AI Structured Summary
Not yet generated for this judgment
Judgment
The appeal is heard finally with the consent of learned Counsel appearing for the parties.
This appeal under Section 16 of the National Green Tribunal Act, 2010 is directed against the order dated 18.08.2023 passed by the Punjab Pollution Control Board (PPCB) for revocation/cancellation of Consent to Operate granted to the appellant under the provisions of the Water (Prevention and Control of Pollution) Act, 1974 (Water Act, 1974) and the Air (Prevention and Control of Pollution) Act, 1981 (Air Act, 1981) and also imposing certain conditions including deposit of environmental compensation amounting to Rs. 50 lakhs and furnishing of Bank Guarantee of the same amount.
The facts as reflected in the memo of appeal reveal that the appellant is engaged in manufacturing, supplying, and distribution of automotive components used in two/three/four-wheelers automobiles and its primary business segment is manufacturing and trading of auto components. The appellant is said to have obtained Consent to Establish issued under the Air Act, 1981 and the Water Act, 1974, Consent to Operate issued by the PPCB under the Air and Water Acts and Authorization issued under the Hazardous and Other Wastes (Management and Transboundary Movement) Rules, 2016.
Initially on inspection dated 09.11.2022, certain observations were made against the unit and the show cause notice dated 01.03.2023 for revocation/cancellation of consent under the Air and Water Acts was issued. The appellant was granted opportunity of hearing. Another inspection on 07.07.2023 was done and certain observations in respect of non-compliance of the provisions of the Water and Air Acts on the part of the Appellant were recorded and show cause notice dated 19.07.2023 was issued. The appellant had filed the written reply and had also appeared personally appeared on 25.07.2023 and, thereafter, the impugned order dated 18.08.2023 was passed to the following effect:
“After hearing the officers of the Board and the representatives of the industry, the Chairman of the Board decided that:
Consents to operate granted to the industry under the provisions of the Water (Prevention & Control of Pollution) Act, 1974 and Air (Prevention & Control of Pollution) Act, 1981 be revoked/cancelled.
The industry shall deposit Environment Compensation amounting to Rs. 50 Lacs (Rupees Fifty Lacs) on the best assessment basis on polluter pay principle for the degradation of the environment made by it, within 7 days.
The industry shall submit a Bank Guarantee amounting to Rs. 50 Lacs (Rs. Fifty lacs) as an assurance to comply with the Environmental Laws, within 7 days.
The industry shall get its water balancing carried out, within 15 days and submit the same to the Board.
The industry shall install two piezometers around its plantation area to check the quality of the groundwater, within 15 days.
The industry shall comply with the other observations raised by the Board during the previous visits, within 15 days, failing which strict action shall be taken against the industry under the provisions of the various Environmental Laws.
Environmental Engineer, Regional Office, Patiala shall monitor the piezometers after installation of the same by the industry and check the groundwater contamination, if any, with the operation of the unit and submit its report, within one month.
Further action shall be taken after the receipt of the report from Regional Office, Patiala.
You are, therefore, requested to comply with the aforesaid decisions of the personal hearing.”
The Tribunal in the first hearing in the appeal on 29.08.2023, after considering the submission of the appellant that the lapses noted in the impugned order were cured and appellant was complying with all the pollution norms, had appointed a joint Committee to carry out spot inspection and submit the report. Meanwhile, the appellant was permitted to carry out the operation till the next date of hearing subject to the condition of despite of environment compensation of Rs. 50 lakhs contained in the impugned order and further furnishing Bank Guarantee of Rs. 1 crore as an assurance to comply with the environmental laws.
It is undisputed that in terms of the order of the Tribunal dated 29.08.2023 the appellant has deposited the environmental compensation of Rs. 50 lakhs and has also furnished a Bank Guarantee of Rs. 1 crore.
The joint Committee in terms of the order of the Tribunal had initially submitted the interim report dated 12.09.2023 by mentioning that the stack samples were sent to the PPCB, Head Office Lab, Patiala for analysis and the results were awaited. In that report, certain lapses on the part of the appellant were noticed.
The joint Committee has submitted the final report dated 02.10.2023. As per the said report, trade effluent samples were collected in three sets. First set of samples was sent to Sophisticated Analytical Instruments Laboratories Society (SAI Lab Thapar Technology Campus, Bhadson Road, Patiala), second set of samples was sent to PPCB, Head Office Lab, Patiala and third set of samples was given to industry for analysis.
The Committee, after analysing the reports of three sets of samples which were sent to three different centres, has recorded certain lapses on the part of the appellant in the detailed report.
The comparative chart of status mentioned by the joint Committee as on the date of inspection, reveals that there were certain lapses in respect of operation of DAFs, existence of concentration of oil and grease, permissible limit, improper plantation of an area of around six acres, non-provision of water meters for its metal surface treatment plants etc.
In view of this, the following recommendations have been made by the joint Committee in its report dated 02.10.2023:
“Recommendations:
The industry shall install tertiary treatment facilities and shall explore the possibility of reuse of treated wastewater into process to reduce the consumption of fresh ground water. The industry will submit a time bound action plan to Punjab Pollution Control Board.
The industry shall stop the use of treated effluent being used in Karnal Technology as ground water contamination is observed in piezometers 1 and 2 after installation of tertiary treatment plant.
Since, the concentration of oil and grease is beyond the permissible limits in treated effluent, the industry shall upgrade the oil and grease recovery system and action plan be submitted to Punjab Pollution Control Board.
The Bank Guarantee submitted by the industry should be released only after installation of tertiary effluent treatment facilities.
The industry shall install Online Continuous Effluent Monitoring System (OCEMS) system at final outlet and its link will be uploaded to PPCB website. The real time results will also be displayed at main gate of the industry.
The water stored in rain water collection tank will be treated and intermixing of effluent with rain water collection system must be identified by the industry and stopped immediately.
The industry shall engage institute of repute for detailed ground water contamination study within the radius of 5 km from the Environment Compensation (EC) fund deposited with PPCB in order to suggest remedial measures if any based on the ground water study.
Since, there is no Municipal Solid Waste management facility in Bahadurgarh area, the industry shall provide infrastructure / machinery for management of solid waste generated by Bahadurgarh area in consultation with Department of Rural Development and Panchayat / Department of Local Government from the EC funds.”
In the above background, the arguments of Counsel for the parties have been heard.
The first submission of learned Senior Counsel appearing for the appellant is that no samples were collected during the surprise visit of 07.07.2023, therefore, there was no proper material before the competent authority to reach to the definite conclusion in respect of violation of environmental laws.
Learned Counsel for the Respondent, PPCB has not disputed the fact that the samples were not collected at the time of inspection on 07.07.2023.
The second argument advanced by the learned Senior Counsel for the appellant is that the competent authority while passing the impugned order has not assigned any reason for directing cancellation/revocation of Consent to Operate and also for imposing the environmental compensation and other conditions in the impugned order. He has submitted that the reasoned order is one of the fundamental requirements of fair administration. The legal position reflected in respect of assigning of reason in the judgment relied upon by the appellant is as under:
“The Hon’ble Supreme Court in Madhyamam Broadcasting Limited vs Union of India [2023 SCC Online SC 366] has held that:
The principles of natural justice ensure that justice is not only done but it is seen to be done as well. A reasoned order is one of the fundamental requirements of fair administration. It holds utmost significance in ensuring fairness; scholars and courts now term it as the third principle of natural justice. The rule of a reasoned order serves five important purposes. Firstly, it ensures transparency and accountability. It places a check on arbitrary exercise of power. Lord Denning observed that in giving reasons “lies a whole difference between a judicial decision and an arbitrary one”. Justice Bhagwati observed in Maneka Gandhi (supra) that the rule is “designed to secure the rule of law and the court should not be too ready to eschew it in its application to a given case.” Secondly, nonreasoned orders have the practical effect of placing the decision out of the purview of judicial review. A non-reasoned order limits the power of the courts to exercise judicial review because the scope of judicial review is not limited to the final finding on law or facts but extends to the reasons to arrive at the finding. A limitation on the right to appeal necessarily means that the scope of judicial review is restricted. Thirdly, articulation of reasons aids in arriving at a just decision by minimalizing concerns of arbitrary state action. It introduces clarity of thought and eschews irrelevant and extraneous considerations. Fourthly, it enhances the legitimacy of the institution because decisions will appear to be fair. There is a higher probability that the finding through a reasoned order is just. Fifthly, reasoned orders are in furtherance of the right to information and the constitutional goal of open government. Secrecy broods partiality, corruption and other vices that are antithetical to a governance model that is premised on the rule of law.”
Further, the Hon’ble Delhi High Court vide its Order dated 20.07.2022 in Smt. Usha Rani & Anr. vs Union of India & Ors. [W.P.(C) 10876 of 2022] has held that –
“7. Reason is the soul of justice. Any order passed, whether in the exercise of judicial or administrative powers vested in the authority, must be speaking. As goes the judicial precedents, an order disposing of an application necessarily requires recording of reasons in support of the conclusions arrived at in the order and failure to give reasons tantamount to denial of justice.
In fact, the insistence on recording of reasons is meant to further the principles of natural justice, and specifically for ensuring that justice must not only be done but it also be seen to be done. Recording of reasons also operates as a legitimate restraint on any possible arbitrary exercise of judicial or quasi-judicial or administrative power by any authority and as such is a facilitator of Rule of Law”
The Kerala High Court has also considered the importance of a reasoned judgement in Ambili S. Pilla vs Vinod Kumar Pilla & Ors. [O.P. (FC) No. 702 of 2022] and held that –
“6. In Breen v. Amalgamated Engineering Union [1971 (1) All. E.R. 1148] Lord Denning, M.R. Observed that, the giving of reasons is one of the fundamentals of good administration. In Alexander Machinery (Dudley) Ltd. v. Crabtree [1974 ICR 120] it was observed that, failure to give reasons amounts to denial of justice. Reasons are live links between the mind of the decision-taker to the controversy in question and the decision or conclusion arrived at.
In Commissioner of Police, Bombay v. Gordhandas Bhanji [AIR 1952 SC 16] the Apex Court has held that, public orders publicly made, in exercise of a statutory authority cannot be construed in the light of explanations subsequently given by the officer making the order of what he meant, or of what was in his mind, or what he intended to do. Public orders made by public authorities are meant to have public effect and are intended to affect the actings and conduct of those to whom they are addressed and must be construed objectively with reference to the language used in the order itself. Following the principle laid down in Gordhandas Bhanji’s case (supra), the Apex Court has reiterated in Mohinder Singh Gill v. Chief Election Commissioner [(1978) 1 SCC 405] that, when a statutory functionary makes an order based on certain grounds, its validity must be judged by the reasons so mentioned and cannot be supplemented by fresh reasons in the shape of affidavit or otherwise. Otherwise, an order bad in the beginning may, by the time it comes to Court on account of a challenge, gets validated by additional grounds later brought out.
Following the principle laid down in the decisions referred to above, the Apex Court in Chairman and Managing Director, United Commercial Bank v. P.C. Kakkar [(2003) 4 SCC 364] held that, reasons substitute subjectivity by objectivity. The emphasis on recording reasons is that if the decision reveals the ‘inscrutable face of the sphinx’, it can, by its silence, render it virtually impossible for the courts to perform their appellate function or exercise the power of judicial review in adjudging the validity of the decision. Right to reason is an indispensable part of a sound judicial system. Another rationale is that the affected party can know why the decision has gone against him. One of the salutary requirements of natural justice is spelling out reasons for the order made, in other words, a speaking out. The ‘inscrutable face of a sphinx’ is ordinarily incongruous with a judicial or quasi - judicial performance.
The object underlying the rules of natural justice is to prevent miscarriage of justice and secure fair play in action. The recording of reasons by an administrative or quasijudicial authority serves a salutary purpose, namely, it excludes chances of arbitrariness and ensures a degree of fairness in the process of decisions making. It would apply equally to all decisions made by such authority and its application cannot be confined to decisions which are subject to appeal, revision or judicial review. At the same time, it is not the requirement that, the reasons should be as elaborate as in the decision of a Court of law. What is necessary is that, the reasons are clear and explicit so as to indicate that the authority has given due consideration to the points in controversy. Hence, it is an essential requirement of the rule of law that, some reasons, at least in brief, must be disclosed in the order passed by an administrative or quasi-judicial authority.”
Thus, the law in respect of recording of reasons by administrative or quasi-judicial authority is well settled. A perusal of the impugned order reveals that the competent authority of the PPCB had taken note of the surprise visit dated 07.07.2023 of officers of the Board and, thereafter, had recorded the factum of issuance of show cause notice and the stand of the industry in the written reply and, thereafter, without recording any finding and without giving his own reasons has straightway reached to the operative part of the order directing revocation/cancellation of Consent to Operate, imposing environmental compensation and directing furnishing of Bank Guarantee, etc. Hence, we find substance in the arguments advanced by the learned Senior Counsel appearing for the appellant in this regard.
At the end, Counsel for the appellant without prejudice to the above arguments, has advanced following two contentions:
i. Without prejudice to the contentions raised in the appeal, the appellant without entering into any controversy, consents that the amount of Rs. 50 lakhs already deposited as per order dated 18.08.2023 may be utilized in accordance with the recommendation of the joint Committee. The appeal may be disposed of accordingly.
ii. The bank guarantee of Rs. 1 crore furnished in terms of the order of the Tribunal dated 29.08.2023 will be kept alive till the recommendations made by the joint Committee in the report dated 02.10.2023 are fully complied with and in case, if the industry fails to comply with the same within six months, the concerned respondent will be entitled to invoke the Bank Guarantee after giving a notice to the appellant.
No serious arguments have been advanced by learned Counsel for the PPCB questioning the above final submission of Counsel for the appellant. We also find that by virtue of interim order dated 29.08.2023 passed by the Tribunal, the appellant is carrying out the operation after complying with the conditions of deposit of environmental compensation of Rs. 50 lakhs as contained in the impugned order and after furnishing the Bank Guarantee of Rs. 1 crore. It is also worth noting that the recommendations of the joint Committee in the report dated 02.10.2023 are after sample analysis which has not been disputed.
Having regard to the fact that the impugned order has been passed without collecting any samples and without assigning any reason, we find that the recommendation for revocation/cancellation of Consent to Operate under the Air and Water Acts cannot be sustained. However, considering the last submission of Counsel for the appellant and keeping in view the object that the industry must comply with the relevant environmental law and any infringement in this regard cannot be ignored, we find it proper to sustain rest of the order by accepting the stand of the appellant that Bank Guarantee of Rs. 1 crore furnished in terms of the order of the Tribunal dated 29.08.2023 will be kept alive by the appellant till the recommendation made by the joint Committee in the report dated 02.10.2023 are fully complied with and on failure to do so within six months, the competent authority will be entitled to invoke the Bank Guarantee after giving notice to the appellant.
The appeal is accordingly disposed of.