VASANT CHEMICALS LIMITED versus THE MANAGING DIRECTOR, HYDERABAD METROPOLITIAN WATER SUPPLY AND SEWERAGE BOARD AND OTHERS on 13 February 2019

[2019] 3 S.C.R. 749

VASANT CHEMICALS LIMITED

v.

THE MANAGING DIRECTOR, HYDERABADMETROPOLITIAN WATER SUPPLY AND SEWERAGE BOARDAND OTHERS

(Civil Appeal Nos. 4616-4617 of 2009)

FEBRUARY 13, 2019

[R. BANUMATHI AND INDIRA BANERJEE, JJ.]

Hyderabad Metropolitan Water Supply and Sewerage Act,1989:

s.55 – Charges towards the use of sewerage cess – Appellantunit’s industrial effluents, after partial treatment at another company,let into the Water Supply and Sewerage Board’s sewer line – Levyof sewerage cess on the appellant by the Board – Held: Levy ofsewerage cess on the appellant by the Board is in accordance withs. 55 and Clause 16 of the agreement entered into between theappellant and the Board – Appellant being occupier of the premises,though its unit is not directly connected with the Board sewer line,the industrial effluents of the appellant unit partially treated at JETLare ultimately let into the Board sewer line which is finally carriedto the Sewerage Treatment Plant – It cannot be said that appellantis not liable to pay sewerage cess to the Board as it is not directlyletting out sewage effluents into the sewage line of the Board andthat it is carrying its effluents in the tanker, lorries and letting outin the effluent treatment plant of JETL and thus, not connected withthe sewage system of the Board – Since the sewage of the appellantis ultimately let into the sewer line of the Board, the appellant cannotcontend that it is covered under proviso to s. 55 – Furthermore, payment of sewerage surcharges and other charges by JETL cannottake away the statutory liability of sewerage cess levied on theappellant’s unit which consumes water and lets out the sewage intothe Board sewer system – Payment of sewerage surcharge and othercharges by JETL to the Board will not amount to double levy –Cess.

Dismissing the appeals, the Court

HELD: 1.1 Section 55 of the Hyderabad MetropolitanWater Supply and Sewerage Board Act, 1989 contemplates levy

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Aof sewerage cess on the occupier of the premises from wherethe sewage or industrial effluents, as the case may be, are letinto the sewer facility provided by the Board by any meanswhatsoever irrespective of fact whether or not the area is servedby sewerage system of the Board. [Para 11][761-A-B]

B1.2 As per the agreement entered into with the Board, themanagement of the JETL pays the amount to the Board towardssurcharge for discharging partially treated effluents from JETLinto Board sewer and also for maintenance of the seweragesystem. After the industrial effluents are partly treated at JETL,the industrial effluents are let into the dedicated pipelineCbelonging to the Board system at Balanagar and from there, thesewage is let into 1000 mm diameter sewage trunk main belongingto the Board through which the effluents are carried to SewerageTreatment Plant (STP) at Amberpet. [Para 13][762-G-H; 763-A]

1.3 The appellant being an occupier of a “non-domesticDpremise” having bulk water supply connection from the Boardand “a consumer of water” and eventually discharging sewageeffluents into the sewer line of the Board, the essential ingredientsof Section 55 are thus satisfied. The levy of sewage cess by therespondent is a statutory levy which the appellant is liable to payunder Section 55 of HMWS&S Act. Clause 16 of the agreementEprovides for payment of sewerage cess in terms of Section 55 ofthe Act which inter alia stipulates that the appellant is requiredto pay sewerage cess in accordance with Section 55 of the Act.The sewerage cess of 35% levied by the Board for carrying thesewage of the acceptable quality through its transmission system Fis thus, both statutory and in terms of the agreement betweenthe appellant and JETL. [Para 16][764-B-C]

1.4 As per Section 54 of the Act, sewage which is likely todamage or interfere with the free maintenance of the seweragesystem of the Board cannot be passed into the Board sewer andsewage treatment works. In terms of Section 54 of HMWS&SGAct, Clause 19 is also incorporated in the agreement betweenthe appellant industry and HMWS&SB, whereby no effluents shallbe discharged into the Board’s sewerage system unless sucheffluents are treated in accordance with the provisions of the WaterAct, 1974. Admittedly, JETL is neither a consumer of bulk waterHsupply nor generating any sewage/industrial effluents of its own.

VASANT CHEMICALS LTD v. MD, HYDERABAD METROPOLITIANWATER SUPPLY & SEWERAGE BOARD

The effluents of the appellant industry are not of acceptablestandards for transmission system of the Board. Before theeffluents of the appellant industry are to be let into the sewerline of the Board, the appellant industry has to get the effluentstreated at its own cost to bring the quality of the effluents to anacceptable level. After getting partial treatment from JETL, theeffluents are let into the said dedicated pipeline which belongs tothe Board at Kukutpally/Balanagar and then they are let into 1000mm diameter sewage trunk belonging to the Board through whichthe effluents are carried to Sewerage Treatment Plant (STP) atAmberpet measuring a distance of 18.90 kilo meters. The lengthof the pipeline from JETL to Amberpet is 29.28 kilo meters.Though the appellant’s unit is not directly connected with theBoard sewer line, the industrial effluents of the appellant unitpartially treated at JETL are ultimately let into the Board sewerline which is finally carried to STP at Amberpet. Thus, the appellantis liable to pay sewerage cess under Section 55 of the Act. Provisoto Section 55 of the Act contemplates that the sewerage cessshall not be levied on the occupier of the premises if suchpremises is stated to be in an area which is not served by thesewerage system of the Board. The proviso implies that theoccupier of such premises cannot use the Board sewer by anymeans whatsoever. Therefore, the submission of the appellantthat it is not liable to pay sewerage cess to the Board as it is notdirectly letting out sewage effluents into the sewage line of theBoard and that it is carrying its effluents in the tanker, lorriesand letting out in the effluent treatment plant of JETL and thusnot connected with the sewage system of the Board, is whollyuntenable. Since the sewage of the appellant is ultimately let intothe sewer line of the Board, the appellant cannot contend that itis not covered under Section 55 of the Act and that it is coveredunder proviso to Section 55 of the Act. [Para 19][765-C-D, F-H;766-A-D]

1.5 The agreement between the appellant and JETL forpartial treatment of appellant’s industrial effluents is the internalcontractual agreement between JETL and the appellant. Theappellant unit is to treat and process the industrial effluents andbring them down to permissible standard limits in accordancewith the provisions of Water Act, 1974 and Environment Act,

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A1986 relating to discharge and disposal of industrial effluents andother objectionable effluents into sewers before discharging ofthe effluents into the Board sewer. The treated effluents shouldalso have to conform to the IS specification laid down from timeto time for disposal of effluent into the domestic sewer of theBoard. To discharge their contractual obligation in bringing theBindustrial effluents to permissible standard limits, the appellantunit entered into an agreement with JETL engaging it to treat itsindustrial effluents in accordance with the environmental laws inforce. The appellant instead of treating the effluents at itspremises at its own cost engaged JETL for treating its effluents.CThus, for its convenience, the appellant unit has entered into anagreement with JETL for treating its effluents and the chargespaid by them to JETL are towards the treatment of effluents andbring it to permissible standards. Therefore, the function of JETLis that of an intermediary with whose assistance, the appellant isdischarging its statutory obligation. [Para 23][767-F-H; 768-A-C]D

1.6 The sewerage cess aims to recover the cost of treatingthe effluents of strength stronger than domestic sewage and tomake the effluents of acceptable quality. In addition to partialtreatment at JETL, the effluents require further treatment andtheir transmission to Sewer Treatment Plant (STP) at AmberpetEsituated at 18.90 kms from Bala Nagar which requires hugefinance. The maintenance of sewer line is highly essential forproper transmission of the effluents from JETL to Board’s sewersystem at Amperpet where the Board brings down the industrialeffluents to the tolerance limits. It requires huge amount toFmaintain the STP treatment of industrial effluents. It also requireshigh demand of energy, STP personnel to operate and maintainthe system, skilled and unskilled workers for proper maintenanceof the plant. The respondent-Board unless it collects seweragecess and other charges cannot meet the heavy expenditure onthe operation and maintenance of sewerage system. The liabilityGof the appellant to pay sewerage cess to the Board arises fromthe Statute and also by way of an agreement which was agreedupon by the appellant. There is no merit in the contention of theappellant unit that its liability has ended upon transferring theindustrial effluents to JETL and that it is not connected to theHBoard’s sewer line. [Para 25][768-E-H; 769-A-B]

1.7 The sewerage cess levied under Section 55 is a statutorylevy on the appellant as it satisfies the essential requirements ofSection 55 of the Act. The agreement/contract between theappellant’s unit and JETL does not take away the appellant fromthe network of the Board’s sewer line and its “use and treatmentof sewerage” of the Board’s sewerage system. Where theappellant’s effluents are being eventually sent to the Board’ssewer, the contention of the appellant that its premises are notserved with a sewer line by the Board defies logic and runscontrary to the object of the Act. Appellant cannot escape fromthe statutory levy by taking a technical approach and interpretingthe proviso as a general rule where it is merely a qualifying one.[Para 27][770-A-C]

1.8 The plea of double levy was rightly rejected by the HighCourt inter alia holding that “even assuming for a moment thatthe petitioner-company is paying some amounts to the JETL, itcannot be said that it is towards sewerage cess”. [Para 30][771-D]

1.9 So far as the payment by the appellant unit to the Board,it is the statutory liability of payment of sewerage cess in termsof Section 55 of HMWS&S Act and Clause 16 of the agreementwhich obligates the appellant unit to pay the sewerage cess interms of Section 55 of the HMWS&S Act. The appellant havingbulk water supply connection from the Board and being“consumer of water” and discharging sewage/effluents into thesewer line of the Board, the payment of sewerage cess by theappellant unit is the statutory liability under Section 55 of theHMWS&S Act and Clause 16 of the agreement. Insofar as thecharges paid by the appellant to JETL for the treatment andprocessing of its effluents, it is purely contractual pursuant tothe agreement entered into between the appellant unit and JETLand the earlier agreement. The same cannot be considered to bein deference to the statutory cess/statutory charge which can onlybe levied by the Board. [Paras 33, 34][772-E-G; 773-B]

1.10 Subject to the provisions of Water Act, 1974 andEnvironment Act, 1986 and subject to the restrictions of Section54 of HMWS&S Act and in terms of Rule 4 and other terms andconditions, Board has the right to permit the ‘applicants’ seekingto discharge their trade or industrial effluents into the Board’s A

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Asewer system and Sewerage Treatment Plant subject to theimposition of costs. The treatment for letting the trade or industrialeffluents into the Board’s sewer shall be subject to such termsand conditions and in such form of agreement as may be prescribedin the regulations made by the Board in accordance with theserules. Having entered into the agreement with the Board onB31.08.2000 and on prior dates, JETL cannot turn around andchallenge the terms and conditions imposed upon it by virtue ofthe agreement. [Para 36][774-E-G]

1.11 So far as the various payments made by JETL to theBoard, levy is in terms of Rule 4 of the Sewerage Rules and asCper the contract and is purely contractual between JETL and therespondent Board for letting partially treated the industrialeffluents of the appellant and other units into the Board’s sewer.Likewise, charges paid by JETL to the Board cannot be said tobe in lieu of the sewerage cess that the appellant unit is liable toDpay which is a statutory liability. Many industries about fifty units,apart from the appellant unit, discharge their effluents to theCETP/JETL. The agreements between JETL and the Board arepurely contractual consciously entered into between the parties.[Para 37][774-H; 775-A-B]

E1.12 JETL lets partially treated effluents into the Board’ssewerage system for further treatment. For further treatment ofsewerage, the effluents are to be taken to Sewerage TreatmentPlant (STP) at Amberpet which is situated at the distance of 08.30kilometres from Balanagar. It requires huge amount fortransmission of the effluents to Board’s sewer system atFAmberpet where the Board brings down the industrial effluentsto tolerance limits. The treatment of industrial effluents requireshigh demand of energy, personnel to operate the system andskilled workers for maintenance of the plant. Unless the Boardcollects sewerage charge/sewerage surcharge, the Board cannotGmeet the heavy expenditure on the operation and maintenanceof sewerage system. Various other members of JETL whodischarge sewage into JETL which is ultimately let into Boardsewer line, may or may not be consumers of water supply by theBoard. That apart, members of JETL may have their own sourceof water supply or they may supplement the supply of water fromH

the Board through different sources either by extraction of groundwater or supply through tankers which cannot be quantified bythe Board. In pursuance of the provisions of the HMWS&S Actand the Sewerage Rules and pursuant to the agreement dated31.08.2000, the charges are levied on JETL who in turn collectsthe charges from its member industrial units who discharge theireffluents into JETL. Therefore, the payments made by JETL tothe Board and the charges in turn collected by JETL from theappellant and other member units, cannot absolve the appellantunit from its statutory liability to pay the sewerage cess. There isno double levy of sewerage cess. [Para 38][775-C-F]

1.13 Levy of sewerage cess being a statutory levy in termsof Section 55 of HMWS&S Act and Clause 16 of the agreementwhich incorporates the statutory levy under Section 55 ofHMWS&S Act, the Single Judge and the Division Bench rightlyrecorded concurrent findings upholding the levy. Observing thatthe appellant being occupier of the premises, though not directlyconnected to the sewer line of the Board, is ultimately lettinginto the sewerage system of the Board after partial treatment atJETL, the High Court was right in holding that the levy ofsewerage cess is in accordance with Section 55 of HMWS&SAct. The payment of sewerage surcharges and the other chargesby JETL cannot take away the statutory liability of sewerage cesslevied on the occupier of the premises who consumes water andlets out the sewage into the Board sewer system. The paymentof sewerage surcharge and other charges by JETL to therespondent-Board will not amount to double levy and the HighCourt rightly dismissed the writ petitions and also the reviewpetitions filed by the appellant. The impugned order does notsuffer from any infirmity warranting interference. The arrears ofsewerage cess, if any, to be paid by the appellant within thestipulated period with 6% interest with effect from the date cessfell due, else it shall carry interest at the rate of 12% thereafter.[Paras 39-40][775-G-H; 776-A-D]

Indian Council for Enviro Legal Action and others v.Union of India and others (1998) 9 SCC 580; WorldSaviors v. Union of India and others (1998) 9 SCC247; Ultra Tech Cement Ltd. v. State of Maharashtra

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Aand another (2011) 13 SCC 497 : [2011] 11 SCR 613; Romesh Kumar Sharm v. Unon of India and Others(2006) 6 SCC 510 : [2006] 4 Suppl. SCR 227 - referredto.

Environmental & Pollution laws in India by Justice T.S.BDoabia (2[nd] Edn-2010) LexisNexis ButterworthsWadhwa, Volume 1 p 1054 - referred to.

Case Law Reference

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CIVIL APPELLATE JURISDICTION: Civil Appeal Nos.4616-4617 of 2009.D

From the Judgment and Order dated 29.12.2003 of the High Courtof Andhra Pradesh at Hyderabad in Review Petition W.P.M.P. Nos.33154 & 33158 of 2003.

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Civil Appeal Nos. 4618-4619 of 2009.

V. Giri, Gourab Banerji, Guru Krishna Kumar, Sr. Advs.,Ms. S. Suman Mund, Krishna Kumar, Mrs. D. Bharathi Reddy, Ms. RakaChatterjee, S. P. Mukherjee, Sudhakar Reddy, K. Parameshwar,M. V. Mukunda, Advs. for the appearing parties.

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The Judgment of the Court was delivered by

R. BANUMATHI, J. 1. These appeals arise out of the judgmentdated 29.10.2003 passed in the Writ Petition Nos.4917 and 5044 of 2000and order dated 29.12.2003 passed in review petition by the High CourtGof Andhra Pradesh at Hyderabad dismissing the writ petitions as well asthe review petitions holding that the levy of sewerage cess levied on theappellant by the respondent-Board is in accordance with Section 55 ofthe Hyderabad Metropolitan Water Supply and Sewerage Act, 1989(HMWS&S Act) and Clause 16 of the agreement entered into betweenthe appellant and the Board.

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2. The facts giving rise to these appeals are that the appellant-M/s Vasant Chemicals Limited which is an amalgamation of three companiesis engaged in the manufacture and export of dye intermediates and otherorganic chemicals in their units at Jeedimetla Industrial Estate, RangaReddy District, Hyderabad. The effluents of the appellant industry andother industries were not of acceptable standards to be let into the sewerline of the Board and required treatment and therefore, the industrialunits in Jeedimetla Estate decided to establish the Common EffluentTreatment Plant (CETP). Hence, under the joint efforts of all the chemicalunits and other industries including the appellant, a company was formednamely M/s Jeedimetla Effluents Treatment Limited (JETL) in the year1987 to get the effluents treated at their own cost to bring the quality ofthe effluents to an acceptable level. The appellant and the other industrialunits made investment by way of shares in the said company towards itscapital. According to the appellant, it has invested to the extent of morethan 29% of the shares in JETL towards its equity.

3. After treating the effluents to sewer standards as prescribedunder the Water (Prevention and Control of Pollution) Act, 1974 (WaterAct, 1974) and the Environment (Protection) Act, 1986 (EnvironmentAct, 1986) between 1988 and 1995, JETL was discharging the treatedwaste water/effluents into the open drains/nalas in Jeedimetla Area.After discussion with Hyderabad Metropolitan Water Supply andSewerage Board (HMWS&SB-the Board) and the Government ofAndhra Pradesh and APPCB, a dedicated pipeline was laid from thepremises of JETL to connect to the sewerage system of HMWS&SBwhich is located at a distance of about 10.38 kilometers at Balanagar atan estimated cost of Rs.346 lakhs. For the said dedicated pipeline, JETLpaid an amount of Rs.75,00,000/- as its contribution and the balanceamount was contributed by the Board and the Government of AndhraPradesh. The pipeline became operational on 31.01.1998. As per thedirection of APPCB, the industries in IDA Jeedimetla are dischargingtheir industrial effluents to JETL, which in turn partially treat effluentsand let into the dedicated pipeline connecting JETL and sewer line atBoard’s sewer at Kukatpalli, Balanagar and then carried to SewerageTreatment Plant (STP) at Amberpet.

4. The appellant has obtained bulk water supply connection fromthe respondent-HMWS&S Board and the Board accorded sanction forsupply of 36,200 gallons water per day @ Rs.12 per kilo litre to the A

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Aappellant-Industry. An agreement was entered into by the appellant withthe respondent-Board on 27.04.1995 stipulating the terms and conditionsof supply of water and the payments required to be made in terms thereto.The agreement provides that HMWS&SB will supply water to theappellant industry and water charges will be levied for the supply ofwater as per the agreement. Clause 16 of the agreement inter aliaBprovided for payment of sewerage cess and that the appellant is liable topay a sewerage cess in accordance with Section 55 of the HMWS&SAct. Clause 17 of the agreement obligates the appellant to avail thesewer facility provided by the HMWS&SB if the premises of the appellantis located at a distance of less than thirty-five meters from the sewerCline of the HMWS&SB.5. The appellant made representations between 1998 and February,2000 stating that levy of sewerage cess was illegal and contrary to theprovisions of HMWS&S Act as the appellant is not discharging itseffluents into the sewerage system of the Board. According to theDappellant, the Board insisted upon payment of the arrears and soughtpayment of the sewerage cess for the period January, 1998 to March,2000 and sought certain amount towards water cess from 1[st] January,1998 to February, 2000 vide two notices dated 25.01.2000. Aggrievedthereby, the appellant filed writ petitions in WP(C) No.4917/2000 andWP(C) No.5044/2000 challenging the notices levying of water cess andEsewerage cess respectively. The writ petitions were dismissed by theHigh Court by the common judgment dated 29.10.2003 upholding thelevy of sewerage cess by holding that such levy is in terms of Section 55of HMWS&S Act. The High Court held that though the appellant’spremises is not directly connected to the sewer line of the Board, theFindustrial effluents of the appellant are being carried to JETL and afterpartial treatment at JETL, the same is let into the sewerage system ofthe Board. It was further observed that as per Section 55 of theHMWS&S Act, the occupier of the premises from where the sewerageor effluents are let into the sewer facility provided by the Board by anymeans, has to pay the sewerage cess irrespective of the fact that whetherGor not the area is served by sewerage system of the Board. The HighCourt pointed out that this statutory liability is incorporated in Clause 16of the agreement as per which the appellant has to pay sewerage cessalong with water cess @ 20% of the water charges. The High Courtdismissed the writ petitions vide judgement dated 29.10.2003 holdingH

that the demand notices are not arbitrary and that do not suffer from anylegal infirmities.

6. The appellant filed review petitions being Review MP No.33154/2003 in WP(C) No.4917/2000 and Review MP No.33158/2003 in WP(C)No.5044/2000 before the High Court which came to be dismissed videorder dated 29.12.2003 on the ground that the judgment dated 29.10.2003does not suffer from any error apparent on the face of the record.

7. Mr. V. Giri, learned senior counsel for the appellant submittedthat since the premises of the appellant industry is situated in the areanot served by the sewage system of the Board and in terms of proviso toSection 55 of the HMWS&S Act, no sewerage cess is leviable. It wascontended that since the appellant is covered under proviso to Section55 of the HMWS&S Act, the statutory liability cannot be imposed on theappellant on the basis of Clause 16 of the agreement. Without prejudiceto the above contentions, it was urged that under the agreement dated31.08.2000 between the JETL and the Board, various charges are leviedon JETL which are in effect sewerage cess and therefore, there cannotbe double levy for the same service/same taxable event which isimpermissible under the law. It was contended that the various documentsproduced and the contentions raised by the parties in the review petitionswere not considered by the High Court and the High Court erred indismissing the review petitions.

8. Reiterating the above submissions, on behalf of JETL, Mr. GuruKrishna Kumar, learned senior counsel submitted that under theagreement dated 31.08.2000, five different kinds of charges are leviedon JETL by the Board namely:- (i) capital contribution (clause 4); (ii)sewerage connection charges (clause 4); (iii) charges towardsmaintenance of sewer line (clause 28); (iv) sewerage maintenance andsewerage treatment charges (clause 28); and (v) sewerage surchargefor effluents above a certain level (clause 29) and those charges thoughnot christened as sewerage cess, they are in effect sewerage cess interms of Section 55 of HMWS&S Act. It was further contended thatvarious charges levied on JETL by virtue of the agreement dated31.08.2000 correspond to the sewerage cess under Section 55 ofHMWS&S Act and levy of sewerage cess on the appellant for the sameact of discharging of the same sewage, would therefore amount to adouble levy on the industrial units.

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A9. On behalf of the respondent Board, learned senior counsel Mr.Gourab Banerji submitted that the appellant industry, obtaining bulk watersupply from the Board and discharging sewage into the sewer line of theBoard, is liable to pay sewerage cess under Section 55 of the HMWS&SAct. It was submitted that since after partial treatment at JETL, theeffluents are let into the sewer line of the Board through which theBeffluents are carried to Sewerage Treatment Plant (STP) at Amberpetfor further treatment, the appellant is connected to the sewerage systemof the Board and is liable to pay sewerage cess under Section 55 of theHMWS&S Act. It was contended that Clause 16 of the agreementincorporates the levy under Section 55 of the HMWS&S Act and theCRules and Regulations thereunder and as per the terms of the agreementalso, the appellants are liable to pay sewerage cess. Insofar as the pleaof double taxation, it was submitted that the JETL was not a party to thewrit petitions filed by the appellant and the subsequent writ petition inWP(C) No.17381/2004 filed by the JETL inter alia challenging the sewerage surcharge under various agreements was already dismissedDfor default by the High Court.

10. We have carefully considered the submissions and perusedthe impugned judgment and materials on record. The following pointsarise for determination in these appeals:- E(i) Whether the appellant is right in contending that the appellantunit is not connected to the sewerage system of the Board andso the levy of sewerage cess on the appellant under Section55 of HMWS&S Act is not sustainable?

(ii) Whether the appellant is right in contending that since theFappellant’s unit is not served by a sewerage system of theBoard, as per proviso to Section 55 of HMWS&S Act, nosewerage cess can be levied?

(iii) Whether the charges collected from JETL under theagreement dated 31.08.2000 is in effect, sewerage cess inGterms of Section 55 of HMWS&S Act, thereby amounting todouble levy of sewerage cess/charge for the same service/same taxable amount?

Appellant’s statutory liability to pay sewerage cess andRe: contention: Appellant is covered by the proviso to Section55 of the ActH

11. Section 55 of the HMWS&S Act contemplates levy ofsewerage cess on the occupier of the premises from where the sewageor industrial effluents, as the case may be, are let into the sewer facilityprovided by the Board by any means whatsoever irrespective of factwhether or not the area is served by sewerage system of the Board.Section 55 of HMWS&S Act reads as under:- “55. Charges towards the use of sewerage cess—

Every occupier of both domestic and non-domestic premises shallpay to the Board at the rate not exceeding thirty five percent ofthe bill charging for the water consumed or at such rate as maybe prescribed by rules, to defray the capital cost of sewerage andsewage treatment works undertaken by the Board and theoperation and maintenance of the sewerage system from time totime:

Provided that no such charges shall be levied in any premisessituated in the areas which are not served by the sewerage systemof the Board.”

12. Admittedly, the appellant industry has obtained sanction forbulk water supply connection from the Board for the supply of 36,200gallons of water per day @ Rs.12/- per kilo litre for the manufacture ofdye and other chemicals. In terms of the sanction of water supply to theappellant, an agreement was entered into with the respondent-Board on27.04.1995 stipulating the conditions and the payments required to bemade in terms thereto. The agreement provides for payment of seweragecess in accordance with Section 55 of the HMWS&S Act. Clause 16 ofthe agreement mandates the Board to collect sewerage cess from theappellant-industry in terms of Section 55 of the HMWS&S Act. Clause17 of the agreement makes it obligatory on the part of the appellant toavail the facility of the Board if it is located within thirty-five metersfrom the Board’s sewerage system. Clauses 16 and 17 read as under:- “Clause 16. In accordance with the provisions of Section 55 ofthe HMWSSA Act, 1989, the consumer shall pay sewerage cessalong with water charges at the rate of 20% of the water chargesor such other rates as may be prescribed and determined by theBoard from time to time.

Clause 17. It shall be obligatory on the part of the consumer toavail the sewers facility provided by the Board if the premises of A

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Athe consumers are located at a distance less than 35 metres awayfrom the Board sewer line to any point of the boundary of theconsumer premises.”

13. Appellant industry and other industrial units are producingchemicals, bulk pharmaceuticals and dye intermediates causing heavyBpollution. In order to comply with the provisions of Water Act, 1974, theindustrial effluents discharged by the appellant industry and others areto be treated otherwise the industrial units will be violating various lawsgoverning the treatment and disposal of sewage including protection ofenvironment. The issue pertaining to pollution, discharge of effluents inthe State of Andhra Pradesh including the industrial region of JeedimetlaCwas the subject matter of a proceeding before this Hon’ble Court beingWrit Petition (C) No.1056 of 1990, in the matter of Indian Council forEnviro/legal Action and Others. In the said proceedings, a joint actionplan was proposed by the CPCB, New Delhi and APPCB and a commoneffluent treatment plant was ordered to be set up. As the industriesDwere sending their untreated effluents into the sewer, directions weregiven that the A.P. Pollution Control Board would not accept the effluentsunless these conform to the standards prescribed by the Board videIndian Council for Enviro Legal Action and others v. Union of Indiaand others, (1998) 9 SCC 580. Similar problem arose in the case ofWorld Saviors v. Union of India and others (1998) 9 SCC 247. InEorder to comply with the provisions of the Water Act, 1974 and theEnvironment Act, 1986 and in order to carry the industrial sewage to theBoard’s sewer trunk, a dedicated pipeline to the extent of 10.38 kilometers from JETL to Kukatpally and Sanathnagar Main Line was laid.The cost of laying the pipeline is stated to be Rs.346 lakhs out of whichFcontribution of the JETL was Rs.75 lakhs and the balance amount wascontributed by the Board and the Government of Andhra Pradesh. Thisdedicated pipeline became operational from 31.01.1998. The pipelinefrom JETL to Balanagar is a dedicated pipeline used exclusively by theJETL. As per the agreement entered into with the Board, the management of the JETL pays the amount to the Board towards surcharge forGdischarging partially treated effluents from JETL into Board sewer andalso for maintenance of the sewerage system. After the industrialeffluents are partly treated at JETL, the industrial effluents are let intothe dedicated pipeline belonging to the Board system at Balanagar andfrom there, the sewage is let into 1000 mm diameter sewage trunk mainH

belonging to the Board through which the effluents are carried toSewerage Treatment Plant (STP) at Amberpet.

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14. “A ‘trunk sewer’ is one which bears the same relation to anentire sewer system that the trunk of a tree bears to its branches, or themain stream of a river bears to its tributaries. It is sometimes called a‘trunk line sewer,’ an ‘intercepting sewer,’ or a ‘trunk line interceptingBsewer”. “Ref: Environmental & Pollution laws in India by Justice T.S. Doabia (2ndEdition-2010) published by LexisNexis Butterworths”Wadhwa, Volume 1 at page no.1054.Graphic description of thesewerage connection is as under:- C

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15. As per Section 55 of the HMWS&S Act, the following essential ingredients are to be satisfied for levy of sewerage cess:-

1. There has to be an occupier domestic or non-domestic premise; G

2. There should be consumption of water by such occupier;

3. The rate to be charged would be up to 35% of bill for waterconsumed or at such rate as may be prescribed by rules; and

4. The amount collected is towards:- (a) defraying capital cost ofsewerage and sewerage treatment works undertaken by the H

ABoard; and (b) for operation and maintenance of seweragesystem from time to time.

16. The appellant being an occupier of a “non-domestic premise”having bulk water supply connection from the Board and “a consumerof water” and eventually discharging sewage effluents into the sewerBline of the Board, the essential ingredients of Section 55 are thus satisfied.The levy of sewage cess by the respondent is a statutory levy which theappellant is liable to pay under Section 55 of HMWS&S Act. Clause 16of the agreement provides for payment of sewerage cess in terms ofSection 55 of the Act which inter alia stipulates that the appellant isrequired to pay sewerage cess in accordance with Section 55 of theCAct. The sewerage cess of 35% levied by the Board for carrying thesewage of the acceptable quality through its transmission system is thusboth statutory and in terms of the agreement between the appellant andJETL.

17. Contention of the appellant is that it is not liable to pay sewerageDcess to the Board as it is not letting out the sewage effluents to thesewage system of the Board but is carrying the effluents in the tanker,lorries and letting it out in the effluent treatment of JETL and thus is notconnected with the sewage line of the Board. Mr. V. Giri, learned seniorcounsel for the appellant contended that the appellant industry is notEconnected with sewerage system of the Board and therefore, levy ofsewerage cess under Section 55 of the HMWS&S Act is not sustainable.Drawing our attention to the finding of the High Court “that there is nosewerage line of HMWS&SB connecting the appellant’s premisesto the sewerage system of HMWS&SB…..”, the learned senior counselfor the appellant submitted that since there is no sewer or drainage lineFconnecting the appellant industry, proviso to Section 55 of the HMWS&SAct applies and no sewerage cess is leviable. It was further submittedthat even assuming that the dedicated pipeline from JETL for carryingits treated effluents to the sewerage system of the Board at Balanagaris a “sewerage system of the Board” which is more than two kiloGmeters from the premises of the appellant industry, JETL is separatelypaying the surcharge and the appellant is not connected with the seweragesystem and therefore, there cannot be levy of sewerage cess on theappellant under Section 55 of the HMWS&S Act.

18. As pointed out earlier, admittedly, the appellant has obtainedHbulk water supply connection from the Board for supply of 36,200 gallons of water per day @ Rs.12/- per kilo litre. It is also admitted that theappellant is discharging its industrial effluents into the Board sewer line.The appellant being an occupier of the premises who is consuming waterand discharging sewage into the sewerage system of the Board, in termsof Section 55 of the HMWS&S Act, is liable to pay sewerage cess.Though the pipeline from JETL to Kukutpally/Balanagar is stated to bethe dedicated pipeline, as pointed out earlier, this was laid at the cost ofRs.346 lakhs, out of which, JETL has paid only Rs.75 lakhs. The rest ofthe cost was borne by the Board and the Government of Andhra Pradesh.It is pertinent to note that Clause 4 of the agreement dated 31.01.1998between JETL and the Board categorically stipulates that the dedicatedpipeline from JETL to Kukutpally/Balanagar belongs to the Board.

19. As per Section 54 of the Act, sewage which is likely to damageor interfere with the free maintenance of the sewerage system of theBoard cannot be passed into the Board sewer and sewage treatmentworks. In terms of Section 54 of HMWS&S Act, Clause 19 is alsoincorporated in the agreement dated 27.04.1995 between the appellantindustry and HMWS&SB. As per Clause 19 of the agreement, noeffluents shall be discharged into the Board’s sewerage system unlesssuch effluents are treated in accordance with the provisions of the WaterAct, 1974. Clause 19 reads as under:- “19. No effluent shall be discharged into the Board sewer unlesssuch effluent is treated in accordance with the provisions of Water(Prevention and Control of Pollution) Act, 1974 relating todischarge and disposal of industrial effluents and otherobjectionable effluents. Further, the treatment shall also conformto the IS specification laid down from time to time for disposal ofeffluent into the domestic sewer of the Board.”

Admittedly, JETL is neither a consumer of bulk water supply norgenerating any sewage/industrial effluents of its own. The effluents ofthe appellant industry are not of acceptable standards for transmissionsystem of the Board. Before the effluents of the appellant industry areto be let into the sewer line of the Board, the appellant industry has toget the effluents treated at its own cost to bring the quality of the effluentsto an acceptable level. After getting partial treatment from JETL, theeffluents are let into the said dedicated pipeline which belongs to theBoard at Kukutpally/Balanagar and then they are let into 1000 mmdiameter sewage trunk belonging to the Board through which the effluents AB

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Aare carried to Sewerage Treatment Plant (STP) at Amberpet measuringa distance of 18.90 kilo meters. The length of the pipeline from JETL toAmberpet is 29.28 kilo meters. Though the appellant’s unit is not directlyconnected with the Board sewer line, the industrial effluents of theappellant unit partially treated at JETL are ultimately let into the Boardsewer line which is finally carried to STP at Amberpet. In the light ofBthis admitted factual position, the appellant is liable to pay seweragecess under Section 55 of the Act. Proviso to Section 55 of the Actcontemplates that the sewerage cess shall not be levied on the occupierof the premises if such premises is stated to be in an area which is notserved by the sewerage system of the Board. The proviso implies thatCthe occupier of such premises cannot use the Board sewer by any meanswhatsoever. Therefore, the contention of the appellant that it is not liableto pay sewerage cess to the Board as it is not directly letting out sewageeffluents into the sewage line of the Board and that it is carrying itseffluents in the tanker, lorries and letting out in the effluent treatmentplant of JETL and thus not connected with the sewage system of theDBoard, in our view, is wholly untenable. Since the sewage of the appellantis ultimately let into the sewer line of the Board, the appellant cannotcontend that it is not covered under Section 55 of the Act and that it iscovered under proviso to Section 55 of the Act.

20. Placing reliance upon Ultra Tech Cement Ltd. v. State ofEMaharashtra and another, (2011) 13 SCC 497, learned senior counselfor the appellant contended that when a particular cess is leviable underan enactment and the said enactment exempts a specific class of personsfrom paying the said cess, the State Government cannot make the lesseeliable to pay the said cess on the ground that the agreement was enteredFinto under a different enactment. Placing reliance upon paras (12) and(20) of the said judgment, it was contended that there is no sewer ordrainage line connecting the appellant’s units or any other industry inJeedimetla Effluent Treatment Limited to the sewerage system ofHMWS&SB and neither the appellant nor other industries dischargetheir sewage into the sewer line of the Board and, therefore, theGappellant’s unit is covered under proviso to Section 55 of the HMWS&SAct. The learned senior counsel further contended that any fiscalextraction is required to be constructed strictly in accordance with theprovisions of the charging section and even if a clause for such paymentis incorporated into the agreement as the agreement is subject to theHprovision of the relevant charging section.

21. The above argument proceeds on the presumptive footing asif the appellant’s unit is covered under proviso to Section 55 of theHMWS&S Act. Proviso to Section 55 of HMWS&S Act states that nocharge would be levied in any premises situated outside the sewagesystem/not served by the sewerage system of the Board. It has to beseen whether the appellant is right in contending that the appellant industryis not connected with the sewerage line of the Board and that no sewageof the appellant is let into the sewerage system of the Board and therefore,the appellant is covered under proviso to Section 55 of HMWS&S Act.

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22. In the process of letting out effluents, two things are involvednamely – (i) the treatment of industrial effluents to bring down the contentsof the effluents to an agreed specification on one part; and (ii) thetransmission of those partially treated industrial effluents through thesewerage system of the Board. Parties have entered into variousagreements and there are three sets of agreements which are as under:- C

S. No.Parties Date of DAgreement 1. M/s. Vasant Chemicals Ltd. and 27.04.1995 HMWS&S Board 2. M/s. Vasant Chemicals Ltd. and 22.01.1996 Jeedimetla Effluent Treatment Ltd. E(JETL) 3. Jeedimetla Effluent Treatment Ltd. 31.01.1998 (JETL) and HMWS&S Board and 31.08.2000

23. Let us now consider the effect of the agreement between theappellant and JETL on the statutory liability of the appellant under Section55 of the Act. The agreement between the appellant and JETL for partialtreatment of appellant’s industrial effluents is the internal contractualagreement between JETL and the appellant. The appellant unit is totreat and process the industrial effluents and bring them down topermissible standard limits in accordance with the provisions of WaterAct, 1974 and Environment Act, 1986 relating to discharge and disposalof industrial effluents and other objectionable effluents into sewers beforedischarging of the effluents into the Board sewer. The treated effluentsshould also have to conform to the IS specification laid down from time F

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Ato time for disposal of effluent into the domestic sewer of the Board. Todischarge their contractual obligation in bringing the industrial effluentsto permissible standard limits, the appellant unit entered into an agreementdated 22.01.1996 with JETL engaging it to treat its industrial effluents inaccordance with the environmental laws in force. The appellant insteadof treating the effluents at its premises at its own cost engaged JETL forBtreating its effluents. Thus, for its convenience, the appellant unit hasentered into an agreement with JETL for treating its effluents and thecharges paid by them to JETL are towards the treatment of effluentsand bring it to permissible standards. Therefore, the function of JETL isthat of an intermediary with whose assistance, the appellant is dischargingCits statutory obligation.

24. Admittedly, the appellant’s industrial effluents are carried toJETL in closed tankers and after partial treatment at JETL, let into theBoard’s sewer line. Admittedly, the effluents of the appellant’s unit arenot of acceptable standards for transmission through the sewer line ofDthe Board and therefore, the appellant’s industry and other industrieshave to get the effluents treated at their own cost to bring the quality ofthe effluents to an acceptable level by treating the same to some extent.The sewerage cess of 35% levied by the Board is for carrying thesewerage of acceptable quality through its sewer line and further treatingit at STP at Amberpet.E

25. The sewerage cess aims to recover the cost of treating theeffluents of strength stronger than domestic sewage and to make theeffluents of acceptable quality. In addition to partial treatment at JETL,the effluents require further treatment and their transmission to SewerTreatment Plant (STP) at Amberpet situated at 18.90 kms from BalaFNagar which requires huge finance. The maintenance of sewer line ishighly essential for proper transmission of the effluents from JETL toBoard’s sewer system at Amberpet where the Board brings down theindustrial effluents to the tolerance limits. It requires huge amount tomaintain the STP treatment of industrial effluents. Further, it requiresGhigh demand of energy, STP personnel to operate and maintain thesystem, skilled and unskilled workers for proper maintenance of the plant.The respondent-Board unless it collects sewerage cess and other chargescannot meet the heavy expenditure on the operation and maintenance ofsewerage system. The liability of the appellant to pay sewerage cess tothe Board arises from the Statute and also by way of an agreementHwhich was agreed upon by the appellant. There is no merit in the contention of the appellant unit that its liability has ended upon transferringthe industrial effluents to the respondent-JETL and that it is not connectedto the Board’s sewer line. As discussed earlier, the partially treatedeffluents of the appellant’s unit are ultimately let into the sewer lineprovided by the Board which is being carried to Amberpet STP for furthertreatment and discharge. After partial treatment at JETL, when appellant’seffluents are let into the Board’s sewage system, the appellant is notjustified in contending that it is not connected to the sewer line of theBoard and hence, covered under the proviso to Section 55 of the Act.

26. It is well-settled that the normal function of a proviso is toexcept something out of the enactment. While considering theinterpretation of the proviso, in Romesh Kumar Sharma v. Union ofIndia and others, (2006) 6 SCC 510, this Court held as under:-

“12. “10. The normal function of a proviso is to except somethingout of the enactment or to qualify something enacted therein whichbut for the proviso would be within the purview of the enactment.As was stated in Mullins v. Treasurer of Surrey (1880) 5 QBD170 (referred to in Shah Bhojraj Kuverji Oil Mills and GinningFactory v. Subbash Chandra Yograj Sinha AIR 1961 SC 1596and Calcutta Tramways Co. Ltd. v. Corpn. of Calcutta AIR1965 SC 1728, when one finds a proviso to a section the naturalpresumption is that, but for the proviso, the enacting part of thesection would have included the subject-matter of the proviso.The proper function of a proviso is to except and to deal with acase which would otherwise fall within the general language ofthe main enactment and its effect is confined to that case. It is aqualification of the preceding enactment which is expressed interms too general to be quite accurate. As a general rule, a provisois added to an enactment to qualify or create an exception towhat is in the enactment and ordinarily, a proviso is not interpretedas stating a general rule. ‘If the language of the enacting part ofthe statute does not contain the provisions which are said to occurin it you cannot derive these provisions by implication from aproviso. …’ said Lord Watson in West Derby Union v.Metropolitan Life Assurance Society 1897 AC 647. Normally,a proviso does not travel beyond the provision to which it is aproviso. It carves out an exception to the main provision to whichit has been enacted as a proviso and to no other……”

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A27. The sewerage cess levied under Section 55 of the HMWS&SAct is a statutory levy on the appellant as it satisfies the essentialrequirements of Section 55 of the Act. The agreement/contract betweenthe appellant’s unit and JETL does not take away the appellant from thenetwork of the Board’s sewer line and its “use and treatment ofsewerage” of the Board’s sewerage system. Where the appellant’sBeffluents are being eventually sent to the Board’s sewer, the contentionof the appellant that its premises are not served with a sewer line by theBoard defies logic and runs contrary to the object of the Act. Theappellant, being an occupier of non-domestic premises, is consuming thewater provided by the Board, generating the industrial effluents and usingCthe Board’s sewer to release them after partial treatment. In such anadmitted position, the appellant cannot escape from the statutory levy bytaking a technical approach and interpreting the proviso as a generalrule where it is merely a qualifying one. As the appellant eventually letsout its effluents to the Board’s sewerage system, the appellant is notright in contending that it is covered under proviso to Section 55 of theDAct.

28. Re: Contention – Levy of double taxation:- Learned seniorcounsel for the appellant contended that even assuming that the dedicatedpipeline of JETL which connects to the sewerage system of the Boardat Balanagar is construed to be “Sewer”, any levy of sewerage cess isEapplicable only to JETL and JETL under its agreement with HMWS&SB,is paying surcharges and sewerage charges to HMWS&SB by collectingthe said amount from the appellants and other industries for the saidtaxable event. It was submitted that under Section 55 of HMWS&SAct, the sewerage cess is collected for the – (i) to defray capital cost ofFsewerage; (ii) for sewage treatment works undertaken by the Board;and (iii) for operation and maintenance of the sewerage system. It iscontended that under its agreement dated 31.08.2000 with the Board,JETL is paying various charges like - (i) sewerage connection charges;(ii) charges towards maintenance of sewer line; (iii) seweragemaintenance and water treatment charges; and (iv) sewerage surchargeGfor effluents above a certain level. It was contended that various chargespaid by JETL to the Board is in essence “sewerage cess”, though it iscollected under different head “sewerage surcharge”.

29. Taking us through Clause 4 of the agreement with Board dated31.08.2000, Mr. Guru Krishna Kumar, learned senior counsel appearingH

for JETL submitted that under agreement dated 31.08.2000, variouscharges are collected and it additionally provides for levy of surchargealso. It is contended that even though these charges may not be christenedas a sewerage cess, they are in effect correspond to the essentials of“sewerage cess” in Section 55 and a levy of cess from the appellantfor the same act of disposal of the sewage would therefore amount to adouble levy on the industrial units. The learned senior counsel submittedthat sewerage cess cannot be exacted from the appellant because it isalready been paid by JETL. It was urged that various charges levied onJETL are excessive arbitrary apart from the fact that there is a doublelevy.

30. As rightly contended by learned senior counsel for therespondent-Board, the plea of double payment of sewerage cess wasnever raised in the writ petition filed by the appellant; but it was raisedby way of oral submission before the High Court and thereafter, by wayof review petition. The plea of double levy was rightly rejected by theHigh Court inter alia holding that “even assuming for a moment thatthe petitioner-company is paying some amounts to the JETL, it cannotbe said that it is towards sewerage cess”.

31. As pointed out by the learned senior counsel for the respondent-Board, JETL never sought to implead itself as a party respondent in thewrit petition filed by the Board. It is also pertinent to point out that oneMr. G.K.B. Chowdary who was then the Managing Director of theappellant-group of companies, was also the Managing Director of JETL.It passes one’s comprehension as to why JETL whose Managing Directoris the same as the Managing Director of the appellant Group ofCompanies had not taken any step to get themselves impleaded in thewrit petition before the High Court and raise the plea of double taxation.

32. In the Supreme Court, notice was ordered on 07.07.2004 andpermitted the appellant to implead JETL as party respondent. It wasthereafter, JETL filed writ petition in WP(C) No.17381/2004 (24.09.2004)inter alia for various reliefs:- (i) That clauses 28 and 29 of the agreementdated 10.06.2003 between the petitioner company Jeedimetla EffluentTreatment Limited and HMWS&SB as shylockin and unconscionable,usurious, exorbitant, unconstitutional, ultra vires the powers of theHMWS&SB; and (ii) That the action of the HMWS&SB in collectingvarious charges under Clause 4 of the agreement and other chargeslevied upon JETL. The said writ petition that kept pending for many AB

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Ayears came to be dismissed by the High Court’s order dated 21.12.2015for non-prosecution. JETL has also filed WP(C) No.20117/2017challenging the enhancement of sewerage surcharge and the said writpetition is also said to have been dismissed on 25.06.2014.-

33. Since, elaborate arguments were advanced regardingB“excessive and arbitrary levy on JETL” as well as the plea of “doublelevy of sewerage cess”, we have also considered the matter on merits.Based on three sets of agreements between the parties, there are threekinds of payments as under:-

a) Payment of sewerage cess by the appellant to the Board inCterms of Section 55 of the HMWS&S Act and Clause 16 ofthe agreement dated 27.04.1995;

b) Payment of treatment and processing service charges by theappellant unit to JETL as stipulated in Clause 19 of theagreement between the appellant and JETL dated 01.04.2000;andD

c) Various charges paid by JETL to the Board pursuant to theagreement dated 31.08.2000 and the earlier agreements.

So far as the payment by the appellant unit to the Board, it is thestatutory liability of payment of sewerage cess in terms of Section 55 ofEHMWS&S Act and Clause 16 of the agreement which obligates theappellant unit to pay the sewerage cess in terms of Section 55 of theHMWS&S Act. The appellant having bulk water supply connectionfrom the Board and being “consumer of water” and discharging sewage/effluents into the sewer line of the Board, the payment of seweragecess by the appellant unit is the statutory liability under Section 55 of theFHMWS&S Act and Clause 16 of the agreement.

34. Insofar as the charges paid by the appellant to JETL for thetreatment and processing of its effluents, it is purely contractual pursuantto the agreement entered into between the appellant unit and JETL dated01.04.2000 and the earlier agreement dated 22.01.1996. As pointed outGearlier, the appellant unit is obligated to treat and process the industrialeffluents and bring them down to permissible standard limits in accordancewith the provisions of the Water Act, 1974 and Environment Act, 1986before they are let into the sewer line of the Board. To discharge itsstatutory as well as contractual obligation, the appellant unit has entered H

into agreement with JETL for the treatment and processing of appellant’seffluents before being let into Board’s sewer line. Payment of chargesby the appellant to JETL is purely contractual between the parties andthe same cannot be considered to be in deference to the statutory cess/statutory charge which can only be levied by the Board. In this regard,the High Court has rightly observed that assuming that the appellant ispaying some amount to JETL, the same cannot be termed as “seweragecess”.

35. So far as payment of charges by JETL to the respondentBoard, the same is governed by the terms and conditions of the agreementbetween JETL and the Board dated 31.08.2000. JETL’s contention istwo fold: - (i) levy of various charges under the agreement is arbitraryand exorbitant; and (ii) double levy of sewerage cess. The gist of theterms and conditions of the contract dated 31.08.2000 between JETLand the Board and various charges levied are as under:-

1. Clause 4 specifically stipulated that JETL shall be chargedtowards overall proportionate sewerage maintenance andsewerage treatment charges being incurred by the Board fromtime to time on the overall sewerage system of the Board;

2. In terms of Clause 4, the Board has levied sewerage connectioncharges @ Rs.4/- per litre for the discharge into the Boardsewer (6 equal installments of Rs.23.34 lakhs each by 10[th] ofeach month) – Total Rs.140.04 lakhs;

3. Clause 18 stipulates that no treated effluent shall be dischargedby JETL unless the same is treated in accordance with theprovisions of the Water and the Air Acts and the various upperlimits of the parameters of the treated industrial effluents shallbe within the permissible standard limits prescribed; Further,Clauses 22 to 24 give the Board the right to reject effluents ofJETL if they are not found to be consistent with the prescribedparameters;

4. In terms of Clause 28, an amount of rupees one lakh per monthis to be paid by JETL towards maintenance of the sewer line.Additionally, JETL has to pay sewerage maintenance andsewerage treatment charges @ Rs.6 per thousand litres oftreated effluents; A

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A5. Further, as per Clause 29, a surcharge was also levied on JETLfor permitting industrial effluents beyond the limits prescribedon two important parameters viz. Chemical Oxygen Demand(COD) and Total Dissolved Solids (TDS); Each parameter/COD and TDS will be considered independent for levy thesurcharge.

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36. In terms of Rule 4 of Sewerage Rules, the Board shall chargeon the applicants seeking to discharge the trade or industrial effluentsetc. Rule 4 reads as under:- “Sewerage and Industrial Effluents- C

4. The Board shall charge on applicants seeking to discharge theirtrade or industrial effluents, sullage drain, sewer (other than stormsewer or combined sewer) of a private party, State Government,Central Government, or local body or local authority, into Boardsewers, towards the special treatment cost of such sewage andthe charges shall be as fixed by the Board from time to time,depending upon the nature of such sewage and cost of treatmentinvolved to bring the same within tolerance limits of effluentstandards etc. The installation and maintenance of required metersfor measuring the volume of effluents shall be insisted at the costof the applicants, by the board.”

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Subject to the provisions of Water Act, 1974 and EnvironmentAct, 1986 and subject to the restrictions of Section 54 of HMWS&S Actand in terms of Rule 4 and other terms and conditions, Board has theright to permit the ‘applicants’ seeking to discharge their trade orindustrial effluents into the Board’s sewer system and SewerageFTreatment Plant subject to the imposition of costs. The treatment forletting the trade or industrial effluents into the Board’s sewer shall besubject to such terms and conditions and in such form of agreement asmay be prescribed in the regulations made by the Board in accordancewith these rules. Having entered into the agreement with the Board onG31.08.2000 and on prior dates, JETL cannot turn around and challengethe terms and conditions imposed upon it by virtue of the agreement.

37. So far as the various payments made by JETL to the Board,levy is in terms of Rule 4 of the Sewerage Rules and as per the contractand is purely contractual between JETL and the respondent Board forletting partially treated the industrial effluents of the appellant and other H

units into the Board’s sewer. Likewise, charges paid by JETL to theBoard cannot be said to be in lieu of the sewerage cess that the appellantunit is liable to pay which is a statutory liability. It is pertinent to notethat many industries about fifty units, apart from the appellant unit,discharge their effluents to the CETP/JETL. The agreement dated31.08.2000 and the earlier agreements between JETL and the Boardare purely contractual consciously entered into between the parties.

38. JETL lets partially treated effluents into the Board’s seweragesystem for further treatment. As discussed earlier, for further treatmentof sewerage, the effluents are to be taken to Sewerage Treatment Plant(STP) at Amberpet which is situated at the distance of 08.30 kilometresfrom Balanagar. It requires huge amount for transmission of the effluentsto Board’s sewer system at Amberpet where the Board brings down theindustrial effluents to tolerance limits. As pointed out earlier, the treatmentof industrial effluents requires high demand of energy, personnel tooperate the system and skilled workers for maintenance of the plant.Unless the Board collects sewerage charge/sewerage surcharge, theBoard cannot meet the heavy expenditure on the operation andmaintenance of sewerage system. Various other members of JETLwho discharge sewage into JETL which is ultimately let into Board sewerline, may or may not be consumers of water supply by the Board. Thatapart, members of JETL may have their own source of water supply orthey may supplement the supply of water from the Board through differentsources either by extraction of ground water or supply through tankerswhich cannot be quantified by the Board. In pursuance of the provisionsof the HMWS&S Act and the Sewerage Rules and pursuant to theagreement dated 31.08.2000, the charges are levied on JETL who inturn collects the charges from its member industrial units who dischargetheir effluents into JETL. Therefore, the payments made by JETL tothe Board and the charges in turn collected by JETL from the appellantand other member units, cannot absolve the appellant unit from itsstatutory liability to pay the sewerage cess. We find no merit in thecontention that there is double levy of sewerage cess.

39. Levy of sewerage cess being a statutory levy in terms ofSection 55 of HMWS&S Act and Clause 16 of the agreement whichincorporates the statutory levy under Section 55 of HMWS&S Act, thelearned Single Judge and the Division Bench rightly recorded concurrentfindings upholding the levy. Observing that the appellant being occupier AB

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Aof the premises, though not directly connected to the sewer line of theBoard, is ultimately letting into the sewerage system of the Board afterpartial treatment at JETL, the High Court was right in holding that thelevy of sewerage cess is in accordance with Section 55 of HMWS&SAct. The payment of sewerage surcharges and the other charges byJETL cannot take away the statutory liability of sewerage cess leviedBon the occupier of the premises who consumes water and lets out thesewage into the Board sewer system. The payment of seweragesurcharge and other charges by JETL to the respondent-Board will notamount to double levy and the High Court rightly dismissed the writpetitions and also the review petitions filed by the appellant. The impugnedCorder does not suffer from any infirmity warranting interference.

40. In the result, these appeals are dismissed. The arrears ofsewerage cess, if any, to be paid by the appellant within a period of eightweeks from today with 6% interest with effect from the date cess felldue. If the arrears are not paid within the stipulated period of eight weeks,Dit shall carry interest at the rate of 12% thereafter.

Nidhi Jain

Appeals dismissed.

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