In Brief
Two private hydro-electric companies, INDSIL and CUMI, challenged a Government order requiring them to pay royalty and charges for the controlled supply of water used to generate electricity. The Supreme Court upheld the order, holding that the charges were contractual, not taxes, arising from agreements that incorporated a 1990 Government policy. Both companies benefited from assured, controlled water supply—CUMI from tailrace discharge and INDSIL from dam releases—which the Court found justified compensation. The distinction between the companies (CPPs generating for self-use) and independent power producers (generating for consumers) was not discriminatory, as charges on CPPs do not burden the public. The appeals were dismissed.
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