Judgment Hemant Gupta, J. Challenge in the present writ petition is to Regulation 15 of the Punjab State Electricity Regulatory Commission (Electricity Supply Code and Related Matter) Regulations, 2007 (for short the Regulations), as amended vide notification dated 24.05.2010 in respect of security amount alleging it to be unjust, arbitrary, illegal and ultra vires of the Electricity Act, 2003. The relevant Regulation reads as under: 15. Security (Consumption) 15.1 different categories of consumers will maintain Security (Consumption) as below: 15.1.1. Consumers other than Large Supply Industrial consumers will maintain as security with the Licensee an amount equivalent to consumption charge (i.e. Fixed and variable charges as applicable) for two and a half months where bi-monthly billing is applicable and one and a half months in case of monthly billing, during the period of agreement for supply of electricity. It is averred that the Punjab State Electricity Regulatory Commission was constituted under the repealed Electricity Regulatory Commission Act, 1998 and the same has been notified as the State Commission under Section 86 of the Electricity Act, 2003 (for short 'the Act'). The Act enumerates functions of the State Commission which, inter alia, relates to determination of tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be within the State. The State Commission is empowered to frame Regulations consistent with the provisions of the Act and Rules in terms of Section 181 of the Act. It is pleaded that earlier the interest free security against consumption was deposited by the members of the petitioner Association ranging up to 30% of the monthly consumption called as 'Advance Consumption Deposit'. The impugned regulations including Regulations 14 to 20 notified on 29.07.2007 are said to be without any statutory support as it is averred that there is no provision to base the Security (Consumption) on the basis of the billing cycle. It is alleged that the billing cycle is established by the Commission for its convenience and it is wrong to link with the quantum of Security (Consumption). Initial Security (Consumption) as per Regulation 15 was an amount equivalent to consumption charges for three months, where monthly bill is applicable and two months in case of monthly billing as security during the period of agreement for supply of electricity. The earlier notification prior to amendment on 24.05.2010 reads as under: 15. Initial Security (Consumption) as per Regulation 15 was an amount equivalent to consumption charges for three months, where monthly bill is applicable and two months in case of monthly billing as security during the period of agreement for supply of electricity. The earlier notification prior to amendment on 24.05.2010 reads as under: 15. Security (Consumption) 15.1 Consumers will maintain with the Licensee an amount equivalent to consumption charges (i.e. fixed charges and variable charges as applicable) for three months where bi-monthly billing is applicable and two months in case of monthly billing as security during the period of agreement for supply of electricity. Consumption charges will be worked out on the basis of average monthly consumption of an existing consumer over a period of twelve months immediately before coming into force of these Regulations. It is argued by the learned counsel for the petitioner that in terms of Section 47 of the Act, the Regulations in respect of Security can be framed only if a distribution licensee requires for the payment to it of all monies which may become due to it. It is contended that there is no request from the licensee such as respondent No.2 for deposit of the security amount, therefore, the action of the Board in framing the Regulations is beyond the provisions of the Statute. It is also argued that in terms of sub-Section 5 of Section 47 of the Act, a licensee is not entitled to security if the person requiring the supply is prepared to take the supply through a pre-payment meter. It is argued that since the members of the petitioner Association have sought the supply on pre-payment meter, therefore, the demand of security as per the amended Regulations is not permissible. Lastly, it is argued that in terms of sub-Section (4) of Section 47 of the Act, a licensee is to pay interest equivalent to bank rate or more, but no such interest is being paid to the consumers. In the written statement, it is averred that the security amount is payable by all the large supply industrial consumers and it has been issued after considering issues/objections raised by all the concerned parties and after following the due procedure as per Sections 47 and 181 (3) of the Act. In the written statement, it is averred that the security amount is payable by all the large supply industrial consumers and it has been issued after considering issues/objections raised by all the concerned parties and after following the due procedure as per Sections 47 and 181 (3) of the Act. It is stated to the following effect: “Thus, the licensee is required to be provided reasonable security by a person for the electricity supplied to such a person, as all expenses for supplying electricity during the period are borne by the licensee. Ideally the security should cover cost of electricity for actual billing period, time taken for raising bills, time allowed for payment of bills by the person/consumer of electricity besides notice period for disconnection. This period works out to be 60 days to 80 days for consumers billed every month (cost of electricity for one month plus 5 to 20 days for billing plus 10 to 15 days for payment and 15 days notice as provided under Section 56 of the Act). Similarly the period works out to be 90 to 110 days for consumers billed on bi-monthly basis as in their case billing time is about 21 days and 15 days are allowed for payment. However, keeping in view the hardship of the consumers this period was fixed as 1 ½ month in case of consumers who are billed monthly and 2 ½ months having bi-monthly billing in the amendment notified on 24.05.2010.” Learned counsel for the respondents have argued that in terms of Section 86 of the Act, the State Commission is to determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State. Section 61 of Part VII dealing with “Tariff” contemplates that the Appropriate Commission shall specify the terms and conditions for the determination of tariff, guided inter alia by the principles and methodologies specified by the Central Commission for determination of the tariff applicable to generating companies and transmission licensees, and; the generation, transmission, distribution and supply of electricity are conducted on commercial principles. The Regulations contemplate that safeguarding of consumer interest and at the same time recovery of cost in a reasonable manner shall be considered by the Commission while framing Tariff Regulations. The Regulations contemplate that safeguarding of consumer interest and at the same time recovery of cost in a reasonable manner shall be considered by the Commission while framing Tariff Regulations. Therefore, it is contended that the Regulation framed by the Commission in respect of security amount is part of the condition of supply of tariff to ensure recovery of cost of electricity by the licensee and also to safeguard the consumer interest. At this stage, the relevant provisions of the Statute need to be extracted. The same are as under: 47. Power of require security – (1) Subject to the provisions of this section, a distribution licensee may require any person, who requires a supply of electricity in pursuance of section 43, to give him reasonable security, as determined by regulations, for the payment to him of all monies which may become due to him - (a) in respect of the electricity supplied to such persons; or (b) where any electric line or electrical plant or electric meter is to be provided for supplying electricity to person, in respect of the provision of such line or plant or meter, and if that person fails to give such security, the distribution licensee may, if he thinks fit, refuse to give the supply or to provide the line or plant or meter for the period during which the failure continues. (2) Where any person has not given such security as is mentioned in subsection (1) or the security given by any person has become invalid or insufficient, the distribution licensee may, by notice, require that person, within thirty days after the service of the notice, to give him reasonable security for the payment of all monies which may become due to him in respect of the supply of electricity or provision of such line or plant or meter. (3) If the person referred to in sub-section(2) fails to give such security, the distribution licensee may, if he thinks fit, discontinue the supply of electricity for the period during which the failure continues. (4) The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the concerned State Commission, on the security referred to in sub-section (1) and refund such security on the request of the person who gave such security. (4) The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the concerned State Commission, on the security referred to in sub-section (1) and refund such security on the request of the person who gave such security. (5) A distribution licensee shall not be entitled to require security in pursuance of clause (a) of sub-section (1) if the person requiring the supply is prepared to take the supply through a pre-payment meter. 61. Tariff regulations - The Appropriate Commission shall, subject to the provisions of this Act, specify the terms and conditions for the determination of tariff, and in doing so, shall be guided by the following, namely:- (a) the principles and methodologies specified by the Central Commission for determination of the tariff applicable to generating companies and transmission licensees; (b) the generation, transmission, distribution and supply of electricity are conducted on commercial principles; (c) the factors which would encourage competition, efficiency, economical use of the resources, good performance and optimum investments; (d) safeguarding of consumers' interest and at the same time, recovery of the cost of electricity in a reasonable manner; xxx xxx xxx 86. Functions of State Commissioner – (1) The State Commission shall discharge the following functions, namely: (a) determine the tariff for generation, supply, transmission and wheeling of electricity, wholesale, bulk or retail, as the case may be, within the State: Provided that where open access has been permitted to a category of consumers under section 42, the State Commission shall determine only the wheeling charges and surcharge thereon, if any, for the said category of consumers; xxx xxx xxx 181. Powers of State Commissions to make regulations – (1) The State Commissions may, by notification, make regulations consistent with this Act and the rules generally to carry out the provisions of this Act. (2) In particular and without prejudice to the generality of the power contained in sub-section (1), such regulations may provide for all or any of the following matters, namely xxx xxx (v) reasonable security payable to the distribution licensee under sub-section (1) of Section 47; (w) payment of interest on security under sub-section (4) of section 47; xxx xxx (zd) the terms and conditions for determination of tariff under section 61. The Appropriate Commission i.e. Respondent No.1 in the present case, is competent to frame Regulations under Section 181 of the Act including to determine the reasonable security payable to the licensee and the payment of interest on such amount. On the other hand, under Section 61 of the Act, the Commission is competent to specify the terms and conditions for the determination of the tariff including that the supply of electricity is conducted on commercial principles. The Punjab State Electricity Regulatory Commission (Electricity Supply Code and Related Matter) Regulations, 2007 have been framed by the Commission inter-alia in exercise of the powers conferred under Section 181 read with Section 61 of the Act. Therefore, it cannot be said that the Commission is not competent to frame Regulations without any request from a licensee as stipulated under Section 47 of the Act. Section 47 of the Act contemplates that a distribution licensee may require any person, who requires a supply, to give him reasonable security, as may be determined by regulations. The argument of learned counsel for the petitioner is that in the absence of any request from the distribution licensee, the Commission cannot frame Regulations, is not tenable. Firstly, the Regulations contemplating that a distribution licensee “may require any person” is enabling provision so as to confer jurisdiction on a distribution licensee to move the Commission for deposit of reasonable security as condition of supply. But it does not oust the jurisdiction of the Commission, de-hors the request from a licensee, to frame regulations relating to security. It is the duty of the Commission to ensure recovery of the cost of electricity in the reasonable manner in terms of Section 61. Secondly, the Commission is to determine tariff for transmission and wheeling of electricity. The condition of security deposit is a condition for supply of electricity and, thus, the Commission can determine the amount of security in exercise of powers conferred under Section 86(1)(a) of the Act as well. The condition of security earlier called as 'Advance Consumption Deposit' was part of the conditions of supply as contemplated by the Electricity Act, 1910. Considering the said provisions, a Single Bench of Delhi High Court in M/s Haryana Ice Factory Vs. The condition of security earlier called as 'Advance Consumption Deposit' was part of the conditions of supply as contemplated by the Electricity Act, 1910. Considering the said provisions, a Single Bench of Delhi High Court in M/s Haryana Ice Factory Vs. Municipal Corporation of Delhi & another AIR 1986 Delhi 78 has held that demand of security by the licensee is correlated to the consumption pattern of the consumers and to cover the energy charges from the date of its consumption till the date of ultimate disconnection as a result of non-payment of the charges due. At that time, no independent Regulatory Commission was in existence and the licensee was authorised to determine the amount of security. Examining the provisions of Section 21(2) of the Act, the Court held to the following effect: 24. The demand of the security by the Corporation is correlated to the consumption pattern of the consumers and to cover the energy charges from the date of its consumption till the date of ultimate disconnection as a result of non-payment of the charges due. This Court cannot enter into mathematical calculations to come to a conclusion that instead of three months, it should be 2½ months. The fixing of the period of security equal to energy consumption of three months is reasonable. The rationale or basis on which the additional security had been demanded was gone into by high-powered Committee appointed by the Corporation and they found a reasonable basis for the demand of the security deposit. It may be that the Haryana Electricity Board has fixed the period of security deposit equal to the amount of energy consumed for a period of two months but that would depend upon the billing cycle adopted by the Haryana State Electricity Board. The Supreme Court accepted the view of the Andhra Pradesh High Court followed by the Rajasthan High Court who held that it is reasonable on the part of the Board to require security for three months consumption charges. I, therefore, do not find the demand of the Corporation either arbitrary or unreasonable. Therefore, the security amount by whatever name called was the condition of supply even prior to enactment of the Act and continues to be part of conditions of Supply after the Act came into force. The Hon'ble Supreme Court in Ferro Alloys Corporation Ltd. Vs. I, therefore, do not find the demand of the Corporation either arbitrary or unreasonable. Therefore, the security amount by whatever name called was the condition of supply even prior to enactment of the Act and continues to be part of conditions of Supply after the Act came into force. The Hon'ble Supreme Court in Ferro Alloys Corporation Ltd. Vs. A.P. State Electricity Board AIR 1993 SC 2005 has held to the following effect: “34. The reason why three months' security deposit is demanded is, for two months, the consumer gets free electricity. For supply of such electricity, the Board has to borrow and make payment of interest. If there are no consumer deposits, the tariff shall have to be increased. That will affect all the consumers. Interest at 2% is charged in case of default only in order to ensure proper payment. It is penal in character. In the judgment under appeal, the High Court held that the burden relating to interest can be reflected either in the tariff or could be set off by calling upon the consumer to make deposit. In fact, this Court has upheld the tariff revision effected by Andhra Pradesh Electricity Board as seen from Hindustan Zink Ltd. Vs. Andhra Pradesh State Electricity Board, (1991) 3 SCC 299 . It cannot be contended that the three months' consumption deposit is arbitrary. This argument ignores the following important factors: (i) This is not a security deposit but a consumption deposit. (ii) It is in the nature of an advance payment. (iii) In the event of failure to pay, it could be proceeded against as seen from clause 28.1.2. (iv) Consumption deposit is variable as per clause 28.2(iv). 35. If therefore, the object of consumption deposit is to ensure proper payment with reference to electricity supply, there is nothing arbitrary or unjustifiable. The fact that some of the appellants pay large amounts by way of electricity charges will have nothing to do with the nature of deposit. Merely because it is a power based unit, it cannot be treated separately. Nor can the appellant make a virtue out of necessity. The fact that some of the appellants pay large amounts by way of electricity charges will have nothing to do with the nature of deposit. Merely because it is a power based unit, it cannot be treated separately. Nor can the appellant make a virtue out of necessity. The terms of supply relating to consumer deposit must be uniform, therefore, it is not correct to contend that the power based unit must be treated separately.” In respect of the argument that no interest is being paid to the consumer in terms of sub-section (4) of Section 47 of the Act, it is categorical stand of both the respondents that the consumers are paid interest on the security as specified in Regulation 17 from 01.01.2008. No interest was allowed on advance consumption deposit prior to the date of enforcement of the regulations. Therefore, we do not find any merit in the grievance raised by the petitioner that interest is not being paid. If the interest is not being paid in terms of sub-section (4) of Section 47 of the Act, it shall be open to the consumers to take recourse to Electricity Ombudsman as held by a Single Bench of this Court in a judgment reported as Dakshin Haryana Bijli Vitran Nigam Limited, Hisar Vs. Electricity Ombudsman, Haryana, Panchkula & others AIR 2010 Punjab 173, confirmed by Division Bench in Dakshin Haryana Bijli Vitran Nigam Limited, Hisar Vs. Electricity Ombudsman, Haryana, Panchkula & others 2011 (4) RCR (Civil) 58. In respect of the argument that the consumers, the members of the petitioner Association are prepared to take supply from a pre-payment meter in terms of sub-section (5) of Section 47 of the Act, suffice it to state that option for facility for pre-payment meter is available as and when it is provided by the licensee. Therefore, whether the facility is available with the licensee for pre-payment meter or not, has not been brought on record. The only averment made by the petitioner association in para 15 is that most of the members of the petitioners' association are prepared to take the supply through the pre-payment meter. It appears that none of the petitioner have applied for supply through pre-payment meter nor it has come on record that such facility is available with the licensee. Therefore, it is premature to examine the said argument in any further detail. It appears that none of the petitioner have applied for supply through pre-payment meter nor it has come on record that such facility is available with the licensee. Therefore, it is premature to examine the said argument in any further detail. However, it is stated that as and when the members of the petitioner association or any other consumer seeks supply through pre-payment meter, the same shall be considered by the respondents, if it is technically feasible to be granted. In view of the above, we do not find any illegality or irregularity in Regulation 15.1 framed, which warrants any interference by this Court in its writ jurisdiction. Dismissed.