(1) Subject to the provisions of this section, a distribution licensee may require any person, who requires a supply of electricity to his premises in pursuance of section 43, to give him reasonable security in respect of the electricity to be supplied to such person.
(2) If any person fails to give such security, the distribution licensee may refuse to give the supply of electricity or discontinue the supply of electricity for the period during which the failure continues.
(3) The distribution licensee shall pay interest equivalent to the bank rate or more, as may be specified by the State Commission, on the security deposit received under sub-section (1).
Legal Commentary & Landmark Judgments: Section 47
Section 47 of the Electricity Act, 2003 empowers the distribution licensee to require reasonable security for electricity supplied and electric meters provided, mandating the payment of interest at the Reserve Bank of India bank rate and permitting disconnection upon failure to provide security.
In large commercial or industrial supply disputes, check whether the licensee has credited annual Section 47(4) interest on the accumulated security deposit; if the utility attempts disconnection for security shortfall, plead set-off and adjustment of accrued statutory interest to stay disconnection.