Gujarat High Court Quashes ₹146.79 Lakh Bill Issued To Reliance Industries Over Arrears Of Water Charges

The Gujarat High Court has set aside a 21-year-old water bill of Rs. 146.79 Lakh issued to Reliance Industries by the state government for arrears of water charges between 1997-2005, noting that the same was based on a government resolution which was not acted upon at the time and the transaction had been already concluded. Justice Hemant M Prachchhak in his order noted that the transaction had concluded in June 2005 on payment of charges by the petitioner and had the petitioner been aware that it would have been charged more in accordance with the 2002 Government Resolution, it would have conducted itself differently. "Considering the aforesaid, the transaction having been concluded, in the opinion of this Court, it is not open for the respondent State-Government to ask the petitioner to pay arrears since the petitioner cannot pass on the burden to the consumers. It was a clear and unequivalent contract knowing and intending that it would be acted upon by the petitioner on the price charged. In the opinion of this Court, it would be unfair now to demand from the petitioner the arrears of charges on the basis of the Resolution which was not acted upon. In view thereof, the contention of the petitioner that the bill raised by the respondent demanding arrears from the petitioner by communication dated 21.07.2005 requires consideration.This Court is inclined to interfere with the said communication issued by the respondent State Government. The contract entered into between the parties has been executed, concluded and the benefit has been passed on to the consumers by the petitioner. Considering the contract executed between the parties, the petitioner herein ought not to have been asked for payment of arrears by the respondent State placing reliance on the Government Resolution dated 24.09.2002," the court said.Reliance Industries entered into an agreement with the State Government for drawing water from Singanpore Weir (small dam) on 19.03.2002 for a period of 20 years. The agreement said that the petitioner corporation was liable to pay water charges for "water actually drawn" at the rate of Rs.2.50 per 1000 litre till the water rate is revised by Government as per Government Resolution No.WTR-1099/3453/63/P dtd. 21-01-2001. If bill amount remains outstanding for more than 3 months, an interest at the rate of 24 percent plus 1 percent service charges shall be charged from the petitioner. Further, the petitioner shall pay fixed water charges of Rs.3,11,11,688 annually for the quantity of water got reserved at the rate of Rs.0.75 per 1000 litre or as may be fixed by Government from time to time, for the quantity got sanctioned from Government. These charges shall be in addition to the normal water charges to be paid as per clause-3(i) of the agreement. The State Government raised bills for supply of water in accordance with the agreement till 2005. The State Government demanded further amount by the communication dated 21.07.2005 seeking further recovery on the basis of reassessment of water charges used for drinking purposes towards fixed charges and normal water charges for the entire period between 1997-98 to 2005-06. Upon the reassessment, the State Government claimed that the petitioner owed Rs.146.79 Lakh. The State Government issued a communication dated 21.07.2005 placing reliance on the ground that owing to an inadvertence, "legally claimable amount" could not be shown in the bill raised earlier which was as per the Government Resolution of 2002. As per this resolution, it was reiterated that separate rates will be applicable for water supply towards industrial and for drinking water purposes. This resolution, for the first time, stipulated that the entire quantity of water given to an industry is to be assessed at the rates applicable for industrial purpose and from the said estimation, the quantity of water for drinking purposes is required to be rebated. The court was considering whether the State Government may seek further recovery by communication dated 21.07.2005 through re-assessment of water charges used for drinking purposes, fixed charges and normal water charges for the period from 2002-03 to 2005-06, claiming an amount of Rs.146.79 Lakhs.The court set aside the 21.07.2005 communication and allowed the petition. Case title: RELIANCE INDUSTRIES LTD & ANR. v/s STATE OF GUJARAT & ANR.R/SPECIAL CIVIL APPLICATION NO. 5789 of 2006Click Here To Read/Download Order

Gujarat High Court Quashes ₹146.79 Lakh Bill Issued To Reliance Industries Over Arrears Of Water Charges

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