PEPSICO INDIA HOLDING PVT. LTD. versus STATE OF MAHARASHTRA & ORS.

Citation: [2011] 15 S.C.R. 675 · Decided: 12-09-2011 · Supreme Court of India · Bench: MUKUNDAKAM SHARMA · Disposal: Dismissed

Judgment (excerpt)

[2011] 15 (ADDL.) S.C.R. 675 
PEPSICO INDIA HOLDING PVT. LTD. 
v. 
STATE OF MAHARASHTRA & ORS. 
(CIVIL APPEAL NO. 7780 OF 2011) 
SEPTEMBER 12, 2011 
[DR. MUKUNDAKAM SHARMA AND ANIL R. DAVE, JJ.] 
A 
B 
Water charges - Levy of increased water charges -
Challenged, on ground that it could not be given retrospective 
effect - Held: In the instant case, decision was taken by the C 
Corporation to increase the water charges based on the 
decision of the State Government to increase such rates of 
water charges - The Corporation had no other alternative but 
to revise the same and follow the increased rates as 
demanded by the State Government itself - The State D 
Government had increased the water charges and the said 
rates were circulated by the Government to the Corporation 
in 2001 itself - However, demand for payment of water 
charges at the aforesaid increased rates was for some time 
kept in abeyance in view of the several representations 
E 
pending at the level of the Government from appellant and 
others - But the Government did not change its position -
The appellant is receiving the facility of water supply from the 
Corporation and is obliged to pay at such rates which are 
demanded by the Corporation as the same rate is being 
F 
charged by the Government - The Corporation cannot be 
asked to suffer a Joss for extensive user of water by the 
appellant - Although in 2003 a policy decision was taken to 
charge half the rate of the increased rate, but later on it was 
found that half the rate was not feasible and Corporation's 
G 
financial loss was continuously increasing - That policy 
decision of 2003 was a/so a stop gap arrangement and the 
said decrease finally came to be amended in the notification 
of 2005 - The stand of the appellant that the increased rate 
675 
H 
676 
SUPREME COURT REPORTS [2011J 15 (ADDLJ S.C.R. 
A of water charges is being demanded from them on a 
retrospective basis is erroneous and fallacious and not proper 
because it is established from the record that the appellant 
had the knowledge ·about the aforesaid increase in 2001 itself 
when the Government issued the notification intimating such 
B increase which fact is an admitted position - There was no 
violation of the water supply agreement between the appellant 
and respondent-corporation nor was there any question of 
giving any retrospective effect to the aforesaid increase. 
Constitution of India, 1950 - Article 14 - Levy of water 
C charges - Classification of consumers on basis of user -
Three categories of consumers - Higher rates for industrial 
consumers using water as a raw material - Held: Requirement 
and use of water by such industrial consumers is huge and 
therefore they are placed as one distinct category or class of 
D their o.vn - These industries stand apart from other industries 
and are also differently situated from residential houses -
There is an intelligible differentia between these three 
categories so there is no discrimination. 
E 
Appellant-company manufactures non-alcoholic 
beverages using water as one of the raw materials. There 
was a water supply agreement between the appellant and 
the respondent-corporation in terms of which the 
respondents could fix charges for water from time to time 
F and increase or decrease the water charges in its 
discretion after giving notice to the consumer. 
In the year 2001, water cess was increased by 
issuance of a Government Resolution. The revision was 
made after drawing a classification differentiating three 
G categories of consumers of water, namely:- a) water used 
for purpose of drinking; b) water for industrial use and 
c) Industries where water was being used as a raw 
material as drinking water, for such industries (that is, 
cold drinks, mineral water etc.). Subsequently, 
H respondent-corporation issued Circular deciding to 
PEPSICO INDIA HOLDING PVT. LTD. v. STATE OF 677 
MAHARASHTRA 
increase its water charges from November.1, 2001 
A 
onwards. The demand for payment of water charges at 
increased rates was, however, kept in abeyance in view 
of the several representations pending at the level of the 
Government from the appellant and others. The 
Government did not change its position and ultimately in 
B 
the year 2005, water rates for industrial consumers using 
water as a raw material was notified by the respondent-
corporation to have been revised w.e.f. 01.11.2001. 
Appellant filed writ petition before the High Court C 
questioning the le

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