M/S. ORIENT BELL LTD vs BANGALORE ELECTRICITY SUPPLY COMPANY LIMITED
- Court
- Karnataka High Court
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 12 DAY OF NOVEMBER, 2026
BEFORE
THE HON'BLE MR. JUSTICE C.M. POONACHA
REVIEW PETITION NO. 312 OF 2025
BETWEEN:
1. M/S. ORIENT BELL LTD
A COMPANY REGISTERED UNDER
THE PROVISIONS OF COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
CHOKKAHALLI VILLAGE,
HOSKOTE TALUK,
BENGALURU-562 114,
(REPRESENTED BY ITS AUTHORIZED SIGNATORY,
MR. NARAYANA. G. K.)
…PETITIONER
(BY SRI. SHRIDHAR PRABHU.,ADVOCATE)
AND:
1. BANGALORE ELECTRICITY SUPPLY
COMPANY LIMITED
A COMPANY REGISTERED UNDER THE
PROVISIONS OF COMPANIES ACT, 1956,
HAVING ITS REGISTERED OFFICE AT
KAVERI BHAVAN,
K.R. CIRCLE,
BENGALURU-560 001.
(REPRESENTED BY ITS GENERAL MANAGER
HR AND ADMIN)
2. ASSISTANT EXECUTIVE ENGINEER ELECTRICAL
O AND M SUB DIVISION,
BESCOM, HOSAKOTE SUB DIVISION,
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BENGALURU-562 114.
3. ELECTRICITY OMBUDSMAN,
NO. 16, MILLERS TANK BED AREA,
VASANTH NAGAR,
BENGALURU-560052.
…RESPONDENTS
(BY SRI. SRIRANGA SUBBANNA, SENIOR COUNSEL FOR
SMT. SUMANA NAGANAND.,ADVOCATE FOR R1 & R2
R3 NOTICE SERVED)
THIS REVIEW PETITION IS FILED UNDER ORDER 47 RULE
1 OF CPC 1908, PRAYING TO REVIEW THE IMPUGNED
JUDGMENT DATED 25.11.2022 PASSED IN WP NO.8009/2020
(GM-KEB) AND DISMISS THE SAME HEREIN PRODUCED AT
ANNEXURE A AND ETC.
THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDERS, COMING ON FOR PRONOUNCEMENT THIS DAY,
ORDER WAS PRONOUNCED AS UNDER:
CORAM: HON'BLE MR. JUSTICE C.M. POONACHA
CAV ORDER
The present Review Petition is filed seeking review of the
order dated 25.11.2022 passed in W.P.No. 8009/2020 (GM-
KEB).
2. Before considering the contentions put forth by the
respective parties in the present review petition, it is relevant
to notice the factual matrix in brief.
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MONNAPPA POONACHA
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1
3. The review petitioner is a High Tension consumer
of respondent Nos.1 and 2 - Bangalore Electricity Supply
2
Company Limited . The petitioner entered into an agreement
dated 08.12.2008 with BESCOM, which is a distribution licensee
3
as per the Electricity Act, 2003 . The petitioner paid a sum of
Rs.1,12,09,680/- (Rupees One Crore Twelve Lakhs Nine
Thousand Six Hundred and Eighty only) towards the security
deposit to the BESCOM. The petitioner was required to deposit
an equivalent of 2 months of consumption charges as per
Regulation 4 of the Karnataka Electricity Regulatory
4
Commission (Security Deposit) Regulations, 2007 . It is the
contention of the petitioner that it has to pay the additional
security deposit as and when demand is raised by BESCOM in
that regard in addition to the previous security deposit. The
petitioner was also buying power as an "open access
consumer".
4. It is the case of the petitioner that since it was also
buying power through open access, its consumption of power
1
Hereinafter referred to as ‘HT’
2
Hereinafter referred to as 'BESCOM'
3
Hereinafter referred to as ‘Act’
4
Hereinafter referred to as ‘Security Deposit Regulations’
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MONNAPPA POONACHA
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from BESCOM had reduced. That the security deposit of two
months charges as per the actual consumption charges was a
sum of Rs.28,88,816/- (Rupees Twenty Eight Lakhs Eighty
Eight Thousand Eight Hundred and Sixteen only). Hence, the
petitioner sought for a refund from BESCOM of the excess
additional security deposit charges that it had deposited with
BESCOM. Accordingly, the petitioner sought for a refund of
Rs.54,52,048/- (Rupees Fifty Four Lakhs Fifty Two Thousand
and Forty Eight only) from BESCOM, contending, inter alia , that
the power consumption from BESCOM had reduced and that it
had deposited an excess amount than what was prescribed
under the Security Deposit Regulations.
5. Since the request of the petitioner was not acceded
to by BESCOM, the petitioner filed a complaint (Case
No.CGRF/02/2018/3438) before the Consumer Grievance
5
Redressal Forum, Bengaluru Rural . The CGRF vide its order
dated 02.11.2018 dismissed the complaint. Being aggrieved,
the petitioner preferred an appeal/application under Regulation
21.3 of the Karnataka Electricity Regulatory Commission
5
Hereinafter referred to as ‘CGRF’
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MONNAPPA POONACHA
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(Consumer Grievance Redressal Forum and Ombudsman)
6
Regulations, 2004 read with Section 42(6) of the Act, before
7
the Electricity Ombudsman, Bengaluru in case No.OMB/B/G-
309/2018/D-1201. The Ombudsman vide order dated
21.02.2019 directed BESCOM to process the petitioner's
application for refund in accordance with Regulation 6.2 of the
Security Deposit Regulations. Being aggrieved, BESCOM
preferred W.P.No.8009/2020.
6. In the said writ petition, the review petitioners were
arrayed as respondent Nos.1 and 2. Despite service of notice,
the petitioners did not enter appearance in the writ
proceedings. This Court vide its order dated 25.11.2022
allowed the said writ petition and set aside the order dated
21.02.2019 passed by the Ombudsman. Vide the present
petition, the review petitioner has sought review of the said
order dated 25.11.2022 passed in the writ proceedings.
6
Hereinafter referred to as ‘Grievance Regulations’
7
Hereinafter referred to as ‘Ombudsman’
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7. Along with the review petition, IA.No.1/2026 was
filed for condonation of delay, which was allowed by this Court
vide order dated 09.03.2026.
8. The submissions of the learned counsel Sri.
Shridhar Prabhu, for the petitioner and the learned Senior
Counsel Sri. S. Sriranga, along with learned counsel Smt.
Sumana Naganand, for BESCOM have been heard at length.
9. It is the contention of the learned counsel for the
petitioner that since it did not have an adequate opportunity to
enter appearance in the writ petition and contest the same, an
opportunity ought to be afforded to the petitioner to contest the
writ petition filed by BESCOM.
10. In addition, it is pointed out that the order dated
25.11.2022 is liable to be reviewed having regard to the fact
that the entitlement of the petitioner for seeking refund of the
security deposit amount in terms of the Security Deposit
Regulations has not been properly noticed. Elaborate reference
has been made by the learned counsel for the petitioner to the
Security Deposit Regulations as also the Grievance Regulations.
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MONNAPPA POONACHA
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11. Per contra , learned Senior Counsel appearing for
BESCOM opposes the review petition and contends that the writ
proceedings are sought to be re-adjudicated by the review
petitioner, who did not contest the writ petition despite the
notice having been served on it.
12. Before noticing the contentions put forth by both
the parties, it is necessary to notice the requisite statutory
stipulations.
13. Regulations 4 and 5 of the Security Deposit
Regulations stipulate as to the security deposit to be paid when
a consumer commences receiving the supply of electricity from
the concerned service provider. The same are extracted
hereunder for ready reference:
"4. Security Deposit for the electricity
supplied / to be supplied
4.1 All the Consumers shall at all times maintain
with the Licensee an amount equivalent to fixed
charges/demand charges plus energy charges
corresponding to consumption for two months (2
MMD) in case of monthly billing and three months
(3 MMD) in case of bi-monthly billing as Security
Deposit towards the electricity supplied / to be
supplied to them against any default in payment
during the period the Agreement for supply of
energy is in force.
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4.2 If any person requiring supply opts to take the
supply through a pre-payment meter, the
Distribution Licensee shall not be entitled to collect
the Security Deposit from such a person and the
existing security deposit, if any, shall be refunded.
5. Initial Security Deposit (ISD)
5.1 All applicants for electricity shall pay Security
Deposit to cover estimated power consumption
charges for two months (2 MMD) in case of monthly
billing and three months (3 MMD) in case of bi-
monthly billing. The estimated power consumption
charges shall include fixed charges for LT
installations and demand charges on 100% contract
demand for HT installations, fuel surcharges, if any.
The fixed charges / demand charges shall be as per
the Tariff schedule in force from time to time. The
energy charges shall be on the basis of estimated
consumption as per the table given below by
applying the tariff schedule in force from time to
time. The Distribution Licensee shall prepare and
publish a ready reckoner regarding the ISD to be
paid in respect of the new connections based on the
above, and provide it to each applicant at the time
of issue of application.
5.2 In the case of Consumers who seek sanction of
additional demand / load, the ISD shall be collected
only for additional demand / load."
14. In the event of additional supply, Regulation 6 of
the Security Deposit Regulations contemplates deposit of
additional security deposit. The said Regulation 6 reads as
under:
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MONNAPPA POONACHA
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"6.Additional Security Deposit (ASD)
6.1 General Review
The Licensee shall review the adequacy of the
amount of Security Deposit in respect of all
Consumers in the first quarter of every year based
on the average consumption for the preceding
year.
6.2 Demand notice for Additional Security
Deposit
Based on such a review, demand for shortfall in
Security Deposit or refund of excess Security
Deposit shall be made by the Licensee. However,
the Licensee can hold Security Deposit up to
Rs.3000/- at the credit of any Consumer and
refund the excess Security Deposit when it is over
and above Rs.3000/-.
a) In the case of existing Consumers, from
whom 3 MMD had been collected by the
Licensee where the monthly billing cycle is
in vogue:
(i) Additional Security Deposit shall
not be collected till deposit held at
credit falls short of the average bill
amount corresponding to two months
(2 MMD) in case of monthly billing
and three months (3 MMD) in case of
bi-monthly billing calculated based on
the consumption in the preceding
year.
(ii) If the deposit held is more than
120% of the average bill amount
corresponding to two months (2
MMD) in case of monthly billing and
three months (3 MMD) in case of bi-
monthly billing of the preceding year,
the Licensee shall refund excess
deposit held over and above 120% of
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MONNAPPA POONACHA
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the average bill amount
corresponding to two months (2
MMD) in case of monthly billing and
three months (3 MMD) in case of
bimonthly billing of the preceding
year, with in 12 months of the
notification of these Regulations in
the first instance and during the first
quarter in the subsequent years,
through adjustments in the energy
bill of the Consumer. However, the
limit of Rs.3000/- for refund of the
excess Security Deposit as per clause
6.2 shall be adhered to.
b) In case the Licensee fails to refund the
excess Security Deposit as per Clause
6.2(a)(ii) of these Regulations, penal
interest at 1 % per month on the amount
of excess Security Deposit for actual days
of delay shall be payable to the Consumer
for the delay beyond the specified period.
c) The bill amount for the purpose of
these Regulations shall include only
FC/DC plus EC and not any other charges
like the Electricity Tax, arrears, audit
short claim, interest, back billing charges,
penal charges for excess consumption /
demand.
d) Additional security deposit shall be
demanded when the deposit held falls
short of the average bill amount
corresponding to two months (2 MMD) in
case of monthly billing and three months
(3 MMD) in case of bi-monthly billing
calculated based on the consumption in
the preceding year. However, if the
shortfall is less than Rs.200/- in case of
LT categories and Rs.1000/- in respect of
HT installations, the same need not be
demanded.
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MONNAPPA POONACHA
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e) Where the Consumer is required to pay
Additional Security Deposit, the Licensee
shall serve a minimum 30 days' notice
containing necessary particulars effective
from 1st day of April of that year. The
notice shall indicate that in case the ASD
is not paid within 30 days, the installation
shall be liable for disconnection. In case
the Consumer has no objections on the
amount demanded, the additional
Security Deposit shall be paid within 30
days of the date of demand. In case the
Consumer has any objections for the said
demand, he may file his objections within
7 days from the date of receipt of such
demand notice. The amount of ASD
demanded may be revised based on the
information, if any, furnished by the
Consumer. The Licensee shall furnish all
the necessary details to justify the claim
of ASD within 7 days of the receipt of
objections. In case of revised demand,
the payment shall be made within 15
days of the date of revised demand.
f) The refund / recovery amount shall be
rounded off to nearest Rs.10/-.
6.3 Disconnection for non-payment of
Security Deposit for the electricity
supplied.
If a Consumer fails to pay the Security
Deposit demanded by the Licensee in
terms of clause 6.2 (d), the Licensee shall
disconnect the power supply to the
installation without further notice. Any
arrears due on this account shall be
deemed to be arrears of electricity
charges."
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MONNAPPA POONACHA
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15. The petitioner in the present petition, in addition to
being a HT consumer of electricity, is also an "open access
consumer". In that regard, it is the case of the petitioner that
he has entered into a agreement for purchasing power, as a
result of which, consumption of the petitioner from BESCOM
from its initial contracted capacity has reduced.
16. Section 49 of the Act permits consumption of power
as an open access consumer. The purchase of power by open
access is regulated by the Karnataka Electricity Regulatory
Commission (Terms and Conditions for Open Access)
8
Regulations, 2004 .
17. Regulation 3 of the Open Access Regulations
stipulates the criteria for allowing open access. Regulation 4
stipulates the eligibility for open access and phasing. Regulation
5 stipulates the provision for existing entities i.e., existing
distribution licensees as well as existing customers excluding
existing distribution licensees. Regulation 6 stipulates the
categorization of open access customers into short term open
access customers who intend on availing open access for a
8
Hereinafter referred to as 'Open Access Regulations'
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period of less than 5 years and long term open access
customers who intend on availing open access for more than 5
years.
18. Regulation 8(1) of the Open Access Regulations
stipulates that the nodal agency for arranging long-term open
access shall be the State Transmission Utility and Regulation
8(2) stipulates that the nodal agency for short-term open
access shall be the State Load Dispatch Centre. Regulation 9 of
the Open Access Regulation stipulates the procedure for
applying for open access and Regulation 10 stipulates the non-
utilization of open access service by an open access customer.
Regulation 11 stipulates the open access charges.
19. It is the contention of the petitioner that the Open
Access Regulations operates independent of the Security
Deposit Regulations, inasmuch as, while availing electricity
through open access, it is also required to pay a security
deposit [in terms of sub-regulation (xii) of Regulation 11 of the
Open Access Regulations] apart from open access charges as
contemplated under sub-regulations (i) and (ii) of Regulation
11 of the said Regulations. It is further contented that the said
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security deposit and open access charges are to be paid to the
nodal agency, which could either be the State Transmission
Utility [in terms of Regulation 8(1)] or the State Load Dispatch
Centre [in terms of Regulation 8(2)].
20. It is the further contention of the petitioner that the
respondent [writ petitioner - BESCOM] has to levy consumption
charges in terms of the Electricity Tariff, 2019 (Karnataka
Electricity Regulatory Commission Tariff Order dated
9
14.05.2018) . It is also stipulated that the rate of Tariff as
notified by the Electricity Tariff is liable to be reviewed from
time to time.
21. It is in the present backdrop that the review
petitioner had filed a complaint before CGRF since its request
for refund of the security deposit charges was not acceded to
by BESCOM. Pursuant to the dismissal of the complaint by
CGRF, the petitioner had filed an appeal before the
Ombudsman, which was allowed by order dated 21.02.2019,
which was impugned by BESCOM in the writ petition [WP
No.8009/2020].
9
hereinafter referred to as the 'Electricity Tariff'
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22. It is the contention of the review petitioner that the
Ombudsman had adequately appreciated the relevant aspect of
the matter and had rightly concluded that BESCOM was liable
to refund the security deposit charges.
23. In this context, it is pertinent to notice that while
considering the complaint made by the review petitioner, the
CGRF vide its order dated 02.11.2018 concluded as under:
“Conclusion:
1. The consumption has reduced since the consumer
has opted for OPEN ACCESS SUPPLY.
2. At the time of framing clauses under KERC
notification No: D/07/7 dated 1.10.2007 on KERC
(Security Deposit) and gazette dated 11.10.2017, the
OPEN ACCESS SYSTEM was not existing
3. Clause No.9 which states: "The Licensee, on
termination of the agreement by either party shall
refund ISD,ASD & Meter Security Deposit (if any)
after adjustments of dues, if any, within two months
from the date of termination failing which interest at
1% per month shall be payable on the ISD, ASD &
Meter Security Deposit for the actual days of delay.
But it does not give any guide lines or policies when
the consumption reduces due to the consumer
availing power through OPEN ACCESS SYSYEM.
4. The present connected power of 2500 KVA is
retained by the consumer, even after availing
additional power through OPEN ACCESS SYSTEM.
5. The statement of the Counsel for the complainant
that, the present connected power is required and
that they may even apply for additional power implies
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the possibilities of the consumer coming back to the
system always remains.
6. At present, there are no fixed policies or guide
lines framed or laid out in writing on the usage of the
OPEN ACCESS system and that whether this system
will continue for ever.
7. The consumption means all the units consumed
through the supply point and the total MD recorded.
8. The KERC regulation Order No. Y/03/4 dated 31-
05-2006 wherein The KERC Regulation on Terms and
conditions for Open Access Regulation 2004 on 12-
11-2004 published in the Karnataka Gazette on 16-
12-2004 is, considered along with Its amendments,
Clause 11(xii). On the open access system-"An open
access consumer shall pay 2 Months charges as
security deposit to the appropriate licensee as
applicable to secure the licensee against default in
payments".
and
Clause 18- "Collection, and disbursement of charges"-
the charges may be collected either by the
distribution licensee, the transmission licensee or the
STU, depending on whose facilities are used by the
consumer for availing open access. In all cases the
amounts collected from a particular consumer should
be given to the distribution licensee in whose area the
consumer is located. In case of two licensees
supplying in the same area the licensee from whom
the consumer was availing supply shall be pald the
amounts collected. Provided further that transmission
charges shall be payable to the concerned
transmission licensee."
The Forum based on the above conclusions pass
the following order.
THE ORDER
1. The prayer for refund claim is rejected.
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2. The prayer of the complainant is dismissed.”
24. The Ombudsman, while considering the appeal filed
by the review petitioner, upon noticing the rival contentions of
the parties, allowed the appeal of the review petitioner and
quashed the order passed by the CGRF. The relevant portion of
the order of Ombudsman is as under:
“7. Heard oral submissions made by both the parties
and also perused the written submissions made by
them. The Respondent has submitted alongwith his
parawise replies, copy of the Circular bearing No.
CYS/10 dated 04/05/2009 issued by the Chief General
Manager (Tech.) BESCOM, regarding uniform procedure
for arranging Refund of Deposits. As per this Circular,
the Consumer is expected to submit certain documents
alongwith his Application. The Respondent says that the
procedure for refund of deposit, as per the Circular
dated 04/05/2009 was orally explained to the
Representative of the Appellant. The arguments of the
AEE and also the stand, taken by the CGRF that the
Appellant is availing the power from Open Access
System and hence, there is no reduction in the
consumption pattern, the Security Deposit related to
energy supplied by the BESCOM and Security towards
energy units procured under Open Access System, are
one and the same, the question of refund of Security
Deposit will arise only at the time of surrender of power
and hence the Consumer is not entitled to claim any
refund of excess amounts placed with BESCOM, cannot
be accepted.
8. The procedure for determining the adequacy of the
amount of Security Deposit paid by the Consumer is
clearly laid down in clause 6 of KERC (Security Deposit)
Regulations, 2007. This clause does not make any
differentiation between the Consumers availing power
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from BESCOM and consumer availing power through
Open Access System. It is incorrect on the part of CGRF
to have clubbed the fact that Appellant is a consumer
availing power supply through BESCOM. The Appellant
has produced alongwith his Appeal Memo, copies of
letters written to AEE for refund of Additional Security
Deposits. In not even single letter is it mentioned that
the Application submitted alongwith all the required
documents.
69. In view of the foregoing paras, I proceed to pass the
following:
No.OMB/B/G-309/2018/D-1201 Dated
21/02/2019
ORDER
a) The order of CGRF, Bangalore (Rural) bearing No.
CGRF/02/2018/3438 dated 02/11/2018 is quashed;
b) The Respondent is directed to process the Application
of the Appellant strictly in accordance with Clause 6.2 of
KERC (Security Deposit) Regulations, 2007, if and when
submitted alongwith all the required documents as per
the Circular of BESCOM dated 04/05/2009 and getting
clarification from the Respondent with regard to change
in the name of the Company;
c) The Respondent is directed to refund the additional
Security Deposit of the Appellant if any, within 30 days
of submission of all the documents required;
d) The demand of the Appellant for refund of excess
amount with the Respondent, with interest, and award
of compensation as per SOP and award of Rs 30,000/-
as exemplary cost is rejected, in view of the fact that
the Appellant has never submitted his application
alongwith all the required documents and he has not
clarified the doubt of the Respondent No.1, regarding
change in the name of the Company.”
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25. In the writ petition filed by the respondent, this
Court noticing Regulation 4.1 of the Security Deposit
Regulations as well as Clause (xii) of Regulation 11 of the Open
Access Regulations, allowed the writ petition, the relevant
portion of the said order under review is as under:
“9. It is to be noticed that despite the first
Respondent buying power through an open access, as
long as, it has contracted with the Petitioners with a
particular demand, the Petitioners will be required to
be ready to supply the power as per the contracted
demand as and when the first Respondent requires
the same.
10. Admittedly, it is not the case of the first
Respondent that it has surrendered the power availed
from the Petitioners. Hence, it is clear that the first
Respondent has continued to remain contracted with
the Petitioners to supply the requisite demand of
2500 KVA of power.”
26. This Court noticing that the review petitioner, who
was respondent No.1 in the writ petition, had not surrendered
the power availed from BESCOM, allowed the writ petition.
However, it was the case of the review petitioner before the
CGRF as well as the Ombudsman that the review petitioner
having availed power through Open Access Regulations, its
consumption of power pursuant to the initial supply that was
being availed having been reduced, it was not required to
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maintain the security deposit in terms of Regulations 4 and 5 of
the Security Deposit Regulations.
27. This Court, while considering the writ petition filed
by the respondent, had merely noticed that the review
petitioner had not surrendered its power. The contention of the
review petitioner before the CGRF and the Ombudsman as to
its requirement/necessity to maintain/retain the security
deposit in terms of Regulations 4 and 5 of the Security Deposit
Regulations was not considered.
28. Although it is the vehement contention of the
learned Senior Counsel for BESCOM, that vide the present
review petition, the review petitioner is seeking to re-agitate
the writ petition on its merits which is impermissible in law and
various citations are sought to be relied upon in support of the
said contentions as noticed above, while adjudicating upon the
writ petition filed by BESCOM, the contention put forth by the
review petitioner before the CGRF and the Ombudsman as to
its entitlement to seek for refund of deposit which is made
pursuant to the Security Deposit Regulations, since it has also
Digitally Signed by CHEPPUDIRA
MONNAPPA POONACHA
- 21 -
HC-KAR
NC: 2026:KHC:62734
RP No. 312 of 2025
CNR: KAHC010501562025
purchased power as an open access customer in terms of the
Open Access Regulations was not considered.
29. Accordingly, the review petition filed by the
petitioner merits consideration.
30. Hence, the following:
ORDER
i. The review petition is allowed ;
ii. The order dated 25.11.2022 passed in
WP.No.8009/2020 (GM-KEB) is
reviewed/recalled.
iii. The review petitioner shall be permitted to file
statement of objections in WP.No.8009/2020
within two weeks.
iv. List WP.No.8009/2020 (GM-KEB) before the
concerned Court on 09.12.2026.
Digitally Signed by CHEPPUDIRA
MONNAPPA POONACHA
(C.M. POONACHA)
JUDGE
PNV - List No.: 1 Sl No.: 81