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Judgment
P.K. Misra, J.—All these writ petitions, which were heard analogously, raise similar question of facts and law and are being disposed of by
this common judgment.
All these writ petitions have been filed to quash the order passed by the Government in G.O.Ms. No. 474 dated 13.11.2001. The petitioners
are various industries which have been permitted by the Government to draw water from Cauveri river or other tributaries of Cauveri. The
common questions raised by all the petitioners revolve round the steep hike of the charges required to be paid by the petitioners for drawing water
from such water sources. As per G.O.Ms. No. 1307 dated 16 .4.1947, the rate of water charges had been fixed at Rs. 6/- per 1000 cubic yards.
This was increased to Rs. 12/- per 1000 cubic yards in G.O.Ms. No. 1435 dated 6.6.1964 and such charge was fixed at Rs. 16/- per 1000 cubic
metres (obviously after introduction of metric system) as per G.O.Ms. No. 434 dated 22.2.1966. Thereafter the rate was fixed at Rs. 30/- per
1000 cubic metres as per G.O.Ms. No. 1446 dated 4.10.1975. After lapse of about a decade, such rate was increased to Rs. 60/- per 1000
cubic metres as per G.O.Ms. No. 517 dated 10.3.1986. Subsequently, by G.O.Ms. No. 890 dated 9.5.1991, such rate was increased more than
eight times and was pegged at Rs. 500/- per 1000 cubic metres. Such G.O.Ms. No. 890 dated 9.5.1991 effected changes in respect of two
material terms. The first change was relating to fixing of rate at Rs. 5 00/-per 1000 cubic metres and other change was incorporation of a provision
to the effect that industries were required to pay in advance on the basis of the estimate of quantum of water required without any right for refund
of any amount on the ground that less quantity than the estimated quantity had been consumed or used by the industry concerned. So far as the
revision of rate was concerned, a batch of writ petitions, such as W.P. No. 9333 of 1992, had been filed questioning such increase. The other
condition relating to the effect that the industries are required to pay on the estimate of the quantum required for the year without any right of refund
was challenged in another batch, namely, W.P. No. 15720 of 1994. In the later batch of writ petitions, the main contention was to the effect that
the industries were asked to pay on the actual quantity drawn and utilised. This later batch of cases had been dismissed by a learned single Judge
of this Court by order dated 9.8.2002 and it is stated that Writ Appeals filed against such order are pending. So far as challenge in respect of
enhancement of rate is concerned, W.P. No. 9333 of 1992 and other connected matters were disposed of by a learned single Judge by order
dated 24.12.1999. Since such order has some bearing on the questions now raised, it is necessary to extract the relevant portion of such order.
In the above G.O.Ms. No. 890/PWD dt.9.5.91 the Government has enhanced the charges for water drawn for industrial purposes from Govt.
sources. They have enhanced the water charges from Rs. 60/- to Rs. 500/- or different rates depending upon the capacity of the industry to draw
the water from Govt. Sources. The senior counsel appearing in this matter has argued that there are no basis of guidelines for coming to the
conclusion to enhance the water charges from the minimum rate of Rs. 60/- to a maximum rate of Rs. 500/-. He has also argued that the
Government has not called upon the petitioners to put forth their objections before enhancing the water charges. Under the above circumstances
the petitioners are ready to submit representation to the Government to re-consider the Government Order basing on their objections.
Under the above circumstances, without going into the merits of the case, it is suffice to give liberty to the petitioners to file their objections
within a period of three months from the date of receipt of a copy of this order. Thereafter the respondents shall dispose of the representations
after affording an opportunity to the petitioners. Further liberty is given to the petitioners to raise all their objections that have been raised in these
writ petitions. The respondents are further directed to consider and pass appropriate orders afresh as expeditiously as possible. Till such time, the
petitioners have to follow the interim direction given by this Court. Further the respondents are directed not to enforce the Government Order,
pending the passing of the orders afresh.
Pursuant to the aforesaid direction, the impugned G.O.Ms. No. 474 dated 13.11.2004 has been issued by the Government. As per such G.O.,
the rate has been fixed as follows :-
(i) For new industries, upto a period of five years from the date of commencement of their production/ operations, the rate will be 30 ( thirty) paise
per 1000 (thousand) litres subject to a minimum of Rs. 30 00 (Rupees three thousand only) per annum, and thereafter 50 (fifty) paise per 1000
(thousand) litres subject to a minimum of Rs. 5000/- ( Rupees five thousand only) per annum.
(ii) For the existing industries, the rate will be 50 (fifty) paise per 1000 (thousand) litres subject to a minimum of Rs. 5000/- (Rupees five thousand
only) per annum.
As per paragraph 5 of the said G.O., the revised rates had been made effective from 9.5.1991, i.e., the date on which earlier G.O.Ms. No. 8 90
had been issued. This latest order of the Government has been challenged by various industries in the present batch of writ petitions.
The main contentions are to the following effect:-
(a) There has been steep and arbitrary hike in the rate in the year 1991 and, inspite of the direction of the High Court for reconsideration, under the
impugned order, the Government has fixed the very same rate, which has been made effective from 9.5.1991.
(b) Rate has been fixed at Rs. 3000/- for new industries, whereas rate has been fixed at Rs. 5000/- for the existing industries. The existing
industries are thus hostilely discriminated without any rhyme or reason.
(c) The amount should not be collected on the basis of estimated quantum, but on the basis of actual quantum used.
(d) The order should not have been made effective from a retrospective date.
A counter affidavit has been filed on behalf of the Government justifying the increase of the rate. It has been stated that in view of the acute
shortage of water, particularly in the Cauvery basin, it is necessary to regulate use of water for industrial purpose and the rate has been fixed with a
view to regulate such use. It is also stated that as a matter of fact the State is required to spend much more amount for the purpose of supplying
drinking water and the rate fixed for industrial use is much less than the rate fixed for supply of drinking water. It is further stated that the rate fixed
earlier was indeed very low and the present rate cannot be said to be very exorbitant, particularly keeping in view the fact that proportion of
expenditure on such component is very minimal so far as the industries are concerned.
The right of the State Government to collect charges for permitting various industries to draw and use water has not been questioned. All the
Counsels appearing for the petitioners almost in one voice have submitted that even though the right of the Government to collect charges is not in
dispute, the rate fixed by the Government is exorbitantly high and such rate has been fixed arbitrarily, more particularly when the Government is not
required to spend any amount for the water sources concerned, which are natural water sources. It has been highlighted by the petitioners that the
rate had been fixed at Rs. 6 /- per 1000 cubic yards in 1947, which was increased to Rs. 12/- in 19 64 and altered to Rs. 16/- per 1000 cubic
metres in 1966 and thereafter increased to Rs. 30/- in the year 1975 and further increased to Rs. 6 0/- in the year 1986. It has been submitted that
such increase was being effected on each occasion after a gap of about 10 to 12 years and the increased rate was almost twice the rate fixed
previously. However, in the present case, the Government after about five years, increased the rate by 800% or by more than eight times without
any justification.
The aforesaid submission, even though attractive on the face of it, does not merit acceptance. The amount to be collected for the aforesaid
purpose is essentially a question of policy to be fixed by the Government by taking into account the various facts and circumstances and ordinarily
a court of law is not expected to sit in appeal in such matte Rs. It has been pointed out by the learned Addl. Advocate General appearing for the
State that compared to the amount paid by the persons for getting water for domestic use, the rate charged from the industrialists for industrial use
appears to be much low. Moreover, as rightly pointed by him, the proportion of expenses incurred by the industry on account of the water rate
charged by the Government appears to be minimal as compared to other expenses. According to him the amount charged previously was
disproportionately low. These are obviously relevant considerations on the basis of which the Government has fixed the amount chargeable and it
cannot be said that the rate fixed by the Government is arbitrary, warranting any interference by the High Court in exercise of jurisdiction under
Article 226 of the Constitution.
In the above connection, a contention has been raised by the learned counsels appearing for the petitioners to the effect that the impugned
G.O.Ms. No. 474 dated 13.11.2001 should not be applied retrospectively with effect from 9.5.1991. This submission is again attractive only on
the surface.
It is to be noticed that G.O.Ms. No. 474 dated 13.11.2001 has been passed consequent to the order of the learned single Judge dated
24.12.1999 in W.P. No. 9333 of 1991 and other connected matters, where under the increase of rate to Rs. 500/- per 1000 cubic metres was
under challenge and the learned single Judge has merely directed that the matter should be reconsidered after giving opportunity to the industries to
submit their view points. A fair reading of such earlier decision makes it clear that the order earlier passed had not been quashed as such, but only
a scope had been given for reconsideration of the same. Since the Government after reconsideration and taking into account the various
submissions and suggestions made by the industries has come to the conclusion that the rate fixed at Rs. 500/- is reasonable, there is nothing
arbitrary in directing that such rate should be made applicable with effect from 9.5.1991, the date on which earlier G.O.Ms. No. 890 was issued.
As a matter of fact, the learned single Judge had observed that till the matter is re-examined, the industries would be required to pay at the old rate
for the time being, which clearly implies that the rate can be re-fixed with effect from the earlier date. A perusal of the earlier order dated
24.12.1999 clearly indicates that the earlier G.O.Ms. No. 890 dated 9.5.1991 had been kept in abeyance pending consideration, but there was
no embargo on the Government to fix any rate effective from 9.5.1991. Such contention is therefore not acceptable.
Learned counsels appearing for the petitioners have also submitted that the rate should be fixed on the basis of actual consumption. It is
submitted by the counsels that the amount of water actually drawn by the industry concerned can be measured and, therefore, the amount should
be collected on the basis of actual user and not on the basis of estimated quantum of water likely to be drawn.
As rightly submitted by the learned Additional Advocate General, this question was already raised in W.P. No. 15720 of 1994, etc., and the
matter is now pending in appeal and therefore it would not be appropriate for me to express any opinion at this stage and obviously the matter can
be agitated in the writ appeals. This question is therefore left open to be decided appropriately in the writ appeals.
In this connection, a contention has been raised by some of the learned counsels that the water is drawn only for cooling purpose and
thereafter such water is re-diverted to the very same river.
Learned Addl. Advocate General has pointed out that only two companies, namely, M/s. E.I.D. Parrys and M/s. Cauvery Sugars and
Chemicals draw water for cooling purpose and, so far as these companies are concerned, they are charged at the concessional rate of Rs. 20/- per
1 000 Cubic Metre in terms of Government letter dated 22.6.1987 and, therefore, they cannot have any grievance. This submission of the learned
Addl. Advocate General is also acceptable.
Some of the learned counsels have raised contention relating to violation of Article 14 of the Constitution. It is submitted by them that the new
industries are allowed to use water at the rate of Rs. 3000/- per annum, whereas the existing industries are allowed to use such water at the rate of
Rs. 5,000/- per annum.
I do not think such a submission can be taken seriously. It is quite well known that various State Governments in order to encourage new
industries, provide certain concessions to them in the matter relating to supply of electricity or payment of sales tax, etc. The obvious object being
to increase the number of new industries, the classification can be said to be reasonable and has some nexus with the object to be achieved.
Therefore, in my opinion, the attack on the ground of discrimination dissipates and cannot be sustained.
In the above view of the matter, the contentions raised by various writ petitioners being unacceptable all the writ petitions are liable to be
dismissed.
During pendency of earlier writ petitions and the present writ petition, the petitioners have been permitted to pay at a lesser rate. Since the writ
petitions are dismissed, it is obvious that such petitioners are liable to pay the balance amount on the basis of G.O. Ms. No. 474 dated
13.11.2001. It is brought to my notice that interest is being demanded for payment of the amount. If any of the petitioners make the payment due
within a period of two months from the date of receipt of this order and apply for waiver of interest, such petition for waiver of interest may be
considered by the Respondents.
Subject to the observations made in paras 11 and 17, all the writ petitions are dismissed. However, there would be no order as to costs.
Consequently, the connected miscellaneous petitions are closed.