Prepaid meter consumers entitled to refund of deposit: HC

Prepaid meter consumers entitled to refund of deposit: HC

 Consumers who opt for prepaid meters are entitled to refund of their security deposit, the High Court has ruled. The judgment is expected to benefit a large number of electricity consumers.

The High Court directed the Bangalore Electricity Supply Company (Bescom) on June, 5, 2015, to refund the security deposit to consumers in case they opt for prepaid meters. Justice H G Ramesh gave the ruling on a petition filed by Kunigal-based Vijaya Steels Private limited (VSPL). The single bench, however, directed the firm to pay energy charges in advance as is done in prepaid mobile phone and other such services.

The VSPL had moved the High Court against an order given by the Karnataka Electricity Regulatory Commission (KERC) ombudsman who had dismissed its complaint that Bescom was demanding additional security deposit. The ombudsman ruled that the applicant (VSPL) hadn’t made a proper application for prepaid meter, except for the objections to the demand of additional security deposit (ASD).

VSPL, an HT power consumer, had opted for Time Of the Day (TOD) tariff in December 2010 following a request by Bescom. At the time of service installation, it paid an initial security deposit of Rs 1.91 crore to Bescom. On December 24, 2013, Bescom demanded Rs 4.29 crore as ASD within 30 days. It had made a similar demand earlier too. But the VSPL informed Bescom that it was not permissible under relevant laws and regulations.

Additional deposit

After a series of communication, the VSPL on January 28, 2014 wrote to Bescom, saying it will opt for prepaid meter and sought refund of the security deposit along with applicable interest. Bescom then replied that the deposit would be refunded once the prepaid meter was installed, but continued its demand for additional security deposit.

On February 24, 2014, Bescom chief engineer wrote to the VSPL, reminding the firm that it had agreed to pay ASD in three instalments and the officials were asked to collect it within 15 days. The VSPL, however, contended that it had not made any such promise. The VSPL then made a complaint to the KERC (Consumer Grievance Redressal Forum and Ombudsman) under section 42 of the Electricity Act, 2003, urging that the demand letter dated February 17, 2014, be set aside. Meanwhile, the electricity supply to the installation was discontinued. The KERC ombudsman dismissed the complaint and the VSPL moved the High Court.

In the High Court, the VSPL argued that the KERC ombudsman’s order was arbitrary and should be set aside. It also sought the court’s direction to Bescom to refund the deposit. But Bescom contended that it didn’t have prepaid meters in supply. The court then held that even if there was no supply of meters, Bescom was bound to refund the security deposit, in case the consumer opted for prepaid meters.

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