1993 (4) TMI 314 - SC - Indian Laws

Summary

Issues Involved:
1. Validity of Section 49 of the Electricity Supply Act.
2. Nature of consumption security deposit.
3. Liability of Electricity Boards to pay interest on security deposits.
4. Constitutionality of clauses providing for non-payment of interest.
5. Validity of demand for additional consumer deposit.

Summary:
1. Validity of Section 49:
The Supreme Court upheld the validity of Section 49 of the Electricity Supply Act, which allows the Electricity Board to prescribe terms and conditions for the supply of electricity and fix tariffs. The Court noted that Section 49 contains sufficient guidelines and is subject to the provisions of the Act and regulations.

2. Nature of Consumption Security Deposit:
The Court determined that the consumption security deposit is essentially an advance payment of consumption charges, intended to ensure the proper payment of bills. It is not merely a deposit but is subject to appropriation to cover any unpaid charges. The Court found that the requirement of a three-month security deposit is reasonable and not arbitrary.

3. Liability to Pay Interest:
The Court held that there is no statutory, common law, or equitable obligation for the Electricity Boards to pay interest on security deposits. The Court emphasized that the nature of the deposit, being in the form of a running current account, does not warrant the payment of interest. The Court also clarified that the Interest Act, 1978, does not apply to such deposits.

4. Constitutionality of Non-Payment Clauses:
The Supreme Court found that clauses in the terms of supply that provide for non-payment of interest are not unconstitutional, arbitrary, or unconscionable. The Court reasoned that such clauses are reasonable given the nature of the deposit and the operational requirements of the Electricity Boards.

5. Validity of Additional Consumer Deposit:
The Court upheld the validity of demands for additional consumer deposits, stating that no specific reasons need to be provided for such demands. The Court recognized that upward revisions in security deposits are justified in the context of revised tariffs and increased consumption levels.

Conclusion:
The Supreme Court upheld the judgment of the Andhra Pradesh High Court and reversed the judgment of the Rajasthan High Court. The Court dismissed the petitions challenging the Andhra Pradesh Electricity Board and allowed the appeals filed by the Rajasthan State Electricity Board. The Court also dismissed petitions against the Uttar Pradesh Electricity Board and the Punjab Electricity Board, while allowing the petitions filed by the Bihar Electricity Board. The Court concluded that there is no obligation for the Electricity Boards to pay interest on security deposits and that clauses providing for non-payment of interest are valid.