Kerala High court Judgement on 7-4-2005 that allowed coca cola to loot 50000 litre water/day from communities
Hindustan Coca-Cola Beverages (P) Ltd. v. Perumatty Grama Panchayat
(M. Ramachandran & K.P. Balachandran, (JJ)
W.A. No. 2125 of 2003
W.A. No.215 of 2004
W.A. No.1962 of 2003 &
W.P. (C) No. 12600 of 2004
Judgment
Ramachandran J:
W.A. No.2125 of 2003 and W.A. No.215 of 2004 arise from the judgment
in W.P. (C) No. 34292 of 2003 dated 16-12-2003. The writ petition had
been filed by a local authority (Perumatty Grama Panchayat)
challenging Ext. P6 order passed by the Government. The above said
order came to be passed by the Government. The above said order came
to be passed on an adjudication, as directed by this Court at an
earlier round of the proceedings. This had arisen, when the Panchayat
refused to renew a licence, which had been earlier issued,
facilitating an industrial establishment to manufacture branded items
of beverages.
2. The writ petition had been disposed of with certain findings,
observations and directions, the details of which could be stated
later. The second respondent to the proceedings is a limited
company-Hindustan Coca-Cola Beverages Private Limited (hereinafter
referred to as ‘the company’). Challenging such of those
observations, which were likely to have hindered their normal
manufacturing and sales activities, W.A. No.2125 of 2003 came to be
preferred, at the instance of the company. The Panchayat has preferred
W.A. No.215 of 2004 feeling aggrieved by some other findings that had
been entered into by the learned single Judge, which would have,
according to the Panchayat, gone against their interests.
3. W.A. No.1962 of 2003 had come to be filed at the instance of the
said company, aggrieved about the judgment passed in W.P. (C) No.31286
of 2003 dated 14-11-2003, which also concerned the issue of licensing.
As the main issues have been agitated in the connected writ appeals,
it was also posted along with them.
4. During the pendency of W.P. (C) No.34292 of 2003, the Panchayat had
taken further steps for cancelling the licence granted to the company
and such proceedings had been subjected to an appeal, as envisaged
under section 276 of the Kerala Panchayat Raj Act. However, the orders
had been stayed by the Government. W.P. (C) No.12600 of 2004 had been
filed by the Panchayat contending that the Government was not within
its rights to tamper with such orders and the proceedings should not
have been so interfered with. This too had been referred for being
considered by a Bench, along with other cases.
5. Mr. K. Ramakumar, learned counsel for the Panchayat, submits that
since an appeal had been filed by the company against the steps taken
for cancellation of the licence by the Panchayat, now that a statutory
Tribunal has already been constituted, the appeal is to be deemed as
transferred to such Tribunal. He submitted that perhaps without going
to the merits or demerits of the contentions raised by the parties, it
would have been proper for all concerned to agitate the matters before
the said authority and a decision of this Court could have been
deferred to a future occasion.
6. Appearing on behalf of the State Government Mr. Rajan Joseph, the
learned Additional Advocate General, also voiced this opinion. But
Mr. Vaidyanathan, senior counsel representing the company, points out
that although an appeal is pending, it arose as an off shoot of
collateral proceedings, while the matter was being actively agitated
before this Court by the parties, and a finality would not have come,
if the parties were relegated to pursue such remedies. According to
him, since the validity and veracity of the Government Orders has also
been under challenge, the Tribunal adjudge on such issues. On our
part, we find that the matters had been pending before this Court for
almost two years, and a large amount of time had been spent and
reports from expert bodies, appointed by the Court, have been made
available. Therefore relegating the matter to be decided by the
Tribunal may not be a proper procedure, since the effort is to have a
lasting solution to the disputes that had cropped up, for unfortunate
reasons. Hence the parties were required to state their respective cases.
7. Mr. Ramakumar submitted that the Panchayat, represented by him,
should not be understood as having basic objections about the
functioning of the industry in the Panchayat area, since direct and
indirect employment to a number of persons was being offered. But the
objection was about the impact, which was found to be real,
interfering with the basic life pattern of the Grama Panchayat.
Residents had worry about exploitation of resources and were concerned
of pollution. If such apprehensions are appropriately remedied, there
would not be any objection for the Panchayat to permit the company to
carry on their activities, it is submitted.
8. Taking notice of the submissions, as above made, we feel that the
matter could be gone into in some detail and the legal and factual
contentions raised by the parties could be subjected to examination,
as coming within the purview of this Court, exercising jurisdiction
under Article 226 of the Constitution of India.
9. In fact, as could be seen from the proceedings on record before the
Division Bench, taking notice of the observations of the learned
single Judge, the effort was to rest the findings on scientific data
collected by expert bodies, as the issue very much revolved round
balancing of ecological rhythm, the aspirations of the people in the
locality, the duties and responsibilities, that were expected to be
discharged by a Grama Panchayat, especially in the wake of
decentralisation of powers and the predicament of an industrial unit,
which had been cordially invited to invest substantial funds, ensuring
them freedom of functioning. Therefore, advertence to a great extent
would have to be made to the report prepared by the investigation
team, constituted by order in W.A. No.2125 of 2003 dated 19-12-2003 by
the Division Bench, since this would have been the most proper way to
assess and tackle the situation resulting from conflicting stand.
10. The provocation of the Panchayat for filing W.P. (C) No.34292 of
2003 could be stated now. At the point of time, they had refused to
renew the licence in favour of the company. The steps were challenged
by way of a writ petition. Although a stay order had been issued,
ultimately this Court refused to go into the merits of the case, and
had suggested that since already an appeal had been filed before the
Government, it would have been proper for the company to pursue the
appeal. The writ petition was closed. Thereafter, on hearing the
parties, the Government by order dated 13-10-2003 had held that the
Panchayat was in error in issuing the orders, and a more detailed
investigation should have been appropriate, and had directed
consequential instructions in this direction. This order was the
subject matter of challenge, at the instance of the local authority.
The details of the sequence would be given later.
11. The concerned industrial unit is engaged in the business of
manufacturing, storage, distribution and sale of aerated and
carbonated non-alcoholic beverages, fruit beverages and Packaged
Drinking Water. It is predominantly a water based industry.
According to the company they have set up units and factories in
various parts of India, and one such factory is at Moolathara Village
in Perumatty Grama Panchayat. The company claims that it operating
worldwide in over 195 countries and has conceived and introduced
environmentally friendly policies. They are ever careful to carry out
operations taking care to always frontline effort to comply with
safety standards and were frugal while dealing with natural resources.
Waste management was an area of special emphasis. Reference to the
state-of-the-art Effluent Treatment Plant installed at a cost of over
Rs.3 crores is made. The water recovered from the process is recycled
for internal use and it is a ‘zero discharge’ plant. Therefore, they
were at a lose to find how they had come to the bad books of the
Panchayat.
12. We may presently refer to the background of the disputes as well.
After identifying a location and installing infrastructural
facilities, in response to its application, the Panchayat had issued a
licence to them on 27-01-2000 for running the factory, using electric
power up to 2600 HP. They claim that they had obtained licence under
the Factories Act and had obtained clearance from the Pollution
Control Board. The licence issued by the statutory authorities were
being renewed from year to year. The operations were smooth for a
while. But discordant notes were heard at a distance, but they had
though it prudent to take them in their stride, as basically their
hands were clean.
13. An application for renewal of the licence, for the year 2003-04,
had been duly presented with in prescribed time. But, by
communication dated 09-04-2003, the company was informed that the
Panchayat had decided not to renew the licence consequent to a
resolution of the Panchayat dated 07-04-2003. The company was also
required to show cause as to why the working licence should not be
cancelled within 15 days of receipt of the notice dated 09-04-2003.
It had been alleged that because of the working the factory,
exploitation of excess ground water occasioned and there is serious
shortage of drinking water. Ecological problems also were seen.
Further reason pointed out was that the Panchayat was also noticing
that certain organisations were agitating over the functioning of the
factory. At the auspices of early settlers, for over a year an
agitation was going on. Panchayat had been constrained, according to
them, therefore to pass a resolution, taking notice of these. The
notice is Ext. P2 in W.P.(C) No.34292/2003 and Ext. P1 is the copy of
the resolution dated 07-04-2003.
14. A reply was filed by the company against the show cause notice on
30-04-2003, whereunder they refuted show cause notice on 30-04-2003,
whereunder they refuted the allegations as made. They apprehended
that it is a post-decisional notice and amounted to violation of the
principles of natural justice. The allegations, according to them,
were factually not sustainable and the agitations were stage managed
and for extraneous reasons. Reference had been made to the grant of
licence by the other statutory authorities. It had been pleaded that
taking notice of the circumstance that it was catering to the social
needs of the region, the Panchayat was requested to desist from the
contemplated steps. A right of hearing had also been solicited. It
had also been highlighted in Ext.P3 reply that:
“We have also done/are undertaking number of community development
programmes for the people of living in the locality in the field of
education, health and drinking water supply. We are actively
supporting the Perumatty Panchayat run Higher Secondary School at
Kannimari by providing laboratory facility for the students.”
15. A formal hearing had been offered, and thereafter, by Ext.P4 order
dated 15-05-2003, the Panchayat had cancelled the licence granted to
the company. It had been directed that the activities are to be
stopped from 17-05-2003. It appears that the only recourse available
viz., an appeal had been filed before the Government by the Company,
challenging the steps contemplated by the Panchayat, seeking guidance
and interference, as briefly referred to earlier.
16. In the meanwhile, an Original Petition also had been filed against
Ext.P2 as O.P. No.34292 of 2003. After hearing the parties, finding
that a decision after hearing the explanation was yet to be passed,
the Court had, by order dated 22-04-2003, directed the parties to
maintain status quo till 16-05-2003 or till the Panchayat takes a
decision, whichever is earlier. O.P. No.34292 of 2003 came up for
final orders on 16-05-2003 and this Court had directed that the
company is to move the appropriate authority against the decision
taken by the Panchayat. Such representation was to be filed within one
week from the date of the judgment. A decision was to be taken
thereon within one month; status quo was to be maintained till such
time. The decision, referred to earlier, came to be passed in this
context.
17. In due course, orders on the appeal cam to be passed as Ext.P6 on
13-10-2003. The Government had gone to the essential details and
found that the Panchayat had not conducted any scientific
investigation or obtained benefit of any report from the competent
agencies before taking the drastic stand of cancelling the licence
already being enjoyed. The predominant issue of course centered round
exploitation of water resources. According to the Government, the
circumstances called for a detailed independent investigation and
consequently had issued the following direction:
“In the above circumstances Government hereby order that the Perumatty
Grama Panchayat will constitute a team of experts from the departments
of Ground Water and Public Health and the State Pollution Control
Board to conduct a detailed investigation into the allegations
levelled against the Company its products. The Panchayat will take a
decision based on this independent investigation as to whether the
licence granted to the Company should be renewed or cancelled. The
Panchayat will get the enquiry conducted by these agencies and come to
a just and fair conclusion based on this enquiry within three months
from the date of receipt of this order. All enquiries and
investigations should be conducted with notice to the appellant
Company. Till the Panchayat takes a final decision on the
cancellation of the licence issued to the Company, the stay granted by
Govt. on 12-6-2003 against the order of cancellation of licence by the
Panchayat will continue in operation.”
A copy of the order is Ext. P6. W.P.(C) No.34292 of 2003 came to be
filed at the instance of the Panchayat challenging the above order of
the Government. Observations and directions had made and issued by
the learned Judge, while disposing of the Original Petition. The
validity thereof has presently come up for consideration in the two
writ appeals (W.A. No.2125 of 2003 and W.A. No.215 of 2004, as both
the parties had grievances in their respective areas of interest.,
Before examining the rival contentions, it is essential that the facts
leading to W.A. No.1962 of 2003 also are catalogued. When the matter
was being considered by the Government, as stated above, the Panchayat
had issued a further show cause notice on 18-09-2003 pointing out that
the company had installed bore-wells without permission. They also
alleged that there were medical reports pointing out the presence of
toxic substances in the effluent discharges. Company was directed to
show cause as to why steps for closure should not be enforced. The
notice was purported to be issued by virtue of powers conferred on the
Panchayat under section 166 of the Kerala Panchayat Raj Act. It had
also been suggested that paddy fields in the possession of the company
were converted into dry lands, which was unauthorised. According to
the Panchayat, there was also reason to presume that the products of
the company were likely to create health hazards.
19. Before us, it had been suggested that there was even an over play
of the issue. Notice confided that on enquiries, the Panchayat
gathered that though the company has shareholders in India, none of
them has voting rights or any say in the decision making process by
the company. All decisions are taken by the foreign nationals as
regard the manufacturing of soft drinks, establishment of factories,
disposal of waste etc., without any say to any one of the Indian
Nationals. Therefore, the Panchayat claimed that it had reasons to
believe that the very establishment of the factory in the country, and
especially at Plachimada, is violative of various provisions of law
regulating the conduct of business by multi-national companies. As
the sale and consumption of the products like Coca-Cola have been
banned within the Parliament premises in New Delhi and also by the
State Legislative Assembly, Trivandrum on the ground that they
contained poisonous substance, according to them, the proposal for
closure was being mooted.
20. A writ petition had thereupon been filed by the company as W.P.
No.31286 of 2003 challenging the orders, inter alia pointing out that
the issue was already before the Government and the fresh notice
showed the bias harboured. No interim orders had been granted,
however. According to the Court, the writ petition was premature as
there was only a show cause notice. The submission made, however, had
been noticed that an explanation was being submitted. It was during
this time that Ext.P6, referred to earlier leading to W.P. (C)
No.34292 of 2003 came to be passed on 13-10-2003.
21. On the show cause notice, taking notice of the reply, a personal
hearing had been offered. A stand had been taken by the company that
the later developments in the form of Government Orders took
cognizance of the disputes and there was no requirement for a separate
or independent examination, or orders to be passed, as a course of
conduct had been directed to followed. The writ petition itself was
however disposed of, observing that the matter was being heard by the
Panchayat on 17-1-2003 and the decision if adverse, could be
challenged. Against the this judgment dated 14-11-2003, W.A. No.1962
of 2003 had come to be filed, pointing out that the exercise of power
by the Panchayat was unwarranted and showed the mala fides harboured
by the local authority against them, and this Court should have
considered the issues on merits.
22. But a separate examination of the rival contentions may not be
necessary, as the issues are closely interlinked. The anxiety of the
Company is that the rejection of the writ petition should not cause
technical hurdles to them.
23. We may also advert to W.P. (C) No.12600 of 2004, at this juncture.
An application for licence for the year 2004-2005 had been submitted
by the company along with a covering letter dated 17-02-2004 (Ext.P1
in the writ petition). However, referring to the resolution that had
been passed on 05-03-2004, by Ext. P2 communication dated 11-03-2004,
the company had been informed that their style of running of the
industrial unit was not one which inspired confidence. To the regret
of the Panchayat, they had noticed, according to them, the over
extraction of ground water by installing six bore-wells without the
permission of the Panchayat, and as a result thereof, there was
drought resulting in shortage of drinking water. Additionally, there
was a direction by the Government to stop the drawing of ground water
by the company, and Joint Parliamentary Committee had reported about
the all round pollution brought about by the working of the factory
and manufacturing products, which were hazardous to health. There
were complaints abouts skin diseases, itching etc., as a result of the
discharge of poisonous effluents from the factory, there was improper
effluent treatment and the Pollution Control Board as per their letter
dated 23-02-2004 was dissatisfied about the disposal of hazardous
waste generated from the factory, and that the Panchayat had a duty to
preserve water resources, soil protection etc. Because of the
precarious availability of water, they were therefore practically
convinced that considering the nature of magnitude of water
requirement, it may not be proper for grant of the request.
24. Notwithstanding the above and although the Panchayat would have
been justified in refusing renewal, the company was informed that as a
special case, taking notice of the employment potential of persons in
the local area, a renewal could be considered, if they were not to
draw any ground water from the Panchayat area and were to carry on the
industry by bringing water from else where. There were also to
immediately stop discharge of waste to the satisfaction of the
Panchayat and also to satisfy the Panchayat about the safety of the
products, taking notice of the report of the Joint Parliamentary
Committee. An undertaking was to be given forthwith, as otherwise the
operations were to be completely closed down.
25. By Ext. P3, the company had invited the attention of the Panchayat
to the unreasonableness of the advice. In effect, it was
unreasonableness of the advice. In effect, it was highlighted that
they were flouting the orders of the Court as also Government by
resorting to such a stand. But, referring to the resolution passed on
29-03-2004, by order dated 30th of March, 2004 (Ext. P5), the company
was advised them not to resume their operation in the absence of a
valid licence from the Panchayat pin pointing five reasons, viz.
1) The application for renewal contains false statements and claims.
2) The Kerala State Pollution Control Board has refused to issue the
authorisation under the Hazardous Wastes (Management and Handling)
Rules with a result that the company has not provided satisfactory
facility for the disposal of Hazardous Wastes generated in your company.
3) The Joint Parliamentary Committee report has clearly indicated that
the products of the company contain harmful materials, which is
injurious to public health.
4) The drawal of ground water by the company has affected the source
of drinking water and water supply to the entire area, which is a
matter of consideration and the government had declared so and stopped
the drawal of ground water until the Edavapathy (Monsoon).
5) The Panchayat is convinced that the reasons stated in its
intimation dated 11.3.2004 have to be reiterated and the company has
not satisfactory explained any one of them either in the course of the
hearing or in the written statement made by the company through the
counsel.
This order had been challenged by way of an appeal. By order dated
01-04-2004, the Government had granted a stay on three conditions,
namely that (i) The Government Order dated 21-02-2004 regarding the
extraction of ground water (which pertained to prohibition of
extraction of water during drought season) was to be strictly
followed; (ii) the appellant was to strictly follow conditions laid
down by the Pollution Control Board; (iii) the directions in the
judgment of the High Court in W.P. (C). No.34292 of 2003 regarding the
extraction of ground water subject to the directions/orders in W.A.
No.2125 of 2003 was to be followed. In the writ petition, at the
instance of the Panchayat, it is contended that an ex parte order
ought not have been passed. Mr. Ramakumar submits that the practical
solution now will be to direct the statutory Tribunal to hear and
dispose of the pending appeal, after hearing all the parties, and the
indiscretion of the Government in granting the interim order is not to
be separately examined.
26. The issues are practically interlinked. Although certain
additional grounds had been pointed out, justifying non-renewal of the
licence, the basic issue is the assumption, which almost stands
transformed to a conviction harboured by the Panchayat, that
consumption of any amount of water for the industry would be
detrimental to the general interests of the Panchayat and which
prompted the Panchayat to advise the company that renewal for the year
2003-04 also was not being favourable considered. However, such an
attitude adopted did not get full support from this Court, when we
examine the judgment in W.P. (C) No.34292 of 2003, although the Court
had been persuaded to feel towards a necessity for a study and
imposing of restrictions in the enjoyment of nature’s bounty. The
Government had advised the Panchayat for the necessity and requirement
of expert opinion, and it had to come from a competent body.
27. By judgment in W.P. (C) No.34292/03, the directions were
streamlined. In the present proceedings, this Court had felt the
necessity for presence of adequate materials by entrusting the
investigation to an expert body, practically concurring with the
Government’s view. After hearing the parties concerned, by order
dated 19-12-2003, it had been ordered that:
“for a proper adjudication of this case, more scientific data are
required. In this view of the matter, prima facie we are of the view
that the Government was right in directing the Perumatty Grama
Panchayat to constitute a team of experts to conduct a detailed
investigation into the allegations levelled against the company and
its products”.
28. Noticing the suggestions made at the bar, the learned Judges, at
the early stage of the hearing, opined that “the investigation should
be entrusted with the Centre for Water Resources Department and
Management, Kunnamangalam, Kozhikode, which is part of the Kerala
State Council for Since, Technology and Environment”. The Centre was
thereby appointed for conducting an investigation as to whether the
allegation viz., that working of the factory at Moolathara Village had
resulted in shortage and scarcity of drinking water in the
neighbouring areas due to the over-exploitation of groundwater for the
use of the factory. The Experts’ .. had been name by the Court and
expenses were directed to be defrayed by the company. The project
report was required to be filed by 07-01-2004, so that further
directions could be issued.
29. Monitoring the progress, follow up orders had been issued from
time to time. It cannot be ignored that such data was being
authoritatively collected be ignored that such data was being
authoritatively collected so as to subject the contention of the
Panchayat for an examination as to the alleged existence of
exploitation, and if so, for curbing the activities and for
prescribing parameters, as might be required, so as to ensure justice
as between the parties. The role played by the Court had never been
objected by any of the participants to the proceedings. The objective
had been made known to shirk responsibility, by refusing to look into
that. Also we fee that in view of the vital nature of the issue, the
matter has to be dealt with, befitting with the importance it deserves.
30. A preliminary report, followed by a final report, have come on
record. Formal objection has been filed by the Government on
01-04-2005, in the form of an affidavit, filed on behalf of the second
respondent. The Panchayat has also filed an objection, and had
produced along with it the materials relied on by them as about the
interim report, reserving leave to ‘file further statements/objections
in due course. Before adverting to them, it is essential that the
criticism and contentions raised by the parties in Writ Appeals
No.2125/03 and 215/04 are examined.
31. Judgment in W.P. (C) No.32492 of 2003 dealt with the issues in
some detail, and paragraph 8 thereof could be extracted as follows.
“8. Exts. P1, P2 and P4 would show that action was taken against the
2nd respondent for excessive extraction of ground water and the
resultant problem of drinking water scarcity and environmental
problems. But, at the time of hearing before the Government, the
Panchayat raised certain allegations regarding the pollution caused by
the industrial waste generated along with it the materials relied on
by them as about the interim report, reserving leave to ‘file further
statements/objections in due course. Before adverting to them, it is
essential that the criticism and contentions raised by the parties in
Writ Appeals No.2125 /03 and 215/04 are examined.
31. Judgment in W.P.(C). No.34292 of 2003 dealt with the issues in
some detail, and paragraph 8 thereof could be extracted as follows:
“8. Exts P1, P2 and P4 would show that action was taken against the
2nd respondent for excessive extraction of ground water and the
resultant problem of drinking water scarcity and environmental
problems. But, at the time of hearing before the Government, the
Panchayat raised certain allegations regarding the pollution caused by
the industrial waste generated and also the impurity of the Cola
produced by the company. The 2nd respondent answered those
allegations. The Government, while disposing of the matter, ordered
an investigation and a decision on these matters also. While
exercising the licensing jurisdiction, the Panchayat is not competent
to go into the quality of the beverages produced. It is for other
appropriate authorities to look into such allegations. Regarding the
pollution caused by industrial effluents, the Panchayat can look into
and take appropriate action in consultation with expert bodies under
Section 233 A of the Act. But, in this case the notice was issued
only on the ground of excessive exploitation of ground water and the
decision to cancel the licence was taken only on the basis of that
ground. Therefore, the Panchayat fairly submitted that the validity
of its decision and that of the Government on this point alone need be
considered by this Court in this case.”
The Court therefore had held that while exercising the licensing
jurisdiction, the Panchayat is not competent to go into the quality of
the beverages produced and it is for other authorities to look into
such aspects. As notice was issued only on the ground of excessive
exploitation, the jurisdiction or right to cancel the licence could
have been exercised by the Panchayat only on the basis of that reason.
The approach is unexceptionable.
32. Mr. Vaidhyanathan, senior counsel submits that if that be the
case, the Court was not justified to go into other aspects. As
highlighted in the appeal memorandum, according to him, most of such
points were never even agitated. Counsel referred to paragraph 12 of
the judgment also, which is in the following terms:
“12 Now, coming to the present case, at the outset, it has to be held
that the order of the Panchayat to close down the unit on the finding
of excessive extraction of ground water is unauthorised. The
Panchayat can at best, say, no more extraction of ground water will be
permitted and ask the Company to find out alternative sources for its
water requirement. So, the Government’s order to extent it interfered
with the closure of the unit has to be upheld.”
But, according to him, the learned Judge had faltered steps, when he
observed that :
“even in the absence of any law governing ground water, I am of the
view that the Panchayat and the State are bound to protect ground
water from excessive exploitation”.
The approach and enquiry, which began from this premises, according to
the counsel, has adversely affected the thought process leading to the
rest of the directions, which according to him plainly defied logic.
33. Exploitation, if carried out, has to be established, before
accusing one of the indiscretion. He suggests that the Court was not
examining a hypothetical question. A finding was yet to be arrived,
and as it has turned out, it was one really begging the issue.
Counsel points out that it is not as if a person is not the owner of
water beneath his field, be it well water or groundwater. The
reasoning supplied for entering a finding to the contrary, according
to him, was feeble and not based on any legally accepted principles.
Excess exploitation is still more a secondary issue.
We may point out that precise information was not forthcoming as to
the meaning of the term “ground water”. The Additional Advocate
General, on being asked, explained that groundwater was generally
water which was available, possibly below hundreds of meters below
ground level and mostly locked hundreds of meters below ground level
and mostly locked among rocks in the upper crest regions of the earth.
But, he submits that the legislation of the Government, as also
dictionary meaning, referts to “groundwater” as any water below the
surface of the earth, be it well water or water in a pond or water
which could be brought up by pumping through the bore-well. The
essential difference as between the water sources have not been
attempted to be noticed.
35. We have to assume that a person has the right to extract water
from his property, unless it is prohibited by a statute. Extraction
thereof cannot be illegal. We do not find justification for upholding
the finding of the learned Judge that extraction of ground water is
illegal. It is definitely not something like digging out a
treasure-trove. We cannot endorse the findings that the company has
no legal right to extract this ‘wealth’. If such restriction is to
apply to a legal person, it may have to apply to a natural person as
well. Abstract principles cannot be the basis for the Court to deny
basic rights, unless they are curbed by valid legislation. Even
reference to mandatory function, referred to in the third schedule of
the Panchayat Raj Act, namely “Maintenance of traditional drinking
water sources” could not have been envisaged as preventing an owner of
a well from extracting water therefrom, as the wishes. The Panchayat
had no ownership about such private water source, in effect denying
the proprietary rights of the occupier and the proposition of law laid
down by the leaned Judge is too wide, for unqualified acceptance.
36. In fact, we find that the learned single Judge was himself in two
minds about an absolute proposition that might have resulted.
Observations in paragraph 14 of the judgment indicated that what was
objectionable was a “right to claim a huge share of it” alone.
Further, it has been claim a huge share of it” alone. Further, it has
been observed in paragraph 15 that “like every other land owner, the
second respondent can also be permitted to draw ground water by
digging wells, which must be equivalent to the water normally used for
irrigating the crops in a 34 acre plot”, but however, the right had
been given to the Panchayat to fix the quantity permitted to be used.
No reason is however given as to why agriculture has a priority than
an industrial activity. Agricultural needs for water differ from
crops to crops. Therefore, the observation in sum total would have
resulted in a chaotic situation.
37. It should have been found that the Panchayat had no machinery to
assess requirement for water to a property owner other than to adopt
the rule of thump. Senior Counsel points out that after making these
observations, again in the operative portion of the judgment,
practically a contrary direction had been issued which enabled the
Panchayat to prevent the company from drawing any ground water after a
period of one month. Even this period was to enable the company to
find out alternate sources of water. The criticism is that the real
issue has escaped notice of the learned Judge, and there was no
justification therefore to deny the rightful claims, even recognised
by the Government.
38. We find that the findings are not precise and the follow up course
suggested may not be practical. After holding that there is right for
using a reasonable amount of water, the Court could not have held that
the Panchayat is obliged to renew the licence and should not interfere
with the functioning of the company, only if the Company is not
extracting groundwater and is depending for its water needs from other
sources. The absolute prohibition was neither called for, nor legal.
A further direction had been made, whereunder the Panchayat was to get
the assistance of the Ground Water Department for assessing the
quantity of water that could be drawn by a land owner, who had 34
acres of land for his domestic and agricultural purposes. But it is
not suggested as to what earthly purpose this exercise is to benefit
anybody. Use of any amount of water had been prohibited and the
earlier directions stood as a ban for use of water for the
manufacturing work in the factory. The criticism of the appellant
appears to be correct, as inspite of the suggested examination or
exercise directed to be carried out, follow up directions had not
forthcome, as to whether the groundwater could have been utilised at
least to a limited extent.
39. Mr. Vaidyanathan also points out that the condition prescribed by
the learned Judge that the factory may be worked by bringing water
from other sources, though established in Perumatty Grama Panchayat
would have been plainly unworkable. Not only the right to use its own
water is prohibited, but impossible conditions are prescribed, which
can lead only to one result viz., that the establishment is to be
closed down. The benefit of the earlier observations, when the
Government order had been upheld is thereby lost to the company. It
is argued that if the principle deducible from the judgment could be
understood in plain terms, an owner of a land cannot draw water from
his properties or use even a single drop thereof. It could be
visualised that in all possibility, any other local authority would
have objected to drawing of water for being utilised for an industry
distantly situated. The restrictions would have applied to them as
well, as an individual was not entitled to draw water without the
permission of authorities. The net result will be that bringing water
from any other sources becomes illegal and unauthorised.
40. There is basis in such submissions, as it exposes presence of
rigid and unworkable propositions. We are reconvicned that as
suggested by the Division Bench, at the early phase of hearing, the
workable solution was to get sufficient data from authentic sources
and try to resolve the issues which a sense of proportion and
balancing. A water based industry, with a huge investment has to
receive water, to quench its thirst without inconveniencing others.
We also do not approve the observation made in paragraph 13 of the
judgment that “even assuming the experts opine that the present level
of consumption by the second respondent is harmless, the same should
not be permitted”. The reasons given in the judgment do not does not
to us as reasonable. Also the above, essentially does not go hand in
hand with the finding in the judgment, in paragraph 12 that:
“Now, coming to the present case, at the outset, it has to be held
that the order of the Panchayat to close down the unit on the finding
of excessive extraction of groundwater is unauthorised.”
as well as the observation:
“So, the Government’s order to the extent it interfered with the
closure of the unit has to be upheld”
41. Coming to Writ Appeal No.215 of 2004, we notice that the findings
just above extracted have not been subjected to challenge in the writ
appeal of the Panchayat. The grounds taken were that the Judge erred
in law in holding that the Panchayat cannot cancel the licence if
there is a health hazard in the continuance of an industrial unit
within the area of the Panchayat (Ground A); and that the
“observations of the learned Judges are contrary to the mandate of the
Constitution enjoying on the Panchayat to attend to measures of
protection of health and well being of its residents (Ground-B).
Ground-C was that the learned Judge erred in holding that the
cancellation of the licence is not warranted in the case. Ground-D
also was in the following terms:
“The learned Judge ought to have held that if an industrial unit poses
health hazards or cause pollution all round it is within the powers of
the Panchayat to exercise the power of licensing and seeking the
cancellation of the licence already granted.”
But these grounds have been taken totally forgetting the submissions
made by the Panchayat, while the matter was being heard by the learned
single Judge. There was no categoric challenge about the finding in
paragraph 8 of the judgment that “while exercising the licensing
jurisdiction, the Panchayat is not competent to go into the quality of
the beverages produced and it is for other appropriate authorities to
look into such allegations.” As a matter of fact, the learned Judge
has recorded that “the Panchayat fairly submitted that the validity of
its decision and that of the Government on this point alone need be
considered by this Court in this case”. This we find concerned with
the issue of excessive exploitation alone.
42. Therefore, the appeal filed by the Panchayat poses no challenge on
the quoted findings of the learned Judge. On the other hand, the Court
has held in favour of the Company that the Panchayat had been
arbitrary in imposing its decision. This appeal therefore has no
merit. Really we are again being reminded of the necessity of
examining the report of the Expert Committee, so as to give a quietus
to the issues.
43. We hold that ordinarily a person has right to draw water, in
reasonable limits, without waiting for permission from the Panchayat
and the Government. This alone could be the rule, and the restriction,
an exception. The reliance placed by the learned judge in Kamal Nath’s
case (M.C. Mehta v. Kamal Nath (1997 (1) SCC 388) is not sufficient to
dislodge the claim. The observation in paragraph 13 that the ground
water under the land of the respondent does not belong to it may not
be a correct proposition in law. In the presence case, we also notice
the statement that the Company has registered themselves as required
under the Kerala Ground Water (Control and Regulation) Act 2002, which
came into force on 11-12-2003.
44. Now we may enter the next phase of the adjudication. The final
report of the Expert Committee is comprehensive, and it could be
gathered therefrom that a scientific investigation on the groundwater
potential of the area and the shortage and scarcity of drinking water
in the nearby areas due to the current level of water in the nearby
areas due to the current level of water extraction by the company had
been made the subject matter of enquiry/investigation. The Committee
found that the rainfall data recorded in respect of the areas revealed
of a shortfall in showers for the years 2002-03 and 2003-04, as much
lesser than the mean value. This deficiency, according to the
Committee, could e considered as the most significant factor that has
contributed to the scarcity of water experienced in the study area.
The Committee has recorded the opinion that the unrelated withdrawal
of groundwater from the wells within the Coca-Cola factory complex
and also outside, even during such a deficit period had aggravated the
scarcity situation. The annual average rainfall for the past ten years
has been taken notice, and up to the year 2004. During the year 2004,
as could be seen from the statements, there was a better amount of
rainfall (1690mm at Meenkara). For the purpose of calculation, the
lower value of 1412mm at Chitturpuzha project office has been taken
for assessing the groundwater potential of the area. The data
available for the macro area of Chittur block had been considered and
the committee had come to the conclusion that the committed annual
groundwater draft that should be reserved to meet the water
requirements of both domestic and irrigation sections in Chittur Block
till 2025 AD could be estimated as 62.5 Million Cubic Meters (MCM),
leaving an annual balance of about 4.2 MCM of groundwater resources
for meeting other uses of water, including industrial purposes. The
annual groundwater required by the company, at the average rate of 5
lakh litres per day, would have come at 0.1825 MCM, which would be
less than 5% of the total available 4.2 MCM.
45. As revealed in the report, Committee had also studied the data
pertaining to groundwater resource of Plachimada watershed. It found
that what could be used by the company was 4.97% of the annual
available groundwater resource of 3.67 MCM which would be there in the
watershed. The recommendation appears to be that permissible
groundwater withdrawal could be 5 lakh litres per day, if for relevant
year, average rainfall was available. If it was less by 10%,
exploitation is to be reduced to 4 lakh litres per day. If the monsoon
is less by 20% or 30%, restriction should have been made to 3 lakh
litres and 2 lakh litres respectively. In a case of a year where there
was 30% lesser rainfall than average, total ban of use to be imposed.
46. The Panchayat had not filed any detailed objection about the
report, and continued to rely on the objections made against the
interim report. Thus, it has not been possible to know their stand
about the presentation, including the watershed approach for arriving
at water availability status for various purposes, which alone appears
to have been the addition (See Minutes dated 20-01-2005-Appendix IF).
Nothing was specifically pointed out for discarding the report or the
recommendations. Although an affidavit is filed on behalf of the
second respondent on 01-04-2005, it has come out as a very feeble
effort, and an effort, which is difficult to be accepted as of any
consequence. A “Geological Assistant” of the Ground Water Department
is the signatory to the affidavit. He submits that on going through
the report, no principle is found out and reason for allowing
withdrawal of such a huge quantity of water is also not discernible
from the report. Attempt is to import and rely on statistics in the
form of Ext. R2 (a) (Yearly Rainfall at Chulliar Dam) and Ext. R2(c)
(Monthly Rainfall at Meenkara Dam) for the year 2004. It is to be
noticed that Chulliar Dam is situated more than 15 kilometers away.
Also the signatory has overlooked that the Expert Committee had taken
the lowest figures of rainfall as mean value recorded by relevant rain
gauges, which was lesser than for the latest year. The mechanism of
the projections suggested is not attempted to be challenged. We are
also constrained to observe that it was not prudent for a subordinate
officer to swear an affidavit controverting the findings of the Expert
Committee, especially since his superior officer (Hydrogeologist,
Ground Water Department) was one of the members of the Expert
Committee. The opinion of the Officer, who is a Geological Assistant,
can only be considered as pedestrian. Evidently, the attempt of the
Government was to escape fro a possible pique of indiscretion that
otherwise might have been suggested. Perhaps it is filed purely for
the purpose of records; if not to appease the gallery. We find that
the report of the Committee is fair, it appears to be authentic, based
on data collected, maure and therefore acceptable.
47. Before coming to the final phase of the case, we may also advert
to the relevance of W.P.(C). No. 12600 of 2004. Although orders were
passed by the Government on 13-10-2003, as per the directions of this
Court in O.P.No. 13513 of 2003, certain fresh issues were
precipitated, especially pointing out the health hazard and the
application for licence for the year 2004-05 had been rejected.
Because of the binding judgment in W.P. (C). No. 34292 of 2003 dated
16-12-2003, wherein the panchayat had suffered an order that “while
exercising the licensing jurisdiction, the Panchayat is not contempt
to go into the quality of the beverages produced and it was for the
other appropriate authorities to look into such allegations”, we feel
that such arguments are incapable of being reagitated, as the
Panchayat is bound by the observations, as such findings have never
been challenged. Also the proceedings were of not good taste, as the
Government order dated 13-10-2003 bound the discretion of the
Panchayat, which had only been partially modified by the judgement in
W.P.(C).No. 34292 of 2003. All steps were to be kept in abeyance, and
they had a duty to assess the magnitude of alleged exploitation before
any further adventure. Of course, it could be seen that additional
circumstances were arrayed, but even prima facie, such allegations
appear to be of no substance.
48. When we go through the exhibits presented in the writ petition, we
find that the Panchayat has however, in their letter dated 11-03-2004,
offered to renew the licence on satisfaction of three conditions. They
are: (1) The company should not draw or cause to be drawn any
groundwater from anywhere in Perumatty Grama Panchayat, including the
open well, and they may bring water from outside; (2) The company is
to immediately stop discharge of waste, including dangerous and
offensive contents, which are serious health hazards and attend to
waste management; and (3) the products are to be ensured as not having
any poisonous chemical substance in them, as has been found by the
Joint Parliamentary committee. Therefore, it was more of an ego clash,
and we do not wish to go to other details.
49. As regards the first objection, we have already held that such a
restriction will be unwarranted. It always will be permissible for an
occupier to draw water out of his holding. The permissible
restrictions, in public interest, can only be to compel him to ensure
that by his conduct he does not bring about a drought or any imbalance
in the water table. The interim report of the Expert Committee itself
indicate (vide paragraph 4.3) that although the pumping of groundwater
was stopped during March, 2004 the trend of water level falling in the
observation wells in the area continued. The suggestion and condition
to bring water fro outside the Panchayat area to run an industry
housed there is plainly unreasonable and we cannot approve such a
condition for curing the normal activities.
50. In respect of the objection about pollution, in the course of
hearing, reference is made to a letter addressed to the Chairman of
the Kerala State Pollution Control Board pointing out that every
possibility of any waste product contamination has been plugged up.
May be the Pollution Control Board has no objection in permitting
operation. As for the third objection viz., report from the Joint
Parliamentary Committee, we had occasion to peruse through the
documents as produced by the Panchayat: There is no reference to any
sample taken from the Factory at Plachimada and therefore the
objection as presented does not appear to be valid or even
sustainable. The Panchayat might not be possessing sophisticated
equipments for analysing the contents of the manufactured products,
and although as Mr. Ramakumar points out that the Schedule to the
Panchayat Raj Act is specific about the mandatory duties of the local
body, that by itself will not justify them to engage in a pursuit for
which they are illequipped. The anxiety of the Panchayat of course is
understandable, but blind faith may lead to perpetration of
arbitrariness, as point of view of third parties do not get noticed.
51. An overall assessment of the situation. We feel, may not be out of
place. Water travels constantly through water channels beneath the
ground. These are generally referred to as water sources and reserves,
and replenishment of ordinary wells is brought about naturally through
this system. But, water in immeasurable quantities which reach
substantially lower levels by percolation processes round the year are
locked in, for ages, between rock formations, and it could be tamed
out only by mechanical devices, e.g., through bore-wells. Presence of
water could be compared to that of petroleum deposits underground,
although there is no regular replenishment for the latter. Often
kilometers below ground level, both remain eternally trapped. It is
not uncommon that large deposits of petroleum are found far below the
ocean floor. The groundwater similarly are trapped deep below the
ground. Such deposits are not subject to evaporation, and laws of
gravity do not permit it ever to come up of its own. It is, therefore,
safe to assume that bore-wells are used to draw such water alone and
by working of such pumps, water might be drawn from areas extending to
several kilometers. Drying up of ordinary wells, tanks etc., in summer
season is not a phenomenon specific to Plachimada. As could be
gatherable from the report, the shortage in rainfall substantially is
a contributory factor thereto. By natural seepage during rainy
seasons, on its own, water travels downwards to reach low levels. The
Committee has explained the above as a process of recharging to the
groundwater, which is likely to replace the exploited amounts. This
appears to be the basis of the future projections made by them. The
very fact that the wells were drying up in the summer at. Plachimada,
notwithstanding stoppage of exploitation after March 2004, and when
the company’s bore-wells were kept idle, leads to the assumption that
the apprehensions and allegations were not true to the factual situation.
52. We, therefore, come to the conclusion that the Panchayat was not
justified in resorting to steps. Whereby renewal of licence for the
Hindustan Coca-Cola Beverages Private Limited was rejected well before
a scientific assessment was made. The Panchayat had also no legal
authority to cancel the licence for functioning the unit in the
Panchayat area for any of the reasons pointed out, at different
occasions. The Panchayat is therefore directed to consider the
application for renewal of the licence granted to the Company, for the
coming year, or any block years, if such application is filed within
two weeks from today. The Company will have the obligation to appraise
the Panchayat that they possess licences issued under the Factories
Act and clearance received from the Pollution Control Board. Within
one week of such presentation, if the above two conditions are
satisfied, the Licensing Authority of the Panchayat is directed to
grant the licence and it may not be within its jurisdiction to enquire
about the details of the machineries installed, including bore-wells,
as such matters predominantly are to be within the jurisdiction of
enforcement officers under the Factories Act. After grant of licence,
it may be permissible for the Panchayat for making inspections, so as
to see whether further licence fee would be payable.
53. For the year 2005-06, taking notice of the average rainfall, that
had been there in the locality, the Company will be entitled to draw
groundwater, not exceeding 5 lakh of litres per day, without any right
for accumulation in case of non-user per day. The Panchayat will be
entitled to carry out inspection, as coming within its jurisdiction,
including the limits of use of water per day, in a manner at their
discretion, of course without unduly interfering or inconveniencing
the company. The company should satisfy the Panchayat abut the intake
of water per day, keeping correct up-to-date log books and records.
The renewal of licence for the coming years should also be on the
basis of the observations made herein, as might be applicable with
required changes, so as to suit the occasion.
54. Although third parties had got themselves impleaded, we had only
opportunity to hear Mr. Chithambaresh, representing the cause of
workmen. They were vociferous in contending that the Panchayat had
been unnecessary twisting the arms of the company for no useful
purpose, misdirecting itself. There were no representations from any
others, who posed to represent the general public. Nevertheless, we
feel that taking notice of the commitment to which reference and claim
is made by the company, we have to direct that the company should
actively involve in the community development programs for the people
residing in the locality, especially in the matter of health and
drinking water supply, at the supervision of the Panchayat. Fe may
refer to the stand taken by them, as could be seen from Ext.P3,
produced in W.P.(C) No. 34292 of 2003, which calls for such
directions. Since the early settlers and general public are
apprehensive about the shortage of drinking water, this becomes an
essential duty of the company. The factory is drawing water resources
from the Plachimada watershed, and also perhaps from other regions of
Chittur Taluk through suction. Therefore, a reasonable amount of the
water so drawn are to be utilised for benefit of general public, and
as directed by the Panchayat from time to time. This work of water
supply is to be undertaken, and commenced before 30th of June 2005.
The restriction imposed for its own consumption will not be applicable
when water is drawn for this additional requirement.
55. In view of our observations and findings. We hold that the appeal
proceedings before the statutory Tribunal, filed by the Company under
section 276. of the Panchayat Raj Act, is to be closed as having
become infructuous, and a formal request is to be made by the Company
in that regard, on the authority of this judgment. As far as the
refund of deposit of cash made, in view of the order of this court
dated 07-01-2004, on application being filed, the Registry is to place
the matter before the court, and obtain further orders.
56. The three writ appeals and the writ petition are disposed of as
above. The directions and observations of the learned single Judge in
the judgment in W.P.(C)No. 34292 of 2003 will be deemed as modified in
consonance with the directions, as above made.
7th April, 2005. Sd/-
(M.Ramachandran, Judge)
Sd/-
(K.P. Balachandran, Judge)
On pronouncement of the judgment in open Court, the learned counsel
for the Panchayat submits that one week’s time granted for
consideration of the application will be too short a period and at
least two weeks might be required. Although Sri. Shaffique, appearing
for the respondent-Company, submits that the time granted is adequate,
taking notice of the circumstances, the time granted as one week will
stand modified as two weeks.
7th April, 2005. Sd/-
(M.Ramachandran, Judge)
Sd/-
(K.P. Balachandran, Judge)