Reliance group power company BSES has decided not to disconnect electricity supply to consumers who do not pay the additional security deposit.

"In deference to consumer requests, the disconnection clause of the bills has been discontinued from the notices issued after December 6. In line with this decision, all consumers who have received prior notice, will receive the same facility," a BSES statement said.

BSES had slapped notices on its consumers in Mumbai demanding they pay an additional security deposit equal to three months' bills and threatened to disconnect their power supply if the order was unheeded.

The Mumbai Grahak Panchayat, a consumer body, objected to these developments and moved the Maharashtra Electricity Regulatory Commission.

In an interim order, the MERC restrained BSES from disconnecting power supply to consumers for non-payment of additional security deposit. The commission observed that the BSES proposal for approval of its annual revenue requirement and determination of tariff was already before it, and the matter of the security deposit might be decided as a part of these proceedings.

"In the meantime, the commission hereby directs the BSES to refrain from disconnection of supply to consumers for non-payment of additional security deposit, pending any further orders that may be issued after hearing them on this limited issue," the order said.

The Mumbai Grahak Panchayat had contended the security deposit was a part of the tariff and hence required a specific approval from MERC.

"The MGP has sought invocation of section 142 of the Electricity Act, 2003, and urged the MERC to restrain BSES from collecting the additional security deposit. Since BSES have threatened to disconnect the electric supply in a very short time, MGP has also prayed from an immediate injunction," the MERC order says.

Meanwhile, the BSES has approved the payment of the security deposit in quarterly installments instead of monthly. The BSES spokesman said "the impact of the additional security deposit requested from a vast majority of residential consumers is at an average of Rs 60 per consumer for three months."

BSES had earlier said the logic behind the deposit was to use it as a security against bad debts.