Bombay High Court
Indiabulls Power Limited, New ... vs The State Of Maharashtra Through ... on 5 May, 2016
Bench: B.P. Dharmadhikari
wp4968.15 1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH
WRIT PETITION NO. 4968 OF 2015
RATTAN INDIA POWER LIMITED
having its registered office at
12th Floor, Tower A, Building No.5,
DLF Phase 3, DLF Cyber City,
Gurgaon, Haryana 122 092. ... PETITIONER
Versus
1. The State of Maharashtra
through the Chief Secretary,
Mantralaya, Mumbai 400 032.
2. The Secretary (WRD),
Water Resources Department,
Government of Maharashtra,
2nd Floor, Main Building,
Mantralaya, Mumbai 400 032.
3. The Secretary (CADA),
Water Resources Department,
Government of Maharashtra,
2nd Floor, Main Building,
Mantralaya, Mumbai 400 032.
4. The Chief Engineer,
Water Resources Department,
Sinchan Bhavan, Shivaji Nagar,
Upper Wardha Vasahat Camp,
Amravati 444 603.
5. Executive Engineer,
Upper Wardha Dam Division,
Shivaji Nagar, Uppar Wardha
Vasahat Camp, Amravati 444 603.
6. Executive Engineer,
Vidarbha Irrigation Development
::: Uploaded on - 06/05/2016 ::: Downloaded on - 07/05/2016 00:00:59 :::
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Corporation, Sinchan Sewa
Bhawan, Civil Lines, Nagpur.
7. The High Power Committee
through the Principal Secretary
(WRD), 2nd Floor, Main Building,
Mantralaya, Mumbai 400 032. ... RESPONDENTS
Shri M.G. Bhangde, Senior Advocate with Shri S.D. Dewani,
Advocate for the petitioner.
Shri Rohit Deo, Associate General with Mrs. Bharti H. Dangre,
GP for respondent Nos. 1 to 3 & 7.
Shri S.G. Jagtap with Shri S.S. Godbole, Advocates for
respondent Nos. 4 to 6.
.....
CORAM : B.P. DHARMADHIKARI &
V.M. DESHPANDE, JJ.
DATE OF RESERVING JUDGMENT: FEBRUARY 10, 2016.
DATE OF PRONOUNCEMENT : MAY 05, 2016.
JUDGMENT : (PER B.P. DHARMADHIKARI, J.)
By this writ petition filed under Article 226 of the
Constitution of India, the petitioner seeks a writ in the nature
of certiorari and after setting aside adverse orders, a direction
to the respondents to apply Irrigation Potential Restoration
Charges (hereinafter referred to as IRC), as per Government
Resolution dated 21.02.2004 with respect to the water
allocated to the petitioner, based on deficit in water for
irrigation as per the latest report. The prayers have been
amended and a prayer to restrain the respondents from
recovering interest as per demand letters dated 17.01.2013
and 04.02.2013 has been added. Hiwever, no arguments are
advanced on this interest aspect.
2. It appears that the petition was presented at
Bombay as Writ Petition No. 1487 of 2013 and there, on
05.05.2014, this Court noted that ad interim order /
arrangement was operating as per statement of respondents
made before it on 26.02.2013. On 17.06.2014, the Court
noticed that the petitioner had already paid an amount of
Rs.116.57 crores to the Government towards IRC including an
amount of Rs.10 crores deposited on 21.05.2013 and granted
ad interim stay of coercive recovery of balance amount. On
03.08.2015, the Bench at Bombay felt that the matter should
have been presented at Nagpur and it was accordingly
returned to the Advocate for the petitioner. This matter has
then been presented at Nagpur.
3. The petitioner is a Public Limited Company
registered under the Companies Act, 1956, and it produces
electricity. For that production, it requires assured supply of
water constantly. It is not in dispute that because of deficit of
electricity in Maharashtra, Respondent No. 1 - State
introduced a policy viz., "Mega Power Policy" to promote
private investment in power generation sector. As per that
policy and guidelines thereunder, the petitioner offered to
make investment and set up Thermal Power Project (T.P.C.).
According to the petitioner, it agreed to invest about
Rs.15,000/- crores in setting up of a 2700 MW Thermal Power
Project at Amravati and Respondent No. 1 - State gave
necessary permission. Circular dated 21.02.2004 isssued by
the State regulate allocation of water for non-irrigational
purposes. The petitioner sought water allocation in December
2007 and High Power Committee accepted it in its meeting
dated 13.05.2007. Water agreement was then executed on
22.09.2008.
4. Respondent No. 5 - Executive Engineer submitted
a report on 11.01.2008 and quantified expenditure on IRC at
Rs.50,000/- per Hectare for notional area of 23218 Hectares,
totaling to Rs.116 crores. As per decision dated 21.02.2008,
the petitioner was required to pay its share towards capital
contribution and IRC at prevailing charges. The prevailing IRC
charges at that time was Rs.50,000/- per Hectare.
Accordingly, on 16.08.2008, Respondent No. 4 - Chief
Engineer of Water Resources Department conveyed the
decision of allocation of 87.60 MM3 water to the petitioner.
However, Respondent No. 5 - Executive Engineer demanded
IRC at the rate of Rs. One lakh per Hectare for 23218 Hectare.
The total demand was of Rs.549.98 crores out of which 232.18
crores represented IRC while balance Rs.317.80 crores were
demanded towards capital contribution. The petitioners also
claim that Respondent No. 6 - Executive Director had on
17.01.2012 sent a letter to Respondent No. 3 - Secretary of
Command Area Development Authority, pointing out that IRC
should have been demanded @ Rs.50,000/- per Hectare only.
5. The petitioner thereafter addressed various
representations and Respondent No. 1 - State and Respondent
No. 2 - Secretary of Water Resources department passed a
resolution on 06.03.2009 fixing maximum rate of IRC at Rs.
One lakh per Hectare prospectively from 01.04.2009. The
petitioner sent a letter to the Minister for Water Resources
Department on 25.01.2011 and pointed out discriminatory
and exorbitant demand. The petitioner then sent another
representation on 01.06.2011 and then a detailed
representation dated 30.06.2011 to the said Minister.
6. Respondent No. 5 on 23.04.2012 informed the
petitioner that last date for executing Water Agreement was
31.05.2012 and failure to execute it would result in
cancellation of water allocation. On 07.05.2012, the
petitioners replied to it and reiterated its grievance. The
petitioner stated that the Minister, Water Resources
Department was considering the demand of the petitioner,
however, power project being of national importance and due
to the fact that the respondent was in a position to exercise
economic duress on the petitioner, the petitioner agreed to
execute agreement by paying IRC of Rs.50,000/- per Hectare
with an undertaking on an affidavit to pay balance, if any,
subject to final decision of State on representation of the
petitioner. On 10.05.2012, the petitioner sent a letter to the
Superintending Engineer, Uppar Wardha Dam Project,
pointing out its readiness and willingness to execute
agreement without prejudice to its demand of calculating IRC
at Rs.50,000/- per Hectare. The respondents insisted upon
executing that agreement with IRC of Rs. One lakh per Hectare
and suggested that that amount be paid in installments. The
petitioner then submitted two demand drafts both dated
18.05.2012 and each in the sum of Rs.23,21,90,000/- towards
first installment of IRC. The petitioners were given draft of
agreement on 23.05.2012. The petitioner was forced to
execute that agreement in the form as supplied. The
agreement has been entered into for non-irrigation water
supply with effect from 22.05.2012 and as stipulated therein,
the amount paid by the petitioner towards IRC was made
subject to decision of the government on representation of the
petitioner.
7. The next installment of Rs.60.13 crores towards
IRC computed @ Rs. One lakh per Hectare was due on
21.11.2012 and the representation of the petitioner was not
decided, hence the petitioner approached this Court at
Bombay in Writ Petition No. 2714 of 2012. On 22.11.2012,
this Court directed the State Government to decide the
petitioner's representation within eight weeks. The petitioner
vide letter dated 18.12.2012 informed Respondent Nos. 3 & 5
about amounts deposited and grant of personal hearing.
Separate communication was sent to Respondent No. 5
disputing the bill raised towards water charges pointing out
that water charges could be levied only two years after
company started drawing water and also disputing its right to
levy interest. On 27.12.2012, Respondent No. 5 - informed
that Respondent No. 4 was seized of the matter and refuted
petitioner's charges that no water charges or interest was
payable. The petitioner's claim that on 03.01.2013 it clarified
that payments made towards IRC were without prejudice to
the petitioner's rights and submissions under law and the
representations filed by it. It further stated that interest could
be determined once the representations were conclusively
decided. On 21.01.2013, the petitioner informed Respondent
No. 3 about pending representation. This was repeated on
28.01.2013.
8. The Water Resources Department vide letter dated
29.01.2013, summarily disposed of the petitioner's objections.
This disposal has been questioned in present writ petition.
9. We have heard Shri M.G. Bhangde, learned Senior
Advocate with Shri S.D. Dewani, learned counsel for the
petitioner, Shri Rohit Deo, Associate General with Mrs. Bharti
H. Dangre, learned Government Pleader for respondent Nos. 1
to 3 & 7 and Shri S.G. Jagtap with S.S. Godbole, learned
counsel for respondent Nos. 4 to 6.
10. After narrating the facts, Shri Bhangde, learned
Senior Advocate has submitted that the dispute in this writ
petition is about the area qua whicu & rate at which Irrigation
Restoration Charges (IRC) is to be calculated. According to
him, it should be Rs.50,000/- per Hectare while the
respondents claim to be Rs. One lakh per Hectare. On second
contention about the area with reference to which this IRC is
to be calculated, he points out that according to the petitioner,
there is absolutely no loss of irrigation potential and,
therefore, as not an inch of land has been deprived of
irrigation, the petitioner is not required to pay anything on
that count. He further contends that in the alternative, the
said area is eithrt 4600 Hectare or then, 13140 Hectare. Thus,
the calculation considering that area to be 23218 Hectare by
the respondents is not correct.
11. Insofar as contribution towards capital expenditure
is concerned, it does not form part of this petition as the
petitioner has instead of capital contribution agreed to pay
higher charges for water supplied to it & Respondents have
consented to it.
12. Shri Bhangde, learned Senior Advocate submits
that IRC is to be worked out on a date when the water
allocation is finalized i.e. on 12.12.2007 and any subsequent
modification therein cannot be made applicable to such
allocation. He has invited attention to the fact that on
16.08.2008 sanction is granted for permanent water allocation
of 87.60 MCM from completed Uppar Wardha Project and it
was to be operational only after agreement is made. The
water charges at the rate as decided by the State Government
from time to time are to be paid. The said document,
however, demands Rs.232.18 crores towards IRC and this
calculation is @ Rs. One lakh per Hectare. For 232.18
Hectares. He states that as per clause 13, though action was to
be taken within three years, said period was extended up to
31.05.2012. He has invited attention to demand letter dated
26.09.2008 whereby the amount of Rs.549.98 crores has been
demanded and it includes IRC of Rs. 232.18 crores. He has
then taken us through various representations made by the
petitioner from time to time. The representation dated
25.01.2011 makes reference to IRC rates applied to other
similar units. It points out treatment extended to those units &
complains of discrimination. Instances are of total waiver for
NTPC, rate of Rs. 50,000/-per hectare to units like Adani
Power Maharashtra, Adani GR Power and Reliance Energy
Limited. He submits that State Government does not have any
uniform policy and IRC has been calculated by using varying
norms. Norm of 64 Hectare per cubic meter is applied in case
of Tata Power, while norm of 265 Hectare per cubic meter is
used in case of IPL. Therefore, the actual rate varies from NIL
to 265 crores which is the highest one. In that representation,
it has been pointed out that in case of the petitioner, the Chief
Engineer, Water Resources Department, on 11.01.2008, has
pointed out IRC of Rs.116.09 crores omly as per rate
prevailing on th date of water allocation.
13. Our attention has also been drawn to agreement
entered into between the petitioner and the respondents on
22.05.2012 to show that the petitioner - company agreed to
pay Rs.232.18 crores as IRC in five installments over a period
of two years with applicable interest but it was subject to
decision on representation of company dated 25.01.2011.
That decision was to be binding on parties. Petitioners
contend that the company was already permitted to draw
water for the specified purposes and thus agreement does not
reserve or allocate water for the first time for it. It only
facilitate use of water already allocated or reserved. An
undertaking furnished by the petitioner on 22.05.2012 to
support its request for five installments is also relied upon
to show that it is subject to the decision of representation.
14. Our attention has been drawn to the orders passed
at Bombay in Writ Petition No. 2714 of 2012 to demonstrate
that this representation was directed to be decided within
eight weeks and it was kept pending for quite some time
thereafter. The impugned order which decides representation
on 29.01.2013 is also relied upon to contend that it ignores
the vital aspect of the objection on "area" qua which the IRC
needed to be charged. The guidelines or norms prevailing on
the date of entering into an agreement have been erroneously
referred to and rate of Rs. One lakh per Hectare prevailing at
the time of agreement has been found proper.
15. To point out how illustration of other units given
by the petitioner have been perfunctorily dealt with, he has
placed reliance upon the discussion in paras 6(a) and 6(b) of
the impugned order. He submits that water allocation in case
of Aparna Infra Energy was on 01.07.2007. The company
executed an agreement on 24.01.2011 and still IRC was
calculated @ Rs.50,000/- per Hectare. The case of the
petitioner stands on same footing. Para 7 is also pressed into
service to show how favourable treatment has been extended
to Reliance Energy, Shahapur, Ispat Power Project, Pen and
Tata Power, Pen. He submits that rate of Rs. One lakh per
Hectare is introduced on 06.03.2009 with effect from
01.04.2009 and as it has not been made applicable in case of
Aparna, the same should not have been applied to the
petitioner also.
16. Water Policy providing for non irrigational user of
water formulated on 21.01.2003 has been relied upon by him
to submit that the petitioner has been given water allocation in
terms of said policy. Rate of Rs.50,000/- per Hectare
stipulated in clause 13 thereof is heavily relied upon by him.
The Circular issued on 21.02.2004 about payment of
contribution towards capital cost and about irrigation
restoration charges is also pressed into service to show that in
present facts, there is no question of exceeding rate of
Rs.50,000/- per Hectare. He adds that the rate prevailing,
when the water is reserved for the petitioner, is decisive and
date of entering agreement has got no bearing. Hence, the
later revisionor enhancement on 06.03.2009 with effect from
01.04.2009 cannot be applied retrospectively.
17. Our attention is invited to communication dated
11.01.2008 by which the proposal of the petitioner was
submitted for scrutiny to the State Government where rate of
Rs.50,000/- per Hectare has been applied to 23218 Hectare of
land. It is contended that in present matter, the reservation
was vide memorandum dated 16.08.2008 and even at that
time prevailing rate was Rs.50,000/- per Hectare. Hence,
stipulation in clause 12 thereof about amount of Rs.232.18
crores as IRC is bad. This error was pointed out on
17.08.2008 but it was not corrected. Had mistake been
corrected, the petitioner could have paid the amount or had
there been refusal, the petitioner could have come to this
Court. The learned Senior Advocate submits that delay in
taking decision is an error on the part of the State Government
and it cannot be allowed to take advantage of its own wrong.
18. Our attention is drawn to an affidavit tendered at
Bombay in Writ Petition No. 1487 of 2013 to urge that effort
made therein to explain different treatment extended to NTPC
is unsustainable. He points out that as NTPC was allotted land
otherwise to be used for irrigation project, rate of Rs. One lakh
has been applied to it. He further points out that on
25.07.2008, the Water Reservation rate has been sanctioned
by the Executive Director of VIDC. According to him,
documents on record show that said rate is not fixed by the
State Government. He draws support from communication
dated 22.12.2011 sent by the State Government to the
Executive Director of VIDC which mentions this fact.
19.
Strong reliance is placed upon the response thereto
by VIDC on 17.01.2012. This communication sent by the
Executive Director of VIDC to the Secretary of Water Resources
Department point out IRC of Rs.50,000/- per Hectare only.
The extent of area to be calculated for that is also taken as
150 Hectare per cubic meter of water as per this
communication. Manner in which said Executive Director has
explained distinguishing feature in the matter of NTPC is also
pressed into service by the petitioner.
20. Mega Policy dated 28.03.2005 is produced before
us by the petitioner during hearing. The respective counsel
appearing for the respondents were asked whether they have
any objection to that production and they gave their no
objection. Shri Bhangde, learned Senior Advocate submits
that clause 3(iii)(c) of this policy is assurance of water and
relying upon this policy and circular dated 21.02.2004, the
petitioner made huge investment. Our attention is invited to
grounds (hh)(ii) in memo of writ petition to substantiate the
same.
21.
Coming back to the impugned order, in this
background, Shri Bhangde, learned Senior Advocate submits
that it shows total non application of mind and the relevant
material has been overlooked. He adds that case of Aparna
looked into is identical to the case of the petitioner. Reference
to clause 27 of the Agreement dated 22.05.2012 is irrelevant
as it does not enable them to apply circular dated 06.03.2009.
He submits that legal relationship does not start from
22.05.2012 but it has started when water allocation was done.
He points out that express stand of VIDC in this respect has
been ignored.
22. Pointing out the judgment delivered by this Court
at Bombay in Writ Petition No. 757 of 2011 on 1 st & 2nd March
2013, the learned counsel states that there, after considering
the rival contentions, the Division Bench has looked into State
Water Policy and then in para 27 notices that 202.203 MCM of
water is sufficient for irrigating 75000 Hectare of land. He
contends that in the light of this observation, when water
being supplied is only 87 MCM, there is no reduction in
irrigation potential at all. Our attention is also drawn to an
affidavit filed by the Executive Director, VIDC in Writ Petition
No. 1038 of 2010 which was decided along with a Public
Interest Litigation to urge that as disclosed in para 8 thereof by
VIDC, the Power Project of the present petitioner does not in
any manner hamper the irrigation potential of the region. He,
therefore, submits that no IRC can be recovered from the
petitioner.
23. Using same equation (proportion), he points out
that at the most water lost is 17.60 MCM which could have
catered 4600 Hectare. Hence, IRC @ Rs.50,000/- per Hectare
could have been calculated only for 4600 Hectare of land. Our
attention is drawn to a report on Water Planning of Uppar
Wardha Project to submit that as mentioned therein, after
simulation study, with added requirement of 87.60 MCM
water for the petitioner, the total water available for the
irrigation purposes is 182.7 MCM. He, therefore, states that
the shortfall is at the most of 17.60 MCM as is apparent from
the stand of irrigation department looked into in paragraph
27 of the judgment dated 1.2 March, 2013 in W.P. 758 of
2011 , 757 of 2011 delivered at Bombay.
24. Without prejudice, he adds that as per letter of
VIDC dated 17.01.2012, the standard area which can be
catered per MCM of water is 150 Hectare. If this area is
applied, then loss of irrigation capacity is 13140 Hectare.
25. In this background, he again invites attention to
absence of uniformity in this respect as highlighted in
representation dated 25.01.2011 and accompanying chart by
the petitioner.
26. He concludes by pointing out that actual water
came to be released to the petitioner for the first time on
18.11.2013.
27. Shri Deo, learned Associate Advocate General
submits that on 21.02.2008, only a meeting took place and
89.72 MCM of water in principle was agreed to be reserved for
the petitioner. He states that as per said consideration, because
of this reservation, 232.19 Hectare of land was being deprived
of irrigation. He further submits that as per Government
Circular dated 21.02.2004, there are clear instructions which
put any controversy beyond doubt. The rate of IRC has to be
as prevailing on the date on which the agreement is reached
and supply of water without agreement has been specified to
be a grave misconduct. He also adds that the petitioner does
not seek quashing of agreement dated 22.05.2012. He invites
our attention to Government Resolution dated 21.01.2003 to
show how clause 13 again reiterates that water for non
irrigational purposes should not be supplied without
agreement. A High Power Committee has been constituted for
said purposes and, in this situation, only reservation of water
in favour of the petitioner cannot, therefore, result in fixing a
date for rate determination. A communication dated
16.08.2008 sent by the Assistant Chief Engineer containing
terms and conditions is heavily relied upon by learned AAG to
show that water reservation takes place only after agreement
is entered into. He points out that rate of capital expenditure
and IRC is mentioned in it and three years of time limit is also
prescribed. He further states that the petitioner exercised
option in relation to not paying capital contribution and
agreed to pay water royalty at a higher rate on 25.02.2011.
The petitioner never raised any objection from August 2008 till
17.10.2008 and thereafter till 21.05.2011. Shri Deo, learned
counsel adds that objection is only about rate and not about
area of land in relation to which the calculation needs to be
made. He invites our attention to representation dated
01.06.2011 sent by the petitioners where they sought
additional time of one year for executing agreement & during
said period time, government should take decision on the
proposal. The proposal was to set aside demand of Rs.232.18
crores. On 08.06.2011, Government extended that time. On
10.05.2012, the petitioner agreed to a conditional agreement
and to pay an amount of Rs.232.18 crores in five installments
subject to decision on its representation. On 18.05.2012, the
petitioner gave two Demand Drafts and then on 25.05.2012,
agreement under Article 299 of Constitution of India has been
entered. He contends that, therefore, it is not a statutory
contract.
28. Separate undertaking given by the petitioner on
the very same day is also relied upon by him with submission
that second installment was due on 21.11.2012 with interest
and at that juncture, the petitioner filed writ petition at
Bombay on 27.04.2012 which came to be decided on
22.11.2012. He submits that this court was reluctant to
intervene due to undertaking and other factors. Adv. Deo
urges that adjudication therein operates as res judicata. He
heavily relies upon said judgment dated 22.11.2012. to state
that all contentions being raised now were looked into and
High Court has refused to intervene. This being a contract
matter, writ jurisdiction is not available and only remedy is to
assail the impugned order in Civil Court. He states that there
is no scope to substitute siad order dated 25.02.2012 passed
by this Court in its writ jurisdiction.
29. According to him, pleadings in instant writ petition
are very narrow and mostly about rate of IRC. He invites
attention to pleadings in para 9 of writ petition about area
affected and to an affidavit in reply filed by the respondents in
reply to it. Formula applicable to determine said area & need
to work it out accordingly, is pressed into service by him to
urge that the irrigation potential affected by reservation has
been rightly calculated to be 23218 Hectare. He further points
out that as disclosed therein the irrigation potential ihas later
ncreased and with that increase, because of improvements in
infrastructure, 87.60 MCM water reserved for the petitioner is
enough cater to more than 23218 Hectare of land. He,
therefore, states that actual demand on account of IRC has to
be much more than Rs. 232.18 Crs. He, however, adds that as
all these are technical facets, this Court should not intervene in
writ jurisdiction.
30. On unequal treatment extended to the petitioner,
he has taken us through the very same reply affidavit to point
out how comparision done is either defective or legally
unsustainable. According to him, there is a distinguishing
feature in case of NTPC because NTPC project itself affects the
area of 560.68 Hectare and cause actual loss in irrigation
potential of 820.56 Hectare. He further submits that NTPC
paid amount to Water Resources Department in March 2012
@ Rs. One lakh per Hectare. He further adds that while
allocating water for non-irrigation purpose to NTPC, High
Power Committee agreed to waive Rs.95 crore as it is Central
Government Undertaking. He has submitted that insofar as
project Aparna Infra Energy, Chandrapur, is concerned,
Chandrapur is not a Water deficit area and proposal was
submitted to levy IRC at Rs.50,000/- per Hectare in the light of
Government Circular dated 21.02.2004. The High Power
Committee in its meeting dated 02.07.2008 decided to obtain
restoration charges of Rs.309 lakh. The reservation in favour
of Aparna Infra Energy is of 6 MCM from Nand-reservoir. The
allocation of reservation for the petitioner is much more ie
87.60 MCM, that too in water deficit area. The other technical
details are also pressed into service by him to urge that the
project of the petitioner cannot be compared with the project
of Aparna. The prevailing rate of IRC at Rs.50,000/- per
Hectare has been offered to M/s. Ideal Energy Private Limited
when agreement was entered into on 22.09.2008. The
projects of Reliance Energy, Shahpur; Ispat Power Project, Pen
and Tata Power, Pen (all in Raigarh district) were required to
be cancelled as non-irrigation agreement was not executed
within the prescribed time. He has relied heavily upon facts
disclosed in paras 16 and 17 of said affidavit to point out the
impact of reservation of water in favour of the petitioner.
Various technical details are given in para 17 to urge that the
petitioner is not entitled to any reduction in IRC charges.
31. In this background, the learned counsel submits
that reliance upon internal communication dated 17.01.2012
sent by the Executive Director, VIDC to the Secretary, Water
Resources Department, is misconceived. It is not a "decision"
of Government at all. The specific stand in reply in this
respect in para 23 is pressed into service by him.
32. Shri Deo, learned Associate Advocate General
urges that this Court has been approached belatedly and the
approach itself is barred as the petitioner has already
acquiesced in everything, therefore, the petitioner is estopped
from raising any grievance. He further contends that there is
no scope for remanding this issue or matter back as its
representation has been considered & rejected by the State
Government in accordance with law.
33. He has relied upon the judgment in the case of
State of Haryana vs. Lal Chand, reported at AIR 1984 SC 1326,
to urge that the present contract is not a statutory contract.
The judgment in the case of Pimpri Chinchwad Municipal
Corporation & Ors. vs. Gayatri Construction Company & Anr.,
reported at (2008) 8 SCC 172 is relied upon to submit that a
contract in relation to public utility service is not a statutory
contract. The judgment in the case of Orissa State Financial
Corporation vs. Narsingh Nayak, reported at (2003) 10 SCC
261, is relied upon by him to submit that rewriting of contract
in writ jurisdiction is not permissible. The judgment in the
case of Rajasthan State Industrial Development vs. Diamond &
Gem Development Corporation Ltd., reported at (2013) 5 SCC
470, is relied upon to contend that the petitioner cannot be
permitted to approbate and reprobate and contract between
the parties cannot be rewritten. The judgment in the case of
Shyam Telelink Ltd. Now Sistema Shyam Teleservices Ltd. vs.
Union of India, reported at (2010) 10 SCC 165, is the
judgment relied upon by him again on approbation and
reprobation. On enforcement of non statutory contract in writ
jurisdiction, he draws support from the judgment in the case of
State of U.P. & Ors. vs. Bridge & Roof Company (India) Ltd.,
reported at (1996) 6 SCC 22 and in the case of M/s.
Radhakrishna Agarwal & Ors. vs. State of Bihar & Ors., reported
at (1997) 3 SCC 457.
34. The judgment in the case of M/s. Mahabir Jute
Mills Ltd., Gorakhpore vs. Shri Shibban Lal Saxena & Ors.,
reported at (1975) 2 SCC 818, is pressed into service to urge
that while considering the representation of present nature, it
is not necessary to record the reasons. The adjudication of
petitioner's representation does not give any fresh cause of
action as representation is not statutory in nature. To buttress
this submission, he relies upon the judgment in the case of
Union of India & Ors. vs. M.K. Sarkar, reported at (2010) 2
SCC 59. The judgment in the case of Union of India & Ors. vs.
E.G. Nambudiri, reported at (1991) 3 SCC 38, is relied upon
by him to urge that in such matters, the petitioner cannot
insist for reasons.
35. Shri Deo, learned Associate Advocate General,
submits that, at worst, only one instance to support alleged
unequal treatment has been pointed out by the petitioner. He
relies upon the judgment in the case of Gurucharan Singh vs.
New Delhi Municipal Committee, reported at AIR 1996 SC
1175; Chandigarh Administration vs. Jagjit Singh, reported at
AIR 1995 SC 705; Shanti Sports vs. Union of India, (2009) 15
SCC 705 and in the case of Jayant Vegoils and Chemicals vs.
The City and Industrial Development Corporation, reported at
(1997) 2 BCR 600, to submit that any irregularity or illegality
cannot be perpetuated by taking recourse to Article 14 of the
Constitution of India.
36. He further submits that on IRC, the case of the
petitioner falls under clause B(1) of Government Resolution
dated 21.02.2004 and rate prevailing on the date of agreement
has been correctly relied upon. He invites attention to
representations made by the petitioner on 25.01.2011,
25.02.2011, 01.06.2011 and 30.06.2011, to contend that the
extent of area which is deprived of irrigation potential was
never in dispute. He, therefore, prays for dismissal of writ
petition.
37. Shri Bhangde, learned Senior Advocate, in his reply
points out that NTPC did not pay IRC and that amount has
been waived by High Power Committee (HPC). The reasons
given in the matter of Aparna in para 12 of affidavit are legally
unsustainable. The placement of an industry in water deficit
area or water surplus area is not disclosed as a relevant norm
in the water policy. He adds that otherwise, the petitioner
establishment would have gone to Chandrapur area. He
submits that even the quantum of water allotted, does not
appear to be relevant. The petitioner had submitted
representations on various occasions but the same were not
decided. He states that date of agreement in case of Aparna is
much after 1.4.2009, but as allocation was prior thereto, old
rate has been applied. Analogy and rate in the case of Aparna
ought to have been applied even in the case of the petitioner.
He further adds that rate applied even in the case of Ideal
Energy Limited ought to have been extended to the case of the
petitioner. The cancellation of permission to other projects is a
subsequent event which has got no relevance on a challenge
raised by the petitioner. He relies upon a communication
dated 17.01.2012 to urge that it has to clinch the issue.
38. On nature of contract and need of filing a Civil
Suit, he invites attention to the provisions of Section 58(6) of
the Maharashtra Irrigation Act, 1976, (XXXVIII of 1976) and
submits that water is made available to the petitioner under
that provision. The water policy has been elevated to a status
of statue by 2011 Amendment i.e. Section 31-B of the
Maharashtra Water Resources Regulatory Authority Act, 2005.
The water policy of State Government and grant of water to
the petitioner is deemed to be under Section 31B. He further
points out that dispute about IRC is at threshold of contract i.e.
before entering into contract and not a subject matter or
aspect of contract, hence, different principles apply. He draws
support from the judgment in the case of Radhakrishna
Agarwal v. State of Bihar, reported at (1977) 3 SCC 457, (para
10) for said purpose. He adds that imposition of a condition
contrary to Water Policy while entering into contract itself is
bad. While explaining absence of pleading on "area" dispute ,
he points out that the representation has not been looked into
and, therefore, it was not necessary to raise any plea in that
respect. He further states that in representation dated
21.01.2013, after High Court judgment, this point has been
raised and it has been replied to by the respondents in their
reply before this Court vide paras 12, 13 and 14. He also
submits that no prejudice is caused to the petitioner in absence
of such a plea because extent of area affected is a matter of
record and all material relevant thereto is undisputed. He also
relies upon the Division Bench judgment at Bombay between
the parties which mandated adjudication of representation to
show that that Division Bench expected decision on area
dispute also.
39. Taking us through said judgment, he points out
that it cannot operate as res judicata or constructive res
judicata because at that time representation was pending and
subsequently, it has been decided obeying the directions
issued therein. If tat all he petitioner had approached writ
court belatedly, the question needed to be raised in that matter
when the Division Bench decided said Writ Petition No. 2714
of 2012 on 22.11.2012. After that adjudication and directions,
such contentions cannot be raised by the respondents in this
matter. That Division Bench has kept everything open and
hence arguments of finality or propriety cannot be raised in
this matter.
40. He further points out that if prayer (A) in present
writ petition is allowed, prayer (B) therein becomes
redundant. The dispute is only in relation to correct rate and
proper area. The agreement between the parties dated
22.05.2012 is provisional on IRC rate as it depends on decision
of the representation. The said decision on representation
prevails over the arrangement in agreement. Communication
dated 17.11.2012 though internal, brings on record facts and
the petitioner has placed reliance upon it to invite attention to
those facts. The petitioner is not relying upon any
recommendation contained therein. He further submits that
doctrines like estoppal or approbate or reprobate are not
attracted here as the petitioner does not assail the agreement
and IRC rate is expressly agrred to be contingent upon the
decision on its representation by the parties thereto.
41. In respect of rate of IRC and relevant date, he
invites attention to clause (B) of Government Circular dated
21.02.2004. He contends that stipulation of rate in the letter
dated 16.08.2008 by the Assistant Chief Engineer (2), Water
Resources Department, Amravati, is contrary to this clause and
demand could not have been raised on its basis. He invites
attention to agreement dated 22.05.2012 to urge that
reservation of water was already done and agreement only
stipulates conditions subject to which right to it is to be
exercised. He further states that vide its page 6, the agreement
specifically refers to Maharashtra Irrigation Act, 1976.
42. He relies upon the judgment in the case of State of
Orissa v. Bhagyadhar Dash, reported at (2011) 7 SCC 406, to
urge that in such facts and circumstances, Article 226 of the
Constitution of India, is always open.
43. The affidavit in reply particularly para 16 is relied
upon to show the impact of payment made by the petitioner.
He contends that when project was over in 2005 itself,
subsequent developments or improvements made in services
thereafter cannot have any bearing in the matter. He argues
that the respondents have travelled outside the report of
experts and water policy. He further submits that the effort of
the respondents is to change the norm for calculating IRC.
44. The judgment in the case of State of Karnataka vs.
All India Manufacturers Organisation, reported at (2006) 4 SCC
683, para 60 is relied upon by him to urge that State has to act
reasonably in contractual matters. The judgment in the case
of Reliance Energy Ltd. vs. Maharashtra State Road Development
Corporation Ltd., reported at (2007) 8 SCC 1, is relied upon
by him to para 36 along with judgment in the case of Meerut
Development Authority vs. Association of Management Studies,
reported at (2009) 6 SCC 171, paras 35 to 39, to buttress the
said contention. To explain what constitute promissory
estoppel, he draws support from the observation of the Hon'ble
Apex Court in para 10 of its judgment in the case of Devi
Multiplex & Anr. vs. State of Gujarat & Ors., reported at (2015)
9 SCC 132.
45. The judgment in the case of South India
Corporation (P) Ltd. vs. Secretary, Board of Revenue,
Trivendrum & Anr., reported at AIR 1964 SC 207 (1), para 19
is relied upon by him to explain the meaning of phrase "subject
to". He contends that agreement between the parties is "subject
to" the decision of representation of the petitioner, and hence,
all objections raised by the respondents are misconceived. He,
therefore, prays for allowing the petition.
46. After considering these arguments and the
material on record, we find it appropriate to first look into the
facts and then proceed to appreciate the precedents cited by
the respective learned Counsel.
47. We find that the order of Water allocation to
petitioner is issued on 16.08.2008. It considers reservation of
100 MLD water for petitioners. Approval is accorded to this
allocation or reservation in 13th Meeting of Ministers High
Power Committee (HPC) held on 21.02.2008 and sanction has
been granted for permanent water allocation of 87.60 MCM on
that day. The terms and conditions regulating the
reservation, vide clause 12, apply rate of Rs. One lakh per
Hectare and demand Rs. 232.18 Crores towards irrigation
restoration charges on account of loss of irrigation. Material
on record shows that (on 06.03.2009) with reference to
Government resolution dated 21.01.2003, Government
Circular dated 21.02.2004 and Government resolution dated
26.02.2004; the Government circular dated 06.03.2009 has
been issued. However, it is mentioned as a government
resolution issued by the order and in the name of Governor of
Maharashtra. It further stipulates that in the government
circulars indicated in its reference part, in order to compensate
for irrigation loss on account of water reservation for non
irrigation use, the IRC be levied in future (henceforth) at Rs.
One lakh per Hectare. It expressly stipulates that new rate
becomes effective from 01.04.2009.
48. To understand what is irrigation restoration
charge, it is essential to look into the Government Resolution
dated 21.01.2003. In clause No.1, it gives preference number
to be accorded to demands for water, dependency upon its
user. Domestic user, has been placed at Sr.No. 1, Industrial
user has been placed at Sr.No. 2, while irrigation has been
placed at Sr.No. 3. This government resolution at its page No.
19, vide clause No. 13 mentions that the expenditure to
restore the land irrigation capacity should be computed at Rs.
50,000/- per Hectare. Vide Clause 10, it takes into
consideration total irrigation potential or capacity of the
project, loss in that capacity because of diversion of water for
non irrigational purposes and accordingly computation in
clause 13 is required to be worked out to compensate for that
loss. A circular no. BWS-1003 dated 21.02.2004 has been
issued thereafter, by order and in the name of Governor of
Maharashtra. Reason for its issuance is confusion over
recovery of capital contribution and irrigation restoration
charges at regional level which was causing delays in
executing the agreements with non-irrigation water user
bodies. Clause A therein deals with contribution towards
capital costs and enables the user body like the petitioner to
pay water levy at a higher rate, instead of said contribution.
Present petitioner has opted for this higher rate. Clause B is
relevant here. It is on the subject of irrigation restoration
charge. It reads as under -
About Irrigation Restoration Charges : As
"B).
per prevailing directives, cost @ Rs. 50,000/- per
Hectare is calculated towards loss in irrigation
capacity due to water reservation for non-irrigation
purpose. Following directives are being issued in this
regard
1) If the construction of canal network for
distribution for the area under irrigation of the
project is complete then the cost of irrigation
restoration for the loss in irrigation area should be
recovered from the body for whom the water is
reserved.
2) The work of under construction of
distribution network should be curtailed keeping in
view the loss of area under irrigation on account of
reservation for non-irrigation in the command area
of the project and further work of redundant
distribution system should be immediately stopped.
In such cases, there will not be any issue of recovery
of irrigation restoration charges as there will be no
further expenditure.
3) If the distribution system in the command area
where there is likely loss of irrigation on account of
reservation for non irrigation is partially built, then
further construction work of distribution system
should be immediately stopped and the costs incurred
should be recovered from the entity for whom water
has been reserved for non-irrigation use. This cost
will be less than the stipulated area of Rs. 50,000/-
per hectare."
(Emphasis added by Court)
Clause C thereafter is about requirement of
agreement to be made with such bodies. It warns that supply
of water without agreement would be viewed as grave
misconduct.
49. Scheme of Clause B supra shows that when such a
demand for non-irrigational purpose is made, and it is likely to
result in loss of irrigation, further construction work of
distribution channels etc. Of that irrigation project needs to
be immediately stopped. Costs ialready ncurred are to be
recovered from the body for whom water is to be reserved for
non-irrigational use. In that case, State Government has stated
that such costs would be less then the stipulated rate of Rs.
50,000/- per hectare. Thus, sub-clause [3] above of Clause B
shows that actual expenditure incurred till then for facilitating
use of quantity of water reserved for petitioner is to be
recovered from it. It also states that further expenditure for
facilitating the distribution of said quantity of water for
irrigation purposes ought not be incurred. Sub-clause [2] also
requires that in such an eventuality, construction of
distribution net-work should be curtailed and for that purpose,
proportionate reduction in area of land to be irrigated as water
is diverted for non-irrigational purposes is to be borne in mind.
Thus, because of proportionate reduction in command area of
project, the State Government has directed that the
construction of project or distribution net-work rendered
redundant due to water allocation should be
discontinued/stopped. It has further added that in that case
there would not be any issue of recovery of irrigation
restoration charge, as there would not be any further
expenditure. This therefore shows that IRC may not be due
and payable in all cases where the water is allocated for non-
irrigational purposes at the beginning of construction work of
an irrigation project. Proportionate water quantity already
allocated for non-irrigational purpose is deleted from
consideration for the purpose of completion of such project
and expenditure to utilize it for irrigation is avoided. Hence,
in that event, as no expenditure is incurred for providing that
water for irrigation purposes, the IRC is not payable by bodies
like petitioner. Even in sub-clause [1] when work of canal or
network for distribution of such reserved quantity of water is
complete, its actual costs as required to be recovered from the
body like petitioner. This arrangement & stipulation of norm
to determine IRC is already inbuilt in the scheme &, hence, not
negotiable between the parties. It flows into every contract
automaticaly & the State Governemnt can not deviate from it.
It is the basis on which bodies like Petitioner are induced to
take steps, finalize their power generation project and invest
on it.
50. This scheme of clause "B" supra, therefore, shows
that the extent of land to which irrigation facility could have
been provided by using the quantity of water which is diverted
for non-irrigational purpose is relevant only initially to
determine the amount spend to appropriate it for irrigation.
Once that amount is ascertained, change in said potential due
to improved infrastructure or technology is irrelevant and is
not the norm to be looked into. Only if any expenditure is
incurred for actually distributing (appropriating) the allocated
quantity of water or any part of it for irrigational purpose, then
only that much expenditure which otherwise represents the
part of project costs, is to be recovered from the body for
whom that water is reserved. This exercise therefore, is to be
undertaken only once and that is on the date on which water
is allocated or reserved. The government resolutions and
circulars prohibit further expenditure in any irrigation project,
on or for this reserved/ allocated quantity of water. It is this
amount actually spent till date of reservation of said water
which is recoverable from any industry as IRC. Hence,
considering this scheme, it appears that date on which the
allocation is made or water is reserved for petitioner is
significant and relevant. The date of agreement between
Petitioner & the Respondent has got no bearing on this issue.
The petitioner sought water allocation in December 2007 and
High Power Committee accepted it in its meeting dated
13.05.2007. Water agreement was then executed on
22.09.2008. It granted time of three years to Petitioner to
enter into an elaborate agreement & that time was extended
by one more year. Ultimately, within the tipulated time i.e. on
22.05.2012, the later agreement has been entered into. Later
agreement is essentially due to watrer reservation or allocation
on 22.09.2008. Later agreement dated 22.05.2012 does not
reserve or allocate water but specifies how that water is to be
used.
51. Mega Power Policy of Maharashtra State for
investment in power generation sector for capacity addition of
500 MW and above, issued on 28.03.2005 shows a decision to
promote the investment in power generation sector by giving
adequate support and single window clearance. State
Government has assured the availability of water for such
project. Certain other exemptions or incentives have been
granted while extending initial support. We need not delve
into the nicites thereof, but, it is in consonance with the
circular dated 21.02.2004 supra.
52. Agreement entered into between the parties on
22.05.2012, needs to be perused in this background. In this
agreement, petitioner - Company has instead of capital
expenditure, agreed to pay for water supplied at a higher rate
as per government resolution dated 21.02.2004. According to
it, petitioner company has to pay IRC (irrigation restoration
charge) calculated at Rs. 1,00,000/- her hectare, and
accordingly total Rs. 232.18 crores is to be paid in 5
installments over a period of two years with applicable
interest, for which it has to give Bank Guarantee equivalent to
10% i.e. of Rs. 23.218 crores. It has been also agreed
between them that decision on representation of petitioner
company dated 25.01.2011, addressed to Government shall be
binding on the parties. Petitioner Company has accordingly
submitted an undertaking on same date and in that
undertaking, it has reiterated its commitment to pay IRC of Rs.
232.18 Crores with interest and in installments, as stated
therein. Clause 8 of the undertaking mentions that
undertaking is without prejudice to rights of the petitioner,
made in the representation. The respondents have accepted
this undertaking. The Respondents before this Court accept
that readiness and willingness expressed by the petitioner to
pay IRC of Rs. 232.18 crores is subject to decision on its
representation dated 25.01.2011.
53. This representation dated 25.01.2011, points out
rate of IRC to NTPC, Adani Power Maharashtra, Adani GR
Power and Reliance Energy Limited. It then complains that
there is no uniformity in criteria for determining the loss of
irrigation potential. It states that calculation of area which
could have been brought under irrigation varies from 65
hectares MM3 to 265 hectares MM3. It is pointed out that
highest rate of 6.28 Crores has been applied to Petitioner. It
also points out that as per the original proposal dated
11.01.2008, only an amount of Rs. 147.84 Crores was
proposed to be recovered & out of it, sum of Rs. 116.09 Crores
was towards restoration of irrigation potential, while Rs. 31.75
Crores was towards capital investment. This demand is
obviously as per the government circular dated 21.02.2004 at
Rs. 50,000/- per Hectare . Along with this representation, the
petitioner also supplied a chart showing projects where water
allocation was approved by HPC (High Power Committee),
with details thereof. Again we need not delve into details
thereof. This representation does not dispute the area of land
to be considered to be 23,218 hectares, but, requests for
applying rate of Rs.50,000/- per hectare in relation thereto so
that total demand towards IRC works out to Rs. 116.09 Crores.
The respondents demand Rs. One lakh per hectares and hence,
total amount of Rs. 232.18 Crores. It is therefore, obvious
that in this representation, which is prior to the agreement,
there is no dispute about the extent of area with respect to
which IRC needs to be worked out. It is this representation,
subject to which an agreement has been entered into between
the parties, and subject to which an undertaking has been
furnished by the petitioner and accepted by the respondents.
In view of this position, the arguments of Shri M.G. Bhangde,
learned Senior Counsel that area with relation to which IRC
needs to be computed need not be and cannot be gone into.
He has advanced three different arguments and Shri R. Deo,
learned Associate Advocate General has in reply pointed out
that because of later improvements and modifications,extent
of area deprived of irrigation is much more. In the light of
our findings on water allocation policy and resolution dated
21.02.2004, changes in project potential after reservation of
water in favour of any body like petitioner cannot result in
adding to the burden of petitioner. State Government does
not permit any expenditure to be incurred to facilitate
distribution of that quantity of water which is reserved for
petitioner, and therefore, is no more available for irrigation
purpose. This is also in consonance with the decision of the
State Government to promote such power generation in State
of Maharashtra. Orders of this Court in Writ Petition No.
2174/2012, passed at Bombay on 22.11.2012 are in
appreciation of these documents. The Division Bench has
directed the State Government to decide the representation of
petitioner dated 25.01.2011, and also subsequent
representations within a period of eight weeks. It has also
directed that if as an outcome thereof, IRC are scaled down,
it would be open to the petitioner to pursue an appropriate
remedy available in law, either for refund or as the case may
be, to adjust the amount found in excess towards future
charges to be paid to the Respondents. It needs to be noted
that the said Division Bench has kept all rights and contentions
of parties open in case it became necessary for the petitioner to
challenge any adverse decision taken on said representations.
Division Bench, therefore, has entertained the Writ Petition
No. 2174/2012 and has also issued certain directions. It has
not held that the petition before it was not maintainable. This
discussion is sufficient to negate the arguments of res-judicata
or constructive res-judicata advanced by the learned Associate
Advocate General.
54. Here, it is necessary for us to briefly mention what the
Division Bench has said in its order dated 22.11.2012 in Writ
Petition No. 2174 of 2012 . In paragraph no.1, history has
been taken note of, it has then found that before entering into
an agreement dated 22.05.2012, petitioners paid first
installment of Rs. 46.43 Crores and Second installment of Rs.
60.53 Crores was due on 21.11.2012. After representation
dated 25.01.2011, petitioners submitted later representation in
the month of February and June, 2011 claiming levy of IRC at
Rs.50,000/- per hectare. Their complaint about discrimination
is then taken note of by the Bench. The Division Bench has
also noted that the petitioner claimed allocation approval in
2008 when rate of Rs. 50,000/- per hectare was in vogue as
per Circular dated 21.02.2004, and it was before revision of
the rate which took place on 26.03.2009. In paragraph No.3
of the order, the statement made by the Government Pleader
that representation submitted by the petitioner is pending
consideration and decision thereon would be arrived at within
reasonable period has been taken note of. The said Division
Bench also then looks into communication of petitioner dated
10.05.2012, whereby the petitioner did agree to pay Rs.
232.18 Crores in 5 installments over a period of 2 years with
interest but subject to decision on their representations as also
to consequential reduction or modification of installments and
adjustments of amount found paid in excess. Argument that
matter pertains to contractual obligation and hence, the Court
should not intervene, has also been taken note of. The
Government Pleader there had submitted that the second
installment was due on 21.11.2012, memo of Writ Petition No.
2174 of 2012 was affirmed on 05.11.2012 and was moved
only on 21.11.2012. The petitioners in reply, had pointed out
to that Division Bench that first and second installments by
them cover amount of Rs. 106 Crores, leaving balance amount
of Rs. 10 Crores and it would have become payable only in
May, 2014.
55. In paragraph No.5 of the order, the letter dated
10.05.2012 whereby the petitioner accepted the liability to pay
an amount of Rs. 232.18 Crores in 5 installments has been
considered and its material part has been reproduced. Then in
paragraph No.6 agreement entered into between the parties,
during the pendency of representations on 22.05.2012 and
approaching the Bench at fag end when second installment
was due has been considered. Undertaking furnished on
22.05.2012 has then been looked into. The Division Bench
expressed that taking over all view of the matter, it would not
be possible for it to obviate compliance with the agreement. In
the light of this finding, directions as mentioned supra has
been issued.
56. The present Writ Petition was tendered at Bombay
and registered as Writ Petition No. 1487 of 2013. While
passing orders in Writ Petition No.1487 of 2013 on
17.06.2014, the Division Bench at Bombay in paragraph no.10
observed that both the parties needed to consider whether
amount of Rs. 116.57 Crores already paid by the petitioner can
be considered as adequate IRC with a view to giving a
quietus to the entire controversy. The Division Bench in this
interlocutory order has also considered the contingency in
which the petitioner's challenge to computation of IRC at Rs.
One lakh per hectare was rejected, but, then State Government
was required to consider in the light of its subsequent report,
as to whether loss of irrigation facility would be only to the
extent of 4600 hectares, as against 23219 hectares, as
originally estimated. It held that the amount payable qua said
area would work out approximately to Rs. 46 Crores thereby
needing a refund. The Division Bench therefore, by way of ad-
interim order observed that it would be appropriate if both the
parties consider whether amount of Rs. 116.57 Crores already
paid by the petitioner, should be considered as adequate
irrigation restoration charges. In paragraph No.11, the said
Division Bench also takes note of the fact that the petitioner is
paying Block Water Tariff at a higher rate of Rs. 32 per 10000
liters. Paragraph No. 14 of the said order shows that amount
of Rs. 10 Crores was deposited on 21.05.2013, by petitioners.
In the light of these findings, the Division Bench granted ad-
interim stay of coercive recovery of balance amount of
irrigation restoration charges. This interim order continues to
operate even today.
57. The water is a natural and scarce commodity.
Similarly, "electricity" cannot be viewed differently. The
power generation plants are therefore, categorized as Public
Utility Industries. To make up the deficit in need of electricity
in State of Maharashtra, the State Government formulated a
scheme and allowed water, which was till then being used
primarily for irrigation purposes, to be withdrawn and used for
generation plants. Domestic users were given first preference,
while industrial use was placed at second number. Irrigation
purpose was placed at last as third one. In consonance with
this policy, a Mega Policy has come on 28.03.2005. Various
government resolutions and circulars needs to be viewed in
this background. Circular dated 21.02.2004 is issued to avoid
any confusion & hence, the State itself has declared itself to be
bound by it. No negotiations are possible on the factors
stipulated & regulated therein. IRC rate is expressly agreed to
be contingent upon the decision on Petitioner's representation
by the parties thereto. Rate of IRC is not seen left to be a
negotiable term of contract by the State but it has been
determined by GR or circular which may operate against the
wish of parties to Contract. The scheme for working out IRC
looked into above by us show that the rate of IRC may be less
than Rs. 50,000/- per hectare, minimum demand may be of
actual amount spent by the State while the maximum may be
Rs. 50,000/ per hectare. In a given case, there may be no
demand on account of IRC at all. We find that parties before
us are not litigating with any ulterior motive. Respondents
have not pointed out any mala fides on the part of the
petitioners. or vice versa. Though Writ Petition at Bombay
was filed at eleventh hour, it cannot be forgotten that the
representations made by the petitioners long back prior
thereto were pending and not decided by the State
Government. The Division Bench which has disposed of the
Writ Petition No. 2714 of 2012 on 22.11.2012, has looked into
all these and moulded the relief. That Division Bench finds it
necessary to direct the government to decide those
representations and also declares that the rights of petitioner
be altered and modified accordingly.
58. It is in this background that we have to appreciate the
precedents of the parties. To urge that there is no scope for
intervention available to this High Court in contractual
matters, the Respondent State has relied upon Orissa State
Financial Corpn. v. Narsingh Ch. Nayak, (2003) 10 SCC 261.
Hon'ble Apex Court in said judgment at page 263, takes note
of the fact that the High Court while considering the writ
petition filed by the owner of the vehicle for quashing of the
notice of auction-sale and for other consequential reliefs,
passed an order drawing up a fresh contract between the
parties and issued certain further directions in the matter i.e.
the Corporation had been directed to advance a fresh loan to
the writ petitioner to enable him to purchase a new truck; to
enter into agreement for realization of the balance loan
amount in accordance with law; to write off the remaining
amount of Rs.16,500 and to order waiving of the interest
liability etc. This type of order is declared beyond the scope
of the writ petition which was being considered by the High
Court and beyond the jurisdiction of the Court in a contractual
matter. Here, the issue is whether formula for computing IRC
in circular dated 21.02.2004 could have been overlooked by
the Petitioner power generation unit or the Respondents who
assured water to it.
59. In Pimpri Chinchwad Municipal Corpn. v. Gayatri
Construction Co., (2008) 8 SCC 172, the respondent Contractor
filed a writ petition in High Court challenging the termination
of his contract and publication of fresh tender invitation for
construction of road. Appellant Corporation pointed out the
disputed questions involved as also the provision for resolution
thereof in agreement. Hon'ble Apex Court, in para 6 takes
note of the disputed questions of facts arising between the
parties in said background, finds recourse to in house remedy
necessary. This aspect is also clear from State of U.P. v. Bridge
& Roof Co. (India) Ltd., (1996) 6 SCC 22, at page 29 : where
Hon'ble Apex Court, in para 16 observes that the contract
between the parties was a private and not a statutory contract.
Any dispute relating to interpretation of the terms and
conditions of such a contract cannot be agitated, and could not
have been agitated, in a writ petition. That was a matter
either for arbitration as provided by the contract or for the civil
court. All disputed questions arose under said contract which
could not be r adjudicated upon in a writ petition.
60. The effect of arbitration clause or in house remedy is
also clear from State of Orissa v. Bhagyadhar Dash, (2011) 7
SCC 406 : in para 22 observes that the clause in agreement can
not be construed to be an arbitration agreement. It operated
where in regard to a non-tendered additional work executed
by the contractor, if the contractor was not satisfied with the
unilateral determination of the rate therefor by the Engineer-
in-Charge, the rate for such work was to be finally determined
by the Superintending Engineer. It holds that a provision was
made with the intention to avoid future disputes regarding
rates for non-tendered item. The decision of the
Superintending Engineer was not a judicial determination &
open to challenge by the other party in a court of law. In facts
before us, the Respondents themselves urge that the
representation of Petitioner is non-statutory one. Division
Bench of this Court at Bombay has expressly permitted
Petitioner to assail it.
61. Petitioner relies on on para 60 in judgment of Hon.
Apex Court, State of Karnataka v. All India Manufacturers
Organisation, (2006) 4 SCC 683, where it observes :---
"60. Shrilekha Vidyarthi v. State of U.P.
is another
authority for the proposition that the State
Government has to act reasonably and without
arbitrariness even with regard to the exercise of its
contractual rights. In Dwarkadas Marfatia and Sons
v. Board
of Trustees of the Port of Bombay the
situation was one in which a lease between the
Bombay Port Trust and certain parties was
terminated in exercise of contractual rights and the
lease rent was abnormally increased. It was held
that there was always an obligation on the part of
public authorities in their acts of omission and
commission to be reasonable. In Biman Krishna
Bose v. United India Insurance Co. Ltd. the question
was whether an insurance company could
arbitrarily and unreasonably refuse the renewal of a
policy. Considering that the insurance company, as
a result of State monopoly in the insurance sector,
had become "State" under Article 12 of the
Constitution, this Court held that:
"... it [the insurance company] requires (sic) to
satisfy the requirement of reasonableness and
fairness while dealing with the customers. Even in
an area of contractual relations, the State and its
instrumentalities are enjoined with the obligations
to act with fairness and in doing so, can take into
consideration only the relevant materials. They
must not take any irrelevant and extraneous
consideration while arriving at a decision.
Arbitrariness should not appear in their actions or
decisions."
62. The petitioner also relies on judgment of Hon'ble
Apex Court, in Reliance Energy Ltd. v. Maharashtra State Road
Development Corpn. Ltd., (2007) 8 SCC 1. There it is observed--
"36. We find merit in this civil appeal. Standards
applied by courts in judicial review must be
justified by constitutional principles which govern
the proper exercise of public power in a democracy.
Article 14 of the Constitution embodies the
principle of "non-discrimination". However, it is
not a free-standing provision. It has to be read in
conjunction with rights conferred by other articles
like Article 21 of the Constitution. The said Article
21 refers to "right to life". It includes "opportunity".
In our view, as held in the latest judgment of the
Constitution Bench of nine Judges in I.R. Coelho v.
State of T.N., Articles 21/14 are the heart of the
chapter on fundamental rights. They cover various
aspects of life. "Level playing field" is an important
concept while construing Article 19(1)(g) of the
Constitution. It is this doctrine which is invoked by
REL/HDEC in the present case. When Article 19(1)
( g ) confers fundamental right to carry on business
to a company, it is entitled to invoke the said
doctrine of "level playing field". We may clarify that
this doctrine is, however, subject to public interest.
In the world of globalisation, competition is an
important factor to be kept in mind. The doctrine of
"level playing field" is an important doctrine which
is embodied in Article 19(1)(g) of the Constitution.
This is because the said doctrine provides space
within which equally placed competitors are
allowed to bid so as to subserve the larger public
interest. "Globalisation", in essence, is liberalisation
of trade. Today India has dismantled license raj.
The economic reforms introduced after 1992 have
brought in the concept of "globalisation". Decisions
or acts which result in unequal and discriminatory
treatment, would violate the doctrine of "level
playing field" embodied in Article 19(1)(g). Time
has come, therefore, to say that Article 14 which
refers to the principle of "equality" should not be
read as a stand alone item but it should be read in
conjunction with Article 21 which embodies several
aspects of life. There is one more aspect which
needs to be mentioned in the matter of
implementation of the afore-stated doctrine of
"level playing field". According to Lord Goldsmith,
commitment to the "rule of law" is the heart of
parliamentary democracy. One of the important
elements of the "rule of law" is legal certainty.
Article 14 applies to government policies and if the
policy or act of the Government, even in
contractual matters, fails to satisfy the test of
"reasonableness", then such an act or decision
would be unconstitutional."
It is obvious that the government policy emanating
from the circular dated 21.02.2004 aimed at avoiding
uncertainty must be adhered to by the parties before this
Court. Said condition relating to IRC is already prescribed &
parties can not escape from it.
63. To explain the reach of Article 14 in contractual
matters, the Respondent State states that Hon'ble Apex Court
in Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457,
at page 465 : such questions of fact attracting Article 14 to
establish that the State, acting in its executive capacity through
its officers, has discriminated between parties identically
situated. were not argued before the High Court. And, in any
event, they were of such a nature that they could not be
satisfactorily decided without a detailed adduction of evidence
possible in ordinary civil suits., Moreover, the Hon'ble Apex
Court held that it is the contract and not the executive power,
regulated by the Constitution, which governed the relations of
the parties on facts. Here we have already found that to avoid
any confusion, circular dated 21.02.2004 has been taken out &
it denudes the State of its power to bargain on IRC.
64. The Respondent State points out that while
considering the reach of writ court in contractual matters as
also non permissibility of approbation and reprobation,
Hon'ble Apex Court in Rajasthan State Industrial Development
& Investment Corpn. v. Diamond & Gem Development Corpn.
Ltd., (2013) 5 SCC 470, where in para 21, it states that
generally the Court should not exercise its writ jurisdiction to
enforce the contractual obligation. The primary purpose of a
writ of mandamus is to protect and establish rights and to
impose a corresponding imperative duty existing in law. It is
designed to promote justice (ex debito justitiae). The grant or
refusal of the writ is at the discretion of the court. The writ
cannot be granted unless it is established that there is an
existing legal right of the applicant, or an existing duty of the
respondent. Thus, the writ does not lie to create or to establish
a legal right, but to enforce one that is already established.
While dealing with a writ petition, the court must exercise
discretion, taking into consideration a wide variety of
circumstances, inter alia, the facts of the case, the exigency
that warrants such exercise of discretion, the consequences of
grant or refusal of the writ, and the nature and extent of injury
that is likely to ensue by such grant or refusal. Earlier in
paragraph 15 on approbation & reprobation, it observes that a
party cannot be permitted to "blow hot-blow cold", "fast and
loose" or "approbate and reprobate". Where one knowingly
accepts the benefits of a contract, or conveyance, or of an
order, he is estopped from denying the validity of, or the
binding effect of such contract, or conveyance, or order upon
himself. This rule is applied to ensure equity, however, it
must not be applied in such a manner so as to violate the
principles of what is right and of good conscience. In the wake
of discussion supra, we find that these observations of Hon'ble
Apex Court apply against the State. The State has to adhere to
the stipulation in circular dated 21.02.2004 on IRC and it can
not turn around to usher confusion back into the matter. It
also accepted that agreement and undertaking by the
petitioner, both dated 22.05.2012 are subservient to the
decision on the petitioner's representation dated 25.01.2011
and acquiesced in directions of this Court at Bombay in Writ
Petition No. 2714 of 2012 dated 22.11.2012. Respondent State
itself has pointed out that Hon'ble Apex Court in Shyam
Telelink Ltd. vs. UOI, (2010) 10 SCC 165 - in paragraph 23
held that a person can not accept or reject a document in part.
65. On factual dispute Hon'ble Apex Court in paragraph 10
of Kerala SEB v. Kurien E. Kalathil, (2000) 6 SCC 293 observes
that the interpretation and implementation of a clause in a
contract cannot be the subject-matter of a writ petition. If a
term of a contract is violated, ordinarily the remedy is not the
writ petition under Article 226. It appears that there the
contractor was seeking enforcement of a non-statutory
contract. Hon'ble Apex Court points out that a contract would
not become statutory simply because it is for construction of a
public utility and it has been awarded by a statutory body. It
did not agree with the observation of the High Court that since
the obligations imposed by the contract on the contracting
parties came within the purview of the Contract Act, that
would make the contract statutory. In facts before us, the
Petitioner Company points out that rate of IRC is predecided
on 21.02.2004 and Respondents are highhandedly trying to
change it. Petitioners have acted upon the representation
contained in said circular dated 21.02.2004 & the State,
though has enhanced the rate, has not revised it
retrospectively. Further, the observations of Apex Court in
paragraphs 12 & 13 of said judgment pressed into service by
the Respondent State show that after considering the nature of
dispute, Hon'ble Apex Court has refused to intervene in the
matter and allowed the High Court judgment to operate.
66. When State Government has its exclusive hold on
water, formulates a policy, diverts water and assures it to be
available for power generation in public good in terms
thereof, the contract can not be viewed as an ordinary private
contract and this court should, if no disputed issue crops up,
attempt to adjudicate it, both in the interest of general public
and the parties. State of Haryana & Ors. vs. Lal Chand & Ors.
(1984) 3 SCC 634 is relied upon to state the difference
between a statutory contract and contract entered into by the
State in exercise of its executive power. However, in present
facts, considering the previous litigation and circular
regulating IRC, we are not inclined to dwell upon said aspect.
An assurance made to all industrial establishments on
21.02.2004 openly to avoid any confusion can not be allowed
to be defeated to the prejudice of Units like that of Petitioners
who have altered their position relying on it. Judgments of
Apex Court in Gurusharan Singh & Ors. vs. New Delhi
Municipal Committee & Ors., AIR 1996 SC 1175; Chandigarh
Administration & Anr. vs. Jagjit Singh & Anr., AIR 1995 SC
705; Jayant Vegoils & Chemicals vs. City & Industrial
Development Corporation of Maharashtra Ltd., Division Bench
judgment of this High Court reported in 1997 (2) Bom. C.R.
600 - are relied upon by the Respondent - State to urge that
instances which show an illegality or irregularity can not be
used to invoke Article 14 or Article 226 as the illegality or
irregularity can not be perpetuated. We are not examining
here violation of Article 14 because of alleged discrimination
but we find Article 14 breached as the circular dated
21.02.2004 has been not adhered to & the representation of
Petitioner was not promptly decided. Hon'ble Apex Court in
P.H. Paul Manoj Pandian v. P. Veldurai, (2011) 5 SCC 214 :
(2011) 2 SCC (Civ) 681, at page 230 in para 45 lays down
that the departmental circulars are a common form of
administrative document by which instructions are
disseminated. Many such circulars are identified by serial
numbers and published, and many of them contain general
statement of policy. They are, therefore, of great importance
to the public, giving much guidance about governmental
organisation and the exercise of discretionary powers. In
themselves they have no legal effect whatever, having no
statutory authority. But they may be used as a vehicle in
conveying instructions to which some statute gives legal force.
It is now the practice to publish circulars which are of any
importance to the public and for a long time there has been no
judicial criticism of the use made of them. It shows that even
the executive instructions in circular dated 21.02.2004 are
binding in such circumstances.
67. To buttress the submission that notes in a file can
not be used by the Petitioner to claim a right or then an
illegality or irregularity can not be perpetuated by using such
remarks, support is being drawn by the State from Shanti
Sports Club vs. UOI, (2009) 15 SCC 705. The Petitioner is
only pointing out a letter dated 17.01.2011 sent by one office
to other. Only on the basis of such a letter, course of action or
treatment suggested therein, petitioner can not raise any
ground to attack or seek any relief. Different thought
processes or varying opinions may be put forth by different
officers for consideration via such notes in office files and
object is only to enable the competent superior authority to
reach an appropriate view after evaluating all pros & cons. Till
that is done, no decision binding on the State or any artificial
person, emerges. We are also not recording a finding on any
right or seeing any right in petitioner on the strength of advice
tendered in said letter.
68. To justify absence of elaborate reasoning in an
administrative order rejecting the representation passed on
29.01.2013, Respondent submits that as held in UOI vs. E.G.
Nambudri, (1991) 3 SCC 38, since no civil consequences ensue
and no vested right of Petitioners is being taken away,
insistence of Petitioner on reasons is ill founded. We find it
suitable to reproduce paragraphs 7 & 8 of this ruling where
the Hon'ble Apex Court observes--
"7. On behalf of the respondent it was contended
that principles of natural justice require the superior
authority to record reasons in rejecting the
government servant's representation made against
the adverse remarks as the order of rejection affected
the respondent's right. It is true that the old
distinction between judicial act and administrative
act has withered away and the principles of natural
justice are now applied even to administrative orders
which involve civil consequences, as held by this
Court in State of Orissa v. Dr (Miss) Binapani Dei.
What is a civil consequence has been answered by this
Court in Mohinder Singh Gill v. Chief Election
Commissioner. Krishna Iyer, J. speaking for the
Constitution Bench observed: (SCC p. 440, para 66)
"But what is a civil consequence, let us ask ourselves,
bypassing verbal booby-traps? 'Civil consequences'
undoubtedly cover infraction of not merely property
or personal rights but of civil liberties, material
deprivations and non-pecuniary damages. In its
comprehensive connotation, everything that affects a
citizen in his civil life inflicts a civil consequence."
The purpose of the rules of natural justice is to
prevent miscarriage of justice and it is no more in
doubt that the principles of natural justice are
applicable to administrative orders if such orders
affect the right of a citizen. Arriving at the just
decision is the aim of both quasi-judicial as well as
administrative enquiry, an unjust decision in an
administrative enquiry may have more far-reaching
effect than decision in a quasi-judicial enquiry. Now,
there is no doubt that the principles of natural justice
are applicable even to administrative enquiries. See:
A.K. Kraipak v. Union of India.
8. The question is whether principles of natural
justice require an administrative authority to record
reasons. Generally, principles of natural justice
require that opportunity of hearing should be given
to the person against whom an administrative order
is passed. The application of principles of natural
justice, and its sweep depend upon the nature of the
rights involved, having regard to the setting and
context of the statutory provisions. Where a vested
right is adversely affected by an administrative order,
or where civil consequences ensue, principles of
natural justice apply even if the statutory provisions
do not make any express provision for the same, and
the person concerned must be afforded opportunity
of hearing before the order is passed. But principles
of natural justice do not require the administrative
authority to record reasons for the decision as there
is no general rule that reasons must be given for
administrative decision. Order of an administrative
authority which has no statutory or implied duty to
state reasons or the grounds of its decision is not
rendered illegal merely on account of absence of
reasons. It has never been a principle of natural
justice that reasons should be given for decisions.
See: Regina v. Gaming Board for Great Britain, ex p.
Benaim and Khaida. Though the principles of
natural justice do not require reasons for decision,
there is necessity for giving reasons in view of the
expanding law of judicial review to enable the
citizens to discover the reasoning behind the decision.
Right to reasons is an indispensable part of a sound
system of judicial review. Under our Constitution an
administrative decision is subject to judicial review if
it affects the right of a citizen, it is therefore
desirable that reasons should be stated."
In M/s
Mahabir Jute Mills Ltd. vs. Shri Shibban Lal ,
(1975) 2 SCC 818 - cited by the Respondents Hon'ble Apex
Court considers act of appropriate government of refusing to
refer an industrial dispute u/s. 4-K of U.P. Industrial Disputes
Act, 1947. In present facts, in view of discussion already done,
We do not find it necessary to refer to it at length.
69. Respondents also submit that as held in Union of
India v. M.K. Sarkar, (2010) 2 SCC 59 the High Court can not
issue direction to decide the representations made
unnecessarily by the Petitioners & in any case, no cause of
action accrues in favour of petitioner, because of the decision
thereon. Following paragraphs in above judgment are relied
upon :---
"14. The order of the Tribunal allowing the first
application of respondent without examining the
merits, and directing the appellants to consider his
representation has given rise to unnecessary litigation
and avoidable complications. The ill-effects of such
directions have been considered by this Court in C.
Jacob v. Director of Geology and Mining: (SCC pp.
122-23, para 9
"9. The courts/tribunals proceed on the assumption,
that every citizen deserves a reply to his
representation. Secondly, they assume that a mere
direction to consider and dispose of the
representation does not involve any 'decision' on
rights and obligations of parties. Little do they realise
the consequences of such a direction to 'consider'. If
the representation is considered and accepted, the ex-
employee gets a relief, which he would not have got
on account of the long delay, all by reason of the
direction to 'consider'. If the representation is
considered and rejected, the ex-employee files an
application/writ petition, not with reference to the
original cause of action of 1982, but by treating the
rejection of the representation given in 2000, as the
cause of action. A prayer is made for quashing the
rejection of representation and for grant of the relief
claimed in the representation. The tribunals/High
Courts routinely entertain such applications/petitions
ignoring the huge delay preceding the representation,
and proceed to examine the claim on merits and
grant relief. In this manner, the bar of limitation or
the laches gets obliterated or ignored."
15. When a belated representation in regard to a
"stale" or "dead" issue/ dispute is considered and
decided, in compliance with a direction by the
court/tribunal to do so, the date of such decision
cannot be considered as furnishing a fresh cause of
action for reviving the "dead" issue or time-barred
dispute. The issue of limitation or delay and laches
should be considered with reference to the original
cause of action and not with reference to the date on
which an order is passed in compliance with a court's
direction. Neither a court's direction to consider a
representation issued without examining the merits,
nor a decision given in compliance with such
direction, will extend the limitation, or erase the
delay and laches."
70. The representation of the Petitioners here can not
be seen as uncalled for. It is pointing out the rate of IRC
stipulated in circular dated 21.02.2004 and impact thereof.
This representation finds mention in the agreement between
the parties & also in undertaking of the Petitioner accepted by
the Respondents. The rate of IRC is expressly contingent upon
the adjudication of said representation. The Division Bench at
Bombay has in Writ Petition No. 2714 of 2012 on 22.11.2012,
expressly directed the Respondent State to decide it & to give
effect to that decision. Petitioner is left free by it to assail the
adverse decision on it. Hence, here neither the said
representation nor decision thereon can be viewed in the light
of law expounded by Hon'ble Apex Court in this judgment.
Observations of Hon'ble Apex Court itself show that nature of
representation seen therein is all together different than
Petitioner's representation.
71. Petitioner submits that as held in Devi Multiplex v.
State of Gujarat, (2015) 9 SCC 132, the doctrine of promissory
estoppel must apply to the rate of IRC in these facts. There the
Hon'ble Apex Court states :---
"20. The law on the subject of promissory estoppel
------- .......... ---------- ............... ---------- Godfrey
Philips India Ltd. by a Bench of three Judges. We
deem it appropriate to quote paras 27-29, 34, 35
and 36 from the decision in State of Punjab v. Nestle
India Ltd.: (SCC pp. 474-78)
"27. However, the superstructure of the doctrine with its
preconditions, strengths and limitations has been
outlined in the decision of Motilal Padampat Sugar Mills
Co. Ltd. v. State of U.P. Briefly stated: ---------
.................... --------------- ................. ------------ State
Government so as to inhibit it from formulating and
implementing its policies in public interest.
28. This Court rejected all the three pleas of the
Government. It reiterated the well-known preconditions
for the operation of the doctrine:
(1) a clear and unequivocal promise knowing and
intending that it would be acted upon by the promisee;
(2) such acting upon the promise by the promisee so
that it would be inequitable to allow the promisor to go
back on the promise.
29. As for its strengths it was said: that the doctrine was
not limited only to cases where there was some
contractual relationship or other pre-existing legal
relationship between the parties. The principle would be
applied even when the promise is intended to create
legal relations or affect a legal relationship which would
arise in future. The Government was held to be equally
susceptible to the operation of the doctrine in whatever
area or field the promise is made--contractual,
administrative or statutory. To put it in the words of the
Court:
'The law may, therefore, -------- .............. ------------
................. ------------ ................ to carry out the promise
made by it.' (SCC p. 453, para 33)
34. The discordant note struck by Jit Ram case was
firmly disapproved by a Bench of three Judges in Union
of India v. Godfrey Philips India Ltd. It was affirmed that:
(SCC p. 387, para 12)
'12. There can therefore be no doubt that the doctrine of
promissory estoppel is applicable against the
Government in the exercise of its governmental, public
or executive functions and the doctrine of executive
necessity or freedom of future executive action cannot
be invoked to defeat the applicability of the doctrine of
promissory estoppel.'
35. It was held that irrespective of the nature of power
wielded the Government is bound to wield that power
provided it possessed such power and has promised to
do so knowing and intending that the promisee would
act on such promise and the promisee has done so:
(Godfrey Philips India Ltd. Case 9, SCC p. 389, para 14)
'14. ... We think that the Central Government had
power under Rule 8 sub-rule (1) of the Rules to issue a
notification excluding the cost of corrugated fibreboard
--------- ................. ----------------- ................ ------------
bound by promissory estoppel to exclude the cost of
corrugated fibreboard containers from the value of the
goods for the purpose of assessment of excise duty for
the period 24-5-1976 to 2-11-1982.'
36. The limitations to the doctrine delineated in Motilal
Padampat Sugar Mills however, were also reaffirmed
when it was said: (Godfrey Philips India Ltd. Case 9, SCC
pp. 387-88, para 13)
'13. ... [T]hat there can be no promissory estoppel
against the legislature in the exercise of its legislative
functions nor can the Government or public authority be
debarred by promissory estoppel from enforcing a
statutory prohibition . It is equally true that promissory
estoppel cannot be used to compel the Government or a
public authority to carry out a representation or promise
which is contrary to law or which was outside the
authority or power of the officer of the Government or of
the public authority to make. We may also point out
that the doctrine of promissory estoppel being an
equitable doctrine, it must yield when the equity so
requires; if it can be shown by the Government or public
authority that having regard to the facts as they have
transpired, it would be inequitable to hold the
Government or public authority to the promise or
representation made by it, the Court would not raise an
equity in favour of the person to whom the promise or
representation is made and enforce the promise or
representation against the Government or public
authority.'"
(emphasis in original)
In present facts declaring mode and manner of
computing IRC by circular dated 21.02.2004, the Sate
Government has not breached any statutory provision or
public interest. The concession or incentive offered by the
State is in larger public interest and the Respondents do not
even whisper that said policy violates any legal provision. We
have also pointed out how these executive instructions need to
be perceived with the help of judgment of Hon'ble Apex Court
in P.H. Paul Manoj Pandian v. P. Veldurai, supra.
72. The petitioner submits that even in contractual
matters the State can not act unfairly. We find their reliance
on Meerut Development Authority v. Assn. of Management
Studies, (2009) 6 SCC 171, apt in this case. Hon'ble Apex
Court, there, observes :--
"35. In Tata Cellular this Court observed that: (SCC
p. 675, para 71) Judicial quest in administrative
matters is to strike the just balance between the
administrative discretion to decide matters as per
government policy, and the need of fairness. Any
unfair action must be set right by judicial review.
36. In Chief Constable of the North Wales Police v.
Evans Lord Hailsham stated: (WLR p. 1161 A-B) The
underlying object of judicial review is to ensure that
the authority does not abuse its power and the
individual receives just and fair treatment, and not to
ensure that the authority reaches a conclusion which
is correct in the eyes of the court."
73. To explain the import of phrase "subject to"
employed in the agreement as also in undertaking dated
22.5.2012, Petitioner has invited our attention to South India
Corporation (P) Ltd. vs. Secretary, Board of Revenue,
Trivandrum & Anr., AIR 1964 SC 247(1)--1964) 4 SCR 280
where in paragraph 19, Hon'ble Court states :--
"19. That apart, even if Article 372 continues the
pre-Constitution laws of taxation, that provision is
expressly made subject to the other provisions of the
Constitution. The expression "subject to" conveys
the idea of a provision yielding place to another
provision or other provisions to which it is made
subject. Further Article 278 opens out with a non
obstante clause. The ------- ....... ------------- in respect
of "works contracts".
When facts at hand are scrutinized in the light of
these two precedents, the omission or avoidance to decide the
representation of the petitioner for quite some time and till
this Court directed the State Government to do it, all show
improper and unwarranted approach on the part of the
respondents.
74. We find the water allocation is finalized on
12.12.2007 after High Power Committee accepted it in its
meeting dated 13.05.2007. On 16.08.2008 sanction is granted
for permanent water allocation of 87.60 MCM from completed
Upper Wardha Project and it is to be operational only after
agreement is made. As per clause 13, though action was to be
taken within three years, period was extended up to
31.05.2012. The Petitioners have paid the amount in
installments and not when it was determined or water was
reserved for it. The petitioner has, in communication dated
10.05.2012, agreed to pay Rs. 232.18 Crores in five
installments over a period of two years with interest. Hence,
for this delayed payment of IRC, interest of justice demands
that it must pay the interest @ 10% per annum.
75. Accordingly we partly allow the petition and
declare that demand of IRC at revised rate i.e. as per decision
dated 06.03.2009 from the petitioners is illegal and
unsustainable. Said decision dated 06.03.2009 fixes maximum
rate of IRC at Rs. One lakh per Hectare prospectively from
01.04.2009 and is not applicable in case of petitioner to whom
water allocation is finalized on 12.12.2007. Hence the
Respondents shall accordingly receive the IRC at the rate of Rs.
50.000/- per Hectare with interest as mentioned supra.
76. The Petitioner shall accordingly calculate the entire
amount and balance amount after taking credit for payments
already made shall be deposited with the Respondents within
four weeks. In default, it will be open to the Respondents to
recover the same by invoking such coercive means as are open
to it in law.
77. Writ petition is thus partly allowed. Rule is made
absolute accordingly with no order as to costs.
JUDGE JUDGE
******
*GS/RGD/Dragon.
