Case Note & Summary
The petitioner, a public limited company registered under the Companies Act, 1956 and engaged in power generation, challenged the demand for Irrigation Restoration Charges (IRC) made by the State of Maharashtra for allocation of water from the Upper Wardha Dam for its proposed 2700 MW Thermal Power Project at Amravati. Under the State's Mega Power Policy, the petitioner sought and was granted permanent water allocation of 87.60 MCM in December 2007. The dispute centered on the rate and area for calculating IRC. In January 2008, the Executive Engineer quantified the notional area as 23,218 hectares and IRC at Rs. 50,000 per hectare, totaling Rs. 116.09 crores. However, by a Government Resolution dated 06.03.2009, the maximum IRC rate was fixed at Rs. 1 lakh per hectare prospectively from 01.04.2009. The respondents then demanded IRC at the enhanced rate for the same area, totaling Rs. 232.18 crores, along with capital contribution, aggregating to Rs. 549.98 crores. The petitioner raised multiple representations contending that the rate should be Rs. 50,000 per hectare as prevailing on the date of allocation and that there was no actual loss of irrigation potential, so no IRC was payable, or alternatively, the area was much lower. It also alleged discrimination, citing instances where other thermal power units were charged lower rates or received waivers. Despite the pendency of representations, the respondents insisted on executing the water agreement with the higher IRC rate, threatening cancellation of allocation. Under protest and economic duress, the petitioner executed the agreement on 22.05.2012, paying the first installment of IRC at Rs. 1 lakh per hectare, but with the explicit condition that the amount was subject to the final decision on its representation. On 29.01.2013, the Water Resources Department summarily rejected the petitioner's objections. The petitioner then filed the present writ petition under Article 226 of the Constitution of India, originally at Bombay as W.P. No. 1487 of 2013 and later transferred to the Nagpur Bench as W.P. No. 4968 of 2015, seeking to quash the adverse order and to direct the respondents to recalculate IRC based on the earlier rate and correct area. The court heard detailed arguments on the rate, area, date of determination, discrimination, and duress, and reserved judgment on 10.02.2016, pronounced on 05.05.2016.
Headnote
A) Irrigation Restoration Charges - Rate Determination - Government Resolutions dated 21.02.2004 and 06.03.2009 - Petitioner contended IRC rate should be Rs. 50,000 per hectare as per the Chief Engineer's report dated 11.01.2008, while respondents demanded Rs. 1 lakh per hectare prospectively from 01.04.2009 - Court examined whether rate should be frozen on the date of water allocation (12.12.2007) and whether subsequent modification applies (Paras 10-12). B) Irrigation Restoration Charges - Area for Calculation - Loss of Irrigation Potential - Petitioner argued there was no loss of irrigation potential and therefore no IRC is payable, or in the alternative, the area is only 4600 or 13140 hectares, not 23218 hectares - Court considered the correctness of respondent's quantification (Paras 10, 13). C) Constitutional Law - Article 14 - Discrimination - Petitioner alleged that other similarly placed thermal power units like NTPC, Adani Power, and Reliance Energy were charged lower IRC rates or given full waiver, making the demand exorbitant and discriminatory - Court examined whether the State had a uniform policy and whether the demand violated equality (Para 12). D) Administrative Law - Economic Duress - Water Agreement dated 22.05.2012 - Petitioner claimed it was forced to execute the agreement under economic duress, with IRC rate of Rs. 1 lakh per hectare subject to the outcome of its representation - Court considered the binding nature of the agreement and the effect of the undertaking (Paras 6, 13).
Issue of Consideration
Whether the imposition of Irrigation Restoration Charges (IRC) at Rs. 1 lakh per hectare on an area of 23218 hectares is arbitrary, excessive, and discriminatory, and whether the IRC should be calculated as per the rate and area prevailing on the date of water allocation.
