Bombay High Court Orders Fresh Evaluation of Water Tariff for United Spirits Limited
Court mandates reassessment of water usage in United Spirits' distillery to ensure fair billing under Maharashtra's water tariff regulations.
In a significant decision, the Bombay High Court's Aurangabad Bench has directed a fresh evaluation of water charges levied on United Spirits Limited's distillery operations in Nanded, Maharashtra. The court found the current billing practices, which categorized the entire water lifted by the company as being used as raw material, to be arbitrary and unsustainable.
The bench, comprising Justices Manish Pitale and Y.G. Khobragade, addressed the grievances of United Spirits Limited, which argued that the water tariff orders from 2018 and 2022, issued under the Maharashtra Water Resources Regulatory Authority Act, 2005, were arbitrary and ultra vires to the Act. The company contended that the orders failed to reflect the true cost recovery of water resource projects and were not aligned with the principles of the Act.
The court has quashed the earlier orders by the Primary Dispute Resolution Officer and the appellate authority, directing a fresh calculation of water usage. Authorities have been instructed to ascertain the actual utilization of water as raw material versus other processes such as washing and cooling. The court emphasized the need for proportional billing and ordered the inspection of United Spirits' manufacturing unit to ensure accurate assessment.
United Spirits Limited was previously billed under the assumption that all water was used as raw material, leading to inflated charges. The court has now ordered the company to deposit Rs. 66.50 Crores with the Sub Divisional Engineer, which will be adjusted post the reassessment.
The decision has been well-received by industrial bodies, which see it as a move towards fair and equitable water resource management. The court has set a three-month deadline for the completion of this reassessment, ensuring that principles of natural justice are followed during the process.
Bottom Line:
Bulk water tariff orders of 2018 and 2022 challenged - Fresh exercise mandated for determining proportionate utilization of water as raw material and for other purposes, to ensure fair billing.
Statutory provision(s): Maharashtra Water Resources Regulatory Authority Act, 2005, Section 11(d); Maharashtra Land Revenue Code, 1966, Section 70
