Case: Ferro Alloys Corpn. Ltd. And Ors. Etc. Etc Vs. A.P. State Electricity Board And Ors Etc. Etc

2. 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, Hyderabad 1990 AIR(AP) 58. The facts briefly are as under3. 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 category4. 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.n (2) specifies in fixing the uniform tariff, the Board shall have regard to all or any of the following factors, namely(a) the nature of the supply and the purposes for which it is required;(b) thed 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 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 electricity to sparsely developed areasn (3) empowers the Board to enter into a special agreement with any consumer and prescribe different tariffs for him. Under Section 4, an obligation is cast on the Board not to show undue preference to any person while fixing the tariff and terms and conditions for the supply of electricity. In all these cases, the appellants are covered by the general terms and conditions were 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 September 17, 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 terms 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 from time to time under Clause 25.1 the terms and conditions for supply of electricity by special or general proceedings6. 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 accounts payable by the consumer towards charges for energy supplied and any other sum in connection with supply of energy by the Board."7. Conditions 32.2.1 obliges the consumers to pay the amount 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 on 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. Conditions 24.3 also lays down that the consumer shall pay to the Board 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 28 as far as it is necessary for the purpose, omitting what is not relevant as under :"28. Consumption Deposits :28.1.1. The consumer shall deposit with the Board a sum in cash equivalent to estimated three months 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 electricity28.1.2. In 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 consumer28.2 Additional 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 adequacy 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 due to upward revision of tariffs, enhancement of the contracted 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 preceding twelve months after taking into consideration the quantum and nature of restrictions imposed, if any, during that period shall be the basis(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 reviewBased 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 28.1.2 hereof, the consumer shall deposit within 30 days of receipt of notice in this regard such additional amount as may be required by the Board or replenish the required amount as the case may be28.3 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 of such other rate as may be fixed by the Board from time to time. Full calendar months only shall be taken into account for the purpose of calculating interest and interest shall be calculated to nearest five paise. The interest accruing to the credit of the consumer shall be adjusted every year in the month of April in the Electricity Supply bills28.4 Disconnection ort 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 disconnection28.5 The consumption deposit so calculated as per 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 belongs28.6 All consumers shall pay the consumption deposit or additional consumption deposit within thirty days from the date of 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 Boards right to disconnected supply of electricity."8. Clause (1) of condition 28 is general in nature. It applies to all consumer. Clause (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. Clause (2) applies to all consumers, except those L.T. Domestic consumers whose monthly bills are less than Rs. 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. Clause (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 disconnected9. The attack before the High Court was that according to Condition 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 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 days 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 oft under Condition 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 Jagdamba Paper Industries (P) Ltd. v. Haryana State Electricity Board 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 scheduled bank on fixed deposit10. It was generally urged that the Electricity Board being a State within the meaning of Article 12, it has to act fairly. Any term or condition will have to answer the test of reasonableness. On the contrary, if it is arbitrary, it would be violative of Article 1411. The High Court after analysing the object behind Condition 28 relating to the consumption deposit held : The condition requires 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 refers 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 mechanical adherence to Condition 32.3 (instant disconnection) may indeed provee in larger sense. It was also not possible for the Board to notice thet immediately in view of the large number of consumers and the extensive nature of organisation. Besides, huge sum 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 cooperate by paying their bills regularly, by furnishing security deposits and by conforming to the terms and conditions of supply. Under these circumstances, the requirements of three months deposit could not be said to be unreasonable and unjustified12. 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. 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 petitions13. Aggrieved by this decision, the present SLPs have come to be preferred.

Reasoning:
96. The next section is Section 79 which talks of power to make 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 energy97. The attack against Section 49 is that it does not contain any norm or 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.n (1) of the said section starts with the words "Subject to the provisions of the Act and of regulations, if any, made in this behalf". Therefore, the Board has to conform to the various provisions of the Act and the regulationsIn 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 validNature of Consumption Security Deposit101. Each of the Electricity Board before us is a State within the meaning of Article 12 of the Constitution of India. The Boards are different from licensees. Each of the Boards has framed the terms 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 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 of Rajasthan, the security is in the form of cash for one month and bank or insurance guarantee for two months102. The legislative sanction behind 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 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 VI of the Schedule to 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 from 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 consumersThe 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 Boards104. 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 Rajasthan105. 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 period106. Thus, it will be clear that the true nature of the transaction in these cases is one of the advance payment of charges for consumption of electricity estimated for a period of approximately three months. Such an advance is 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 account107. 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 liability108. 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 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 kilolitre 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 payments 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 credit109. 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 offset part of the amount the consumer owes to the Board continually and 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 transactionIn these circumstances, we conclude that the object of security deposit is to ensure proper payment of bills116. Now, we come to the crucial question as to whether interest is payable on security deposit or advance consumptiondeposit.We will examine from the following angles :(a) The scheme of Electricity Acts(b) Schedule VI of the Supply Act(c) Interest Act, 1978(d) Equity or common law(a) & (b) Scheme of Electricity Acts & Schedule VI of Supply Act :117. 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 utilise 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 seen118. There is no statutory provision which casts an obligation on the Board to pay interest on securitydeposit.However, reliance is placed on model form of draft conditions of supply as is found in Annexure VI, traceable to Rule 27 of Indian Electricity Rules, 1956. Clause 14 relating to security deposit of the said Annexure reads :"... Interest at the rate of... per cent. per annum will be paid by the licensee on deposits exceeding Rs. 25."119. The model form is applicable only to a licensee as defined in Section 2(4) of the Electricity Act120. Though Rule 27 prescribes a model form it is not compulsory even for a licensee 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."121. Second proviso of the Supply Act leads us to Schedule VI. This Schedule has been framed in exercise of powers under Sections 57 and. 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 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(c) Interest Act : applicability :123. As regards the applicability of Interest Act, we find that the Division Bench of Rajasthan High Court has erred in holding that it is applicable124. This section has no application to a case where on account of a contractual term or a statutory provision payment of interest is not permitted125. 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 ae clause. But, such a clause is restricted to the provisions of Interest Act and cannot extend to other laws or a contract between the parties126. Accordingly we overrule the judgment of Rajasthan High Court which holds the Interest Act is applicable127. The deposit made cannot be equated to a fixeddeposit.It has already been seen that in the case of daily supply of electricity, there is a consequential liability to pay for each days 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 :128. 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 obliged to pay interest for the period of its user. Halsbury, 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 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 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 trustee and a beneficiary but a depositor and depositee. 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 above129. 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 creditor132. The argument of Mr. G. Ramaswamy, learned counsel, that the deposit does not contemplate appropriate 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 ofe theft of energy, tampering 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 Board133. Mr. G. Ramaswamy would rely on Riches v. Westminster Bank Ltd. 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 case 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 securitydeposit.Interest on belated payments is by way of penalty. That has no bearingIn 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 precision2. The mode and the period of securitys the billing practice must form the consideration3. The consumer with open eyes has entered into the agreement and solemnly undertaken to abide by the conditions regardingt of interest. He cannot resile from the condition because there is nothing inherently objectionable about such a condition not 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 into135. 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. 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 of 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 ?136. By referring to Hindustan Zinc Ltd. we have earlier pointed out thep 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 supply137. 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 constitutional138. We will assume, for a moment, that the contract is an adhesion contract. But still, it is not unconscionable143. 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 considering of the performance of his obligation for obtaining the service which is essential to him2. The electricity supply is made to the consumers on credit as has been noted above3. The billing time taken by the Board is to the advantage of the consumer4. 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 payments made by the Board it gets no interest from the consumers5. The Board needs back its blocked money to carry out public service with reasonable recompense6. The Board is not essentially a commercial organisation to which the consumer has furnished the security to earn interest thereon144. We should also observe that the rate of interest on security deposit cannot be equated with the rate of interest on the fixeddeposit.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 is essentially different from fixeddeposit.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(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 well145. Thus, we hold that the Division Bench of the Rajasthan High Court erred in striking down Condition 20 of the General Conditions of the Rajasthan Electricity Board as violative of Article 14 of the Constitution of India148. 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. Sorabjee, 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 this argument. All the orders have their root in Interlocutory Application No. 1 of 1989 in Writ Petition No. 578 of 1987151. 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 three 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 merits152. 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 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 isolated cases cannot render the provision unconstitutional. We may usefully refer to the following cases157. 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 on 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 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 securitydeposit.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. Gobinda Mukhoty, learned counsel in this regard158. In view of the above finding, upholding the clause relating tot of interest, for example, Rajasthan and Orissa, what is to happen to such of those cases where interest is provided like Andhra Pradesh, Uttar Pradesh and Bihar ? In all those cases wherever the Electricity Boards have framed is provision for payment of interest after adjusting its finances at a stated rate they cannot be allowed to delete such adjusting its finance 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 and further, keeping in view the quantum and mode of security deposit and billing and recovery practice. Nor again, could the Board withhold payment of interest on the basis of this 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 int 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 case159. We also add that notwithstanding Jagdamba case 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 a provision since the matter is stated to be pending.