Contract: Rights and liabilities of the parties stand crystallized on the date of entering into the agreement – In the instant case, appellant and respondent No.1 entered into agreement dated 22.05.2012 which categorically stated that respondent No.1 would pay a sum of Rs.1,00,000 per hectare towards irrigation restoration charge – On the same day, respondent No.1 also gave an undertaking that it would pay the stipulated sum within a specific period of time – Thus, right from the very beginning i.e., in the sanction order, the demand notice and in all its letters, the appellant had stipulated a sum of Rs.1,00,000 per hectare as irrigation restoration charges – In fact, all these communications get subsumed in the agreement dated 22.05.2012 – Thus, respondent No.1 was not justified in challenging the levy of Rs.1,00,000 when it itself had agreed to the same – Signing the agreement and issuing an undertaking would restrain Respondent No.1 from challenging the levy of Rs.1,00,000 as irrigation restoration charges – Also on the aspect of differential treatment alleged, government gave reasonable and sufficient explanation.
Allowing the appeal, the Court
HELD : 1. The argument that it is the rate prevailing on the date of grant of in-principle approval which would govern Respondent No.1 is not acceptable. The rights and liabilities of the parties stand crystallized on the date of entering into the agreement, which is 22.05.2012. Therefore, the rate prevailing on 22.05.2012 would govern the parties. [Para 18][514-H; 515A]
2. On the aspect of differential treatment, Respondent No.1 alleges that it has been discriminated when compared to eight other companies. This allegation is denied by the Government and they have explained this aspect in their rejoinder filed before this Court and also in the counter and sur-rejoinder filed before the High Court. By referring to these records, in as many as four power generators are concerned, the in-principle approval granted in their favor has itself been cancelled as they had failed to execute an agreement with the Appellant. A Central Government undertaking was given an exemption since the power produced by the said company was to be used for public benefit. One company was charged Rs.50,000 since the agreement was entered into on 22.09.2008, and as on that date, the prevalent rate was Rs. 50,000 per hectare. Further, one other power generator was given an exemption because there was no loss of irrigation potential due to diversion of water. Another company was charged Rs. 50,000 per hectare since the water to be diverted in favor of the said company was minimal and more importantly, that particular area was not a water deficit area. In comparison, Respondent No.1 is drawing a high amount of water from an area where water is a scarce resource. This is a reasonable and sufficient explanation. [Para 19][515-B-E]
3.1 The relief claimed in this Writ Petition is similar to the prayer in the Writ Petition which was disposed of on 22.11.2012. Even in that proceeding, Respondent No.1 had raised similar arguments. They were countered by the State by contending that there existed an agreement between the parties which stipulated a sum of Rs.1,00,000 as irrigation restoration charges, and pursuant to this agreement, Respondent No.1 had even issued an undertaking. [Para 20][515-F-G]
3.2 The High Court merely directed the concerned authority to take a decision on the representations made by Respondent No.1 within a period of eight weeks, and if the same came to be decided in the favor of Respondent No.1, then Respondent No.1 could take such measures in law to seek a refund. The High Court refrained from granting a stay on the payment of the second instalment. In compliance with the direction of the High Court, the Government considered the matter and it rejected the representation on 29.01.2013. In that view of the matter, the High Court committed an error in entertaining a fresh writ petition, which effectively claimed the same reliefs as of the previous one. The High Court committed a mistake in not only entertaining the writ petition, but also in supplanting its view over that of the contract. [Para 20][517-A-C]
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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