IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) MONDAY, THE 26TH DAY OF JULY TWO THOUSAND AND TEN PRESENT THE HON'BLE SRI JUSTICE GODA RAGHURAM and THE HON'BLE SRI JUSTICE NOUSHAD ALI WRIT PETITION NO : 1786 of 2010 Between: Rythu Bhandava Abyudaya Sangam, a Society Registered under the A.P. Societies Registration Act, 2001 bearing Regn.No.109/2008 having its Registered Office at Pittalavanipalem Post and Mandal, Guntur District, represented by Secretary. ... PETITIONER AND 1 A.P. Pollution Control Board, Paryavaran Bhavan, A-3, Industrial Estate, Sanathnagar, Hyderabad. 2 The Government of Andhra Pradesh, represented by its Principal Secretary, Irrigation and C.A.D. Department. 3 The Government of Andhra Pradesh, represented by its Principal Secretary, Industries & Commerce (IP) Dept. 4 The Superintendent Engineer, Irrigation Circle, Guntur District. 5 M/s. NSL Textiles Ltd. Formerly M/s. Jaya Venkatarama Industries Ltd., Chandolu (P), Kunchalavaripalem (V) Cherukupalli (M), Guntur District, represented by its Managing District also at 8-2-684/2/A, NSL ICON, 4th Floor, Road No.12, Banjara Hills, Hyderabad - 500034. 6 Andhra Pradesh Industries Infrastructure Corporation, Basheerbagh, Hyderabad, represented by its Secretary. ...RESPONDENTS Petition under Article 226 of the constitution of India praying that in the circumstances stated in the Affidavit filed herein the High Court will be pleased to issue a Writ, order or direction and more particularly in the nature of Writ of Mandamus declaring the action of respondents issuing consent for Establishment order dated 24.4.2009 to the 5th respondent and any consequential orders issued for the establishment of a textile unit in Sy.No.371 to 379 Chandolu (P), Kunchalavaripalem (V), Cherukupalli (M), Guntur District as being illegal, arbitrary, unconstitutional and contrary to the provisions of Air Act, Water Act and Environment Protection Act and consequently direct the respondents to cancel all approvals granted for the said Unit including the Consent for establishment order dated 24.4.2009 granted in favour of 5th respondent. Counsel for the Petitioner: Mr. SR Ashok, Senior Counsel assisted by Mr. S.Niranjan Reddy Counsel for the Respondent No1.: Mr.Yellapragada Srinivasa Murthy Counsel for the Respondent Nos.2 to 4: Additional Advocate General assisted by the concerned Government Pleaders Counsel for the Respondent No. 5: Mr. B. Adinarayana Rao assisted by Mr. S.V. Bhatt Counsel for the Respondent No. 6: Mr. P. Roy Reddy Counsel for the Respondent No. 7: Mr. D. Seshadri Naidu The Court made the following : THE HON’BLE SRIJUSTICE GODA RAGHURAM AND THE HON’BLE SRIJUSTICE NOUSHAD ALI WRIT PETITION NO. 1786 OF 2010 ORDER: (Per Sri Justice G. Raghuram) This is a writ petition filed in the public interest for declaring the consent for establishment (CFE) dated 24.04.2009 issued to the 5th respondent and any consequent order, for establishment of a textile unit in Sy.No.371 to 379 of Chandolu (P),Kunchalavaripalem (V), Cherukupalli (M), Guntur District as arbitrary and contrary to the provisions of the Air Act, Water Act and Environment Protection Act and for a direction to the respondents to cancel all approvals granted for the said unit including the CFE order dated 24.4.2009. The petitioner pleads (qua the several affidavits): · The petitioner is a Society formed under the provisions of the AP Societies Registration Act 2001 for promoting welfare of the farming community. The 5th respondent initially proposed to establish a Cloth Processing Unit at Manthenavaripalem in Pittalavanipalem Mandal and submitted an application dated 4.8.2006, to the Superintendent Engineer, Irrigation Circle, Guntur for permission to utilize 10 million liters water per day from the Nizampatnam canal. By another representation dated 9.8.2007, the 5th respondent addressed the S.E. informing of a proposal to change the location of the processing unit to Kunchalavaripalem in Cherukupalli Mandal adjacent to Nizampatnam canal and requesting a feasibility certificate. · The respondent after identification of the alternate site, applied to respondents 1 to 3 for grant of approval even without obtaining change of land use and land categorization. The petitioner submitted representations to various authorities including respondents 1 to 4 objecting to the 5th respondent’s proposal. Consequent on an endorsement made on the petitioner’s representation by the Chief Minister, the 1st respondent returned the 6th respondent’s application for CFE with directions to select a suitable alternative site in a notified industrial area/SEZ vide letter dated 18.4.2008. The 1st respondent observed that effluents generation from the proposed unit will be 3257 KLD. · However, and without any change in the circumstances, the 5th respondent resubmitted an application dated 7.7.2008 for issue of CFE. Earlier the 1st respondent constituted a technical committee which met on 4.7.2008 to examine the technical feasibility of the 5th respondent’s proposals and the Committee suggested certain measures. Thereupon, the 1st respondent vide letter dated 23.7.2008 sought certain clarifications and suggested shifting of the site further towards the Nizampatnam Port area or in proximity to an industrial area. · The 5th respondent by its letters dated 11.8.2008 and 13.8.2008 furnished the information sought by the 1st respondent and informed that as the Government could not allot land (for establishing an industrial unit), the 5th respondent had procured the required land by private acquisition. · The technical committee of the 1st respondent again met on 30.08.2008, examined the response of the 5th respondent and opined that the present location of the industry was not ideal and suggested an alternative site. Consequently the 1st respondent by letter dated 6.9.2008 rejected the application for CFE under the provisions of the Water Act, 1974 and Air Act 1981, principally on two grounds: i) That there is a possibility of surface water and ground water contamination due to accidental discharge/ spillages of highly coloured waste water due to the industrial activity, including waste water handling within the factory and leaks due to breakage of marine outfall pipeline; and ii) The area around the site is basically a delta & highly fertile area and establishment of an integrated textile industry at such location may cause pollution and thus detrimental to the agricultural activities. · The 5th respondent submitted a revised application dated 29.10.2008 proposing zero discharge of effluents and requested the 1st respondent to reconsider grant of CFE. The 1st respondent granted CFE on 24.4.2009 to the 5th respondent to establish a textile unit comprising weaving, yarn dyeing and fabric processing at a location adjoining the Nizampatnam canal on the western side of Kunchanvaripalli (v) and to utilize 3965 KLD of water. · The official respondents failed to objectively assess the latest proposal of the 5th respondent, the technical committee of the 1st respondent approved the revised proposal perfunctorily and recommended grant of CFE, in an arbitrary and mala fide fashion. · The only apparent ground for grant of CFE, endorsing the zero discharge proposal of the 5th respondent appears to be a field visit to similar type of units situate in SEZ, Hanumanthapuram. The assessment based on such field visits is misconceived. The 5th respondent unit is proposed in fertile agricultural land in a fragile and sensitive eco- system while the other units located in SEZ (visited by the technical committee for examination and comparison) are not located in similar and sensitive eco-systems. · Rule 3(2) of the Environment (Protection) Rules, 1986 specifically enables the 1st respondent to specify more stringent standards than those approved in (Schedules I to IV) in respect of any specific industry, operation or process, depending upon the quality of the recipient system and after recording reasons therefor in writing. The 1st respondent failed to exercise due diligence in examining the 5th respondent’s proposal for establishing the unit amidst fertile agricultural lands. · The 5th respondent’s unit poses serious threat and would cause irreversible damage to the environment; the 1st respondent failed to consider the 5 respondent’s proposals consistent with the “precautionary principle”. · The CFE is illegal since is granted for a unit proposed in land classified as agricultural land. The land classification has not been altered under the relevant Town and Country Planning Act. · Textile and Dyeing mills are intrinsically a highly polluting industry which discharge effluents which affect the quality of air and water and destroy the surrounding habitat. · The (Environment Impact Assessment) EIA – 2006 notification requires prior Environmental Clearance (EC) for establishing an industry and the relevant procedures require: an application in the prescribed form to the State Level Environment Impact Assessment Authority; screening and scoping of the application by the said Authority; issuance of terms of reference (TOR) to the proponent of the project based on several parameters; submission of a draft environment impact assessment by the proponent based on the TORs issued by the State Level Appraisal Committee; public consultation through a public hearing, duly notified and transparent; submission of final environment impact assessment report by the proponent of the Unit, incorporating issues deliberated during the public hearing and raised by the Authority; appraisal of the final EIA report by the Authority, together with minutes of the public hearing and of the representations received; and a final decision with regard to issuance of EC including any conditions stipulated. Such procedures were not followed before issuance of the impugned CFE. · The concerned Gram Panchayat was not consulted by any of the official respondents before the grant of CFE. · The activities of the 5th respondent unit would have serious and negative impact on the flora and fauna including prawn, pisci and other aqua-culture on which the local population is dependent for livelihood. · The drawal of huge quantity of water for the 5th respondent’s unit would severely deplete water availability for other local operations including agriculture. The 5th respondent’s water utilization of about 10 million liters per day would be sufficient to irrigate 40,000 acres of agricultural land. · The area surrounding the proposed location is fertile irrigated area and a large number of small and marginal farmers are dependent on minor irrigation, apart from about 10,000 acres being used for prawn culture utilizing back water from the sea. An industrial unit amidst agricultural lands would have serious consequences for the area including pollution related issues consequent on the industrial and ancillary activities which would follow. Precious natural resources like water, land and clean air would be polluted by the industrial and other commercial units. · Reply affidavit dated 11.3.2010 to the 5th respondent’s counter: (i) The activities of the 5th respondent unit fall within hazardous/polluting category as the activity includes processes such as scouring, bleaching etc., under item-34 of the schedule of ‘Red’ category industries published by the 1st respondent. Even as per the EIA notification dated 14.9.2006 activities relating to integrated textile unit fall under category 5(d) in its schedule. Thus environmental clearance, EIA, public hearing of stake holders, preparation and submission of environmental management plan etc., are mandatory. The CFE is issued by the 1st respondent is thus in violation of these mandatory requirements. (ii) The MOEF framed guidelines for siting of industries, prohibiting industries in prime agricultural lands. The Unit is being set up on prime delta and agricultural land, in violation of the guidelines. Members of the petitioner- Sangham (agriculturists under Nizampatnam canal) who are dependents on water down stream the R-5’s unit will also be adversely affected. In any event this is a public interest litigation. (iii) Even if the Unit would consume 3955 Kld initially and later only 1360 Kld in addition to 26.05 Kld of recycled water, the huge quantity of water utilized by the 5th respondent would provide sustainable and environmentally friendly livelihood option for large number of people. The Unit would in any event impact future agricultural and drinking water needs. (iv) Of the 14 villages from which the 5th respondent claims to have received consent for establishment of the industry, 12 are up stream villages and are not affected. In any event consent was obtained by the 5th respondent on misrepresentation and coercion. · By an additional affidavit dated 16.4.2010: (i) Under the EIA 2006 notification, construction beyond 20,000 Sq.Mt. of built-up area requires environmental clearance under item 8(a) of the schedule to the said notification and for such clearance an impact assessment followed by a public hearing is mandatory. Though the 5th respondent’s unit has a built up area of 28.329.95 Sq.Mt and falls within the scheduled activity/project under the EIA notification, no environmental clearance was sought, no EIA nor any public hearing conducted. (ii) The requirement of EIA including public hearing is mandatory for any industry established in an ecological fragile or sensitive area including scenic areas, estuaries, delta zone and prime agricultural land. The land sited for the location of the unit falls within these descriptions and it is also a hazardous ‘Red’ category industry of textile processing and yarn dyeing. Proceedings in the writ petition: The Sarpanch of Kunchalavaripalem in WPMP No. 11064/10 applied to implead himself as a respondent, to contest the writ petition and support establishment of the 5th respondent’s industrial unit. This court by the order dated 16.4.2010 allowed this application. Consequently the 7th respondent is impleaded. Earlier, in view of the petitioner’s averment that the proposed unit would consume huge quantities of water to the detriment of local irrigation and other requirements, this court on 7.4.2010 directed the Secretary, Irrigation Department to file an affidavit explaining the impact of allocation of water to the 5th respondent’s industry, the existing and future water allocation and availability for agriculture, drinking water needs under the Nizampatnam irrigation canal and whether the Irrigation Department was consulted and what was its opinion with regard to impact of water availability for agriculture pre and post allocation of water to the 5th respondent’s industry. On 16.4.2010 as the 2nd respondent (Irrigation Department) sought further time to file a counter. This court directed the 1st respondent not to pass any orders granting “Consent for Operation” (CFO), pursuant to the CFE dated 24.4.2009, while permitting the 1st respondent to process any application made by the 5th respondent for grant of CFO and observed that any construction by the 5th respondent in the site in question would be subject to the result of the writ petition. Other Pleadings: Response of the 1st respondent (APPCB): On 29.3.2007 the 1st respondent addressed a letter to the 5th respondent stating that the inspection of the industry by its officials showed that the effluent treatment plant has not been completed in all respects viz., all units of the effluent system plant to post-evaporation unit etc., for treating waste water and the process machinery was not fully installed and is under process, therefore the 5th respondent should communicate completion of the effluent treatment plant in all aspects along with the information as to compliance of the conditions stipulated in the CFE; the action plan on developing green belt in the factory premises; and additional land details agreed to by the management while submitting the CFE application. The 5th respondent was also directed to submit the information within 15 days for further processing of the application (CFO) and that if the information was not received within the stipulated period, the CFO application would be returned without further notice. It was also informed that operation of the industry without a valid consent of the Board is punishable under Sections 44 and 37 of the Water Act and Air Act, respectively. The above letter and another letter dated 16.4.2010 addressed by the Environmental Engineer of the Board to the Joint Chief Environmental Engineer (Legal) have been placed before us for perusal. No counter has however been filed by the 1st respondent. In the letter dated 16.4.2010 it is mentioned that a letter dated 29.3.2010 was addressed by the Board to the 5th respondent and that no information is yet received from the 5th respondent on the clarifications sought. Counter affidavit of the 2nd respondent: The 2nd respondent filed a counter affidavit dated 19.04.2010, on behalf of the Irrigation Department of the State. To the extent relevant and material it is stated: A) In accordance with the National and State Water Policies the water use priority in the descending order in the State is: (i) Drinking water, (ii) Irrigation, (iii) Hydro power, (iv) Ecology, (v) Agro and non-agricultural industries, (vi) Navigation and other uses. Water allocation for industrial usage is on assessment of the available water consistent with the priorities above and allocation of water for industrial use is determined accordingly. Even among the industries, agro-industries have higher priority to other industries. B) Under the Andhra Pradesh Industrial promotion Policy, 20005- 10 10% water is reserved for industrial use, from the existing and future projects. The Industries Department while considering sanction of various incentives indicates water requirement for an applicant industry and on that basis the industrial unit must to approach the Irrigation Department indicating its requirement of water. Thereupon the Irrigation & Command Area Development Department assesses the feasibility, identifies the specific source and issues orders for water allocation. C) In the instant case the 5th respondent approached the Irrigation department by its letter dated 8.4.2008 and by Government memo dated 18.4.2008 the application was referred to the Superintending Engineer, Irrigation Circle, Guntur, to consider allotment of 6 MLD of water from the Nizampatnam canal. The S.E. by his letter dated 8.10.2009 accorded concurrence for allotment of 6 MLD of water. As the report of the Engineer-in- Chief is yet to be received, no allocation of water to the 5th respondent-unit is yet ordered. D) The Krishna Delta system has a total ayacut of 13.08 lacs acres of which the ayacut under the Western Delta is Ac. 5,71,351, and under the Eastern Delta Ac.7,36,64. Under the Krishna Water Dispute Tribunal’s Award allotment of water for the Krishna Delta system for Kharif is 161.20 TMC, of which 91.17 TMC is for the Eastern Delta and 70.73 TMC for the Western Delta. There is no allocation of water for Rabi under the Western Delta. The average utilisation during the last five years under the Western Delta for Kharif is about 63 TMC. There is thus an average saving of 7.73 TMC from the Western Delta, is available for other uses. E) The drinking water needs under the Western Delta system is 0.84 TMC and the total requirement for irrigation, drinking water and industrial needs is 63.89 TMC as against the availability of 70.73 TMC. 6.84 TMC is thus available under the Western Delta system. The allocation to the 5th respondent is a mere 0.06 TMC, leaving a cushion of 6.78 TMC F) Under the Nizampatnam canal (of the Western Delta system), the ayacut is Ac. 22,124, allotment of water under pro rata is 2.74 TMC and the average utilization of water during the last five years is 2.53 TMC. There is thus a saving of 0.21 TMC though the entire ayacut under this canal is irrigated without any gap ayacut. Under the Nizampatnam Canal there are only three rural water supply tanks to meet the drinking needs and water requirement for these tanks is 0.02 TMC per annum. After considering the water allocation of 0.06 TMC to the 5th respondent-Unit and the water requirement for the three tanks, there is still a cushion of 0.13 TMC to cater to future drinking water needs or other requirements. G) Earlier, no allotment was made for industrial use from Nizampatnam canal. However, the of water allocation to various industries in the entire Western Delta is 0.5 TMC. H) On a careful consideration of the relevant aspects it is assessed that allotment of water to the 5th respondent would not have any adverse impact on the ayacut under the Nizampatnam canal or under the entire Krishna Western Delta system. The allegation in the writ petition regarding non-availability of water for the ayacut under the Nizampatnam canal and drinking water needs, are baseless. Counter affidavit of the 3rd respondent: A counter affidavit on behalf of the Industries Department is filed on 17.4.2010. To the extent relevant and material it is stated: A) An industrial unit can be set up anywhere in Andhra Pradesh and not only in the industrial zone or SEZs. In any case, the Kunchalavaripalem Gram Panchayat has granted approval on 16.8.2008 for establishment of the unit. B) The contention of the petitioner that the proposals for establishment of the unit are illegal, since land use change is not approved, is misconceived. Identification of a particular area for establishment of an industry is only a first step. After such identification by the proponent, necessary applications will have to be made seeking approvals. If the 5th respondent obtains land use or a land categorization approval for industrial use, then alone can the industry be set up. C) Under the liberalized industrial policy and to ensure speedy processing of industrial applications a ‘single window scheme’ is launched by the State with the Commissionarate of Industries/ District Industries Centre as a nodal agency entrusted with the responsibility of ensuring that various Government schemes and other incentives are made available to entrepreneurs. The nodal agency is authorized to receive applications from promoters and to facilitate establishment by identification of various statutory and other clearances required and assist the proposed industrial unit by forwarding copies of relevant applications for clearance to the relevant authorities, instead of the promoter running around various departments. D) The 5th respondent applied for approval for a Fabric Processing, Yarn Dyeing, Weaving Industry, proposing investment of Rs.245.85 crores involving employment of 800 people. The application was forwarded to the several competent authorities and departments such as the APPCB for CFE (approved on 24.4.2009); building plan approval from Factories Department (approved on 21.12.2009); the concerned Gram Panchayat (approved on 16.8.2008); the Director of Town and Country Planning (returned on 7.9.2009); and the DISCOM for power feasibility (approved on 20.7.2009). The Industries Department is a mere nodal agency in so far as approval of other departments are concerned. Counter affidavit of the 5th respondent: In a counter dated 17.2.2010 it is pleaded: A) As on the date of filing of the writ petition i.e, 29.01.2010, 75 to 80% of work regarding establishment of the Unit, including ETP/Emission Control System has either been concluded or the material stored at the site. Rs.220 crores as against the total budgeted cost of Rs.280 crores has been incurred. The CFE is an appealable order u/Sections 28 and 31 of the Water and Air Acts. Hence the writ petition should not be entertained. B) The 5th respondent is establishing and operating units at several places in Guntur District with facilities such as ginning, spinning, weaving, processing and garmenting and is one of the best units and the first of its kind in the State. The units are technologically advanced and automated and equipped with ancillary and treatment facilities. The textile units have huge potential to generate direct and indirect employment. C) During 2006-07, the answering respondent has taken up a project integrating several components involving a total capital outlay of Rs.695 crores comprising term loans availed from financial institutions and equity. The total employment potential is 5,400 persons directly besides indirect employment to 10,000 persons apart from providing contract farming opportunity to more than 25,000 cotton farmers. D) By an order dated 27.10.2006 in GO RT. No. 684 the State extended incentives to this unit for setting up new units. Some of the projects at other places have been completed and the textile unit at Kunchanvaripalem would be ready by March 2010 for inspection by the 1st respondent for verifying compliance of the CFE conditions. Thereafter alone, permission for trial run would be granted to assess the ability of the plant and the ETP qua the assured parameters. Only on successful completion of the trial run would CFO be granted incorporating appropriate conditions in accordance with the provisions of the Water and Air Acts. E) The answering respondent applied to the 1st respondent on 07.01.2008 for CFE for the unit at the Kunchanvaripalem location. Initially an ETP to treat the water to normal levels before discharging into the sea through buried pipe lines was proposed and was being considered by the 1st respondent. During the process a complaint was received and consequently the 1st respondent returned the application on 18.04.2008 for selecting a