TaxTMI 
TaxTMI 
2016 (5) TMI 1597
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....nd a prayer to restrain the respondents from recovering interest as per demand letters dated 17.01.2013 and 04.02.2013 has been added. However, 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 intro....
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....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....
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....te 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 modificati....
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....er 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 I....
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....rwise 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 Bhang....
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....m 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 w....
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....eluctant 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....
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....1.2012 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, reporte....
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.... 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....
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....me 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 ....
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....ia 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. Mate....
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....lowing 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 nonirrigation 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 nonirrigation use. This cost will be less than the stipulated area of Rs. 50,000/per hectare." (Emphasis added by Court) Clause C ....
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..... 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 da....
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....pany 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.....
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.... 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 resjudicata or constructive resjudicata 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....
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....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 adinterim order observed that it would be app....
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....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 auctionsale 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....
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....isputes regarding rates for nontendered 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 nonstatutory 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 Ind....
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....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 aforestated 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.15 60 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." ....
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.... 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 hotblow 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. Res....
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....tablishments 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 administ....
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.... 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 boobytraps? 'Civil consequences' undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and nonpecuniary 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 ci....
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.... 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 illeffects of such directions have been considered by this Court in C. Jacob v. Director of Geology and Mining: (SCC pp. 12223, 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 su....
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....ns 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 2729, 34, 35 and 36 from the decision in State of Punjab v. Nestle India Ltd.: (SCC pp. 47478) "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 ....
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....xercise 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 c....