Hindusthan Engineering & Industries And Ors vs Gujarat Pollution Control Board And Ors

This Appeal is filed by Appellant industry under Section 14 and 16 read with Section 18(1) of the National Green Tribunal Act, 2010 challenging the direction of closure issued by Gujarat Pollution Control Board (for short 'GPCB') Respondent Nos.1 and 2 on 27th June, 2016 in exercise of the powers conferred upon the Board under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974. The Appellant industry is a chemical industry and is manufacturing and marketing several chemical products like sodium cyanide, potassium cyanide, sodium ferro cyanide, etc. The Appellant industry was commissioned in 1982 and claims to currently employing, directly or indirectly, about 400 people in the area.

Shorn of unessential, it is the case of the Appellant industry that the impugned Closure Order is passed by the Environment Engineer of GPCB without following the principles of natural justice; without issuing prior Show Cause Notice and granting personal hearing. The Appellant contends that even on merit, the Closure Order is devoid of any merit as it is totally silent on the alleged eminent environmental damage allegedly resulting from pollution nor even reflects any apprehension of such environmental degradation. It contends that based only on some cursory observations cited in the Closure Notice like question of COD, the Closure Notice has been issued. The Appellant has also alleged that the Closure Order/Notice was issued by GPCB under the pressure from the local residents who have lodged complaint against the Appellant industry.

The Appellant contends previously also the GPCB had issued Closure Notice to the industry on 20th January, 2015 and the same was challenged before this Tribunal in Appeal No.7/2015. The Tribunal has considered the Appeal on merit and has allowed the Appeal by Judgment dated 16thApril, 2015 on certain terms and conditions. The industry has complied with such terms and conditions and the said compliance was duly verified by the officials of the GPCB from time to time and even, the compliance report has been filed before the Tribunal.

GPCB has not filed affidavit in reply but when pointed out to the alleged irregularities with reference to the procedure laid down under Rule 34(3) of Water (Prevention and Control of Pollution) Rules, 1975, the learned Counsel appearing for GPCB had sought some time to respond. The Tribunal had recorded in its Order dated 8th July, 2016 that the procedure prescribed under Rule 34(3) of the Water (Prevention and Control of Pollution) Rules, 1975 appears to have been given go-bye. The Closure Order dated 27th June, 2016 was therefore stayed until further orders. Subsequently, on 5th August, 2016 the matter was heard and it was listed for orders on 17 th August, 2016. On 17th August, 2016, learned Counsel for GPCB submitted that GPCB has revoked the impugned Closure Order on its own volition and pleaded that the Appeal be treated as infructuous. He had admitted that such an order for revocation has been issued on 11th August, 2016 after the matter was heard on 5th August 2016 and listed on 17th August 2016 for orders. The Tribunal had noted that GPCB has revoked the impugned order when the issue is sub-judice before the Tribunal.

Faced with this piquant position, the learned Counsel for GPCB sought time to file an affidavit. They were permitted to do so only after taking leave of the Tribunal. Though such affidavit has been filed in Registry, it is without seeking any leave of Tribunal and it only refers to revocation of impugned order and encloses a copy of such order. Unfortunately, in the subsequent hearing on 6th, 7th, 9th September, 2016 neither concerned officer of the GPCB nor the learned Counsel appeared before the Tribunal for the reasons best known to them, though it was well informed that the matter is listed for orders.

Now coming to the present proceedings, it would be relevant to refer to the findings recorded by the Tribunal in Appeal No.7/2015 wherein a similar Closure Order issued to the Appellant Industry was challenged. It reads thus:

"2. We have perused the Appeal and Misc. Applications and the order of closure of the Industry. We find that the closure order is issued under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974, on the basis of assumption that hazardous effluents are being discharged by the Industry, which resulted into pollution and caused problem to the health of the members of nearby residential area. There are complaints received from the inhabitants of localities surrounded by the Industry.

Upon considering the material placed on record, it is manifestly clear that the impugned order is passed without giving hearing to the Industry/ Appellant and moreover, copy of the impugned order was not served on the Industry, as required under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974, which could have given opportunity to the Industry to make representation within period of fifteen (15) days, as permitted under the said provision. Thus there is clear violation of provision of the Law and, therefore, the impugned order is unsustainable.

Gujarat State Pollution Control Board (GSPCB), could not have acted only upon grievances of the group of residents of the localities residing in the area near the Industry, without verification of actual quality, quantity and standards of effluents discharged from the Industrial unit. The norms of load of pollution discharge, the type of pollutants so discharged, water quality, the presence of hazardous elements in the water and other factors ought to have been reflected in the Inspection Report, or closure order, which are not communicated to the Industry, nor they are shown in the report of Technical Expert Committee."

The Tribunal had also issued certain directions and in fact the GPCB came on record to submit compliance of those directions.

The impugned order dated 27th June 2016, challenged in this Appeal has been issued by the Environment Engineer of GPCB and the relevant material portion of the order is reproduced to understand the basis of issuance of such order:

"You are informed that in response to complaint against your industry, officers of GPCB has visited your factory on 30.05.2016 under Water Act 23 and following were the observations:

Polluted water was observed coming out from a 200 meter long underground pipeline, which was laid for drainage of polluted water upto the outside of compound wall towards Khadi side.

Spreading of white colour was observed near the industrial outlet and drainage towards MasmaKhadi.

Traces of discharge were observed at the inlet of above mentioned underground pipeline inside the factory.

White colour deposition was also observed in the plantation area.

Polluted water sample which was collected during the visit & COD was found 522 mg/l in the same."

It is manifest from the bear reading of the Closure Order that the Appellant Industry was not issued with Show Cause Notice prior to the passing of the impugned order nor any personal hearing was granted. This fact was not controverted by GPCB either during oral submissions or through written submissions.

The GPCB is a statutory authority and is required to strictly follow the procedures which are mandatory by law before issuing such directions. Rule 34(3) of the Water (Prevention and Control of Pollution) Rules, 1975 elaborately stipulates the procedure which includes issuance of the Show Cause as well as grant of personal hearing. No doubt, in case of emergent situations and eminent danger of environment degradation, the authorities can issue certain directions, but for the reasons to be recorded in writing. All these procedural requirements have to be complied with by the GPCB which has been totally flouted.

As this is an appeal proceeding, we are required to test the impugned order on the touchstones of legality, rationality and procedural regularity/compliance and propriety. In the present case, the order under challenge is of closure of an industry which means the industry will cease to operate. Such a special power has been bestowed with the Environmental Regulatory Authority regulating the Environment Regulations in law in order to protect the environment. These powers are exemplary and deterrent. Such powers cannot be exercised arbitrarily or in violation of the prescribed procedure. Therefore, it is expected that the authorities upon whom such powers have been conferred use such powers judiciously and sparingly. The Environment Regulations prescribe different levels of regulatory response to deal with issues related to environment pollution and degradation. It is, therefore, necessary for such regulatory authorities to assess the situation on objective technical parameters in order to protect and conserve the environment and thereafter, based on such scientific analysis and appraisal; adopt a reasonable and proportionate response to deal with the emergent situation, following prescribed process of Law. The Hon'ble Apex Court in Maharashtra Land Development Corporation & Ors Vs. State of Maharashtra & Anr. (2011) 15 SCC 616 has dealt with this issue at paragraph 61, which read thus:

"61. The principle of proportionality envisages that a public authority ought to maintain a sense of proportion between particular goals and the means employed to achieve those goals, so that administrative action impinges on the individual rights to the minimum extent to preserve public interest. Thus implying that administrative action ought to bear a reasonable relationship to the general purpose for which the power has been conferred. The principle of proportionality therefore implies that the Court has to necessarily go into the advantages and disadvantages of any administrative action called into question. Unless the impugned administrative action is advantageous and in public interest such an action cannot be upheld. At the core of this principle is the scrutiny of the administrative action to examine whether the power conferred is exercised in proportion to the purpose for which it has been conferred. Thus, any administrative authority while exercising a discretionary power will have to necessarily establish that its decision is balanced and in proportion to the object of the power conferred."

Despite the facts referred to above, the GPCB has gone ahead with issuance of impugned closure orders against the industry in Appeal ignoring the orders and observations of Tribunal in Judgment dated 16th April, 2015 in Appeal No 7 of 2015.

It is manifest that GPCB has issued the impugned order without following the principles of natural justice by not giving Show Cause Notice and subsequent personal hearing. It has also failed to establish that there was an eminent environmental danger or threat in order to support non-issuance of Show Cause Notice. In fact, the GPCB has maintained stoic silence and has not even responded to the grounds raised in Appeal. Under these circumstances, the impugned order fails in terms of its legality, rationality and propriety. The impugned order is, therefore, set aside and quashed.

The facts manifesting from various circumstances including earlier Appeal proceeding in this Tribunal make it clear that the GPCB has not acted in a fair manner in exercising its power conferred upon it by the various statutes relating to prevention and control of pollution, particularly, with reference to Section 33A of the Water (Prevention and Control of Pollution) Act, 1974. It is evident from the proceedings in Appeal No.7/2015 that GPCB in the recent past it had initiated similar action like the present action against the Appellant Industry Hindusthan Engineering & Industries Limited, which action was impugned before this Tribunal. The considered Order passed on 16th April, 2015 in Appeal No.7/2015 bears testimony to the fact that this Tribunal viewed seriously the violations and non-compliance to the strict procedures prescribed under the provisions of the Water (Prevention and Control of Pollution) Act, 1974 and other statutes by GPCB while exercising the powers for issuing orders to close the units on alleged contravention of conditions of EC or other provisions. We had therefore held the action taken by GPCB which resulted in passing the order to close the unit was arbitrary and violative of principles of natural justice. Hence we had issued specific directions in Appeal No. 7/2015 to be complied to prevent such lapses.

The GPCB filed a statement before us that those directions issued in Order dated 16th April, 2015 in Appeal No.7/2015 have been duly complied. We are therefore, pained to see within a short period thereafter the GPCB has indulged in disdainful conduct of once again issuing Closure Order to the Appellant Industry virtually similar to the one which was quashed by our Order dated 16th April, 2015 in Appeal No.7/2015. It is quite obvious that this is not an innocent conduct of the GPCB but smells of deliberate violations in exercise of the enormous power conferred upon it under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974. The order passed is arbitrary, unreasonable and an order which is in conflict with our directions issued to GPCB vide Judgment dated 16th April, 2015 in Appeal No.7/2015 referred to above. The only conclusion would be that GPCB is indulging in confrontation or seems to conduct in conflict with rule of law which conduct cannot be ignored.

It is, therefore necessary, in the interest of justice, to ensure that rule of law prevails and the erring Members who presently constitute GPCB be cautioned, lest, they may feel unbridled to indulge in such acts. Hence, we feel it appropriate to impose cost on the GPCB. We, therefore, impose cost of Rs.5 Lakhs on GPCB which shall be deposited with Collector, Surat within 4 (four) weeks, which shall be used for environmental improvement in or around GIDC Industrial Estate, Olpad, Surat. We also direct the Registry to send a copy of this order to the Chief Secretary of Gujarat for information and necessary action at his end.

We are of the opinion that the officers concerned that are authorized to issue directions need to be sensitized and trained about legal requirements and procedure to be followed in such cases. It is also necessary for the GPCB to review its operational frame work to avoid such incidents. We, therefore, expect Chairman, GPCB to take necessary action in this regard, which will avoid putting GPCB in such awkward position.

The Appeal is, therefore, allowed and disposed of.

We also make it clear that GPCB should not have any prejudice against the Appellant Industry in its regulatory affairs because of the findings of this Appeal.