Important Point
Appellant is liable to water rate for supply of water under Orissa Irrigation Act, 1959 and Rules as he is drawing water from a Govt. source on the River as distinguished from a private source.

Judgment

Rajendra Babu, J.-The appellant before us is the owner of two facto­ries, one situate at Brajarajnagar in the State of Orissa and the other at Amlai in the State of Madhya Pradesh. The mill at Brajarajna­gar was installed by the appellant which is engaged in the manufacture of paper and board since 1939. A compact block of land measuring 889 acres is in the possession of the appellant and abutting the bank of river Ib. East to West. The lands on which the said Mill is situated was used for the purpose of cultivation earlier and is situated about 400 yards away from the river bank. Water is required for the purpose of manufacture of paper and board and for domestic purposes for the use of the workers and staff residing in the colonies attached to the Mill. The appellant has been drawing water from the year 1939 from the flowing stream of said river Ib. Water so drawn from the said river is purified before use for manufacturing paper and for supply for domestic purposes. The water after it is used is discharged into the river after purification in the filter and water recovery plant and sedimentation lagoons. During the lean period which is about four months in a year from January to June, when the flow of water in the river is less, the appellant constructs sand bundhs across the river at different places for impounding the water. Without construction of such bundhs, it would not be possible to get water in sufficient depth from the pumps.

2. Hirakund Dam was constructed in the year 1956. The maximum level of the reservoir of the said dam is stated to be 630 R.L. The Orissa Irrigation Act, 1959 (hereinafter referred to as “the Act”) which came into force from 1st June, 1961 was enacted to consolidate and amend the laws relating to the irrigation, assessment and levy of water rate and cess in force in different parts of the State of Orissa. In March, 1969, the Collector of Sambalpur addressed a letter to the Secretary of Revenue Divisional Commissioner, Northern Division, Orissa regard­ing the construction of the cross-bundhs by the appellant on the river Ib and drawing of water from the said river for its use at its mill. In the course of his letter, he adverted to permission to put up sand bundhs and also regarding payment of water rate. He suggested that the construction of the bundhs benefited the villagers in various ways and accumulated water was also utilised in some places for growing crops. He further suggested that the mill should pay Salami at the rate of Rs. 1,000/- per bundh her year and thereby the proposal made to initi­ate action for encroachment appears to have been dropped. In the year 1967-68, permission was also granted to the appellant for construction of sand bundhs on payment of royalty of Rs. 1,000/- per year. This arrangement continued till 1975-76 when royalty was enhanced to Rs. 3,000/- per bundh per year from the year 1976-77. The Collector stated in his letter that the Revenue Divisional Commissioner had suggested that the appellant should pay a lump sum of Rs. 1,000/- per year towards water rate and the amount so paid was to be adjusted against the water rate fixed under law. It is also indicated that on the con­struction of Hirakund dam in the year 1956, the appellant was using natural flow of the water for a part of the year where the level of the reservoir was below that level at which the pumping station was situated and when the level of the reservoir rose about that level during the months of September to December, the appellant utilised the water of the reservoir. During the period from September to December, the appellant draws water from the artificial reservoir created by putting cross bundhs at their own cost and they are liable to pay water rate only for that period of the year. Taking average period during which the water rate was payable by the appellant to be four months and assuming that about six lacs gallons was to be used per hour, the water rate was roughly worked out at