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Issues: (i) Whether the Corporation could levy water charges at 1.5 times the normal rate on plot holders who had not obtained a Building Completion Certificate; (ii) whether the circular issued by the Executive Engineer of the Ambernath Sub-Division in 1998 conferred any enforceable benefit or created an estoppel against the Corporation; (iii) whether Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery of the water charges demanded from the petitioners.
Issue (i): Whether the Corporation could levy water charges at 1.5 times the normal rate on plot holders who had not obtained a Building Completion Certificate.
Analysis: The water supply regulations empowered the Corporation to fix water charges from time to time, and the agreement bound the petitioners to comply with those regulations. The Corporation had issued circulars in 1997 providing that plot holders without a Building Completion Certificate would be charged at 1.5 times the normal rate. The classification between plot holders with a Building Completion Certificate and those without one was found to be rational, based on intelligible differentia, and connected with the object of ensuring compliance with sanctioned plans and development control requirements.
Conclusion: The levy of water charges at 1.5 times the normal rate was valid and lawful, and the challenge to the demand failed.
Issue (ii): Whether the circular issued by the Executive Engineer of the Ambernath Sub-Division in 1998 conferred any enforceable benefit or created an estoppel against the Corporation.
Analysis: The 1998 circular was held to have been issued by an officer who had no authority under the regulations to issue such a circular. Since the officer's action was unauthorised and contrary to the Corporation's earlier circulars, no enforceable right accrued to the petitioners. The Court held that promissory estoppel or equitable estoppel could not be invoked to sustain a benefit flowing from an illegal and unauthorised act, and the subsequent corrective action was not retrospective in the impermissible sense.
Conclusion: The 1998 circular did not bind the Corporation, and the petitioners could not claim any benefit or estoppel on its basis.
Issue (iii): Whether Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 barred recovery of the water charges demanded from the petitioners.
Analysis: The protection under Section 22 applies to proceedings of the kind contemplated by that provision and does not prevent enforcement of contractual or regulatory obligations for supply of water. The demand in question arose from the petitioners' obligation under the agreement and the regulations governing water supply, not from execution of any decree or similar proceeding.
Conclusion: Section 22 of the Sick Industrial Companies (Special Provisions) Act, 1985 did not bar recovery of the demanded charges.
Final Conclusion: The petitioners failed to establish any illegality, arbitrariness, or statutory bar against the impugned demand, and the challenge to the demand notice was rejected.
Ratio Decidendi: Where a regulatory framework and contractual terms authorise differential water charges for non-compliance with a completion requirement, a classification based on possession of a completion certificate is a valid reasonable classification, and an unauthorised circular issued by a subordinate officer cannot create enforceable rights or an estoppel against the principal authority.
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