Electricity supply terms may include revised security deposits where statute and contract reserve that power and the change is reasonable.

A statutory electricity board may revise security deposit conditions for supply of electricity when the enabling statute and contract reserve that power, and the exercise is not arbitrary or unreasonable. Here, the board's authority to enhance the cash security for energy bills was upheld because the consumers had accepted the original condition and the supply contract allowed amendment of terms. The enhancement of meter security was also accepted in principle, though the basis for revision was to be moderated and a revised formula evolved, with interest on deposits to be increased. The challenge to the board's revised security demands therefore failed in substance.

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Issues: (i) Whether the Electricity Board had statutory and contractual authority to enhance the security deposit for payment of energy bills; (ii) Whether the enhanced security demanded towards meter security was justified.

Issue (i): Whether the Electricity Board had statutory and contractual authority to enhance the security deposit for payment of energy bills.

Analysis: Section 49(1) of the Electricity (Supply) Act, 1948 empowered the Board to supply electricity on such terms and conditions as it thought fit. The consumers had originally accepted the condition requiring cash security for payment of bills, and Clause 31 of the contract reserved to the Board the right to amend, cancel or add to the schedules and conditions of supply. The enhanced demand was found to be an exercise of that power, and it was not shown to be arbitrary or unreasonable.

Conclusion: The Board had authority to enhance the security deposit for payment of energy bills, and the challenge failed.

Issue (ii): Whether the enhanced security demanded towards meter security was justified.

Analysis: The Board justified the enhancement on the ground that meters and costly parts may require replacement or substantial repair. While the existing meters had been supplied earlier, the Court accepted that some increase in security for meter-related liability was permissible. At the same time, the escalation was moderated on the facts, and the Board indicated that it would evolve a revised formula and enhance the interest on security deposits.

Conclusion: The enhancement in meter security was not wholly rejected, but it was to be revised on the basis indicated by the Court and the Board.

Final Conclusion: The petitions failed on the principal challenge to the Board's power to revise security conditions, and the Board's enhanced demand for security was upheld in substance, with directions relating to revision of meter security and interest on deposits.

Ratio Decidendi: A statutory electricity board may, under Section 49(1) of the Electricity (Supply) Act, 1948 and the contractual terms governing supply, unilaterally revise reasonable conditions of supply, including security deposits, so long as the power is not exercised arbitrarily or unreasonably.

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