Authority: High Court of Chhattisgarh at Bilaspur

Order Date: 22 September 2026

Case Overview

  • Petitioner: ACC Ltd, a cement and clinker manufacturer with a 25 MW captive power plant at Jamul, Durg, Chhattisgarh.
  • Respondents: State of Chhattisgarh and various officials of the Water Resources Department.
  • The petitioner challenged demand notices dated 13 June 2024 demanding ₹1,81,32,897 for the captive power plant and ₹1,99,26,915 for the cement plant (period 1 Apr 2020 – 31 May 2024), alleging unauthorised use of water and the imposition of a three‑times rate plus interest.
  • The petitioner argued that the demands contravened the Supreme Court’s order of 11 Jan 2022 (Civil Appeal No. 316/2022) which barred any penalty for the period up to March 2020 and that the applications for surface‑water allotment dated 3 June 2020 and 10 Mar 2023 remained pending.
  • Earlier procedural history includes: High Court orders in 2014 and 2015 directing post‑decisional hearing; dismissal of a writ challenging Rules 71‑A and 73 in 2019; Supreme Court directions on 22 Nov 2021 to recompute consumption and on 11 Jan 2022 to waive penalty and require payment of outstanding consumption charges only.
  • Respondents contended that the three‑times rate is authorized under Rule 73(1) of the Chhattisgarh Irrigation Rules, 1974 for unauthorised use, and that interest is permissible for delayed payment.
  • The Court examined statutory provisions (Sections 26 and 40 of the Chhattisgarh Irrigation Act, 1931; Rules 71‑A, 73, 75‑78, 193 of the 1974 Rules) and relevant Supreme Court precedents on penalty and interest (J.K. Synthetics Ltd. v. CTO, India Carbon Ltd. v. State of Assam, V.V.S. Sugars v. Govt. of A.P.).

Final Outcome

  • The Court set aside the demand notices to the extent they impose the three‑times rate and interest without a proper statutory determination.
  • The matter is remitted to the competent authority for a fresh determination of water consumption for the period 1 Apr 2020 – 31 May 2024, the applicable rate, and the legality of any penalty or interest.
  • The authority must consider the pending applications for surface‑water allotment and cannot treat their pendency as deemed permission.
  • The petitioner must submit detailed objections and supporting documents within four weeks of receiving the copy of this order.
  • The competent authority shall afford a hearing to the petitioner and complete the fresh determination preferably within three months of receiving the objections, adjusting any prior payments against the final amount.
  • No costs were awarded.

Topics: Water Charges, Regulatory Dispute