BALLARPUR INDUSTRIES LIMITED BANGALORE Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) IN this petition for a writ of certiorari, the petitioner calls in question the validity of a notice issued by the 2nd respondent karnataka Urban Water Supply and Drainage Board calling upon the petitioner to clear arrears amounting to Rs. 17,82,290. 20 on account of water supplied to it by the Board or else face disconnection of the supply with effect from 16th of september, 1987. A mandamus directing the Board to continue the supply of water to the petitioner in accordance with the terms and conditions of an agreement executed between the petitioner-Company and the State is also prayed for.

(2.) THE petitioner is a public limited Company who has set up an industrial unit for the manufacture of Caustic Soda in the uttara Kannada District of the State of Karnataka. By an agreement executed between the State Government and the company on the 5th of July, 1971, the Government appear to have agreed to the supply of water to the said Unit on the terms and conditions set out therein. The agreement inter alia stipulated that the Government shall invoice the Company for the water actually supplied to it at the rate of Rs. 177/- per million litres. The rate was inclusive of all impositions including those by way of taxes, duties, fees, surcharge, levies, tolls etc. The agreement was to continue for a period of 20 years and could be extended at the option of the Company for a further period of 5 years. During the currency of the agreement Karnataka Urban water Supply and Drainage Board Act, 1973 was promulgated with effect from 15th of October, 1973. The Act envisaged the creation and incorporation of a Board for carrying out the purposes of the Act. Sections 16 and 17 of the Act identify the functions of the Board and inter alia provide that the Board may either at the instance of the Government or a local authority or even suo motu investigate the nature and the type of Schemes that can be implemented in the area of any local authority for the provision of drinking water and drainage facilities. Execution of schemes, operation and maintenance of drinking water supply and drainage undertakings, levy and collection of water rates, fees, rentals etc. , providing technical assistance or giving advice to local authorities in regard to execution and maintenance of urban water supply and drainage works are among others some of the functions, which the Board has to discharge. A reference in further detail to the provisions of the act shall be made a little later. Suffice it to say that with the incorporation of the Board, supply of water to the petitioner-Company was taken over by the Board from the State government, and has been making the supply ever since. In due course, the Board appears to have raised a demand for payment of water charges from the petitioner. The petitioner did not react favourably to this demand and insisted that in the light of the agreement between the State Government and itself, the Board was not entitled to claim charges at a rate higher than what was stipulated by the said agreement. While maintaining that stand the petitioner offered to raise the rate marginally, recognising the fact that the supply of water at the rates originally stipulated in the agreement had become unremunerative. By its letter dated 4th of July, 1986, the petitioner offered to enhance the rate from Rs. 177/- to Rs. 354/- per million litre effective from 1-7-1986. The Board did not however consider this to be acceptable and demanded water rate at Rs. 979 per million litre with effect from 1-1-1987. It also refuted the claim made by the petitioner that the agreement executed between the petitioner and the State was binding upon it or that the Board could not unilaterally revise the water rates. While the parties thus stuck to their respective stands, the Board issued a notice dated 19th of August, 1987 calling upon the petitioner to pay for the water supplied to it at the rate of Rs. 979/- per million litre from 1-1-1987 and Rs. 1,170/- per million litre from 1-4-1987, failing which it threatened to discontinue the supply with effect from 16th of September, 1987. Aggrieved, the petitioner has come up with the present writ petition assailing the validity of the notice and seeking a mandamus for continuing the supply as already indicated earlier.

(3.) HEARD.