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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 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 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.
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 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 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 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.
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 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.
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 to Section 21(4), we feel that when once a valid consent order is granted and when the Pollution Control Board intends to revoke the same, proper opportunity should have been extended to the party concerned. When we perused the order dated 22.01.2008, we find that there is a reference to the inspection dated 18.12.2007 of the petitioner's unit based on which the Pollution Control Board reached the conclusion that the compliance of G.O.Ms.No.213, dated 30.03.1989, G.O.Ms.No.127, dated 08.05.1989, as well as Environmental Impact Assessment Notification dated 27.01.1994, were attracted and therefore the order dated 05.05.2006 is revoked. The question whether the petitioner's unit falls within the prohibitive restriction viz. Establishment of a new plant, investment would exceed Rs.50 crores are all matters which the petitioner is bound to explain to the Pollution Control Board. Further, when the private contesting respondent placed certain documents for the first time before the first respondent said to have been issued by the District Environment Engineer stating that the investment of the petitioner in setting up the plant would be more than Rs.260 crores, certainly, such a document produced before the first respondent for the first time cannot be straight-away relied upon in order to non-suit the petitioner. When the petitioner has taken a specific stand right from the beginning that its investment is going to be less than Rs.50 crores as against the so called document issued by the third respondent herein mentioning more than Rs.260 crores, the first respondent ought not to have proceeded to make a decision on such disputed questions of facts without providing proper opportunity to the petitioner. Similarly the issue relating to different survey numbers in the location of the plant and the expression used in the report dated 26.12.2007, viz. "New Power Plant" are all matters which the petitioner might have been in a position to convincingly explain before the Pollution Control Board in order to sustain the amendment to the consent order dated 05.05.2006.
20. In support of their respective contentions several decisions were relied upon by both sides, we only refer to such of those decisions which are closely relevant to the case on hand. In the decision reported in 1989 (2) SCC 505 (State of U.P. and others Vs. Maharaja Dharmander Prasad Singh and others), the Hon'ble Supreme Court has stated as under in paragraph 64:
"64. On the point of denial of natural justice, we agree with conclusion of the High Court, though not for the same reasons, that there has been such a denial in the proceedings culminating in the order of cancellation. The show-cause notice itself is an impalpable congeries of suspicions and fears, of relevant or irrelevant matter and has included some trivia. On a matter of such importance where the stakes are heavy for the lessees who claim to have made large investments on the project and where a number of grounds require the determination of factual matters of some complexity, the statutory authority should, in the facts of this case, have afforded a personal hearing to the lessees. We, therefore, agree with the conclusion of the High Court that both the show-cause notice dated 9-1-1986 and the subsequent order dated 19-4-1986 would require to be quashed, however, leaving it open to the statutory authority, should it consider it necessary, to issue a fresh show-cause notice setting out the precise grounds, and afford a reasonable opportunity including an opportunity of personal hearing and of adducing evidence wherever necessary to the respondent lessees......" (Emphasis added)
21. In the decision reported in 2007 (8) RC 205 (Baraka Overseas Traders Vs. Director-General of Foreign Trade and another) the Hon'ble Supreme Court has held as under in paragraph 18:
"18. If a licence is granted to someone, certain rights accrue to the licence-holder, and deprivation of such right without a hearing is violation of natural justice. Before withdrawal of such right opportunity of hearing has to be given. In the present case, no such opportunity was given at all. The stand of the respondents is that grant of a licence does not confer any vested right in favour of the licensee if the licence has been obtained by misrepresentation. We do not agree. The grant of a licence certainly creates certain rights in favour of the licensee, and if the licensing authority was of the opinion that the licence was obtained by misrepresentation, then a show-cause notice should have been given to the appellant, as well as an opportunity of hearing. In the present case neither an opportunity of hearing was given to the appellant nor was the licence cancelled." (Emphasis added)
22. In the decision reported in 2005 (7) SCC 159 (SACI Allied Products Ltd., Vs. Commissioner of Central Excise, Meerut), the Hon'ble Supreme Court has held as under in paragraphs 17 and 18:
"17. In this context, we may usefully refer to the judgment of this Court in the case of Reckitt & Colman of India Ltd. v. CCE3. This Court held that it is beyond the competence of the Tribunal to make out in favour of the Revenue a case which the Revenue had never canvassed and which the appellants had never been required to meet.
18. The impugned order of the Tribunal which had gone beyond the show-cause notice and the order of the respondent Collector is, therefore, liable to be set aside." (Emphasis added)
23. In the decision reported in 1972 (4) SCC 683 (The Pullangoda Rubber Produce Co. Vs. State of Kerala) the Hon'ble Supreme Court dealt with a rebuttable presumption of admission. The Hon'ble Supreme Court has held in paragraph-5 as follows:
"5.... An admission is an extremely important piece of evidence but it cannot be said that it is conclusive. It is open to the person who made the admission to show that it is incorrect." (Emphasis added)
24. In the decision reported in 2006 (4) SCC 153 (Ranjit Singh Vs. Union of India and others), the Hon'ble Supreme Court has held as under in paragraphs 22 and 23:
"22......He filed a show-cause but, albeit after some time the said cause was available with the disciplinary authority before he issued the order of dismissal. Even if he had prepared the order of dismissal, he could have considered the show-cause as he did not leave his office by then. The expression communication in respect of an order of dismissal or removal from service would mean that the same is served upon the delinquent officer. (See State of Punjab v. Amar Singh Harika.)
23. Even otherwise also the jurisdiction of a disciplinary authority to consider the matter would remain with it till it goes out of its hands which would mean that the order is dispatched, as in the case of the order of suspension. (See Sultan Sadik v. Sanjay Raj Subba.)"
25. A learned single Judge of this Court (Justice V.Balasubramanian) in the decision reported in 1979 (II) MLJ 466 (Manohara Chetty and others Vs. Coomaraswamy Naidu and Sons) has held as under in paragraph 10:
"10.The law by no means regards admission as conclusive proof of the matters admitted. This is because to a Court of law admissions are but statements which do no more then suggest an inference as to some facts or facts in issue. (See Sections 31 and 17 of the Indian Evidence Act, 1872). It is, therefore, important that the Court should examine any given admission inside out to see if it suggests any clear inference on the fact in issue against the party making it. For a Court to draw an adverse inference against a party on the basis of what he is stated to have admitted, the admission must be unequivocal. It must also be comprehensive. It must go the whole-hog, as it were, on the point at issue. If a party's admission falls short of the totality of the requisite evidence needed for legal proof of a fact in issue, such an admission would be only a truncated admission. It follows that in such a case it cannot support a valid judicial determination, unless it be that the Court is in a position to find other evidence before it to make up for the deficiencies in the admission." (Emphasis added)
26. In the decision reported in AIR 1987 SC 71 (Institute of Chartered Accountants of India Vs. L.K.Ratna), the Hon'ble Supreme Court, after referring to Sir William Wades erudite and classic work on "Administrative Law" in the passage mentioned therein has held as under in paragraph 18:
"18. But perhaps another way of looking at the matter lies in examining the consequences of the initial order as soon as it is passed. There are cases where an order may cause serious injury as soon as it is made, an injury not capable of being entirely erased when the error is corrected on subsequent appeal. For instance, as in the present case, where a member of a highly respected an publicly trusted profession is found guilty of misconduct and suffers penalty, the damage to his professional reputation can be immediate and far-reaching. Not all the Kings horses and all the Kings men can ever salvage the situation completely, notwithstanding the widest scope provided to an appeal. To many a man, his professional reputation is his most valuable possession. It affects his standing and dignity among his fellow members in the profession, and guarantees the esteem of his clientele. It is often the carefully garnered fruit of a long period of scrupulous, conscientious and diligent industry. It is the portrait of his professional honour. In a world said to be notorious for its blase attitude towards the noble values of an earlier generation, a mans professional reputation is still his most sensitive pride. In such a case, after the blow suffered by the initial decision, it is difficult to contemplate complete restitution through an appellate decision. Such a case is unlike an action for money or recovery of property, where the execution of the trial decree may be stayed pending appeal, or a successful appeal may result in refund of the money or restitution of the property, with appropriate compensation by way of interest or mesne profits for the period of deprivation. And, therefore, it seems to us, there is manifest need to ensure that there is no breach of fundamental procedure in the original proceeding, and to avoid treating an appeal as an overall substitute for the original proceeding."
In paragraph 17 of the above decision, the Hon'ble Supreme Court has extracted what Sir William Wade said in his book 'Administrative Law' and it can be aptly quoted, which reads as under:
"17....If natural justice is violated at the first stage, the right of appeal is not so much a true right of appeal as a corrected initial hearing: instead of fair trial followed by appeal, the procedure is reduced to unfair trial followed by fair trial......
27. The burden of song of the learned counsel for the contesting fourth respondent was that the appellate authority, namely, the first respondent, having given the necessary opportunity to the petitioner, having examined the various materials and based on such examination had reached a conclusion which cannot be disputed on facts, the question of giving any more opportunity to the petitioner before the Pollution Control Board does not arise. In other words, the first respondent having examined the crux of the issue, namely, the so called mere conversion of the fuel alone for operating the power plant as claimed by the petitioner was not true in the facts and materials placed before it, it will be an empty formality if the said order is to be set aside and the matter is remitted back to the Pollution Control Board. To support the said contention, the learned counsel for the fourth respondent took pains to refer to the sketch filed along with the application for conversion, wherein the location of the plant to be operated by coal is shown and the various other details furnished, and contend that those facts pleaded by the petitioner themselves would show that the power plant, which they have now erected, is a new plant and by no stretch of imagination it can be called as an existing plant with mere conversion of its operation by coal instead of diesel.
28. In the first blush, the submission of the learned counsel may appear to be sound. On a detailed examination of the rival contentions, which we have set out in detail in paragraphs 13 to 19, we are of the considered opinion that it really required a detailed consideration at the level of the Pollution Control Board, namely, the original authority who initially granted the consent by passing an order of amendment dated 5.5.2006 to the consent letter dated 16.11.98. At the risk of repetition, it will have to be stated that the appellate authority, having ventured to examine the main issue as to whether the petitioner was erecting a new power plant or it was only a conversion of the fuel from diesel to coal, in our considered opinion, has exceeded its jurisdiction vested with it. When once the first respondent reached a conclusion that there was violation of principles of natural justice in revoking the order of consent dated 5.5.2006 at the instance of the Pollution Control Board, it should have remitted the matter back to the Pollution Control Board for fresh hearing.
29. The first respondent should have also noted that before granting the order dated 5.5.2006 amending the consent order dated 16.11.98, the Pollution Control Board had all the materials relating to the conversion applied for by the petitioner, as could be seen from the report of the third respondent dated 28.4.2006. However, when it came to the question of revoking the order of consent dated 5.5.2006, what all the Pollution Control Board did was, issued a notice dated 6.12.2007 as well as an inspection said to have been made on 4.12.2007 and 18.12.2007 and nothing more.
30. The Pollution Control Board chose to pass the order of revocation on 22.1.2008 on a hyper-technical ground that the petitioner's reply dated 26.12.2007 was submitted after the prescribed period of two weeks. Such an approach of the Pollution Control Board in respect of a proceeding, the consequences of which were of greater dimension, cannot be accepted. In this context, the contention of the petitioner that it did not even know as to what was the outcome of the inspection held on 18.12.2007, which was one of the reasons mentioned in the order of revocation dated 22.1.2008, really merits consideration. That apart, when the fourth respondent placed a document before the first respondent said to have been issued by the third respondent to the effect that the investment of the petitioner in putting up the plant is worth more than Rs.260 crores and when such a stand was never taken by the Pollution Control Board prior to the revocation order dated 22.1.2008, there is every justification in the stand of the petitioner in claiming that the Pollution Control Board itself should extend an opportunity to the petitioner before-ever the consent order dated 5.5.2006/16.11.98 is sought to be revoked.
31. Similarly, the other reason which was also relied upon for revocation of the consent order, namely, that the petitioner itself in its reply dated 26.12.2007 claimed to set up a new power plant, it will have to be stated that as held by the Hon'ble Supreme Court in the decision reported in 1972 (4) SCC 683, the statement contained in a document cannot be straight-away taken as an admission and an adverse order passed against the concerned person. When that specific statement, namely, "new power plant" is to be put against the petitioner, the petitioner ought to have been given an opportunity to explain the said statement and in the absence of such opportunity, it would be a travesty of justice if the petitioner were to be deprived of the valuable right of a consent order being recalled.
32. In this context, the statement of law as propounded by His Lordship Mr.Justice V.Balasubramanian in the decision reported in 1979 (II) MLJ 466 are apposite. His Lordship in his own inimitable style has stated that any such admission if were to be put against a party must be examined inside out to see if it suggests any clear inference on the facts in issue, that such admission must be unequivocal, that it must be comprehensive and it must go the whole-hog as it were on the point at issue. When such principles are applied to the so called admission of the petitioner, it will have to be held that the conclusion reached by the first respondent cannot be held to be a fair conclusion based on consideration of all the relevant factors. In any event, as stated by Sir William Wade, when natural justice was violated at the first stage, it cannot be held that a fair appeal can cure such an unfair trial. In this context, the decision of the Hon'ble Supreme Court reported in AIR 1987 SC 71 assumes greater significance inasmuch as an appeal cannot be an overall substitute in respect of the breach of fundamental procedure committed in the original proceedings. To strengthen the above principle, an English decision reported in 1971 Chancellory 34 (Leary v. National Union of Vehicle Builders can be aptly quoted, wherein Megarry, J. has held that, as a general rule, a failure of natural justice in the trial body cannot be cured by a sufficiency of natural justice in the appellate body."
33. Applying the above well established principles to the case on hand, the violation of principles of natural justice which had occurred at the level of the original authority cannot be said to have been cured at the level of the appellate authority. We have, therefore, no hesitation to hold that the order of the first respondent cannot be said to have set right the violation committed at the level of the original authority. Since the petitioner is entitled to substantiate its stand that the consent obtained by it in the order dated 5.5.2006/16.11.98 was passed on the real claim that the existing power plant operated by diesel is going to be operated in future by the usage of coal and that the same cannot be construed as a new power plant, in all fairness, the first respondent after reaching the conclusion that the Pollution Control Board breached the principles of natural justice ought to have set aside the order dated 22.1.2008 and remitted the matter back to the Pollution Control Board for fresh hearing. Moreover, as referred to by us in the earlier paragraphs, when under the Air Act the proviso to Section 21(4) specifically provides for an opportunity of being heard, the passing of the impugned order dated 22.1.2008 by the Pollution Control Board in revoking the order of consent dated 5.5.2006/16.11.98 will have to be held to be per se illegal and consequently liable to be set aside. Even though such a provision may not be available under the provisions of the Water Act, if for the purpose of considering the petitioner's claim under the Air Act, such an opportunity of personal hearing has to be necessarily extended to the petitioner and when the petitioner has specifically asked for such a hearing in its explanation dated 26.12.2007, in all fairness, the Pollution Control Board ought not to have ventured to pass the order dated 22.1.2008 in such a hurried manner. Instead the Pollution Control Board could have very well extended the opportunity of personal hearing to the petitioner considering the various stand of the petitioner in its explanation before taking any decision as to whether or not its earlier order dated 5.5.2006 should be revoked. Above all, the failure of the Pollution Control Board in completely omitting to refer to the various explanation offered by the petitioner in its explanation dated 26.12.2007 only demonstrates that the Pollution Control Board wanted to pass the said order in a surreptitious manner to the detriment of the interest of the petitioner. The Pollution Control Board should have realised that having passed the order of consent on 5.5.2006 and when it was sought to be revoked after more than a year, namely, in December, 2007, nothing would have been lost by affording an opportunity to the petitioner and pass any orders after hearing the petitioner in detail.
34. For all the above stated reasons, we are not inclined to accede to the submission of the learned counsel for the contesting fourth respondent to hold that the first respondent's order has cured whatever defect committed by the Pollution Control Board in passing the impugned order dated 22.1.2008. That apart, by affording such an opportunity to the petitioner, no prejudice is going to be caused to anyone nor is it going to cause any advantage to the petitioner. When this writ petition was entertained, though initially by an order dated 21.5.2008, the petitioner was permitted to proceed with the construction, by our order dated 2.7.2008, after hearing both parties at length, we directed the petitioner to stop the constructions till the writ petitions are finally heard and disposed of. Therefore, as on date, the petitioner has been directed not to proceed with the constructions. In such circumstances, we are of the view that the Pollution Control Board can be directed to give an opportunity of hearing to the petitioner before passing final orders. Moreover, while extending such an opportunity of hearing to the petitioner, the Pollution Control Board can also be directed to hear the fourth respondent also.
35. In view of our above conclusions, we set aside the impugned order of the first respondent dated 7.5.2008 as well as the order of the Pollution Control Board dated 22.1.2008 and remit the matter back to the Pollution Control Board at the stage where the petitioner submitted its explanation dated 26.12.2007. We direct the Pollution Control Board to furnish the copy of report, if any, based on its subsequent inspection dated 18.12.2007 to the petitioner. It is also open to the petitioner to submit any further representation before the Pollution Control Board within two weeks from the date of receipt of copy of this order. The Pollution Control Board shall thereafter fix the date of hearing at least by giving ten days notice to the petitioner as well as the fourth respondent and after giving an opportunity of personal hearing, pass appropriate orders on merits and in accordance with law expeditiously, preferably within a period of four weeks from the date of hearing of the petitioner and the fourth respondent. Since we directed the petitioner not to proceed with the construction in our order dated 2.7.2008, we direct that the petitioner shall not proceed with the construction and any further construction shall depend upon the outcome of the orders to be passed by the Pollution Control Board.
36. The writ petitions stand allowed with the above directions. No costs. Consequently, M.P.Nos.1,1,2,2 & 3,3 of 2008 are closed.
kk/ss To
1. The Appellate Authority Tamil Nadu Pollution Control Board NCB-1, Greenways Road Chennai 600 028
2. The Member Secretary Tamil Nadu Pollution Control Board 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