Bombay High Court
United Breweries Limited vs State Of Maharashtra on 1 October, 2012
Bench: A.M. Khanwilkar, P. D. Kode
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SQP IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO.2683 OF 2012
United Breweries Limited,
UB Tower, III/IV/V Level,
UB City No.24, Vittal Mallya Road,
Bangalore - 560 001. ...Petitioner
Versus
1. State of Maharashtra,
through its Secretary,
Department of Industries,
Mantralaya, Mumbai -32.
2. Maharashtra Industrial Development
Corporation, having its office at
Andheri East, Bombay-93.
3. Chief Engineer,
(Head Office), MIDC,
Mumbai-93.
4. Executive Engineer,
MIDC, Dombivali,
Thane.
5. Divisional Executive Engineer,
MIDC, having its office at
Taloja, District: Raigad.
6. Deputy Engineer, MIDC,
Thane, Div.-II,
Thane. ...Respondents
......
SQ Pathan 1/18
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Mr.S.S.Pakale with Mr.Avinash R.Belge for Petitioner.
Ms.Molina P.Thakur, A.G.P. for Respondent No.1.
Ms.Deepa Chavan a/w Mr.Kiran Gandhi & Ms.Shyamali Gadre i/b Little &
Co. for Respondent Nos.2 to 6.
......
CORAM:- A.M.KHANWILKAR AND
P.D.KODE, JJ.
DATED:- OCTOBER 1, 2012.
ORAL ORDER (Per A.M.Khanwilkar, J. ) :
1. Heard Counsel for the parties.
2. In this petition under Article 226 of the Constitution of India, two
reliefs have been claimed. The first relief is to challenge the demand
notices, water bills and penal charges demanded from the petitioner as per
the Circular dated 7th October, 2011. The second relief is for direction
against respondents 2 to 6 to charge higher water rate only for 17% of the
water consumed by the petitioner and to charge the remaining water at the
rates applicable to water consumed for industrial purpose.
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3. The issue regarding levy of water charges while keeping the
distinction of nature of activity of the industry has been considered by the
Division Bench of this Court in the case of Waluj Industries Association
& Ors. vs. The State of Maharashtra in Writ Petition No.4263/2005
and connected matters decided on 10 th October, 2008. The Division Bench
of this Court in the ultimate analysis observed thus :
"18. The argument that the Corporation shall not be permitted to levy
water charges at uniform rate from the industrial units engaged in the
activity of manufacturing liquor and beverages, etc. has some substance.
A distinction has to be made in respect of user of water by the concerned
industrial establishment as a raw material for manufacturing finished
product as well as user of water by the industrial units for allied
activities. In respect of portion of the water used in manufacturing
activity as a raw material, Corporation would be within its right to
recover charges at higher rates, whereas in respect of portion of water
used for allied activities is concerned, the industrial units can be made to
pay water charges at normal rates. The Corporation cannot be permitted
to recover water charges at higher rates treating use of water supplied to
the concerned industrial units in its entirety as user of water as a raw
material. The industrial units shall be required to pay in respect of
portion of use of water as a raw material at higher rates, whereas in
respect of portion of the supply of water, which is utilised for allied
activities, the manufacturer shall not be made to pay the water charges at
higher rates and same shall be charged at normal rates. The Corporation
shall have to be directed to make distinction in that regard and charge
accordingly.
19. We decline to quash the notices. However, the petitions can be
disposed of with the following directions:
(i) Respondent - Maharashtra Industrial Development
Corporation shall be at liberty to levy water charges at
revised rates. However, so far as portion of water supplied,
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which is being used for manufacture of liquor, beverages,
etc., wherein water is used as a raw material, Respondent-
Corporation would be within their right to recover water
charges at higher rates, whereas the portion of water utilised
for the purposes other than the manufacturing activity as raw
materials, Respondent - Corporation shall have to recover
water charges at normal rates.
(ii) Respondent-Corporation may tender revised bills
taking into consideration the distinction made above.
(iii) Respective petitioners may make suitable
representations to the Respondents in respect of revision of
water rates effective from 2002 onwards and on receipt of
the representations, Respondents shall take appropriate
decision on considering grievances raised by respective
petitioners."
4. Indeed, petitioner was not party to the said decision but had
filed separate writ petition in the year 2006 being writ petition
No.328/2006, in effect, raising the same challenge regarding the higher
water charges demanded from the petitioner for the period from 2001. The
said writ petition was disposed of along with companion matter on 4 th
November, 2009 with the following observations :
"6. Considering the above, these petitions can be disposed of by
issuing the following directions:
(i) It will be open to the petitioners to submit
documentary evidence before the respondents showing the
water which they wee using as a raw-material and the water
which they were using for allied activities. The respondents
thereafter to complete the entire exercise within 16 weeks
from today.
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(ii) On the petitioners providing such information
supported by documentary evidence, the respondents to
charge the petitioners in terms of the directions issued by this
court in writ petition no.4263 of 2005.
(iii) Considering direction no.3 in paragraph 19 of the
judgment in Waluj Industries Association, it will be open to
the petitioners to make suitable representation in respect of
revision of water rates effected from 2002 onwards and on
receipt of the representation, the respondents shall take
appropriate decision after considering the grievances raised
by the respective petitioners.
(iv) Rule made absolute accordingly in all the petitions.
There shall be no order as to costs."
5.
The petitioner allowed the said decision to attain finality. It is
the petitioner in companion writ petition (Pepsico India Holdings Pvt.Ltd.),
who took the matter in appeal before the Apex Court being SLP (Civil)
No.733/2010 (which was later on converted to Civil Appeal No.7780/2011).
Initially, the Court issued notice in the said SLP restricted to question of
retrospective demand from the petitioners vide order dated 22 nd March,
2010. However, it is common ground that the said SLP has been
subsequently dismissed on September 12, 2011. In other words, even the
question regarding retrospective demand at higher rates for the water used
by the petitioner and similarly placed persons has been upheld by the Apex
Court.
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6. Be that as it may, the Corporation, with a view to bring quietus
to the entire controversy, decided to reconsider the representation made by
all the industrial units in the region. To facilitate the Corporation to take a
proper decision, it decided to avail the services of expert i.e. NEERI who is
admittedly an independent body. The scope of work which was referred to
NEERI can be discerned from the Chapter 3 - Objectives and Methodology
in the NEERI's report in paragraphs 3.1 and 3.2. The same read thus:
"3.1 Objectives
The assessment of water use in the different section of industries,
especially bottled water, beverage and liquor industries need analysis of
the pattern of use. With a view to study these aspects following objectives
were set.
• Benchmarking the soft drinks, mineral/bottled water, soft
drinks/beverages and liquor industries with regard to water use and
wastewater generated for sustainability analysis.
• Understand the industrial water use per unit of production with a view to
suggest reduction of water use if any.
• Use this benchmark for promoting Corporate Social Responsibility.
3.2 Methodology:
In order to asses the water use pattern in the industries of the interest,
methodology used includes collection of secondary data as also from the actual
survey of some representative industries. Water footprint methodology step are
described here under:"
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7. The said expert body, in turn, analysed the issue by adopting
methodology referred to in paragraph 3.2 by conducting survey design and
collating primary information, secondary information, data assimilation and
assessment. The analysis was done on the basis of data and information
collected from different industries. The report also discloses that primary
survey was carried out by NEERI by way of actual visit to the plant and
also seeking additional information as and when needed by further follow-
up. The report suggests that the data and information collected from many
industries were analysed for its pattern as also variation. In paragraph
3.2.4, it has been noted in the said report that the secondary information to
be received from industries was difficult, as many of them did not want to
share their water use data. Notably, the data obtained by NEERI was also
compared with information available from elsewhere to arrive at water use.
NEERI was left with no other option but to draw prima facie conclusion on
analysis of data obtained by it. NEERI has also noted that it appears that
many industries do not practice wise water management. Suffice it to
observe that NEERI conducted thorough inquiry into the complex issue
regarding pattern of usage of water by the respective industries and
submitted its report to the Corporation. The said report was placed before
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the Corporation, who, in turn, accepted the same as it is. On the basis of
the said report, Circular in question was issued on 7th October, 2011. The
Circular fully adopts the recommendation in the NEERI's report. As
regards the liquor industry, NEERI has opined that 65% of water usage is
by way of manufacturing processes of its product and the remaining 35% of
water usage by that industry is for ancillary purpose. On the basis of that
recommendation, the Corporation has decided to levy five times of rate
prescribed for water charges taking the rates of 2001 as the base rates to the
extent of 65% of water consumed by the petitioner and similarly placed
liquor industry.
8. The challenge in the present petition is broadly on four counts.
The first argument of the petitioner is that the Corporation could not have
abdicated its duty to decide the representation made by the petitioner and
similarly placed industries. In other words, the appointment of NEERI by
the Corporation to elicit the correct data and the factual position as to the
percentage of water used as raw material by the concerned industry has
been challenged being without authority of law. As regards this challenge,
we fail to understand as to how the same can be sustained. The direction
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given by this Court was limited to considering the representation to be
made by the petitioner and similarly placed industries. There was no
direction that the Corporation could not have taken assistance of expert
body such as NEERI to analyse the fact situation before taking final
decision in the matter. It is a different matter that the said exercise could
have been conducted by the Officers of the Corporation themselves but if
the Corporation decided to engage the services of expert agency such as
NEERI to obviate any further grievance and to get the correct perspective
of the situation, there was no impediment in appointing such expert body.
Further, the counsel for the respondent Corporation has justly pressed into
service Section 15(h) of the Maharashtra Industrial Development Act, 1961,
which enables the Corporation to take assistance of the expert bodies
having special knowledge or skill to assist the Corporation in the
performance of its functions. Suffice it to observe that the action of the
Corporation in raising demand against the petitioner to pay water charges at
higher rate to the extent of 65% of water consumed by way of raw material
by the petitioner, cannot be assailed merely because the Corporation
decided to take assistance of expert body such as NEERI, unless it is further
shown that there are inherent and intrinsic infirmities in the approach
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adopted by NEERI in the computation and analysis of the data collected
with regard to the concerned industry. That is not the argument before us.
9. The second ground urged before us is that the petitioner is
liable to pay higher water charges only to the extent of 17% of the water
consumed by the petitioner. This argument is on the basis of the noting
made in the opening part of NEERI report. With regard to liquor industries,
in the opening part of the NEERI report, it is observed thus:
" Liquor Industries
• This sector can be divided into two types, beer only and beer and/or liquor. The
water use patterns in both the types of industries are different and also vary from
one to another. Compared to other two sectors, this sector uses much less in its
product. Beer industry uses about 18% of water in its product compared to only
7% in liquor distillation.
• Water consumption is highest in washing operation followed by
other/miscellaneous/domestic, however, the break up of water use is not very
clear for all these operation. Liquor distillation use much more water as its
processes are complex and intensive. Its water footprint is about 15 litres/liter of
the product (Which reduced to 9 litres when waste water reuse is adopted)
compared to about 5.6 liters/litres of product for beer industry. Based on large
volume of water use in this sector; it is important that this sector adopts water
minimization through adoption of clean technologies.
• In the absence of large and comprehensive number of data and information as
also taking into account the available information, about 65% of water can be
taken as commercial use of water. Rest 35% can be taken as water used for
miscellaneous/domestic use. However, this sector needs to undertake water
footprint exercise every year to reduce its water use progressively." (emphasis
supplied).
SQ Pathan 10/18
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10. This argument, though attractive at the first blush, will have to be
stated to be rejected. The noting made in the first paragraph reproduced
above, cannot be read in isolation. The report will have to be read as a
whole. Under the same heading liquor Industries, it has been noted that
after taking into account the available information, 65% of water can be
taken as commercial use of water and rest of the 35% can be taken as water
used for miscellaneous/domestic use. The report also indicates that the
liquor industry needs to undertake water footprint exercise every year to
reduce its water use progressively. The same opinion is reiterated in
paragraph 5.3 of the report. Suffice it to observe that the conclusion of
NEERI about percentage of the water consumed by liquor industry as raw
material for the manufacture of its product, is 65% of its total intake and not
17% as is contended by the petitioner. In paragraph 2.1.3 of the NEERI
report, it deals with the complexities of manufacturing processes in the
liquor industry. Whereas, paragraph 2.1.2 refers to the manufacturing
processes in the Beverage Industry. We have no hesitation in taking the
view that the argument under consideration is based on complete
misinformation and misreading of NEERI report.
SQ Pathan 11/18
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11. The other two points raised before us are overlapping and we propose
to deal with the same together. It was argued that NEERI did not consider
the representation made by the petitioner at all. This argument will have to
be stated to be rejected. There is intrinsic material in the NEERI report to
indicate that all the data and information relevant for deciding the issue
were placed before NEERI and the same has been duly considered. As a
matter of fact, NEERI officers visited the concerned industry to collate
necessary information. It has noted that the industry was not willing to
share the water use details. There is no reason to doubt the veracity of the
said statement contained in the NEERI report. Moreover, we find that no
specific ground has been taken in the writ petition to challenge the validity
of the NEERI report or the decision of the Corporation based on the said
report on this count. In absence of that plea, the Corporation was not
expected to deal with this grievance on affidavit. The Corporation cannot
be taken by surprise by advancing this argument across the Bar. Counsel
for the petitioner was at pains to invite our attention to paragraphs 37 and
39 of the writ petition as well as ground (c) in paragraph 46. We have
perused the averments in the said paragraphs of the writ petition. We are
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unable to accept the argument that specific plea has been taken by the
petitioner that the representation made by the petitioner has not been
considered by NEERI at all. We find that NEERI report is very exhaustive
and variously deals with every aspect relevant for computation of the extent
of usage of water intake for manufacturing activity as its raw material. As
aforesaid, the methodology adopted by NEERI has not been challenged in
the present writ petition nor any argument in that behalf is canvassed before
us.
12. The second shade of the same argument of violation of principles of
natural justice, is that, the petitioner was not given opportunity of hearing
by NEERI before submitting the final report. Once again, this argument
deserves to be rejected for the reasons already recorded hitherto. Even this
plea is conspicuously absent in the memo of writ petition as filed.
Moreover, there is intrinsic material in the NEERI report which goes to
show that NEERI Officers had contacted the industry concerned to collate
data and information which would be relevant to decide the matter in issue.
However, the industry was reluctant to share the water use details for
reasons best known to the industry. In other words, even this grievance
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made by the petitioner cannot be countenanced.
13. The next argument of the petitioner is that the petitioner was
not given opportunity by the Corporation before issuing the Circular dated
7th October, 2011.
As regards this submission, the same will have to be
rejected for more than one reason. Firstly, the petitioner cannot insist for
opportunity of hearing when the issue decided by the Corporation is a
policy matter and more particularly when the decision is founded on well
researched document. The petitioner will get opportunity, if and when it
challenges the demand raised by the Corporation on the basis of the said
Circular by way of other appropriate remedy - where the factual matrix can
be established involving disputed facts. In this petition, the issue examined
is only about the justness of the process of issuance of the said Circular and
the benchmark provided therein. Further, the direction issued by the High
court in the earlier round of proceedings was only to allow the petitioner to
make representation and not personal hearing as such. No provision has
been brought to our notice which obligates the Corporation to give personal
hearing before issuing the subject Circular or for that matter, before sending
the demand notice on the basis of the said Circular. In other words, we are
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unable to countenance the grievance of the petitioner that the petitioner
ought to have been given opportunity of being heard and not limited to
submitting its representation. As a matter of fact, the averments in the writ
petition are conspicuously silent about this grievance as well. But this
argument has been canvassed by the counsel only across the Bar.
14. Reverting back to the background in which the Circular dated
7th October, 2011 has been issued.
ig It refers to Circular dated 28 th
November, 2002 issued by the State Government which is the basis of
making distinction between the consumers. The distinction essentially is on
the basis of the location where the industrial units of consumer is situated.
It is on the basis of industry operating within the industrial area and the
industry operating outside the industrial area and the third category is
domestic user. In due course, it was noticed that the industries operating in
industrial area were using the water supplied to them for different activities.
Some industries were using water supply only for ancillary use, whereas,
some industries were using water for manufacturing processes of its
product as raw material. When this aspect became known to the
authorities, it was decided to charge the industry situated within the
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industrial area keeping the purpose of water consumption in mind. In other
words, it was decided to charge higher rates for water supplied to industries
situated within the industrial area using water primarily as its raw material
for manufacturing processes. The base rate was taken as notified in the
year 2001. In the light of observations made by the Division Bench of this
Court in the case of Waluj Industries Association (supra), the
Authorities reexamined the issue and decided to charge higher water
charges only to the extent of water actually used by the concerned industry
as raw material. For that purpose, it became necessary to take assistance of
NEERI to find out the break-up of water usage by the concerned industry
as raw material. On the basis of the recommendations made by NEERI
which has been accepted by the Corporation in toto, it necessarily follows
that 65% of water is consumed by liquor industry such as the petitioner
herein as raw material for its product and the remainder 35% as ancillary
use. It is in that context, NEERI has used the expression consumption of
water for commercial purpose. The fact that NEERI has used the
expression "commercial purpose" does not mean that the demand raised by
the Corporation is any way different than the principle already decided i.e.
five times higher rate than the base-rate to be charged from industry
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situated within the industrial area for consumption of 65% of its total water
intake as raw material. That demand is not inappropriate.
15. Considered thus, in our opinion, no interference is warranted in
exercise of writ jurisdiction. Hence this petition fails. Dismissed.
16. At this stage, counsel for the petitioner submits that the
petitioner may consider of challenging this decision before the Apex Court,
for which reason, the interim protection given to the petitioner be continued
for some time. This prayer is opposed by the counsel for the Corporation
on the ground that the demand raised against the petitioner pertains to
recovery for the period from 2001 onwards. The Corporation has already
been deprived of the said amount since then, for which reason, no further
protection be given to the petitioner. Moreover, if the petitioner succeeds
before the Apex Court, the Corporation may have to return the amount so
collected but the Corporation cannot be denied the amount, as demanded.
17. Considering the above, coupled with the fact that we have
already examined all issues raised by the petitioner and negatived the same
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by passing a speaking order, indulgence can be shown to the petitioner only
on condition that the petitioner deposits at least 50% of the amount already
demanded by the Corporation within two weeks from today and give an
undertaking that the remainder 50% amount will be deposited within four
weeks from today, subject to such orders to be passed by the Apex Court.
18. In addition, the petitioner shall file undertaking that if the
Apex Court so directs, the petitioner would be liable to pay interest on the
unpaid amount and including on the 50% amount to be deposited by the
petitioner from the date the amount became due and payable to the
Corporation at such rate as may be ordered by the Apex Court. It is only on
this condition, the ad-interim relief granted to the petitioner not to take
coercive action against the petitioner will continue for a period of four
weeks from today.
P.D. KODE J. A.M.KHANWILKAR, J.
SQ Pathan 18/18
