w w w . L a w y e r S e r v i c e s . i n

Rattan India Power Limited v/s The State of Maharashtra through the Chief Secretary & Others

    Writ Petition No. 4968 of 2015

    Decided On, 05 May 2016

    At, In the High Court of Bombay at Nagpur


    For the Appellant: M.G. Bhangde, Senior Advocate with S.D. Dewani, Advocate. For the Respondents: R1 to R3 & R7, Rohit Deo, Associate General with Bharti H. Dangre, GP, R4 to R6, S.G. Jagtap, S.S. Godbole, Advocates.

Judgment Text

B.P. Dharmadhikari, J.

1. By this writ petition filed under Article 226 of the Constitution of India, the petitioner seeks a writ in the nature of certiorari and after setting aside adverse orders, a direction to the respondents to apply Irrigation Potential Restoration Charges (hereinafter referred to as IRC), as per Government Resolution dated 21.02.2004 with respect to the water allocated to the petitioner, based on deficit in water for irrigation as per the latest report. The prayers have been amended and a prayer to restrain the respondents from recovering interest as per demand letters dated 17.01.2013 and 04.02.2013 has been added. Hiwever, 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 introduced a policy viz., “Mega Power Policy” to promote private investment in power generation sector. As per that policy and guidelines thereunder, the petitioner offered to make investment and set up Thermal Power Project (T.P.C.). According to the petitioner, it agreed to invest about Rs.15,000/- crores in setting up of a 2700 MW Thermal Power Project at Amravati and Respondent No. 1 – State gave necessary permission. Circular dated 21.02.2004 issued by the State regulate allocation of water for non-irrigational purposes. The petitioner sought water allocation in December 2007 and High Power Committee accepted it in its meeting dated 13.05.2007. Water agreement was then executed on 22.09.2008.

4. Respondent No. 5 – Executive Engineer submitted a report on 11.01.2008 and quantified expenditure on IRC at Rs.50,000/- per Hectare for notional area of 23218 Hectares, totaling to Rs.116 crores. As per decision dated 21.02.2008, the petitioner was required to pay its share towards capital contribution and IRC at prevailing charges. The prevailing IRC charges at that time was Rs.50,000/- per Hectare. Accordingly, on 16.08.2008, Respondent No. 4 – Chief Engineer of Water Resources Department conveyed the decision of allocation of 87.60 MM3 water to the petitioner. However, Respondent No. 5 – Executive Engineer demanded IRC at the rate of Rs. One lakh per Hectare for 23218 Hectare. The total demand was of Rs.549.98 crores out of which 232.18 crores represented IRC while balance Rs.317.80 crores were demanded towards capital contribution. The petitioners also claim that Respondent No. 6 – Executive Director had on 17.01.2012 sent a letter to Respondent No. 3 – Secretary of Command Area Development Authority, pointing out that IRC should have been demanded @ Rs.50,000/- per Hectare only.

5. The petitioner thereafter addressed various representations and Respondent No. 1 – State and Respondent No. 2 – Secretary of Water Resources department passed a resolution on 06.03.2009 fixing maximum rate of IRC at Rs. One lakh per Hectare prospectively from 01.04.2009. The petitioner sent a letter to the Minister for Water Resources Department on 25.01.2011 and pointed out discriminatory and exorbitant demand. The petitioner then sent another representation on 01.06.2011 and then a detailed representation dated 30.06.2011 to the said Minister.

6. Respondent No. 5 on 23.04.2012 informed 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.23,21,90,000/- towards first installment of IRC. The petitioners were given draft of agreement on 23.05.2012. The petitioner was forced to execute that agreement in the form as supplied. The agreement has been entered into for non-irrigation water supply with effect from 22.05.2012 and as stipulated therein, the amount paid by the petitioner towards IRC was made subject to decision of the government on representation of the petitioner.

7. The next installment of Rs.60.13 crores towards IRC computed @ Rs. One lakh per Hectare was due on 21.11.2012 and the representation of the petitioner was not decided, hence the petitioner approached this Court at Bombay in Writ Petition No. 2714 of 2012. On 22.11.2012, this Court directed the State Government to decide the petitioner's representation within eight weeks. The petitioner vide letter dated 18.12.2012 informed Respondent Nos. 3 & 5 about amounts deposited and grant of personal hearing. Separate communication was sent to Respondent No. 5 disputing the bill raised towards water charges pointing out that water charges could be levied only two years after company started drawing water and also disputing its right to levy interest. On 27.12.2012, Respondent No. 5 – informed that Respondent No. 4 was seized of the matter and refuted petitioner's charges that no water charges or interest was payable. The petitioner's claim that on 03.01.2013 it clarified that payments made towards IRC were without prejudice to the petitioner's rights and submissions under law and the representations filed by it. It further stated that interest could be determined once the representations were conclusively decided. On 21.01.2013, the petitioner informed Respondent No. 3 about pending representation. This was repeated on 28.01.2013.

8. The Water Resources Department vide letter dated 29.01.2013, summarily disposed of the petitioner's objections. This disposal has been questioned in present writ petition.

9. We have heard Shri M.G. Bhangde, learned Senior Advocate with Shri S.D. Dewani, learned counsel for the petitioner, Shri Rohit Deo, Associate General with Mrs. Bharti H. Dangre, learned Government Pleader for respondent Nos. 1 to 3 & 7 and Shri S.G. Jagtap with S.S. Godbole, learned counsel for respondent Nos. 4 to 6.

10. After narrating the facts, Shri Bhangde, learned Senior Advocate has submitted that the dispute 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 modification therein cannot be made applicable to such allocation. He has invited attention to the fact that on 16.08.2008 sanction is granted for permanent water allocation of 87.60 MCM from completed Uppar Wardha Project and it was to be operational only after agreement is made. The water charge

Please Login To View The Full Judgment!

at the rate as decided by the State Government from time to time are to be paid. The said document, however, demands Rs.232.18 crores towards IRC and this calculation is @ Rs. One lakh per Hectare. For 232.18 Hectares. He states that as per clause 13, though action was to be taken within three years, said period was extended up to 31.05.2012. He has invited attention to demand letter dated 26.09.2008 whereby the amount of Rs.549.98 crores has been demanded and it includes IRC of Rs. 232.18 crores. He has then taken us through various representations made by the petitioner from time to time. The representation dated 25.01.2011 makes reference to IRC rates applied to other similar units. It points out treatment extended to those units & complains of discrimination. Instances are of total waiver for NTPC, rate of Rs. 50,000/- per hectare to units like Adani Power Maharashtra, Adani GR Power and Reliance Energy Limited. He submits that State Government does not have any uniform policy and IRC has been calculated by using varying norms. Norm of 64 Hectare per cubic meter is applied in case of Tata Power, while norm of 265 Hectare per cubic meter is used in case of IPL. Therefore, the actual rate varies from NIL to 265 crores which is the highest one. In that representation, it has been pointed out that in case of the petitioner, the Chief Engineer, Water Resources Department, on 11.01.2008, has pointed out IRC of Rs.116.09 crores only as per rate prevailing on the date of water allocation.13. Our attention has also been drawn to agreement entered into between the petitioner and the respondents on 22.05.2012 to show that the petitioner – company agreed to pay Rs.232.18 crores as IRC in five installments over a period of two years with applicable interest but it was subject to decision on representation of company dated 25.01.2011. That decision was to be binding on parties. Petitioners contend that the company was already permitted to draw water for the specified purposes and thus agreement does not reserve or allocate water for the first time for it. It only facilitate use of water 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.4. 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 IRC was calculated @ Rs.50,000/- per Hectare. The case of the petitioner stands on same footing. Para 7 is also pressed into service to show how favourable treatment has been extended to Reliance Energy, Shahapur, Ispat Power Project, Pen and Tata Power, Pen. He submits that rate of Rs. One lakh per Hectare is introduced on 06.03.2009 with effect from 01.04.2009 and as it has not been made applicable in case of Aparna, the same should not have been applied to the petitioner also.16. Water Policy providing for non irrigational user of water formulated on 21.01.2003 has been relied upon by him to submit that the petitioner has been given water allocation in terms of said policy. Rate of Rs.50,000/- per Hectare stipulated in clause 13 thereof is heavily relied upon by him. The Circular issued on 21.02.2004 about payment of contribution towards capital cost and about irrigation restoration charges is also pressed into service to show that in present facts, there is no question of exceeding rate of Rs.50,000/- per Hectare. He adds that the rate prevailing, when the water is reserved for the petitioner, is decisive and date of entering agreement has got no bearing. Hence, the later revisionor enhancement on 06.03.2009 with effect from 01.04.2009 cannot be applied retrospectively.17. Our attention is invited to communication dated 11.01.2008 by which the proposal of the petitioner was submitted for scrutiny to the State Government where rate of Rs.50,000/- per Hectare has been applied to 23218 Hectare of land. It is contended that in present matter, the reservation was vide memorandum dated 16.08.2008 and even at that time prevailing rate was Rs.50,000/- per Hectare. Hence, stipulation in clause 12 thereof about amount of Rs.232.18 crores as IRC is bad. This error was pointed out on 17.08.2008 but it was not corrected. Had mistake been corrected, the petitioner could have paid the amount or had there been refusal, the petitioner could have come to this Court. The learned Senior Advocate submits that delay in taking decision is an error on the part of the State Government and it cannot be allowed to take advantage of its own wrong.18. Our attention is drawn to an affidavit tendered at Bombay in Writ Petition No. 1487 of 2013 to urge that effort made therein to explain different treatment extended to NTPC is unsustainable. He points out that as NTPC was allotted land otherwise 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 Bhangde, learned Senior Advocate submits that clause 3(iii)(c) of this policy is assurance of water and relying upon this policy and circular dated 21.02.2004, the petitioner made huge investment. Our attention is invited to grounds (hh)(ii) in memo of writ petition to substantiate the same.21. Coming back to the impugned order, in this background, Shri Bhangde, learned Senior Advocate submits that it shows total non application of mind and the relevant material has been overlooked. He adds that case of Aparna looked into is identical to the case of the petitioner. Reference to clause 27 of the Agreement dated 22.05.2012 is irrelevant as it does not enable them to apply circular dated 06.03.2009. He submits that legal relationship does not start from 22.05.2012 but it has started when water allocation was done. He points out that express stand of VIDC in this respect has been ignored.22. Pointing out the judgment delivered by this Court at Bombay in Writ Petition No. 757 of 2011 on 1st & 2nd March 2013, the learned counsel states that there, after considering the rival contentions, the Division Bench has looked into State Water Policy and then in para 27 notices that 202.203 MCM of water is sufficient for irrigating 75000 Hectare of land. He contends that in the light of this observation, when water being supplied is only 87 MCM, there is no reduction in irrigation potential at all. Our attention is also drawn to an affidavit filed by the Executive Director, VIDC in Writ Petition No. 1038 of 2010 which was decided along with a Public Interest Litigation to urge that as disclosed in para 8 thereof by VIDC, the Power Project of the present petitioner does not in any manner hamper the irrigation potential of the region. He, therefore, submits that no IRC can be recovered from the petitioner.23. Using same equation (proportion), he points out that at the most water lost is 17.60 MCM which could have catered 4600 Hectare. Hence, IRC @ Rs.50,000/- per Hectare could have been calculated only for 4600 Hectare of land. Our attention is drawn to a report on Water Planning of Uppar Wardha Project to submit that as mentioned therein, after simulation study, with added requirement of 87.60 MCM water for the petitioner, the total water available for the irrigation purposes is 182.7 MCM. He, therefore, states that the shortfall is at the most of 17.60 MCM as is apparent from 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 8.11.2013.27. 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 which the agreement is reached and supply of water without agreement has been specified to be a grave misconduct. He also adds that the petitioner does not seek quashing of agreement dated 22.05.2012. He invites our attention to Government Resolution dated 21.01.2003 to show how clause 13 again reiterates that water for non irrigational purposes should not be supplied without agreement. A High Power Committee has been constituted for said purposes and, in this situation, only reservation of water in favour of the petitioner cannot, therefore, result in fixing a date for rate determination. A communication dated 16.08.2008 sent by the Assistant Chief Engineer containing terms and conditions is heavily relied upon by learned AAG to show that water reservation takes place only after agreement is entered into. He points out that rate of capital expenditure and IRC is mentioned in it and three years of time limit is also prescribed. He further states that the petitioner exercised option in relation to not paying capital contribution and agreed to pay water royalty at a higher rate on 25.02.2011. The petitioner never raised any objection from August 2008 till 17.10.2008 and thereafter till 21.05.2011. Shri Deo, learned counsel adds that objection is only about rate and not about area of land in relation to which the calculation needs to be made. He invites our attention to representation dated 01.06.2011 sent by the petitioners where they sought additional time of one year for executing agreement & during said period time, government should take decision on the proposal. The proposal was to set aside demand of Rs.232.18 crores. On 08.06.2011, Government extended that time. On 10.05.2012, the petitioner agreed to a conditional agreement and to pay an amount of Rs.232.18 crores in five installments subject to decision on its representation. On 18.05.2012, the petitioner gave two Demand Drafts and then on 25.05.2012, agreement under Article 299 of Constitution of India has been entered. He contends that, therefore, it is not a statutory contract.28. Separate undertaking given by the petitioner on the very same day is also relied upon by him with submission that second installment was due on 21.11.2012 with interest and at that juncture, the petitioner filed writ petition at Bombay on 27.04.2012 which came to be decided on 22.11.2012. He submits that this court was reluctant 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 said 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 has later increased and with that increase, because of improvements in infrastructure, 87.60 MCM water reserved for the petitioner is enough cater to more than 23218 Hectare of land. He, therefore, states that actual demand on account of IRC has to be much more than Rs. 232.18 Crs. He, however, adds that as all these are technical facets, this Court should not intervene in writ jurisdiction.30. On unequal treatment extended to the petitioner, he has taken us through the very same reply affidavit to point out how comparison done is either defective or legally unsustainable. According to him, there is a distinguishing feature in case of NTPC because NTPC project itself affects the area of 560.68 Hectare and cause actual loss in irrigation potential of 820.56 Hectare. He further submits that NTPC paid amount to Water Resources Department in March 2012 @ Rs. One lakh per Hectare. He further adds that while allocating water for non-irrigation purpose to NTPC, High Power Committee agreed to waive Rs.95 crore as it is Central Government Undertaking. He has submitted that insofar as project Aparna Infra Energy, Chandrapur, is concerned, Chandrapur is not a Water deficit area and proposal was submitted to levy IRC at Rs.50,000/- per Hectare in the light of Government Circular dated 21.02.2004. The High Power Committee in its meeting dated 02.07.2008 decided to obtain restoration charges of Rs.309 lakh. The reservation in favour of Aparna Infra Energy is of 6 MCM from Nandreservoir. The allocation of reservation for the petitioner is much more ie 87.60 MCM, that too in water deficit area. The other technical details are also pressed into service by him to urge that the project of the petitioner cannot be compared with the project of Aparna. The prevailing rate of IRC at Rs.50,000/- per Hectare has been offered to M/s. Ideal Energy Private Limited when agreement was entered into on 22.09.2008. The projects of Reliance Energy, Shahpur; Ispat Power Project, Pen and Tata Power, Pen (all in Raigarh district) were required to be cancelled as non-irrigation agreement was not executed within the prescribed time. He has relied heavily upon facts disclosed in paras 16 and 17 of said affidavit to point out the impact of reservation of water in favour of the petitioner. Various technical details are given in para 17 to urge that the petitioner is not entitled to any reduction in IRC charges.31. In this background, the learned counsel submits that reliance upon internal communication dated 17.01.2012 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, reported at (2003) 10 SCC 261, is relied upon by him to submit that rewriting of contract in writ jurisdiction is not permissible. The judgment in the case of Rajasthan State Industrial Development vs. Diamond & Gem Development Corporation Ltd., reported at (2013) 5 SCC 470, is relied upon to contend that the petitioner cannot be permitted to approbate and reprobate and contract between the parties cannot be rewritten. The judgment in the case of Shyam Telelink Ltd. Now Sistema Shyam Teleservices Ltd. vs. Union of India, reported at (2010) 10 SCC 165, is the judgment relied upon by him again on approbation and reprobation. On enforcement of non statutory contract in writ jurisdiction, he draws support from the judgment in the case of State of U.P. & Ors. vs. Bridge & Roof Company (India) Ltd., reported at (1996) 6 SCC 22 and in the case of M/s. Radhakrishna Agarwal & Ors. vs. State of Bihar & Ors., reported at (1997) 3 SCC 457.34. The judgment in the case of M/s. Mahabir Jute Mills Ltd., Gorakhpore vs. Shri Shibban Lal Saxena & Ors., reported at (1975) 2 SCC 818, is pressed into service to urge that while considering the representation of present nature, it is not necessary to record the reasons. The adjudication of petitioner's representation does not give any fresh cause of action as representation is not statutory in nature. To buttress this submission, he relies upon the judgment in the case of Union of India & Ors. vs. M.K. Sarkar, reported at (2010) 2 SCC 59. The judgment in the case of Union of India & Ors. vs. E.G. Nambudiri, reported at (1991) 3 SCC 38, is relied upon by him to urge that in such matters, the petitioner cannot insist for reasons.35. Shri Deo, learned Associate Advocate General, submits that, at worst, only one instance to support alleged unequal treatment has been pointed out by the petitioner. He relies upon the judgment in the case of Gurucharan Singh vs. New Delhi Municipal Committee, reported at AIR 1996 SC 1175; Chandigarh Administration vs. Jagjit Singh, reported at AIR 1995 SC 705; Shanti Sports vs. Union of India, (2009) 15 SCC 705 and in the case of Jayant Vegoils and Chemicals vs. The City and Industrial Development Corporation, reported at (1997) 2 BCR 600, to submit that any irregularity or illegality cannot be perpetuated by taking recourse to Article 14 of the Constitution of India.36. He further submits that on IRC, 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, old rate has been applied. Analogy and rate in the case of Aparna ought to have been applied even in the case of the petitioner. He further adds that rate applied even in the case of Ideal Energy Limited ought to have been extended to the case of the petitioner. The cancellation of permission to other projects is a subsequent event which has got no relevance on a challenge raised by the petitioner. He relies upon a communication dated 17.01.2012 to urge that it has to clinch the issue.38. On nature of contract and need of filing a Civil Suit, he invites attention to the provisions of Section 58(6) of the Maharashtra Irrigation Act, 1976, (XXXVIII of 1976) and submits that water is made available to the petitioner under that provision. The water policy has been elevated to a status of statue by 2011 Amendment i.e. Section 31B of the Maharashtra Water Resources Regulatory Authority Act, 2005. The water policy of State Government and grant of water to the petitioner is deemed to be under Section 31B. He further points out that dispute about IRC is at threshold of contract i.e. before entering into contract and not a subject matter or aspect of contract, hence, different principles apply. He draws support from the judgment in the case of Radhakrishna Agarwal v. State of Bihar, reported at (1977) 3 SCC 457, (para 10) for said purpose. He adds that imposition of a condition contrary to Water Policy while entering into contract itself is bad. While explaining absence of pleading on “area” dispute, he points out that the representation has not been looked into and, therefore, it was not necessary to raise any plea in that respect. He further states that in representation dated 21.01.2013, after High Court judgment, this point has been raised and it has been replied to by the respondents in their reply before this Court vide paras 12, 13 and 14. He also submits that no prejudice is caused to the petitioner in absence of such a plea because extent of area affected is a matter of record and all material relevant thereto is undisputed. He also relies upon the Division Bench judgment at Bombay between the parties which mandated adjudication of representation to show that that Division Bench expected decision on area dispute also.39. Taking us through said judgment, he points out that it cannot operate as res judicata or constructive res judicata because at that time 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 or approbate or reprobate are not attracted here as the petitioner does not assail the agreement and IRC rate is expressly agrred to be contingent upon the decision on its representation by the parties thereto.41. In respect of rate of IRC and relevant date, he invites attention to clause (B) of Government Circular dated 21.02.2004. He contends that stipulation of rate in the letter dated 16.08.2008 by the Assistant Chief Engineer (2), Water Resources Department, Amravati, is contrary to this clause and demand could not have been raised on its basis. He invites attention to agreement dated 22.05.2012 to urge that reservation of water was already done and agreement only stipulates conditions subject to which right to it is to be exercised. He further states that vide its page 6, the agreement specifically refers to Maharashtra Irrigation Act, 1976.42. He relies upon the judgment in the case of State of Orissa v. Bhagyadhar Dash, reported at (2011) 7 SCC 406, to urge that in such facts and circumstances, Article 226 of the Constitution of India, is always open.43. The affidavit in reply particularly para 16 is relied upon to show the impact of payment made by the petitioner. He contends that when project was over in 2005 itself, subsequent developments or improvements made in services thereafter cannot have any bearing in the matter. He argues that the respondents have travelled outside the report of experts and water policy. He further submits that the effort of the respondents is to change the norm for calculating IRC.44. The judgment in the case of State of Karnataka vs. All India Manufacturers Organisation, reported at (2006) 4 SCC 683, para 60 is relied upon by him to urge that State has to act reasonably in contractual matters. The judgment in the case of Reliance Energy Ltd. vs. Maharashtra State Road Development Corporation Ltd., reported at (2007) 8 SCC 1, is relied upon by him to para 36 along with judgment in the case of Meerut Development Authority vs. Association of Management Studies, reported at (2009) 6 SCC 171, paras 35 to 39, to buttress the said contention. To explain what constitute promissory estoppel, he draws support from the observation of the Hon'ble Apex Court in para 10 of its judgment in the case of Devi Multiplex & Anr. vs. State of Gujarat & Ors., reported at (2015) 9 SCC 132.45. The judgment in the case of South India 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. Material on record shows that (on 06.03.2009) with reference to Government resolution dated 21.01.2003, Government Circular dated 21.02.2004 and Government resolution dated 26.02.2004; the Government circular dated 06.03.2009 has been issued. However, it is mentioned as a government resolution issued by the order and in the name of Governor of Maharashtra. It further stipulates that in the government circulars indicated in its reference part, in order to compensate for irrigation loss on account of water reservation for non irrigation use, the IRC be levied in future (henceforth) at Rs. One lakh per Hectare. It expressly stipulates that new rate becomes effective from 01.04.2009.48. To understand what is irrigation restoration charge, it is essential to look into the Government Resolution dated 21.01.2003. In clause No.1, it gives preference number to be accorded to demands for water, dependency upon its user. Domestic user, has been placed at Sr.No. 1, Industrial user has been placed at Sr.No. 2, while irrigation has been placed at Sr.No. 3. This government resolution at its page No. 19, vide clause No. 13 mentions that the expenditure to restore the land irrigation capacity should be computed at Rs. 50,000/- per Hectare. Vide Clause 10, it takes into consideration total irrigation potential or capacity of the project, loss in that capacity because of diversion of water for non irrigational purposes and accordingly computation in clause 13 is required to be worked out to compensate for that loss. A circular no. BWS-1003 dated 21.02.2004 has been issued thereafter, by order and in the name of Governor of Maharashtra. Reason for its issuance is confusion over recovery of capital contribution and irrigation restoration charges at regional level which was causing delays in executing the agreements with non-irrigation water user bodies. Clause A therein deals with contribution towards capital costs and enables the user body like the petitioner to pay water levy at a higher rate, instead of said contribution. Present petitioner has opted for this higher rate. Clause B is relevant here. It is on the subject of irrigation restoration charge. It reads as under:“B). About Irrigation Restoration Charges:As per prevailing directives, cost @ Rs. 50,000/- per Hectare is calculated towards loss in irrigation capacity due to water reservation for non-irrigation purpose. Following directives are being issued in this regard1) 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 non-irrigation 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 non-irrigation use. This cost will be less than the stipulated area of Rs. 50,000/- per hectare.”(Emphasis added by Court)Clause C thereafter is about requirement of agreement to be made with such bodies. It warns that supply of water without agreement would be viewed as grave misconduct.49. Scheme of Clause B supra shows that when such a demand for non-irrigational purpose is made, and it is likely to result in loss of irrigation, further construction work of distribution channels etc. Of that irrigation project needs to be immediately stopped. Costs already incurred are to be recovered from the body for whom water is to be reserved for non-irrigational use. In that case, State Government has stated that such costs would be less then the stipulated rate of Rs. 50,000/- per hectare. Thus, sub-clause [3] above of Clause B shows that actual expenditure incurred till then for facilitating use of quantity of water reserved for petitioner is to be recovered from it. It also states that further expenditure for facilitating the distribution of said quantity of water for irrigation purposes ought not be incurred. Sub-clause [2] also requires that in such an eventuality, construction of distribution network should be curtailed and for that purpose, proportionate reduction in area of land to be irrigated as water is diverted for non-irrigational purposes is to be borne in mind. Thus, because of proportionate reduction in command area of project, the State Government has directed that the construction of project or distribution network rendered redundant due to water allocation should be discontinued/stopped. It has further added that in that case there would not be any issue of recovery of irrigation restoration charge, as there would not be any further expenditure. This therefore shows that IRC may not be due and payable in all cases where the water is allocated for non-irrigational purposes at the beginning of construction work of an irrigation project. Proportionate water quantity already allocated for non-irrigational purpose is deleted from consideration for the purpose of completion of such project and expenditure to utilize it for irrigation is avoided. Hence, in that event, as no expenditure is incurred for providing that water for irrigation purposes, the IRC is not payable by bodies like petitioner. Even in sub-clause [1] when work of canal or network for distribution of such reserved quantity of water is complete, its actual costs as required to be recovered from the body like petitioner. 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 date on which water is allocated or reserved. The government resolutions and circulars prohibit further expenditure in any irrigation project, on or for this reserved/ allocated quantity of water. It is this amount actually spent till date of reservation of said water which is recoverable from any industry as IRC. Hence, considering this scheme, it appears that date on which the allocation is made or water is reserved for petitioner is significant and relevant. The date of agreement between Petitioner & the Respondent has got no bearing on this issue. The petitioner sought water allocation in December 2007 and High Power Committee accepted it in its meeting dated 13.05.2007. Water agreement was then executed on 22.09.2008. It granted time of three years to Petitioner to enter into an elaborate agreement & that time was extended by one more year. Ultimately, within the tipulated time i.e. on 22.05.2012, the later agreement has been entered into. Later agreement is essentially due to watrer reservation or allocation on 22.09.2008. Later agreement dated 22.05.2012 does not reserve or allocate water but specifies how that water is to be used.51. Mega Power Policy of Maharashtra State for investment in power generation sector for capacity addition of 500 MW and above, issued on 28.03.2005 shows a decision to promote the investment in power generation sector by giving adequate support and single window clearance. State Government has assured the availability of water for such project. Certain other exemptions or incentives have been granted while extending initial support. We need not delve into the nicites thereof, but, it is in consonance with the circular dated 21.02.2004 supra.52. Agreement entered into between the parties on 22.05.2012, needs to be perused in this background. In this agreement, petitioner – Company has instead of capital expenditure, agreed to pay for water supplied at a higher rate as per government resolution dated 21.02.2004. According to it, petitioner company has to pay IRC (irrigation restoration charge) calculated at Rs. 1,00,000/- her hectare, and accordingly total Rs. 232.18 crores is to be paid in 5 installments over a period of two years with applicable interest, for which it has to give Bank Guarantee equivalent to 10% i.e. of Rs. 23.218 crores. It has been also agreed between them that decision on representation of petitioner company 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, lmade 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 11.01.2008, only an amount of Rs. 147.84 Crores was proposed to be recovered & out of it, sum of Rs. 116.09 Crores was towards restoration of irrigation potential, while Rs. 31.75 Crores was towards capital investment. This demand is obviously as per the government circular dated 21.02.2004 at Rs. 50,000/- per Hectare . Along with this representation, the petitioner also supplied a chart showing projects where water allocation was approved by HPC (High Power Committee), with details thereof. Again we need not delve into details thereof. This representation does not dispute the area of land to be considered to be 23,218 hectares, but, requests for applying rate of Rs.50,000/- per hectare in relation thereto so that total demand towards IRC works out to Rs. 116.09 Crores. The respondents demand Rs. One lakh per hectares and hence, total amount of Rs. 232.18 Crores. It is therefore, obvious that in this representation, which is prior to the agreement, there is no dispute about the extent of area with respect to which IRC needs to be worked out. It is this representation, subject to which an agreement has been entered into between the parties, and subject to which an undertaking has been furnished by the petitioner and accepted by the respondents. In view of this position, the arguments of Shri M.G. Bhangde, learned Senior Counsel that area with relation to which IRC needs to be computed need not be and cannot be gone into. He has advanced three different arguments and Shri R. Deo, learned Associate Advocate General has in reply pointed out that because of later improvements and modifications, extent of area deprived of irrigation is much more. In the light of our findings on water allocation policy and resolution dated 21.02.2004, changes in project potential after reservation of water in favour of any body like petitioner cannot result in adding to the burden of petitioner. State Government does not permit any expenditure to be incurred to facilitate distribution of that quantity of water which is reserved for petitioner, and therefore, is no more available for irrigation purpose. This is also in consonance with the decision of the State Government to promote such power generation in State of Maharashtra. Orders of this Court in Writ Petition No. 2174/2012, passed at Bombay on 22.11.2012 are in appreciation of these documents. The Division Bench has directed the State 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 res-judicata or constructive res-judicata 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 before entering into an agreement dated 22.05.2012, petitioners paid first installment of Rs. 46.43 Crores and Second installment of Rs. 60.53 Crores was due on 21.11.2012. After representation dated 25.01.2011, petitioners submitted later representation in the month of February and June, 2011 claiming levy of IRC at Rs.50,000/- per hectare. Their complaint about discrimination is then taken note of by the Bench. The Division Bench has also noted that the petitioner claimed allocation approval in 2008 when rate of Rs. 50,000/- per hectare was in vogue as per Circular dated 21.02.2004, and it was before revision of the rate which took place on 26.03.2009. In paragraph No.3 of the order, the statement made by the Government Pleader that representation submitted by the petitioner is pending consideration and decision thereon would be arrived at within reasonable period has been taken note of. The said Division Bench also then looks into communication of petitioner dated 10.05.2012, whereby the petitioner did agree to pay Rs. 232.18 Crores in 5 installments over a period of 2 years with interest but subject to decision on their representations as also to consequential reduction or modification of installments and adjustments of amount found paid in excess. Argument that matter pertains to contractual obligation and hence, the Court should not intervene, has also been taken note of. The Government Pleader there had submitted that the second installment was due on 21.11.2012, memo of Writ Petition No. 2174 of 2012 was affirmed on 05.11.2012 and was moved only on 21.11.2012. The petitioners in reply, had pointed out to that Division Bench that first and second installments by them cover amount of Rs. 106 Crores, leaving balance amount of Rs. 10 Crores and it would have become payable only in May, 2014.55. In paragraph No.5 of the order, the letter dated 10.05.2012 whereby the petitioner accepted the liability to pay an amount of Rs. 232.18 Crores in 5 installments has been considered and its material part has been reproduced. Then in paragraph No.6 agreement entered into between the parties, during the pendency of representations on 22.05.2012 and approaching the Bench at fag end when second installment was due has been considered. Undertaking furnished on 22.05.2012 has then been looked into. The Division Bench expressed that taking over all view of the matter, it 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 ad-interim order observed that it would be appropriate if both the parties consider whether amount of Rs. 116.57 Crores already paid by the petitioner, should be considered as adequate irrigation restoration charges. In paragraph No.11, the said Division Bench also takes note of the fact that the petitioner is paying Block Water Tariff at a higher rate of Rs. 32 per 10000 liters. Paragraph No. 14 of the said order shows that amount of Rs. 10 Crores was deposited on 21.05.2013, by petitioners. In the light of these findings, the Division Bench granted ad-interim stay of coercive recovery of balance amount of irrigation restoration charges. This interim order continues to operate even today.57. The water is a natural and scarce commodity. Similarly, “electricity” cannot be viewed differently. The power generation plants are therefore, categorized as Public Utility Industries. To make up the deficit in need of electricity in State of Maharashtra, the State Government formulated a scheme and allowed water, which was till then being used primarily for irrigation purposes, to be withdrawn and used for generation plants. Domestic users were given first preference, while industrial use was placed at second number. Irrigation purpose was placed at last as third one. In consonance with this policy, a Mega Policy has come on 28.03.2005. Various government resolutions and circulars needs to be viewed in this background. Circular dated 21.02.2004 is issued to avoid any confusion & hence, the State itself has declared itself to be bound by it. No negotiations are possible on the factors stipulated & regulated therein. IRC rate is expressly agreed to be contingent upon the decision on Petitioner's representation by the parties thereto. Rate of IRC is not seen left to be a negotiable term of contract by the State but it has been determined by GR or circular which may operate against the wish of parties to Contract. The scheme for working out IRC looked into above by us show that the rate of IRC may be less than Rs. 50,000/- per hectare, minimum demand may be of actual amount spent by the State while the maximum may be Rs. 50,000/ per hectare. In a given case, there may be no demand on account of IRC at all. We find that parties before us are not litigating with any ulterior motive. Respondents have not pointed out any mala fides on the part of the petitioners. or vice versa. Though Writ Petition at Bombay was filed 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 auction-sale 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 fresh loan to the writ petitioner to enable him to purchase a new truck; to enter into agreement for realization of the balance loan amount in accordance with law; to write off the remaining amount of Rs.16,500 and to order waiving of the interest liability etc. This type of order is declared beyond the scope of the writ petition which was being considered by the High Court and beyond the jurisdiction of the Court in a contractual matter. Here, the issue is whether formula for computing IRC in circular dated 21.02.2004 could have been overlooked by the Petitioner power generation unit or the Respondents who assured water to it.59. In Pimpri Chinchwad Municipal Corpn. v. Gayatri Construction Co., (2008) 8 SCC 172, the respondent Contractor filed a writ petition in High Court challenging the termination of his contract and publication of fresh tender invitation for construction of road. Appellant Corporation pointed out the disputed questions involved as also the provision for resolution thereof in agreement. Hon'ble Apex Court, in para 6 takes note of the disputed questions of facts arising between the parties in said background, finds recourse to in house remedy necessary. This aspect is also clear from State of U.P. v. Bridge & Roof Co. (India) Ltd., (1996) 6 SCC 22, at page 29 : where Hon'ble Apex Court, in para 16 observes that the contract between the parties was a private and not a statutory contract. Any dispute relating to interpretation of the terms and conditions of such a contract cannot be agitated, and could not have been agitated, in a writ petition. That was a matter either for arbitration as provided by the contract or for the civil court. All disputed questions arose under said contract which could not be r adjudicated upon in a writ petition.60. The effect of arbitration clause or in house remedy is also clear from State of Orissa v. Bhagyadhar Dash, (2011) 7 SCC 406 : in para 22 observes that the clause in agreement can not be construed to be an arbitration agreement. It operated where in regard to a non-tendered additional work executed by the contractor, if the contractor was not satisfied with the unilateral determination of the rate therefor by the Engineer-in-Charge, the rate for such work was to be finally determined by the Superintending Engineer. It holds that a provision was made with the intention to avoid future disputes regarding rates for non-tendered 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 non-statutory one. Division Bench of this Court at Bombay has expressly permitted Petitioner to assail it.61. Petitioner relies 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 India Insurance Co. Ltd. the question was whether an insurance company could arbitrarily and unreasonably refuse the renewal of a policy. Considering that the insurance company, as a result of State monopoly in the insurance sector, had become “State” under Article 12 of the Constitution, this Court held that:“… it [the insurance company] requires (sic) to satisfy the requirement of reasonableness and fairness while dealing with the customers. Even in an area of contractual relations, the State and its instrumentalities are enjoined with the obligations to act with fairness and in doing so, can take into consideration only the relevant materials. They must not take any irrelevant and extraneous consideration while arriving at a decision. Arbitrariness should not appear in their actions or decisions.”62. The petitioner also relies on judgment of Hon'ble Apex Court, in Reliance Energy Ltd. v. Maharashtra State Road Development Corpn. Ltd., (2007) 8 SCC 1. There it is observed –“36. We find merit in this civil appeal. Standards applied by courts in judicial review must be justified by constitutional principles which govern the proper exercise of public power in a democracy. Article 14 of the Constitution embodies the principle of “non-discrimination”. However, it is not a free-standing provision. It has to be read in conjunction with rights conferred by other articles like Article 21 of the Constitution. The said Article 21 refers to “right to life”. It includes “opportunity”. In our view, as held in the latest judgment of the Constitution Bench of nine Judges in I.R. Coelho v. State of T.N., Articles 21/14 are the heart of the chapter on fundamental rights. They cover various aspects of life. “Level playing field” is an important concept while construing Article 19(1)(g) of the Constitution. It is this doctrine which is invoked by REL/HDEC in the present case. When Article 19(1) ( g ) confers fundamental right to carry on business to a company, it is entitled to invoke the said doctrine of “level playing field”. We may clarify that this doctrine is, however, subject to public interest. In the world of globalisation, competition is an important factor to be kept in mind. The doctrine of “level playing field” is an important doctrine which is embodied in Article 19(1)(g) of the Constitution. This is because the said doctrine provides space within which equally placed competitors are allowed to bid so as to subserve the larger public interest. “Globalisation”, in essence, is liberalization 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 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.”It is obvious that the government policy emanating from the circular dated 21.02.2004 aimed at avoiding uncertainty must be adhered to by the parties before this Court. Said condition relating to IRC is already prescribed & parties can not escape from it.63. To explain the reach of Article 14 in contractual matters, the Respondent State states that Hon'ble Apex Court in Radhakrishna Agarwal v. State of Bihar, (1977) 3 SCC 457, at page 465 : such questions of fact attracting Article 14 to establish that the State, acting in its executive capacity through its officers, has discriminated between parties identically situated. were not argued before the High Court. And, in any event, they were of such a nature that they could not be satisfactorily decided without a detailed adduction of evidence possible in ordinary civil suits., Moreover, the Hon'ble Apex Court held that it is the contract and not the executive power, regulated by the Constitution, which governed the relations of the parties on facts. Here we have already found that to avoid any confusion, circular dated 21.02.2004 has been taken out & it denudes the State of its power to bargain on IRC.64. The Respondent State points out that while considering the reach of writ court in contractual matters as also non permissibility of approbation and reprobation, Hon'ble Apex Court in Rajasthan State Industrial Development & Investment Corpn. v. Diamond & Gem Development Corpn. Ltd., (2013) 5 SCC 470, where in para 21, it states that generally the Court should not exercise its writ jurisdiction to enforce the contractual obligation. The primary purpose of a writ of mandamus is to protect and establish rights and to impose a corresponding imperative duty existing in law. It is designed to promote justice (ex debito justitiae). The grant or refusal of the writ is at the discretion of the court. The writ cannot be granted unless it is established that there is an existing legal right of the applicant, or an existing duty of the respondent. Thus, the writ does not lie to create or to establish a legal right, but to enforce one that is already established. While dealing with a writ petition, the court must exercise discretion, taking into consideration a wide variety of circumstances, inter alia, the facts of the case, the exigency that warrants such exercise of discretion, the consequences of grant 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 hot-blow 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. Respondent State itself has pointed out that Hon'ble Apex Court in Shyam Telelink Ltd. vs. UOI, (2010) 10 SCC 165 – in paragraph 23 held that a person can not accept or reject a document in part.65. On factual dispute Hon'ble Apex Court in paragraph 10 of Kerala SEB v. Kurien E. Kalathil, (2000) 6 SCC 293 observes that the interpretation and implementation of a clause in a contract cannot be the subject-matter of a writ petition. If a term of a contract is violated, ordinarily the remedy is not the writ petition under Article 226. It appears that there the contractor was seeking enforcement of a non-statutory contract. Hon'ble Apex Court points out that a contract would not become statutory simply because it is for construction of a public utility and it has been awarded by a statutory body. It did not agree with the observation of the High Court that since the obligations imposed by the contract on the contracting parties came within the purview of the Contract Act, that would make the contract statutory. In facts before us, the Petitioner Company points out that rate of IRC is pre-decided on 21.02.2004 and Respondents are highhandedly trying to change it. Petitioners have acted upon the representation contained in said circular dated 21.02.2004 & the State, though has enhanced the rate, has not revised it retrospectively. Further, the observations of Apex Court in paragraphs 12 & 13 of said judgment pressed into service by the Respondent State show that after considering the nature of dispute, Hon'ble Apex Court has refused to intervene in the matter and allowed the High Court judgment to operate.66. When State Government has its exclusive hold on water, formulates a policy, diverts water and assures it to be available for power generation in public good in terms thereof, the contract can not be viewed as an ordinary private contract and this court should, if no disputed issue crops up, attempt to adjudicate it, both in the interest of general public and the parties. State of Haryana & Ors. vs. Lal Chand & Ors. (1984) 3 SCC 634 is relied upon to state the difference between a statutory contract and contract entered into by the State in exercise of its executive power. However, in present facts, considering the previous litigation and circular regulating IRC, we are not inclined to dwell upon said aspect. An assurance made to all industrial establishments 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 administrative document by which instructions are disseminated. Many such circulars are identified by serial numbers and published, and many of them contain general statement of policy. They are, therefore, of great importance to the public, giving much guidance about governmental organisation and the exercise of discretionary powers. In themselves they have no legal effect whatever, having no statutory authority. But they may be used as a vehicle in conveying instructions to which some statute gives legal force. It is now the practice to publish circulars which are of any importance to the public and for a long time there has been no judicial criticism of the use made of them. It shows that even the executive instructions in circular dated 21.02.2004 are binding in such circumstances.67. To buttress the submission that notes in a file can not be used by the Petitioner to claim a right or then an illegality or irregularity can not be perpetuated by using such remarks, support is being drawn by the State from Shanti Sports Club vs. UOI, (2009) 15 SCC 705. The Petitioner is only pointing out a letter dated 17.01.2011 sent by one office to other. Only on the basis of such a letter, course of action or treatment suggested therein, petitioner can not raise any ground to attack or seek any relief. Different thought processes or varying opinions may be put forth by different officers for consideration via such notes in office files and object is only to enable the competent superior authority to reach an appropriate view after evaluating all pros & cons. Till that is done, no decision binding on the State or any artificial person, emerges. We are also not recording a finding on any right or seeing any right in petitioner on the strength of advice tendered in said letter.68. To justify absence of elaborate reasoning in an administrative order rejecting the representation passed on 29.01.2013, Respondent submits that as held in UOI vs. E.G. Nambudri, (1991) 3 SCC 38, since no civil consequences ensue and no vested right of Petitioners is being taken away, insistence of Petitioner on reasons is ill founded. We find it suitable to reproduce paragraphs 7 & 8 of this ruling where the Hon'ble Apex Court observes -“7. On behalf of the respondent it was contended that principles of natural justice require the superior authority to record reasons in rejecting the government 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 booby-traps?‘Civil consequences’ undoubtedly cover infraction of not merely property or personal rights but of civil liberties, material deprivations and non-pecuniary 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 citizen. Arriving at the just decision is the aim of both quasi-judicial as well as administrative enquiry, an unjust decision in an administrative enquiry may have more far-reaching effect than decision in a quasi-judicial enquiry. Now, there is no doubt that the principles of natural justice are applicable even to administrative enquiries. See: A.K. Kraipak v. Union of India.8. The question is whether principles of natural justice require an administrative authority to record reasons. Generally, principles of natural justice require that opportunity of hearing should be given to the person against whom an administrative order is passed. The application of principles of natural justice, and its sweep depend upon the nature of the rights involved, having regard to the setting and context of the statutory provisions. Where a vested right is adversely affected by an administrative order, or where civil consequences ensue, principles of natural justice apply even if the statutory provisions do not make any express provision for the same, and the person concerned must be afforded opportunity of hearing before the order is passed. But principles of natural justice do not require the administrative authority to record reasons for the decision as there is no general rule that reasons must be given for administrative decision. Order of an administrative authority which has no statutory or implied duty to state reasons or the grounds of its decision is not rendered illegal merely on account of absence of reasons. It has never been a principle of natural justice that reasons should be given for decisions. See: Regina v. Gaming Board for Great Britain, ex p. Benaim and Khaida. Though the principles of natural justice do not require reasons for decision, there is necessity for giving reasons in view of the expanding law of judicial review to enable the citizens to discover the reasoning behind the decision. Right to reasons is an indispensable part of a sound system of judicial review. Under our Constitution an administrative decision is subject to judicial review if it affects the right of a citizen, it is therefore desirable that reasons should be stated.”In M/s Mahabir Jute Mills Ltd. vs. Shri Shibban Lal, (1975) 2 SCC 818 – cited by the Respondents Hon'ble Apex Court considers act of appropriate government of refusing to refer an industrial dispute u/s. 4K 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 ill-effects of such directions have been considered by this Court in C. Jacob v. Director of Geology and Mining: (SCC pp. 122-23, 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 realize the consequences of such a direction to ‘consider’. If the representation is considered and accepted, the ex-employee gets a relief, which he would not have got on account of the long delay, all by reason of the direction to ‘consider’. If the representation is considered and rejected, the ex-employee files an application/writ petition, not with reference to the original cause of action of 1982, but by treating the rejection of the representation given in 2000, as the cause of action. A prayer is made for quashing the rejection of representation and for grant of the relief claimed in the representation. The tribunals/High Courts routinely entertain such applications/petitions ignoring the huge delay preceding the representation, and proceed to examine the claim on merits and grant relief. In this manner, the bar of limitation or the laches gets obliterated or ignored.”15. When a belated representation in regard to a “stale” or “dead” issue/ dispute is considered and decided, in compliance with a direction by the court/tribunal to do so, the date of such decision cannot be considered as furnishing a fresh cause of action for reviving the “dead” issue or time-barred dispute. The issue of limitation or delay and laches should be considered with reference to the original cause of action and not with reference to the date on which an order is passed in compliance with a court’s direction. Neither a court’s direction to consider a representation issued without examining the merits, nor a decision given in compliance with such direction, will extend the limitation, or erase the delay and laches.”70. The representation of the Petitioners here can not be seen as uncalled for. It is pointing out the rate of IRC stipulated in circular dated 21.02.2004 and impact thereof. This representation finds mention in the agreement between the parties & also in undertaking of the Petitioner accepted by the Respondents. The rate of IRC is expressly contingent upon the adjudication of said representation. The Division Bench at Bombay has in Writ Petition No. 2714 of 2012 on 22.11.2012, expressly directed the Respondent State to decide it & to give effect to that decision. Petitioner is left free by it to assail the adverse decision on it. Hence, here neither the said representation nor decision thereon can be viewed in the light of law expounded by Hon'ble Apex Court in this judgment. Observations 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 estoppels …....... …............ Godfrey Philips India Ltd. by a Bench of three Judges. We deem it appropriate to quote paras 27-29, 34, 35 and 36 from the decision in State of Punjab v. Nestle India Ltd.: (SCC pp. 474-78)“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 would be acted upon by the promisee;(2) such acting upon the promise by the promisee so that it would be inequitable to allow the promisor to go back on the promise.29. As for its strengths it was said: that the doctrine was not limited only to cases where there was some contractual relationship or other pre-existing legal relationship between the parties. The principle would be applied even when the promise is intended to create legal relations or affect a legal relationship which would arise in future. The Government was held to be equally susceptible to the operation of the doctrine in whatever area or field the promise is made—contractual, administrative or statutory. To put it in the words of the Court:‘The law may, therefore, …........... ….............. …............. to carry out the promise made by it.’ (SCC p. 453, para 33)34. The discordant note struck by Jit Ram case was firmly disapproved by a Bench of three Judges in Union of India v. Godfrey Philips India Ltd. It was affirmed that:(SCC p. 387, para 12)‘12. There can therefore be no doubt that the doctrine of promissory estoppel is applicable against the Government in the exercise of its governmental, public or executive functions and the doctrine of executive necessity or freedom of future executive action cannot be invoked to defeat the applicability of the doctrine of promissory estoppel.’35. It was held that irrespective of the nature of power wielded the Government is bound to wield that power provided it possessed such power and has promised to do so knowing and intending that the promisee would act on such promise and the promisee has done so:(Godfrey Philips India Ltd. Case 9, SCC p. 389, para 14)‘14. … We think that the Central Government had power under Rule 8 sub-rule (1) of the Rules to issue a notification excluding the cost of corrugated fibre-board ….............. …............. bound by promissory estoppel to exclude the cost of corrugated fibreboard containers from the value of the goods for the purpose of assessment of excise duty for the period 24-5-1976 to 2-11-1982.’36. The limitations to the doctrine delineated in Motilal Padampat Sugar Mills however, were also reaffirmed hen it was said: (Godfrey Philips India Ltd. Case 9, SCC pp. 387-88, para 13)‘13. … [T]hat there can be no promissory estoppels against the legislature in the exercise 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 concession or incentive offered by the State is in larger public interest and the Respondents do not even whisper that said policy violates any legal provision. We have also pointed out how these executive instructions need to be perceived with the help of judgment of Hon'ble Apex Court in P.H. Paul Manoj Pandian v. P. Veldurai, supra.72. The petitioner submits that even in contractual matters the State can not act unfairly. We find their reliance on Meerut Development Authority v. Assn. of Management Studies, (2009) 6 SCC 171, apt in this case. Hon'ble Apex Court, there, observes:“35. In Tata Cellular this Court observed that: (SCC p. 675, para 71) Judicial quest in administrative matters is to strike the just balance between the administrative discretion to decide matters as per government policy, and the need of fairness. Any unfair action must be set right by judicial review.36. In Chief Constable of the North Wales Police v. Evans Lord Hailsham stated: (WLR p. 1161 A-B) The underlying object of judicial review is to ensure that the authority does not abuse its power and the individual receives just and fair treatment, and not to ensure that the authority reaches a conclusion which is correct in the eyes of the court.”73. To explain the import of phrase “subject to” employed in the agreement as also in undertaking dated 22.5.2012, Petitioner has invited our attention to South India Corporation (P) Ltd. vs. Secretary, Board of Revenue, Trivandrum & Anr., AIR 1964 SC 247(1)1964) 4 SCR 280 where in paragraph 19, Hon'ble Court states:“19. That apart, even if Article 372 continues the pre-Constitution laws of taxation, that provision is expressly made subject to the other provisions of the Constitution. The expression “subject to” conveys the idea of a provision yielding place to another provision or other provisions to which it is made subject. Further Article 278 opens out with a non obstante clause. The ….... in respect of “works contracts”.When facts at hand are scrutinized in the light of these two precedents, the omission or avoidance to decide the representation of the petitioner for quite some time and till this Court directed the State Government to do it, all show improper and unwarranted approach on the part of the respondents.74. We find the water allocation is finalized on 12.12.2007 after High Power Committee accepted it in its meeting dated 13.05.2007. On 16.08.2008 sanction is granted for permanent water allocation of 87.60 MCM from completed Upper Wardha Project and it is to be operational only after agreement is made. As per clause 13, though action was to be taken within three years, period was extended up to 31.05.2012. The Petitioners have paid the amount in installments and not when it was determined or water was reserved for it. The petitioner has, in communication dated 10.05.2012, agreed to pay Rs. 232.18 Crores in five installments over a period of two years with interest. Hence, for this delayed payment of IRC, interest of justice demands that it must pay the interest @ 10% per annum.75. Accordingly we partly allow the petition and declare that demand of IRC at revised rate i.e. as per decision dated 06.03.2009 from the petitioners is illegal and unsustainable. Said decision dated 06.03.2009 fixes maximum rate of IRC at Rs. One lakh per Hectare prospectively from 01.04.2009 and is not applicable in case of petitioner to whom water allocation is finalized on 12.12.2007. Hence the Respondents shall accordingly receive the IRC at the rate of Rs. 50.000/- per Hectare with interest as mentioned supra.76. The Petitioner shall accordingly calculate the entire amount and balance amount after taking credit for payments already made shall be deposited with the Respondents within four weeks. In default, it will be open to the Respondents to recover the same by invoking such coercive means as are open to it in law.77. Writ petition is thus partly allowed. Rule is made absolute accordingly with no order as to costs.

Already A Member?