Papers and Industries Limited & Anr Vs. Tahsildar-Cum-Irrigation Officer
& Ors  INSC 464 (7 September 1998)
S.Rajendra Babu Rajendra Babu.J.
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 Brajrajnagar 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.
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.
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 per 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 Hirakud
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 above
that level during the months of September to December. the appellant Utilized
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 Rs.12 per hour or Rs.280/-
per day or Rs.8,500/- per month. It is suggested that the Mill may have to pay
about Rs.34,000/to Rs.40,000/- for four months depending upon the actual
quantity of water used during a particular year. However, it was made clear
that after coming into force of the Act from the year 1961-62, the appellant
became legally liable to pay water rate so long as it draws water from the
reservoir. The stand taken by the appellant in reply to the communication sent
by the Collector on the lines as stated above is that even when the level of
water rises above the level of the pump, it uses the flowing water of the said
river Ib. Therefore, it is not liable to pay any levy under the Act. Thereafter
proceedings were initiated in Irrigation Case No. 1 (IRR) of 1972 by the Irrigaiton
Officer. A show cause notice was issued as to why water tax should not be
charged. The appellant replied that the Act and the Rules framed there under
did not apply to the case as the appellant was drawing water from the flowing
stream of the river Ib and not from any irrigation work as defined under the
statute and since it has been drawing water from the natural flow of river Ib
since 1939, it had acquired rights to enjoy free flow of water from the river
and the said right cannot be abridged under the law. By an order made on 27th April, 1974, the Irrigaiton Officer imposed
water rate for the year 1961-62 to 1973-74 Rs.1,47,168/on the basis that the
Act and the Rules were applicable to the appellant as it was drawing water from
the Hirakund reservoir. Water tax was calculated on the basis of consumption at
6 lacs gallons per hour.
by the aforesaid order an appeal was preferred before the sub Divisional Officer,
Sadar, Sambalpur to set aside the order made by the Irrigation Officer and to
remand the matter for fresh disposal as in his view the proper inquiry had not
been made to come to the conclusion whether the lifting of water was done
within the point of Hirakud Reservoir. The matter was reconsidered by the
Appellate Authority and when the appellant examined three witnesses and the
Department examined one witness, certain documents were also produced. By an
order made on 10th
August, 1976, the
appellate authority held that the appellant was liable to pay a sum of Rs. 1,89.21,600/-
for the years 1976-77. Thus amounting to a total sum of Rs.2.01,83,050/-, The
finding recorded by the Appellate authority on remand is that the appellant was
drawing water from the reservoir area and, therefore, it was liable to pay for
the unauthorised use of water and further that the water discharged by the
appellant was not purified before being discharged in the river. The assessment
of the levy was made at the maximum rate applicable for unauthorised use of the
appellant perferred an appeal against the order.
appeal was disposed of by the Appellate Authority upholding the findings of the
Irrigation Officer. The Appellate Authority modified the calculations of the
amount due from the appellant by deleting charges for the period prior to
coming into force of the Act. Being dissatisfied by the order made by the
appellant authority, the appellant preferred a Revision Petition under Section
48 of the Act before the Divisional Commissioner, Northern Division, Sambalpur
who rejected the same with a modification to the extent that the rate of tax
for the unauthorised use of water was reduced to four times the bulk rate
instead of 6 times as imposed by the lower authorities. The Revisional
Authority formulated nine questions for its consideration and they are as
in the second enquiry the Tahsildar could go into the question of fresh
assessment of water rate instead of restricting his finding out if the intake
point is within the Hirakud Reservoir?
the intake point of the mill is below 630 R.L.?
so, whether this point is within the reservoir of Hirakud project?
the definition of reservoir to include the bed of river Ib is valid?
the drawal of water is from an irrigation work as defined under the Act?
drawal of water can be treated as supply on which water rate is payable?
drawal of water can be held as unauthorised?
water discharged is polluted; and
any levy is possible for unauthorised use under rule 47(2) within the frame
work of the Orissa Irrigation Act?"
the questions were answered in the affirmative and against the appellant. The
matter was, therefore, carried in a writ petition before the High Court. Before
the High Court the contentions put forth by the appellants pertain to –
appeliant does not use the water from the river Ib for the purpose of
irrication or domestice purpose and, therefore, the Act and the Rules do not
water is drawn by the appellants at a point which is within the Hirakund
reservoir area and as such the appellant do not draw arter for any irrigation
work as defined under Section 4(9) of the Act.
assuming that the appellants are liable to pay water rate for the use of water
for their mill or supply of water to the residential colonies, levy at penal
rates was uncalled for.
division bench of the High Court considered the matter and held that the
contentions raised in the matter are covered by a decision of the High Court in
Titaghur Paper Mills ILR 1975 1095 (Cuttack). The Court reflected the
contention that the appellant had any riparian right to use water from the
river and such user of the water was available free of charge. They also held
that under Section 21(2) of the Act supply of water for purpose other than
irrigation is also covered and therefore, the contention that they draw water
for the purpose other than irrigation and therefore the statute has no
application was held to be untenable. As long as the source of water from which
supply is made is for irrigation as defined under Section 4(9) of the Act. the
authorities under the Act were empowered to levy the water rate for cess. On
the principal question as to whether the appellant draws water from the point
which lies within the Hirakund reservoir the matter was enquired into by the
Irrigation Officer. He had held that the point was within the reservoir area.
The appellate Authority as well as the Revisional Authority had affirmed this
view and therefore, the High Court held that these aspects were questions of
fact and cannot be re-examined by the High Court.
High Court took the view that the appellants were using the water from the
river Ib since 1939 and during lean months, i.e. from January to June, they
were using the water by constructing sand bundhs on the river. There was a
serious controversy between the parties that whether at the point at which the
appellant had drawn water lie within the area of Hirakud reservoir and,
therefore penal rates could not have been levied and thereby held that the
appellants would be liable to pay water rate at the usual rate which is Rs.10/-
per lac gallons and directed the Irrigation Officer to revise the demand
accordingly. It is against this order that this appeal has been preferred.
Bhushan, learned Senior Advocate appearing for the appellant submitted that the
Irrigation Officer could not go into the question of fresh assessment of water
rate and ought to have confined his findings only to the question of
restricting it to the point whether it is within the Hirakud reservoir or not.
On this aspect of the matter, we may advert to the order made by the Appellate
Authority dated 23rd
December, 1975. The
concluding portion of the order reads as follows:- "The main point is
whether lifting of water from river Ib is being done from a point which is
within the reservoir. This is a question of fact and as admitted by the
Government Pleader, proper enquiry to come to a finding that lifting is being
done from a point within the reservoir has not been conducted. The case is
therefore remanded to the learned Irrigation Officer-cum-Tahsildar, Jharsuguda
for re-enquiry and disposal." Though the various points on which the order
made by the Irrigation Officer were challenged in the Appeal on the basis of
non consideration of the question whether the point at which the water was
lifted by the appellant was within the reservoir, entire order made by the
Irrigation Officer was set aside and there was an open remand. When the scope
of enquiry after remand was not restricted by the appellate authority, it was
certainly permissible by the irrigation Officer to examine all questions
arising thereto. Therefore, we find absolutely no merit in the first contention
urged on behalf of the appellant and it is accordingly rejisted.
important point raised by Mr. Shanti Bhushan is that the irrigation work as
defined under Section 4(9) would not cover the area in which reservoir lies,
but only a reservoir, tank, anicuts, dams, weirs, canals, barrages, channels,
pipes, wells, tube-wells and artesian wells constructed, maintained or
controlled by the State or a local authority. In order to appreciate this
contention, it is necessary to refer to the view taken by the authority. After
examining certain documents produced by the authorities, it was held the point
from which the water is lifted by the appellant from the river Ib is below 630
R.L. in the bed of river Ib and it was stated that it cannot be construed that
such a point would not lie within the area of the irrigation work. He held as
follows:- "True it is that the river Ib has not been constructed or
maintained by the Government. But it does not necessarily mean that every spade
and dredger or bulldozer to be constructed as a part of the reservoir. But the
lands within the contours of 630 R.L. in contiguity and the water of which is
compounded by artificial dam is a reservoir i.e. an irrigation work." He
further held that after the construction of Hirakund reservoir it could not be
said any more that the appellants are lifting water from the flowing stream of
the river Ib because the place from which water is lifted is part of the
reservoir itself. Flow of water is not only limited to the river Ib but it
extends to the entire reservoir including central areas covering the contours
of lower level. The water which flows or remains stagnant in areas covered
within 630 R.L. in continuity is nothing but the water of the reservoir.
thus he ultimately held that the appellants are lifting water from the
reservoir itself. Hence they are liable to pay water rate after commencement of
the Orissa Irrigation Act.
Appellate Authority affirmed the finding recorded by the Irrigation Officer. It
held as follows :- ....
a considerable part of the year, the water level of the reservoir extends
beyond the intake point and during this period the appellant without any
additional effort, is lifting water directly from the reservoir area. Only
because during part of the year the stagnant water level recedes beyond the
lifting point, it cannot be said that the lifting point ceases to be a part of
the reservoir." And it further concluded as follows :- "Once ti is
concluded that the intake point is within 630 R.L., it will not cease to be a
part of the reservoir only because the water level recedes beyond this point
for a particular period of the year. The reservoir limits are fixed and have
nothing to do with the water Spread area at different points of time. The
reservoir extends up to the limits to which the water Spreads at the maximum
water level and hence all areas in continuity within 630 R.L. are included in
the reservoir." Ultimately he observed that the intake point is within 630
R.L. and hence it is a part of the reservoir and any water lifted from the
point whether apparently stagnant, flowing or artificially stored would be
water coming from an irrigation work under the definition of the a Act and
would be liable to payment of water rate and other consequences prescribed
under the Act. The Revisional Authority also took the view that as was done by
the lower authorities.
the consistent view taken by all the authorities on a question of fact is that
the point at which the water is drawn by the appellants lies within the
reservoir area and is conclusive.
work is defined under Section 4(d) of the Act as to include all land occupied
by Government for the purpose of reservoir, tanks etc. and other structures occupied
by or on behalf of the State Government on such land.
reservoir cannot be understood merely to be a means to hold water in a stream.
It is only by controlling the flowing stream in an area water can be stored in
reservoir. Viewed thus, irrigation work would include land used for such
purpose. In this case the finding recorded by the authorities is in accord with
this view. 'Reservoir' may not necessarily mean only the constructed part of
the land but includes the area where the water is held by a dam constructed by
the Government then if form such a point falling within that area water is
drawn it must be held that the appellant is liable to pay the water rate.
Therefore, there is no substance in the contention urged on behalf of the
appellant that the point at which the water is drawn by the appellant does not
lie within the reservoir area or water is not drawn from a Government source or
a water work. Under Section 28 of the Act, the Irrigation Officer is empowered
to fix the compulsory basic water rate for supply of water from a Government
source as distinguished from a private source.
result, we find no merit in this appeal which is accordingly, dismissed.
Bearing in mind the circumstances in which this matter has been brought before
us, we direct the parties to bear their own costs.
APPEAL NO. 1822 OF 1992 This appeal arises out of order made on 3.4.1986 by the
High Court of Orissa on an application for Review of its order made on
15.1.1986 in O.J.C. Nos. 609 and 1144 of 1980.
the order in O.J.C. Nos. 609 and 1144 of 1980 a separate appeal by special
leave has been preferred before this Court in C.A. No. 1798 of 1986. That
appeal has been disposed of by us dismissing the same. Hence this appeal does
not survive for consideration and is dismissed.