Key Points: - Supreme Court dismissed appeals by INDSIL and CUMI against High Court order upholding charges for controlled release of water in their captive hydel projects (!) (!) . - Government policy (G.O. 07.12.1990) allowed private agencies to set up small hydel schemes but required payment for controlled release benefits from existing reservoirs/tailrace (!) (!) . - CUMI and INDSIL agreements incorporated policy terms, obligating payment of royalty and charges for controlled water release advantage [1000742400002][1000742400006]. - Projects of CUMI and INDSIL derive benefit from controlled water supply: CUMI from tailrace of Moozhiyar/Kakkad, INDSIL from Anayirankal Dam releases [1000742400030][1000742400031]. - Charges for controlled release are contractual royalty/fee, not tax, as they compensate for specific privilege/benefit without statutory compulsion [1000742400053][1000742400054]. - Distinction upheld between CPPs (self-consumption, no consumer burden) and IPPs (grid supply); no discrimination in applying charges to CPPs (!) . - Clauses not unconscionable or arbitrary; parties entered commercial contracts knowingly after negotiations [1000742400039][1000742400041]. - High Court Division Bench correctly restored: contractual liability enforceable, computation to link to water quantity/control benefit (!) (!) .

What is the distinction between a tax and a fee?

What is the nature of royalty in contractual arrangements for use of water in hydel projects?