Judgment : This Writ Petition is filed seeking a writ of mandamus declaring the action of the respondents in reviewing the petitioner’s consumption deposit of Rs.69,45,700/-towards additional consumption deposit and also declaring the levy and collection of surcharge @ 18% p.a. and penal interest @ 25% on the additional consumption deposit, as illegal and contrary to Clauses 5 and 6 of the A.P.Regulatory Commission (Security Deposit) Regulation,2004 (for brevity ‘Regulation’) and for consequential reliefs. 2. With the consent of the learned counsel appearing for the petitioner and the learned standing counsel for the respondents-company, Writ Petition is taken up for final hearing. Arguments of both sides are heard. 3. Petitioner-company established an industrial unit in Sy.Nos.62 and 63 at Reddaylapalli village, Balanagar mandal, Mahaboobnagar and is engaged in the manufacture of mild steel ingots and for the said purpose obtained a H.T.service connection from the 1st respondent. Initially, 1st respondent released power supply to the petitioner on 16.02.2008. Respondents issued a bill for the month of March, 2008 to a tune of Rs.77,71,781/-for the period from 16.02.2008 to 21.03.2008 and the said amount was paid by the petitioner. It is not disputed that the consumers have to pay security deposit equivalent to two months’ consumption charges as per Clause 6 of the Regulation issued under Section 47 of the Act. It is also not disputed that initially the respondents have collected a sum of Rs.79,25,000/-towards initial consumption deposit. While so, petitioner received a letter, dated 20.05.2008, from the 2nd respondent, wherein it is stated that the petitioner’s consumption deposit was reviewed for the year, 2008-09 by taking the consumption in respect of March, 2008 alone. The contention of the petitioner is that as per Clause 6 of the Regulation, review of the adequacy of the security deposit has to be made once in a year based on the average consumption for a period of twelve months preceding such review. Petitioner would therefore assail the demand made by the respondent pursuant to the review on the ground that the said review is premature and is contrary to the provisions of the Regulation. Petitioner would therefore assail the demand made by the respondent pursuant to the review on the ground that the said review is premature and is contrary to the provisions of the Regulation. Petitioner has also questioned the liability to pay the sum of Rs.1,59,562/-demanded by the respondents by way of surcharge at 18% p.a. for the belated payment of the additional consumption deposit and also a sum of Rs.1,54,330/-demanded towards penal interest @ 24% p.a. It is stated that usually the petitioner made certain payments pursuant to the demand made under protest and after realizing that the very demand for additional consumption deposit is itself illegal, the present Writ Petition is filed. 4. Respondents filed a counter-affidavit admitting that the amount of Rs.77,71,781/-was paid by the petitioner towards the consumption charges for the month of March, 2000. 5. The power supply was released to the petitioner on 16.02.2008 and a sum of Rs.77,71,781/-was paid towards the consumption charges for the month of March, 2008. It is also admitted that the petitioner has paid an amount of Rs.74,25,000/-towards initial consumption deposit. Respondents seek to justify the review of the consumption deposit and the demand made for the additional consumption deposit on the ground that as per Clause 5 (3) (1) of JTCS and the Regulation, the H.T. consumers have to keep security deposit equaling to two months consumption charges, whereas the amount of Rs.74,25,000/-paid as initial deposit is less than even one month’s consumption as noted for the month of March, 2008. Respondents also seek to justify the demand made for the surcharge and penal interest on the ground that the petitioner failed to pay the instalments as agreed to. 6. Clause 6 of the Regulation reads as follows: “Review and payment of additional security deposit for the electricity supply (1) general review:-subject to the billing periods of three months or two months as specified in clause 4 the adequacy of the amount of security deposit in respect of consumers shall be reviewed by the adequacy generally once in every year( preferably after refund of tariff for the respective year) based on the average consumption for the period representing 12 months from April to March of the previous year”. (2) Demand notice for Additional Security Deposit:- (a) Based on review as per sub-clause (1) above, demand for shortfall or refund of excess will be made by the licensee: Provided, however, that if the security deposit payable by the consumer is short by or in excess of not more than 10% of the existing security deposit, no demand for shortfall will be made for payment of Additional Security Deposit and the consumer shall not be entitled to demand the refund of the excess. (b) If the existing Security Deposit of a consumer is found to be in excess by more than 10% of the required security deposit, refund of the excess security deposit shall be made by the Licensee by adjustment of the then outstanding dues from the consumer to the Licensee or any amount becoming due from the consumer to the Licensee immediately thereafter. (c) Where the consumer is required to pay Additional Security Deposit, the Licensee shall issue to the Consumer a 30 days’ advance notice specifying the amount payable with supporting calculations. (3) Surcharge for belated payment of additional security deposit:- (a) The consumers shall pay the additional security deposit within thirty days from the date of service of the demand notice issued by the licensee. (b) If there is any delay in payment, the consumer shall pay surcharge thereon at 18% per annum or at such rates as may be fixed by the Commission from time to time, without prejudice to the Licensee’s right to disconnect supply of electricity, as per the Regulation. (4) Disconnection for non-payment of security deposit for the electricity supplied:- In the case where Additional Security Deposit is demanded by the licensee in terms of clause 6, and the consumer does not make payment, the supply to the consumer shall be liable for disconnection, without any further notice”. 7. A plain reading of the above provision would clearly disclose that the adequacy of the amount of security deposit shall be reviewed by the licencee once in every year based on the average consumption for the period representing twelve months from April to March of the previous year. In the present case, admittedly, the supply was regularized in the month of February, 2008 and by the date of the review there was only one months’ consumption pertaining to March, 2008, which was pending in a sum of Rs.77,71,781/-. In the present case, admittedly, the supply was regularized in the month of February, 2008 and by the date of the review there was only one months’ consumption pertaining to March, 2008, which was pending in a sum of Rs.77,71,781/-. The impugned proceedings also shows that the consumption for the month of March, 2008 is taken into consideration while demanding the additional consumption deposit in a sum of Rs.69,45,700/-after deducting the available consumption deposit. While regulation contemplates review only once in a year and based on the average consumption for the period of twelve months from April to March of the previous year, the review undertaken by the respondents in the case of the petitioner, who was a new consumer having obtained the service connection only for the month of February, 2008, is wholly unsustainable as the same is in contravention of the Regulation. 8. Learned counsel for the respondents would seek to justify the review on the ground that Clause 6 of the Regulation contemplates the review at the end of every financial year but the same Regulation also states that the review has to be made on the basis of the average consumption recorded for the period of twelve months from April to March of the previous year. As the petitioner was released with power supply only in the month of February, 2008, the respondent ought to have waited for the completion of the twelve month’s period i.e. till the end of the next financial year for undertaking the review inasmuch as the additional consumption deposit, if any, payable can be ascertained only on the basis of the average consumption of twelve months’ period. The review undertaken by the respondents in the present case based on the consumption for a single month of March, 2008 is therefore unwarranted, premature and in contravention of Clause 6 of the Regulation and is liable to be set aside and is accordingly set aside. When once the demand itself is found to be illegal, the question of payment of any penal interest or surcharge over the amount demanded towards additional consumption deposit does not arise. The fact that the petitioner has paid certain amounts initially by way of instalments is of no consequence and does not in any way affect his right to question the validity of the demand itself. The fact that the petitioner has paid certain amounts initially by way of instalments is of no consequence and does not in any way affect his right to question the validity of the demand itself. In fact, the amounts are said to have been paid only under protest. Even otherwise, when the review itself is in contravention of Clause 6 of the Regulation, the demand made in pursuance of such review of payment of the additional consumption deposit is unsustainable and consequently the question of payment of any penal interest or surcharge thereon does not arise. 9. Learned counsel for the respondents would submit that the petitioner has not been regular in payment of even the monthly consumption charges and the petitioner is in arrears. 10. Learned counsel for the petitioner on the other hand would submit that the petitioner has deducted the amount from out of the consumption charges payable for the subsequent months as the petitioner was not liable to pay any amount in pursuance of the impugned demand. 11. Respondents are certainly entitled to recover whatever amounts are due and payable by the petitioner towards monthly consumption charges or any other amount legally due and payable by the petitioner under law and this order does not come in the way of the respondents recovering any such amounts due by the petitioner. However, insofar as the demand for the additional consumption deposit pursuant to the impugned notice, dated 20.05.2008, based on the premature review is concerned, it is held that the petitioner is not liable to pay the said amount demanded by way of the additional consumption deposit, as also, the penal interest of Rs.1,54,330/-and the surcharge in a sum of Rs.1,59,562/-. The respondent is however at liberty to review the adequacy of the amount of security deposit in accordance with clause 6 of the Regulation and recover any such amount found due from the petitioner in accordance with law. Consequently the petitioner would be entitled for refund of any amount paid in excess together with interest as stipulated under the Regulation. 12. Writ Petition is accordingly disposed of with the above directions. There shall be no order as to costs.