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WA No.100625/2017 C/w. WA No.100256/2017 1 IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH
DATED THIS THE 18TH DAY OF DECEMBER, 2018
PRESENT
THE HON’BLE MRS. JUSTICE B.V. NAGARATHNA AND THE HON’BLE MR. JUSTICE BELLUNKE A.S.
WRIT APPEAL No.100625 OF 2017 (GM-RES) C/w. WRIT APPEAL No.100256 OF 2017 (GM-RES)
IN W.A. No.100625/2017:
BETWEEN:
THE STATE OF KARNATAKA REP. BY ITS CHIEF SECRTARY VIDHANA SOUDHA, AMBEDKAR VEDHI BENGALURU – 560 001.
THE STATE OF KARNATAKA REP. BY PRL. SECRETARY TO GOVT., DEPARTMENT OF REVENUE AMBEDKAR VEEDHI, VIDHANA SOUDHA BENGALURU – 560 001.
THE STATE OF KARNATAKA REP. BY ITS UNDER SECRETARY AMBEDKAR VEDHI, DEPARTMENT OF REVENUE BENGALURU – 560 001.
THE DEPUTY COMMISSIONER HAVERI, HAVERI DISTRICT – 581 123.
THE ASSISTANT COMMISSIONER HAVERI, HAVERI DISTRICT – 581 123. ... APPELLANTS
(BY SRI RAVI HOSMANI, ADDL. GOVT. ADVOCATE)
WA No.100625/2017 C/w. WA No.100256/2017 2
AND:
M/S. HARIHAR POLYFIBERS A UNIT OF M/S. GRASIM INDUSTRIES A COMPNY INCOPROATED UNDER THE COMPANIES ACT, 1956 KUMARAPATNAM TALUK: RANEBENNUR DISTRICT: HAVERI – 581 123 REP. BY ITS AUTHORIZED SIGNATORY MR. SURESH HEGDE.
... RESPONDENT
(BY SRI PRAMOD M. KATHAVI ADVOCATE)
THIS APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT, 1961 PRAYING TO CALL FOR RECORDS (II) SET ASIDE THE IMPUGNED ORDER DATED 15.03.2017 PASSED BY THE LEARNED SINGLE JUDGE IN W.P. No.109820 OF 2016 IN THE INTEREST OF JUSTICE AND EQUITY, AND ETC.,
In W.A. No.100256/2017:
BETWEEN:
M/S HARIHAR POLY FIBERS, A UNIT OF M/S GRASIM INDUSTRIES A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956 KUMARAPATNAM, TALUK: RANEBENNUR DISTRICT: HAVERI-581123 REPRESENTED BY ITS AUTHORIZED SIGNATORY MR.SURESH HEGDE.
... APPELLANT
(BY SRI PRAMOD N. KATHAVI ADVOCATE)
AND:
THE CHIEF SECRETARY GOVERNMENT OF KARNATAKA
WA No.100625/2017 C/w. WA No.100256/2017 3 VIDHANA SOUDHA AMBEDKAR VEDHI BENGALURU – 560 001.
THE STATE OF KARNATAKA DEPARTMENT OF REVENUE VIDHANA SOUDHA, AMBEDKAR VEDHI, BENGALURU – 560 001. REPRESENTED BY ITS PRINCIPAL SECRETARY.
THE STATE OF KARNATAKA DEPARTMENT OF REVENUE VIDHANA SOUDHA, AMBEDKAR VEDHI BENGALURU – 560 001 REPRESENTED BY ITS UNDER SECRETARY.
THE DEPUTY COMMISSIONER HAVERI, HAVERI DISTRICT – 581 110.
THE ASSISTANT COMMISSIONER HAVERI, HAVERI DISTRICT – 581 110.
THE KARNATAKA STATE POLLUTION CONTROL BOARD,
PARISARA BHAVAN, CHURCH STREET,
BENGALURU.
... RESPONDENTS
(BY SRI RAVI HOSMANI, ADDL. GOVT. ADV. FOR R1-R5;
SRI G.I. GACHCHINAMATH ADV. FOR R6)
THIS WRIT APPEAL IS FILED U/S.4 OF KARNATAKA HIGH COURT ACT, 1961, PRAYING THIS HON'BLE COURT TO:
i) CALL FOR RECORDS IN THE ABOVE MATTER;
ii) SET ASIDE THE ORDER DATED 15.03.2017 OF THE LEARNED SINGLE JUDGE PASSED IN W.P.NO.109820/2016 TO THE EXTENT TO WHICH IT STATES THAT THE APPELLANT IS EMITTING EFFLUENTS, LEADING TO AIR AND
WA No.100625/2017 C/w. WA No.100256/2017 4 WATER POLLUTION AND IS CAUSING HEALTH HAZARDS TO THE VILLAGERS;
iii) SET ASIDE THE ORDER DATED 15.03.2017 TO THE EXTENT WHERE IT DIRECTS THE APPEALLANT TO MAKE PAYMENT OF RS.10 CRORES, INCLUSIVE OF THE AMOUNTS PAID BY IT; AND
iv) PASS SUCH OTHER ORDER OR ORDERS AS THIS HON'BLE COURT MAY DEEM FIT, PROPER, NECESSARY AND EXPEDIENT IN THE CIRCUMSTANCE OF THE CASE, IN THE INTEREST OF JUSTICE AND EQUITY.
THESE APPEALS COMING ON FOR ADMISSION THIS DAY, NAGARATHNA J., DELIVERED THE FOLLOWING:
J U D G M E N T Though these writ appeals are listed for admission, with the consent of learned counsel on both sides, they are heard finally.
Writ Appeal No.100625 of 2017 has been filed by the State assailing order dated 15.03.2017 passed in Writ Petition No.109820 of 2016 [GM- RES] by the learned Single Judge of this Court, while Writ Appeal No.100256 of 2017 has been filed by the writ petitioner assailing certain
WA No.100625/2017 C/w. WA No.100256/2017 5 observations as well as directions issued by the learned Single Judge in the aforesaid order.
Briefly stated, the facts are that the appellant/petitioner is one of the Units of M/s.Grasim Industries Limited. The latter is a Company registered under the provisions of the Companies Act, 1956 having its registered office in the State of Madhya Pradesh. That M/s.Grasim Industries Limited established two units at Kumarapatnam, Haveri District in the State in the name and style of M/s. Harihar Poly Fibers and Grasilene Division.
The said units were established in the year 1972 and 1977 respectively. It appears that the residents of Nelavagilu village, Ranebennur Taluk, Haveri District, situated near petitioner’s unit complained of air and water pollution allegedly caused by the petitioner industrial units and sought for shifting of the village to a new location. There were a
WA No.100625/2017 C/w. WA No.100256/2017 6 series of meetings and talks held in that regard between the State Government officials, elected representatives of the village and the representatives of the petitioner Company. Apparently, during the pendency of these talks, petitioner had decided to extend financial contribution of Rs.5,00,000/- only for shifting of Nelavagilu village. It is further averred that the State Government had acquired about 34 acres of land in Sy.Nos.11 to 23 in Kodiyal Village adjacent to Nelavagilu village for the purpose of shifting the residents of Nelavagilu village in a portion thereof. In fact, the State Government passed an order bearing No.RD:154:REH:92 dated 09.06.1993 wherein it took a decision to shift Nelavagilu village to a portion of Sy.Nos.11 to 23 of Kodiyal village, a copy of which is produced at Annexure ‘A’ to the memorandum of Writ Petition.
WA No.100625/2017 C/w. WA No.100256/2017 7 4. Being aggrieved by the said order, petitioner had filed Writ Petition Nos.26709-10 of 1993 before this Court. During the pendency of those writ petitions, the then Hon’ble Chief Minister had convened a high level meeting on 02.02.1999 with regard to the demands of the villagers of Nelavagalu village. It was decided that a Committee be constituted to arrive at a proposal and accordingly, under the Chairmanship of the Deputy Commissioner, Haveri District, Haveri, a Committee was constituted vide Government Order dated 20.02.1999 (Annexure ‘B’). The said Committee held several meetings and ultimately, finalised its recommendations on 24.05.1999, under which the petitioner was to pay a sum of Rs.261.11 lakhs (Rs.2,61,11,000/-) as a one time contribution to the State Government towards the rehabilitation project to be implemented by the State Government without any further financial assistance by the Company. A
WA No.100625/2017 C/w. WA No.100256/2017 8 report was submitted by the Deputy Commissioner, Haveri District, Haveri to the State Government on 08.07.1999 and there was a modification sought to Government Order dated 09.06.1993 (Annexure ‘A’). A fresh Government Order was passed on 07.10.1999 and subsequently, a corrigendum was issued on 07.01.2000 under which the petitioner was required to contribute Rs.2,61,11,000/- to the State Government as full and final settlement in relation to the shifting of Nelavagilu village and in turn, the State Government was to implement the rehabilitation project. According to the petitioner, a sum of Rs.1,22,87,164/- was paid by the petitioner on various dates as and when demanded by the State Government, which is detailed in paragraph 12 of the writ petition. This was between 21.06.2000 and 28.01.2004.
WA No.100625/2017 C/w. WA No.100256/2017 9 5. It appears that in the meanwhile, the residents of Nelavagalu village had instituted certain public interest litigations before this Court in WP Nos.32870-902 of 2002 and Writ Petition Nos.68597-98 of 2011 seeking implementation of the rehabilitation project and for other reliefs. The said Writ Petitions are still pending adjudication before this Court. Thereafter, there have been several meetings and parleys held between the representatives of the State Government, the representatives of the petitioner Company as well as with other concerned persons and representatives of the residents of Nelavagilu village. It appears that the rehabilitation scheme has not yet been fully implemented.
But, when the matters stood thus, the State issued Government order dated 05.11.2016 (Annexure ‘AA’) and communication dated 10.11.2016 (Annexure ‘BB’) by the Deputy
WA No.100625/2017 C/w. WA No.100256/2017 10 Commissioner/respondent No.4. Under Annexure ‘AA’ Government Order dated 05.11.2016, the petitioner Company was directed to construct 432 appropriate houses for the affected families of Nelavagilu village of Ranebennur Taluk which is to be shifted on account of discharge of effluents, water and environment pollution, allegedly discharged by M/s. Harihar Poly Fibers Factory. The said order has been issued by the Department of Revenue of the State Government. Subsequently, the Deputy Commissioner, Haveri District, Haveri wrote to the President and unit head of the petitioner Company on 10.11.2016 stating that pursuant to communication dated 10.11.2016, another order would be issued for construction of 432 houses by the petitioner company. Being aggrieved by the same, the petitioner assailed Government Order dated 05.11.2016 and communication dated 10.11.2016 before this Court.
WA No.100625/2017 C/w. WA No.100256/2017 11
Learned Single Judge after hearing the respective parties allowed the writ petition with the following directions: “1. The petitioner-industry has agreed to pay Rs.2.61 crore in the year 1993. The price index has escalated manifold based on the cost of living; and hence the amount agreed upon in the year 1993 may not serve the purpose at this point of time. Under the circumstance, instead of calculating logically, the petitioner is directed to pay Rs.10.00 crore, including the amount that has been deposited in the year 1993. 2. The respondent–Government, by making use of schemes that are available with it, is directed to put up 432 houses for the displaced villagers and hand it over to the villagers immediately after the completion. 3. After shifting the entire village, the present land is to be handed over to the petitioner for afforestation and the petitioner is directed to afforest the entire
WA No.100625/2017 C/w. WA No.100256/2017 12 area within a period of five years from thereafter. The said land shall not be used for any manufacturing activities of the petitioner-industry, but as a lung-space and to maintain ecological balance. 4. Further, if the said land is required by the petitioner, liberty is reserved to the petitioner to make representation to the respondent, and it is for the respondent to consider the same and pass appropriate orders.
With the above observations and directions, petition stands allowed.”
Being aggrieved by the same, both the State as well as the writ petitioner have preferred these appeals.
We have heard learned counsel for the Writ Petitioner, learned Additional Government Advocate for the State and learned counsel for respondent No.6/Karnataka State Pollution Control Board, Bengaluru (for short ‘KSPC Board’) which
WA No.100625/2017 C/w. WA No.100256/2017 13 has been arrayed as a respondent in Writ Appeal No.100256 of 2017 and perused the material on record.
On a detailed hearing of the learned counsel for the respective parties, we find that the writ petitioner’s grievances in his appeal are two fold: firstly, with regard to the direction being issued by the learned Single Judge to the petitioner to pay a sum of rupees ten crores including the amount that has been deposited in the year 1993 towards the rehabilitation of the displaced villagers and in the matter of construction of 432 houses, the second grievance is with regard to the observations made by the learned Single Judge in paragraph 7 of his order stating that the petitioner industry is causing health hazards by emitting effluent substances and the Government is not taking any steps in that regard.
WA No.100625/2017 C/w. WA No.100256/2017 14
Learned counsel for the writ petitioner submitted that pursuant to the Government order dated 09.06.1993 and the subsequent order dated 20.02.1999, petitioner has paid a sum of Rs.1,22,87,164/-.
That the petitioner was expected to pay a sum of Rs.2,61,11,011/- in terms of Government Order dated 20.02.1999 and that as and when the Deputy Commissioner, Haveri District, Haveri sought for and demanded payments it has made those payments to the above extent. That the petitioner was ready and willing to pay the entire amount of Rs.2,61,11,011/-, but the demand was only to an extent of Rs.1,22,87,164/- which has been paid. Merely, because the State Government did not take up the rehabilitation project on a timely basis, Learned Single Judge could not have directed the petitioner to pay a sum of rupees ten crores owing to inflationary trends in the economy
WA No.100625/2017 C/w. WA No.100256/2017 15 and escalation of prices. It is contended that the petitioner cannot be penalised on account of delay and laxity on the part of the State Government in completing the rehabilitation project.
Learned counsel for the petitioner further contended that the learned Single Judge has observed that an amount of rupees ten crores has to be paid as the petitioner industry is a polluting one. That there can be no link between the two. In this regard, learned counsel for the writ petitioner drew our attention to the status report submitted before this Court by respondent No.6/ KSPC Board and contended that the petitioner industry is not a polluting one. He submitted that this Court may restrict the amount payable by the petitioner to what was ordered on 20.02.1999 i.e., to an extent of Rs.2,61,11,011/- by deducting what has already been paid and modify the order of the Learned Single Judge. He
WA No.100625/2017 C/w. WA No.100256/2017 16 further urged that it may be held that the observations made with regard to the petitioner industry being a polluting one being contrary to the report now submitted by respondent No.6 and to expunge those observations.
Per contra, learned Additional Government Advocate appearing for the respondent-State which has also filed an appeal contended that the learned Single Judge has been very modest in directing the petitioner to pay a sum of rupees ten crores only. The time lag between 1993-1999 and present day would have to be taken into consideration. The cost of rehabilitation of the villagers has escalated. 432 houses for displaced villagers cannot be constructed with Rs.2.61 crores as had been stipulated in the Government order dated 20.02.1999. Learned Single Judge ought to have directed to petitioner to pay at least rupees thirty
WA No.100625/2017 C/w. WA No.100256/2017 17 crores instead of rupees ten crores only. Therefore, this Court may allow the appeal filed by the State and dismiss the appeal filed by the petitioner.
Learned Additional Government Advocate further submitted that way back in the year 1999, decision taken was that the petitioner Company would put up 432 houses by shifting the village and therefore, Annexure ‘AA’ and Annexure ‘BB’ were rightly issued to the petitioner and that the direction could not have been issued by the learned Single Judge to the State Government to implement the scheme by constructing 432 houses to the displaced villagers. He further submitted that in the year 1999, there was a report to the effect that the petitioner Unit was causing pollution and the same was the basis for shifting of the village. Therefore, the appeal filed by the
WA No.100625/2017 C/w. WA No.100256/2017 18 petitioners may be dismissed and the appeal filed by the State be allowed.
Learned counsel for respondent No.6 submits that the report has been filed on behalf of the KSPC Board and having regard to the same, appropriate orders may be made in these writ appeals.
By way of reply, learned counsel for the petitioner – appellant herein submitted that the petitioner is aggrieved by only two directions issued by the learned Single Judge of this Court. One is with regard to payment of a sum of rupees ten crores instead of Rs.2.61 crores as was decided in the year 1999 and secondly, with regard to the observations made by the learned Single Judge that the petitioner Unit is causing pollution. He submitted that having regard to the latest report submitted by the learned counsel for the KSPC Board in the writ appeal filed by the
WA No.100625/2017 C/w. WA No.100256/2017 19 petitioner, wherein it is arrayed as respondent No.6, the observations of learned Single Judge may no longer remain valid.
However, the controversy remains with regard to the amount of rupees ten crores being directed to be paid by the petitioner company to the State and the State demanding that in lieu of the direction issued by the learned Single Judge asking the State Government to put up 432 houses, the petitioner Company may be directed to pay at least rupees thirty crores towards the expenditure regarding construction of said houses. Therefore, the controversy in these writ appeals is in a very narrow compass.
The detailed narration of facts and contentions would not call for a reiteration. Learned Single Judge has noted that the petitioner industry had agreed to pay Rs.2.61 crores in the year 1993 but on account of the escalation in the
WA No.100625/2017 C/w. WA No.100256/2017 20 price index and the inflationary trends in the economy and the fall in the value of the Indian Rupee, the direction to pay rupees ten crores was issued. But, we are of the view that the said direction cannot be linked to expenditure involved in construction of 432 houses for displaced villagers. This is because learned Single Judge has directed the State Government to utilize various State Government schemes for construction of 432 houses for displaced villagers. In the circumstances, even according to learned Single Judge, the direction to pay rupees ten crores is not towards the expenditure to be incurred for construction of 432 houses for displaced villagers, as that is now the responsibility of the State Government. Hence, the State cannot urge that a sum of rupees thirty crores be paid by the petitioner towards the construction of 432 houses. But, the fact remains that a sum of Rs.2.61 crores was to be paid by the
WA No.100625/2017 C/w. WA No.100256/2017 21 petitioner Company pursuant to the Government order dated 20.02.1999, out of which a sum of Rs.1,22,87,164/- only has been paid. Of course, the justification by the petitioner is that the State Government has never demanded anything further and, as and when any demand was made, payments have been made by the petitioner for the purpose of rehabilitation project.
In the circumstances, the question as to whether the learned Single Judge was right in enhancing Rs.2.61 crores which had been stipulated in Government Order dated 20.02.1999 to rupees ten crores remains to be answered. It is submitted on behalf of the Writ petitioner, had the State Government demanded the payment of Rs.2.61 crores, the same would have been made and there would have been no further financial burden on the petitioner, as the petitioner was not to construct 432 houses. The justification for
WA No.100625/2017 C/w. WA No.100256/2017 22 seeking additional amount by the State Government by filing an independent writ appeal is that the amount of rupees ten crores would not meet the expenses of building 432 houses under rehabilitation scheme. However, in our view the direction to pay rupees ten crores cannot be linked to the rehabilitation scheme of building 432 houses as learned Single Judge has directed the State Government to take up the said project.
However, Learned Single Judge has directed that a sum of rupees ten crores has to be paid by the petitioner having regard to the pollution that is being caused by the petitioner industry. That the said sum which has now been stipulated is on account of the fact that the entire amount of Rs.2.61 crores had not been paid by the petitioner but according to petitioner, there has been no demand for payment at an appropriate point of time. The amount of Rs.2.61 crores to be
WA No.100625/2017 C/w. WA No.100256/2017 23 paid by the petitioner company was determined and communicated vide Government proceedings dated 24.05.1999 Annexure ‘B2’.
In the circumstances, a direction has been issued by the learned Single Judge to pay the said amount which, in our view, is in the nature of discharging corporate social responsibility. Of course, by saying so we are not directly relating it to Section 135 of the Companies Act, 2013. But, as a part of what is known as paying back to the society for having utilised the infrastructure and other facilities and amenities provided by Karnataka State and its people to the petitioner industry. Hence, we do not think that the direction to pay rupees ten crores is either exorbitant or unreasonable and therefore, we do not think it necessary to interfere with the said direction.
Hence, we permit the petitioner industry to pay the said sum within a period of six
WA No.100625/2017 C/w. WA No.100256/2017 24 weeks from the date of receipt of certified copy of this judgment to any Account of the State Government which would fetch the highest deduction in Income Tax to the petitioner industry on the said amount. The same could be identified either by the said head of account or a particular scheme which would be identified either by the petitioner or indicated by the State Government. The payment of the said amount by the petitioner industry shall also be construed as a final payment under the impugned government order and communications.
We further hold and observe that having regard to the report submitted by the KSPC Board before this Court, there have been compliances made by the petitioner industry. Hence, the observations made by the learned Single Judge that the petitioner industry has been causing health hazards by emitting effluents and that the
WA No.100625/2017 C/w. WA No.100256/2017 25 State Government has not taken any step in that regard, may no longer be a valid or appropriate observation. Respondent no.6 in its report has stated as under: “The Regional Directorate of Central Pollution Control Board has independently inspected both the divisions on 07.03.2018 & 08.03.2018 for assessing the actual performance evaluation of the units. Based on observations of inspecting team & analysis results of samples collected during inspections, the units were found complying with effluent discharge norms. The Central Pollution Control Boards has communicated the same to Karnataka State Pollution Control Board vide letter No.F.No.B-23012/1/PCI-III/2244 dated: 09.05.2018.”
In view of the same, we observe that there is no pollution being caused by the petitioner industry, for the present.
Having regard to the direction issued by the learned Single Judge to the State Government
WA No.100625/2017 C/w. WA No.100256/2017 26 to construct 432 houses under the rehabilitation scheme concerned, we do not think the said direction would require any interference in these appeals.
Learned Additional Government Advocate has explained the reasons as to why the rehabilitation scheme could not be implemented in time and therefore, has still not yet reached completion. Since, the learned Single Judge has directed the State Government to complete the construction of 432 houses under the rehabilitation scheme, the State is directed to complete the said project in an expeditious manner and in accordance with law.
The other directions issued by the learned Single Judge are not interfered with.
WA No.100625/2017 C/w. WA No.100256/2017 27 25. In the result, the writ appeal filed by the writ petitioner is disposed off in the following terms: (i) The petitioner is directed to pay a sum of rupees ten crores to the first respondent within a period of six weeks from the date of receipt of a certified copy of this judgment in any account of the State Government which would fetch the highest income tax deduction to the petitioner industry; or in the alternative, respondent No.1 to identify the head of account or a particular scheme in respect of which the payment could be made by the petitioner;
(ii) The payment of the said amount by the petitioner industry shall be construed as a final payment towards the rehabilitation scheme under the impugned government order and communications;
WA No.100625/2017 C/w. WA No.100256/2017 28
(iii) Other directions issued by the learned Single Judge are not interfered with;
(iv) Consequently, the writ appeal filed by the State Government stands disposed off.
In view of the disposal of the writ appeals, all pending applications stand disposed off.
Sd/- JUDGE
Sd/- JUDGE
RK/-