Summary
A thermal power company was allotted dam water reserved for irrigation. In its 2012 water supply agreement and a same-day undertaking, it agreed to pay irrigation restoration charges of Rs. 1 lakh per hectare, Rs. 232.18 crore in all. The Bombay High Court in a second writ petition reduced the charge to Rs. 50,000, the rate prevailing at the in-principle approval. The Supreme Court restored the contractual rate. Having signed the agreement and undertaking, which reflected every demand made since sanction, the company was estopped from disputing the consideration. Rights crystallised on the date of the agreement, and the Government gave reasonable explanations for treating other companies differently. The earlier writ petition had already refused the same relief, so the second should not have been entertained. The balance was ordered paid with 12% interest.
Issues
- Whether a party which signed a water supply agreement and undertaking to pay irrigation restoration charges at Rs. 1,00,000 per hectare could later have the charge reduced to the rate prevailing on the date of in-principle approval, in a second writ petition.
Provisions considered
- Article 226, Constitution of IndiaThe High Court erred in entertaining a second writ petition claiming the same relief as one disposed of on 22.11.2012, and in substituting its view for the terms of a concluded contract. (¶ 20)
- Irrigation restoration charges, Government Resolutions of the Water Resources Department, Maharashtra (21.02.2004 and 01.03.2009)The charge rose from Rs. 50,000 to Rs. 1,00,000 per hectare from 01.04.2009, but the agreed rate in the 2012 agreement governed the parties. (¶¶ 5, 8, 17, 18)
Held
- The sanction order, demand notice and all communications stipulated Rs. 1,00,000 per hectare and were subsumed in the agreement of 22.05.2012; having signed it and issued an undertaking, Respondent No. 1 is estopped from challenging the levy. (¶ 17)
- The rights and liabilities of the parties crystallised on the date of the agreement, so the rate prevailing on 22.05.2012, not on the date of in-principle approval, governs. (¶ 18)
- The differential treatment of eight other companies was reasonably explained by cancellation of their approvals, public-sector use, earlier agreement dates, absence of irrigation loss or minimal diversion in non-deficit areas, unlike Respondent No. 1, which draws large quantities from a water-scarce area. (¶ 19)
- Since only two instalments had been paid, the balance is payable by 30.06.2023, with penal interest at 12% per annum under clause 4 of the undertaking from the due dates until 05.05.2016. (¶ 21)
Result
Civil Appeal No. 8550 of 2022 allowed and the Bombay High Court (Nagpur Bench) judgment dated 05.05.2016 in W.P. No. 4968 of 2015 set aside; the balance irrigation restoration charges directed to be paid by 30.06.2023 with interest; parties to bear their own costs.