REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 7780 OF 2011

[Arising out of SLP (C) No. 7443 of 2010]

PepsiCo India Holding Pvt. Ltd. …. Appellant

Versus

State of Maharashtra & Ors. …. Respondents

JUDGMENT

Dr. MUKUNDAKAM SHARMA, J.

1. Leave granted.

2. The appeal is directed against the judgment and order dated

04.11.2009 passed by the High Court of Judicature at Bombay

in Writ Petition No. 5834 of 2005. The said Writ Petition was

filed by the appellant herein questioning the levy of increased

Page 1 of 36

water charges on ground that it cannot be given retrospective

effect by the respondent herein.

3. The facts leading to the filing of the present appeal are that

the appellant - PepsiCo India Holdings Pvt. Ltd. is incorporated

in India under the Companies Act, 1956 for manufacturing and

distributing carbonated soft drinks, bottled drinking water and

other food products. Appellant stated that it is one of the

leading manufacturers of Carbonated Soft Drinks and bottled

drinking water in the entire State of Maharashtra and a

significant portion of the entire national demand for the

appellant’s product is met from the production made within the

State of Maharashtra itself.

4.

The State of Maharashtra, represented by Secretary, Deptt.

of Industries, Mantralaya is respondent no. 1, the Maharashtra

Industrial Development Corporation [“MIDC”] is respondent no.

2 which is responsible for infrastructure required for any industry,

i.e. land, water and electricity. All the Industrial Estates of State

Government in Maharashtra come under the purview of

respondent no. 2. MIDC at Roha Div. Alibag is respondent no. 3

and is the branch of respondent no. 2 and shares the same

Page 2 of 36

objective. Department of Irrigation is respondent no. 4 and is

responsible for the supply of water to all industrial estates under

respondent no. 2 in Maharashtra.

5.

The appellant stated that respondent no. 2, acting through

respondent no. 3 invited business undertakings to set up

industrial units in the industrial areas to add impetus to industrial

development in the State of Maharashtra. Accordingly, the

appellant decided to set up its manufacturing plant in the State of

Maharashtra at Paithan, Distt. Aurangabad and Roha, Dist.

Raigad. In this case, however, we are concerned with the

manufacturing plant of the appellant located at Roha.

6.

The primary business of the appellant is to manufacture

non-alcoholic beverages in its plant and for the manufacturing of

the same, water is used as one of the raw materials.

7.

The plant from where the appellant operates its unit at

Roha, Maharashtra was earlier owned by another company by the

name Voltas India Limited. The said company had entered into a

Water Supply Agreement with respondent no. 3 for its facilities

at Dhatav, Roha under the Water Supply Regulation Act, 1973.

Page 3 of 36

8.

There are regulations in respect of supply of water, namely,

‘Maharashtra Industrial Development Corporation Water Supply

Regulations’. Regulation 2(2) defines “Consumer”, which means

any person or persons who has applied for supply of water from

any works of the Corporation and to whom MIDC has agreed to

supply water or any person or persons otherwise liable for

payment of water charges to the Corporation. Clause 27 of the

Water Supply Agreement provides that the Respondents shall fix

charges for water from time to time and increase or decrease the

water charges in its discretion after giving notice of one month to

the consumer. Clause 36 of the Water Supply Agreement

provides for penalty in case of failure on part of the consumer to

pay the water bill. Clause 27 of the Water Supply Regulations,

1973 are as unde