Load reduction cannot be blocked by rigid security demands where revival protection and agreed payment arrangements are in place.

A consumer's agreed reduction of contracted load cannot be defeated by rigid insistence on security for arrears where the reduction was already decided under the supply code and the consumer was operating under revival-oriented statutory protection. The Court noted that clause 4.49 then permitted reduction of load when arrears were stayed, subject to security such as a bank guarantee, bond or other instrument acceptable to the licensee. Because the company was under relief- and sickness-related protective regimes and was complying with the payment arrangement directed by the rehabilitative forum, refusal to accept the bond and implement the agreed reduction was unjustified. The company was entitled to the reduction in load.

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Issues: Whether the respondent-company was entitled to reduction of contracted load from 8 MVA to 1.25 MVA with effect from 1-4-2006, notwithstanding the licensee's insistence on security for arrears and its refusal to accept the bond furnished by the company.

Analysis: The application for reduction of load had been made under clause 4.41 of the U.P. Electricity Supply Code, 2005, and the parties had already reached a decision on 19-4-2006 to reduce the load, subject to stated conditions. At that time, the unamended clause 4.49 permitted reduction of load where arrears were stayed, subject to submission of a bank guarantee, bond or other instrument to the satisfaction of the licensee. The respondent-company had also been treated as a relief undertaking under the U.P. Industrial Undertaking (Special Provisions for Prevention of Unemployment) Act, 1966 and later as a sick industrial company under the Sick Industrial Companies (Special Provisions) Act, 1985, with the BIFR directing acceptance of monthly instalments and current consumption-based bills and restraining coercive disconnection. In that setting, the continued insistence on a bank guarantee and refusal to accept the bond effectively defeated the agreed reduction and undermined the revival of the industry.

Conclusion: The respondent-company was entitled to the benefit of reduction of load, and the refusal to implement the agreed reduction was unjustified.

Ratio Decidendi: Where a load reduction has been agreed in the context of revival-oriented statutory protection and the consumer is complying with the revived payment arrangement, the licensee cannot defeat the reduction by rigidly insisting on security in a manner inconsistent with the agreed decision and the special rehabilitative regime.

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