It is impermissible for the state to retrospectively demand arrears for services under a concluded contract where parties have acted upon initial billing, particularly when such recovery cannot be passed on to beneficiaries, thereby violating fairness and legitimate expectations.

JUDGMENT :

HEMANT M. PRACHCHHAK, J.

1. RULE returnable forthwith. Learned Assistant Government Pleader waives service of notice of rule on behalf of the respondents.

2. By way of present petition, the petitioners seek to challenge the notice for payment of water charges used for drinking purposes for an amount of Rs.146.79 Lakh issued by respondent No.2. Being aggrieved by the aforesaid action initiated by the respondent authority, the petitioners herein have approached this Court seeking following reliefs:

(A) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus directing the respondents, their officer servants and agents to forebear from acting in a manner contrary to the understanding and G.Rs. Dated 30.01.2001 and 25.08.2003.

(B) Your Lordships may be pleased to issue a writ of mandamus or a writ in the nature of mandamus quashing and setting aside the impugned demand notice dated 21.7.2005 and G.R. dated 24.9.2002.

(C) Pending the hearing and final disposal of the present petition, Your Lordships may be pleased to stay the recovery pursuant to impugned demand notice dated 21.7.2005 and be further pleased to direct the respondents and its officers, servants and agents to continue to supply water for drinking purposes at the rate prescribed in G.R. dated 30.1.2001 and understanding arrived at between the parties.

(D) An ex-parte ad-interim relief in terms of prayer (C) above may kindly be granted.

(E) Such other and further reliefs as may be deemed just and proper in the facts and circumstances of the present case may kindly be granted.

2. The brief facts leading to the filing of the present petition reads thus:

2.1 The petitioners required water supply for various purposes and in view thereof, entered into an agreement with the respondent – State Government on 09.11.1993 reciprocating the rights and obligations related to the project. The respondents appointed a governing Body to oversee and co-ordinate the construction of the Singanpur Weir and a formal agreement was executed between SMC and Hazira Industries Association reciprocating the rights and obligations related to the project.

2.2 It is the case of the petitioners that the Singanpur Weir was completed at an estimated cost of Rs.33 crores which was entirely borne by Hazira Industrial. That respondent No.1 cancelled the Tripartite Agreement and the petitioners and other companies were directed to pay water charges at exorbitant rates prescribed in resolution dated 1.5.1997. Being aggrieved, Hazira Industries Association had filed Special Civil Application No. 618 of 1998 before this Court. During the pendency of the said petition, the Government came out with clarification vide G.R. for calculating water rates for industrial and the said G.R. was amended vide G.R. dated 30.1.2001 and 24.9.2002. It is the case of the petitioners that the Government passed a resolution directing the industries to pay the charges in terms of clarification dated 27.1.1999 and the rates as prescribed in the revised G.R. dated 30.1.2001 at concessional rate of interest without penalty.

2.3 It is the case of the petitioners that as per the aforesaid resolution, the total amount payable by the petitioner - company as on 30.10.2003 between the period April 1997 and October 2003 to Rs.1065.10 Lakhs and, therefore, the petitioner - company paid the entire amount, for which respondent No.2 issued No Due Certificate certifying that there was no outstanding payment upto 31.10.2