M/s. Gururaja Glass Works vs Karnataka State Pollution Control Board And Ors

1) This Appeal challenges an Order of the 1st respondent, Karnataka State Pollution Control Board dated 29.07.2013 for closure of the Appellant's unit based on the Government of Karnataka's Thippagondanahalli Reservoir (TGR) Notification dated 18.11.2003.

2) Brief facts necessary for the disposal of the Appeal can be stated thus: The Appellant, a partnership firm engaged in the business of manufacture of toughened glass and laminated safety glass along with allied products, has been running its Unit in the industrial area in Plot No.231C, Sompura Industrial Unit, 1st Stage, Sy.No.42P at Makanakuppe, Thyamagondlu Hobli, Nelamangala Taluk, Bengaluru Rural District. It is being run as a small scale industry employing around 30 workers whose livelihood depends on the unit.

3) The Appellant approached Karnataka Udyog Mitra, a Government of Karnataka Organisation, the 2nd respondent herein, by submitting a Project under the State Level Single Window Clearance Committee for the purpose of infrastructural assistance. The 2nd respondent consists of members from the organisations such as Pollution Control Board, Electricity Board, Local Authorities, and Land Acquisition Authority to consider the project under the Single Window System. Request made for allotment of the land for the industrial unit through the 2nd respondent was considered by the Karnataka Industrial Area Development Board (KIADB), the 3rd respondent herein, and land was allotted measuring an extent of 1 acre in Sompura Industrial Unit, 1st Stage, vide letter dated 21.11.2008 under lease -cum- sale agreement and it was registered by the Sub-Registrar, Nelamangala, Bengaluru Rural (N) on 20.04.2010. Planning permission was also accorded on 02.11.2010 on compliance of the requirements. As per the planning permission, construction was completed by the Appellant and he has also imported sophisticated machinery for the operation of the Unit. Financial assistance was also availed amounting to Rs.2 Crores through the State Bank of Mysore, Dobbespet Branch, Bengaluru by way of equitable mortgage by depositing title deeds of the property and a charge was created in favour of the Bank; a deed of hypothecation was also executed wherein the machinery imported from abroad was hypothecated in favour of the Bank. The 3rd respondent had issued No Objection Certificate dated 10.05.2011 permitting the said mortgage. The Appellant approached the competent authorities and obtained all the necessary licenses for the commencement and operation of the unit.

4) The Government of Karnataka issued a Notification on 18.11.2003, vide No. FEE 215 ENV 2000, wherein directions were issued in respect of TGR declaring Schedule of Zones in the TGR. The land allotted to the Appellant does not fall under Sl.No.148 of Makanakuppe Village in the Annexure of the Notification dated 18.11.2003 wherein, details of Village and Survey Number wise areas falling in various Zones of the TGR Catchment Area are referred to. Various authorities viz., Electricity Board, Sales Tax and Central Excise Department and Labour Department also inspected the Appellant Unit and after being satisfied that the Unit is not located in the Survey numbers listed in the TGR Notification, licenses were accorded for running the business. Thereupon, the Unit of the appellant became operational since July, 2011 and made a turnover amounting to Rs. 2.5 crores.

5) While it stood so, the 1st Respondent sent a communication dated 20.10.2011 calling upon the Appellant to appear for a personal hearing with regard to the disposal of an application for Consent for Establishment (CFE). The Appellant attended the enquiry on 03.11.2011 and the allotment of land to the Appellant was discussed. It was informed to the Appellant that the Unit falls under Zone-3 of the TGR Notification dated 18.11.2003 issued by the Government of Karnataka and therein, refused the Consent of the Board for establishment of the Unit. The Appellant explained to the 1st respondent that the allotted land would not fall under Zone-3 and it was excluded from the Notification and thus the reason set out in the letter dated 17.12.2011 was incorrect. The Appellant again approached the 1st respondent and submitted an application for CFE of the Unit drawing the attention that the consent cannot be refused on account of the fact that the Unit is located in Zone-3 Category as it was not so. Despite the same, an Order came to be passed by the 1st respondent on 04.01.2012 vide Proceedings No.PCB/BNB/IND/Consent Refusal/2011-12 under Section 27 2 (b) of the Water (Prevention and Control of Pollution) Act, 1974 (Water Act, 1974) and under Section 21(4) of the Air (Prevention and Control of Pollution) Act, 1981 (Air Act, 1981) refusing the CFE for the industry of the Appellant at Plot No.231C, Sompura Industrial Unit, 1st Stage, Sy. No.42P at Makanakuppe, Thyamagondlu Hobli, Nelamangala Taluk, Bengaluru Rural District. Even without serving any Show Cause notice of the proposed action under Section 33A of the Water Act, 1974 and Rule 34 of Water (Prevention and Control of Pollution) Rules, 1975 and Section 31 A of the Air Act, 1981 and Rule 20A of the Air (Prevention and Control of Pollution) Rules, 1983 calling upon the appellant to submit an explanation, the appellant was directed to attend hearing on 03.11.2011. It was further alleged that an inspection was done in the Appellant Unit by a Senior Environmental Officer and that it was noticed that the Appellant Unit is falling under Zone-3 of the TGR Notification dated 18.11.2003. During the personal hearing, the Appellant explained that the land allotted to him was outside the purview of the TGR Notification. Instead of accepting the explanation, the 1st Respondent has passed the impugned order of closure, which is the subject matter of challenge. The Appellant filed a memo on 10.11.2014 stating that the TGR Notification dated 18.11.2003 was withdrawn by the Karnataka Government in G.O.No.AaPaJee 01 ENG 2011 dated 24.07.2014.

6) On notice, the respondents have entered appearance. However, the 2nd respondent did not appear despite service of notice and hence was set as ex parte by this Tribunal by an Order dated 27.05.2014. The 1st Respondent produced an Order of Stay granted by the First Bench of the Hon'ble High Court of Karnataka in W.P. 38218/2013 on 28.11.2014. It was also pointed out that the Hon'ble High Court of Karnataka in its Order dated 02.02.2015 has appointed an amicus curiae and the Environmental Management & Policy Research Institute (EMPRI) to make a comprehensive survey and study in accordance with the Terms of Reference as may be approved by the High Court and to submit an interim report latest by 27.04.2015.

7) The 3rd Respondent adopted the reply of the 1st Respondent and in addition stated that the Appellant's project proposal was approved by the 2nd Respondent and the request for allotment of 1 acre of land in Sompura Industrial Area, 1st Phase near Dobbaspet through the 2nd Respondent was considered by the 3rd Respondent and they had allotted 1 acre of land to the Appellant in Plot No.213 on 21.11.2008 subject to terms and conditions set forth therein. Subsequently, the allotment was changed to 231 C of Sompura Industrial Area, 1st Stage. The 3rd Respondent also states that the Appellant had utilized only 1033.74 sq.mts of land which works out to 25.55 % of the land allotted. An Interim Order of status quo in favour of the Appellant for a period of 4 weeks was ordered by the Tribunal on 12.08.2013 which was extended until further orders on 21.09.2013.

DISCUSSION & CONCLUSION:

8) The points that arise for consideration in the Appeal are:

a) Whether the impugned order of closure of the Appellant Unit dated 29.07.2013 is liable to be set aside on all or any of the grounds put forth by the respondents; and

b) To what reliefs the Appellant is entitled for.

9) Advancing the arguments on behalf of the Appellant, the Learned Counsel would submit that the impugned order is untenable in law and contradictory to facts. The 1st Respondent failed to note that the Appellant Unit is situated in the land allotted by the 3rd Respondent comprising part of Sy.No.42 which did not fall under the TGR Notification dated 18.11.2003 relied upon by the 1st Respondent in its Order. The Government of Karnataka has approved the interim Master Plan of Nelamangala Planning Area vide G.O. dated 28.05.2009 in which it has been categorically pointed out at Sl.No.148 wherein several Sy.Nos. covered under Zone-3 of Makanakuppe Village are referred to. It is pertinent to point out that the part of Sy.No.42 wherein the Unit of the Appellant is situated is not referred to. A planning permission was also accorded to the 3rd Respondent, after a thorough verification made by the authorities and the Appellant was permitted to proceed with the construction of the Unit in Sy.No.42 of Makanakuppe Village. The Respondents have erred in mentioning that the Appellant is situated within 1 km of the Arkavathy River Bank. The said River Bank is situated 27 km away from the Unit and hence the allegation is thoroughly unfounded. Without giving an opportunity to the Appellant to tender its explanation by serving a Show Cause notice, the 1st Respondent has passed the impugned closure order thereby offending the principles of natural justice and on that ground and also since the Order under challenge is without the application of mind, the impugned order has got to be set aside.

10) In reply, both the Counsel for the 1st and 3rd Respondents put forth their respective submissions. The contentions put forth by either side were considered and all the materials made available, were looked into. Admittedly, the Appellant approached the Karnataka Udyog Mitra, the 2nd respondent herein, for infrastructural assistance under the State Level Single Window Clearance Committee consisting of members from all the concerned organisations of the Government such as Pollution Control Board, Electricity Board, Local Authorities and Land Acquisition Authority. On the strength of the clearance made by the said Committee, the 2nd respondent, KIADB, allotted the land measuring an extent of 1 acre in Sompura Industrial Unit, 1st Stage. Accordingly, the 3rd Respondent allotted the land on 21.11.2008 and on the execution of the agreement, the same was also registered on 20.04.2010. It is pertinent to point out that the allotment was made by the 3rd Respondent only in November, 2008 on an application made by the Appellant only on the strength of the clearance given by the State Level Single Window Clearance Committee in which all the concerned Government authorities were the members including the 1st Respondent. A planning permission was also accorded to the Appellant in November, 2010 and as per the planning permission, construction was also completed. The Appellant Unit, after importing the machinery, became operational. While the matter stood so, the Appellant made an application for CFE of the Unit. According to the Appellant, at the time of personal hearing, to consider the granting of CFE by the 1st Respondent all related documents were placed before the PCB and a discussion had also taken place. In view of the same, on the ground urged by the Appellant an opportunity of being heard was not given and the impugned order came to be passed offending the principles of natural justice which cannot be countenanced and without considering the same, the order of closure came to be passed.

11) On scrutiny of the entire materials, the Tribunal is of the considered view that the impugned order of closure cannot be sustained. As could be seen from the documentary evidence relied on by the Appellant, based on the letter of approval given by the State Level Single Window Clearance Committee dated 21.10.2008 (Page 15 of the Appellant's index to typed set) and also a letter of allotment of the industrial unit by the 3rd Respondent on 21.11.2008 (Page 19 of the Appellant's index to typed set) and also a letter of confirmation of allotment dated 15.06.2009 issued to the Appellant by the 3rd respondent(Page 28 of the Appellant's index to typed set) , the Appellant has taken possession of the site as per the Possession Certificate dated 24.03.2010 (Page 29 of the Appellant's index to typed set) and a lease- cum- sale agreement dated 20.04.2010 was entered between the 3rd respondent and the Appellant. The impugned order reads as follows:

You are operating an industry in the name and style of M/s. Gururaja Glass Works, engaged in Glass toughening activity at No.231C, Sompura Industrial Area, 1st stage, Sy. No.42P of Makanakuppe, Thyamagondlu Hobli, Nelamangala Taluk. Your industry is situated within 1 Km from Arkavathy River bank. As per the notification No.FEE 215 ENV 2000 dated 18.11.2003 issued by the Government of Karnataka, the location of your industry falls within the Zone-3 of the said notification. In Zone-3, no industrial activity is permitted.

12) From the above, it is quite clear that the reason adduced by the 1st Respondent Board for the closure of the Appellant Unit is on the premise that the location of the industry falls within Zone-3 of the Notification dated 18.11.2003 and in Zone-3, no industrial activities are permitted. On scrutiny of the documentary evidence, it is found factually incorrect. Admittedly, the allotted land for the industrial unit for the Appellant is in Plot No.231 C, Sompura Industrial Unit, 1st Stage, Sy. No.42 P at Makanakuppe, Thyamagondlu Hobli, Nelamangala Taluk, Bengaluru Rural District. The TGR Notification dated 18.11.2003 relied on by the 1st Respondent has categorized 4 Zones comprising of areas specified therein. A perusal of the Sl.No.148 of the TGR Notification dated 18.11.2003 would make it abundantly clear that the Plot No.231 C, Sompura Industrial Unit, 1st Stage, Sy. No.42 P does not find place in anyone of those 4 Zones and thus, it would fall outside the Notification. When the Appellant approached the State Planning Authority for the establishment of the Unit, the same was granted since the Sy.No. did not find place in any of the Zones. Learned Counsel for the Respondent relied on an Order of Stay granted by the First Bench, Hon'ble Karnataka High Court in W.P. 38218/2013 which reads as follows:

It may be noted and clarified here that, by virtue of the order dated 28.11.2014, pending hearing of the present group of petitions, the operation of the notification dated 24.07.2014 issued by the Government of Karnataka in exercise of powers under Section 5 of the Environment (Protection) Act,1986 was stayed till further orders, with the effect that the original notification dated 18.11.2003 operates and the authorities designated therein continue to be responsible for strict compliance with the said notification. It is, therefore, unnecessary to further clarify that any new development, construction, utilization, or conversion of lands, in violation of the original notification dated 18.11.2003, shall be viewed seriously and may result into prosecution for the offences under the Environment (Protection) Act, 1986, of the officers and authorities concerned.

13) The Order of the Hon'ble High Court as seen above, is to the effect that the operation of the Notification dated 24.07.2014 issued by the Government of Karnataka was stayed till further orders and also with the effect that the original notification dated 18.11.2003 operates and the authorities designated therein continue to be responsible for strict compliance of the Notification dated 18.11.2003. It remains to be stated that the above Order of the Hon'ble Karnataka High Court in the Writ proceedings is a direction to the authorities designated under the TGR Notification dated 18.11.2003 to strictly comply with the said Notification. In the instant case, it is to be reported that the land in question falls outside the TGR Notification dated 18.10.2003.

14) All the above would clearly indicate that the Closure Order based on the ground that the land allotted to the Appellant for his industrial unit in Sy.No.42 P falls under the Notification dated 18.11.2003 is factually incorrect and the impugned order of closure was made with non application of mind and liable to be set aside. Hence, the impugned order dated 29.07.2013 is set aside and the Appeal stands as allowed. However, there is no order as to costs.