S.N. Sarkar, J.
(1) By this petition under Art. 226 of the Constitution Balu Ram has prayed that the two telephone connections installed in his business premises disconnected by the respondents may be directed to be restored with liberty to the respondents to bill him at shorter intervals of time to ensure payments of the calls made by him from these telephone connections. Respondents to the petition are the Union .of India, General Manager, Telephones, Divisional Engineer, Telephones, Delhi Gate Telephone Exchange respondents 1, 2, 3 and 4 respectively.
(2) The petitioner is carrying on share business with his office at 44-A, Coronation Hotel, Fatehpuri, Delhi, with the assistance of telephones. In 1966, he applied for a telephone connection under the 'own your telephone' scheme of the respondents. This connection was granted to him in December, 1966 and telephone No. 263578 here after referred to as the 'first telephone' was installed at his office. Due to business needs, he applied for a second connection and on March 9, 1969, under the same 'own your telephone' scheme which was also sanctioned and another telephone No. 265177 (hereafter referred as the 'second telephone') was installed in the same office. The second connection commenced working from May 3, 1969. According to the petitioner he was never in arrears in respect of the trunk-calls bills or the local call bills of the first telephone which averaged to about Rs. 500.00 per quarter. In regard to the second telephone, he says, he received a bill for Rs. 1.50 only for the period from May 3, 1969 to May 10, 1969 which was duly paid. No bill or bills for the second telephone were received thereafter. His case in the petition is that a particular official of the telephone Department who came to know that the petitioner's business depended on the telephones approached him with a view to extort money but when he did not oblige him, this official with the help of some line-man had the lines of the petitioner's telephone connections joined to some other connections with the result that the petitioner's telephones recorded a very large number of calls which in fact were never made from these telephones. A report was, thereafter, made by the said official to the Divisional Engineer (Telephones) that the two connections of the petitioner were making heavy calls and immediate action was called for. On May 24, 1969, the petitioner, in consequence, received two demand notices in triplicate requiring him to deposit Rs. 27,500.00 in respect of the first telephone and Rs. 20,000.00 in respect of the second telephone. The deposits were required to be made within three days of the issue of the demand notes failing which the connections were to be disconnected. The petitioner, thereupon, approached the respondents to explain the situation but he was not allowed an interview. The two telephones were thus disconnected for failure of the petitioner to make the deposits. Under these circumstances, he has filed the present writ petition with the relief set out above contending that this action of the respondents was mala-fide and had in law.
(3) After the petition had been admitted, on the application of the petitioner, by order dated June 16, 1969, one of the two connections, that is, the first telephone was directed to be re-connected subject to final decision of the writ petition and also subject to the petitioner giving a security to the extent of Rs. 2,000/. The' petitioner complied with this order and the first telephone was, thereforee, restored.
(4) In the affidavit in opposition filed on behalf of the respondents, it was urged that the petition was premature, amongst others, on the ground that the petitioner had not availed of the remedy of arbitration open to him under section 7B(b) of the Indian Telegraph Act and that while his demand for making reference to arbitration was under consideration he rushed to Court and filed this petition. On facts, it was explained that the meter testing staff of the Delhi Gate Telephone Exchange noticed that meters of these two telephones of the petitioner recorded abnormally large number of calls and that it was apprehended that the Government dues may not be realised later on. The matter was reported to the Divisional Engineer, Telephones. On May 29, 1969, the petitioner met the Divisional Engineer (Telephones) who explained the whole position to him. To safeguard the revenue of the State, in these circumstances, the affidavit stated the action complained of was taken under rule 445 of the Indian Telegraph Rules, The allegations of mala-fide were stoutly denied and it was maintained that the petitioner was not entitled to the relief claimed.
(5) In the rejoinder, the petitioner reiterated the allegations in the petition and further challenged the virus of rule 445 relied upon by the petitioner on the ground that it did not lay down any criteria for the guidance of the departmental officials.
(6) Shri Daijit Singh, learned counsel for the petitioner, has raised following contentions:
(1)That rule 445 of the Indian Telegraph Rules is ultra-vires of Art. 14 of the Constitution. (2) That the respondents acted mala-fide in demanding the deposits from the petitioner. (3) That the order requiring deposit was penal in nature and could not be passed without hearing the petitioner. (4) That in any case the demand for deposits was discriminatory and arbitrary.
(7) It is not possible to accept the first contention of the petitioner. Rule 445 of the Indian. Telegraph Rules, hereafter called 'the Rules' read as under:
'445.SECURITY For CHARGES.-The Telegraph Authority may, at any time, before or during the period for which a telephone or other like service is provided, require a subscriber to deposit as security such amount as it may consider necessary and if the subscriber fails to comply with such demand within such period as it may specify, the Telegraph Authority may withdraw the service and remove any telephone or other apparatus belonging to the Telegraph Authority. Where the security deposit is paid, any amount due from the subscriber by way of fee or other charges under these rules may be adjusted against' the amount so deposited.'
(8) It is true that this rule confers power on the Telegraph Authority to require a subscriber to deposit as security such amount as it may consider necessary, but this security has to be only for 'charges'. The rule appears in part V of the Rules dealing with the 'Rules for telephone'. Rule 434 of this Part under the sub-head 'Fees and other charges' provides that the charges for various services under these Rules shall be as enumerated therein. It then proceeds to specify the charges in regard to installation fees, re-connection fee, transfer fees and then shifting charges, scale of charges for departmental exchange connections, charges for connection under 'Own Your Telephone Scheme', charges for additional facilities etc. etc. The rate of charges under each head is mentioned separately. Rule 436 provides that the subscriber shall pay the charges for installation or shift or the rent for a telephone connection or similar service for such periods and at such times as may be prescribed by the Telegraph Authority. Rental, according to rule 437, is payable before the commencement of the period as may be prescribed by the Telegraph Authority and rental periods, according to rule 438 could either be monthly, quarterly or annually. In case of charges for calls at message rates or measured rate system in terms of rule 439 they become due and payable on presentation of a bill thereforee. The periods for which the bills shall be prepared and the dates by which they shall be payable are also provided to be fixed in advance by the Telegraph Authority. The amount which can be fixed under rule 445 thus for the purpose of security is to be the amount having reference to the charges so livable against the subscriber. It cannot be any imaginary or arbitrary amount as sought to be made out by the petitioner. The words 'such amount as it may consider necessary' in Rule 445 have reference to the words charges for which alone the security can be called for under the Rule. The power under rule 445, thereforee, is not an unbridled or arbitrary power. The purpose for which this power can be invoked is only to secure payments of the 'charges' in respect of the facility provided. This indication is in the rule itself because failing deposit it provides that the service may be withdrawn and any telephone or other apparatus installed by the Telegraph Authority may be removed It is manifest, thereforee, that the Rules lay down the policy and indicate with sufficient clearness the line of action which should serve as guidance to the Authority acting under rule 445. There is no excessive delegation of power. No question of violation of Art. 14 of the Constitution, thereforee, arises (see Joyti Pershad v. Administrator for the Union Territory of Delhi- : 2SCR125 ).
(9) The learned counsel, then placing reliance on Northern India Caterers (Private) Ltd. and another v. State of Punjab and another : 3SCR399 , urged that rule 424 of the Rules provides less prejudicial remedy in a similar situation in case of a person making excessive calls and that it is thus left to the discretion of the Telegraph Authority to pick and choose between persons similarly placed and so rule 445 was open to the charge of discrimination, vocative of Art. 14 of the Constitution. This grievance also to my mind does not bear scrutiny. Rule 424 reads as under.-
'424.DISCONNECTION Due To Excessive CALLS. In the event of a subscriber making outward local calls in excess of a certain number to be laid down by the Telegraph Authority from a telephone or telephones of which the count made by the Divisional Engineer shall be conclusive proof, the Divisional Engineer may require the subscriber in writing to rent an additional connection or connections and in default of compliance with such request, the Divisional Engineer may close the connection or connections.'
(10) It is difficult to endorse the submission of the learned counsel for the petitioner that rule 445 is more stringent than rule 424. Both under rule 424 as well as rule 445 the subscriber is bound to pay the charges in respect of the excessive calls made by him and recourse to either of these Rules by the Telegraph Authority does not absolve him of this liability. Apart from that the scope and purpose of rule 424 is different from that of rule 445. While in the case of the latter rule the object is to secure payment of the charges, the object of rule 424 is to divide the load of excessive calls on more than one connection. In cases where the purpose of the Authority is to secure payment of the charges alone without any apprehension of an extra load on the single existing telephone line recourse can be taken to rule 445 alone without taking action under rule 424. These two rules, thereforee, are not two alter native remedies provided for the Authority as was the situation before the Supreme Court in the case of Northern India Caterers (Private) Lfd and the question of discrimination between persons similarly situated does not arise. Challenge to rule 445, thereforee, on this ground also is not sustainable.
(11) Coming now to the second contention, I find that no material in support of the plea of mala-fide has been placed on the record. In fact no such allegation has specifically been made in the petition in clear terms. The learned counsel urged that mala-fides have to be inferred in this case from the facts and circumstances stated in the petition because the Telegraph Authority has proceeded to fix this heavy amount of security (Rs. 47,500.00) arbitrarily. The question whether in this case the Telegraph Authority assessed the amount to be deposited by way of security arbitrarily or otherwise is not at this stage before the Court in view of what I have said while dealing with the remaining two contentions of the petitioner. If a genuine apprehension existed on the part of the Telegraph Authority to resort to rule 445 the action taken would not be malafide.
(12) The third and the fourth contentions may be taken up together. The case of the petitioner is that the demand to deposit the amount of Rs. 47,500.00 by way of security has been made by the Authority arbitrarily and without reference to the facts and without affording a chance to the petitioner to explain the position. I find merit in this submission. The Telegraph Authority while deciding to act under rule 445 and assessing the amount that needs to be deposited by a subscriber under this rule is taking a decision which has civil consequences. If its requisition to deposit the amount so determined is not complied with, the telephone connection of the subscriber is liable to be disconnected. This can have very adverse repercussions. Even assuming, without deciding, that this function of the Telegraph Authority is purely administrative the subscriber still has a right to be heard before action is taken against him under this Rule and the quantum of the amount to be deposited is fixed. The Supreme Court in State of Orissa v. Dr. (Miss) Binapani Dei and others : (1967)IILLJ266SC has laid down that even administrative orders which involve civil consequences have to be passed consistent with the rules of natural justice in a case where dispute is raised. After receipt of the demand notes by the petitioner asking him to deposit Rs. 47,500.00 within three days the petitioner replied that he was being called upon to deposit a heavy amount and that a proper enquiry be made. Along with this reply (Annexure 'D') he enclosed details of the previous bills in respect of the calls made from his two telephones obviously in an attempt to show that the demand for the deposit of this heavy amount was not justified but no notice appears to have been taken of this reply.
(13) The two demand notes served on the petitioner required a deposit of Rs. 27.500.00 in respect of the first telephone and Rs. 20.000.00 in respect of the second telephone (Annexure 'B' and 'C'). Annexure 'G' is the copy of a bill in respect of the first telephone (263578). It relates to the period from March 1, 1969 to May 31, 1969. The petitioner has been charged for 750 net calls only made from this K. No. Likewise the bill for the second telephone was only for Rs. 1.50 though for seven days only. They furnished no indication to justify the apprehension and the demand made. If there was some material in the possession of the Telegraph Authority to justify the demand for the deposit of Rs. 47.500.00 as it is claimed then the petitioner was entitled to be apprised of it and to be heard why the proposed order should not be made against him. In para 12 of the affidavit all that the respondents have said is that the petitioner met respondent No. 3 on May 29, 1969 who 'explained the entire position of the case to the petitioner'. No affidavit has been filed by respondent No. 3 himself. At the time of arguments no further light was thrown as to the alleged Explanationn of the position to the petitioner. The vague averment in para 12 of the counter affidavit, thereforee, in the circumstances of this case, can be of no assistance to the respondents. At the time of arguments, Shn A. B. Sahariya, the learned counsel for the respondents, pointed out a letter from the file of the Department which, he said, had been sent to the petitioner as covering letter of the demand notes containing particulars of the net calls. The petitioner emphatically denied that any such covering letter was sent to him. No copy of the alleged letter was filed along with the counter affidavit. No assistance can, thereforee, be derived from this letter on the departmental file.
(14) The learned counsel then referred me to Annexure R. Ii, copy of the declaration given by the petitioner to the General Manager, Telephones, staling that he agreed to abide by the Indian Telegraph Rules and terms and conditions applicable to telephone service from time to time. The learned counsel said that rule 445 by reason of this declaration became a contractual term of the agreement entered into by the petitioner with the Department and the Authority acting in pursuance of the terms of the contract was not bound to give any hearing before taking action under it. I find no force in this submission. The Telegraph Authority, it was not denied, was a public authority acting in discharge of its statutory duties. Merely because the petitioner agreed to abide by the Indian Telegraph Rules, rule 445 did not cease to be a statutory provision. A public authority even while making administrative orders in discharge of its statutory duties where the order involves civil consequences is bound to act in a manner consonant with the rules of natural justice. I find support for this view from a recent decision of the Supreme Court in the D.F.O. South Kheri and others v. Ram Saneni Singh (Civil Appeal No. 1638 of 1969 decided on January 15, 1970) . The argument raised in this case was that since the dispute arose out of the terms of a contract and the Divisional Forest Officer under the terms of the contract had authority to modify any action, the impugned order which was purely administrative could not be inter fared with. Dealing with this contention, the Court said :
(15) 'IT is unnecessary to consider whether the order of the Divisional Forest Officer is made on 'irrelevant grounds' because it is clear that before passing the order the Divisional Forest Officer did not call for any Explanationn of the respondent and gave him no hearing before passing the order. It is averred in Paragraph 22 (i) of the petition that the 'cancellation order is in violation of the principles of natural justice having been done at a very late stage without affording any opportunity to the petitioner (respondent) to say anything against the action cancelling his tallies'. To that averment, no reply was made by the forest authorities against whom the petition was filed. Granting that the order was administrative and not quasi-judicial, the order had still to be made in a manner consonant with the rules of natural justice when it affected the respondent's rights to property. This Court in the case of State of Orissa v. Dr. (Miss) Binapani Dei and others held in dealing with an administrative order that 'the rule that a party to whose prejudice the order is intended to be passed is entitled to a hearing applied alike to judicial tribunals and bodies of persons invested with authority to adjudicate upon matters involving civil consequences. It is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its officers'. The Divisional Forest Officer in the present case set aside the proceeding of a subordinate authority and passed an order which involved the respondent in considerable loss. The order involved civil consequences. Without considering whether the order of the Divisional Forest Officer was vitiated because of irrelevant considerations, the order must be set aside on the simple ground that it was passed contrary to the basic rules of natural justice'.
(16) For the aforesaid reasons, I am of the view that the demand of the Telegraph Authority under rule 445 requiring the petitioner to deposit Rs. 47,500.00 being not consistent with the rules of natural justice is not sustainable and deserves to be quashed.
(17) Before parting with the case I may also deal with a preliminary objection raised by Shri Sahariya. The learned counsel urged that the petitioner had no locus standi to file this petition as his grievance arose out of the working of a contractual term which formed part of the agreement that he had entered into with the respondents. This objection cannot be accepted in view of what I have already said. The following observations of the Supreme Court in Civil Appeal No. 1638 of 1969 referred to earlier are a complete answer to this plea :
'COUNSEL for the appellants contends that since the dispute arose out of the terms of the contract and the Divisional Forest Officer under the terms of the contract had authority to modify any action taken by a subordinate forest authority, the remedy of the respondent was to institute an action in the civil court and that the writ petition was not maintainable. But in the present case the order is passed by a public authority modifying order or proceeding of a subordinate forest authority. By that order he has deprived the respondent of a valuable right. We are unable to hold that merely because the source of the right which the respondent claims was initially in a contract, for obtaining relief against any arbitrary and unlawful action on the part of a public authority he must resort to a suit and not to a petition by way of a writ. In view of the judgment of this Court in K. N. Guraswamy's case there can be no doubt that the petition was maintainable, even if the right to relief arose out of an alleged breach of contract, where the action challenged was of a public authority invested statutory power.'
(18) As a result of the above discussion. Civil Writ 942 of 1969 is accepted and the two demand notes for Rs. 27,500.00 and Rs. 20,000.00 are quashed with direction to the Telegraph authority to give a hearing to the petitioner before taking action under rule 445 of the Rules. Parties to bear their own costs.