  of  security deposit  is to secure prompt payment of  electricity  bills. They  are not intended to finance the  Board’s  transaction. Section  57  read with sixth Schedule is meant to  ensure  a reasonable   return.  expression  ’charges’  in  the   Sixth Schedule  clearly  shows  that  security  deposits  are  not included  within  the  expression ’charges’.   There  is  no mutual  exclusivity between increase of tariffs and  earning interest on security deposits, It  is  also  incorrect to contend  that  prompt  payees  of electricity bills are treated on par with the defaulters and thus anequals are treated alike.  The real test is,  whether in   the   general   application  of  law   there   is   any discrimination.  In support of this submission, the  learned counsel placed his reliance on: The Collector of Customs, Madras v. Nathella Sampathu Chetty 230 [1962]  3  SCR  786, Vivian  Joseph  Ferreira  v.  Municipal Corporation of Greater Bombay [1992] 2 SCR 257, B.  Banerjee v.  Anita Pan [975] 2 774 and Fatehchand Himmatlal v.  State of Meharashtra [1977] 2 SCR 828. The  last  submission  of  the learned  counsel  is  that  a statutory  provision may be struck down as  unconstitutional only  if it is palpably arbitrary and irrationality is  writ large.   Merely  because the Court  considers  a  particular

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provision  to be unwise or undesirable, it is  never  struck down.  The learned counsel fairly concedes that the enhanced security  deposit  could be calculated only on  the  average consumption of three months of the previous years.  Mr.  Altaf Ahmad, learned counsel supporting the  arguments of Mr. Soli J. Sorabjee would urge: In this case, the consumers are those who use H.T. and E. H. T. lines.  Section 49 (3) gives the clue that each Board can have its own scheme.  Section 79 of the Supply Act speaks of the  power  to  make regulation.  Clauses (i)  and  (j)  are relevant  because  they  talk of  principles  governing  the making  of arrangements with licensees under Section 47  and other then licensees under Section 49. The industrial consumers constitute the majority user of the electricity  amounting to 49.51 per cent.  the  transmission losses  for  1992-93 alone are 22 per  cent.   Besides,  the Board  is also purchasing power from other corporations  and States.  Therefore, the demand for security deposit is fully justified  and there is nothing arbitrary in  not  providing for interest.  That is what is provided under clause 21  (a) of  the agreement in relation to high tension  supply.   The consumption  deposit cannot be equated to the deposit  in  a bank and interest could be demanded as of right. Mr.  Kapil Sibal, learned counsel appearing for the  Haryana Board which Board has now withdrawn payment of interest, has filed   intervention  application  since  the  present   day position of the Haryana Board is on a par with Rajasthan. Mr. R.K. Mehta, learned counsel for the intervenor on behalf of 231 the   Orissa   Electricity   Board   through   his   written submissions.urges that it may be that the regulations in the case of Andhra Pradesh, Utter Pradesh and Bihar Provide  for payment  of  interest  at a certain  rate  on  the  security deposit.   However,  the Rajasthan  and  Orissa  regulations provide that no interest shall be payable on the  securities furnished  by  the  Board.  In  the  impugned  judgment  the Division Bench has not given any cogent or valid reason  for striking down Condition no. 20 of the General Conditions  of the Rajasthan Electricity Board.  The High Court had  failed to  appreciate  the  following factors  while  quashing  the impugned clause of the regulations.  Electricity is an  item which   cannot  be  sold  and  supplied  immediately   after generation.   For  the sale of electricity one has  to  take meter reading meant for the said purpose and, therefore, the Board sends the bill for particular duration.  It is obvious that  the reading of the meter could not be taken  at  every point of time but only for duration/period.  In the  process 2-1/2 months elapse.  The Board does not charge any interest at  least for 2-1/2 month from its consumers.  At  the  same time,  the  Board needs finance for production,  supply  and other  charges  necessary for supply  of  electricity.   The Board  is thus obliged to take loans from various  financial institutions.   The consumers who are utilising  electricity for  2-1/2  months  without  making  any  payment  will   be unjustifiably enriched at the cost of general public in  the absence  of  security deposit.  Further  taking  of  advance money  without interest for Providing other services in  the market   is  a  general  practice.   Therefore,  a   similar provision in the general conditions for supply of the  Board cannot be treated as arbitrary or unreasonable. A consumer is not entitled to claim interest on his security deposit having regard to the following considerations. 1.The security deposit is furnished in consideration of  the performance  of the consumer’s obligation for obtaining  the

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service  essential  to  the  life  and  the  well-being   of community. 2.   The  electricity  supply is made to  that  consumer  on credit withoutrequiring him to make instant payment. 3.   The billing time taken by the Board is for the  benefit and  convenience  of  the consumer as  he  saves  additional expenditure on 232 account of instant or shorter billing time, possibly through electronic devices which will be included in the tariffs. 4.The  public  revenues Ire blocked  in  the  generation, transmission   and  distribution  of  electricity  for   the performance of supply on which the Board pays interest in so far as they form part of the loans borrowed by the Board for performing the public service.  On the return of the blocked moneys the Board gets no interest from the consumers. 5.The  Board  needs back its blocked money to  carry  out service with a reasonable recompense. 6.The Board is not essentially a commercial  Organisation to which the consumer furnishes the security deposit to earn interest. Having entered into a contract with open eyes it is not open to  the consumer to say that interest should be  paid.   The basis  of supply of electricity and the conditions on  which it  is  supplied being statutory, the provisions  under  the conditions  of supply that the Board shall not pay  interest on the security deposit has statutory basis and  accordingly cannot  be  struck  down  as arbitrary on  the  basis  of  a commercial transaction governing a bank deposit.  Therefore, it  is  submitted  that regulation 7  of  the  Orissa  State Electricity Board General conditions of Supply  Regulations, 1981 providing that no interest would be payable on security deposit  is  just  and reasonable and is  not  arbitrary  or violative of Article 14 of the Constitution. Mr.  Shanti Bhushan, learned counsel opposing the  stand  of Rajasthan  Electricity Board submits that the only  question in this special leave petition is whether Electricity  Board is obliged to pay interest on the cash security deposits  as the  Board  compels industrial consumers to  secure  against default  in  payment  of electricity bills.   In  the  first place, as laid down in Jagdamba Paper Industries (Pvt.) Ltd. v.  Haryana  State Electricity Board [1983] 4 SCC  508  this Court has indicated that the security amount should bear the same  interest as admissible on fixed deposit  of  scheduled banks.   The  interest rate on 10 per cent was  decided  not really on the basis of admission but on a positive  finding. Apart  from  this,  this Court has  in  several  other  writ petitions ordered interest at 12 per cent. 233 It is submitted that the scheme of Indian Electricity  Rules of  1956 and the scheme of the Electricity Supply  Act  also show that the interest on security deposit is supposed to be payable.   The Board is not entitled to use the deposits  to augment  its  finances.  They are meant only to  secure  the default  in payment of the bills.  Section 59 of the  Supply Act  indicates  that the only condition in which  the  Board could  raise  the revenue is by adjustment  of  its  tariff. Section  49  of  the Act makes provision  for  the  sale  of electricity  by  the Board to persons other  then  licensees under the terms and conditions as the Board thinks fit. It can be seen from the definitions of the Sixth Schedule to the Supply Act that the scheme was meant to be applicable to licensees.   The place of the licensees has been taken  over by  the Board.  That is why clause 2 (b) (v) of Schedule  VI of the definition of "clear profit" states that the interest

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on  security  deposits was to be a part of  the  expenditure properly  incurred by licensees.  Then again, the manner  in which  the  accounts are to be maintained by  the  licensees also  shows that the licensees have to make a provision  for payment of interest on security deposits. The  High  court  is right in relying on Section  4  of  the Interest Act. The  contract  in the instant case is  between  a  consumer, however, high he might be and a monopolistic public  utility company.  It is clearly an adhesion contract.  This Court in Central  Inland  Water Transport Corporation v.  Brojo  Nath Ganguly   [1986]  3  SCC  156  has  clearly  held  that   an unreasonable  term  of  an adhesion  contract  will  not  be enforced by the Court. Interest on security deposit is also admissible under equity or common law.  Halsbury’s 4th Edn.  Vol. 32, paragraph  106 at page 53 defines "interest" as the return or  compensation for  the  use or retention by one person of a sum  of  money belonging to or owing to another. The Board is clearly in the position of a trustee in respect of this money since the money is deposited by the  consumers in trust with the Board to secure the Board against  default in  payment of bills.  The deposit of security is  like  the usufructory mortgage which is provided for in Section 76  of the Transfer of property Act.  Section 76 G & H 234 provide  that the mortgagee in a usufructory mortgage  would have  to  keep  account of the  incomes  received  from  the mortgagee in his use and would have to pay compensation  for the  benefit derived by the user of the mortgaged  property. The position here is more or less similar. It  is  not  correct to state that security  is  an  advance payment.  If it is so, it would amount to Board taking three months advance payment from the consumers.  In such a  case, the Board cannot disconnect the electricity until the period of three months is over.  But the rules of the Board  enable it to disconnect even if the consumer fails to pay his bills on  the due date.  Then again, a penal interests is  charged in  case of default.  If it is in the nature of  an  advance payment there is no scope for charging 2-1/2 per cent  penal interest. Lastly, it is submitted that even under English Law interest is  payable  on  security  for  electricity  as  seen   from Halsbury’s Volume 16 paragraph 129:               "129.  Giving of security.  Security  required               under  the  Schedule to be  Electric  Lighting               (Clauses)   Act  1899  to  be  given   to   an               electricity  board (See the Electric  Lighting               (Clauses)  Act 1899, Schedule, ss. 25 (2),  27               (2),  (3), and paras. 115, 118, ante.) may  be               by  deposit  or otherwise, and  of  an  amount               agreed or, failing agreement, determined by  a               magistrates’  court, and that court  may  deal               with  the  caused of the proceedings  and  its               decision is final and binding on all  parties,               (bid., Schedule, S. 71; Electricity Act  1947,               s.  57 (2), 1 Sch 4, Part 111) Where  security               is  given by way of deposit the party to  whom               it is given must pay interest at the rate of 4               per annum an every sop for each period of  Six               months  during which it remains so  deposited.               (Electric   Lighting   (Clauses)   Act   1899,               Schedule, S. 71 proviso; Decimal Currency  Act               1969, S. 10 (I)."           UTTAR PRADESH STATE ELECTRICITY BOARD

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The question raised before the High Court was as to the rate of 235 interest.   The  respondent (U.P.State Electricity  Board  ) amended the rate of security deposit as Rs. 2 per K.V.A.  On such  deposit  it paid only 3 per cent interest  whereas  on late  payment of the bills it charged more than 24 per  cent surcharge from the consumer.  The appellants preferred  writ petitions in so far as they were denied 12 per cent interest on the deposit taken from the consumers.  The Division Bench of the High Court held:               "These   petitions   are  dismissed   with   a               direction  that  in  case  the  Supreme  Court               decided  that  the interest at a  rate  higher               that  3% should be paid on such  security  and               additional  security deposit, the  benefit  of               the  same judgment shall also be  extended  to               the  petitioners herein without the  necessity               of any further proceedings being taken by  the               petitioners."               Hence, the special leave petitions. Mr.  G. Ramaswami learned counsel for the  appellants  would urge  that Jagdamba’s case (supra) has decided that rate  of interest.  Therefore, that should govern. In a number of matters this Court has also ordered  interest at  12  per cent.  The same principle should apply  to  this case as well. 1.Security  Deposit is a compulsory levy.   The  consumer has no option. 2.Even  in contractual matters if the Board, which  is  a State,  does  not  behave  fairly,  this  Court  can  always interfere. 3.The Board cannot compel the consumer to make a security deposit without corresponding obligation to pay interest. 4.   Deposit does not contemplate appropriation. 5.   Prior  to appropriation, what is the character  of  the deposit,  requires to be determined.  It is not the  payment of money by way of 236 advance.    As  to the meaning of interest it could be gathered  from the  case  in Riches v. West minister- Batik  Limited.  1947 Appeal  Cases 390 at 400. In Union of India v.  A.L.  Rallia Ram  [1964]  3  SCR 164 this Court  held  that  interest  is awardable in equity. A distinction will have to be made between unreasonable  and unconscionable.  In Administrative Law mere unreasonableness is  enough  to  set aside a  contract  while  unconscionable relates  to private law.  If interest is not  paid  security deposit   cannot  be  demanded  as  this  will   amount   to unconscionable    bargain.    As   to   the    meaning    of unconscionability,  Black’s Law Dictionary. (Fifth  Edition) at page 1367 can be usefully referred to:               "Basic test of "unconscionability" of contract               is  whether  under circumstances  existing  at               time  of  making of contract and in  light  of               general  commercial background and  commercial               needs  of  particular trade or  case,  clauses               involved  are  so one-sided  as  to  oppressor               unfairly  surprise party.  Division of  Triple               7. Service, Inc. v. Mobil oil Corp., 60  Misc.               2d    720,   304   N.Y.S.   2d    191,    201.               Unconscionability  is generally recognized  to               include an absence of meaningful choice on the               part  of  one of the parties.  to  a  contract

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             together   with  contract  terms   which   are               unreasonably  favorable  to the  other  party.               Gordon v. Crown Central Petroleum Corn.,  D.C.               Ga., 423F.  Supp. 58, 61.               Typically  the cases in which  unconsionablity               is  found involve gross overall  one-sidedness               or _gross one sidedness of a term  disclaiming               a  warranty,  limiting  damages.  or  granting                             procedural  advantages.   In these  cases  one -               sidedness is often coupled with the fact  that               the  imbalance  is buried in small  print  and               often  couched in language  unintelligible  to               even  a person of moderate  education.   Often               the   seller   deals   with   a   particularly               susceptible clientele.  Kugler- v. Romain, 58,               N.J. 522, 279 A. 2d 640." 237 As  to  the meaning of reasonableness it is  stated  in  G.B Mahajan  and  Ors.  v. Jalgaon Municipal  Council  and  Ors. [1991]  3  SCC  91 at 109.  Under English  Law  relating  to electricity  supply  as  seen from  Halsbury’s  Vol.  16  at paragraph 129 it is clearly stated that interest on security deposit is payable.  Therefore, all the more the reason  why here also it must be held to be payable. Mr.  Kapil  Sibal, opposing the stand of  Mr.  G.  Ramaswami arguers  that there is no order of this  Court  adjudicating the  rights of the Board on the consumer in respect  of  the validity  of  consumption security deposit  being  condition precedent  for the supply of electricity by the Board as  we II  as  the liability of the Board to pay  interest  to  the consumer in respect of the consumption security deposit.  In the  absence of any such adjudication the question of  Board being  bound by the previous orders of this Court. does  not arise.   In cases where 12 per cent interest was awarded  it was only by way of ad interim measure.  The other orders are also  not conclusive on this aspect.  Therefore, the  matter will have to be decided afresh in the instant cases. Far  from being a compulsory levy, the consumption  security deposit is not only a deposit in cash to safeguard  recovery of electricity dues for the energy supplied to the  consumer on   credit   but  also  a  security  towards   payment   or satisfaction  of any money (For example, theft),  which  may become due and payable to the Board by the consumer. The  obligation to pay interest to the consumer  proceed  on the  assumption  that  the Board  is  keeping  the  security deposit and depriving the consumer of tile use of the  money which  is  alleged to be earning interest  with  the  Board. This assumption is not warranted for the followings reasons: 1, The cycle of billing demonstrates that in the very nature of  things the consumer is supplied energy on  credit.   The security deposit is hardly sufficient to secure the  payment to  the  Board by the time the formal bill by the  Board  is raised on the consumer. 2.The consumption security deposit indeed represents only part of he money which is payable to the Board at the end of the billing 238 cycle.’  The  said amount can be appropriated  at  any  time towards the payments that are due to the Board and reflected in the formal bill. 3.In  the nature of billings cycle it is the Board  which has  to  receive  interest on the  energy  supplied  to  the consumers on credit. 4.The  concept of interest earned on a fixed  deposit  is

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alien  to  the  issue.   The  liabilities  of  the  consumer increase  on a daily basis depending on the level of  supply and  consumption.  Therefore, the amounts due are liable  to be  appropriated  forthwith.   That is  not  possible  where moneys are placed either on fixed deposit or a savings  bank account. It is incorrect to contend that the amount is lying in trust with the Board.  The amount lying with the Board could  also be appropriated for satisfaction of any amount liable to  he paid  by  the consumer for violation of  any  conditions  of supply  in  the context of wide scale theft  of  energy  and tempering  with  meters.  Therefore,  the  security  deposit serves not only to secure the interest of the Board but also serves  as  a deterrent on the consumer in  discharging  his obligation towards the Board.  Under section 49 the Board is enabled   to   supply  electricity  upon  such   terms   and conditions,  as  it  thinks fit under  Article  226  of  the constitution,  the  Court is to conduct a  limited  scrutiny whether by imposing such a condition the Board has not acted as a private trader and there by shd off its public  utility character.  Should the Coust come to the conclusion that the Board has not acted as a private trader and tile nature  of’ deposit  has  a rational relationship, the issue  will  fall outside the scope of judicial purview. Section   49  must  be  read  alongwith  Section  59.    The contention that the Board can achieve a surplus by adjusting its  credit does not flow from the language of  Section  59. The  requirement  of  consumption  security  deposit  is   a condition  of  supply.   It  has a  direct  bearing  on  the operation of the Board.  Hence it is ’per-se’ reasonable and constitutional. If there is a revision in the rate of tariff there has to be an upward revision of the consumption security deposit since it  has  a  direct  bearing  on  the  level  of  supply   in consumption of electricity.  In October 239 1986,  the  tariffs  in  the State  of  Uttar  Pradesh  were adjusted upwards.  The revision in the form of an additional security deposit with interest at the rate of 3 per cent was made  in  January  1987.   These  facts  would  suggest  the rationale in the imposition of additional security  deposit. This being a condition of supply no reasons need be given at the  time of upward revision.  Union of India v. A.L  Rallia Ran [1964] 3 SCR 164 relates to the award of interest by  an Arbitrator.   The nature of consumption security deposit  is such  that it represents the moneys of the Board.  There  is no  relationship  of  debtor  and  creditor.   There  is  no deprivation   of  property  which  alone  will  entail   the consequences like payment of interest. The learned counsel has also filed a tabulated statement  to show  that  the security deposit made by  the  appellant  is 72.42   lakh  for  all  industries  while  the  affairs   in electricity  come to 965.73 lakh.  A formal chart  has  been filed  based  on  the figures  for  August.   September  and October  1991  to  show  that  after  the  third  month  the consumption  charges  total to 45.09 lakh.   While  security that  is  offered is 15.95. The same is  the  position  with reference  to other industries as well concerning  whom  the learned counsel has filed a tabulated statement.  This so to establish how the Electricity Board has supplied electricity on credit to the various consumers and the security  deposit is hardly sufficient even for one month’s consumption.                            BIHAR SLP 11799 of 1989 The appellant (Bihar Electricity Board) provided 4 per  cent

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interest  per  annum  on security deposit.   When  this  was questioned  in  C.W.J.C. No. 3000 of 1987 in the  matter  of Dhanbad Flour Mills, a Division Bench of the High Court  was of  the view that an interest at 4 per cent appeared  to  be unreasonable and directed the Board to examine the  question of enhancement of the rate of interest.  Similar  directions were  issued  in another case.   The  appellant-Board  after examining  the matter issued a Notification on 27th of  May, 1988 and enhanced the rate of simple interest to 5 per  cent per annum.  This was because the amount of security  deposit was  kept  in the savings account which earned  5  per  cent interest  which  was  passed  on  the  consumer.   The  said notification was questioned before the High Court by seeking 240 a writ of mandamus claiming interest at the rate payable  on fixed deposit by a nationalised bank in view of the decision by  this court in Jagdamba’s case (supra).  By the  impugned judgment  the  High Court directed payment  of  interest  on security  deposit  at the rate payable on fixed  deposit  by nationalised  banks.  Aggrieved by this judgment  the  Bihar State  Electricity  Board has preferred  the  special  leave petition. Mr.  G. L.  Sanghi learned counsel appearing for  the  Bihar Board  draws  our  attention to clause 15.3  of  the  tariff notification  and  submits  that  the  consumption  security deposit  is not only for the supply of energy on credit  but also  for satisfaction of any money payable by him.  If  the consumer  does  not  pay the dues in  time  the  arrears  of consumption  charges  will have to be adjusted  against  the security deposit.  Therefore, the security deposit can never be kept in bank under fixed deposit.  This is the reason why the  amount  is kept in savings bank  account  and  whatever interest  is  earned  thereon.  that is  passed  on  to  the consumer.   Therefore,  the  High Court  was  not  right  in awarding  a higher rate of interest.  In other respect,  the learned  counsel  adopts the argument of the  other  learned counsel  appearing  for  the various  Boards  including  the contention that Jagdamba’s case (supra) did not lay down the rate of interest. Normally,  in  market transaction when any one  supplies  on credit to a consumer a guarantee is taken for the payment on dues.   Such  a  guarantee may be in the  shape  of  a  bank guarantee,  fixed  deposit.  Similarly, the  Board  when  it supplies  electricity on credit it keeps tile  security  for the  amount  of  supply of the  electricity.   According  to Board’s  standing order No. 433 dated 31.12.74, dues at  any time  are not allowed to exceed amount of  security  deposit and  adjustment is to be made against the  security  deposit after  the  disconnection of supply.  Therefore, it  is  not correct  to state that the security is not adjusted  towards the bill and is kept in tact. Section  24 of the Electricity Act is the only provision  to ensure payment is indicated in Bihar State Electricity Board Patna v. M/s. Green Rubber Industries and other [1990] 1 SCC 731. In meeting these arguments it is submitted by Mr. M.P.  Jha, learned  counsel  for the respondent that the stand  of  the Board in 241 making  payment  of  interest at 4/5  per  cent  is  clearly arbitrary.. The security aspect of the Board requirement can easily be satisfied by the board resorting to liquidation of security deposit.  As a matter of fact, the security deposit was  never  adjusted by the appellant Board.   As  a  result large  amounts  were kept without investing  them  in  fixed

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deposit.   Learned counsel for the respondent relies on  the orders issued by this Court and submits that the question of interest  is  settled  by  the  ruling  in  Jagdamba’s  case (supra).  Section  24 is of no help for payment of  a  lower percentage of interest.                     W.P. No. 578 of 1987 In this writ petition, under Article 32 of the Constitution, the  challenge is to the increase of security deposit for  L and H power consumers above 100 B.H.P. It has been increased from  Rs.  170  to Rs. 200.  No  reason  whatever  has  been assigned  for  such an increase of security  deposit.   That will  he  bad in law as laid down in  Central  Inland  Water Transport Corporation Limited (supra).  This is the argument of Mr. Gobind Mukhoty.  ’This is countered saying that  when there is an increase in tariff the security deposit also  is liable to be increased.                            PUNJAB W.P. NO. 1317 of 1990 In  this writ petition, the challenge is to the validity  of Sections  49  and 79 of the Supply Act.   According  to  the respondent  (Punjab  State,  Electricity  Board),  the  writ petition is not maintainable.  A challenge to the imposition of  advance  consumption  of deposit does  not  involve  any fundamental right. The  Punjab  State Electricity Board is a  licensee  of  the State of Punjab.  The electrical energy is generated through hydro  as  well  as  thermal plants  for  ultimate  sale  to consumers.  50% of powers generated through hydro while  the remaining  through  thermal plants which  consume  coal/oil. The coal companies and those major suppliers of power plants are demanding cost of coal in advance.  On these advances no interest  is  payable to the Board.   Therefore,  while  the Electricity  Board is required to make colossal advances  to generate  electricity and supply to consumers the  consumers also use and consume electricity 242 on  credit  ranging from 2 to 3 months  depending  upon  the category  of consumers.  To off-set part of the amount  that the consumer owes to the Board constantly and also to ensure timely payment of advances by the Board to its suppliers  an advance   consumption  deposit  is  insisted   upon   before commencing supply to the consumer.  If this is not so  taken the Board will be left with no other option than to increase the  tariff.   This advance deposit cannot be  termed  as  a fixed deposit as the amount cannot be utilized against  non- payment  of dues from consumers.  Besides,the consumers  can also  ask for the refund.  Sections 49(1) and 79 (j)  cannot be termed as arbitrary.  In fact, this Court has upheld  the validity of Section 49 (1) in Jagdamba’s case (supra). Lastly,  it  is  submitted  that  the  Board  is  generating electricity and each unit so generated costs the Board rupee one per unit.  The Board is selling at an average rate of 50 paisa   per  unit  to  the  consumer  which   includes   the agricultural sector.  Therefore, the amendment to clause  23 of  abridged conditions of supply requiring to  pay  advance consumption deposits is perfectly reasonable. Mr.  P.P.  Rao, learned counsel appearing as  intervenor  on behalf   of   Calcutta   Electricity   Supply    Corporation supplements  the submissions of Mr. Soli J.  Sorabjee.   The deposit   though  called  security  deposit  is  really   an adjustable  advance  payment of  consumption  charges.   The amount  is  revisable from time to time depending  upon  the average   consumption  charges  on  the  basis   of   actual consumption over a period. The  true  nature of transaction in these cases  is  one  of

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advance  for  consumption  of electricity  estimated  for  a period  of three months subject to adjustment /revision,  if necessary.   Such an advance is liable to be made  good  and kept at a stipulated level from month to month.  It is  open to  the consumer to permit adjustment of the advance in  the first  instance.   Thereafter, make good  the  shortfall  in consumption  charges and the security deposit before  actual disconnection  of  supply which takes at least  about  three months.  In short, it is in the nature of a running account. The  security deposit does not remain in tact like  a  fixed deposit  but  gets depleted day after day depending  on  the extent  of consumption More often than not, the  consumption charges  and other dues exceed the security  deposit.   That necessitates calling for 243 additional  advance to make up a shortfall.  In the  absence of  any usage or contract or any provision of law  requiring payment of interest is not payable for wrongful detention of money.   In  this case, there is no  wrongful  detention  of even.  Section 4 (2) of the Interest Act has no  application to this deposit.  When electricity supply is duly made  with a consequential liability to pay for each day’s consumption, the so-called security deposit is not a deposit in the  real sense  for  the consumers to claim the benefit  of  Interest Act. We will now proceed to consider the correctness of the above submissions with reference to the following aspects:               (i)   Whether  Section 49 is bad for  want  of               guidelines.               (ii)The   nature  of  consumption   deposit,               irrespective  of the nomenclature by which  it               is called.               (iii)(a)  The  liability  of  the  Electricity               Board to pay interest.               (b)   Whether  the  clause  in  the  terms  of               supply providing for nonpayment of interest is               unconstitutional or arbitrary.               (iv)The   demand  for  additional   consumer               deposit Whether valid? VALIDITY OF SECTION 49 The law relating to electricity is principally contained  in two Acts. (i)The   Indian  Electricity  Act  of  1910   (hereinafter referred  to  as the "Electricity Act").  ’Ms  provides  for grant  of licences in relation to supply of electricity  and the  projects of undertakings.  It also provides for  supply of electricity including the protective clauses. (ii)The  Electricity  (Supply)  Act  of  1948   (hereinafter referred  to as the "Supply Act") provides for  constitution of State Electricity Boards, the powers and- duties of  such Boards.  Certain important 244 provisions of the Act may now be seen. Section 2 is interpretation Section, Under  Section  2 (2) the Board means  a  State  Electricity Board constituted under Section 5. Under   Section   2  (10)  states  that   regulation   means regulations made by the Board under Section 79. Section  5  deals with the constitution and  composition  of State Electricity Board. Section  49 is the provision for sale of electricity by  the Board to persons other than the licensees.  Sub-section  (1) of the said Section commences with the words "Subject to the provisions  of this Act and of Regulations".  This means  if there are any provisions regulating the Board in the  matter

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of supplying electricity to any persons not being a licensee then  the supply by the Board will he subject to  all  those provisions.   It  has  been so laid  down  in  Mysore  State Electricity   Board  v. Bangalore Woollen, Cotton  and  Silk Mills Ltd., AIR 1963 SC 11 28 at page 1136:               "The expression "Subject to the provisions  of               this  Act"  merely  that  if  there  are   any               provisions regulating the Board in the  matter               of  supplying  electricity to any  person  not               being a licensee, then the supply by the Board               will  be  subject  to  those  provisions.   No               provision has been brought to our notice which               regulates  the  Board  in the  matter  of  the               charges  which  it may fix for the  supply  of               electricity." This  Court had occasion to deal with the scope-of the  said Section  and Section 59.  In Hindustan Zinc Ltd.  v.  Andhra Pradesh  State Electricity, Board [1991] 3 SCC 299 at  pages 317-319 it has been observed thus:               "Section  49 makes provision for the  sale  of               electricity by the Board to persons other than               licensees.  Sub-               245               section (1) starts with the words "Subject  to               the provisions of this Act and of regulations,               if any, made in this behalf’.  This means that               the provision made therein is subject to other               provisions   of   the  Supply  Act   and   the               regulations.  It then proceeds to say that the               Board may supply electricity to any person not               being   a  licensee  upon  ’such   terms   and               conditions as the Board thinks fit and may for               the  purposes  of such supply  frame  ’uniform               tariffs’.   Sub-section  (2)  then  enumerates               several factors which the Board is required to               ’have   regard  to’  in  fixing  the   uniform               tariffs.   The meaning of the expression  have               regard  to is well settled, it means that  the               factors specifically enumerated shall be taken               into  account  while performing  the  exercise               which in this case is fixation of the  uniform               tariffs.    Ordinarily,   therefore,   uniform               tariffs are required to be framed by the Board               for making such supply.  Sub-section (3)  then               proceeds  to say that nothing in  the  earlier               enacted  provisions  shall derogate  from  the               power  of  the  Board,  "if  it  considers  it               necessary   or  expedient  to  fix   different               tariffs  for the supply of electricity to  any               person",  having  regard to  the  geographical               position of any area, the nature-of the supply                             and  purpose for which supply is  required  an d               any other relevant factors’.  Sub-section  (4)               then says that in fixing the tariffs and terms               and conditions for the supply of  electricity,               ’the Board shall not show undue preference  to               any  person.,  In other word,  subsection  (4)               provides   against   any   unreasonable   dis-               crimination  in fixing the tariffs  and  terms               and conditions for supply of electricity.  The               power  of fixation of tariffs in the Board  is               provided  in this manner by Section 49 of  the               Supply  Act  which requires  the  fixation  of               uniform   tariffs  ordinarily  having   regard

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             particularly  to  the  specified  factors  and               enables  fixation  of  such  tariffs  for  any               person having regard to the factors  expressly               stated   and  any  other   relevant   factors,               providing  further  that  no  unreasonable  or               undue preference shall be shown to any  person               by  the  Board in exercise of  its  powers  of               fixin the tariffs.               246               The next important provision is Section 59  of               the Supply Act.  For appreciating the argument               based  on Section 59, it is necessary to  bear               in  mind the distinction in Section 59  as  it               stood  prior to 1978, as amended by Act 23  of               1978 and finally as amended by Act 16 of 1983,               quoted earlier.               Prior to 1978, Section 59 required the  Board,               as far as practicable and after taking  credit               for any subventions from the State  Government               under   Section  63,  not  to  carry  on   its               operations  under this Act at a loss  and  for               this  purpose, it was empowered to adjust  its               charges accordingly from time to time.   Under               the  provision  as it then existed,  the  main               thrust  was to avoid the Board  incurring  any               loss and for that purpose, it could adjust its               charges   accordingly  from  time   to   time.               Section  59  as  amended by  Act  23  of  1978               required  the Board, after taking  credit  for               any  subventions  from  the  State  Government               under  Section 63, to carry on its  operations               under this Act and to adjust its tariffs so as               to ensure that the total revenues in any  year               after meeting all expenses properly chargeable               to revenue including those specified,left such               surplus as the State Government specified from               time  to  time.   The  shift  was,  therefore,               towards   having  a  surplus.  as  the   State               Government specified from time to time.   Sub-               section  (2) then provided guidelines for  the               State  Government  in specifying  the  surplus               under   sub-section  (1)  and  mentioned   the               factors to which regard was to be had for this               purpose.  The effect of the amendment made  in               Section 59 by Act 16 of 1983, which came  into               effect from April 1, 1985, was to provide  for               a  minimum surplus, of three per cent or  such               higher  percentage as the State Government  is               to  specify in this behalf.  In  other  words,               prior to 1978 amendment, the requirement  from               the  Board was towards ensuring a  surplus  as               specified  by the State Government, and  after               the  1983 amendment the Board is  required  to               ensure  a surplus of at least three  per  cent               unless   the  State  Government  specifies   a               higher. sur-               247               plus.  This is the scheme of Section 59 and it               is Section 59 as amended by 1978 Act but prior               to  its amendment by the 1983 Act, with  which               we are concerned in the present case.               It cannot be doubted that Section 59 requiring               the  Board  to  adjust  its  tariffs  for  the               purpose of Board’s finance is to be read along               with  Section 49 which  provides  specifically

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             for  fixation  of tariffs and  the  manner  in               which that exercise has to be performed  while               dealing   with  any  question   relating   the               revision of tariffs.               into  force  from April 1, 1985, is  that  the               Board entitled to adjust its tariffs to ensure               generating  a surplus of not less  than  three               per  cent even without such  specification  by               the  State  Government  and  when  the   State               Government  specifies a higher  surplus,  then               the  Board must ensure generating  the  higher               specified   surplus.   This  is,  of   course,               subject  to  the accepted norm  of  the  Board               acting  in consonance with its public  utility               character  and  not  entirely  with  a  profit               motive  like  that of a private  trader.   The               pre-1978 concept of the Board’s functioning to               merely avoid any loss is replaced by the shift               after  1978  amendment  towards  the  positive               approach  of requiring a surplus to be  gener-               ated,  the quantum of Surplus being  specified               by  the  State Government, with a  minimum  of               three  per cent surplus in the absence of  the               specification  by the government of  a  higher               surplus,  after  the  1983  amendment.    This               construction  made of Section 59, as it  stood               at  different  times in  Govinda  prabhu  case               [1986]  4 SCC 198 indicated earlier cannot  be               faulted in any manner.  In Govinda Prabhu case               the same argument which is advanced before  us               was  expressly rejected.  We are of  the  same               view." The next Section is Section 79 which talks of power to make 248 regulations.  Clause (j) deals with the principles governing the supply of electricity by the Board to persons other than the  licensees under Section 49.  In accordance  with  this, each  of the Boards has framed regulations.   All  consumers are  required to execute agreements governing the supply  of energy. The  attack against Section 49 is that it does  not  contain any  norm of guideline with regard to framing of  terms  and conditions for the supply of electricity and in  particular, the demand of payment of interest on the amounts due to  the Board.  Further, the principle of fairness of action has not been  explicitly set out so as to make it a  visible  guide. The words occurring in the Section "as the Board thinks fit" must be construed as "reasonably thinks fit".  We are unable to countenance this argument.  A careful reading of  Section 49 clearly discloses as was noted in Hindustan Zinc Ltd.  v. A.P.S.E.B.  [1991] 3 SCC 299 at 317 sub-section (1)  of  the said   section  starts  with  the  words  "Subject  to   the provisions  of the Act and all regulations, if any, made  in this  behalf’.  Therefore, the Board has to conform  to  the various provisions of the Act and the regulations.   Section 49 contains two powers: 1. To prescribe terms and conditions of supply; and 2. fix the tariff. No  guidelines  are required in this  regard.   In  Jagdamba Paper  Industries  Pvt.  Ltd. v. Haryana  State  Electricity Board  [1983]  4  SCC 508 at 513-14 it was  pointed  out  as follows:               "We  are of the view that the Board  has  been               conferred statutory power under Section 49 (1)               of the Act to determine the conditions on  the

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             basis  of  which supply is to be  made.   This               Court  in  Bisra Stone Lime  Company  Ltd.  v.               Orissa  State Electricity Board [1976]  2  SCR               307,  took the view that enhancement of  rates               by way of surcharge was well within the  power               of  the  Board to fix or revise the  rates  of               tariff under the provisions of the Act.   What               applied  to the tariff would equally apply  to               the security, that being a condition in               249               the   contract   of  supply.   Each   of   the               petitioning  consumers had agreed  to  furnish               security  in cash for payment of energy  bills               at the time of entering into their  respective               supply agreements.  There was no challenge  in               these  writ  petitions  that  the  demand   of               security  at the time of entering into  supply               agreements  has  to be struck  down  as  being               without  jurisdiction.  Section 49 (1) of  the               Act  clearly  indicates  that  the  Board  may               supply  electricity  to any person  upon  such               terms and conditions as the Board thinks  fit.               In  exercise  of  this  power  the  Board  had               initially  introduced the condition  regarding               security  and  each  of  the  petitioners  had               accepted the term."                (Emphasis supplied) Where, therefore, under Section 49 read with Section 79  (j) regulations are made, the validity of the regulations  could be  examined  by the Court, whether they are  reasonable  or not. In  Southern  Steel Ltd.  Hyderabad v.  The  Andhra  Pradesh State Electricity Board AIR 1990 Andhra Pradesh 58 at 66-67, it was observed:               "Before  we  proceed to deal  with  the  rival               contentions, it would be appropriate to notice               the  scope of judicial scrutiny by this  Court               in such matters.  Acting under Art. 226 of the               Constitution,  this Court does not sit  as  an               appellate   authority  over  the   Electricity               Board.   Indeed,  the Act has  not  chosen  to               provide  an  appeal  against  the  terms   and               conditions   under  S.49.   The   jurisdiction               exercised  by  this Court under  Art.  226  is               supervisory  in nature.  It is to  ensure  the               observance  of fundamental right the  rule  of               law, and to keep the authorities within  their               bounds.  Undoubtedly, the Electricity Board is               a  ’State’ within the meaning of Art.  12  and               hence it is subject to Parts III and IV of the               Constitution.     The   scope   of    enquiry,               therefore,  would  be to examine  whether  the               power conferred               250               upon  the  Board by S.49 of the Act  has  been               exercised so unreasonably and arbitrarily that               interference by this Court is called for.                For  the  purpose of this enquiry it  is  not               necessary  for  us  to go  into  the  question               whether  the  terms  and  conditions  notified               under  S.49 are statutory, in nature  or  not.               We  shall proceed on the assumption that  they               are  not statutory.  We shall also proceed  on               the  assumption that the terms and  conditions               notified  under S. 49 ought to be  reasonable,

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             in the sense that they must be related to  the               object and purpose for which they are  issued.               We  are equally aware that the power under  S.               49  cannot be allowed to be used  for  oblique               purposes, or for purposes unrelated to the one               sought to be achieved by a given condition." In  M/s  Mills, Bharatpurv Assistant  Engineer(D)  R.S.E-.B. ,Bharatpur AIR 1981 Rajasthan 108 at 109, it was observed:                "Where  demand for deposit of  cash  security               for one month’s estimated consumption  charges               and   bank  security  equal  to   two   months               estimated    charges   as   contemplated    by                             Regulation  20 read with the  Schedule  theret o               was  made  by  the Electricity  Board  from  a               consumer  of  high  tension  electricity,  the               demand  could not be said to  be  unreasonable               and  the  consumer would not  be  entitled  to               continuation  of the energy under Sec.  24  of               the Electricity Act on his failure to  deposit               such  security, even if no agreement had  been               entered.  into  between the consumer  and  the               Board  after the commencement of high  tension               supply.   Once the supply for electricity  had               commenced the consumer was bound by the  terms               and  conditions  of supply  contained  in  the               Regulations.  Further, in such a case,  merely               because the Board did not encase or could  not               encash   a  small  portion  of  the   security               deposited  in  the  form  of  National  Saving               Certificates  before coming into force of  the               Regulations, it could               251               not  be said that the demand of cash  security               in  the  form of Bank guarantee by  the  Board               under   the  Regulations   was   unreasonable.               furthermore,  the demand of security from  the               consumer  which  was in  accordance  with  the               Regulations  framed by the Board could not  be               said  to  be unreasonable  merely  because  no               interest   is  paid  on  the   cash   security               deposited by the consumer."  In  other  words, the terms and conditions  notified  under Section 49 must relate  to the object and purpose for  which they  are issued. Certainly, that power cannot be  exercised for  a collateral purpose. In this view, we hold Section  49 as valid.          NATURE OF CONSUMPTION SECURITY DEPOSIT Each  of the Electricity Boards before us is a State  within the  mening  the meaning of Article l2 the  Constitution  of India.   The Boards are different from licensees.  (Emphasis supplied)  Each  of  the Board has framed  the  tern-is  and conditions  of  supply.   One  such  condition  relates   to security  deposits.   Such a deposit varies  from  Board  to Board.  For example, under the terms and conditions notified by Andhra Pradesh Electricity Board under Condition No.  28. 1.1 the consumer is required to deposit with the Board a sum in  cash  equivalent to estimated three  months  consumption charges.   In the case or Rajasthan, the security is in  the form  of cash for one month and bank or insurance  guarantee for two months. The  legislative Sanction behing the power of the  Board  to direct  a consumer to furnish security may be examined.   It has  already been seen that the Supply Act is  complementary to  the Electricity Act, 1910. Section 26 of the supply  Act

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states  that  the  Board  shall  have  all  the  powers  and obligations  of a licensee under the Electricity  Act.   And this  shall be deemed to be a licence of the Board  for  the purpose  of  the Act.  Under the regulations framed  by  the Board in exercise of powers of Section 49 read with  Section 79  (j) the consumer is only entitled and the Board  has  an obligation to supply energy to the consumer upon such  terms and  conditions  as  laid  down  in  the  regulations.   If, therefore,  the  regulations prescribed a  security  deposit that will have to be complied with.  It also requires to  be noticed under clause (6) of Schedule II of 252 the  Electricity  Act  that the requisition  for  supply  of energy by the Board is to be made under proviso (a) after  a written contract is duly executed with sufficient  security. This,  together with the regulations stated above, could  be enough  to  clothe it with legal sanction.  In  cases  where regulations  have  not been made Rule 27 of the  Rules  made under the Electricity Act enables the adoption of model form of  draft  conditions of supply.  Annexure VI in  clause  14 states that the licensee may require any consumer to deposit security  for  the payment of his monthly bills  for  energy supplied and for the value of the meter and other  apparatus installed in his premises.  Thus, the Board has the power to make regulations to demand security from the consumers. The  next question will be: what is the object in  demanding security? The  deposit  though called security deposit  is  really  an adjustable  advance  payment of  consumption  charges.   The payment  is  in  terms of  the  agreement  interpreting  the conditions  of supply.  This security deposit  is  revisable from  time  to  time on the  basis  of  average  consumption charges depending upon the actual consumption over a period. This  is  the position under the terms of supply  of  energy with reference to all the Boards. As a matter of fact, electricity is supplied in anticipation of  payment.   In almost every case it  takes  nearly  2-1/2 months  for  the recovery of the amount  before  action  for disconnection could be taken.  We will give one illustration as  is  in  the case of  Rajasthan.   The  following.is  the billing cycle: (a) Consumption period                         30 days (b)  Period consumed after taking the meter readings to issue bills.              10 days (c) Period allowed for payment                  17 days (d)  -Notice for disconnecting 253 supply if consumer fails to deposit energy bill in             7 days time. (e) Period taken in actual disconnection after expiry of notice.                             10 days Total:                                        74 days In  practice,  some time is also taken  between  the  period allowed for payment and the notice of disconnection.  At the same time, there is no obligation that the consumer must use only  a  particular quantum of electricity.  He  could  even consume more than the average consumption.  The Board  after 2-1/2 months recovers amount for the electricity supplied by it.  It could charge late surcharge in case of high  tension tariff after the expiry of the said period. Thus,  it  will  be  clear  that  the  true  nature  of  the transaction  in  these cases is one of  advance  payment  of charges  for  consumption  of electricity  estimated  for  a period  of approximately three months.  Such an  advance  is

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liable to be made good and kept at the stipulated level from month  to  month.   It is open to  the  consumer  to  permit adjustment   of   the  advance  in   the   first   instance. Thereafter, he could make good the shortfall in  consumption charges    and   the   security   deposit   before    actual disconnection.   Actually speaking, it is only  after  three months  the disconnection takes place.  Hence, it is like  a running current account. The  cycle of billing by the Board demonstrates that in  the very  nature of things, the consumer is supplied  energy  on credit.   The compulsory deposit in the context  of  billing cycle is hardly adequate to secure payments to the Board  by the  time  the  formal bill by the Board is  raised  on  the consumer.   In one sense, the consumption  security  deposit represents only a part of the money which is payable to  the Board on the bill being raised against the consumer.   Thus, the  Board  secures itself by resorting to such  deposit  to cover part of the liability. For  supply  of  electricity the  Board  needs  finance  for production, supply and other-charges necessary for supply of electricity.  For this purpose, it takes loans from  various financial institutions.  This is best 254 illustrated  if  one  looks at the  transactions  of  Punjab Electricity Board where electric energy is generated through hydro  as  well as thermal plants for ultimate sale  to  the consumers of the total power generated about 50 per cent  is through  hydro  plants.  The remaining energy  is  generated through  thermal  power plants which are operated  on  coal/ oil.   Due  to limited hydro resources within the  State  of Punjab  the dependency on power on thermal plants is on  the increase.   The present requirement for working  of  thermal plants  is more than 52 lakh tonnes of coal per  annum.   In addition, 60 thousand kolo litre of furnace oil is required. The  coal companies/Coal India Limited together  with  major suppliers  of  power plant like M/s.  BHEL  demand  cost  of coal/ spares/projects in advance for the supply of material. The  Board is also required to purchase power  from  Central projects N.T.P.C., N.H.P.C. in order to meet the demand  for power  by the consumers.  For purchase of such  power  again advance payment are made by the Board.  On such advances the Board is not paid any interest.  The effect is, the Board is obliged  to  bear  the liability of hundreds  of  crores  of rupees  per annum.  It has no option but to pay the  charges and deposits in order to keep the power available at a level to meet with the demand of the consumers.  It is the case of the  Board  that it has opened letters of credit  by  making advance  deposits  in  favour  of  National  Thermal   Power Corporation and the suppliers.  Coal India Limited has  also asked  the  Board  to open revolving letters  of  credit  in favour  of Coal companies/Coal India Limited.   Despatch  of coal is only against the letter of credit. From the above, it is clear that while the Electricity Board is   required   to  make  colossal  advances   to   generate electricity  and supply to consumers, the consumers use  and consume  electricity  on credit ranging from 2 to  3  months depending  upon the category of consumers.  To off-set  part of the amount the consumer owes to the Board continually  to ensure  timely  payment  of  bills  by  the  Board  to   its suppliers, the advance consumption deposit is required to be kept  with  the  Board  before  commencing  supply  to   the consumer.   The  clauses  in the  contract  in  relation  to conditions of supply of electric energy enable the Board  to adjust  the bill against such deposits.  Therefore, this  is not  a  case  of  mere deposit of  money  as  in  commercial

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transaction.   In demanding security deposit it is  open  to the  Court to take note of pilferage as laid down  in  Ashok Soap Factory v. Municipal Corporation of Delhi J.T. (1993) 1 S.C. 128 at page 137: 255               "............The variation in the  electricity               consumed by different consumers indicated that               the  charge  of pilferage of  electricity  and               gross  under  utilisation  or  consumption  of               electricity  compared to the  sanctioned  load               was not without foundation.......... The  meaning of he term "deposit" is given in  Corpus  Juris Secundum,  Vol.  26A,P.  194 quoted  in  Davidson  v.  U.S., CCA.Pa.,292 F. 750, 752 as follows:               "In  the sense of an Act.  A deposit has  been               described as a mere incident of custody,  and,               in   its   ordinary   signification,   implies               something more than mere possession, negatives               all idea of loan with contemplation of use for               profit,  and  has been defined as  an  act  by               which  a  person  receives  the  property   of               another,  binding himself to preserve  it  and               return  it  in  kind; the act  of  one  person               giving  to  another,  with  his  consent   the               possession  of personal property to  keep  for               the use and benefit of the first or of a third               party.  It may mean a permanent disposition of               the  thing  placed  or deposited,  or  a  mere               temporary disposition or placing of the thing. In  these  circumstances,  we conclude that  the  object  of security deposit is to ensure proper payment of bills. Three  months’  security  deposit  cannot  be  characterised either  unreasonable or arbitrary.  This Court had  occasion to  point out in Jagdamba Paper industries Pvt.  (supra)  at paragraph 10 which reads as under:               "We  agree however, on the facts  placed  that               the stand of the Board that a demand equal  to               the energy bill of two months or a little more               is  not  unreasonable.   Once  we  reach   the               conclusion  that  the Board has the  power  to               unilaterally revise the conditions of  supply,               it  must  follow  that the  demand  of  higher               additional  security  for  payment  of  energy               bills is unassailable, provided               256                that  the power is not exercised  arbitrarily               or unreasonably." Several  High  Court decisions also had taken this  view  as seen  from K.C Works v. Secretary APSEB.  Vidyut Soudha  AIR 1979 Andhra Pradesh 291 at 294:               "The  reasonableness of such a requirement  is               explained by the Board in its counter in  W.P.               No. 2359/ 75 out of which W.A. No. 156 of 1977               arises.   In  the  counter it  was  stated  as               follows:-               "The   consumer  is  billed  for  such   month               separately.     The   consumers    electricity               consumption during the month is billed at  the               end  of the succeeding month and 30 days  time               is  given to him for payment of the bill.   If               he does not pay the bill his supply is  liable               to  be  disconnected after giving  one  week’s               notice   under  Section  24  of   the   Indian               Electricity  Act, 1910. Meanwhile he  will  be               consuming  the  power.   So by  the  time  the

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             supply   is  disconnected  to   a   defaulting               consumer the would have consumer energy for  3               months.   The Board’s interest  requires  that               there  should  be some protection  by  way  of               security of advance payment in respect of  the               consumption of this three months period."               This  is how the Board sought to  explain  the               reasonableness of the requirement of  security               representing three months average  consumption               charges.    Nobody  can  say  that   this   is               unreasonable.  For three months a consumer can               go  on  consuming  electrical  power   without               paying   any   charges.   It   is   therefore,               eminently reasonable for the Board to  require               the  consumer  to furnish security  for  three               months  charges.  Therefore, we are  satisfied               that  the  requirement of security  for  three               months consumption charges is reasonable."               At page 295 it was observed thus:               257               "As  a matter of fact it may be that the  writ               appellant  and the writ petitioner  before  us               are  prompt in paying their  electrical  dues.               but  the Board alees with lakhs and  lakhs  of               consumers and it should have a uniform  policy               in demanding security.  It cannot make a  dis-               tinction  or discrimination from one  consumer               to another.  That is why  a uniform policy has               been  laid  down by incorporating  it  in  the               conditions  aforesaid.  For these  reasons  we               are satisfied that the requirement of security               for  three months average consumption  charges               by way of cash deposit is reasonable." In  Municipal  Corporation  for Greater Bombay  v.  M/s  D.M Industries AIR 1984 Bombay 242 at 256 it was observed thus:               "This brings us to the last argument  advanced               by  Mr.  Hidayatullah that Clause  12  of  the               draft agreement is arbitrary and unreasonable.               The  argument  was that the  power  to  impose               conditions  cannot  be  exercised  to   impose               unreasonable  conditions and it must  also  be               ascertained whether the condition achieves the               object for which it is imposed.  On principle,               the  proposition is undisputable.   Clause  12               which  can  be described as  unreasonable  and               whether  this  Clause has no  nexus  with  the               object of the Act and the Rules.  The argument               ,appears to be that if the object of  security               is to secure payment of bills, then insistence               on cash deposits would be unreasonable because               the object could also be served by  furnishing               of  any  security  and it  is  said  that  the               consumer   was  willing  to  furnish  a   bank               guarantee.  In addition, it is urged that  the               period   of.  consumption  for   which   these               security  is  required should not  exceed  two               months  and, therefore, the  determination  of               three months is arbitrary." In Haryana Ice Factory v. Municipal Corporation of Delhi AIR 1986 Delhi 78, It was held thus:               "Also,   the  demand  of  the   security   was               corelated to the               258               consumption  Pattern of the consumers  and  to               cover the energy charges from the date of  its

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             consumption   till   the  date   of   ultimate               disconnection  as a result of  non-payment  of               the changes due.  The court cannot enter  into               mathematical   calculations  to  come   to   a               conclusion  that in stead of three  months  it               should  be  21/2 months.  The  fixing  of  the               period of security equal to energy consumption               of three months is reasonable.  It may be that               the  Haryana Electricity Board has  fixed  the               period of security deposit equal to the amount               of energy consumed for a period of two  months               but  that would depend upon the billing  cycle               adopted  by  the  Haryana  State   Electricity               Board." In   Southern  Steel  Ltd.  Hvderabad  V.  The  A.P.   State Electricity Board AIR 1 990 Andhra Pradesh 58 at pages 68-69 it was observed:               "It is also stated by the Board that huge sums               are  required by it as rotating capital;  that               it  borrows large amounts  from  organisations               like  L.I.C. and Banks; that it pays  interest               to them, and that in such circumstances it  is               well  entitled to require the consumer to  co-               operate  by paying their bills  regularly,  by               giving security deposits, and by conforming to               the  terms  and conditions of supply.   It  is               argued that this consideration was also one of               the  bases  of condition No. 28.   We  do  not               think  it necessary to express any opinion  on               this question, though the truth of the  matter               cannot  be denied.  There are two  views  upon               the  matter.   The petitioners  say  that  the               interest  burden  should be reflected  in  the               tariffs,  while the Board says  that  interest               burden   can  be  reflected   in   consumption               deposits, and not necessarily in tariffs.  All               that  can say is that there no hard  and  fast               rule in this behalf.  The interest burden  can               be  reflected  either in tariffs,  or  can  be               sought  to  be  set off by  calling  upon  the               consumers  to  make deposits.  In  this  case,               however.   It is unnecessary to go  into  this               aspect, since the requirement of three  months               deposit, in our opinion, cannot be said to  be               unreasonable and unjustified having regard  to               the facts mentioned above.  It cannot be  said               that  the  said condition is  so  unreasonable               and. arbitrary as to call for interference  by               this Court under Art.               259               226  of the Constitution.  We  reiterate  that               even  if  this court comes to  the  conclusion               that the deposit should not be 3 months, but 2               months  7 days, or 2-1/2 months, it would  not               be  entitled to interfere in the  matter,  not               being  an  appellate  authority.   It   cannot               substitute its own opinion for the opinion  of               the  Board.   It can interfere only  when  the               exercise  of power is shown to  be  arbitrary,               and  unrelated  to  the object  sought  to  be               achieved."                We are in agreement with the above extracts.               The  liability  of Electricity  Board  to  pay               interest on Security Deposit: Now, we come to the crucial question as to whether  interest

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is  payable  on  security  deposit  or  advance  consumption deposit.  We will examine from the following angle: (a)  The scheme of Electricity Acts. (b)  Schedule VI of the Supply Act. (c)  Interest Act, 1978 (d)  Equity or Common Law. (a  & 6) Scheme of Electricity Acts & Schedule VI of  Supply Act: It is the submission of Mr. Shanti Bhushan, learned  counsel appearing  for the respondent against Rajasthan  Electricity Board that the scheme of the Electricity Act and Supply  Act together  with  the rules suggest the payment  of  interest. The Board is ’not entitled to utilize the security  deposits for augmenting its finances as they are meant to secure  the Board  against  default  in  payment  of  the  bills.    The correctness of this argument may now be seen: There is no statutory provision which casts an obligation on the  Board  to pay interest on security  deposit.   However, reliance  is  placed on model form of  draft  conditions  of supply  as is found in Annexure VI, traceable to Role 27  of Indian  Electricity  Rules,  1956.  Clause  14  relating  to security deposit of the said Annexure reads: 260               "..  ....  Interest at the rate of   per  cent               per  annum  will be paid by  the  licensee  on               deposits exceeding Rs. 251/-".                     (Emphasis supplied) The  model form is applicable only to a licensee as  defined in Section 2 (4) of the Electricity Act. Though   Rule  27  prescribes  a  model  form  it   is   not compulsory,even for a lincesee to adopt the model  condition of  supply.  This is because Rule 27 itself  Stipulates  the model  conditions  of supply contained in Annexure  VI,  may with  such  variations  as the circumstances  of  each  case require, be adopted by the licensee." Therefore, there is an option available to adopt with such modifications.  In  such a  case, the adoption of the model form becomes  permissive. In  this connection, Section 26 of the Supply Act, to  which we have made a reference earlier, must be looked at.  Though the  Board is to have powers and obligations of  a  licensee under  the  Electricity  Act, the  second  proviso  to  this Section assumes importance.  It reads:               "Provided  further  that  the  provisions   of               Clause  VI of the Schedule to that  Act  shall               apply  to  the Board in respect of  that  area               only  where distribution mains have been  laid               by the Board and the supply of energy  through               any of them has commenced." Second  proviso of the Supply Act leads us to  Schedule  VI. This  Schedule has been framed in exercise of  powers  under Sections  57 and 57A.  In defining "clear profit"  paragraph (2) of clause XVII, Item (v) makes a reference, as  interest of security deposits which is a part of expenditure properly incurred  by  the licensee.  From this it is  impossible  to hold that this clause imposes an obligation on the  licensee to  pay interest on security deposits.  All that would  mean is,  if  interest is paid then it qualifies as  an  item  of expenditure  properly incurred.  This is the  position  with regard  to  licensee.  But this cannot apply to  the  Board, which  as  stated above, is not a licensee.   For  the  same reason  Item  L 1 (c) of Form IV of  the  Electricity  Rules relating to interest paid and accrued on consumers’ security deposits  is of no avail because that relates to the  manner of keeping accounts by the licensee, not being applicable to a Board.

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261 In  the above premises, it follows that there is nothing  to indicate under the scheme of the Electricity Act or Schedule VI  of  the  Supply Act that interest must be  paid  on  the security deposit. (c) Interest Act: applicability. As  regards the applicability of Interest Act, we find  that the  Division  Bench of Rajasthan High Court  has  erred  in holding  that  it is applicable.  Section 4(2)  (g)  of  the Interest Act of 1978 reads as under:               "Notwithstanding  the  aforesaid  and  without               prejudice to the generality of the  provisions               of sub-section (1), the Court shall in each of               the  following cases allow interest  from  the               dates   specified   below  to  the   date   of               institution of the proceedings at such rate as               the Court may consider reasonable, unless  the               court  is  satisfied that  there  are  special               reasons  why  interest should not  be  allowed               namely:               (a)Where  money or other property has  been               deposited  as security for the performance  of               an obligation imposed by law or contract  from               the date of the deposit." This  section has no application to a case where on  account of  a contractual term or a statutory provision  payment  of interest is not permitted, A careful reading of Section 4(2) of the Interest Act  would disclose  that  it  merely enlarges the  category  of  cases mentioned in Section 4(1).  Even otherwise, there is nothing to indicate that section 4(2) could override other statutory provisions  or  a  contract between  the  parties.No  doubt, Section  4(2)  contains a non-obstante clause.  But  such  a clause  is restricted to the provisions of Interest Act  and cannot  extend  to  other laws or  a  contract  between  the parties. Accordingly we overrule the judgment of Rajasthan High Court which holds the Interest Act is applicable. 262 The  deposit made cannot be equated to a fixed deposit.   It has already bee In seen that in the case of daily supply  of electricity,  there is a consequential liability to pay  for each  day’s  consumption  of electricity.   To  ensure  that payment,  the  security  deposit is  furnished.   Hence’  it cannot be equated to a deposit at all.  It is in the  nature of a running current account. (d) Position in Equity or Common Law If this be the position, could interest be claimed either on equity  or  common  law?   The argument  on  behalf  of  the consumers  is, if money belonging to any person is  used  by someone  else he is oblilsed to pay interest for the  period of  its  user.   Halsbury’s Volume 32  (page  53  para  106) defines  "interest" as "the return or compensation  for  the use  or retention by one person of a sum of money  belonging or  owed to another".  Therefore, it is contended  that  the Board is clearly in the position of a trustee in respect  of this  money since the money is deposited by the consumer  in trust with the Board to secure the Board against default  in payment of interest.  The object of the deposit is to secure the payment of consumption charges.  These charges may  very depending upon the daily consumption, depending on the level of  supply.   The amount due by way of  consumption  charges would  also be liable to be appropriated.  Therefore, it  is incorrect  to  state  that  the Board  is  a  trustee.   The relationship between the Board and consumer is not that of a

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trustee  and  a beneficiary but a depositor  and  deposited. This  is  not  even a case of  a  constructive  trust  under Section  90 of the Indian Trust Act, since no  advantage  is gained by the Electricity Board in derogation of the  rights of the consumer in, view of what we have observed above. Strictly  speaking, the word "interest" would apply only  to two  cases  where  there is a  relationship  of  debtor  and creditor.  A lender of money who allows the borrower to  use certain  funds deprives himself  of the use of those  funds. He  does  so  because  he  charges  interest  which  may  be described  as a kind of rent for the use of the funds.   For example, a bank or a lender lending out money on payment  of interest,  In  this  case, as already  noted,  there  is  no relationship of debtor and creditor.    We may now refer to Halsbury’s Vol. 32 para 108: 26               "108.  When interest is payable at common law.               At  common law interest is payable  (1)  where               there is an express agreement to pay interest;               (2) where an agreement to pay interest can  be               implied from the course of dealing between the               parties or from the nature of the  transaction               or   a  custom  or  usage  of  the  trade   or               profession concerned; (3) in certain cases  by               way of damages for breach of a contract (other               than a contract merely to pay money) where the               contract, if performed, would to the knowledge               of the parties have entitled the plaintiff  to               receive interest.               Except  in the cases mentioned, debts  do  not               carry interest at common law." Consumption  security  deposit does not fall  under  any  of categories mentioned above.  Para 109 says:               "Equitable  right  to  interest.   In   equity               interest  may  be recovered in  certain  cases               where a particular relationship exists between               the creditor and the debtor, such a  mortgagor               and mortgagee, obligor and obliged on a  bond,               personal representative and beneficiary, prin-               cipal   and  surety,  vendor  and   purchaser,               principal  and  agent, solicitor  and  client,               trustee  and beneficiary, or where the  debtor               is  in a fiduciary position to  the  creditor,               Interest is also allowed on pecuniary legacies               not  paid  within  a  certain  time,  on   the               dissolution  of a partnership, on the  arrears               of an annuity where there has been  misconduct               or  improper delay in payment, or in the  case               of  money obtained or retained by  fraud.   It               may also be allowed where the defendant  ought               to  have  done  something  which  would   have               entitled  the plaintiff to interest at  common               law, or has Wrongfully prevented the plaintiff               from  doing something which have  so  entitled               him."               This  Paragraph  is also inapplicable  to  the               present case. 264 Even a case of wrongful detention of money cannot arise.  In Bengal  Nagpur  Railway v.RuttanjiRamji AIR  1938  PC67  the question  arose whether interest was payable on  damages  on account of wrongful detention of money.  It was held:               "The  Interest Act however contains a  proviso               that  "interest shall be payable in all  cases               in  which  it  is now payable  by  law."  This

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             proviso applies to cases in which the Court of               equity   exercises   jurisdiction   to   allow               interest: As observed by Lord Tomlin in  Maine               and New Brunswick Electrical Power Co. Ltd. v.               Hart, 1929 AC 63 1:               "In  order to invoke a rule of equity,  it  is               necessary  in the first instance to  establish               the  existence  of a  state  of  circumstances               which attracts the equitable jurisdiction,  as               for example, non-performance of a contract  of               which equity can give specific performance."               "The present case does not however attract the               equitable jurisdiction of the Court and cannot               come within the purview of the proviso." The  very passage was noted by this Court in Union of  India v. A.L. Rallia Ram [1964] 3 SCR 164 at 188-189. The argument of Mr. G., Ramaswami, learned counsel, that the deposit  does not contemplate appropriation is  not  correct because  in  the  nature  of contract it  is  liable  to  be appropriated for the satisfaction of any amount liable to be paid  by  the  consumer to the Board for  violation  of  any conditions  of supply in the context of wide scale theft  of energy,  tempering  with the meters and such  other  methods adopted  by the consumers.  Therefore, the said  consumption security  deposit serves not only to secure the interest  of the  Board  for any such violation but should  serve  as  a, deterrent  on  the consumer in discharging  his  obligations towards the Board. Mr.  G. Ramaswami would rely on Riches v. Westminster  Batik Limited 1947 Appeal Cases 390 at 400. 265 That  is a case which arose under Income Tax Act.  That  has no application to this case.  What came up for consideration in A.L Rallia Ram’s case (supra) was the power of the  Board to  award  interest.  Hence, that case has  no  application. Accordingly,  it is held that the claim for interest  cannot be  legally founded either on common law or equity.   As  is rightly  contended by Mr. Kapil Sibal, learned  counsel  and the other learned counsel appearing for the various  Boards, it is the Board which should be entitled to receive interest on  energy  supplied  to  the consumers  on  credit  as  the consumers enjoy a credit facility as noted already.  We  are also  unable  to accept the argument advanced on  behalf  of consumers   that  because  the  Electricity  Boards   charge interest  on  belated  payments, interest must  be  paid  on security deposit.  Interest on belated payments is by way of penalty.  That has no bearing, Clause providing for non-payment of interest: Whether unrea- sonable? While the terms and conditions of supply of Andhra  Pradesh, Uttar  Pradesh and Bihar provide for payment of interest  at certain rate, in the case of Rajasthan and Orissa the Boards have clearly stipulated that no interest shall be payable on the securities furnished to the Board.  Whether that  clause could  be  considered  unconstitutional  or  arbitrary?   In examining  the constitutionality of this provision, in  that it is violative of Article 14 of the Constitution of  India, the following factors have to be borne in mind: 1.Article 14 does not mandate mathematical exactitude  or scientific precision. 2.The mode and the period of security vis-a-vis the  billing practice must form the consideration. 3.The  consumer  with  open eyes  has  entered  into  the agreement and solemnly undertaken to abide by the conditions regarding nonpayment of interest.  He cannot resile from the

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condition because there is nothing inherently  objectionable about  such  a  condition nor is such  a  condition  per  se illegal  or  void as opposed to public policy.   It  is  not uncommon  in  commercial transaction, such  a  provision  is entered into. 266 The argument that the Board is monopolistic in character and therefore,  the consumers have no other option but to  enter into  contract appears to be misconceived.  The Board  under Section 49 of the Supply Act is entitled, apart from framing uniform tariff, to insist upon such terms and conditions  as the  Board  thinks fit.  This has also been  so  stated  in. Jagdamba  case  (Supra).  The consumption  security  deposit whether or not it carries interest is a condition  precedent for  the supply of electric energy.  We are clearly  of  the view  that  the  scrutiny by the Court  in  determining  the unconstitutionality   of  a  provision  not  providing   for interest must be tested on the following touchstone: In  imposing  such  a condition has the  Board  acted  as  a private  trader  and  thereby shed off  its  public  utility character’?  By referring to Hindustan Zinc Ltd. (supra)  we have  earlier  pointed  out  the  interrelationship  between Sections  49  and  59  as  noted  by  this  Court.   We  are therefore. of the view that in imposing such a condition the Board  has  not acted as a private trader.   The  nature  of deposit  has a rational relationship to the object which  is incorporated as a condition of supply. Some  of  the learned counsel appearing  for  the  consumers would draw our attention to Section 59 of the Supply Act  as well.   Under  the said section the Board  is  obligated  to carry  on  its operation as to ensure that  it  generates  a surplus  of  3  per  cent  or  as  specified  by  the  State Government.   The Board is obligated to adjust  its  tariffs for   ensuring  such  surplus.   The  condition  of   supply requiring  a  consumption  security  deposit  has  a  direct bearing  on  the  operations of the Board which  are  to  be conducted  in  such a manner as to ensure  a  surplus.   The language  in Section 59 of the Supply Act is "carry, on  its operations  under  this  Act and adjust  its  tariffs."  The language  of  the said section is not by  adjusting  tariff. Therefore,  the argument that the only manner in  which  the Board  can achieve a surplus is to adjust its  tariffs  does not  flow from the language of Section 59.  So read, in  the context  of the insistence of a security deposit  which  has direct  bearing  on the operations of the Board  is  per  se reasonable and constitutional. We  will  assume,  for a moment, that  the  contract  is  an adhesion contract.  But still, it is not unconscionable. 267 In Central Inland Water Transport Corporation v. Brojo  Nath Ganguly  [1986]  3  SCC 156 at 208  "adhesion  contract"  is defined  quoting Black’s Law Dictionary, Fifth  Edition,  at page 38, as follows:               "Adhesion  contract.   Standardized   contract               form   offered  to  consumers  of  goods   and               services on essentially ’take it or leave  it’               basis  without  affording  consumer  realistic               opportunity   to   bargain  and   under   such               condition that consumer cannot obtain  desired               product  or services except by acquiescing  in               forth   contract.   Distinctive   feature   of               adhesion contract is that weaker party has  no               realistic  choice  as to its  terms  is.   Not               every such contract is unconscionable." With  reference to these contracts the Court offered  relief

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to   the  parties  against  such  a  clause  if  it  is   so unreasonable  as to be unconscionable.  As a matter of  fact at page 21 1, paragraph 83 of Central Inland Water Transport Corporation v. Brojo Nath Ganguly [1986]  3 SCC 15 it stated thus:               "Yet   another  theory  which  had  made   its               emergence in recent years in the sphere of the               law of contracts is the test of reasonableness               or  fairness of a clause in a  contract  where               there is inequality of bargaining power.  Lord               Denning,  MR,  appears to have been  the  pro-               pounder,  and perhaps the originator at  least               in  England,  of this  theory.   In  Gillespie               Brothers  & Co. Ltd. v. Roy  Bowled  Transport               Ltd. [1973] QB 400, 416 where the question was               whether an indemnity clause in a contract,  on               its    true   construction,    relieved    the               indemnifier  from  liability  arising  to  the               identified  from  his  own  negligence,   Lord               Denning said (at pages 415-416):               The  time  may  come  when  this  process   of               ’construing’  the contract can be  pursued  no               further.  The words are too clear to permit of               it.  Are the courts then powerless?  Are  they               to   permit   the   party   to   enforce   his               unreasonable  clause,  even  when  it  is   so               unreasonable,               268               or   applied   so  unreasonably,  as   to   be               unconscionable?  When it gets to this point, I               would say, as I said many year ago:.               ’there  is  the vigilance of  the  common  law               which,  while  allowing freedom  of  contract,               watches to see that it is not abused’ John Lee               &  Son  (Grantham) Ltd. v.  Railway  Executive               [1949] 2 All ER 581, 584.               It  will not allow a party to  exempt  himself               from his liability at common law when it would               be  quite  unconscionable for him  to  do  so.               (emphasis supplied,)"               Farms  worth on Contracts, 2nd Edn.  319,  320               para 4.27 states:               "4.27 Precursors of Unionscionability.  Courts               of  equity  did not share  the  reluctance  of               common  law  courts  to  police  bargains  for               substantive    unfairness.     Though     mere               "inadequacy of consideration" alone was not  a               ground  for with holding equitable  relief,  a               contract    that    was    "inequitable"    or               "unconscionable" one that was so unfair as  to               "shock the conscience of the court’ would  not               be  enforced in equity.  In one such  case,  a               man promised to give a 20 percent interest  in               all  property that he might later  acquire  in               Alaska in return for the Promisee’s payment of               $1,000 and his cancellation of an $11,225 debt               of  questionable  collectability.   When   the               promiser   acquired  property  worth  over   $               750,000,   the   promises   sought    specific               Performance.   The court refused to grant  it.               Though  the fairness of the bargain was to  be               judged  as  of the time that the  bargain  was               made,  in  equity as at common law,  here  the               "inadequacy of consideration" for the  promise               sought  to  be enforced was "so  gross  as  to

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             render the contrast unconscionable." In  dealing with the validity of the agreement containing  a clause 269 relating  to  minimum guarantee this Court had  occasion  to observed  in Bihar State Electricity, Board v. Green  Rubber Industries [1990] 1 SCC 731 at page 740 as follows:               "It  is  true  that  the  agreement  is  in  a               standard  form  of  contract.   The   standard               clauses  of  this contract have  been  settled               over  the years and have been  widely  adopted               because experience shows that they  facilitate               the  supply of electric energy.  Lord  Diplock               has  observed: "If fairness or  reasonableness               were relevant to their enforceability the fact               that  they  are widely used by  parties  whose               bargaining power is fairly matched would arise               a  strong presumption." That their  terms  are               fair  and  reasonable.   Schroeder(A.)   Music               Publishing Co. Ltd. v. Macaulayr [1974] 3  All               ER 616,624. in such contracts a standard  form               enables  the  supplier to say:  "If  you  want               these goods or services at all, these are  the               only terms on which they are available.   Take               it or leave it.  "It is a type of contract  on               which  the conditions are fixed by one of  the               parties in advance and are open to  acceptance               by  anyone.   The contract,  which  frequently               contains  many  conditions  is  presented  for               acceptance and is not open to discussion.   It               is  settled  law  that a person  who  signs  a               document  which contains contractual terms  is               normally bound by them even though he has  not               read  them, even though he is ignorant of  the               precise legal effect."  In  the  light  of the above discussion we  hold  that  the clause not  providing for interest is neither arbitrary  nor palpably unreasonable, nor even unconscionable.  In  holding so we have regard to the following: 1.The consumer made the security deposit in consideration of  the  performance  of Ms  obligation  for  obtaining  the service which is essential to Wm. 2.The  electricity  supply is made to  the  consumers  on credit as has been noted above. 270 3.   The billing time taken by the Board is to the advantage of the consumer. 4.Public  revenues are blocked in  generation,  transmission and  distribution of electricity for the purpose of  supply. The Board pays interest on the loans borrowed by the  Board. This  is  in  order to perform  public  service.   On  those payment  made  by  the Board it gets no  interest  from  the consumers. 5.The Board needs back its blocked money to carry out public service with reasonable recompense. 6.The Board is not essentially a commercial  Organisation to which  the  consumer  has fumished the security  to  earn interest thereon. Weshould  also  observe  that the  rate  of  interest  on security deposit cannotbe   equated  with  the   rate   of interest  on  the  fixed  deposit.  First  of  all,  if  the consumption  charges  are  to  be  appropriated  the  moneys accrued by way of deposits cannot be held in fixed deposits. Nor  all deposits need carry interest in every  transaction. Secondly,  the nature and character of the security  deposit

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is   essentially  different  from  fixed  deposit.   It   is worthwhile,  in  this  connection,  to  refer  to  Companies Acceptance  of  Deposits)  Rules, 1975.  In  Rule  2  it  is stated:-               "2.  Definitions.  In these Rules, unless  the               context otherwise requires.-               (a)               (b)   "deposit"  means  any deposit  of  money               with,  and includes any amount borrowed by,  a               company, but does not include-               (i)               (ii)               (iii)               271               (iv).............               (v)   any amount received from an employee  of               the company by way of security deposit;               (vi)  any  amount received by way of  security               or  as an advance from any  purchasing  agent,               selling  agent, or other agents in the  course               of or for the purposes of the business of  the               company or any advance received against orders               for  the supply of goods or properties or  for               the rendering of any service;......... We may add that merely because the English Acts provide  for interest,  it  is not necessary the same should  be  adopted here as well. Thus, we hold that the Division Bench of the Rajasthan  High Court erred in striking down Condition No. 20 of the General Conditions  of the Rajasthan Electricity Board as  violative of Article 14 of the Constitution of India. Has  this Court decided the question of rate of interest  in jagdamba  Paper  Industries  (Pvt.) Ltd.  v.  Haryana  State Electricity  Board  [1983]  4 SCC 508?   In  that  case  the following two points were raised as seen from paragraph 3 at page 51 1: 1.The enhancement made in the security amount towards the meter is without any justification. 2.   The enhancement of security deposit was not warranted. On the question of interest in paragraph  11 at page 515  in Jagdamba’s case (supra) it is stated thus:-               "On  the security amount interest at the  rate               of 4 per cent-was initially payable.  The same               has  already been enhanced to 8 per  cent  per               annum.  Since the amount is held as  security,               we indicated to the counsel for the Board that               security amount should bear the same               272               interest  as admissible on fixed  deposits  of               Scheduled  Banks  for a term of years  and  we               suggested keeping the present rate of interest               in  view that it should be enhanced to 10  per               cent.   Board’s  counsel has now  agreed  that               steps  would be taken to enhance  the  present               rate  of interest of 8 percent to  10  percent               ’with effect from October 1, 1983." It  requires  to  be carefully noted that  the  question  of interest  on  security  was not  raised  before  the  Court. Therefore, the Court had no occasion to decide this issue of interest.   That part of the judgment, as rightly  contended by Mr. Soli J. Sorabeejee, learned counsel, is sub-silentio. However, the learned counsel for the consumers pressed  into service the various orders passed by this Court in  relation to interest and urged that it is concluded by those  orders. We  are unable to accept his argument.  All the orders  have

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their root in Interlocutory Application No.1 of 1989 in Writ petition No. 578 of 1987.  That order is extracted in full:               "We  have heard counsel for the parties.   Mr.               Gopal  Subramaniam’  counsel  for  the   State               Electricity Board on instructions states  that               the initial deposit which has been made by the               consumer  petitioner,  to  the  tune  of   Rs.               10,07,378.81 was intended as security for pay-               ment of energy dues.  In terms of our order of               5th   May.  1988.  the  petitioner  would   be               entitled  to the interest on that amount  from               the date of the deposit at the rate of 12% per               annum.   Mr. Gobind Mukhoty, counsel  for  the               petitioner  now agrees to deposit the  balance               amount of Rs. 691,621 minus the interest which               is  said  to be the  additional  security  and               while  making  the deposit of  the  additional               amount,  the petitioner is entitled to  deduct               the interest already accrued on the deposit of               Rs. 10,07,378.81 from the date of the  deposit               at  the  rate of 12% per annum.   The  balance               amount  after deduction of the interest  shall               be   deposited   in   two   equal    quarterly               instalments, the first being due by 15.10.89.               273               The application for directions is disposed  of               accordingly."               Based  on  this, in Writ Petition No.  613  of               1990 it was stated thus:               "In  view of the order made by this  Court  in               the  connected matters on September  7,  1989,               after  hearing  parties in Writ  Petition  No.               578/87 on the amount deposited by the consumer               as security, interest at the rate of 12% would               be admissible.               The Writ petition is disposed of accordingly." Two  other orders remain to be seen.  One rendered  in  W.P. 5582 of 1989 which was disposed of by consent and the  other in  W.P.No.576 of 1990 where the writ petition was  disposed of in the following manner:               "If the Electricity Board has been directed to               allow interest at the rate of 12% per annum on               the  security deposited with the Board by  the               petitioners similarly situated, the claims  of               the petitioners should similarly be dealt with               by  the Board.  The Writ Petition is  disposed               of." On careful examination of the above orders, we do not  think the  Court  ever  intended to adjudicate upon  the  rate  of interest or render a decision on that question.   Therefore, it  cannot be contended that the disposal of  Writ  Petition No.  613  of 1990, though by a Bench of 3  judges  would  be binding  on  us  because,  as pointed  out  above.   It  was entirely  based on Interlocutory order.  We are of the  view that we are free to decide the question on its merits. The  argument  of  Mr.  Anil  Divan,  learned  counsel  that unequals  are treated equals has no basis.  It may  be  that the  consumers  of electricity, where it  is  raw  material, would be prompt in their payment .in their own interest.  On that basis, it cannot be contended that they 274   cannot  be  treated in the same way  as  defaulters.   The test, in our   considered opinion, is whether in the general application  of  law  there is  any  discrimination.  Merely because some of the consumers are  prompt   those    related

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cases cannot render the provision constitutional.      We may usefully refer to the following cases:      The  Collector of Customs, Madras v. Nathella [1962]  3 SCR 786   at 829-30 it was observed?               "The  deleterious  effects  of  smuggling,  as               pointed out     in   the  extract   from   the               Report, are real and it is not in   dispute               that   the  prevention  and   eradication   of               smuggling  is a proper and legally  attainable               objective and   that  this  is  sought  to  be               achieved by the relevant law. If therefore for               the purpose of achieving the desired     objective               and   to   ensure  that  the   intentions   of               Parliament  shall  not be defeated  a  law  is               enacted  which operates somewhat harshly on  a               small   section  of  the  public,   taken   in               conjunction  with the position that without  a               law  in  that  form and  with  that  amplitude               smuggling  might  not  be  possible  of  being               effectively   checked,  the  question   arises               whether the law could be held to be  violative               of the freedom guaranteed by Art. 19 (1) (f) &               (g) as imposing an unreasonable restrain. That               the  restrictions are in the "interest of  the               general public" is beyond controversy."           In   Vivian  Joseph   v.   Municipal               Corporation, Bombay, [1972] 2 SCR 257 at  276-               77 it was observed:                "The levy of the cess under s. 27 of the  Act               is not based on the principle of quid pro quo.               Its  object is not to repair  all  residential               premises,  but to preserve and  prolong  their               lives  in order to avert the dilema caused  by               the    acute    shortage    of     residential               accommodation   on  the  one  hand,  and   the               reluctance  and/or inability of the owners  to               carry out repairs resulting from the Rent Act,               on  the  other and to establish an  agency  so               that   structural  repairs  to  buildings   in               dangerous or ruinous               275               conditions  can be carried out.  The  finances               for  these  objects are provided from  a  fund               from  the impugned cess and  contributions  by               the State and the Corporation.               The  contention  that some  of  the  buildings               falling  in categories B and C would not  need               structural repairs throughout the life of  the               Act or that such repairs would carried out  in               buildings   not   cared  for   by   defaulting               landlords,  takes no notice of the  fact  that               the primary object of the Act is not to repair               all  buildings subject to cess but to  prevent               the  annually  recurrent  mischief  of   house               collages    and   the   human   tragedy    and               deprivations they cause.  The cess being  thus               levied to prevent such disasters, there is  no               question  of  unequal  treatment  between  one               class    of   owners   and    another.     The               classification   of   buildings   into   three               categories  is  based, as already  stated,  on               their age and the construction current  during               the    periods   of   their   erection.     It               is,therefore,   based   on   an   intelligible               differentia  and  is closely  related  to  the

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             objects   of  the  legislation.    There   is,               therefore   no  question  of  unequals   being               treated  as  equals, as each building  of  the               Board  and has to be structurally repaired  if               the need were to arise." In  B. Banerjee v. Anita Pan, [1975] 2 SCR 774 at 787-88  it was observed:               "Moreover,  what is the evil corrected by  the               Amendment  Act?   The influx of  a  transferee               class  of evictors of tenants and  institution               of  litigation to eject and rack-rent  or  re-               build to make larger profits.  Apparently, the               inflow  of such suits must have been  swelling               slowly  over  the years and  when  the  stream               became a flood the Legislature rushed with  an               amending  bill.   Had it made the  law  merely               prospective these who had in numbers,  already               gone   to   Court  and   induced   legislative               intention  would have escaped the  inhibition.               This  would  defeat  the  object  and  so  the               application of               276               the  additional than to pending actions  could               not be called unreasonable.  To omit to do  so               would  have  been  unreasonable  folly.    The               question  is  whether those cases  which  were               filed  several  years  ago  should  have  been               carved out of the category of transferees  hit               by the act?  Where do you draw the line?  When               did  the evil assume proportions?   These  are               best  left  to  legislative  wisdom  and   not               court’s  commensense  although  there  may  be               grievances for some innocent transferees.               If this be the paradigm of judicial review  of               constitutionality,    we   have   to    ignore               exceptional  cases  which  suffer   misfortune               unwittingly.  The law is made for the bulk  of               ’the  community to produce social justice  and               isolated  instances of unintended  injury  are               inevitable  martyre for the common good  since               God  Himself has failed to make  perfect  laws               and   perfect  justice,  Freaks  have  to   be               accepted by the victims rightly or wrongly  as               froensic fate" In Fatelichand Himmatlal v.  State of Maharashtra, [1977]  2 SCR 828 at 851 it was observed:               "May be, some stray money-lender,. may be good               souls   and  to  stigmatize  the  lovely   and               unlovely   is  simplistic  betise.   But   the               legislature  cannot  easily  make   meticulous               exceptions   and  has  to  proceed  on   broad               categorisations,         not          singular               individualisations.   so   viewed   pragmatics               overrule punctilious and unconscionable money-               lenders  fall into a defined group.  Nor  have               the creditors placed material before the Court               to  contradict the presumption which  must  be               made  in favour of the  legislative  judgment.               After  all, the law-makers representatives  of               the   people,   are  expected  to   know   the               socioeconomic conditions and customers.  Since               nice   distinctions  to  suit   every   kindly               creditor is beyond the law making process,  we               have to uphold the grouping as reasonable  and               the   restrictions   as   justified   in   the

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             circumstances of, the case.  In this 277 branch, there are no finalities." The attack on additional consumer deposit is that no reasons have  been  adduced  for additional demand.   It  stands  to reason  that  if there is a revision in the rate  of  tariff there must be an upward revision in the consumption security deposit  since it has direct bearing to the level of  supply in consumption of electricity.  For example,in the State  of Uttar Pradesh, the tariffs were adjusted upwards in  October 1986.   The revision in the form of an  additional  security deposit with interest at the rate of 3 per cent was made  in January  1987.   These facts indicate the rationale  in  the demand  of  additional security deposit.  As  stated  above, this being a condition of supply, no reason need be given at the  time  of  upward revision.  Therefore.  we  reject  the argument  of  Mr. Govind Mukhoty, learned  counsel  in  this regard. In view of the above finding, upholding the clause  relating to  nonpayment  of  interest,  for  example,  Rajasthan  and Orissa,  what  is  to happen to such of  those  cases  where interest is provided like Andhra Pradesh, Utter Pradesh  and Bihar?   In all those cases wherever the electricity  boards have  framed  a  provision for  payment  of  interest  after adjusting  its  finances  at a stated rate  they  cannot  be allowed to delete such a clause.  The provision for interest has  been  made by the various Boards having regard  to  the overall budgetary and financial position.  Further,  keeping in view the quantum and made of security deposit and billing and recovery practice.  Nor again, could the Board  withhold payment of interest on the basis of this judgment.  However, if  there is any change in the circumstances  affecting  the budgetary and financial position, the Board can examine  the case and decide the future course of action.  But any change resulting in non-payment or reduction of interest will  have to  be  justified by cogent reasons and materials  having  a bearing  on the financial position of each Board  and  facts and circumstances of each case. We also add that not withstanding Jagdamba’s case (supra) as on  today,  Haryana  Electricity Board  has  dispensed  with payment of interest.  We make it clear by this judgment that we are not deciding the validity of such provision since the matter is stated to be pending. Inconclusion, We hold: 278 (1)  Section, 49 of the Supply Act is valid. (2)  The nature of consumption deposit is to secure prompt payment and is intended for appropriation. (3)There  is no liability on the Electricity Board  either tinder the statute or common law or equity to pay interest. (4)Conditions  and the terms of supply providing for  non- payment of interest is not so unconscionable as to shock the conscience of the Court. (5)No reason need be given for. enhancement of  additional security deposit. Accordingly  we uphold the judgment of Andhra  Pradesh  High Court and reverse the judgment of Rajasthan High Court. In  the  result, the following cased  filed  against  Andhra Pradesh Electricity Board are dismissed: S.L.P. (c) Nos. 13004/89,  14995/89,14629/89,14899/89,15739/ 89,15817/89,7475/90,6374/90,9661-65/90,5461/90,6371/00,5294/ 90,  6779/90, 5492/90, 5921/90, 5559/90,  4793-94/90,  4791- 91/90,   6375/90.  6570/90,  12270/90,  9926/90,   11548/90, 2600/90,  6372.73/90, 6035-44/90, 6505/90,6374/90,  6094/00, 6765-68/90,6462/90, 5306-08/90, 9132/00, 12424/90,  6370/90,

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C.A. No. 1779/90, S.L.P. (c) Nos. 17465/91, 17679/91, 17865- 66/91, 20125/91, 19532/91, 18043/91, 19586-93/91, 19597-600, 20076/91,  21/92,  649/92,  2564/92,5782-83/92,8336/92,9124- 25/92,9488/92,12318/92,12506/   92,   12610/92,    12805/92, 12804/92,  12814/92,  14439/92,  14449/92,  14555/92,  1739- 43&43A/92,  13593/92,  C.A.  No.  2409/92,  W.P.  (c)   Nos. 603/92,455/92,  3558/83,  566/92,  1353/89,  48/92,  362/92, 1293/ 89, 6770/90. The  Transfer  Petition (c) No. 366/92 filed by  the  Andhra Pradesh Electricity Board is allowed. 279 The  following cases filled by Rajasthan  State  Electricity Board are allowed: C.A.  Nos.  4714/91  &4028-43/91,S1,P(c)  Nos.446/92.703/92, 12941/90.  433-36/92, 439-42/92, (’.A. Nos.  5342/92.  1187- 88/92,  4512/92, 45 10/92. 4511/92, 2800/92.  1204/92,  406- 436/92, S. L. P. (c) No.  20/92,46/02.47/92,50/92,53/02,449- 452/92,494/02,516/92,48/92.49/92.51/02.52/92,54/92,55/92,43- 45/92,56-72/92,428-432/92,  443-444/92,453-457/92,503-08/92. 512-14/92.530-33/92,14450/92. The following cases filed by the Bihar Electricity Board are allowed: SLP(c) Nos.  11799/89, 1856/90, 8318/92, 16028/92. The following, cases against Uttar Pradesh Electricity Board are dismissed. W.P.  (c)  Nos,  513/87, 804/87,  1144/87.  743/87,  531/87, 725/87.  739/87,  526/91. 576/87,  577/87,  801/87,  833/87. 769/87,  676/87,  578, 87, 728/87, 762/87.  818/87,  526/87, 744/87.  742/87. 540/87, 1238/87, 738/87.684/87, S.L.P.  (c) Nos, 2952-56/1987, 15885/91, & 12902/9 1. The  W.P. (c) No. 1317/90 filed against  Punjab  Electricity Board is dismissed. All the I.A.s are allowed. However, there shall he no order as to costs. T. N. A.                   Petitions disposed of. 280