Dear student, When an object rotates in a vertical plane, the direction of its velocity at the topmost point of its motion, is parallel to the horizontal. Similarly, when a bucket ful of water undergoes circular motion in a vertical plane, the velocity of all the water particles is in a direction which is parallel to the horizontal. So, due to their inertia of motion and direction, they tend to continue their motion in the horizontal direction and hence the water does not fall. Regards