TMI Blog2004 (4) TMI 651X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharashtra. 3. The grievance of the petitioners is that the Deputy Engineer of the first respondent illegally refused to accept the Building Completion Certificate ( B.C.C. for short) issued by the Area Manager of respondent No. 1. Consequently a demand was made for payment of more than rupees two crores as difference between normal rate and penal rate of water charges. According to the petitioners, they had regularly paid water charges at normal rates. The action of the first respondent in demanding water charges at penal rate of 1.5 times is illegal, contrary to law and unlawful. Since the first respondent-Corporation is insisting for penal rate of water charges, the petitioner is constrained to approach this Court. 4. The first respondent - Corporation formulated a scheme under which every industrial unit was required to submit B.C.C. for its factory building and construction. If B.C.C. is not submitted, the first respondent used to levy water charges at the penal rate of 1.5 times of normal water charges. According to the petitioners, first respondent is neither authorised nor entitled to levy water charges at penal rate. Several representations were, therefore, made to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ners was found to be strictly in accordance with the specifications but the Executive Engineer, Ambernath Civil Division, vide his letter dated 11th June, 2002 addressed to the Area Manager of respondent No. 1 stated that some structure was made in open marginal space which was required to be kept vacant and thus the construction was not in conformity with law. But it was also stated that the petitioners had agreed to remove such construction. Respondent No. 1 vide its letter dated 23rd September, 2003 informed the petitioners that their application for B.C.C. was kept pending for documentary compliance and requested them to submit revised plan. The petitioners, however, stated that they had already complied with all the requirements of the respondents and B.C.C. had already been issued in their favour as early as in 1989. Unfortunately, however, the first respondent proceeded on the basis that there was no B.C.C. in favour of the petitioners and accordingly a demand notice was issued on December 23, 2003 for an amount of rupees two crores calculating water charges at. a penal rate. 6. It is also the case of the petitioners that reference was made to the Board for Industrial and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the first respondent that the Chief Executive Officer of the first respondent issued circulars dated November 5, 1997 and November 25, 1997 whereby first respondent used to levy water charges at penal rate at 1.5 times of normal water charges on allottees who had failed to obtain B.C.C. It was emphatically stated by the deponent that those circulars had never been revoked, cancelled nor withdrawn. The affidavit further states that the Executive Engineer of Ambernath Sub- Division had unauthorisedly issued a circular dated July 31, 1998 in contradiction of earlier circulars of November 5, 1997 and November 25, 1997 issued by the Chief Executive Officer of M.I.B.C. The said fact came to the notice of the Chief Executive Officer, M.I.B.C., only after the issue was brought to light during the course of audit by the Accountant General. It was then stated: The Executive Engineer of the Sub-Division was issued show cause notice seeking his explanation in that regard. It is also stated that the Executive Engineer was never delegated any power by the Chief Executive Officer of M.I. D.C. in respect of water charges. It is asserted that circulars dated 5th November, 1997 and 25th No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of the petitioners be considered as having B.C.C. and notice issued to the petitioners be cancelled. The affidavit proceeded to state that the Superintending Engineer has accepted the said recommendation of the Executive Engineer and forwarded the same to the Chief Engineer at the Headquarters of M.I.D.C. It is also stated that on 17th September, 2002, the Chief Engineer of the M.I.D.C. has accepted the recommendation of the Superintending Engineer as proposed by the Executive Engineer. Inspite of the above decision, a wrongful demand has been made by the first respondent. The petitioners have, therefore, called upon M.I.D.C. to produce noting dated 22nd August, 2002 in this Court. 13. We have heard the learned Counsel for the parties. 14. The learned Counsel for the petitioners raised several contentions. He submitted that the action of the respondent-Corporation of demanding water charges at 1,5 times normal water charges was penal in nature and since neither the provisions of the Act nor Regulations provided for such penal charges, no penalty could be levied. Moreover, B.C.C. was issued in favour of petitioners and hence, the first respondent was not entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at no case has been made out by the petitioners for exercise of extraordinary jurisdiction of this Court under Article 226 of the Constitution. There is suppression of material facts by the petitioners. The petitioners have never obtained B.C.C. In view of that, as per the circulars dated November 5, 1997 and November 25, 1997, the petitioners were required to pay water charges at the rate of 1.5 times of normal water charges and such an action cannot be termed as unlawful, illegal or otherwise unreasonable. It is on the basis of the Maharashtra Industrial Development Corporation Water Supply Regulations, 1973 as also in consonance with the agreement executed by and between the Corporation and plot holders/units/consumers. All throughout the State of Maharashtra, circulars of 1997 operated and are still operative. All the units in the entire State of Maharashtra are paying water charges as per the Regulations of 1973 and both the above circulars. Both circulars were issued by the M.I.D.C. through Chief Executive Officer and Secretary of the Corporation, who has the authority to issue them. At no point of time, concession was given to any area and the petitioners were also bound to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame to know about issuance of circular by Executive Engineer, Ambernath, on the basis of audit report. The case referred to by the petitioners in the affidavit-inrejoinder was a totally different and distinct. In that case, the structure was regularised and thus the case was not comparable to the case of the petitioners. The provisions of S.I.C.A. would not apply as no proceedings under Section 22 of the S.I.C.A. have been taken by the first respondent against the petitioners. On all these grounds, it was submitted that the petition deserved to be dismissed. 16. Having heard the learned Counsel for the parties, in our opinion, no case has been made out by the petitioners for exercise of extraordinary jurisdiction of this Court under Article 226 of the Constitution. The first respondent-Corporation was established under the Act of 1961. As the Preamble of the Act shows it has been enacted with a view to make a special provision for securing the orderly establishment in industrial areas and industrial estates of industries in the State of Maharashtra, and to assist generally in the organisation thereof, and for the purpose to establish an Industrial Development Corporation and fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .I.D.C. Water Supply Regulations, 1973 as amended from time to time. It is, therefore, clear that the petitioners were bound to comply with Water Supply Regulations and to pay water charges as fixed by the Corporation. The petitioners were actually paying such charges. 19. It is not in dispute between the parties that a circular came to be issued by the Chief Executive Officer of respondent No. 1 on 5th November, 1997 relating to water charges for supply of water to the plot holders. The relevant part of the said circular allowing the Corporation to levy 1.5 times water charges reads as under : It is necessary for the plot holders to obtain the Building Completion Certificate and for that purpose it is necessary that the Corporation should take some concrete steps. If Building Completion Certificate is not, obtained, it is against the Development Control Regulations and it becomes difficult for M.I.D.C. to implement the Development Control norms. Considering these difficulties, by this Circular M.I.D.C. notifies that, when the water connection is being granted to the plot holder for the construction of the Building at that juncture, rate of water charges should be charged 1.5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n unauthorised Officer. 2 2 . The question for our consideration, therefore, is whether the action of the respondent No. 1 -Corporation in demanding water charges at the rate of 1.5 normal charges is illegal or unlawful and whether the petitioners can claim benefit under the circular purported to have been issued by Executive Engineer of Ambernath Sub- Division. As is clear, both the circulars of 1997 have been issued by the Corporation through Chief Executive Officer of the Corporation. It is a common ground that under the said circulars, plot holders/consumers not having B.C.C. were to pay 1.5 times water charges. It is the specific case of the respondent-Corporation in the affidavitin- reply that Executive Engineer of a Sub-Division has no power or authority to issue a circular for a particular division. Water Supply Regulations, 1973, to which reference have already been made hereinabove, do not authorise Executive Engineer of a Sub-Division to issue such a circular for that Sub-Division. No other provision has been shown to us by the learned Counsel for the petitioners under which Executive Engineer can issue such a circular. Not only that, but. according to the respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cular of 1998, which must be held to be legal, valid and in consonance with law. The circular of 2002 cannot be held to be retrospectively applied. 24. It was then submitted that the circular dated 1st February, 2002 (Exhibit D) was also issued by Executive Engineer, M.l.D.C,, Ambernath Civil Division by which earlier circular dated 31st July, 1998 was cancelled. It was also stated in the said circular that as per prevailing M.I.D.C. Rules, 1.5 time water charges would be levied from all plot owners who had not obtained B.C.C. 25. It may, however, be stated that after the show cause notice was issued to the Executive Engineer and after his reply, the Chief Executive Officer addressed a letter on 29th January, 2002, which had been produced on record by the learned Counsel for the Corporation wherein he was directed by the Chief Executive Officer to take corrective action and was ordered to issue revised circular immediately and initiate action to recover due and unpaid amount (defaulted amount). 2 6 . It is, therefore, amply clear that the action which has been taken by the Executive Engineer, Ambernath Sub-Division of issuance of circular dated July 31, 1998 was illegal an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he petitioners anywhere if the petitioners have been treated equally with all other plot holders/consumers in the State of Maharashtra. 2 8 . It was then contended that the action is penal and punitive in nature. Since penalty has been imposed, there must be express power to impose such penalty. Moreover, before imposing penalty on the petitioners, a show cause notice ought to have been issued, explanation called for and hearing afforded before making demand of payment of huge amount of rupees two crores. It was also contended that there must be application of mind, adjudication by the authorities and exercise of discretion as to why such penalty was called for and imposed. 29. We must frankly admit that we are unable to uphold the contention. It is no doubt true that the expression used by the respondent-Corporation Is penal charges or rates. We are, however, not impressed that it is penalty imposed by the Corporation on the petitioners. Penalty as understood in legal parlance is in the nature of punitive action imposed on a defaulting party and must precede by presence of power, application of mind, adjudicatory process and exercise of discretion. In the instant case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore, for two categories of plot holders/consumers cannot be held arbitrary, unreasonable or ultra vires Article 14 or Article 19 of the Constitution. 3 1 . Since there was unauthorised structure/construction made by the petitioners, B.C.C. was not granted and hence the petitioners were not entitled to water on normal charges of one time. 32. In view of the above position, in our considered opinion, reliance placed by the learned Counsel for the petitioners on the decisions in (i) Hindustan Steel Limited v. State of Orissa [1972]83ITR26(SC) ; (ii) Khemka Co. Pvt. Ltd. v. State of Maharashtra [1975]3SCR753 ; (iii) Shree Digvijay Cement Company Limited and Anr. v. Union of India and Anr. [2003]259ITR705(SC) ; (iv) Ahmedabad Urban Development Authority v. Sharadkumar Jayantikumar Pasawalla and Ors. [1992]3SCR595 and (iv) Delux Land Organisers v. State of Gujarat and Ors. AIR1992Guj75 is of no avail and the ratio laid down therein would not apply to the facts of the case. In all those cases, the question was of imposition of penalty which is not the case here. 33. The Counsel drew our attention to a decision of the House of Lords in J, F. Stone Lighting Ratio Ltd. v. Hay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to a State Act. The recovery of sales tax arrears under the relevant State Act, therefore, could not be effected against a sick company without the consent of B.I.F.R. 3 8 . In our opinion, however, submission of the learned Counsel for the first respondent-Corporation has substance that the respondent-Corporation is not enforcing compliance under any decree or order but merely obligation under the agreement and Regulations relating to supply of water which would not be covered by the above provision. 39. It may be profitable in this connection to refer to a decision of the Supreme Court in Indian Maize and Chemicals Limited v. State of U.P. and Ors. [1997]1SCR217 . In that case, there was default in payment of electricity charges by the consumer company. The company was a sick unit and proceedings were pending before B.I.F.R. In the light of pendency of proceedings before B.I.F.R., protection under Sub-section (1) of Section 22 of the S.I.C.A. was sought. A prayer was also made directing the Electricity Company for uninterrupted supply of electrical energy without compliance of the corresponding obligation of payment under Regulations or contract under the Electricity (Suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Engineer of Headquarters of M.I.D.C. had accepted the recommendation on 17th September, 2002. Hence, even on that ground, no action can be taken against the petitioners. 4 3 . Now, except bald assertions, nothing has been placed on record by the petitioners. There is no material whatsoever to support the above assertions. The learned Counsel for the respondent-Corporation is right in contending that it is surprising that such assertions have been made by the petitioners. She is also right in submitting as to on what basis such assertions have been made by the petitioner and that too in the affidavit-in-rejoinder. Though the petition was filed on 15th January, 2004, nothing has been stated on this point, though it relates to notings of 2002. Moreover, normally all such correspondence would be in the nature of inter departmental communications and one fails to know as to how the petitioners would come to know about such communications or correspondence. 44. In more than one case, the Supreme Court had an occasion to deal with such situations. It was observed in those cases that such internal notes, correspondence and orders are meant for official purposes and should not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is taken by the authority concerned in the name of the Rajpramukh which formality is a constitutional necessity, nothing done would amount to an order creating rights or casting liabilities on third parties. It is possible, observed this Court, that after expressing one opinion about a particular matter at a particular stage a Minister or Council of Ministers may express quite a different opinion which may be opposed to the earlier opinion. In such cases, which of the two opinions can be regarded as the order of the State Government. It was held that an opinion becomes a decision of the Government only when it must be communicated to the person concerned and that this is the essence of the matter. We seek support from these observations for our purpose that notings in a notes file, not only of officers but even that of a Minister will not constitute an order to affect others unless it is done in accordance with Article 166(1) and (2) and communicated to the person concerned. 46. In M.D., U.P. Land Development Corporation and Anr. v. Amar Singh and Ors. (2003)IIILL J220SC while dealing with a question of regularisation of project employees, the Court observed : Having peruse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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