Dismissed

Jsw Energy (Barmer) Limited v. the State of Rajasthan

Rajasthan HC20 Oct 2021SAW/555/2021

Case brief

AI extract

What is this about?

The Special Bench upheld the vacation of an interim order that restrained the State of Rajasthan from charging revised water rates to Jsw Energy (Barmer) Limited, noting that the supply agreement itself contemplated such revisions by the State.

What did the court decide?

Vacation of interim order upholding the State's demand; observations held interim only; dispute resolution mechanism under Clause 8.2 remains available.

Jsw Energy (Barmer) Limited Vs the State… — Contract and Commercial Disputes | Rajasthan HC (2021)

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HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

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D.B. Spl. Appl. Writ No. 555/2021

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Jsw Energy (Barmer) Limited, Having Its Registered Office At Jsw Centre, Bandra Kurla Complex, Bandra (East) Mumbai 400051, Through Its Authorized Signatory Shri Chandra Prakash.

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----Appellant

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Versus

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The State Of Rajasthan, Through The Chief Secretary, Government Of Rajasthan, Secretariat, Jaipur.

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Chairman, Indira Gandhi Nahar Department, Government Of Rajasthan, Secretariat, Jaipur.

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Chief Engineer, Indira Gandhi Nahar Pariyojna, Government Of Rajasthan, Jaisalmer.

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Superintending Engineer, Office Of The Superintending Engineer, 2Nd Stage, Circle-Iii, Indira Gandhi Nahar Pariyojna, Jaisalmer.

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Executive Engineer, T.m.c. Division, Indira Gandhi Nahar Pariyojna, Mohangarh, Jaisalmer.

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----Respondents

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For Appellant(s) : Mr. R.N. Mathur, Sr. Advocate with Mr. Veyanktesh Garg. For Respondent(s) : Mr. Sandeep Shah, AAG.

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HON'BLE THE CHIEF JUSTICE MR. AKIL KURESHI HON'BLE MR. JUSTICE SANDEEP MEHTA

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Order

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20/10/2021

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This appeal is filed by the original petitioner aggrieved by the order dated 13^th September, 2021 passed by the learned Single Judge in Civil Writ Petition No.6519/2020.

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The appellant-petitioner is a company registered under the Companies Act, 1956. Between the appellant-petitioner and the

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[SAW-555/2021]

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State of Rajasthan, an agreement was entered in the year 2006 for setting up of a Lignite Mining cum Thermal Power Plant in Barmer region of State of Rajasthan. The principal agreement contained a clause, which envisaged that the Government of Rajasthan would provide specified quantity of water for the project at the rates that may be specified by the Government of Rajasthan.

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A separate agreement for the purpose of water supply was also executed between the appellant-petitioner and the Government of Rajasthan on or around 19^th February 2007. Clause 4.3.2 of this agreement envisaged that the petitioner shall pay charges for water consumed at the industrial rate of Rs.20 per thousand cubic feet. The Government of Rajasthan may, from time to time and on a general basis, revise the rate at which the appellant-petitioner shall pay for the water.

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Till the year 2020 this rate for supply of water remained constant. In may 2020, the State of Rajasthan amended Rule 15 of the Rajasthan Drainage and Irrigation Rules, 1955 (hereinafter referred as the “Rules”). Rule 14 of the said Rules pertains to contract of water supply for other than irrigation purposes. Prior to its amendment, Rules 15 provided that with the previous permission of the Divisional Irrigation Officer, tanks may be filled, or water may be supplied, from the tank or canal for purposes other than irrigation, at the rates mentioned in Schedule-I. Rule 15 in amended form by virtue of notification dated 27.01.2020 provides that with the prior permission of the Divisional Irrigation Officer tanks may be filled or water may be supplied without a special contract from canal/tank/river/nallah for purposes other than at the rates specified in Schedule-I. Corresponding rates

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provided in Schedule-I in the year 2006 was Rs.20 per thousand cubic feet. This Schedule-I was amended on 14^th May 2020 and envisaged collection of water charges at two different rates. For water used for industrial purposes from tank/canal/river/nallah, the rates would be Rs.250 per thousand cubic feet and if such water is used for industrial purposes from river/nallah without incurring any Government expenditure, the same would be at the rate of Rs.30 per thousand cubic feet. The State Government demanded water charges from the appellant-petitioner at the revised rate of Rs.250 per thousand cubic feet, upon which the petitioner approached this Court and challenged such demand.

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The learned Single Judge initially passed an ex-parte order on 10.08.2020 and restrained the respondents from charging water consumption bill from the appellant-petitioner as per the amended provisions of Rule 15. The State of Rajasthan thereafter approached the learned Single Judge and requested for vacating the interim order. The learned Single Judge passed the impugned order on 13.09.2021 and vacated the interim protection granted to the appellant-petitioner inter-alia on the grounds that granting such interim order would amount to allowing the petition finally and that the petitioner had signed the agreement, which contained a clause of settlement of disputes. The learned Single Judge also referred to clause 4.3.2 of the water supply agreement which, as noted earlier, provides that the State Government may from time to time on a general basis revise the rates at which the appellant-petitioner would pay for the water consumption.

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Having heard learned counsel for the parties and having perused the documents on record, what prima facie emerges is that agreement for setting up of the Power Plant itself envisaged

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that the rate of consumption of water may be varied by the State of Rajasthan from time to time. The separate agreement for water supply starts with the preamble that the Government of Rajasthan has agreed to provide support for the project and would allow drawing of 80 cusecs water from Indira Gandhi Nahar Project at the rate that may be specified by the State of Rajasthan. Further, the Clause 4.3.2 of this agreement also provided that the current rate for consumption of water would be Rs.20 per thousand cubic feet, which may be revised from time to time by the State of Rajasthan.

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Original unamended Rule 15 did not refer to a special contract which would be out of the purview of the said Rule. It is true that the schedule of rates specified under the unamended Rules did refer to “special contract”. The amended Rule 15 now speaks of a special contract and it would, therefore, be a matter of interpretation whether the existing contract between the appellant-petitioner and the State Government can be covered within the expression “special contract” for the purpose of the said rule and the intention of the Rule making authority is to exclude those contracts from the purview of Rule 15 or that the contracts which are executed by the government after amending the rule and categorized as special contracts can only be kept out of the preview of the rule.

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These issues, however, must be gone into at the time of final disposal of the writ petition. At this interim order stage, we may take note of the fact that the agreements between the appellantpetitioner and the State of Rajasthan at multiple places envisaged revision of rates for consumption of water and such revision would be as decided by the State of Rajasthan. Our attention was drawn

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to Clause 10 of the water supply agreement, which provides that no amendment in the provision of the agreement could be made without the consent of both the sides. However, this general prescription, which would prevent any changes in the terms of the agreement without consent of both sides cannot govern clause 4.3.2, which recognizes the right of the State of Rajasthan to vary the rate at which the water would be supplied to the appellantpetitioner.

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We cannot lose sight of the fact that agreed rates in the year 2006 for water consumption, which was Rs.20 per thousand cubic feet remained unchanged till the year 2020. The learned Additional Advocate General also pointed out that such revised rates are applied to all industries to which the water is being supplied by the State Government.

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In our opinion, the learned Single Judge committed no error in vacating the interim relief.

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Before closing, we may notice that Clause 8.2 of the water supply agreement envisages a mechanism for settlement of disputes. Disposal of this appeal or pendency of the writ petition would not prevent the appellant-petitioner from approaching such mechanism for resolution of the disputes.

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In the result, the appeal is disposed of with the following directions:

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(i) Vacation of interim order is upheld.

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(ii) Observations made in the order are only for the purpose of dealing with the matter at interim stage and would not influence final outcome of the writ petition.

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(iii) Disposal of this appeal or pendency of the writ petition would not prevent the appellant-petitioner from approaching

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the State authorities for resolution of the disputes under Clause 8.2 of the water supply agreement.

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(iv) If ultimately the writ petition is allowed the respondents shall refund the excess amount with interest at such rate that may be specified by the court.

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The appeal is accordingly disposed of.

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(SANDEEP MEHTA),J

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(AKIL KURESHI),CJ

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26-a.asopa/-

Jsw Energy (Barmer) Limited v. the State of Rajasthan

Case brief

What is this about?

What did the court decide?

Jsw Energy (Barmer) Limited v. the State of Rajasthan

Case brief

What is this about?

What did the court decide?

What the court decided

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