PEPSICO INDIA HOLDING PVT. LTD. versus STATE OF MAHARASHTRA & ORS.

24. Appellant in the year 2005 filed a writ petition before the High Court of Bombay which was registered as WP No. 5834 of 2005 challenging the Govt. Resolutions passed by Respondent no. 4 dated 12.09.2001, 24.10.2001 and 28.11.2002 along with letters issued by Respondent Nos. 2 & H 3 dated 6.6.2005 and 24.6.2005 and prayed for quashing the PEPSICO INDIA HOLDING PVT. LTD. v. STATE OF 695 MAHARASHTRA [DR. MUKUNDAKAM SHARMA, J.) same by issuance of writ of certiorari or such other writ and to direct the respondents to refrain from severing any water connections with respect to industrial units of t~e appellant. The High Court vide its order dated 6.9.2005 stayed the operation of the notices dated 6.6.2005 and 24.6.2005 and allowed the appellant to continue to pay the bills at the pre-revised/earlier rates and charges. Consequently, however, vide order dated 4.09.2009 High Court dismissed the Writ Petition of the appellant in terms of the decision of the coordinate ben<;:h of the said. High Court in Writ Petition No. 4263/2005. The High Court held in,the following manher: – c "(i) It will be open to the petitioners to submit documentary evidence before the respondents showing the water which they were using as a raw-material and the water which they were using for allied activities. The respondents thereafter to complete the entire exercise within 16 weeks from today. (ii) On the petitioners providing such information supported by documentary evidence, the respondents to charge the petitioners in terms of the directions issued by this court in writ petition no. 4263 of 2005. (iii) Considering direction no. 3 in paragraph 19 of the Judgment in Waluj Industries Association, it will be open to the petitioners to make suitable representation in respect of revision of water rates effected from 2002 onwards and on receipt of the represd1tation, the respondents shall take appropriate decision after considering the grievances raised by the respective petitioners."

25. Against the said decision of the High Court, appellant has filed the present appeal, on which, we heard the learned counsel appearing for the parties. Counsel appearing for the parties have taken us meticulously through the entire relevant materials on record.

26. Learned counsel appearing for the appellant contended that the High Court erred in ignoring that inter se classification of jndustrial users on the basis of their usage without any reasonable differentia is discnminato1; and that respondents are not allowed to categorize industrial users into B consumers of ·water as raw materials" and consumers for other purposes without any reasonable classification. It was submitted by him that the notification dated 18.05.2005 being prospective in operation and that there being no specific stipulation that it would be retrospective in operation, the c respondent could not demand tax at the revised rate from a retrospective date. It was also submitted by him that in view of clause 27 of the agreement there could not have been any demand from a retrospective date. Counsel also relied upon clause 5 of Circular di. 27 .5.2003 and submitted that the rate 0 of water supply to the consumers under the industrial area using water as raw material should be the same as that of the rates in industrial area.

27. Counsel appearing for the respondents, however, not only refuted the contentions put forth by the counsel appearing E for the appellant but also submitted that the demand for payment of water tax with arrear, payable by the appellant is just and proper, as there wa~ a continuing liability to pay at increased rate from the year 2001 itself on the part of the appellant but not paid pursuant to the representations filed by F him. He also submitted that the irrigation department vide its circular dated 25th October, 2001 initially increased the rate of royalty by 10 times and the same was not altered even upon representations submitted by the aggrieved persons including the appellant and therefore the demand made, which is a G subject matter of the appeal, cannot be said to be a retrospective demand made by the respondent. It was also submitted that industries using water as raw material stands clearly on an independent footing than the other industries not using water as raw material and, therefore, there is an PEPSICO INDIA HOLDING PVT. LTD. v. STATE OF. MAHARASHTRA [DR. MUKUNDAKAM SHARMA, J.] intelligible criteria in making a clear distinction between two categories of industries.

28. In the light of the aforesaid submissions and the materials on record, we proceed to dispose of this appeal by recording our reasons.

29. The specific stand of the respondents in respect of their liability to supply water in lieu of water charges emanates from their responsibility of making water available to the residential houses, industries, factories and entrepreneurs and also to those industries where water is. used as raw material and the corporation does not by itself generates water and instead of it procure water from the respondent nos. 1 [State of Maharashtra) and 4 [Department of Irrigation] and provides the same to the residential houses, industries, factories and entrepreneurs etc.

30. It is also a specific stand of the respondent that water is made available by corporation to its allottees at no profit no loss basis. The corporation obtains water from the Irrigation Department for which it is obliged to pay royalty and the charges as fixed by the State Government. The Corporation also has to revise water charges to cover the expenditure of water, particularly, taking into consideration the increase in royalty and water charges by the State Government as well as other factors like increase in price of water purification, chemicals, energy charges, laying down pipelines, overhead tanks and other factors.

31. There is no dispute with regard to the fact that the State Government with effect from 1st September, 2001 upon consideration of the recommendation of the Finance Commission, Irrigation Commission and National Water Policy as well as the deficit arising due to the then prevalent low rates of water supply revised the water rates. Consequent upon the said revision, the Corporation also had to revise water rates to put in parity with the charges towards water supply by the A State Government. Consequent, there upon in the year 2001 itself the appellant was intimated the revision of water rates by the circular issued by the Corporation on 31.10.2001. A number of representations came to be filed from various aggrieved persons due to which a Circular dated 6.12.2001 was issued B permitting the industries to pay at the pre revised/earlier rates in order to reconsider old rates in view of the fact that several representations were pending and were being considered by the State Government. The appellant himself submitted such a representation intimating that they are not paying al the c increased rate in view of the pendency of the issue before the State Government. The appellant also in the present proceedings has admitted that they had knowledge about the increase of water charges in the year 2001 itself.

32. Another communication dated 28.11.2002 was issued D by the State Government and in the said communication it was stated that there is recession world over in the field of industry and taking sympathetic view on the representation submitted by the industrialists with the Government, a decision has been taken to make some revisions in the rates of water cess of E industrial use of water. It was, however, made clear in the said communication that no change has been made for the use of water by the industry producing drinking water and cold drinks/ breweries where water is being used as raw material. The Government resolution communicated by the said resolution F stated that rates of the industrial use are being doubled but so far industries where water is being used as raw material, for such industries the rates are being made 10 times.

33. A communication, however, came to be issued on G 27.05.2003 by the Maharashtra Industrial Development Corporation referring to circular dated 24.10.2001 and 28.11.2002 issued by the Irrigation Department. By referring to Circular dated 28.11.2002, it was stated that _water rate for industrial use has been decreased from 200 percent to 100 percent but the increase in residential use of water as raw H maierial is confirmed. PEPSICO INDIA HOLDING PVT. LTD. v. STATE OF MAHARASHTRA [DR. MUKUNDAKAM SHARMA, J.]

34. Consequent upon issuance of the Circulars by the Government regarding increase in the rate of water charges the matter of taking a policy decision in respect of water supply was put up before the Board of Directors of the Maharashtra Industrial Development Corporation, who had taken a decision that the rate of water supply of the consumets under the industrial area using water as raw material, will be same as of the rates in industrial area. It was also intimated therein that the representation seeking reduction of water charges is under the consideration of the Government and therefore though the bills are sent to the consumers at increased rate, a concession was c given to pay the same at the earlier rate.

35. The Corporation issued yet another circular on 18.05.2005 and in this Circular reference was made to the Government resolution dated 28.11.2002 stating further that pursuant to the State Government resolution a circular dated 11.06.2003 was issued stating therein as to how the rates fixed by the Government resolution should be implemented. It was also stated that by the aforesaid circular dated 11.06.2003 equal rates are fixed for the water supply to all industries including the industries using water as raw material in industrial area but while implementing the said policy it was found that in some industrial areas, the use of water by industries which are using water as raw material is in huge extent and that as the rates of water use as raw material are more than five tirpe of the water tax rate of general industrial use, the financial burden of amount of difference is falling on the corporation. It was also intimated that with a view not to put financial burden on the corporation, decision of amending the rates of water supply under industrial area has been taken. The rates of water supply of such consumers who use water a raw material was revised by extending the rates by Rs. 34.60 per cm of water _supply of respective industrial area issued vide circular no. GI 7 dated 27.05.12003, the rates of water supply was amended from 01.11.2001. As to how water bills relating to the period A from 01.11.2001 to 30.11.2002 should be recovered was also spelt out in the said notification.

36. Consequent thereto a letter was written to the appellant herein by Deputy Engineer, Maharashtra Industrial Development 8 Corporation, on 06.06.2005 intimating him that he is required to pay water bills for the period from 01.11.2001 to 30.11.2005 as per revised rates.

37. It is, therefore, established from all the aforesaid policy decisions of the Government for increasing the rates of water C supply charges and also from the resolution of the Corporation taking a policy decision and also from the circulars issued for raising the water charges to 10 times that the decision was taken by the Corporation to increase the water charges based on the decision of the State Government to increase such rat D s of water charges. The Corporation supplies water to all ne dy persons be it residential houses, industrial units or to those industries where water is used as raw material on "no profit no loss basis". Consequent upon revision of the rates by the Govern men! at which rate the Corporation is to make payment to the E Government, the Corporation has no other alternative but to revise the same and follow the increase rates as demanded by the State Government itself. The State Government has increased the water charges so far those industries where water is used as raw material to 10 times and t~.e said rates F were circulated by the Government to the Corporation in 2001 itself. The fact of such increase was intimated to all the persons to whom water was supplied by the Corporation including the appellant who was fully aware about the aforesaid increase of water charges from 2001.

38. There cannot be any dispute to the fact that in the industries like that of the appellant, consumption of water is much more than all other types of industries as they use water as raw materials. Requirement and use of water in these industries is huge and therefore they are placed as one distinct H category or class of their own. These industries stand apart PEPSICO INDIA HOLDING PVT. LTD. v. STATE OF MAHARASHTRA [DR. MUKUNDAKAM SHARMA, J.] from other industries and also differently situated from residential houses. Therefore, there is an intelligible differentia between these three categories so there is no discrimination.

39. However, a demand for payment of water charges at the aforesaid increased rates was for some time kept in abeyance in view of the several representations pending at the level of the Government from the aggrieved and affected persons including that of the appellant. But since the Government did not change its position and informed the Corporation to make payment at the revised rate which was increased in 2001 itself, the Corporation has no other alternative but to release the payment of water tax/bill at the increased rate demanded by the State Government. Although in 2003 a policy decision was taken to charge half the rate of the increased rate i.e. five times instead of ten times, at par with the industrial uses, but later on it was found that half the rate is not feasible and that what is being charged at the earlier point of time is required to be paid as Corporation's financial loss was continuously increasing. That policy decision of 2003 was also a stop gap arrangement which is indicated from paragraph 6 thereof and the said decrease finally came to be amended in the notification of 2005.

40. The appellant is receiving the facility of water supply from the Corporation and is obliged to pay at such rates which are demanded by the Corporation as the same rate is being charged by the Government. The Corporation cannot be asked to suffer a loss for extensive user of water by the appellant using water as raw material for its business as it is discharging its public and welfare duty for supplying water to help and assist industries like the appellant. The stand of the appellant that the increased rate of water charges is being demanded from them on a retrospective basis is erroneous and fallacious and not proper because it is established from the record that the appellant had the knowledge about the aforesaid increase in 2001 itself when the Government issued the notification intimating such increase which fact is an admitted position. A Therefore. there is no violation of clause 27 nor is there any question of giving any retrospective effect to the aforesaid increase. It was also submitted that appellant was not paying increased water charges as the matter was pending for final consideration in view of several pending representations. In the B pleadings before us, the said fact is clearly proved by the statement of the appellant in the affidavit filed.

41. We have gone through the judgment and order passed by the High Court in the coordinate Bench which was followed by the High Court in the present case. From the judgment it is C distinctly indicated that while rejecting the contentions of the counsel appearing for the appellant the High Court has recorded cogent reasons for rejecting such contentions. We find no infirmity in the said reasons. We however make it clear that a representation of the nature as suggested by the High Court D could still be made by the appellant on all the grounds specifically mentioned therein and any other valid ground, which when filed would be disposed of expeditiously.

42. Consequently, we find no merit in this appeal and the E same is dismissed with the aforesaid liberty and leaving the parties to bear their own costs. B.B.B. Appeal dismissed.