UNION OF INDIA vs HARDEV SINGH

THIS is a Revision Petition against the Order dated 1.6.1992 passed by the State Consumer Disputes Redressal Commission, Punjab in First Appeal No. 24 of 1992 by which the appeal filed by the Opposite Parties i.e. Telecom District Engineer, Sangrur & Anr. Petitioner-Complainant was dismissed.

THE brief facts of the case are that the Respondent-Hardev Singh filed a complaint in the District Forum, Sangrur alleging that he was subscriber of telephone No. 2964 and has received inflated bills dated 1.9.1990 and 1.11.1990 from the Telephone Department for the amounts of Rs. 545/- and Rs. 472/- respectively. The Complainant prayed that the Opposite Party may be directed to make enquiries regarding the excess billing. It was also averred that he may be awarded interest on the security of Rs. 800/- deposited with the Telephone Department and he may be awarded Rs. 1,000/- as compensation on account of negligence on the part of the Department and also inconvenience caused to him during the period his telephone remained dead. The District Forum held that the bill dated 1.11.1992 was excessive even after the department had given rebate of Rs. 200/- to the subscriber as there was no STD facility on that telephone. The District Forum therefore, ordered that the department was only entitled to Rs. 88/- plus Rs. 25/- more against the local calls. It was, therefore, ordered that the department shall refund the amount in excess of Rs. 110/-. Rs. 500/- was also awarded as damages and compensation to the Complainant, as the telephone has been disconnected till the pendency of the complaint and in spite of the order of the District Forum adjourning the case in the present of the parties for settlement of the bill dated 1.10.1990 and 1.11.1990. The District Forum took this action of the department as a highhanded one in disconnecting telephone. Rs. 100/- as rebate of the rental was also given from the bill dated 1st November, 1990 as the telephone remained dead for one month w.e.f. 2nd September, 1990. The District Forum also directed the Department to pay interest @ 11% on the amount of Rs. 800/-w.e.f. date of the application till the amount was refunded. This amount said to have been deposited with the department as security.

FEELING aggrieved by that order, the present Petitioner filed an appeal before the State Commission. Before it only two points were urged. First the award or Rs. 500/- as compensation was assailed. Second was that no interest was payable on the amount of security deposited by the Complainant. No other point was urged before the State Commission. The State Commission upheld the order of the District Forum on the above two points. The Petitioners herein have now filed this Revision Petition.

WE have heard the Counsel for the Petitioner and have gone through the record of the case. As far as the question of award of compensation is concerned we do not find any material irregularity in the exercise of jurisdiction by the State Commission and, therefore, that part of the order will have to be maintained. However, as far as the question of interest on security is concerned we are of the opinion that the order of the District Forum and the State Commission cannot be sustained. The learned Counsel for the Petitioner has relied upon Rule 434 of the Indian Telegraph Rules. However, that Rule is not applicable to the present case that Rule only speaks of installation fees. In the present case, we are concerned with the amount said to have been deposited as security. Under Rule 445 a subscriber of the telephone can be asked to deposit security, it reads as follows: "Security for charges "ï½ The Telegraph Authority may, at any time, before or during the period for which a telephone or the other like service is provided require a subscriber to deposit as security such amount as it may consider necessary and if the subscriber fails to comply with such demand within such period as it may specify, the Telegraph Authortly may withdraw the service and remove any telephone or other apparatus belonging to the Telegraph Authority. Where the security deposit is paid, any amount due from the subscriber by way of fee or her charges under these rules may be adjusted against the amount so deposited.,. From the Rule it is clear that the amount is kept by the Department for adjustment against fee or charges due from the subscriber of telephone.

THE question is whether the department is liable to pay interest on the security amount, when there is no provision for the same in the Rules. The matter has been discussed in detail by the Supreme Court in case Ferro Alloys Corporation Ltd. etc. v. A. P. State Electricity Board and Anr. etc. etc. Civil Appeals Nos. 2117 to 2122 of 1993 etc. etc, decided on 15th April, 1993. The case relates to payment of interest on the deposit of security demanded by the various State Electricity Boards from the consumers. Some Boards have made provision for payment of interest in the Rules while the Rules of some Boards had no such provision or the Rules specifically provided that no interest is payable on the security amount. In a case where interest on security amount was provided under the Rules, the challenge was made to the lower rate of Interest. In other cases the contention was that since the security amount was being retained by the Boards and utilised it was bound to give interest. All those contentions were overruled by the Supreme Court. It is not necessary to reproduce the various observations made by that Court. It was held that the amount cannot be held as fixed deposit of consumers nor could the Boards deposit the amounts in fixed deposit to earn interest. It was also held that in the nature of things the consumer is supplied energy on credit. The security amount is hardly sufficient to secure payment to the Board by the time the formal bill is raised on the consumer. About the nature of deposit it was remarked that though it is called security deposit it is really an adjustable payment of consumption charges. It was further remarked that there was no statutory provision which casts an obligation on the Board to pay interest on security deposit nor such claim can be founded under the Interest Act, 1978 or under common law orequity. The Supreme Court has gone to the extent of saying in that case that it is Electricity Boards which should be entitled to receive interest on energy supplied to consumers on credit as the consumers enjoyed a credit facility for the supply of energy. The same principle applies to the present case.

THE above observations clearly, apply to the present case. The telephone bill is received after the telephone calls have been made. The Telephone Department has to bear expenses for maintaining the Telephone Exchange, Telecommunciation Lines and the work force. The security amount is nothing but a provision to enable adjustment towards the bill if the bill is not paid. Hence the District Forum and the State Commission were in error in allowing interest to the subscriber i.e. the Complainant. For the reasons given above we partly accept the present Revision Petition and set aside the impugned orders of the State Commission and the District Forum so far as they relate to the direction for payment of interest on security amount. We make no order as to costs.