Allowed

M/S Siddhasiri Souharda Sahakari Niyamitha v. Karnataka State Pollution Control Board

Karnataka HC21 Aug 2024WP/10181/2024

Case brief

AI extract

What is this about?

The High Court allowed a writ petition seeking Consent for Operation for a sugar and distillery unit. The court held that Environmental Clearance was deemed granted after 45 days of Expert Appraisal Committee recommendation under the EIA Notification, 2006, and directed the Pollution Control Board to issue the consent forthwith.

What did the court decide?

The writ petition was allowed and the Karnataka State Pollution Control Board was directed to issue Consent for Operation within four weeks.

M/S Siddhasiri Souharda Sahakari Niyamitha Vs… — Environment and Pollution | Karnataka HC (2024)

¶1

¶2

NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶3

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

¶4

DATED THIS THE 21^ST DAY OF AUGUST, 2024

¶5

PRESENT

¶6

THE HON'BLE MR. N. V. ANJARIA, CHIEF JUSTICE

¶7

AND

¶8

THE HON'BLE MR. JUSTICE K. V. ARAVIND

¶9

WRIT PETITION No. 10181 OF 2024 (GM-POL)

¶10

BETWEEN:

¶11

M/S SIDDHASIRI SOUHARDA SAHAKARI NIYAMITHA, CHINCOLLI TALUKA, KALBURAGI DISTRICT-585307. REPRESENTED BY ITS DIRECTOR, SRI RAMANAGOUDA B. PATIL, S/O SRI BASANAGOUDA PATIL, AGE: 29, OCC: BUSINESS

¶12

…PETITIONER

¶13

(BY SRI K.N. PHANINDRA, SENIOR COUNSEL FOR SRI DALWAI VENKATESH P., ADVOCATE)

¶14

Digitally signed by VALLI MARIMUTHU Location: High Court of Karnataka

¶15

AND:

¶16

KARNATAKA STATE POLLUTION CONTROL BOARD, PARISARA BHAVANA , 1 TO 5^TH FLOOR, No.49, CHURCH STREET, BANGALORE-650001, REPRESENTED BY ITS CHAIRMAN.

¶17

THE SECRETARY, MINISTRY OF ENVIRONMENT, FOREST AND CLIMATE CHANGE, ( IMPACT ASSESSMENT DIVISION), GOVERNMENT OF INDIA,

¶18

¶19

NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶20

INDIRA PARYAVARAN BHAVAN, VAYUWING, 3^RD FLOOR, ALIGANJ, JORBAGH ROAD, NEW DELHI-110003.

¶21

…RESPONDENTS

¶22

(BY SRI K. SHASHI KIRAN SHETTY, SENIOR ADVOCATE FOR SRI A. MAHESH CHOWDHARY, ADVOCATE FOR C/R1; SRI ARVIND KAMATH, ASGI A/W SRI H. SHANTHI BHUSHAN, DSGI FOR R2)

¶23

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT IN THE NATURE OF MANDAMUS DIRECTION THE RESPONDENT TO ISSUE CONSENT FOR OPERATION IN FAVOUR OF THE PETITIONER IN TERMS OF THE APPLICATION DATED 29/01/2024 PRODUCED AT ANNEXURE-B FORTHWITH.

¶24

THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

¶25

CORAM: HON'BLE THE CHIEF JUSTICE MR. JUSTICE N. V. ANJARIA and HON'BLE MR. JUSTICE K. V. ARAVIND

¶26

ORAL ORDER

¶27

(PER: HON'BLE MR. JUSTICE K.V. ARAVIND)

¶28

The instant writ petition under Articles 226 of the Constitution

¶29

of India with the following prayers,

¶30

“(a) A writ in the nature of mandamus direction the Respondent to issue Consent for Operation in favour of the petitioner in terms of the application dated 29.01.2024 produced at Annexure-B forthwith in the interest of justice and equity.

¶31

(b) Any other direction or order may be passed in the interest of justice.”

¶32

3 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶33

Heard learned Senior Advocate Mr. K.N. Phanindra for learned advocate Mr. Dalwai Venkatesh for the petitioner, learned Senior Advocate Mr. K. Shashi Kiran Shetty for learned advocate Mr. A. Mahesh Chowdhary for respondent No.1 and learned Additional Solicitor General of India Mr. K. Aravind Kamath along with learned Deputy Solicitor General of India Mr. H. Shanthi Bhushan for respondent No.2.

¶34

Brief facts.

¶35

The petitioner owns a Sugar, Cogen and Distillery Unit at Chincholi, Kalaburagi District. Respondent No.1- the Karnataka State Pollution Control Board issued a closure order dated 25.01.2024. While considering the challenge to the order dated 25.01.2024 in Writ Petition No.2769 of 2024, this Court by order dated 08.02.2024 directed the closure order to be treated as showcause notice and permitted the petitioner to file objections. It is stated that due to subsequent events, the show-cause notice and related proceedings are not relevant.

¶36

As stated, the petitioner filed an application for the issue of Consent for Establishment [Expansion] and Consent for Operation [CFO] on 29.01.2024. Respondent No.1 issued Consent for

¶37

¶38

NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶39

Establishment on 14.03.2024. The Environmental Officer, on inspection of the petitioner's industry, recommended the grant of CFO. The petitioner has deposited a fee of Rs.40,00,000/- towards the CFO.

¶40

Respondent No.1 insisted on Environmental Clearance [EC] from Ministry of Environment, Forest and Climate Change, Government of India [MOEFCC] as a condition for the issue of CFO. It is stated that though the petitioner is benefited with deemed EC, respondent No.1 withheld the issue of CFO. The Expert Appraisal Committee, as per Annexure-J, dated 09.11.2023, recommended a grant of EC in favour of the petitioner.

¶41

It is stated that EC is issued as per the Environmental Impact Assessment Notification, 2006 [for short 'Notification 2006']. The Regulatory Authority can confirm or reject the recommendation of the EC by the Expert Appraisal Committee within 45 days, failing which, under Paragraph 8(i) and (iii) of the Notification 2006, the EC is deemed to have been granted after 45 days. It is stated that even though the Member Secretary and the Regulatory Authority are the members of the Expert Appraisal Committee, respondent

¶42

5 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶43

No.1 failed to issue the CFO. Alleging inaction, the present petition.

¶44

Submissions:

¶45

Learned Senior Advocate Mr. K.N. Phanindra for the petitioner submits that the Expert Appraisal Committee, in its Minutes of the Meeting held on 09.11.2023, has recommended for grant of EC in favour of the petitioner. The recommendation has been uploaded to the website. It is further submitted that the Member Secretary and the Regulatory Authority are the members of the Expert Appraisal Committee, and the recommendation of the Expert Appraisal Committee was within the knowledge of respondent No.1.

¶46

7.1 As per Paragraph 8(i) and (iii) of the Notification 2006, if no decision is taken on the recommendation within 45 days, on expiry of 45 days, the recommendation of the Expert Appraisal Committee is deemed to be a public document under Paragraph 8(iv) of the Notification 2006. By operation of law, the EC is deemed to have been granted; consequently, respondent No.1 is bound to issue a CFO. It is submitted that the inaction of respondent No.1 has resulted in stalling huge investment and workforce.

¶47

¶48

NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶49

7.2 Learned Senior Advocate submits that even if the industry

¶50

has started before environmental clearance, the Environment (Protection) Act, 1996 does not prohibit ex post facto environmental clearance.

¶51

Per contra, Mr. K. Shashi Kiran Shetty, Senior Advocate appearing on behalf of learned advocate Mr. A. Mahesh Chowdhary for respondent No.1 by reiterating the contentions raised on the statement of objections, submits that the recommendation made in the Minutes of Meeting dated 09.11.2023 by the Expert Appraisal Committee has been recalled on 17.11.2023. The Minutes of the Meeting by the Expert Appraisal Committee dated 09.11.2023 recommending issuance of EC was on the basis of the Office Memorandum dated 07.07.2021. It is further submitted that the Hon'ble Supreme Court in Writ Petition No.1394 of 2023 on 02.01.2024 has stayed the operation of the Office Memorandum dated 07.07.2021. Thus submits that the recommendation by the Expert Appraisal Committee dated 09.11.2023 is not justifiable.

¶52

8.1 Learned Advocate General submits that the concept of deemed clearance under Paragraph 8(iii) of the Notification 2006 is

¶53

7 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶54

unavailable. In support of such submission relies on the judgment of the Hon'ble Supreme Court in the case of Secretary, Kerala State Coastal Management Authority vs. DLF Universal Limited and others reported in (2018) 2 SCC 203.

¶55

Learned Additional Solicitor General of India, Mr. K. Aravind Kamath, appearing for respondent No.2 impleaded vide order dated 08.08.2024, submits that the recommendation by the Expert Appraisal Committee for grant of EC on 09.11.2023 is not recalled as contended by learned advocate for respondent No.1 and the same is in force. It is further submitted that in terms of Paragraph 8 of the Notification 2006, if no decision is made within 45 days by the Regulatory Authority on the final recommendation of the Expert Appraisal Committee, on expiry of the period specified, the applicant can proceed as if the environment clearance sought for has been granted.

¶56

Analysis:

¶57

Considered the submissions of learned advocates for the

¶58

respective parties and perused the writ papers.

¶59

8 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶60

The petitioner owns a Sugar, Cogen and Distillery Unit at Chincholi, Kalaburagi District. The petitioner submitted an application for the issue of Consent for Establishment [Expansion] and CFO on 29.01.2024. The Consent for Establishment [Expansion] was issued by respondent No.1 on 14.03.2024. The Environmental Officer, after inspection of the petitioner's industry, recommended to grant CFO. The petitioner has deposited the consent fee of Rs.40,00,000/- towards the CFO. Respondent No.1, under communication dated 19.03.2024, demanded certain compliances for the issue of CFO, and under reply dated 22.03.2024, the compliances are made. For consideration of the issue of CFO, respondent No.1 insisted EC from MOEFCC. The petitioner submitted an application for issuance of environmental clearance on 26.10.2023. In its meeting held on 09.11.2023, the Expert Appraisal Committee recommended granting EC in favour of the petitioner. It is on record that the Member Secretary and the Regulatory Authority of respondent No.1 are members of the Expert Appraisal Committee and have knowledge of the recommendation of the Expert Appraisal Committee.

¶61

9 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶62

The Notification 2006 governs the issue of EC. Paragraph 8(i) and (iii) of Notification 2006 mandates a timeframe decision by the Regulatory Authority on the recommendation of the Expert Appraisal Committee. If no decision is taken within 45 days, by operation of law, the EC is deemed to have been granted after 45 days. The Expert Appraisal Committee recommendation is deemed to be public document under Paragraph 8(iv) of the Notification 2006. In the present case, no decision has been made on the recommendation dated 09.11.2023 of the Expert Appraisal Committee, and Paragraph 8 of the Notification 2006 comes into operation. In the absence of any decision within 45 days of the recommendation of the Expert Appraisal Committee, the EC is deemed to have been granted.

¶63

13 Respondent No.1 sought to justify withholding CFO as awaiting clearance from the Expert Appraisal Committee. The reasoning is not justifiable and without basis. Respondent No.1 in the Statement of Objections has stated that the recommendation by the Expert Appraisal Committee dated 09.11.2023 has been recalled on 17.11.2023.

¶64

10 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶65

Learned Additional Solicitor General of India appearing for respondent No.2 MOEFCC has made a categorical statement that the recommendation dated 09.11.2023 is not recalled and the same is valid. In view of the categorical statement by the learned Additional Solicitor General of India, the basis for inaction by respondent No.1 in issuing CFO is no more available and justifiable.

¶66

The contention of the learned advocate for respondent No.1 that the recommendation dated 09.11.2023 by the Expert Appraisal Committee was on the basis of the Office Memorandum dated 07.07.2021, the operation of the said Office Memorandum has been stayed by the Hon'ble Supreme Court in Writ Petition No.1394 of 2023 on 02.01.2024 is without any basis.

¶67

The Expert Appraisal Committee has recommended the grant of EC on 09.11.2023, 45 days from 09.11.2023 expires on 24.12.2023. It is to be noticed that by operation of law under Paragraph 8 of the Notification 2006, the right of deemed grant of EC has accrued in favour of the petitioner. The stay of operation of the Office Memorandum is dated 02.01.2024. It is a trite law that any interim order of stay of the notification/statute will not take

¶68

11 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶69

away any right accrued under a notification or a statute. Paragraph

¶70

8 of the Notification 2006, having extended/conferred right by fiction in favour of the petitioner, the same cannot be permitted to contend that said right is not available as a result of the interim order by the Hon'ble Supreme Court at a later point in time.

¶71

The Hon'ble Supreme Court in the case of the DLF Universal Ltd., (supra) , while examining the deemed clearance as per Paragraph 8(iii) of the Notification 2006, wherein the authorities raised various issues/violations after the DLF constructed the project substantively. The Hon'ble Supreme Court, while emphasizing the need, necessity and requirement of the authorities under the various statutes to act at the earliest point of time, has held that the deemed clearance should imply prior clearance and necessary clarifications be issued by the authorities concerned in a time bound manner to obviate such situations to arise in future. The observations of the Hon'ble Supreme Court in the context of facts in that case are not applicable to the case at hand.

¶72

The deemed Environmental Clearance will not enable the applicant/industry to commence commercial operations. On the expiry of 45 days under Paragraph 8(iii) of the Notification of 2006,

¶73

12 -

¶74

NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶75

the recommendation of the Expert Appraisal Committee would result in deemed environmental clearance. The industry's operations would not immediately commence on deemed environmental clearance. The industry operations would begin on the issue of consent for operation. The concern expressed by the Hon’ble Supreme Court is dealt with through mechanism to issue CFO after deemed EC.

¶76

Respondent No.1 in its letter dated 19.03.2024 has stated

¶77

as,

¶78

“The industry has submitted a letter vide ref (6) stating that, the industry has submitted EC application on 19.1.2022 and 28.09.2023, the Expert Appraisal Committee(EAC) of MoEF & CC recommended the project for issue of EC on 09.11.2023. It is further stated that as per Section 8(i) & (iii) of EIA Notification 2006, the recommendation of the EAC is final if the acceptance / rejection is not communicated within 45 days i.e., on 24.12.2023, hence the EAC recommendation is considered as deemed EC and recommendation shall become public document. Further, the industry has requested for issue of CFO. However, the claim made by the industry with respect to "deemed EC" is to be clarified from MoEF & CC, Gol and the Board cannot accept the claim made by the industry.”

¶79

In view of the specific assertion in the letter by Respondent

¶80

No.1, it is clear that the recommendation of the Expert Appraisal Committee is final on expiry of 45 days and considered as deemed

¶81

13 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶82

EC. However, the CFO was not issued to seek clarification from MOEFCC, Government of India. Respondent No.2 has stated before this Court that the recommendation of the Expert Appraisal Committee is in force as of this date. Respondent No.1 has not stated any other reason for not issuing a CFO.

¶83

The respondent Board has not taken any viable defence before the Court as to why recommendation by Expert Appraisal Committee is not acceptable. The Board is unable to point out any other view possible on the recommendation of Expert Appraisal Committee. The Board has not assigned any reasons for its inaction on the recommendation of Expert Appraisal Committee within 45 days. In such circumstances, it is not open to the Board to contend that EC is not automatic on expiry of 45 days of Expert Appraisal Committee recommendation.

¶84

Once statute or the notification mandates time bound action, any compliance required is to be within the time frame. This requirement is observed by the Hon’ble Supreme Court in the case of Electrosteel Steels Limited Vs. Union of India and Others reported in (2023) 6 SCC 615.

¶85

14 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶86

Even before the Court, Board has not pointed out any impactable concern in the recommendation of Expert Appraisal Committee disentitling the petitioner to EC. Board has not pointed out any violation under any statute by the petitioner thereby disentitling either EC or CFO.

¶87

The very purpose of deemed EC after a stipulated period is to ensure timely compliance by the competent authorities. Board has been provided reasonable period of 45 days to raise any concern on the recommendation of Expert Appraisal Committee. Either to permit industry or not is to be decided as per the timelines, failing which the very purpose would be defeated. Without a persuasive reason in not acting on the Expert Appraisal Committee recommendation within 45 days, it is not open to the Board to remain inactive on issue of CFO.

¶88

Before conclusion, it is relevant to refer to the judgment of the Hon'ble Supreme Court in the case of Electrosteel Steels Limited (supra). The Hon'ble Supreme Court held as:

¶89

15 - NC: 2024:KHC:33869-DB WP No. 10181 of 2024

¶90

“75. The 1986 Act does not prohibit ex post facto environmental clearance. Some relaxations and even grant of ex post facto EC in accordance with law, in strict compliance with rules, regulations notifications and/or applicable orders, in appropriate cases, where the projects are in compliance with, or can be made to comply with environment norms, is in over view not impermissible. The court cannot be oblivious to the economy or the need to protect the livelihood of hundreds of employees and others employed in the project and others dependent on the project, if such projects comply with environmental norms.”

¶91