Bombay High Court
Rattanindia Power Ltd. Thr Its ... vs State Of Maharashtra Thr Its ... on 14 July, 2017
Bench: V.A. Naik
1407WP1372.16-Judgment 1/13
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH, NAGPUR.
WRIT PETITION NO. 1372 OF 2016
PETITIONER :- 1. RattanIndia Power Limited, (Formerly
known as Indiabulls Power Ltd.) A Company
established under Companies Act, 1956
having its Registered office at 5 th Floor,
Tower-B, Worldmark 1, Aerocity, New Delhi
- 110037, and its power plan situated at Plot
No.D2 & D2 (Part), Additional Industrial
Area, Nandgaon Peth M.I.D.C., Amravati-
444901, through its Director (Admin) Mr.
Sharad S/o Ganpatrao Kinkar.
2. Vaibhav S/o Mohinder Singh Poonia, Aged
about: 24 years, Occupation: Business, R/o
204, Police Colony, Hauz Khas, Opposite IIT
Flyover, New Delhi-16.
...VERSUS...
RESPONDENTS :- 1. State of Maharashtra, Through Water
Resources Department, Mantralaya,
Mumbai-32 Through its Principal Secretary.
2. The Executive Engineer, Upper Wardha Dam
Division, Upper Wardha Colony, Shivaji
Nagar Camp, Amravati-444 602.
Email: [email protected]
gov.in
[email protected]
3. The Dy.Executive Engineer, Upper Wardha
Dam Division, Upper Wardha Colony,
Shivaji Nagar Camp, Amravati- 444 602.
4. The Chief Engineer, Water Resources
Department, Sinchan Sewa Bhawan, Shivaji
Nagar Camp, Amravati- 444 603.
Email:[email protected]
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1407WP1372.16-Judgment 2/13
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Mr.M.G.Bhangde, Sr.Counsel with Mr.Shyam Dewani,
counsel for the petitioners.
Mrs.H.N.Prabhu, Asstt.Govt.Pleader for the respondent No.1.
Mr. S.G.Jagtap, counsel for the respondent Nos.2 to 4.
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CORAM : SMT. VASANTI A NAIK &
ARUN D. UPADHYE
, JJ.
DATED : 14.07.2017
O R A L J U D G M E N T (Per Smt.Vasanti A Naik, J.)
In the circumstances of the case, whether the State
Government and the Vidarbha Irrigation Development Corporation are
entitled to levy 5% commitment charges on the reduced demand of
water for the power generation unit of the petitioner No.1-company is
the question that falls for consideration in this writ petition.
2. Rule. Rule made returnable forthwith. The writ petition
is heard finally at the stage of admission with the consent of the learned
counsel for the parties.
3. The petitioner No.1 is a company engaged in the business
of setting up of power projects and power generation. The petitioner
No.2 is a shareholder of the said company. After the power generation
unit was set up by the company in Amravati District, the petitioner
1407WP1372.16-Judgment 3/13
No.1-company applied to the State of Maharashtra for allocation of
water for its thermal power plant. The State Government entered into
an agreement with the petitioner No.1-company and sanctioned the
quota of 87600 million liters of water per year on the payment of water
charges, as provided in the agreement. Agreements were executed
between the petitioner No.1-company and the State Government from
time to time and the last such agreement was executed between the
parties on 22/05/2012. As per sub-clause (II) of clause 11 of the
agreement, if for any unforeseen reason the company was required to
reduce/increase the demand of water made earlier i.e. 87600 million
liters of water per year, the company was required to make a revised
annual demand before the commencement of the year i.e. the 1 st of
November. Sub-clause (II) further provided that on acceptance of such
revised demand, the company would be charged as per changed
demand for the period specified, other conditions of the agreement
remaining the same. Such supplementary agreements were required to
be made on Rs.1,000/- stamp paper for the changed quantity required
by the petitioner No.1-company, which would form a part of the main
agreement. During the relevant years, due to low power demand, the
thermal power plant of the petitioner No.1 was more or less idle and
there was a fall in water consumption as the MSEDCL was not in a
position to procure power as per the agreement. By invoking sub-clause
(II) of clause 11 of the agreement dated 22/05/2012, before the
1407WP1372.16-Judgment 4/13
commencement of every year, the petitioner No.1 made a lesser
demand, for the period specified. It is not disputed that
supplementary agreements were executed between the petitioner No.1-
company and the State Government and by these supplementary
agreements, the initial demand of 87600 million liters of water was
reduced. Clause 26 of the agreement further provided that the
government had reserved the right to change/amend/modify/cancel/
revise any of the terms and conditions, rules and regulations of water
management and Maharashtra Irrigation Act and Rules made there
under, which would apply to the agreement executed on 22/05/2012.
By the communications/demand letters dated 18/07/2014,
25/07/2014, 20/08/2014 and 17/10/2015 the respondents claimed the
amount of Rs.1,22,11,200/- towards 5% commitment charges as the
petitioner No.1-company had reduced the demand of water. According
to the respondents, 5% commitment charges were payable on the
difference between the sanctioned demand and the lesser demand made
by the petitioner No.1-company. Penal interest was also demanded by
the respondents on the commitment charges as there was a delay on the
part of the petitioner No.1-company in paying the commitment charges.
The petitioner No.1 paid the commitment charges and also the penal
interest under protest. After paying the commitment charges and the
penal interest under protest, the petitioner No.1 made a representation
to the respondents against the demand notices seeking 5% commitment
1407WP1372.16-Judgment 5/13
charges and penal interest. The representation made by the petitioner
No.1-company was rejected vide communication dated 02/12/2015.
The petitioners have challenged the demand notices as also the
communication dated 02/12/2015 in the instant petition. The
petitioners have sought the recovery of the amount of Rs.5,93,21,826/-
that was paid by the petitioner No.1-company to the respondents
towards commitment charges and penal interest, under protest.
4. Shri Bhangde, the learned senior counsel appearing for the
petitioners, submitted that the respondents were not justified in
demanding 5% commitment charges and penal interest. It is submitted
that there is nothing in the agreement dated 22/05/2012 or the
supplementary agreements that would authorise the respondents to
demand 5% commitment charges on the reduced demand of water. It
is submitted that in view of the provisions of Maharashtra Water
Resources Regulatory Authority Act, 2005, it is not permissible for any
company or person to utilize water in bulk quantities unless the person
or the company possesses the order granting the entitlement. It is
submitted that since the Maharashtra Water Resources Regulatory
Authority Act, 2005 was not implemented for quite sometime, the
Maharashtra Act No.XXI of 2011 has amended the provisions of the Act
of 2005. It is stated that as per section 31 of the Amendment Act, if the
permission, allocation, sanction or authorisation is granted by the State
1407WP1372.16-Judgment 6/13
Government for the water user before 17/09/2011, the same shall be
deemed to have been granted in accordance with the provisions of the
Act of 2005. It is submitted that the initial sanction/authorisation was
granted by the State Government to the petitioner No.1-company before
17/09/2011. It is submitted that there is no provision in the Act of
2005 or any other enactment that provides for the levy of 5%
commitment charges in the case of a reduced demand. It is submitted
that in the absence of any provision in the Acts, Rules or Regulations
pertaining to water management, providing for levy of 5% commitment
charges, the respondents could not have demanded the same. It is
submitted that though clause 26 of the agreement provides that the
Government had reserved the right to change, amend, modify, cancel or
revise any of the terms and conditions, rules and regulations of water
management as also the Maharashtra Irrigation Act and Rules and the
same would be applicable to the said agreement dated 22/05/2012, the
government has not changed, amended, modified, cancelled or revised
any of the terms and conditions of the agreement or the Act or Rules.
It is submitted that in the absence of any provision in the Acts, Rules or
Regulations for the levy of 5% commitment charges and in the absence
of any change or modification in the original agreement dated
22/05/2012 or the supplementary agreements, the respondents were
not justified in demanding 5% commitment charges on the lower
demand of water. It is submitted that since the demand for
1407WP1372.16-Judgment 7/13
commitment charges is made by the respondents without any authority
of law, the petitioner would not be liable to pay the commitment
charges and the penal interest thereon.
5. Mrs. Prabhu, the learned Assistant Government Pleader
appearing for the State Government and Shri Jagtap, the learned
counsel for the respondent Nos.2 to 4, have supported the action of the
respondents. It is submitted that the State Government had issued a
G.R. dated 29/06/2011 making a reference therein to an order passed
by the Water Resources Regulatory Authority dated 30/05/2011 and
clause 5 of the order of the Water Recourses Regulatory Authority dated
30/05/2011 provides that while executing agreements in future, clauses
13.4 (ii) and (v) of the norms should be considered. It is submitted that
as per clause 13.4 (v) (c) if a lesser demand of water is made by a
company, the said company would be liable to pay 5% commitment
charges. It is submitted that though a specific term relating to levy of
5% commitment charges is not incorporated in the agreement dated
22/05/2012, the respondents would be entitled to claim 5%
commitment charges on the basis of the government resolution dated
29/06/2011 that refers to the order of the Water Resources Regulatory
Authority dated 30/05/2011. It is submitted that since the petitioner
No.1-company had objected to the levy of 5% commitment charges, a
meeting of the officials of the respondents and the representatives of
1407WP1372.16-Judgment 8/13
the petitioner No.1-company was conducted on 05/02/2015 and it
appears from the minutes of the said meeting that the representative of
the petitioner No.1-company had admitted the liability to pay the
commitment charges. It is submitted that since disputed questions of
facts arise for determination in this writ petition, this court may not
entertain and decide the same and the petitioners may be relegated to
the appropriate authority for seeking the relief claimed.
6. We are not inclined to uphold the objection raised on
behalf of the respondents to the tenability of the writ petition. We do
not find that there is any dispute in regard to the relevant facts that are
required to be considered for a decision. It is the case of the petitioners
that the demand of commitment charges is made without any authority
of law. For considering the said question, it would be necessary to
consider the terms and conditions of the agreement dated 22/05/2012
and the government resolution dated 29/06/2011 which according to
the respondents is the source of authorisation for the levy of
commitment charges. The agreement was executed between the State
Government and the petitioner No.1-company for the supply of water to
the petitioner No.1-company. It would be necessary to consider
whether there is any term in the agreement dated 22/05/2012 that
empowers the respondents to levy 5% commitment charges. The
agreement stipulates that the sanctioned quota of water to be supplied
1407WP1372.16-Judgment 9/13
to the petitioner No.1-company would be 87600 million liters per year.
The water charges for the user of the said quota are also specified. Sub
Clause (II) of clause 11 of the agreement gives a right to the petitioner
No.1-company to revise its demand of water by entering into a
supplementary agreement with the State Government at the
commencement of the year, on 1st of November. It is not in dispute that
though the parties had entered into an agreement for supply of 87600
million liters of water per year, the petitioner No.1-company did not
require the said quantity during the years 2012 to 2016 and at the
commencement of every year on 1 st of November a supplementary
agreement was executed between the State Government and the
petitioner No.1-company for supply of a lesser quantity of water. There
is one more relevant clause in the agreement i.e. clause 26 on which
great reliance has been placed by the respondents to point out that 5%
commitment charges could have been levied. According to clause 26 of
the agreement, the government would have a right to change, amend,
modify, cancel or revise any of the terms and conditions of the
agreement. It is nobody's case that the terms of the agreement dated
22/05/2012 were changed, modified, cancelled or revised at any point
of time after 22/05/2012. The clause further provides that any
revision, modification or change in the rules and regulations of water
management and any amendment to the Maharashtra Irrigation Act or
the Rules would be applicable to the agreement dated 22/05/2012.
1407WP1372.16-Judgment 10/13
However, it is not the case of the respondents that the rules and
regulations of water management or the Maharashtra Irrigation Act and
the Rules provide for the levy of 5% commitment charges on lesser
demand of water. The respondents have harped only on the government
resolution dated 29/06/2011. The government resolution as such, does
not provide that the government has decided to levy 5% commitment
charges if the demand is lesser than the agreed demand. The preamble
of the government resolution makes a reference to an order of the
Water Resources Regulatory Authority dated 30/05/2011, a copy of
which is annexed to the government resolution. According to the
respondents, the authority to levy 5% commitment charges flows from
clause 5 of the order of the Water Resources Regulatory Authority dated
30/05/2011. Since the respondents have based their demand notices
only on clause 5 of the said order of the Water Resources Regulatory
Authority, it would be necessary to consider what clause 5 provides for.
Clause 5 (1) with which we are concerned only stipulates that while
executing agreement for supply of water in future, the Water Resources
Department should consider clause 13(4) (ii) and (v) of the norms. It is
not the case of the respondents that clause 13(4) (ii) would apply to the
facts of this case. It is the case of the respondents that clause 13(4) (v)
would apply and clause 13(4) (v) (c) of the norms provides that 5%
commitment charges could be levied on the difference between the
sanctioned quantity of water and the lesser demand. According to the
1407WP1372.16-Judgment 11/13
respondents, on the basis of the norms, specially the norms in clause
13(4) (v)(c), the commitment charges are levied. We are afraid that in
the absence of any term in the agreement dated 22/05/2012 for levy of
5% commitment charges and in the absence of any provision in the Act,
Rules and Regulations to levy the same, the respondents could not have
levied 5% commitment charges on the difference between the
sanctioned quantity of water and the lesser demand. Though the
government had reserved the right, as per clause 26 of the agreement
dated 22/05/2012, to change, amend, modify, cancel or revise any of
the terms and conditions of the agreement or amend the rules and
regulations pertaining to the supply of water, neither has the State
Government revised, modified or cancelled the agreement nor is there
any modification in the rules and regulations of water management.
Nobody had prevented the State Government from modifying the terms
of the agreement by invoking clause 26 of the same if the respondents
were of the view that it was necessary to levy the commitment charges
on the reduction of the demand. No provision is pointed out on behalf
of the respondents in any Act, Rules or Regulations pertaining to water
management and supply of water that would empower the respondents
to levy 5% commitment charges. The government resolution dated
29/06/2011 also does not provide so. All that the order of the Water
Resources Regulatory Authority dated 30/05/2011 states in clause 5(1)
is that while entering into an agreement for supply of water in future,
1407WP1372.16-Judgment 12/13
the norms laid down in 13(4) (ii) and (v) should be considered.
Despite the order of the Water Resources Regulatory Authority dated
30/05/2011 to consider the norms while entering into an agreement in
future, the respondents had not inserted a term in the agreement, under
which the respondents could have levied 5% commitment charges. In
any case, since a clause authorising the respondents to levy 5%
commitment charges does not find place in the agreement dated
22/05/2012, or in the Act, Rules and Regulations the respondents
would not be entitled to levy the commitment charges, specially when
clause 5 of the order of the Water Resources Regulatory Authority dated
30/05/2011 only provides that while entering into the agreement for
supply of water in future the norms may be looked into. We are firmly
of the view that in the absence of any power or authority in the
respondents to levy 5% commitment charges in terms of the agreement
or under any Act, Rules and Regulations in force, the respondents could
not have demanded 5% commitment charges on the lesser demand of
water. While holding so, we are not inclined to accept the submission
made on behalf of the respondents that the representative of the
petitioner No.1-company had admitted the company's liability to pay
commitment charges. On a reading of the minutes of the meeting dated
05/02/2015, it appears that the representative of the petitioner No.1-
company had objected to the levy of commitment charges and after
recording the said objection in one paragraph, it is observed in the next
1407WP1372.16-Judgment 13/13
paragraph that the representative had accepted the demand. Apart
from the fact that the observations made in these two paragraphs are
contradictory, it further appears that the petitioner No.1-company had
immediately conveyed to the respondents that the observation in the
minutes of the meeting dated 05/02/2015 about the acceptance of the
liability is incorrect and the company has serious objection against the
levy of 5% commitment charges. Since the levy of 5% commitment
charges is made without any authority of law, the impugned demand
notices and the communication dated 21/02/2015 are liable to be
quashed and set aside.
7. Hence, for the reasons aforesaid, the writ petition is
allowed. The impugned demand notices and order are quashed and set
aside. The respondents are directed to refund the amount paid by the
petitioner No.1-company towards commitment charges and penal
interest to the petitioners within one month. Rule is made absolute in
the aforesaid terms with no order as to costs.
JUDGE JUDGE
KHUNTE
