IN THE HIGH COURT OF HIMACHAL PRADESH SHIMLA CWP No. 1204 of 2010 Judgment reserved on: 14.5.2010. Date of decision : 4.6.2010. M/s.Vardhman Roofing Pvt. Ltd. …Petitioner Versus. State of H.P. & others …Respondents Coram: The Hon’ble Mr. Justice Deepak Gupta, Judge . The Hon’ble Mr. Justice Sanjay Karol,, Judge. Whether approved for Reporting ? Yes For the Petitioner (s): Mr. R.L. Sood, Senior Advocate with S/Sh.B.C. Negi, Chander Narayan Singh and Arjun Lall, Advocates. For the Respondent(s): Mr. Vivek Thakur, Addl. A.G. for respondents No.1 to 3. Mr. T.S. Chauhan, counsel for respondent No.4. Deepak Gupta, J. By means of this writ petition the petitioner has prayed for the grant of following amongst other reliefs: “a) Quash the impugned order dated 11.11.2009 (Annexure P-20), order dated 19.11.2009 (Annexure P-22), order dated 28.1.2010 (Annexure P-25) and order dated 23.3.2010 (Annexure P-34) passed by the respondents with all consequences flowing there from especially in the matter of restoration of the Essentiality Certificate Annexure P-7 in favour of the Petitioner Company and to its benefit. b) Issue a writ of Mandamus or other appropriate writ, order or direction as this Hon’ble Court deems fit directing the respondents to continue to process the case of the petitioner for the grant of permission to it for purchase of land under Section 118 of the H.P. Tenancy and Land - 2 - Reforms Act, 1972 and consequently to grant such permission in its favour. c) Issue appropriate directions to the respondents to permit the petitioner to install a Non-Asbestos Cement Sheet (Plaint and corrugated) Manufacturing Plant at the proposed site till such time that the requisite permissions/sanctions from the concerned authorities are not granted in favour of the petitioner for setting up an Asbestos Cement Sheet Plant, with further directions to be issued to the respondents to permit to the petitioner to set up the aforesaid Asbestos Cement Sheet Manufacturing Unit after such permissions/approvals are granted in its favour.” The petitioner Company is a registered Company under the Indian Companies Act. Sh.N.C. Jain, is the Director of the Company and has filed the present writ petition. Brief facts of the case are that in the month of February, 2009, the petitioner approached the State of Himachal Pradesh seeking permission to set up an Industrial Unit for manufacturing of Asbestos Cement Sheets. The Entrepreneur Memorandum (E.M.) of the petitioner Company was considered by the Single Window Clearance Agency, Kala Amb, District Sirmour and on 9.6.2009 an acknowledgment was issued by the Member Secretary of the Single Window Clearance Agency informing the petitioner that its E.M. has been received. It was clarified that the acknowledgment - 3 - does not bestow any legal right on the petitioner and it is required to seek requisite clearances and fulfil other statutory obligations stipulated under law. On the basis of this acknowledgment the petitioner entered into two agreements to sell whereby it agreed to purchase 41-03 bighas of land in Mauza Kheri, Tehsil Nahan, District Sirmour, H.P. from M/s. Anupama Home Appliances & Sh.Vishal for setting up the unit in question. The petitioner thereafter approached the Member Secretary of the Single Window Clearance Agency praying that recommendations be issued to the Director of Industries for purchase of the aforesaid land. On 17.8.2009 the Member Secretary of the Single Window Clearance Agency issued the requisite certificate relevant portion of which reads as follows: “It is certified that M/s.Vardhman Roofing Pvt.Ltd. which is proposed to be set up at Village Kheri, Trilokpur Road, Kala Amb, Distt. Sirmour, H.P. for the manufacturing of Asbestos Cement Sheets vide EM Part-I No.02/010/12/00616 dated 9.6.2009. The proposed land measuring 41-03 Bighas comprised in Khasra Nos.198/110, 190/104, 305/103. 197/110, 532/285/168 & 304/103 Village and Mauja Kheri was inspected by the office of the undersigned and found the proposed site quite suitable for Industrial Purpose. The proposed site is surrounded by N/s.Anupam Home Appliances, Pasupati Spinning & Weaving Mills Ltd. and Swiss Devices.” - 4 - On the basis of this certificate the Commissioner of Industries issued an Essentiality Certificate in favour of the petitioner recommending that the petitioner be granted permission to purchase the said land in terms of Section 118 of the H.P. Tenancy and Land Reforms Act. Condition No.4 of the Certificate reads as follows: “4.The party shall have to obtain other necessary NOC/permission from other concerned authorities as required for this Industrial Project including exemption under the rule, if any.” Thereafter, the petitioner applied for permission to purchase the land. The petitioner also submitted draft terms of reference with the Ministry of Environment and Forest, Government of India, New Delhi for permission to set up the Unit as is apparent from Annexure P-9 dated 26th August, 2009 whereby the petitioner was asked to give further details. It appears that M/s.Anupam Home Appliances in the meantime had a change of heart and did not want to sell the land to the petitioner. It sent a representation to various authorities praying that the Essentiality Certificate be withdrawn since Asbestos is a polluting and hazardous industry and the petitioner should not be permitted to set up the said unit in the area. Taking - 5 - cognizance of this representation the Member Secretary, Single Window Clearance Agency, Kala Amb sent a letter dated 11.9.2009 to the petitioner asking it to respond to this allegation. The petitioner submitted its reply. Realizing that M/s.Anupam Home Appliances and Mr.Vishal may try to back out from the agreements, the petitioner also filed two Civil Suits No.85 of 2009 and 84 of 2009 in this Court praying for a decree for specific performance against M/s.Anupam Home Appliances and Mr.Vishal. Stay orders were passed in favour of the petitioner on 18.9.2009 restraining M/s.Anupam Home appliances and Mr.Vishal from transferring, alienating and encumbering the suit land in any manner till further orders. On 19.9.2009 an office order was issued by the Commissioner of Industries, Himachal Pradesh wherein it was mentioned that the manufacturing, handling and processing of asbestos and its products falls in the list of industries involving hazardous process requiring prior site clearances from the State Level Site Appraisal Committee and environment clearance from the Ministry of Environment and Forest, Government of India and the Essentiality Certificate issued in favour of the petitioner - 6 - was withdrawn. This order was challenged by the petitioner by filing CWP No.3542 of 2009 in this Court which came up before the Court on 9th October, 2009. The State did not oppose the prayer that the order dated 19.9.2009 may be quashed since it had been passed without issuing notice to the petitioner. The petition was disposed of with liberty reserved to the State to take fresh action in accordance with law. In the meantime, both the suits filed by the petitioner were compromised and the defendants in the said suits agreed to transfer the land in favour of the petitioner as per the agreements to sell. Thereafter, a hearing in the matter was held on 4.11.2009 and after hearing, the Commissioner of Industries passed an order dated 11.11.2009, Annexure P- 20, which is impugned before us, canceling the Essentiality Certificate granted in favour of the petitioner. While endorsing a copy of the order to the petitioner, a copy was also sent to all the General Managers of the District Industry Centers and Member Secretaries of the Single Window Clearance Agencies in Himachal Pradesh with a direction that no Asbestos Unit should be registered without prior permission. The petitioner - 7 - immediately sent a representation challenging the validity of the said order mainly on the ground that no notice had been issued to it and that one of the Directors who happened to be at Shimla was telephonically informed that a meeting would be held on 4.11.2009 itself. Pursuant to this order the Member Secretary, Single Window Clearance Agency, Kala Amb withdrew the acknowledgement of EM-I on 19.11.2009. The petitioner challenged the aforesaid orders before this Court by filing CWP No.4333 of 2009. In this writ petition an order of status quo was passed in favour of the petitioner on 24.11.2009. During the pendency of the petition, the petitioner made a representation to the Chief Secretary to the Government of Himachal Pradesh on 22.12.2009 praying that the orders cancelling the Essentiality Certificate and Cancelling the EM-Part-I may be recalled. Since the petitioner had itself made the representation, this Court passed an order on 8.1.2010 in CWP No.4333 of 2009 which reads as follows: “Mr.Anup G, Chaudhary, learned Senior Counsel has apprised the Court that in sequel to order dated 22nd December, 2009, the Chief Secretary has not heard the representation. Mr.Sood, learned Additional Advocate General submits that the representation shall be heard and decided - 8 - by the Chief Secretary on 19th January, 2010 at 3.00 p.m. in her Chambers. Consequently, the Chief Secretary is directed to hear and decide the representation on 19th January, 2010 by passing a speaking order. The order shall be passed by the Chief Secretary wholly uninfluenced by the withdrawal of the essentiality certificate. In order dated 22nd December, 2009, we have restrained the Chief Secretary to pass the final orders without the leave of the Court. However, in order to do complete justice, we permit the Chief Secretary to pass the final orders. Liberty is reserved to the parties to make a mention before the learned Vacation Judge if the occasion so arises. Dasti copy on usual terms.” The Chief Secretary to the Government of Himachal Pradesh after hearing the petitioner rejected the representation of the petitioner vide a detailed order dated 28th January, 2010. Thereafter, the petitioner filed an application seeking permission to amend the CWP No.4333 of 2009 so that it could also implead the Chief Secretary as a party respondent and challenge the order dated 28.1.2010 passed by her. On 11.2.2010 a learned Vacation Judge of this Court issued notice on the application for amendment and directed that the reply affidavit be filed. On 26.2.2010 when the matter came up for hearing before the Court, learned counsel for the petitioner withdrew the writ petition without reserving any liberty to file a fresh petition on the same cause of action. - 9 - According to the petitioner, on 26th February, 2010 it also filed another representation to the Chief Secretary since it was assured that the respondents would re- consider the matter favourably. The comments of the Commissioner of Industries and others were called for and finally this representation was also rejected and a communication in this regard was sent to the petitioner on 23rd March, 2010 informing it that the Chief Secretary had not found any reason to review her earlier order dated 28.1.2010. Aggrieved by these orders, the present writ petition has been filed. We have heard Sh.R.L. Sood, learned Senior Counsel for the petitioner and Sh.Vivek Singh Thakur, learned Additional Advocate General for the State. On behalf of the petitioner it has been urged that the eligibility certificate has been cancelled without following the rules of natural justice and without giving reasonable opportunity to the petitioner to put-forth its case. It has also been urged that the State Government has no role to play and it is only the Ministry of Environment & Forests, Government of India which has the right to decide whether a hazardous industry should be set up or not. It is also argued that the Essentiality - 10 - Certificate could not be cancelled/withdrawn since there is no violation of the conditions laid down therein. It is submitted that in case the petitioner gets permission to set up the Industry from the Central Government the State Government has no right to impose any further restrictions as to whether such an industry should be set up or not. It has also been urged that the Kala Amb is a severely polluted area and not a critically polluted area and therefore the industry can be set up there. Lastly, it has been urged that the petitioner has spent a huge amount of money for purchase of the land and machinery for setting up of the plant and therefore the Essentiality Certificate should not have been withdrawn. First of all, we take up the allegations of the petitioner that the orders have been issued in violation of the Natural Justice. There can be no manner of doubt that the order dated 19.9.2009 had been passed without issuing notice to the petitioner. This however would have no effect on the writ petition since the said order was quashed by this Court on perusal of the letter produced by the State Government and permission was granted to the State to take fresh action in accordance with law. - 11 - We therefore come to the order dated 11.11.2009. According to the petitioner, on 4.11.2009 one of the Director of the petitioner was telephonically informed that a meeting is to be held on the same date and no notice was given to him. Assuming this to be correct it would only mean that the order dated 11.11.2009 was passed in violation of the rules of natural justice. Therefore, the petitioner itself during the pendency of the earlier writ petition decided to make a representation to the State Government praying that the order cancelling the Essentiality Certificate and EM-Part-1 may be recalled. This Court firstly passed an order permitting the Chief Secretary to proceed with the hearing but not to decide the matter without leave of the Court. The Chief Secretary accordingly did not decide the matter. Thereafter, on 8th January, 2010 this Court directed the Chief Secretary to hear and decide the representation and pass a speaking order thereon. The Chief Secretary after hearing the matter passed a detailed order thereon. All the points raised by the petitioner have been duly considered by the Chief Secretary and she vide a detailed order has rejected the same. Relevant - 12 - portion of the order of the Chief Secretary reads as follows: “The undersigned has also gone through the report of the Public hearing conducted by the Pollution control Board under the chairmanship of ADC Sirmour. I find that people have expressed their concerns with regard to the unit especially due to the hazardous material used in the process. The company management no doubt has tried to assuage their fears by telling the local residents that they are going to install a very modern machine and are going to provide for air pollutant control mechanism. Some of the local residents have given a conditional acceptance to the unit subject to the company arranging their visit to such a plant and satisfying themselves with regard to the air and water pollution of such units. The Presiding Officer has, however, concluded that most local residents have supported the proposed unit. The report has been forwarded to the Ministry of Environment but the final clearance of Ministry of Environment is still awaited. In the meanwhile the report of Central Pollution control Board has come and placed Kala Amb in the severely polluted industrial clusters with the comprehensive Environmental Pollution Index of 68.77 which is now to be assessed by the Ministry by norms which are meant for projects located in the critically Polluted Areas as per the Government of India O.M. No.J-11013/5/2010-1A.II(I). In view of the above facts I am of the considered view that it is not in public interest to have a manufacturing unit of Asbestos Cement Sheet which is a hazardous and polluting industry located at Kala Amb, Tehsil Nahan, District Sirmour. More so because Kala Amb has already been identified as a severely polluted industrial cluster as per the Central Pollution Control Board Report with CEPT of 68.77. I, therefore, reject the representation of M/s.Vardhman - 13 - Roofing Pvt. Ltd. A copy of the order be sent to the Petitioner Company by Registered A.D.” The Chief Secretary has rejected the prayer of the petitioner on the ground that it would be against the public interest to allow an Asbestos based Unit to be set up in the Kala Amb area which is already a severely polluted industrial cluster. The petitioner had full opportunity to put forth its case before the Chief Secretary and since it had itself invoked the jurisdiction of the Chief Secretary it now cannot be heard to say that the Chief Secretary had no right to hear the matter. The petitioner cannot urge that the principles of natural justice have been violated since it was aware of all the grounds raised by the State and had argued all the points before the Chief Secretary who gave a proper hearing to the petitioner. It would be pertinent to mention that in fact after the Chief Secretary passed her order, the petitioner filed a petition for amendment of the writ petition seeking leave to challenge the order of the Chief Secretary also. Notice was issued on this application but on the next date i.e. 26th February, 2010 the CWP No.4333 of 2009 was withdrawn unconditionally. The petitioner did not reserve the right to challenge the order of the Chief - 14 - Secretary in any other proceedings and in our considered view this second petition would not be maintainable in view of the fact that no liberty was reserved by the petitioner. Having said so, we have gone into the merits of the petition also. We had summoned the record from the office of the Chief Secretary and we find that on 26th February, 2010 the date when the petitioner withdrew the writ petition, it had not filed any representation. The representation which was filed is no doubt dated 26th February, 2010 but it was filed only on 3rd March, 2010. The comments on this representation were called for and finally on 20th March, 2010 the Chief Secretary came to the conclusion that she had already passed an order in the case and saw no justification for reviewing her earlier order. The matter did not stop here. Again a representation appears to have been made to the Hon’ble Chief Minister of the State who again called for the comments from various officials. After consideration by the highest authority in the State the action of the Chief Secretary was approved. We now take up the argument of the petitioner that in view of the provisions of the Environmental - 15 - Protection Act and the notification issued thereunder it is only the Central Government which has the power to decide as to where such a hazardous unit should be located and the State Government has no role to play in the matter. It is not disputed that the industry being set up by the petitioner is hazardous industry and as per EIA notification dated 14th September, 2006, Annexure P-37, all Asbestos Industries and Asbestos Units fall in category ‘A’. Power to permit the setting up of these Units and to grant prior environmental clearance thereof lies with the Central government. Section 3 of the Environment Projection Act, 1986 lays down the powers of the Central Government. Sub Clause (v) of Clause (2) reads as follows: “3.Power of Central Government to take measures to protect and improve environment: (1)xxxxxxx (2)In particular, and without prejudice to the generality of the provisions of sub-section (1), such measures may include measures with respect to all or any of the following matters, namely:- (i) to (iv) xxxxxxxxxxxxx (v)restriction of areas in which any industries, operations or processes or class of industries, operations or processes shall not be carried out or shall be carried out subject to certain safeguards.” - 16 - Section 5 of the Act empowers the Central Government to give directions and Rule 5 (3) (a) & (d) of the Environment (Protection ) Rules, 1986 read as follows: “5.Prohibition and restriction on the location of industries and the carrying on processes and operations in different areas: (1)&(2) xxxxxxx (3)(a) Whenever it appears to the Central government that it is expedient to impose prohibition or restrictions on the location of an industry or the carrying on of processes and operations in an area, it may, by notification in the official gazette and in such other manner as the Central Government may deem necessary from time to time, given notice of its intention to do so. (b)&(c)xxxxxxxx (d)The Central Government shall, within a period of one hundred and twenty days from the date of publication of the notification in the Official Gazette, consider all the objections received against such notification and may within three hundred and sixty-five days from such date of publication, impose prohibition or restrictions on location of such industries and the carrying on of any process or operation in an area.” On the basis of the aforesaid statutory provisions and rules it is urged that it is only the Central Government who has the power to decide whether an industry should be set up in a particular area or not. Further more on the basis of Clauses (3) & (4) of Annexure P-36 it is urged that since the State of Himachal Pradesh does not have an environment policy of its own it is bound to follow the general directions issued by the Central Government. - 17 - At first blush, this argument seems attractive but on a closer analysis of the constitutional provisions it is apparent that the State Government has the right to decide whether a polluting industry should be set up in the State or in a particular area in the State. Article 248 of the Constitution of India provides that the Parliament has exclusive power to make any law with respect to any matter not enumerated in the concurrent list or State list. List-I of the 7th schedule deals with the matters to be exclusively dealt with by the Parliament. The two relevant entries are entries No.7 and 52 which read as follows: “7.Industries declared by Parliament by law to be necessary for the purpose of defence or for the prosecution of war. xxxxxxx 52.Industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest.” A bare perusal of these entries shows that the Union is empowered to make laws in respect of those industries which Parliament by law has declared to be necessary for purposes of defence or prosecution of war or those industries over which the Union has control in accordance with an Act of Parliament passed in the public interest. - 18 - List-II of Schedule-7, is the State List. Entry-6 empowers the State to make laws in respect of Public health and sanitation; hospitals and dispensaries. Entry 24 empowers the State Government to frame legislation in respect of industries not covered by entry 7 and 52 of List-I. Entry 33 of list-III of 7th Schedule of the concurrent list reads as follows: “33.Trade and commerce in, and the production, supply and distribution of- (a)the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in the public interest, and imported goods of the same kind as such products; (b)foodstuffs, including edible oilseeds and oilseeds and oils; (c)cattle fodder, including oilcakes and other concentrates; (d)raw cotton, whether ginned or unginned, and cotton seed; and (e)raw jute.” This also does not cover the present case since we are dealing with a hazardous industry. In State of Rajasthan vs. G.Chawla and another, AIR 1959 SC 544, the Apex court while considering the plenary powers of legislation vested in the Union and the State held that the theory of pith and substance should be applied when deciding a question as to whether the - 19 - concerned legislature has a power to legislate on a particular topic or not. It held as follows: “8. After the dictum of Lord Selborne in Queen -Empress v. Burah, (1878) 3 AC 889 oft-quoted and applied, it must be held as settled that the legislatures in our Country possess plenary powers of legislation. This