W.P. (C) No. 543/2008 batch Page 1 of 122 IN THE HIGH COURT OF DELHI AT NEW DELHI W.P.(C) 543/2008 with 2714/08, 2771/08, 2772/08, 3815/08, 7081/08, 8143/08, 8144/08, 8145/08, 8146/08, 8147/08, 8148/08, 8149/08, 9040/08, 464/09, 465/09, 508/09, 509/09, 510/09, 511/09, 525/09, 794/09, 7575/09, 8208/09, 8751/09, 10860/09, 3095/08, 4319/08, 4321/08, 4322/08, 4323/08, 4330/08, 4333/08, 3905/08, 8789/08, 8901/08, 9128/09 & 1391/2010 Reserved on: 11th August 2010 Decision on: 30th September 2010 SPLENDOR LANDBASE LTD ..... Petitioner Through Mr. Soli J Sorabjee, Senior Advocate with Mr. B.B. Gupta and Mr. B. Mohanty, Advocates for Petitioners in WP (C) 543/08, 3095/08, 3905/08, 4319/08, 4321/08, 4322/08, 4323/08, 4330/08, 4333/08. Mr. Sanjay Goswami with Mr. H.K. Balajee, Advocates for WP (C) Nos. 2714/08, 2771/08, 2772/08, 7081/08, 3815/08, 8143/08, 8144/08, 8145/08, 8146/08, 8147/08, 8148/08, 9040/08, 508/09, 509/09, 510/09, 511/09, 794/09, 8208/09, 8751/09, 10860/09. Mr. Amit Sood, Advocate for Petitioner in WP (C) 7575/09. Mr. Prem Kumar with Mr. Girish Kumar, Advocate for Petitioner in WP (C) 465/09. Mr. Gaurav Gupta, Advocate for Petitioner in WP (C) 8149/08. Mr. Sanjay K. Shandilya with Ms. Ekta Mehta, Advocate for Petitioner in WP (C) 8789/08. Mr. Deepak Khurana with Mr. Shobhit Chandra, Advocate for Petitioner in WP(C) 1391/10. Ms. Urvi Kuthiala, Advocate for Petitioner in WP(C) 9128/09, 464/09, 8901/08, 525/09. versus DELHI POLLUTION CONTROL COMMITTEE .....Respondent Through Mr. Sudhir Chandra, Senior Advocate with Mr. C. Mohan Rao, Advocate for Respondent/DPCC. Mr. Satya Sehrawat with Ms. Rashi Bansal, Advocate for R-1 in WP(C) 508/09 509/09, 510/09, 511/09 and 794/09. Mr. Neeraj Chaudhari, Advocate for UOI in WP (C) 794/09. Mr. Manish with Ms. Sadhna, Mr. Rajesh Pratap, Advocates for UOI in WP (C) 8143/08, 8144/08, 8145/08, 8146/08, 8147/08, 8148/08. W.P. (C) No. 543/2008 batch Page 2 of 122 Mr. Darpan Wadhwa with Ms. Divya Jha, Advocate for GNCTD in WP(C) 543/08, 2714/08, 7081/08, 8148/08. Mr. Baldev Malik, Advocate for R-3 in WP (C) 9040/08. Mr. N. Waziri, Standing Counsel with Mr. Shoaib Haider, Advocate for GNCTD in WP (C) 8751/09, 10860/09. Mr. Atul Nanda with Mr. Sumeer Sodhi and Mr. Gaurav Gupta, Advocates for UOI in WP (C) 7081/08, 508, 510, 511 and 8751 of 2009. Mr. Ravinder Aggarwal, Advocate for UOI in WP (C) 901/08. Mr. Ajay Verma, Advocate for the DDA in WP(C) 8901/08. CORAM: JUSTICE S. MURALIDHAR 1. Whether reporters of the local news papers be allowed to see the judgment? Yes 2. To be referred to the Reporter or not? Yes 3. Whether the judgment should be reported in the Digest? Yes JUDGMENT 30.09.2010 Introduction 1.1 These are 38 writ petitions filed by builders of various properties in the National Capital Territory of Delhi (NCT of Delhi) who have been issued show cause notices and also directions by the Respondent Delhi Pollution Control Committee (`DPCC‟) for alleged violation of Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 [hereafter `the Water Act‟) and Sections 21 and 22 of the Air (Prevention and Control of Pollution) Act, 1981 [hereafter `the Air Act‟]. Barring two petitions where the buildings constructed are residential complexes, in each of the other petitions the building constructed is a commercial shopping complex or a shopping mall. W.P. (C) No. 543/2008 batch Page 3 of 122 1.2 The show cause notices have been issued on the ground that these Petitioners had not, prior to commencing construction, applied to the DPCC for and obtained from it the „consent to establish‟ under Section 25 of the Water Act or the DPCC‟s „consent to operate‟ under Section 21 of the Air Act. 1.3 Some of the petitioners have constructed commercial complexes or shopping malls of a built up area of over 20,000 sq.m. They were therefore required to comply with the environment impact assessment (EIA) notifications in terms of the Environment (Protection) Act, 1986 (EPA). The EIA norms with which they are expected to comply are set out in the EIA notification dated 27th January 1994 as further amended on 7th July 2004 and 14th September 2006. The issue that arises in some of these petitions, where the commercial or residential complex is of a built up area of over 20,000 sq.m, is whether independent of the EIA clearance obtained by such petitioners from the Government of India in the Ministry of Environment and Forests (`MoEF‟), a separate consent to establish under the Water Act and a consent to operate under the Air Act would nevertheless be required to be obtained from the DPCC. 1.4 Another issue common to some of these petitions is the validity of the levy by the DPPC of penalties, fines and environment damages in the form of fixed sums of monies or by requiring the Petitioners to furnish bank guarantees as a condition to the grant of consent under the Air Act and the Water Act. W.P. (C) No. 543/2008 batch Page 4 of 122 2. The case of the Petitioners broadly stated is that the residential and commercial shopping complexes and shopping malls are not covered under either the Water Act or the Air Act. Therefore there was no need for any of these Petitioners to have obtained from the DPCC either prior consent to establish under Section 25 of Water Act or prior consent to operate under Section 21 of the Air Act. The case of the DPCC is that the activity of construction of commercial complexes, shopping malls and even residential complexes is covered under both the Air Act and the Water Act and the failure to obtain prior consent to establish or prior consent to operate makes the petitioners liable under either or both Acts. For complexes where the built up area is over 20,000 sq.m, the stand of the DPCC is that the mere obtaining by such builders of EIA clearance from the MoEF will not obviate the need to obtain separate prior consents from the DPCC under the Water Act and Air Act. Background to the Water Act and amendments 3. The first issue to be considered is the applicability of the Water Act to the complexes in question. Emphasis has been placed by both sides on the background to the enactment of the Water Act. The Statement of Objects and Reasons (`SOR‟) to the Water Act as it was first enacted on 23rd March 1974 referred to a Committee set up in 1962 to draw up a draft enactment for the prevention of water pollution. The SOR noted that “the problem of pollution of rivers and streams has assumed considerable importable and urgency in recent years as a result of the growth of the industries and the increasing tendency to urbanization.” The Report of the Committee was circulated to the State Governments and was also W.P. (C) No. 543/2008 batch Page 5 of 122 considered by the Central Council of Local Self-Government. Based on the recommendation of the Central Council a draft bill was prepared. The Bill was passed by both the Houses of Parliament and received the assent of the President in 1974. 4. The Water Act underwent further changes in 1978 and thereafter in 1988. Section 25 of the Water Act in its present form was a result of certain extensive amendments made to it in 1988. Para 2 of the SOR of the Amendment Act No. 53 of 1988, which is relevant for the present purposes, reads as under: “2. The Water Act is implemented by the Central and State Governments and the Central and State Pollution Control Boards. Over the past few years, the implementing agencies have experienced some more administrative and practical difficulties in effectively implementing the provisions of the Act. The ways and means to remove these difficulties have been thoroughly examined in consultation with the implementing agencies. Taking into account the views expressed, it is proposed to amend certain provisions of the Act in order to remove such difficulties. The State Legislatures of Himachal Pradesh, Manipur and Tripura have passed resolutions under Article 252(2) of the Constitution authorizing the Parliament to amend the provisions of the Water Act to give effect to those amendments.” 5. Thereafter in Para 3(iii) and 3(vi) of the SOR, it was explained that the Bill inter alia sought to make the following amendments to the Act, namely: “(iii) it is proposed to make it obligatory on the part of a person W.P. (C) No. 543/2008 batch Page 6 of 122 to obtain the consent of the relevant Board for establishing or taking any steps to establish any industry, operation or process which is likely to cause pollution of water and also to empower the Boards to limit their consents for suitable periods so as to enable them to monitor observance of the prescribed conditions; ...... (vi) it is proposed to empower the Boards to give directions to any person, officer or authority including the power to direct closure on regulation of offending industry, operation or process or stoppage or regulation of supply of services such as water and electricity” 6. It is plain, therefore, that the amendments made in 1988 were with a view to making it obligatory on the part of the person taking any steps to establish “any industry, operation or process which is likely to cause pollution of water....” to obtain the prior consent of the State Pollution Control Committee (PCC). Position under the Water Act 7. To recapitulate, one of the central issues in these petitions is whether there is statutory requirement in terms of Section 25(1) (a) of the Water Act for persons establishing a commercial shopping complex or shopping mall or a residential complex to obtain prior consent to establish from the DPCC. Section 25 of the Water Act which mandates such requirement reads as under: “25. Restrictions on new outlets and new discharges. (1) Subject to the provisions of this section, no person shall, without the previous consent of the State Board, -- W.P. (C) No. 543/2008 batch Page 7 of 122 (a) establish or take any steps to establish any industry, operation or process, or any treatment and disposal system or any extension or addition thereto, which is likely to discharge sewage or trade effluent into a stream or well or sewer or on land (such discharge being hereafter in this section referred to as discharge of sewage); or (b) bring into use any new or altered outlet for the discharge of sewage; or (c) begin to make any new discharge of sewage: Provided that a person in the process of taking any steps to establish any industry, operation or process immediately before the commencement of the Water (Prevention and Control of Pollution) Amendment Act, 1988, for which no consent was necessary prior to such commencement, may continue to do so for a period of three months from such commencement or, if he has made an application for such consent, within the said period of three months, till the disposal of such application. (2) An application for consent of the State Board under sub- section (1) shall be made in such form, contain such particulars and shall be accompanied by such fees as may be prescribed. (3) The State Board may make such inquiry as it may deem fit in respect of the application for consent referred to in sub- section (1) and in making any such inquiry shall follow such procedure as may be prescribed. (4) The State Board may- (a) grant its consent referred to in sub-section (1),subject to such conditions as it may impose, being- W.P. (C) No. 543/2008 batch Page 8 of 122 (i) in cases referred to in clauses (a) and (b) of sub- section (1) of section 25,conditions as to the point of discharge of sewage or as to the use of that outlet or any other outlet for discharge of sewage; (ii) in the case of a new discharge, conditions as to the nature and composition, temperature, volume or rate of discharge of the effluent from the land or premises from which the discharge or new discharge is to be made; and (iii) that the consent will be valid only for such period as may be specified in the order, and any such conditions imposed shall be binding on any person establishing or taking any steps to establish any industry, operation or process, or treatment and disposal system of extension or addition thereto, or using the new or altered outlet, or discharging the effluent from the land or premises aforesaid; or (b) refuse such consent for reasons to be recorded in writing. (5) Where, without the consent of the State Board, any industry, operation or process, or any treatment and disposal system or any extension or addition thereto, is established, or any steps for such establishment have been taken or a new or altered outlet is brought into use for the discharge of sewage or a new discharge of sewage is made, the State Board may serve on the person who has established or taken steps to establish any industry, operation or process, or any treatment and disposal system or any extension or addition thereto, or using the outlet, or making the discharge, as the case may be, a notice imposing any such conditions as it might have imposed on an application for its consent in respect of such establishment, such outlet or discharge. (6) Every State Board shall maintain a register containing particulars of the conditions imposed under this section and so W.P. (C) No. 543/2008 batch Page 9 of 122 much of the register as relates to any outlet, or to any effluent, from any land or premises shall be open to inspection at all reasonable hours by any person interested in, or affected by such outlet, land or premises, as the case may be, or by any person authorized by him in this behalf and the conditions so contained in such register shall be conclusive proof that the consent was granted subject to such conditions. (7)The consent referred to in sub-section (1) shall, unless given or refused earlier, be deemed to have been given unconditionally on the expiry of a period of four months of the making of an application in this behalf complete in all respects to the State Board. (8) For the purposes of this section and sections 27 and 30- (a) the expression "new or altered outlet" means any outlet which is wholly or partly constructed on or after the commencement of this Act or which (whether so constructed or not) is substantially altered after such commencement; (b) the expression "new discharge" means a discharge which is not, as respects the nature and composition, temperature, volume, and rate of discharge of the effluent substantially a continuation of a discharge made within the preceding twelve months (whether by the same or a different outlet), so however that a discharge which is in other respects a continuation of previous discharge made as aforesaid shall not be deemed to be a new discharge by reason of any reduction of the temperature or volume or rate of discharge of the effluent as compared with the previous discharge.” 8. For further understanding the scope of the expressions used in Section W.P. (C) No. 543/2008 batch Page 10 of 122 25 (1) of the Water Act, the definitions therein of the terms “outlet” occurring in Section 2(d)(d), “sewage effluent” under Section 2(g) and “trade effluent” under Section 2(k) are relevant. They read as under: “2 (dd) “outlet” includes any conduit pipe or channel, open or closed, carrying sewage or trade effluent or any other holding arrangement which causes, or is likely to cause, pollution; ..... 2 (g) “sewage effluent” means effluent from any sewerage system or sewage disposal works and includes sullage from open drains; ..... 2 (k) “trade effluent” includes any liquid, gaseous or solid substance which is discharged from any premises used for carrying on any industry, operation or process, or treatment and disposal system, other than domestic sewage.” 9. One of the submissions made by Mr. Sorabjee, learned Senior counsel on behalf of the Petitioners is that the requirement of obtaining prior consent to establish in terms of Section 25 (1) (a) of the Water Act arises only where the activity in question is to establish an „industry, operation or process‟ which in turn discharges „trade effluent‟. The argument is that a residential complex cannot produce „trade effluent‟. It can only produce domestic sewage which the legislature has consciously excluded from the expression „trade effluent‟. It is further urged that what takes place in a commercial shopping complex or shopping mall is mere retail sale of goods and services. There is no „industry, operation or process‟ that goes on inside a commercial shopping complex or mall that discharges „trade effluent‟. On behalf of the Petitioners, it is sought to be contended that W.P. (C) No. 543/2008 batch Page 11 of 122 the above provision was never intended to cover shopping complexes, malls or the residential complexes. Mr. Sorabjee submitted that the words “operation or process or any treatment and disposal system or any system of extension or addition thereto” following the word “industry” have to be read ejusdem generis the word “industry” and therefore was not meant to cover an activity which is not an industrial activity. It is contended that there is no industrial activity that takes place in a shopping complex or mall or a commercial complex. In other words, only industries such as chemical industries, metallurgical industry, engineering industry and so on are meant to be covered by the Water Act. Consequently, it is argued that Section 25 (1) of the Water Act is not attracted in any of the present cases. 10. It must be noticed that the definition of „trade effluent‟ under Section 2(k) underwent a change with the Amendment Act No. 53 of 1988. The definition of „trade effluent‟ in the unamended Section 2(k) contained the words “carrying on any trade or industry” following the words “…any premises used for..” This was replaced by the words “…from any premises carrying on any industry, operation or process, or treatment and disposal system.” The idea was to expand the use of the premises and not limit it to an industry but also any process or treatment and disposal system. What stood excluded from the definition of „trade effluent‟ was “domestic sewage”. The word `sewage‟ itself has been defined under Section 2(g) to mean effluent from any sewerage system or sewage disposal works and includes sullage produced from open drains. The word `sewage‟ when qualified by the word `domestic‟ should necessarily W.P. (C) No. 543/2008 batch Page 12 of 122 mean sewage produced from premises used for domestic purposes. The word “domestic” when contra-distinguished from the expression “trade” could mean a place used for residence rather than for business or trade. 11. However, the above definition of „trade effluent‟ does not take a residential complex or even a commercial shopping complex or shopping mall out of the purview of Section 25 (1) of the Water Act. A careful reading of Section 25 (1) of the Water Act would show that it is intended to cover not just „industry‟ which discharges „trade effluent‟ but any „process or operation‟ that results in a discharge of „sewage‟ not limited to trade effluent. The expression „sewage or trade effluent‟ in Section 25 (1) (a) Water Act which follows the words „operation or process, or any treatment and disposal system or any extension or addition thereto, which is likely to discharge..‟ is wide enough to cover all kinds of sewage and not just „trade effluent‟. Likewise, the expressions „process‟ and „operation‟ is not meant to be confined to „industry‟ but to all kinds of processes and operations including those that take place in kitchens and bathrooms of residential complexes and retail sales in shops and restaurants and activities in the rest rooms of commercial shopping complexes and malls. 12. The definition of the words “operation” and “process” as occurring in the New Shorter Oxford English Dictionary (Leslie Brown Ed.) are as follows: operation: An action, deed; exertion of force or influence; working, activity; an act of a practical or technical nature, esp one W.P. (C) No. 543/2008 batch Page 13 of 122 forming a step in a process process: The action or fact of going on or being carried on; a continuous series of actions, events or changes; a systematic series of actions or operations directed at a particular end. 13. Under Section 25(1) (b) Water Act if the operation, process or the process that is proposed to be established brings into use “any new or altered outlet for the discharge of sewage” then Section 25(1) will stand attracted. The proviso to Section 25(1) states that where the steps to establish an industry, operation or process have already commenced before the commencement of the 1988 Amendment Act, such steps may continue for a period of three months and if, the person who has taken such steps makes an application for consent within that period, till the disposal of such application. The proviso underscores the mandatory nature of the requirement of even an ongoing construction to obtain prior consent to establish from the State PCC. 14. When the Water Act was first enacted in 1974, the scale of both commercial and residential shopping complexes as a result of urbanization was perhaps not anticipated. There has been a dramatic increase in the number of residential and commercial shopping complexes that have come up in urban metropolises in the recent past. More significant is the size of such commercial/shopping complexes. Having huge shopping malls having a built up area of 20,000 sq. m. is not an unusual feature as is evident in seven cases in the present batch of writ petitions. The volume of sewage that such residential and W.P. (C) No. 543/2008 batch Page 14 of 122 commercial complexes and shopping malls are likely to discharge into the sewage system would indeed be enormous. The recognition of the need to have the regulatory authority, in these cases the DPCC, to be approached by the builders of such complexes and malls for prior consent to establish under the Water Act is consistent with the object of the Water Act as amended in 1988. The ultimate object is to ensure that there is effective prevention and control of pollution. Purposive construction 15. In the considered view of this Court, it is not possible to place a narrow construction on the words “operation” and “process” occurring in Section 25(1) of the Water Act. The words “operation or process” occurring in Section 25(1) (a) have to be given the widest possible meaning and scope. This approach is consistent with the SOR of the 1988 amendments to the Water Act which make it clear that the legislative intent was to expand the scope of the regulatory powers of the state PCC. The principle of ejusdem generis is therefore inapposite in the context. On the other hand the principle of purposive construction commends itself for application. In Anderton v. Ryan (1985) 2 All ER 355, it was explained that: “Statutes should be given what has become known as the purposive construction, that is to say the Courts should identify the „mischief‟ that existed before passing of the statute and then if more than one construction is possible, favour that which will eliminate the mischief so identified.” In Pepper v. Hart (1993) 1 All ER 42, it was held: “The courts now adopt a purposive approach which seeks to give effect to the true purpose of legislation and are prepared to look at much W.P. (C) No. 543/2008 batch Page 15 of 122 extraneous material that bears on the background against which the legislation was enacted.” This has been consistently followed by our Supreme Court in New India Assurance Co. Ltd. v. Nusli Neville Wadia (2008) 3 SCC 279; Tanna and Modi v. CIT AIR 2007 SC 2301 and recently in a decision dated 31st August 2010 in Civil Appeal No. 5842 of 1998 (Grid Corporation of Orissa Ltd. v. Eastern Metals and Ferro