Case: Birla Jute Manufacturing Company and Another Vs. State of Madhya Pradesh and Others

Appellant 1 herein is a company (hereinafter referred to as "the Company") registered under the Companies Act and has a factory in the district of Satna in the State of Madhya Pradesh where it is manufacturing cement. On the basis of agreement between the Company and the State of Madhya Pradesh, the State of Madhya Pradesh is supplying raw water directly from the river to the appellants factory. Dispute in this case is at what rule the Company is liable to pay the water charges. In the year 1983, the Company was served with three notices of demand. The first demand notice dated3 was for Rs. 43, 45, 050.11 for the period9 to. The second demand was dated3 for the period1 to. The third demand is dated6 for Rs. 21, 78, 812.15 for the period6 to. Under the first demand water charges were assessed at the rate of Rs. 1.50 per 1000 gallons with late fee and surcharge. The second demand was for late payment and surcharge. The third demand was at the rate of Rs. 2.20 per 1000 litres, which is equal to Rs. 10 per 1000 gallons. It is relevant to mention here that on2 the Company entered into an agreement wherein it undertook to pay water charges at the rate of Rs. 2.25 per 4540 litres with effect from1 and for the period prior to, the Company gave an undertaking that they would accept the rate fixed by the State Government from time to time. After giving the said undertaking the appellant challenged the aforesaid three demands by means of a petition under Article 226 of the Constitution before the High Court of Madhya Pradesh. The High Court was of the view that the third demand for the period6 to6 was unreasonable as it was found that the rate on the basis of which the demand was raised was excessive. The High Court found that the respondent was not entitled tot charges and surcharge. Consequently, the first and second demands were also set aside because the demands included late payment and surcharge. The High Court was of the further view that the appellant Company is bound by the undertaking given by it and the Company is liable to pay water charges at the rate of Rs 1.50 per 1000 gallons prior to1 and Rs. 2.25 per 1000 gallons after. The High Court further directed respondents to fix a reasonable rate for untreated water, after hearing the appellant, for the period6 to. Although the appellant got the substantial relief from the High Court, yet it has chosen to file this appeal.

Court's reasoning:
There is no material before us to come to this conclusion that the undertaking given by the appellant was under duress. On the contrary we find that the appellant had given the solemn undertaking voluntarily. We, therefore, find no merit in the appeal.