2016 (5) TMI 1597 - HC - Indian Laws

Direction to the respondents to apply Irrigation Potential Restoration Charges - water allocated to the petitioner, based on deficit in water for irrigation as per the latest report - HELD THAT - 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. It is declared that the 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. Petition allowed in part.

Summary

Issues Involved:
1. Calculation of Irrigation Potential Restoration Charges (IRC) rate.
2. Area of land affected by water allocation.
3. Application of revised IRC rates retrospectively.
4. Uniformity in IRC rates applied to different entities.
5. Legality of the agreement and the undertaking given by the petitioner.
6. Jurisdiction of the High Court in contractual matters.
7. Application of promissory estoppel against the government.

Detailed Analysis:

1. Calculation of IRC Rate:
The petitioner argued that the IRC should be calculated at Rs. 50,000 per hectare based on the government resolution dated 21.02.2004. The respondents claimed it should be Rs. 1 lakh per hectare. The court found that the IRC rate applicable is the one prevailing at the time of water allocation, i.e., Rs. 50,000 per hectare, and not the revised rate of Rs. 1 lakh per hectare implemented prospectively from 01.04.2009.

2. Area of Land Affected by Water Allocation:
The petitioner contended that there was no loss of irrigation potential, hence no IRC should be paid. Alternatively, they argued that the affected area should be either 4600 hectares or 13140 hectares, not 23218 hectares as claimed by the respondents. The court noted that the representation dated 25.01.2011 did not dispute the area but only the rate. Therefore, the court did not delve into the area calculation issue, adhering to the representation's original scope.

3. Application of Revised IRC Rates Retrospectively:
The court held that the revised IRC rate of Rs. 1 lakh per hectare, effective from 01.04.2009, could not be applied retrospectively to the petitioner, whose water allocation was finalized on 12.12.2007. Therefore, the demand for IRC at the revised rate was declared illegal and unsustainable.

4. Uniformity in IRC Rates Applied to Different Entities:
The petitioner pointed out discriminatory treatment in IRC rates applied to other entities like NTPC and Adani Power. The court acknowledged the lack of uniformity and noted that the state government did not have a consistent policy for calculating IRC, leading to varying norms and potential discrimination.

5. Legality of the Agreement and the Undertaking Given by the Petitioner:
The agreement and undertaking dated 22.05.2012 between the petitioner and the respondents were subject to the decision on the petitioner's representation dated 25.01.2011. The court found that the agreement did not reserve or allocate water for the first time but facilitated the use of already allocated water. The court also noted that the petitioner was forced to execute the agreement under economic duress.

6. Jurisdiction of the High Court in Contractual Matters:
The respondents argued that the matter pertained to contractual obligations and should not be adjudicated in writ jurisdiction. The court, however, found that the issue involved adherence to government policy and executive instructions, which could be reviewed under Article 226 of the Constitution of India. The court also noted that the previous Division Bench had entertained the writ petition and issued directions, indicating that writ jurisdiction was appropriate in this case.

7. Application of Promissory Estoppel Against the Government:
The court applied the doctrine of promissory estoppel, holding that the state government could not go back on its promise as per the circular dated 21.02.2004, which assured a specific IRC rate. The court emphasized that the government must act reasonably and without arbitrariness, even in contractual matters.

Conclusion:
The court declared the demand for IRC at the revised rate of Rs. 1 lakh per hectare as illegal and unsustainable. The respondents were directed to calculate IRC at the rate of Rs. 50,000 per hectare with interest. The petitioner was given four weeks to deposit the balance amount after taking credit for payments already made. The writ petition was partly allowed, and the rule was made absolute with no order as to costs.