Jolly George vs George Elias And Associates

CIVIL APPEAL NOS. OF 2023 (Arising out of Special Leave Petition (C) Nos.1333-1335 of 2022)

JOLLY GEORGE & ANR. …APPELLANTS

VERSUS

GEORGE ELIAS AND ASSOCIATES & ORS. …RESPONDENTS

WITH

CIVIL APPEAL NO. OF 2023 (Arising out of Special Leave Petition (C) No.4822 of 2022)

JUDGMENT

V. Ramasubramanian, J.

Leave granted.

2. George Elias and Associates, which is respondent No.1 in

the first set of three appeals and which is the appellant in the

fourth appeal, filed two writ petitions in WP (C) Nos.10381 and

17920 of 2020 on the file of the High Court of Kerala at Signature Not Verified Digitally signed by Ernakulam praying respectively for (i) setting aside an Order of POOJA SHARMA Date: 2023.04.12 16:42:52 IST Reason:

the Committee of the Kalloorkad Gram Panchayat refusing to

1 grant license to them for establishing a Hot Mix Plant; and (ii) for

a declaration that by virtue of the certificate granted under the

Kerala Micro Small and Medium Enterprises Facilitation Act,

20191, all licenses and approvals including the license of the

Panchayat should be deemed to have been obtained.

3. By a common order dated 18.03.2021, the learned Judge of

the High Court of Kerala disposed of both the writ petitions

permitting the writ petitioners to prefer an application for

permission under Rule 68 of the Kerala Panchayat Building

Rules, 20192 within two weeks and further directing the

Secretary of the Panchayat to grant necessary permission subject

to the conditions, if any, that may be imposed by the Panchayat.

The learned Judge held that inasmuch as the writ petitioners had

obtained consent from the State Pollution Control Board, the

Secretary of the Panchayat cannot refuse permission under Rule

68 of the Rules, 2019, though he can impose general conditions.

4. Challenging the said order of the learned Judge, three intra-

court appeals came to be filed. One of the intra-court appeals

was filed by the writ petitioners themselves, as they were not

1 For short, “Kerala MSME Act”

2 For short, “Rules of 2019”

2 satisfied with the outcome. The other writ appeals were filed by

some people in the locality, who objected to the establishment of

the Hot Mix Plant.

5. By a common order dated 09.12.2021, the Division Bench of

the Kerala High Court dismissed the appeals. Therefore, people of

the locality have come up with the first three appeals challenging

the common order passed by the Division Bench of the Kerala

High Court in the three intra-court appeals. The writ petitioners

have also come up with one appeal, which is the fourth one, as

they are aggrieved by not getting full relief from the High Court.

6. We have heard the learned counsel appearing for all the

parties.

7. The controversy to be resolved in these appeals can be

better understood if we take a glance at the brief facts leading to

this litigation. These brief facts are as follows:

(i) George Elias and Associates, whom we shall describe as the writ petitioners, are engaged in undertaking road works in different parts of the State of Kerala. They purchased Hot Mix Plants for carrying out the road works for which they bagged contracts.

3 (ii) By an Agreement dated 06.03.2019, the writ petitioners were awarded the contract for road work in Cherthala Aroorkutty. Within a few months, the Kerala MSME Act came into force and hence the writ petitioners obtained what is known as an Acknowledgement Certificate under Section 5 of the said Act.

(iii) The writ petitioners also submitted an application to the Kalloorkad Panchayat for the grant of a license, for installation of the Hot Mix Plant. The application was made on 05.02.2020.

(iv) On 04.03.2020 the Kerala State Pollution Control Board granted “Consent to Establish”.

(v) Since there was no response from the Panchayat, to the application for license, the writ petitioners claimed the benefit of the deeming provision under Rule 12(3) of the Kerala Panchayat Raj (Issue of License to Factories, Trades, Entrepreneurship Activities and Other Services) Rules, 1996. Accordingly, the writ petitioners transported the equipments for installing the Hot Mix Plant, to the property from which they proposed to operate it.

(vi) Objections were raised by some members of the locality owing allegiance to some political parties which led to a meeting of conciliation. However, the Gram Panchayat rejected the application by an Order dated 12.05.2020.

4 (vii) Therefore, challenging the said order dated 12.05.2020 the writ petitioners filed the first writ petition bearing WP (C) No.10381 of 2020. The writ petitions were admitted and an interim stay of operation of the order of the Gram Panchayat was also granted.

(viii) Subsequently, a few writ petitions came to be filed, the details of which may not be necessary to be recorded here. Suffice it to say that in one of the writ petitions, the High Court granted police protection to the writ petitioners to set up the Plant, after getting consent from the Pollution Control Board.

(ix) Eventually, the writ petitioners filed the second writ petition seeking a declaration that by virtue of the Acknowledgement Certificate obtained under the Kerala MSME Act, a license under the Kerala Panchayat Raj Act, 19943 was not necessary.

(x) The learned Single Judge, without actually getting into the question relating to the overriding effect of Kerala MSME Act, held that the Hot Mix Plant of the writ petitioners was a portable equipment and that it does not fall within the definition of the word “building” under the Rules of 2019. The learned Single Judge also held that after the grant of “Consent to Establish” by the Pollution Control Board, permission of the Panchayat was only formal. This view was also confirmed by the

3 For short, “Act of 1994”

5 Division Bench. This is why the parties have landed up before this Court.

8. A bare reading of the order of the learned Single Judge and

the Division Bench would show that the most vital aspect has

been lost sight of. Admittedly, the writ petitioners have obtained

consent to establish, from the Kerala State Pollution Control

Board. It is also admitted that the writ petitioners have obtained

an Acknowledgment Certificate under Section 5(3) of the Kerala

MSME Act. Section 6 of the Kerala MSME Act reads as follows:

“6. Effect of the Acknowledgement Certificate.—(1) An acknowledgment certificate issued under section 5 shall, for all purposes, have effect as if it is an approval as defined in clause (c) of section 2, for a period of three years from the date of its issuance and after the expiry of the said period of three years, such enterprise shall have to obtain required approvals as defined in clause(c) of section 2, within six months from the date of such expiry:

Provided that the acknowledgement certificate shall not entitle a person to use a land contrary to the provisions contained in the Kerala Conservation of Paddy Land and Wetland Act, 2008 (28 of 2008) and it shall also not entitle a person to use the land in deviation to the land use specified in the master plan notified under the Kerala Town and Country Planning Act, 2016 (9 of 2016), wherever such plan is in force.

(2) During the period of three years specified in sub-

section (1), no competent authority shall undertake any inspection for the purpose of, or in connection with, any approval as defined in clause (c) of section 2.”

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9. It is seen from Section 6(1) extracted above that an

Acknowledgement Certificate shall have effect as if it is an

approval as defined in Section 2(c). Section 2(c) reads as follows:-

“2.(c) “approval” means licenses, permissions, approvals, clearances, registration, consents, no objection certificate and the like, required under any State law in connection with the establishment or operation of micro small and medium enterprise in the State;”

10. What is held against the writ petitioners today is the

requirement of a permission under the Act of 1994. But Section

10 of the Kerala MSME Act not only confers overriding effect to

the Act on other laws, but also makes a specific reference to the

Act of 1994. Section 10 of the Kerala MSME Act reads as follows:

“10. Overriding effect of this Act on other laws.— (1) The provisions of this Act shall have overriding effect, notwithstanding anything inconsistent therewith contained in any other law, for the time being in force.

(2) In particular and without prejudice to the generality of the foregoing provisions of this Act, such provisions shall have effect notwithstanding anything inconsistent therewith contained in the following enactments and the provisions of these enactments shall be read as amended in conformity with the provisions of this Act, namely:—

1. The Kerala Panchayat Raj Act, 1994 (13 of 1994)

2. The Kerala Municipality Act, 1994 (20 of 1994)

3. The Kerala Shops and Commercial Establishments Act, 1960 (34 of 1960)

4. The Kerala Lift and Escalators Act, 2013 (18 of 2013)

5. Travancore - Cochin Public Health Act, 1955 (XVI of 1955)

6. Madras Public Health Act, 1939 (3 of 1939)”

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11. Therefore, the prayer made by the writ petitioners in their

second writ petition, deserved to be granted, clearly in the light of

the statutory prescription. But unfortunately, both the learned

Single Judge and the Division Bench completely overlooked this

most vital aspect.

12. However, Shri K. Parameshwar, learned counsel appearing

for the objectors contended that two issues arise for

consideration namely (i) whether a self-certification obtained by

respondent No.1 under the Kerala MSME Act is sufficient in itself

to set up a Hot Mix Plant; and (ii) whether in the light of such

self-certification, no permission from the Panchayat is required

under the Act of 1994 and Rules of 2019.

13. According to the learned counsel for the objectors, Rule 3 of

the Kerala Micro Small Medium Enterprises Facilitation Rules,

2020, requires all persons seeking Acknowledgment Certificate

under Section 5(3) to furnish a duly filled self-certification in

Form-I. This form contains an undertaking from the applicant to

comply with the Kerala Panchayat Building Rules, 2019 and

hence it is contended that the writ petitioners cannot avoid the

requirement of permission from the local Panchayat.

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14. But the said argument cannot be sustained for the simple

reason that the Rules framed under the Act cannot annul the

effect of the statutory provisions. Section 10(2) of the Kerala

MSME Act makes it clear that the provisions of the Act of 1994,

shall be read as amended to be in conformity with the provisions

of the Kerala MSME Act. Therefore, the objectors cannot fall back

upon the Rules to nullify the effect of the provisions of the Act.

15. It is contended by Shri K. Parameshwar, learned counsel

that though his clients have not challenged the constitutional

validity of Section 10 of the Kerala MSME Act, this Court can

read down the overriding and absolute clauses in public interest.

According to the learned counsel, the Panchayat has a public

duty to safeguard the areas and persons within its jurisdiction

against environmental pollution and that the precautionary

principle requires to be applied. The learned counsel relied upon

the decisions of this Court in Municipal Corporation of Greater

Mumbai (MCGM) vs. Abhilash Lal & Ors.4 and A.P. Pollution

Control Board vs. Prof. M.V. Nayudu (Retd.) and Ors.5

4 (2020) 13 SCC 234

5 (1999) 2 SCC 718 9

16. But the above argument is completely misconceived.

Section 10 of the Kerala MSME Act does not override the

provisions of any of the pollution control laws such as

Environment (Protection) Act, 1986, Air (Prevention and Control

of Pollution) Act, 1981, Water (Prevention and Control of

Pollution) Act, 1974. The Kerala MSME Act overrides the 1994

Act and a few other local enactments. This is why the writ

petitioners have taken “consent” from the Pollution Control

Board. Once consent is taken from the Pollution Control Board,

the necessity for reading down Section 10 of the Kerala MSME

Act, for the purpose of protecting the environment, does not

arise.

17. The argument that Panchayat being the grassroot

institution, has the right of participation in decision making, is

again misconceived. All Panchayats want motorable roads. But

if they do not want road construction materials to be

manufactured within their Panchayat, we do not know where

from these materials can be imported. Therefore, the reliance

placed by the learned counsel for the objectors on the decision of

this Court in Lafarge Umiam Mining Private Limited in T.N.

10 Godavarman Thirumulpad vs. Union of India and Ors.6, is

also misplaced.

18. In fact, arguments were advanced also on the question

whether the Hot Mix Plant is portable or whether it is a

temporary or permanent structure etc. But we do not think that

it is necessary to go into the said question, because the

Acknowledgement Certificate obtained under the Kerala MSME

Act, alone is sufficient to clinch the issue in favour of the writ

petitioner.

19. In view of the above, the writ petitioner who is respondent

No.1 in three of these appeals and the appellant in one of these

appeals is entitled to the reliefs sought in both the writ petitions.

Accordingly, the appeal filed by the writ petitioner George Elias

and Associates is allowed, the impugned orders are set aside and

the writ petitions filed by George Elias and Associates are

allowed. The appeals filed by the objectors, namely, the people of

the locality are dismissed. There will be no order as to costs.

……………………………….. J.

(V. RAMASUBRAMANIAN)

6 (2011) 7 SCC 338

11 ……………………………….. J.

(PANKAJ MITHAL)

New Delhi;

April 12, 2023

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