Chattisgarh High Court
Nova Iron And Steel Limited vs State Of Chhattisgarh on 19 December, 2024
-1-
2024:CGHC:50121
NAFR
HIGH COURT OF CHHATTISGARH AT BILASPUR
Order Reserved on 17.09.2024
Order Delivered on 19.12.2024
WPC No. 3014 of 2022
Nova Iron And Steel Limited A Company Incorporated Under The
Provisions Of The Companies Act, 1956 Having Its Registered Office At
Village-Dagori, Tahsil - Bilha, District - Bilaspur Chhattisgarh Through Its
Director - Dinesh Kumar Yadav, S/o Kuldeep Singh Yadav, Aged 49
Years, Director, Nova Iron And Steel Limited, R/o SH-11, Garden
Grooms, Lalpur, Deopuri, District - Raipur Chhattisgah
... Petitioner
versus
1 - State Of Chhattisgarh Through Secretary, Department Of Water
Resources, Mahanadi Mantralaya, Naya Raipur , Post Officer And Police
Station - Naya Raipur , District - Raipur Chhattisgarh
2 - The Collector District - Bilaspur Chhattisgah
3 - Chief Engineer Hasdeo Kachhar, Water Resources Department,
Bilaspur Chhattisgarh
4 - Sub Divisional Officer Water Resources Department, Sub-Division
Bilaspur Chhattisgarh
5 - Executive Engineer Kharung Water Resources Department, Bilaspur
Chhattisgarh
... Respondents
Digitally For Petitioner : Mr. Rajeev Shrivastava, Senior Advocate signed by PRAVEEN with Mr. Malay Shrivastava, Advocate KUMAR SINHA For State : Mr. R.S. Marhas, Additional Advocate General with Mr. K.P. Gupta, Govt. Advocate -2- S.B.: Hon'ble Shri Parth Prateem Sahu, Judge CAV Order
1. This writ petition is filed by the petitioner seeking following reliefs:-
"10.1.That, this Hon'ble Court may kindly be pleased to quash the order dated 02.03.2022 bearing No.244/TAK/2022 issued by the respondent No.4 and the order dated 10.02.2022 bearing No.659/TAK/2022 passed by the respondent No.5 by which the wrong calculation sheet was issued to the petitioner.
10.2. Any other relief (s)/order (s) /direction (s) in favour of petitioner, which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, in the interest of justice.
10.3. Cost of the petition."
2. Learned counsel for the petitioner would submit that petitioner is registered under the Companies Act, 1956 having its registered office at Village- Dagori, Tahsil-Bilha, District-Bilaspur. Petitioner- company has established a Sponge Iron Plant at Village -Dagori. To fulfill the water requirement of petitioner's plant, petitioner moved an application initially on 21.05.1991 before State Government seeking permission to use the water of river Shivnath which flows adjacent to the plant of petitioner and sought permission to use 3 MGD water for its plant from river Shivnath. The Industry was using only 720 cubic meter water per day according to its need and the Irrigation Department of the Sate levied water charges according to such quantity of consumed water. It is contention of learned counsel for the petitioner that, earlier agreement was not executed between parties. Petitioner submitted proposal for execution of agreement to -3- which respondents have raised no objection and accordingly the agreement dated 17.05.2017 was executed between the petitioner and respondent No.1. According to terms and conditions of agreement, petitioner deposited a sum of Rs.43,87,510/- as the water rates and local fund cess for the quantity of water to be drawn by the company in three months. As per the agreement, petitioner company has permission to draw 4,16,667 cubic meter of water per month from river Shivnath and the water changes is fixed as Rs.3.51 Cum/per unit. Petitioner was depositing water charges regularly, however, due to shutting down of petitioner's plant, petitioner failed to deposit the water charges for few months during intervening period from May 2017 til date, for some of the months, but later on, the petitioner has made lump-sum payment of Rs.2 crores to settle old dispute of payment. On 04.01.2022, respondent No.4 issued a memo giving calculation of Rs.136.14 lakh pending against the petitioner till December 2021. In the calculation made, respondents have adjusted all the payments which have been made by the petitioner. But on 10.02.2022 respondents have raised the demand of Rs.229.86 lakh miscalculating the amount in contravention of earlier letter dated 04.01.2022. While calculating the aforementioned amount in its letter dated 10.02.2022, respondent No.4 has not considered the settlement of arrears for a period from July 2019 to June 2020 and interest and surcharge has been raised treating the bill paid for current month regularly from June 2020 till February 2022. Petitioner is requesting for reconsideration of the demand note dated 10.02.2022 and submitted representation on 27.02.2022 in this regard. However without considering the representation -4- submitted by the petitioner on 27.02.2022 and deciding the same has again raised demand on 02.03.2022 which was revised to the tune of Rs.197.07 lakh. Again the calculation is wrongly done and therefore petitioner again submitted reminder on 16.03.2022 for reconsideration of the demand note dated 10.02.2022 which is pending for decision till date and again on 06.06.2022 demand is raised to the tune of Rs.211.14 lakhs. It is contention of learned counsel for the petitioner that the demand letter issued by respondent is arbitrary, illegal and contrary to law applicable to facts and circumstances of present case. The calculation made is erroneous without considering the earlier payment made and settlement arrived at between the parties. It is the contention of learned counsel for the petitioner that the amount which is being paid by the petitioner monthly is being adjusted towards the arrears and for monthly payment which the petitioner is making, respondent is imposing penalty and interest upon the petitioner which is nothing but an unequal bargaining power of respondents. Action on the part of respondents by adjusting amount and imposing penalty for the monthly payment which the petitioner is making come within the purview of unjust enrichment.
3. Learned counsel for the State vehemently opposes the submission made by learned counsel for the petitioner and would submit that the petitioner is a company running a Sponge Iron Plant and for its requirement of water to be used in plant had entered into an agreement on 17.05.2017 with respondent for supply of 3 MGD water. According to terms of agreement in particular Clause (12), mode of payment towards supply of water on monthly basis is -5- prescribed and it also provides that the monthly bill ought to be paid within 30 days from the monthly demand by the company. In default, it provides for 24% interest and service charge at the rate of 1%. He further submits that the writ petition in its present form is liable to be dismissed at the threshold for being frivolous and misconceived. Petitioner requested the respondent for supply of water and as such an agreement in Form No.7- A was executed between petitioner and respondent on 17.05.2017. Petitioner was well aware with terms of agreement. Petitioner was required to pay monthly bills as water charges for water supplied by respondent. Petitioner was also aware that it was the obligation of petitioner to clear the monthly demand within thirty days from the date of bill raised. As per the terms of agreement, on default payment, petitioner is to pay interest at the rate of 24%. State is the custodian of natural resources and water being one of natural resource, State is under constitutional obligation to ensure that the water so supplied on demand is not only properly utilized but it also suitably and timely compensated in terms of money from the user so that the amount so received could be properly and timely utilized for the public purpose at large. He submits that the ground raised is disputed fact and for redressal of disputed fact petitioner is having efficacious alternate remedy under the agreement under Clause (23) which provides for Settlement of Dispute between the parties. He contended that representation dated 18.02.2022 has been decided by respondent No.5 in letter dated 23.07.2022 and it was rejected. There exists serious dispute in particular with respect to interpretation of the respective provision of the agreement and therefore it is to be decided under Clause (23) -6- where mechanism is provided for settlement of dispute. He contended that as the petitioner is having efficacious remedy under agreement writ petition is not maintainable. He also contended that in view of ground raised, disputed facts with respect to payment and calculation is involved and therefore also it cannot be decided in writ petition.
4. I have heard learned counsel for the respective parties, perused the pleadings made in the writ petition as also reply and clauses of agreement.
5. In the writ petition, petitioner has specifically pleaded that petitioner entered into agreement on 17.05.2017 for supply of 4,16,667 cubic meter of water per month from river Shivnath at the rate of Rs.3.15 Cum/per unit. Relevant portion of agreement is extracted below for ready reference.
" Whereas the Company had applied to the Government for permission to draw 416667 Cum (Four lakhs sixteen thousand six hundred sixty seven Cubic Meter only) of water per month from the River Sheonath (hereinafter referred to as the Natural water Source") for the use by the Company's M/s. Nova Iron & Steel Ltd., plant to be located at Village & Po- Dagori, Tahsil-Bilha, District-Bilaspur, 495 224, Chhattisgarh (hereinafter referred to as "the said plant") and laying underground and surface pipes and drains for discharge of the factory effluent.
And whereas prior to the execution of these presents the Company has deposited with Government, the sum of Rs.4387510=00 (Rupees -7- forty three lakhs eighty seven thousand five hundred only) being the water rates and local fund cess for the quantity of water to be drawn by the Company in three months.
And whereas it has been agreed that the said sum of Rs 4387510=00 (Rupees forty three lakhs eighty seven thousand five hundred only) will not bear any interest.
Now this agreement witnessth as under-
x x x (2) The Company shall pay to the Government water rates for water drawn by it from said natural water source at the rates fixed by water Resources Department No./7- A/JS/TS/D-4/OJP/01 date 24.02.2016 which is Rs 3.51 (Rupees Three and Fifty One paisa) per Cum/per unit.
Note: The rates which are going to apply to the Company must be shown and not other rates. For the quantities of water drawn in excess of the agreed quantities and for any other unauthorized drawal of water then 50% (Fifty percent) additional rates shall be charged in addition to the normal rates as specified above.
In addition to the payment of water rates as specified above, the Company shall also pay the Water Resources Department local fund cess or any other tax at the rates as fixed by the Government from time to time. Government hereby reserves the right to revise the rates from time to time the said water rates and the local cess or other taxes to be paid by the Company and the company shall pay such revised water rates and local cess or other taxes as may be fixed by the Government from time to time. Excepting the -8- circumstances or short water supply specified in clause (15) the Company shall in any event pay the water charges on the actual consumption of the water drawn from the natural source as per the allotment letter issued by the Water Resource Department, M.P. Government vide letter No.29/6/92/M/31, dated 17.02.1993 and also as per the order passed by the Hon'ble High Court of Chhattisgarh dtd. 01.05.2017.
x x x x x x
(12) Within Thirty days from the date monthly demands are received by the Company from Executive Engineer. The Company shall pay to the Executive Engineer the amount of water rates and local fund cess for the water drawn by the Company during the proceeding month. Interest at the rate of 24% (Twenty four percent) and service charge at the rate of 1% (One percent) shall be recovered if the payment is not done within three months from the date of the bill for water supplied Non payment of the bills upto Six months from the due date of payment shall be treated as the breach of agreement.
(13) The Company shall always keep deposited with the Executive Engineer the said sum of Rs.43,87,510/- (Rupees. Forty three lakhs eighty seven thousand five hundred and ten only) (Three times of allocated monthly quantity bill) as Security for due and proper payment of the water rates and local fund cess and irrigation dues and due observance and performance of the terms and conditions herein. In the event of failure by the Company to duly pay the aforesaid dues, the outstanding dues from the Company shall be adjusted against the said deposit on default of the -9- Company to punctually pay the water rates and local fund cess as aforesaid the Government shall without prejudice to its any other rights and remedies be entitled to terminate this agreement forthwith.
(23) SETTLEMENT OF DISPUTES:
(a) Mutual Discussion:- The parties to this agreement agree that all disputes touching upon or arising out of this agreement including interpretation of any clauses of this agreement, the respective rights and obligation of the parties or non performance of obligation on the part of any party shall be amicably resolved by mutual negotiations.
Arbitration:- If after sixty days from the commencement of such negotiations, the parties have been unable to resolve amicably a dispute, such dispute or difference shall be referred to Arbitration under the provision of the arbitration and conciliation Act 1996. The award of the Arbitration panel shall be final and binding on the parties.'"
6. Petitioner in the writ petition has specifically pleaded that due to shutting down of plant, petitioner could not able to pay water charges for few months. It also does not dispute the arrears of water charges however dispute is raised with respect to calculation made of arrears of water charges in the demand letter and further that the amount paid is adjusted in arrears and not deposited with the regular monthly payment. Ground raised in the writ petition is factual and also disputed facts are raised in this writ petition.
7. In the agreement itself mechanism is provided for settlement of dispute. Clause 23 (a)-Mutual Discussion- provides that the parties to the agreement shall amicably resolve their dispute by mutual negotiations and Clause 23 (b) -Arbitration provides that- if after sixty days from commencement of such negotiations, the parties -10- have been unable to resolve amicably the dispute, such dispute or difference shall be referred to arbitration under the provision of Arbitration and Reconciliation Act, 1996.
8. Agreement between the parties is a commercial agreement. They have entered into agreement after going through the clauses forming part of agreement including clause mentioning the liability to pay interest at the rate of 24 % upon making default to pay monthly payment within the time specified therein and service charge at the rate of 1% if payment is not done within three months of the date of bill for water supply and further provides that non-payment of bills upto to 6 months from the date of demand shall be treated as breach of agreement.
9. In writ petition under relief clause, Clauses of agreement is not under challenge and the grievance of the petitioner is with respect to the calculation of amount of arrears towards water charges raised in the demand letter which is a factual dispute which cannot be gone into by this Court in the writ petition.
10. Hon'ble Supreme Court in the case of State of U.P. and Ors. Vs. Bridge & Roof Company (India) Ltd. (1996) 6 SCC 22 while dealing with the issue of maintainability of writ petition on the ground of availability of efficacious remedy of invoking arbitration clause mentioned in the terms and conditions of contract, has held as under:
"21. There is yet another substantial reason for not entertaining the writ petition. The contract in question contains a clause providing inter alia for -11- settlement of disputes by reference to arbitration (clause 67 of the contract). The arbitrators can decide both questions of fact as well as questions of law. When the contract itself provides for a mode of settlement of disputes arising from the contract, there is no reason why the parties should not follow and adopt that remedy and invoke the extraordinary jurisdiction of the High Court under Article 226. The existence of an effective alternative remedy -- in this case, provided in the contract itself -- is a good ground for the court to decline to exercise its extraordinary jurisdiction under Article 226. The said article was not meant to supplant the existing remedies at law but only to supplement them in certain well-recognised situations. As pointed out above, the prayer for issuance of a writ of mandamus was wholly misconceived in this case since the respondent was not seeking to enforce any statutory right of theirs nor was it seeking to enforce any statutory obligation cast upon the appellants. Indeed, the very resort to Article 226 -- whether for issuance of mandamus or any other writ, order or direction -- was misconceived for the reasons mentioned supra."
11. In the case of Joshi Technologies International INC Vs. Union of India & Ors. (2015) 7 SCC 728, it was observed as under:-
"69.2. Whenever a particular mode of settlement of dispute is provided in the contract, the High Court would refuse to exercise its discretion under Article 226 of the Constitution and relegate the party to the said mode of settlement, particularly when settlement of disputes is to be -12- resorted to through the means of arbitration."
12. Considering the entire facts and circumstances of the case, decisions of Hon'ble Supreme Court and further the specific Clause- 23 under the agreement executed between the parties, I am of the view that writ petition is not maintainable in view of efficacious alternate remedy available to the petitioner for redressal of its grievance, therefore, it is accordingly dismissed. However, considering the provision under Clause 23 (b) mentioned in the agreement, petitioner is granted liberty to invoke Clause 23 (b) of 'Arbitration' within a period of three weeks from the date of receipt of copy of this order.
Sd/----/---/-/-
(Parth Prateem Sahu) Judge Praveen