{"id":158335,"date":"2002-08-09T00:00:00","date_gmt":"2002-08-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/nava-bharat-ferro-alloys-limited-vs-the-secretary-to-government-on-9-august-2002"},"modified":"2015-01-24T22:54:16","modified_gmt":"2015-01-24T17:24:16","slug":"nava-bharat-ferro-alloys-limited-vs-the-secretary-to-government-on-9-august-2002","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/nava-bharat-ferro-alloys-limited-vs-the-secretary-to-government-on-9-august-2002","title":{"rendered":"Nava Bharat Ferro Alloys Limited: vs The Secretary To Government on 9 August, 2002"},"content":{"rendered":"
Madras High Court<\/div>\n
Nava Bharat Ferro Alloys Limited: vs The Secretary To Government on 9 August, 2002<\/div>\n
       \n\n  \n\n  \n\n \n \n IN THE HIGH COURT OF JUDICATURE AT MADRAS\n\nDated: 09\/08\/2002\n\nCoram\n\nThe Hon'ble Mr. Justice P. SATHASIVAM\n\nWrit Petition No. 15720 of 1994 and Writ Petition No. 15794 of 1994\nand W.P.Nos. 15834 of 1989, 14189 of 1993 and 18540 of 1994\nand\nW.M.P.Nos. 22994, 23107, 23161\/89, 20498\/90 and 28149\/94.\n\n\n\nW.P.No. 15720 of 1989\n\nNava Bharat Ferro Alloys Limited:\nSugar Division, Deccan Sugars,\n47, Greames Road, Madras-600 006.             ..  Petitioner.\n\n-Vs-\n\n1. The Secretary to Government,\n   Public Works Department,\n   Fort St. George,\n   Madras-600 009.\n\n2. The Superintending Engineer,\n   Public Works Department,\n   RC Division, Thanjavur.\n\n3. E.I.D. Parry (India) Ltd.,\n   Dare House, N.S.C. Bose Road,\n   Madras.1.\n   (3rd respondent was impleaded<\/pre>\n
   as per order of Court dt.19-8-98).              ..  Respondents.\n<\/p>\n
W.P.No. 15794 of 1989
\nCauvery Sugars and Chemicals
\nLimited, Madras,
\n47, Greenways Road,
\nMadras-28.\n<\/p>\n
                                    .. Petitioner.\n<\/p>\n
                           Vs.\n<\/p>\n
1. The Secretary to Government,
\n   Public Works Department,
\n   Fort St. George, Madras-9.\n<\/p>\n
2. The Superintending Engineer,
\n   Public Works Department,
\n   R.C. Division, Thanjavur.\n<\/p>\n
                                       .. Respondents.\n<\/p>\n
W.P.No. 15834 of 1989
\nA. Krishnan,
\nEquity Shareholder in and
\nWholetime Director of M\/s
\nCauvery Sugars & Chemicals
\nLtd., 47, Greenways Road, Madras-28.\n<\/p>\n
                                       .. Petitioner.\n<\/p>\n
                              Vs.\n<\/p>\n
1. The Secretary to Government,
\n   Public Works Department,
\n   Fort St. George, Madras-9.\n<\/p>\n
2. The Superintending Engineer,
\n   Public Works Department,
\n   R.C. Division, Thanjavur.\n<\/p>\n
                                       .. Respondents.\n<\/p>\n
W.P.No. 14189 of 1993\n<\/p>\n
1. The South India Textile
\n   Processors Association,
\n   represented by its Chairman
\n   Mr. P. Elango, Erode.\n<\/p>\n
2. S.S.M. Processing Mills,
\n   represented by its Partner
\n   Mrs. E. Nirmala, Komarapalayam.\n<\/p>\n
3. J.K.K. Textile Processing
\n   Mills Private Ltd.,
\n   represented by its Managing Director,
\n   Mr. J.K.A. Kandasamy.\n<\/p>\n
4. Rajalakshmi Textiles Processors
\n   Ltd., represented by its
\n   General Manager, N. Duraisamy.\n<\/p>\n
                                         .. Petitioners.\n<\/p>\n
                          Vs.\n<\/p>\n
1. The State of Tamil Nadu,
\n   represented by its Secretary to
\n   Government, Public Works
\n   Department, Fort St. George,
\n   Madras-600 009.\n<\/p>\n
2. The Superintending Engineer,
\n   Public Works Department,
\n   Mettur, Salem District.\n<\/p>\n
3. The Executive Engineer,
\n   Public Works Department,
\n   Mettur Division, Mettur Dam,
\n   Salem District.\n<\/p>\n
                                         .. Respondents.\n<\/p>\n
W.P.No. 18540 of 1994
\nE.I.D. Parry India Ltd.,
\nDare House, N.S.C. Bose Road,
\nMadras.\n<\/p>\n
                                         .. Petitioner.\n<\/p>\n
                            Vs.\n<\/p>\n
1. The State of Tamil Nadu,
\n   represented by the Secretary to
\n   Government, Public Works Department,
\n   Fort St. George, Madras-600 009.\n<\/p>\n
2. The Executive Engineer P.W.D.\n<\/p>\n
   R.C.Division, Trichy-1.\n<\/p>\n
                                         .. Respondents.\n<\/p>\n
Petitions under Article 226 of the Constitution of
\nIndia for issuance of Writs of Certiorarified Mandamus as
\nstated therein.\n<\/p>\n
!For petitioner in W.P.Nos. 15720,
\n15794, 15834\/89.                         :  Mr.  V.  Ravi<\/p>\n
For petitioner in W.P.14189\/93.          :  Mr.   M.  Venkatachalapathy,
\n                                            Senior counsel  for
\n                                            Mr.  M.  Sriram<\/p>\n
For petitioner in W.P.18540\/94.       :  Mr.  V.  Nataraj<\/p>\n
^For respondents 1 and 2 in W.P.15720, 15794,
\n15834\/89, 18540\/94 and for respondents 1 to 3 in
\nW.P.14189\/93.                :   Mr.  R.  Muthukumarasamy, Additional Advocate General
\n                                 Assisted by Mr.  S.  Kandasamy, Special Govt.,Pleader:\n<\/p>\n
No appearance for others.\n<\/p>\n
:COMMON ORDER<\/p>\n
Since the issue raised in all these writ petitions is one and the  same,  they
\nare being  disposed  of  by  the  following  common  order.   Aggrieved by the
\nGovernment instructions  communicated  in  letter  No.    CP\/7083\/88\/A1  dated
\n28-7-88  of  the  Executive Engineer, P.W.D., R.C Division, Trichy-1 regarding
\nlevy of Royalty on water drawn for their factory,  Nava  Bharat  Ferro  Alloys
\nLimited, Sugar  Division,  Deccan  Sugars  has filed W.P.No.  15720 of 1989 to
\nquash the said communication and direct the respondents to  levy  and  collect
\nroyalty  from  the petitioner according to the instructions contained in Board
\nStanding Order  No.11-A  and  at  the  concessional  rate  regardless  of  the
\nerstwhile limit of 1.5 million Cubic Yards.\n<\/p>\n
2.   Questioning  the  very  same  communication  of  the  Executive Engineer,
\nR.C.Division, Trichy-1, Cauvery Sugars and Chemicals  Limited,  Madras-28  has
\nfiled W.P.No.  15794 of 89.\n<\/p>\n
3.    Questioning   the   same   communication   of  the  Executive  Engineer,
\nR.C.Division, Trichy-1,  A.    Krishnan,  Equity  Shareholder  and   wholetime
\nDirector of  M\/s Cauvery Sugars and Chemicals Limited has filed W.P.No.  15834
\nof 1989.\n<\/p>\n
4.  Questioning the same communication of the Executive Engineer, Public Works
\nDepartment, Mettur  Division,  Mettur  Dam,  South  India  Textile  Processors
\nAssociation by  its  Chairman, S.S.M.  Processing Mills by its partner, J.K.K.
\nTextile  Processing  Mills  Private  Limited  by  its  Managing  Director  and
\nRajalakshmi   Textiles   Processors   Limited,   by   its   General   Manager,
\nRamanathapuram Pudur P.O.  Erode have filed W.P.No.  14189 of 93.\n<\/p>\n
5.  E.I.D.  Parry India Limited, Madras-1 has filed W.P.  No.    18540  of  94
\nseeking  to  issue a Writ of Mandamus calling upon the respondents to consider
\ntheir application dated 11-6-93 and grant licence for  drawal  of  water  from
\nPugalur  channel without reference to the alleged arrears from M\/s Nava Bharat
\nFerro Alloys Limited and the alleged dues subject matter of W.P.No.  15720\/89.\n<\/p>\n
6.  As stated earlier, since the grievance of all the petitioners  is  similar
\nand  identical,  for  convenience  I shall refer the case of the petitioner in
\nW.P.No.  15720 of 89.  The petitioner company, formerly known  as  the  Deccan
\nSugar and  Abkahri  Company Limited is registered under the Companies Act.  It
\nis engaged in the manufacture of Sugar at  its  factory  situate  at  Pugalur,
\nTrichy District  in  Tamil Nadu on the bank of Pugalur channel.  Eversince the
\nfactory was commissioned in 1944, it has  been  drawing  its  requirements  of
\nwater for cooling purposes from the Pugalur channel which belongs to the State
\nGovernment,  in  conformity  with the instructions contained in Board Standing
\nOrder No.11A and the agreements entered into thereunder.  The exact quantities
\nof water drawn and the quantities returned to  the  channel  are  measured  by
\nWater  Meters  installed  and  duly recorded in the registers maintained under
\nP.W.D.  supervision.  Board  Standing  Order  (  hereinafter  referred  to  as
\n“B.S.O”) No.    11A contains instructions relating to the issue of licence for
\nthe diversion or use of  water  from  Government  sources  for  non-irrigation
\npurposes including  industrial  purposes.    An industrial concern requiring a
\nlicence  for  drawing  water  has  to  enter  into  an  Agreement   with   the
\nSuperintending  Engineer concerned, in Form No.4 Appendix I (1), the Agreement
\nbeing subject to renewal at the end of every 10 years.  Para 5 of  the  B.S.O.
\nspecifies the  rates chargeable as Royalty for the licence to draw water.  Two
\ndifferent rates are prescribed, namely, the Normal Rate  applicable  to  water
\ntaken  and  consumed,  and  a  Concessional  Rate for water taken and returned
\nun-diminished and un-polluted to the Government source.  Royalty is charged on
\nthe basis of the quantity of water actually drawn by the licensee and  not  on
\nany notional  or  other basis.  The licensee is entitled to take such quantity
\nof water as the licensee shall  require  (and  shall  be  available)  for  the
\npurpose  of  the  factory and shall have paid for in advance not exceeding the
\nmaximum quantity.  When the factory was commissioned in 1944 with  an  initial
\ncrushing  capacity  of  20  0 tonnes cane per day, permission was obtained for
\ndrawing channel water upto a maximum limit of 1.5  million  cubic  metres  per
\nannum.  As per B.S.O.  11A and Form 4 Agreement, ever since the very beginning
\nboth  the  established rule and practice was for the factory to pay in advance
\nin April every year the royalty due on the factory’s estimated drawal of water
\nduring that year, and such advance  payment  was  subsequently  adjusted  with
\nreference to  the  actual  quantity  drawn  during  the  year.    This was the
\nprocedure invariably followed both in the case of petitioner as  well  as  all
\nother  licensees  like  Cauvery  Sugars  and Chemicals Limited drawing Cauvery
\nRiver channel water.  However, the entire basis of the levy and collection  of
\nroyalty was radically changed by the Government with effect from the financial
\nyear 1987-88  as evidenced by Circular letter No.  CP\/7083\/88\/A1\/dated 28-7-88
\nfrom the Executive Engineer (RC Division, Trichy) to all the licensees drawing
\nwater from Government water sources.  The petitioner company was  called  upon
\nby  the  Executive  Engineer  to pay the balance for 1987-88 calculated on the
\nmaximum permitted quantity less amounts already  paid,  as  also  the  advance
\nwater charges for 1988-89 calculated on the maximum permitted quantity, within
\none month failing which penal interest would become payable.  Against the said
\ndemand,  the  petitioner  made  an  appeal to the Chief Engineer (Irrigation),
\nPublic Works Department, followed by a representation to the Government by the
\nSouth Indian Sugar Mills Association (Tamil Nadu Branch).  The  Government  in
\ntheir letter  dated  25-7-89  rejected  their request.  Being aggrieved by the
\ndemand for royalty based on the maximum quantity of water permitted  from  the
\nchannel  instead  of  on the basis of water actually drawn, the petitioner has
\napproached this court.  As stated earlier, similar averments have been made by
\nCauvery Sugars and Chemicals, South India Textile Processors  Association  and
\nE.I.D.   Parry  India  Limited;  hence  I am not separately referring to their
\nclaim in this order.\n<\/p>\n
7.  Separate counter affidavit has been filed by  the  first  respondent-State
\nGovernment in  all these writ petitions highlighting their stand.  Here again,
\nfor convenience I shall refer the stand of the respondents  in  Writ  Petition
\nNo.  15720  of  8  9.  The procedure for granting permission to the industrial
\nconcerns from Government sources is laid down in Board’s Standing Orders 11 A.
\nAs per para 5 in B.  S.O.  11A, the consumers should enter into  an  agreement
\nas  per  form  No.4  in  Appendix  1(1)  to B.S.O 11-A with the Superintending
\nEngineer of the Public Works  Department  Circle  in  whose  jurisdiction  the
\nsource lies.    The  agreement is subject to the minor modifications depending
\nupon the cases of the licences issued and is renewable by every ten years  and
\nlast  such  renewal  of  agreement  was made for drawal of water by M\/s Deccan
\nSugar and Abkari company Limited  from  1-8-65  to  31-7-75.    In  this  Writ
\nPetition,  the  department  is  enforcing  clauses  1(a)  2A  and  7(c) of the
\nagreement.  M\/s Deccan Sugar and Abkari Company Limited was permitted to  draw
\nwater for its cooling purposes from Pugalur channel, which is a branch channel
\ntaking off from  River  Cauvery, in G.O.Ms.No.  1264 Revenue dated 9-7-45.  In
\nG.O.Ms.No.  787 PWD dated 25-3 -64  the  company  was  permitted  to  draw  an
\nincreased  quantity  of  80,000 cubic yards per day with an annual limit of 20
\nmillion cubic yards.  While granting permission for enabling  the  company  to
\ndraw increased  quantum,  the Government have fixed two tier rates.  Provision
\nfor the escalation of the rate for drawal has  been  made  in  the  Government
\nOrder.   Hence  any increase in the rates ordered by the Government for drawal
\nof water will apply not only to the normal rates, but also  to  the  increased
\nproportion of  33  1\/3  per  cent.  The intention of the Government behind the
\ngrant of permission to the petitioner company will reveal that, the licence is
\ngranted subject to the execution of the agreement as stipulated in B.S.O.  11A
\nand the licence is valid in law up to the currency of the  agreement  and  the
\nlicence  stands  automatically lapsed on the very next date if not renewed and
\nput back into force.  The company was paying the water charges  at  Rs.10  per
\n1000  metres  for the water drawn for cooling purposes in actual basis and the
\nadvance sum paid had not  relevancy  to  the  permitted  quantum  as  per  the
\nprovisions of  B.S.O.  11-A and the charges were paid at the flat rate for the
\nentire quantity drawn without adopting the increased proportion of 33 1\/3  per
\ncent over the normal rates for the quantity drawn in excess of 11,50,000 cubic
\nmetres.   Since  the  petitioner  company  and  others  have  not  renewed the
\nagreement, it was necessitated to bring out the specific  clauses  under  form
\nNo.4 in Appendix I (1) to B.S.O.  11 A.  The licensees were informed that they
\nshould  pay  for the maximum permitted quantity and that no portion of the sum
\nso paid was refundable due to the non-drawal for the quantity owing to  dearth
\nof supply  in  the  canal  or  for any other reasons as per clause 7 (c).  The
\nwater is drawn from Pugalur  channel  through  an  inlet  and  after  use  the
\nquantity  is let out through an outlet back to Pugalur channel and the quantum
\nso drawn and let out are measured by means of masonry gauge known as “V” north
\nand that the daily measurements are taken by the  gauge  readers  employed  by
\ntheir department  at  the  cost of the drawee company.  These ‘V’ notches will
\nwork under certain specified conditions and it is only a  temporary  mean  for
\nmeasuring water  till  permanent arrangements are made.  To the representation
\nof the petitioner and South Indian Sugar  Mills  Association,  the  Government
\nhave  replied their stand to the effect that, the consumers drawing water from
\nthe Government source should pay full  cost  of  water  as  permitted  by  the
\nGovernment  irrespective of actual drawal and rejected the request made by the
\nAssociation on behalf of the companies.  In the said letter it has been stated
\nby the Government that the licensees are quite  at  liberty  to  reduce  their
\nrequirement  to  the  realistic  limits  after obtaining Government permission
\nwhich may ensure equitable distribution of available supply of  water  to  all
\nthose who  need  it.  Hence the company is at liberty to get the maximum limit
\nof drawal sufficiently reduced to the extent of its requirement.  There is  no
\npromissory estoppel  as attributed by the petitioner.  The State has given two
\noptions in the light of the conditional clauses as per B.S.O.11-A.  Either the
\npetitioner may seek for getting the drawal reduced to the realistic limits  or
\npay  for  the maximum permitted quantity under clause 1(A) of the Condition in
\nForm No.4 of B.S.O.11-A.  There has been no agreement in force from 1-8-75  to
\ntill  date  of filing of the counter affidavit and therefore the petitioner is
\nestopped from any requests under the B.S.O.  11-A and relief prayed for as the
\nright of drawing water from the channel automatically ceased on  1-8-75.    Of
\nlate,  there had been dearth of flow in river Cauvery owing to various factors
\nand many more industries have either been set up or in the offing.   As  such,
\nfor  complying  with  the request of such industries, the cumulative effect of
\nthe quantum so far permitted has to be set apart for considering the grant  of
\npermission to draw water either for industrial purposes and for formulation of
\nschemes for  drinking  water  supply.  As stated earlier, the respondents have
\ntaken a similar stand in other  writ  petitions  by  filing  separate  counter
\naffidavit.\n<\/p>\n
8.  In the  light  of the above pleadings, I have heard Mr.  V.  Ravi, learned
\ncounsel, Mr.  M.  Venkatachalapathy,  learned  senior  counsel  and  Mr.    V.
\nNataraj, learned counsel  for  petitioners  and  Mr.    R.   Muthukumaraswami,
\nlearned Additional Advocate General for respondents-State Government.\n<\/p>\n
9.  The only point for consideration in these writ petitions  is  whether  the
\ninstructions communicated in the impugned letter dated 28-7-88 are sustainable
\nor not?\n<\/p>\n
10.   It is not disputed that Nava Bharat Ferro Alloys Limited Sugar Division,
\nDeccan Sugars Limited, subsequently amalgamated as E.I.D.  Parry  Limited  was
\ngranted  permission  to  draw water for cooling purposes from Pugalur channel,
\nwhich is a branch channel taking off from River Cauvery.    Likewise,  Cauvery
\nSugars  and  Chemicals were permitted to draw water from Uyyakondan channel, a
\nbranch of River Cauvery at Pettaivaytalai, Trichy District.  The  South  India
\nTextile Processors  Association, particularly S.S.M.  Processing Mills, J.K.K.
\nTextile Processing  Mills  and  Rajalakshmi  Textiles  Processing  Mills  were
\npermitted to  draw water from the river Cauvery.  It is also not disputed that
\nthe permission was granted subject to certain terms and conditions as provided
\nin Boards Standing Orders.  Clause 11-A of B.S.O.  speaks about  licences  for
\nthe  use of water from Government sources for domestic or industrial purposes.
\nIn other words, the  procedure  for  granting  permission  to  the  industrial
\nconcerns from  the Government sources is laid down in B.S.O 11-A.  As per para
\n5 in BSO 11-A the consumers should enter into an agreement as per Form No.4 in
\nAppendix I (1) to B.S.O 11-A with the Superintending Engineer of Public  Works
\nDepartment Circle  in  whose  jurisdiction  the  source  lies.  It is also not
\ndisputed that the agreement is subject to the  minor  modifications  depending
\nupon the cases of the licenses issued and is renewable by every ten years.\n<\/p>\n
11.   As  regards  the  present  controversy  and  the question raised, we are
\nconcerned with Clauses 1(a), 2A and 7 (c) of the  agreement  for  the  use  of
\nwater for industrial purposes.\n<\/p>\n
“APPENDIX I (1)
\nNo.4.\n<\/p>\n
(Standing Order no.  11-A, paragraph 5.)
\nForm of agreement for the use of water for industrial purposes.
\nXx xx xxx\n<\/p>\n
1.  xx x xx\n<\/p>\n
(a)  The  right  to take from the said canal at the point marked??????..on the
\nplan annexed hereto????.or at such other point as the Superintending Engineer,
\nPublic Works Department, for the time being of the ?????..circle  (hereinafter
\ncalled the “Superintending Engineer”) shall determine and to convey across the
\nlands of the Government (hereinafter called “the said land”) by means of pipes
\nand\/or  sluices  and\/or  channels and\/or by land such quantity of water as the
\nlicensee shall require (and shall be available) for the purposes of  the  said
\nfactory  and shall have paid for in advance not exceeding the maximum quantity
\nhereinafter mentioned or such  lesser  quantity  as  in  the  opinion  of  the
\nExecutive  Engineer,  Public  Works  Department,  for  the  time  being of the
\ndivision (hereinafter called “the  Executive  Engineer”)  cannot  be  exceeded
\nwithout  interfering  with irrigation or navigation or the ordinary use of the
\nsaid canal by the public.\n<\/p>\n
(b) xx xx\n<\/p>\n
(c) xx xx<\/p>\n
2-A.  The licensee shall and will yield and pay to the Government  in  advance
\nbefore the 10th day of April in each year the charge for water estimated to be
\nrequired  by  the  licensee  during  the  year ending on the 31st day of March
\nfollowing at the following rates:-”\n<\/p>\n
The amended portion of clause 2A is as follows:\n<\/p>\n
“The Government in G.O.Ms.No.  540 Rev.  dt.  4-4-91 has amended the clause 2A
\nof the agreement in Appendix 4 of R.S.O.   11-A  contained  in  Vol.I  of  the
\nR.S.O.   relating  to  the payment of water charges in advance for water drawn
\nfor industrial purposes.\n<\/p>\n
Amendment
\nIn the said R.S.O.  under the heading Appendices in Form No.4  in  Appendix  I
\n(1)  to  Para  5  of  the  Standing Order 11A in clause 2\/A for the expression
\nbeginning with “the licensee shall and will  yield”  and  ”  ending  with  the
\nfollowing rates” the following expression shall be substituted, namely:-\n<\/p>\n
“2A ..    The  licensee  shall and will yield and pay to Government in advance
\nbefore the 10th day of April in each year, the charge for water sanctioned  to
\nthe  licensee,  during  the  year ending on 31st day of March at the following
\nrates”\n<\/p>\n
7(c).  That the licensee shall not be entitled to the refund of any portion of
\nthe said annual sum paid in advance or to claim damages either on  the  ground
\nthat  the  licensee  has  not taken the maximum quantity of water hereinbefore
\nmentioned or on the ground that the licensee has not been able  to  take  such
\nmaximum  quantity owing to defiant water in the said canal consequent on early
\nor sudden closure of the said canal for repairs or otherwise.”\n<\/p>\n
It is not disputed that the petitioners were permitted to draw water from  the
\nGovernment  source referred above on execution of agreement in terms of Form 4
\nincorporating the conditions referred to above.  Learned  Additional  Advocate
\nGeneral  has placed the agreement duly executed by the Superintending Engineer
\nof the area concerned and  the  petitioners  containing  the  above  mentioned
\nclauses.  It is clear that the petitioners are bound by the various clauses in
\nthe agreement.    At  this  juncture, it is relevant to refer the instructions
\ncommunicated in letter dated 28-7-88 (which is impugned in these  proceedings)
\nfrom the  Executive  Engineer, P.W.D., R.C.  Division, Trichy-1 regarding levy
\nof royalty on water drawn by licensees.  The operative portion of  the  letter
\nis as follows:\n<\/p>\n
“In  the  letters  cited,  it has been instructed that the consumers licensees
\ndrawing water from a Govt.  source should pay the full cost of  water  charges
\nin advance  every  year  for  the quantum of water permitted by the Govt.  and
\nthat the licensee shall not be entitled to the refund of any  portion  of  the
\nsaid  annual sum paid in advance or to claim damages either on the ground that
\nthe licensee has not  taken  the  maximum  quantity  of  water  herein  before
\nmentioned  or  on  the ground that the licensee had not been able to make such
\nmaximum quantity owing to dearth of supply of water in the Govt.   sources  as
\nspecified in clause 7(a) in appendix of R.S.O.  11-A<\/p>\n
This  revised  instructions  are operative from the financial year 1987-88 and
\nadvance water charges for 1988-89.\n<\/p>\n
Hence pending incorporation of the above condition  in  the  agreement  as  an
\namendment you are requested to pay the balance amount for 1987-88 based on the
\nmaximum permitted  quantity  by  the  Govt.  less actuals already paid and the
\nadvance water charges for 1988-89 be paid to the maximum quantity  within  one
\nmonth  from  the date of receipt of this communication, failing which interest
\nwill be charged as per rules in force.\n<\/p>\n
Sd.N.  Natarajan
\nExecutive Engineer.”\n<\/p>\n
12.  It is argued on behalf of the petitioners that neither B.S.O.   11-A  nor
\nany  of  the  provisions  of  the  agreement  in  Form  4 confers power on the
\nGovernment to alter the very basis of levying royalty on water  drawn  by  the
\nlicensee.  The impugned revision of the royalty is arbitrary and unreasonable.
\nThey  also  contended  that  even  if  it  is accepted that the Government has
\nunlimited power to alter B.S.  O.  11A as well as the terms and conditions  of
\nthe  agreement prescribed in Form 4, this Court will not permit the Government
\nto exercise such power so as to introduce into the B.S.O.  and  the  agreement
\nthereunder “unconscionable  terms  and  conditions”.  They also contended that
\nthe scope and function of para 7 (c) is totally  unrelated  to  the  basis  on
\nwhich  royalty  is  to  be  levied;  the  basis can only be estimated quantity
\nsubject to adjustment with  reference  to  actual  drawal.    I  have  already
\nreferred  to  the fact that the learned Additional Advocate General has placed
\nthe agreement executed by the  petitioners  and  the  Superintending  Engineer
\nconcerned as  well  as the terms and conditions therein.  As rightly argued by
\nthe learned Additional Advocate General,  undoubtedly  the  petitioners  being
\nparties  to  the  agreement  are  bound by the terms and conditions prescribed
\ntherein.  It is true that the learned counsel appearing  for  the  petitioners
\ndemonstrated  before  me the facts and figures, namely, the actual quantity of
\nwater drawn from Government source and the estimated requirement as sanctioned
\nand approved by the Government.  It is the claim of the petitioners  that  the
\nGovernment is entitled to collect fee only to the extent of actual quantity of
\nwater  drawn  and  used  and  not  the  estimated\/permitted  quantity  by  the
\nGovernment.  The term “estimated requirement” in clause 2-A  would  in  effect
\nmean  the  quantity  of  water  estimated,  applied  for  and  ordered  by the
\nGovernment to draw water while granting licence to the  licensee.    Once  the
\nGovernment  accepts  their  estimated  requirement  and fixed the quantity the
\nlicensees are bound to pay fee for water permitted\/sanctioned to them  by  the
\nGovernment and not the actual water drawn by them.  In such a circumstance, in
\nterms  of  clause 7 (c) they are not entitled for the refund of any portion of
\nthe annual sum paid in advance on the ground that  they  have  not  taken  the
\nmaximum quantity of water for any other reason.  Even as per un-amended clause
\n2-A,  the term “estimated requirement” means the quantum estimated, applied by
\nthe licensee and ordered by the Government to draw water  that  much  quantity
\nwhile granting  licence, to the licensee.  In the amendment made in G.O.Ms.No.
\n540 Revenue dated 4-4-91, the amended clause  2-A  makes  it  clear  that  the
\nlicensees  are  liable  to pay to the Government in advance before 10th day of
\nApril in each year,  the  charge  for  water  sanctioned  to  them.    As  per
\nB.S.O.11-A and various clauses in Form 4, it is clear that the consumer should
\npay  full cost of water charges in advance every year for the quantum of water
\npermitted\/sanctioned by the Government, even if they draw less.   It  is  also
\nclear that they are not permitted to draw higher quantity than the prescribed.
\nAs  rightly  argued  by the learned Additional Advocate General, the licensees
\nare at liberty to reduce  their  requirement  to  the  realistic  limit  after
\nobtaining  Government  permission  which  may ensure equitable distribution of
\navailable supply of water to all those who need it.\n<\/p>\n
13.  Learned Additional Advocate General has also brought to my notice that in
\nso far as the petitioner in W.P.No.  15720 of 89 water is drawn  from  Pugalur
\nchannel  through  an  inlet  and  after use the quantity is let out through an
\noutlet back to Pugalur channel and the  quantum  so  drawn  and  let  out  are
\nmeasured  by  means  of  masonry  gauge  known as “V” notch and that the daily
\nmeasurements are taken by the gauge readers employed by the department at  the
\ncost of  the  drawee  company.    However,  it  is  stated both in the counter
\naffidavit as well as in the course of argument that  these  “V”  notches  will
\nwork  under  certain  specified conditions and it is only a temporary mean for
\nmeasuring water.  It is also explained before me that  the  “V”  notches  will
\ngive  correct reading up-to the marked level of flow and when water is allowed
\nsubmerging the total height of the “V”  notches,  the  readings  will  not  be
\ncorrect.   In  other  words, as these notches are constructed just at the very
\nbank of the channel, if the water is allowed above the level,  this  will  not
\ngive the  correct  quantum  of  drawal.    In  such a circumstance, as rightly
\ncontended on the side of the respondents, the  correct  or  actual  intake  or
\noutlet cannot  be  determined.  That is the reason why the licensees are asked
\nto estimate their required quantity and if the same is accepted and ordered by
\nthe Government,  they  are  permitted  to  draw  water  to  such  quantity  as
\nsanctioned  and they have to pay charges for the said quantity irrespective of
\nthe actual drawal.\n<\/p>\n
14.  The terms of the agreement  also  show  that  the  Government  has  every
\nliberty  to  revise  the rates periodically and the licensees are bound by the
\nrevised rates from the date of revision.  This is evident from clause  2-A  of
\nForm No.   4.   Clause 1 is about the licensees who have not been permitted to
\ndraw with certain limit of drawal.  Clause 2 deals with the cases of  licences
\nwhich has  no  such  limit depending upon annual requirement.  Clause 7 (c) of
\nthe form of agreement states that the licensee shall not entitle refund of any
\nportion of the annual sum paid in advance or to claim damages  either  on  the
\nground  that  the  licensee has not taken the maximum quantity of water as per
\nthe agreement or on the ground that the licensee has not  been  able  to  take
\nsuch  maximum quantity owing to deficient water in the canal or River Cauvery.
\nIt is further clear that in the case of the licensees who have  maximum  limit
\nof drawal has been prescribed, the licensee apply for the maximum drawal based
\non the daily requirement and in the case of licensees to whom no maximum limit
\nhas been prescribed they estimate their annual drawal to the realistic limits.
\nThus,  the  clause  1  (a),  2A  and  7(c)  are  interdependent in nature with
\nreference to the licence accorded under B.S.O.  11-A and have to be applied as
\naccording to the warrantees of individual cases.  It is also  clear  that  the
\nconsumer  drawing water from the Government source should pay the full cost of
\nwater in advance  each  year  for  the  quantum  of  water  permitted  by  the
\nGovernment.   I  have  already  referred to the representation of South Indian
\nSugar Mills Association and the reply by the  Government  informing  that  the
\nconsumers  drawing  water  from  the Government source should pay full cost of
\nwater as permitted by the Government irrespective of actual drawal.    In  the
\nsame reply, the Government have clarified that the licensees are at liberty to
\nreduce  their  requirement  to the realistic limits after obtaining permission
\nfrom the Government.  In this way, the licensees can get the quantity  reduced
\nto the  extent  of their requirements which will not be a burden for them.  As
\nrightly argued, the petitioners companies  can  opt  to  pay  either  for  the
\nmaximum  permitted  quantity  or  to  reduce  the  drawal  limit to the extent
\nnecessary depending on their financial resources.  There  is  no  material  to
\nshow  that  the companies have ever approached the Government for reducing the
\nmaximum drawal to the realistic limit.\n<\/p>\n
15.  It is not disputed that it is the responsibility  of  the  Government  to
\nconsider the request of various others including supply of water to irrigation
\nand for  drinking  purpose.  As rightly argued, in the yester years industries
\nset up near River Cauvery or its subsidiary channels were very limited and the
\nquantum required for these industries have been complied with generously.   Of
\nlate,  there had been dearth of flow in river Cauvery owing to various factors
\nand many more industries have either been set up or in the offing.   As  such,
\nit  is the responsibility of the Government not only to safeguard the interest
\nof the industries, but also execute various schemes for drinking water supply.
\nIn the counter affidavit filed by the Joint Secretary  to  Government,  Public
\nWorks  Department,  it  is  pointed  out  that  it  has been the policy of the
\nGovernment to give priority to water supply schemes to each and every  village
\nand  therefore  various  schemes  are  under formulation to provide this basic
\ninfrastructure with the limited water available, owing to the exploitation  of
\nboth  surface and ground water potentials to the optimum, the need of the hour
\nis to conserve the available water in which every one has a share.\n<\/p>\n
16.  Coming to the request of E.I.D.    Parry  India  Limited,  petitioner  in
\nW.P.No.   18540  of  94,  as rightly argued by the learned Additional Advocate
\nGeneral, after amalgamation by an order of  the  Company  Court  in  C.P.45\/81
\nwhich  inter alia envisaged the agreement industrial and other licences of the
\nerstwhile company (Deccan Sugar and Abkari Company Limited) to be vest in with
\nMessrs Nava Bharat Ferro Alloys Limited without any further act, deed or order
\nin accordance with Section 894 (2) of Companies Act, 1956.  It is further seen
\nthat the Deccan Abkari Sugars  Company  limited  drawing  water  from  Pugalur
\nchannel  which was in existence till 10-12-80 was amalgamated with Messrs Nava
\nBharat Ferro Alloys Limited with yet another name “Deccan Sugars”.  The  sugar
\nfactory has  been taken over by M\/s E.I.D.  Parry ( India) Limited with effect
\nfrom 13-11-92 from M\/s Nava Bharat Ferro Alloys  Limited.    Inasmuch  as  the
\npetitioner  company inherited the entire assets and liability of the erstwhile
\ncompany without clearance of backlog of arrears of water charges,  undoubtedly
\ntheir application dated 11-6-93 cannot be considered by the respondents.  When
\nthe present  company  namely  E.I.D.    Parry India Limited is very particular
\nabout the renewal of licence, they  have  to  honour  the  commitment  of  its
\nerstwhile company  and discharge its liabilities.  In the light of the various
\nclauses in the transfer deed dated 30-10-92  between  M\/s  Nava  Bharat  Ferro
\nAlloys and M\/s E.I.D.  Parry (India) Limited, the petitioner company cannot be
\npermitted to use the licence without clearing the dues to the Government.\n<\/p>\n
17.   In  the  light of what is stated above, I do not find any merit in these
\nWrit Petitions; accordingly they are dismissed.  No costs.  Consequently,  the
\ninterim injunction granted in W.M.P.Nos.  22994\/89, 23107\/89, and 28149\/94 are
\nvacated.  W.M.P.Nos.  23161\/89 and 20498\/90 are closed.
\nIndex:- Yes
\nInternet:- Yes
\nR.B.\n<\/p>\n
To:-\n<\/p>\n
1.  The Secretary to Government,
\nPublic Works Department,
\nFort St.  George,
\nMadras-600 009.\n<\/p>\n
2.  The Superintending Engineer,
\nPublic Works Department,
\nRC Division, Thanjavur.\n<\/p>\n
3.  The Superintending Engineer,
\nPublic Works Department,
\nMettur, Salem District.\n<\/p>\n
4.  The Executive Engineer,
\nPublic Works Department,
\nMettur Division, Mettur Dam,
\nSalem District.\n<\/p>\n
5.  The Executive Engineer, P.W.D.,
\nR.C.  Division, Trichy-1.\n<\/p>\n
P.  SATHASIVAM, J.\n<\/p>\n
Common Order in
\nW.P.Nos.15720,15794,15834
\nof 89, 14189 of 93 and
\n18540 of 94
\nand
\nWMP Nos.  22994, 23107,
\n23161\/89,20498\/90 and
\n28149\/94.\n<\/p>\n
Dt:  09-08-2002<\/p>\n","protected":false},"excerpt":{"rendered":"
Madras High Court Nava Bharat Ferro Alloys Limited: vs The Secretary To Government on 9 August, 2002 IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 09\/08\/2002 Coram The Hon’ble Mr. Justice P. SATHASIVAM Writ Petition No. 15720 of 1994 and Writ Petition No. 15794 of 1994 and W.P.Nos. 15834 of 1989, 14189 of 1993 […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[8,13],"tags":[],"class_list":["post-158335","post","type-post","status-publish","format-standard","hentry","category-high-court","category-madras-high-court"],"yoast_head":"\nNava Bharat Ferro Alloys Limited: vs The Secretary To Government on 9 August, 2002 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/nava-bharat-ferro-alloys-limited-vs-the-secretary-to-government-on-9-august-2002\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Nava Bharat Ferro Alloys Limited: vs The Secretary To Government on 9 August, 2002 - 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