IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 18.09.2008 C O R A M: THE HONOURABLE MR.A.K.GANGULY, CHIEF JUSTICE and THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLA W.P.Nos.12663 & 12664 of 2008 and M.P.Nos.1,1,2,2 & 3,3 of 2008 M/s.Chemplast Sanmar Limited Having its Registered Office at No.9, Cathedral Road, Chennai 600 086 Rep. by its General Manager (Legal) Mr.T.Ravichandran .. Petitioner in both the WPs. -Vs- 1. The Appellate Authority Tamil Nadu Pollution Control Board NCB-1, Greenways Road, Chennai 600 028 2. Tamil Nadu Pollution Control Board Rep. by its Member Secretary No.100, Anna Salai, Guindy, Chennai 600 032 3. The District Environment Engineer Tamil Nadu Pollution Control Board 1/276, Meyyanoor Main Road Salem 636 004 4. G.Madheswaran .. Respondents in both the Wps. Prayer in both the WPs: Writ petitions filed under Article 226 of the Constitution of India for the issuance of Writ of Certiorari calling for the records relating to the orders of the 1st respondent in Appeal Nos.26 & 27 of 2008, dated 07.05.2008 respectively, confirming the order of the 2nd respondent herein in proceedings No.T10/TNPCB/F- 63203/SLM/RL/A/2008, dated 22.01.2008 respectively and quash the same. For Petitioner in W.P.No.12663/08 : Mr.Habibullah Basha, Senior Counsel assisted by Mr.C.Mani Shankar https://hcservices.ecourts.gov.in/hcservices/ For Petitioner in W.P.No.12664/08 : Mr.Vijay Narayan, Senior Counsel assisted by Dr.P.Vasudevan For Respondents 1 to 3 in both the WPs. : Mr.R.Ramanlal, Standing Counsel for TNPCB For Respondent 4 in both the WPs. : Mr.T.Mohan & Ms.D.Nagasaila - - - - C O M M O N O R D E R F.M.IBRAHIM KALIFULLA, J. These two writ petitions have been filed challenging the common order of the first respondent dated 07.05.2008, passed in Appeal Nos. 26 and 27 of 2008. 2. The petitioner is stated to be engaged in the manufacture of PVC in Plant-II and Caustic Soda / Chlorochemicals in Plant-III. It is also stated to have Captive Power Generation capacity consisting of 7 Nos. of LSHS (Low Sulphur Heavy Stock) fired oil engines which has got combined generating capacity of 48.5 MW and those power generation units are stated to supply power and steam to the petitioners complex in Mettur Dam with which the plants at Mettur are being operated. The second respondent (hereinafter referred to as the ‘Pollution Control Board’) is stated to have granted consent to the petitioner under Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 (hereinafter referred to as the 'Air Act'), in its proceedings dated 16.11.1998, for operating the industrial plant (Plant-III) and similar consent has also been issued under the Water (Prevention and Control of Pollution) Act, 1981 (hereinafter called as the ‘Water Act’) to the said plants. 3. It is stated that such consent was being extended from time to time and was renewed upto 31.03.2008. It is also stated that the said consent also covered the power generating units with LSHS viz., diesel operated generating units. According to the petitioner, in its caustic soda plant it had employed the Mercury Cell Technology and that there was an obligation in India for switching over to Membrane Cell Technology by 2012, as part of environmental protection measures which was notified by the Ministry of Environment and Forest, Government of India in the year 2003. The petitioner is stated to have responded to the said obligation well in advance and has converted its operations 5 years ahead of the upper limit fixed https://hcservices.ecourts.gov.in/hcservices/ viz., 2012. While effecting such a conversion, the petitioner claims that it had to necessarily switch over to other austerity measures and as part of it wanted to switch over to coal based generation of its captive power generation unit from the present set up of LSHS i.e. diesel oil based. 4. The petitioner is stated to have applied for change of fuel from diesel to coal on 23.02.2006, by installing captive power plant combining the Plant-II and Plant-III capacity and by restricting such power generation to the existing level of 48.5 MW. By proceedings dated 05.05.2006, the Pollution Control Board accorded its approval for such conversion by imposing certain additional special conditions to suit the needs of the coal based conversion. Based on such conversion permitted by the Pollution Control Board dated 05.05.2006, the petitioner is stated to have commenced the construction of its power generation plant, in order to commission the same by February, 2008. While the work was in progress, the third respondent is stated to have issued a show cause notice dated 06.12.2007, under the Water and Air Acts stating that there was violation of the provisions contained in G.O.Ms.No.213, dated 30.03.1989 and G.O.Ms.No.127, dated 08.05.1998 of the Environment & Forest Department inasmuch as the clearance of the Environment Impact Assessment Notification dated 14.09.2006, has not been obtained. The petitioner submitted its reply dated 26.12.2007, taking the stand that it does not fall under the purview of the aforesaid G.Os. and that it is not a new industry. The reply was received by the third respondent on 07.01.2008. Thereafter, by proceedings dated 22.01.2008, the petitioner was directed to stop its construction activities of the coal based power plant with a further direction to apply for fresh consent for installation of power plant. The petitioner sent a detailed letter dated 29.01.2008 to the Pollution Control Board, to which there was no response. 5. The petitioner therefore filed its appeals under the Air Act and Water Act challenging the order dated 22.01.2008, before the first respondent. The appeals were numbered as Appeal Nos.26 and 27 of 2008 in which the impugned order dated 07.05.2008, came to be passed confirming the order of the Pollution Control Board dated 22.01.2008. While the appeals were pending, status quo was granted in favour of the petitioner. The said order was subsequently modified by the first respondent directing the petitioner not to put up further constructions. When the petitioner preferred W.P.Nos.9140 and 9141 of 2008, by an order dated 15.04.2008, the Division Bench of this Court directed the first respondent Appellate Authority to dispose of the appeals on day-to-day basis and pass orders before 10.05.2008. During the pendency of the appeals before the first respondent, the fourth respondent filed an application for getting himself impleaded, which was also allowed on 30.04.2008 and the appeals were taken up for hearing on the same date. https://hcservices.ecourts.gov.in/hcservices/ 6. Before the first respondent, the main grievance of the petitioner was that pursuant to the show cause notice dated 06.12.2007, issued by the Pollution Control Board, a reply was submitted on 26.12.2007, which was also received by the third respondent on 07.01.2008 long before the order dated 22.01.2008 and that none of the explanation offered by the petitioner were considered and were not even referred to in the order dated 22.01.2008. The further grievance of the petitioner was that when such a serious adverse order is passed against the petitioner, an opportunity of personal hearing should have been extended to the petitioner. The petitioner therefore insisted for the setting aside of the order dated 22.01.2008 and for remittal before the Pollution Control Board in order to enable the petitioner to put forth its stand for maintaining the consent granted earlier on 05.05.2006. The first respondent having dismissed both the appeals, the petitioner has come forward with these writ petitions. 7. When these writ petitions were initially entertained on 21.05.2008, by way of an interim order, the petitioner was permitted to proceed with the constructions subject to the condition that such construction would be at the risk of the petitioner and that no equity can be claimed later. However, subsequently by an order dated 02.07.2008, the petitioner was directed not to proceed with the constructions till the writ petitions are finally disposed of. 8. We heard Mr.Habibullah Basha, learned senior counsel for the petitioner in W.P.No.12663 of 2008, Mr.Vijay Narayan, learned senior counsel for the petitioner in W.P.No.12664 of 2008, Mr.Ramanlal, learned counsel for the respondents 1 to 3 and Mr.T.Mohan and Ms.D.Nagasaila, learned counsel for the fourth respondent. 9. At the foremost, Mr.Habibullah Basha, learned senior counsel for the petitioner in his submissions drew our attention to the order of the first respondent dated 07.05.2008, wherein the first respondent has found that there was violation of principles of natural justice in passing the order dated 22.01.2008 and contended that after having held so, it ought not to have proceeded with the merits of the case in order to find out whether the order dated 22.01.2008, can be sustained. According to the learned senior counsel, after the issuance of the show cause notice dated 06.12.2007, which only referred to the inspection held on 04.12.2007, simply because the reply submitted by the petitioner dated 26.12.2007 was not within the time granted in the show cause notice, the Pollution Control Board was not justified in ignoring the stand of the petitioner raised in its reply when the order itself came to be passed much later on 22.01.2008, i.e. long after the receipt of the petitioner's reply on 07.01.2008. The learned senior counsel also contended that in the impugned order dated 22.01.2008, when the https://hcservices.ecourts.gov.in/hcservices/ Pollution Control Board referred to the subsequent inspection dated 18.12.2007, the report copy of which was not furnished to the petitioner, there was gross violation of principles of natural justice in the passing of the order dated 22.01.2008. The learned senior counsel therefore contended that when such glaring violations were brought to the notice of the first respondent, which were also accepted by the first respondent, it ought not to have proceeded to decide the case on merits and should have remitted the matter back to the Pollution Control Board as very many factual factors were required to be placed before the Pollution Control Board to support the stand of the petitioner that it was not required to comply with G.O.Ms.No.213, dated 30.03.1989, G.O.Ms.No.127, dated 08.05.1998 as well as the prescription contained in the Environmental Impact Assessment Notification (EIA) dated 14.09.2006. The learned senior counsel relied upon the decisions reported in 1989 (2) SCC 505, 2005 (1) MLJ 441, 2006 (4) SC 153, 2007 (8) RC 205, 2005 (7) SCC 159 and 1972 (4) SCC 683 and 2004 (2) SCC 392 in support of his submissions. 10. Mr.Vijay Narayan, learned senior counsel appearing for the very same petitioner in W.P.No.12664 of 2008 in his submissions pointed out that this Court in the order dated 15.04.2008, directed the first respondent to dispose of the appeal on day-to-day basis and fixed a time limit of 10.05.2008. The learned senior counsel then pointed out that the contesting fourth respondent herein got himself impleaded on 30.04.2008, filed several documents and that the hearing before the first respondent commenced on the very same day. According to the learned senior counsel, even before the first respondent it was pointed out that the petitioner only wanted to convert its existing power plant from diesel operation to coal operation and that all the particulars relating to such conversion were placed before the Pollution Control Board, which persuaded it to pass the consent order dated 05.05.2006, that even after conversion, the power generation would not exceed 48.5 MW and that the statement “new power plant” found in the petitioner's reply dated 26.12.2007, cannot be torn out of the context. According to the learned senior counsel, it was a mere conversion and that the points raised by the contesting private respondent about the new survey numbers, estimated cost of the plant were all particulars which were placed for the first time before the first respondent and such disputed facts could have been satisfactorily explained by the petitioner only before the Pollution Control Board. The learned senior counsel also pointed out that the contesting private respondent produced a copy of the letter said to have emanated from the office of third respondent to state that the cost of the power generation project could be around Rs.260 crores, while according to the petitioner, the cost would be around Rs.40 crores and when such documents were produced for the first time by the contesting private respondent in the course of the hearing before the first respondent, in all fairness, the first respondent https://hcservices.ecourts.gov.in/hcservices/ ought to have set aside the impugned order dated 22.01.2008 and directed the parties to go before the Pollution Control Board for a detailed hearing. The learned senior counsel by referring to Section 21(4) of the Air Act and a similar provision in the Water Act contended that those provisions specifically mandate a reasonable opportunity to be extended which would include a personal hearing at the hands of the Pollution Control Board before cancelling its order dated 05.05.2006. The learned senior counsel relied upon the decision reported in 1979 (2) MLJ 466 in support of his submission. 11. As against the above submissions, Mr.T.Mohan and Ms.D.Nagasaila, learned counsel appearing for the contesting private respondent viz. the fourth respondent herein contended that the petitioner neither had a fundamental right nor was there any violation of fundamental right to be traced in the facts of this case. According to the learned counsel, non-furnishing of the inspection report dated 18.12.2007, by itself, cannot be stated to have caused any violation of principles of natural justice. It was further contended that in any event when the petitioner had a full fledged hearing before the first respondent, that would fall within the well known maxim “unfair trial followed by fair appeal” and therefore no further opportunity need be given. The learned counsel also contended that if the ultimate conclusion of the first respondent cannot be changed, any order of remand would have been a futile exercise and therefore the order of the first respondent does not call for any interference. The learned counsel by making a reference to G.O.Ms.No.213, dated 30.03.1989 and G.O.Ms.No.127, dated 08.05.1998, drew the attention of this Court to various documents starting from the consent letter dated 05.05.2006, to the revocation order dated 22.01.2008 and contended that having regard to the prescription contained in G.O.Ms.No.213, dated 30.03.1989 and G.O.Ms.No.127, dated 08.05.1998 and the further fact that the present attempt of the petitioner in resorting to the conversion of the power plant from diesel based to coal based involves construction of a plant by itself in a different location, it can only be construed as setting up of a new plant and therefore the conclusion of the first respondent in having directed the petitioner to apply for fresh consent in the order impugned dated 07.05.2008 was well justified. The learned counsel relied upon the decisions reported in 1967 (2) LLJ 46, 1984 (1) LLJ 248, 2001 (2) CTC 103, AIR 1985 SC 1416, 1997 (4) SCC 741, 1986 (4) SCC 537, 1999 (6) SCC 237, 2000 (7) SCC 529, 2001 (3) CTC 193, 2005 (6) SCC 321, 1970 (2) SCC 301, 2003 (4) CTC 715, 1973 (1) SCC 380, 1988 (3) SCC 579, 1999 (8) SCC 16 and AIR 1991 SC 2141 in support of their submission. 12. Having heard the learned counsel for the respective parties, the short question that arises for consideration in these writ petitions is whether the claim of the petitioner for a fresh hearing https://hcservices.ecourts.gov.in/hcservices/ by the Pollution Control Board as regards the cancellation of its earlier consent letter dated 05.05.2006 should be granted or not. 13. As we have set out the facts in detail in the above paragraphs, we only refer to some of those facts which need to be restated for taking a decision on this question. The petitioner has got an existing captive power generation plant which is operated by diesel called LSHS and the maximum generating capacity is stated to be 48.5 MW. When the petitioner applied for conversion viz., from diesel operation to coal operation, the Pollution Control Board considered the petitioner's application dated 23.02.2006 and passed orders on 05.05.2006 granting its consent. Subsequently in the year 2007, a show cause notice came to be issued on 06.12.2007 for recalling its order dated 05.05.2006. In the said notice, the petitioner was called upon to submit its reply within 15 days from the date of its receipt. Such notices were issued under both the Acts. The petitioner submitted its reply on 26.12.2007, which was admittedly beyond 15 days time granted by the third respondent in its notice dated 06.12.2007. The fact remains that the petitioner's reply dated 26.12.2007 was received by the Pollution Control Board on 07.01.2008. The Pollution Control Board passed its order on 22.01.2008, revoking its consent order dated 05.05.2006, in which admittedly none of the explanation offered by the petitioner in its reply dated 26.12.2007 was considered. When the petitioner sent a further letter dated 29.01.2008 to the Pollution Control Board seeking for an opportunity of personal hearing, there was no response from the Board. In the appeals preferred by the petitioner, the first respondent viz., the Appellate Authority has made a categoric finding to the effect that there was violation of principles of natural justice in passing the order dated 22.01.2008 by the Pollution Control Board. 14. When we dilate further on this factual issue, we feel it necessary to refer to the petitioner's application dated 20.03.2006 / 26.04.2006, seeking for an amendment to the consent order for converting its power plant from diesel operation to coal operation. Along with its application, a detailed project objective and summary was also submitted setting forth all the features of the proposed coal operated power plant including the various pollution control measures envisaged. The said report also consisted of a topo-sketch indicating the location of the power plant etc. Based on the petitioner's application, the third respondent submitted its report dated 28.04.2006 to the Pollution Control Board and in that report the salient features of the petitioner's project have been set out viz., that the power generation will remain at 48.5 MW even after the conversion, that the contemplated use of imported coal will be with no ash content and that there would be no discharge of effluent from the plant. Thereafter, the amendment order dated 05.05.2006, to the consent letter dated 16.11.1998, came to be issued. https://hcservices.ecourts.gov.in/hcservices/ 15. Be that as it may, when we refer to G.O.Ms.No.213, dated 30.03.1989 of Environment & Forest Department of the Government of Tamil Nadu and G.O.Ms.No.127 of the same department dated 08.05.1998, we find that there is a total ban on the setting up of any polluting industry mentioned in Annexure – I to G.O.Ms.No.213, dated 30.03.1989, within one kilometer of an embankment of a water source mentioned in Annexure-II of the said G.O. Thermal Power Station is one of the industries mentioned in Annexure-I and Mettur Reservoir is one of the water source mentioned in Annexure-II. In G.O.Ms.No.127, dated 08.05.1998, there is a prohibition from granting permission to establish factories that are highly water polluting industry within 5 km of Tamil Nadu's important water sources like Cauvery and its tributaries, Pennaiyaru, Pallaar, Vaigai and Thamirabarani. Similarly, when we refer to the Environment Impact Assessment Notification of 1994, we find that Thermal Power Project is one of the items mentioned in Schedule-I of the said Notification. As per the said notification, the stipulations and restrictions contained therein will not apply if the investment in any plant is less than Rs.50 crores. 16. Keeping in mind the above referred to notifications and the prescriptions contained therein, it will have to be examined whether the petitioner's claim for conversion of its power generating plant from diesel operation to coal operation was properly considered by the Pollution Control Board. If the petitioner's project of conversion exceeds an investment of Rs.50 crores or if it were to be held that it would be setting up a new power plant, then in either case it would attract the above referred to notifications. If the application of the notifications comes into play, then different procedure is prescribed under the Environment Impact Assessment Notification, 1994 dated 27.01.1994, which would require a detailed exercise of a public hearing and clearance from other departments of Ministry of Environment and Forest etc. In the abovesaid background, the point for consideration is whether the petitioner's claim for fresh hearing by the Pollution Control Board merits acceptance. When we considered the said claim, some of the relevant factors to be noted are that when the Pollution Control Board passed its order on 05.05.2006, amending the consent order dated 16.11.1998, substantial particulars about the project of conversion were placed before the third respondent who in turn submitted its report dated 28.04.2006 before the Pollution Control Board. After the issuance of the amendment order dated 05.05.2006, nearly after 18 months, the show cause notice for recalling that order was issued on 06.12.2007. In the said show cause notice, there was a reference to the inspection of the petitioner's plant made on 04.12.2007. The sum and substance of the said notice is that the inspection of the unit revealed that there is a construction of a new thermal power plant inside Plant-III, which is in violation of G.O.Ms.213, dated https://hcservices.ecourts.gov.in/hcservices/ 30.03.1989, G.O.Ms.No.127, dated 08.05.1998 and E.I.A. Notification dated 14.09.2006. 17. In the petitioner's reply dated 26.12.2007, the petitioner took the stand that what was being carried on was only a conversion of its existing plant with 48.5 MW capacity from diesel operation to coal operation and therefore the same does not attract any of the notifications referred to in the show cause notice. Unfortunately, though the said reply was received by the Pollution Control Board on 07.01.2008, it completely omitted to consider any of the points raised by the petitioner. The Pollution Control Board in its order dated 22.01.2008 makes a specific reference to the further inspection held on 18.12.2007 by its officials and reiterated that such inspection revealed a construction of 50 MW plant without environment clearance. On the other hand, the categoric stand of the petitioner is that its power plant will continue to maintain the original permitted capacity of 48.5 MW. Admittedly, no report based on the inspection dated 18.12.2007 was ever furnished to the petitioner. The stand of the Pollution Control Board that the petitioner failed to submit its reply within two weeks from the date of receipt of its show cause notice and therefore, there was no obligation to consider the contents of the reply, was rightly rejected by the first respondent. In effect, as rightly held by the first respondent, there was a serious violation of principles of natural justice in the matter of revocation of the amendment order dated 05.05.2006, to the consent order dated 16.11.1998. 18. The contention of the contesting private respondent that such serious violation got cured in the proceedings held by the Appellate Authority viz., the first respondent, in our considered opinion, cannot be accepted for more than one reason. As pointed out by Mr.Vijay Narayan, learned senior counsel for the petitioner in W.P.No.12664 of 2008, the ground which weighed with the first respondent in rejecting the appeals were : (a) the new power plant was being set up in a different Survey Number; (b) the private contesting respondent produced a copy of a letter from the District Environmental Engineer stating that the cost of the project would be around 260 crores, while the conversion cost as claimed by the petitioner was only Rs.40 crores; (c) the petitioner itself in its reply dated 26.12.2007 stated that it is putting up a "new power plant", and that (d) the petitioner's plant will be covered by the notification dated 27.01.1994. https://hcservices.ecourts.gov.in/hcservices/ The first respondent therefore concluded that even if the matter is remitted back to the Pollution Control Board, the petitioner will not be able to convince the Pollution Control Board to take a different view and therefore no useful purpose will be served by remitting the matter back for fresh disposal. 19. When we heard the learned senior counsel for the petitioner in both the writ petitions and when we perused the various materials placed before us and considered the same in the light of the provisions contained in the Air Act and in particular to the second proviso