K.T.V. Health Food Pvt. Ltd. v. Union of India and Ors
K. M. JOSEPH, J.
1. The Appeals are lodged under Section 22 of the National Green
Tribunal Act, 2010.
C.A. NO. 3626 OF 2020 (THE FIRST APPEAL)
2. The appellant challenges the Order passed by the Natio nal
Green Tribunal (NGT), Southern Zone. By the impugned Order, the NGT
has allowed the appeal filed by Respondent No.5 and set aside
proceedings dated 08.03.2019. By the said proceedings, Respondent No.1
had granted ex post facto clearance purporting to invoke paragraph-4.3
of the Notification issued in the year 2011 (hereinafter re ferred to as,
‘the 2011 Notification’) under the Environment Protection Act, 19 86
(hereinafter referred to as, ‘the Act’). By the said clearance, the appellant
was given clearance for the laying of pipeline for transfer of edible oil
from the Chennai Port to the storage terminal tank and for the
establishment of the storage transit terminal of the appellant. The NGT
has found that while the ex post facto clearance could be granted under
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS.
paragraph-4.3, and that it would have prospective operation, however,
the activity of putting up a storage tank transit terminal, being contrary
to the 2011 Notification, the same was illegal. It was found to be illegal
in turn, on the ground that the storage terminal was not located ‘in’ the
Chennai Port, in which case alone, it would have been permissible under
the permitted activities of Coastal Regulation Zone II ( for short,‘CRZ
II’).
THE FACTS
3. The appellant is in the business of processing and refining edible
oil. Towards the said business, the appellant imports edible oil. The edible
oil is imported through the Chennai Port. On 05.11.2014, in the public
auction, the appellant purchased an existing storage facility. It was located
at Old Door No. 4061/A and New Survey No. 4061/2 in the Ennore
Expressway. The appellant thereafter, according to it, started the process
to seek approvals for laying an underground pipeline of 4.5 kilometres to
the said storage facility. On payment of Rs.5097921/-, the Chennai Fishing
Harbour Management Committee granted permission to lay the
underground pipeline. The NHAI granted permission t o lay the
underground pipeline. On 03.03.2015, allegedly based on inspection of
the storage facility, and on payment of charges, including s ervice tax,
the Chennai Port Trust granted permission for laying the under ground
pipeline from the Chennai Port to the storage facility. On 10.07 .2015,
purporting to act under paragraph-4 of the 2011 Notification, the appellant
made a proposal to the District Coastal Management Authority, Chennai
(hereinafter referred to as ‘the DCZMA’). It would appear that the said
Body recommended the proposal. The third respondent, viz., the Tamil
Nadu State Coastal Zonal Management Authority (hereinafter referred
to as, ‘the State Authority’) considered the proposal and it forwarded
the same through the second respondent, viz., the State of Tamil Nadu
to the first respondent, viz., the Union of India, in th e Ministry of
Environment and Forests and Climate Change. Respondent No.4, viz.,
the Expert Appraisal Committee, CRZ, sought two clarific ations. On
24.08.2016, the Chennai Port Trust issued a Certificate and permitt ed
the laying of the pipeline, which, according to the appellant, was based
on the need to avoid usage of tanker lorries and as it resulted in b etter
handling of vessels at the Port. While the recommendation of the third
respondent was pending before the first respondent, appellant started
laying the pipeline with the prior permission of the NHAI, the Chennai
257
Fishing Harbour Committee and the Port Trust. On 19 .10.2016,
Respondent No. 5 filed O.A. No. 238 of 2016 against the activities of
the appellant in question. A Local Commissioner was appointed, who
inspected the Facility. We may, at this juncture, notice the following
physical features noticed during the inspection.
“1) The premises of the 12th Respondent (in A. No. 238 of 2016),
M/s. KTV Health Foods Pvt. Ltd., is situated at No. 1,2,3,
Suriyanarayana Chetty Street, Tondiarpet, Chennai- 600 001,
facing the Bay of Bengal. In between the premises of the 12th
respondent and Bay of Bengal, the State Highway (Ennore Express
Highway) runs North to South. The State Highway measures about
120 Feet in width and from the road, there is a space of about 40
Feet up to the sea shore. Thus, the distance between the entrance
of the 12th respondent and the seashore is about 160 Feet.”
[The appellant was the 12th Respondent]
4. The NGT disposed of the said O.A. noting that the storage
facility was closed and that till the first respondent took a decision, no
activity will be carried out. It would appear that Re spondent No. 4
recommended the proposal for CRZ clearance, subject to certain
conditions. This was even after finding that there was no provision in the
2011 Notification, but taking inspiration from the provisions of the 2006
Notification.On 06.02.2018, the 2011 Notification was amended by the
insertion of paragraph-4.3. Based on the said amendment, the St ate
Authorities recommendations were called for. On 27.12.2018, the storage
facility was inspected by the DCZMA. The Tamil Nadu State Pollution
Control Board, it would appear, intimated the third respondent that except
for not obtaining prior clearance, there was no other violation. Accordingly,
the State Authority recommended the proposal. It is on thi s basis, the
first respondent granted post facto clearance by proceed ings dated
08.03.2019. The appellant obtained consent to operate from the Pollution
Control Board. On 08.04.2019, the fifth respondent filed the appeal before
the NGT and the NGT has allowed application, as already noticed.
CIVIL APPEAL NO. 3639 OF 2020 (THE CONNECTED
APPEAL)
5. The appellant-company is a sister concern of the appellant i n
the first Appeal. It has also constructed a storage facility, being engaged
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
in the business of edible oil, for the purpose of storing the imported edible
oil at a distance of nearly 600 meters from the location of the storage
tank of the appellant in the first Appeal. It has also dra wn a pipeline
from the storage tank to the facility it has put up for storing edible oil, for
transmission to its factory. We must mention here that the idea was to
import edible oil, unload it at Chennai Port, take the edible oil by a pipeline
to the storage facility and from there, transmit the same by tanker lorries
to their factories, wherein the manufacturing activities were being carried
out.
6. The issues arising in both the Appeals are common and, hence,
we discuss the issues with reference to the first Appeal.
THE SALIENT FEATURES OF THE ORDER DATED
08.03.2019 BY THE FIRST RESPONDENT
7. The salient Features of the Order dated 08.03.2019 passed by
the First Respondent:
i. The site falls in CRZ II.
ii. Five number of storage tanks have been installed.
iii. Permissions has been obtained from the Chennai Port Trust,
NHAI and the Harbour Management Committee.
iv. The project will reduce traffic to the Chennai Port Tr ust.
v. As per CRZ Notification, vide para 8, storage of no n-
hazardous cargo such as edible oil, fertilizers and food grain
can be established ‘only in notified ports’.
8. There are other aspects and specific conditions, apart f rom
general conditions. It is also made clear that the clearance is subject to
the final Order of this Court in the matter of Goa Foundation v. Union
of India in Writ Petition (Civil) No. 460 of 2004.
THE IMPUGNED ORDERS
9. The NGT found merit in the contention of the appellants that
the first respondent had the power to grant ex post facto cle arance.
However, it would have only prospective operation. The clearance could,
however, be supported, if the activity which was permitt ed, was one,
which was contemplated under the 2011 Notification. The Tribunal went
259
on to note that the storage facilities were not located ‘in ’ the Chennai
Port. In fact, it was on the basis that under paragraph-8 of the 2011
Notification, storage of edible oil, inter alia, was permissible ‘in’ the
limits of a notified port. The attempt of the appellants to support the
clearance with reference to the fact that under permitted ac tivities in
CRZ I, storage of non-hazardous cargo, including edible oil, was permitted
‘within’ the limits of a port anda distinction, therefore, existed between
the words ‘within’ and ‘in’, did not find favour with the NGT. It was the
contention of the appellants that being two different words and a
meaningful interpretation being warranted in the case of CRZ I, the
activity to be permitted had to be strictly within t he limits of the port.
Both, taking into account the difference in the words used, as a lso the
fact that CRZ II contemplated a less harsh regime, t he case of the
appellants was that a purposeful interpretation would warrant the view
that the storing of the edible oil in the CRZ II area, could be permitted
even outside the limits of the port. It is this argument that failed.
10. The NGT has found the impugned Order of the first respondent
illegal. The construction of the storage facility and the pipe line were
directed to be removed. The appellant in the first appeal was directed to
pay environmental compensation in a sum of Rs.25 lakhs. We may only
elucidate that the appellant in the connected appealhad initially succeeded
before the Tribunal. However, it was after allowing a Review Petition,
which decision was not challenged and, on hearing the Appeal agai n,
that the present impugned Order came to be passed.Noting that the
appellant in the connected case was earlier visited with environmental
compensation, no compensation was imposed on it.
11. We heard Shri Ranjit Kumar, learned Senior Counsel for the
appellant in the first appeal and also Shri Dhruv Mehta, learned Senior
Counselfor the appellant in the other appeal. We further heard Ms.Anitha
Shenoy, learned senior Counsel on behalf of respondent No.5 and Shri
Anand Tiwari, learned Counsel on behalf of respondents 2 and 3. We
also further heard Mr. Archana Pathak Dave, learned Counsel on behalf
of Union of India.
12. Shri Ranjit Kumar, learned Senior Counsel would submit that
the appellant was engaged in the manufacture of edible oil. In order to
avoid the traffic snarls and the congestion it caused in the Chennai Port,
it was the Chennai Port itself which suggested that the ap pellant may
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
draw the pipeline from the Port area so that the edible o il which was
downloaded on import could be taken to a storage facility and from
there carried to the factory of the appellant. He would subm it that the
provisions of 2011 Notification would reveal that paragraph-3 declares
activities which are prohibited. The storage tank has be en put up in
CRZ-II area. There are construction activities permitted in CRZ-I area
which is the most fragile area. He would take us through the Notification
and point out that on a combined reading of paragraphs-3, 4, 7 and 8, the
following will be the upshot.In regard to CRZ-II, it is less sensitive than
CRZ-I.In CRZ-I, the “storage of edible oil inter alia is permitted within
the notified ports”. In CRZ-II on the other hand, storage of non-hazardous
cargo such as edible oil, fertilizers and foodgrain ispermitted ‘in notified
ports’. Since the word ‘within’ which is used in CRZ-I is not employed
in regard to the similar activity in CRZ-II and instead t he word ‘in’ is
used,the principal contention is that they must rece ive a different
meaning. He would further contend that this Court may adopt purposive
interpretationand, in this regard, he drew our attention to the judgment of
this court in M. Nizamudeen v. ChemplastSanmar Limited and Others1.
The words ‘in notified ports’, occurring in pargraph-8 (II) (vi) of the
2011 Notification must be construed to mean “in or around the notified
ports”.He would submit that storage tanks have been cons tructed not
within the Chennai Port but on a purposive interpretation, the st orage
tank must be treated as “in” the Chennai Port though it isnot inits notified
limits. The storage container was located in the Customs Notified Area
of the Chennai Port. He would contend that CRZ-II even permits facility
for the storage of petroleum products and liquified natural gas.If that is
so, he poses the question that having regard to the fact t hat CRZ-II
generally provides for a less harsh regulatory regime and CRZ-I, it may
result in an absurdity to not permit storage of non-hazardous cargo which
includes edible oil in CRZ II. He would refer to the company that edible
oil keeps in the clause,namely, fertilizers and foodgrains. He would point
out that it may be absurd to disallow storage of foodgrains, fertilizers
and edible oil in CRZ-II. This is all the more reason to place awider
meaning on the word ‘in’ the notified port.
13. Shri Ranjit Kumar, learned Senior Counsel, drew support from
the decisions of this Court as indicated herein. In Electros teel Steels
Limited v. Union of India and Others2, this Court held that the Act does
1 (2010) 4 SCC 240
2 (2021) SCC OnLine 1247
261
not prohibit grant of ex post facto environmental clearance. It also held
that the Court cannot be oblivious to the interest of the economy or need
to protect the livelihood of hundreds of employees and others employed
in the project, if such project complies with environment norms.
14. The said view has been followed in the judgment in Pahwa
Plastics Pvt. Ltd. and Another v. Dastak NGO and Ot hers 3 and
Gajubha Jadeja Jesar v. Union of India and Others 4. It is, therefore,
contended that there was no occasion for the NGT to interfer e.
15. Relying on the Judgment in Alembic Pharmaceuticals Ltd. v.
Rohit Prajapati and Others 5, it is contended that the impugned Order
does not do justice to the Principle of Proportionality. It is pointed out
that in the said case, on payment of environmental compensatio n, the
industry was permitted to continue.
16. Shri Dhruv Mehta, learned Senior Counselin the other case
would adopt the arguments. He would further contend that the principles
of contemporaneous exposito are attracted.In this regard, Shri Dhruv
Mehta, learned Senior Counsel sought to draw considerable support from
the decision of this Court in K.P. Varghese v. Income Tax Officer,
Ernakulam and Another 6. This is on the basis that the understanding
of all the authorities including respondent No.1 in the impugned Order is
that construction of the container for storage facility is permissible under
CRZ-II. The Tribunal clearly erred in interfering with the views of all
the authorities.
17. Shri Dhruv Mehta, learned Senior Counsel, would also contend
that the matter may be viewed in the context of Principles of Sustainable
Development and Polluter Pays Principle.
18. Shri Anand Tiwari, learned counsel appearing on behalf of
respondent 2 and 3 would also support the appellants.He would contend
that a purposive interpretation is to be placed. Smt. Archa na Pathak
Dave, learned Counsel for the Union of India equally supported the stand
of the Government of India.
19. Smt. Anitha Shenoy, learned Senior Counsel appearing on behalf
of respondent No.5 strongly supported the order of the NGTand submits
3 (2022) SCC OnLine SC 362
4 (2022) SCC OnLine SC 993
5 (2020) 17 SCC 157
6 1981 (4) SCC 173
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
that the matter relates to the defending of the environment. In constructing
outside the limits of the notified port, a fact, which is not disputed by the
appellant, there is an indefensible violation of a law which subservesa
salutary and sublimeobject.She would draw support from the body of
case law consisting essentially of the views of this Court indicating that
this Court has firmly set its face against the trampling of law relating to
the environment [See Indian Council for Enviro-Legal Action v. Union
of India 7, S. Jagannathan v. Union of India and others 8, Piedade
Filomena Gonsalves v. State of Goa 9, Vaamika Island (Green Lagoon
Resort) v. Union of India 10, Kapico Kerala Resorts (P) Ltd. v. State
of Kerala 11, Kerala State Coastal Zone Management Authority v.
State of Kerala12]. She would submit the word ‘in’ cannot mean ‘out’.
In other words, it certainly cannot countenance the storage facility being
located outside the notified port. In the facts of this case, it is at quiet a
long distance from the Chennai Port and the laws relating to environment
should be strictly construed.
ANALYSIS
20. The 2011 Notification has been issued under Section 3 of the
Act. The first notification in regard to the notification of Coastal Zone
was issued in the year 1991. There were amendments. It i s thereafter
that the notification was issued in the year 2011. The 2011 notification
came to be published on 6th January, 2011. We may indicate that, in fact,
the notification which holds the field today was issued in the year 2019.
THE SCHEME OF THE 2011 NOTIFICATION
21. The Central Government declared certain areas as C oastal
Regulation Zone (‘CRZ’, for short). The CRZ in the First Clause consists
of the land area from high tide line to 500 meters on the land along the
sea front. The High Tide line is the line based on the highest water mark
during the spring tide. We may only further notice that among the other
4 categories of CRZ,the CRZ includes the water and the bed area
between the LTL (LOW TIDE LINE) (which line is based on the lowest
height of the water body during the spring tide) to the territorial w ater
7 (1996) 5 SCC 281
8 (1997) 2 SCC 87
9 (2004) 3 SCC 445
10 (2013) 8 SCC 760
11 (2020) 3 SCC 18
12 (2019) 7 SCC 248
263
limit (12 nautical miles) in the case of the sea and the w ater bed and
area between the LTL at the bank to the LTL on the opposi te of the
bank of the tidal influenced water bodies. CRZ has been classified under
para 7 into CRZ I, CRZ II, CRZ III, CRZ IV and CRZ V. Since, we are
concerned with CRZ II we may notice the elements which cons titute
the same.
“7. Classification of the CRZ – For the purpose of conserving
and protecting the coastal areas and marine waters, the C RZ
area shall be classified as follows, namely:-
XXXX XXXX XXXX
(ii) CRZ-II,-
The areas that have been developed upto or close to the shoreline.
Explanation.- For the purposes of the expression “developed area”
is referred to as that area within the existing municipal limits or in
other existing legally designated urban areas which are substantially
built-up and has been provided with drainage and approach roads
and other infrastructural facilities, such as water s upply and
sewerage mains;”
22. Paragraph-3 provides for prohibited activities within CRZ.
We may notice that it is divided into 14 categories and the noticea ble
feature is that certain exceptions to the prohibitions are also declared.
Of relevance to the cases before us, are certain Clauses in paragraph-3.
They are:
“3. Prohibited activities within CRZ,- The following are declared
as prohibited activitieswithin the CRZ,-
(i) Setting up of new industries and expansion of existing industries
except,-
(a) those directly related to waterfront or directly needing foreshore
facilities;
Explanation: The expression “foreshore facilities” means those
activities permissible underthis notification and they require
waterfront for their operations such as ports and harbours, jetties,
quays, wharves, erosion control measures, breakwaters, pipelines,
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
lighthouses, navigational safety facilities, coastal police stations
and the like.;”
23. Paragraph-3 (i) (b) permits projects of department of Atomic
energy.Paragraph-3 (i) (d) permits projects of greenfield project already
permitted at Navi Bombay. 3 (i) (e) allows construction, repair work of
dwelling units of local community including fishermen in accorda nce
with Local Town and Country Planning Regulation.
24. Paragraph 3 (ii) deals with a prohibited category which reads
as follows:
“(ii) manufacture or handling oil storage or disposal of hazardous
substance as specified in thenotification of Ministry of Environment
and Forests, No. S.0.594 (E), dated the 28 th July, 1989, S.0. No.
966(E), elated the 27th November, 1989 and GSR 1037 (E), dated
the 5th December, 1989 except,-”
25. However, by way of exception to the prohibition 3 (ii) ( a)
permits transfer of hazardous substances from ships to ports terminals
and refineries and vice versa. Clause 3 (ii) (a) reads as follows:
“(a) transfer of hazardous substances from ships to ports, terminals
and refineries and viceversa;”
26. Paragraph-3 (viii), enacts the following prohibitions:
“(viii) Port and harbour projects in high eroding stretches of the
coast, except those projects classified as strategic and defence
related in terms of EIA notification, 2006 identified by MoEF based
on scientific studies and in consultation with the State Government
or the Union territory Administration.”
(Emphasis supplied)
27. Paragraph-3 (xi) provides for prohibition of construction activity
in CRZ1 except those specified in para 8 of the notificatio n. We need
not be detained with various others clauses. Regulation 4 de als with
permissible activities in CRZ area. It is declared that activities which
are enumerated under paragraph-4 shall be regulated except those
prohibited in paragraph-3. This means what is prohibited in paragraph-3
cannot either be permitted or regulated within the meaning of paragraph-
4. Paragraph-4 reads as follows:
265
“4. Regulation of permissible activities in CRZ area.- The following
activities shall beregulated except those prohibited in para 3 above,-
(i) (a) clearance shall be given for any activity within the CRZ
only if it requires
waterfront and foreshore facilities;
(b) for those projects which are listed under this notification and
also attract EIA notification,2006 (S.O.1533 (E), dated the 14 th
September, 2006), for such projects clearance under EIA
notification only shall be required subject to being recommended
by the concerned State or Union territory Coastal Z one
Management Authority (hereinafter referred to as the CZMA).
(c) Housing schemes in CRZ as specified in paragraph 8 of th is
notification;
(d) Construction involving more than 20,000sq mts built-up area
in CRZ-! 1 shall be considered inaccordance with EIA notification,
2006 and in case of projects less than 20,000sq mts built-uparea
shall be approved by the concerned State or Union terr itory
Planning authorities inaccordance with this notification after
obtaining recommendations from the concerned CZMA and prior
recommendations of the concern CZMA shall be essential for
considering the grant of environmental clearance under EIA
notification, 2006 or grant of approval by the relevant planning
authority.
(e) MoEF may under a specific or general order specify projects
which require prior public hearing of project affected people.
(f) construction and operation for ports and harbours, jett ies,
wharves, quays, slipways, shipconstruction yards, breakwaters ,
groynes, erosion control measures;
(ii) the following activities shall require clearance fr om MoEF,
namely:-
(a) those activities not listed in the EIA notification, 2006.
(b) construction activities relating to projects of Depar tment of
Atomic Energy or Defence requirements for which foreshore
facilities are essential such as, slipways, jetties, wharves,qua ys;
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
except for classified operational component of defence projects.
Residential buildings,office buildings, hospital co mplexes,
workshops of strategic and defence projects in terms ofEIA
notification, 2006.;
(c) construction, operation of lighthouses;
(d) laying of pipelines, conveying systems, transmission line;
(e) exploration and extraction of oil and natural ga s and all
associated activities and facilities thereto;
(f) Foreshore requiring facilities for transport of raw m aterials,
facilities for intake of cooling water and outfall for discharge of
treated wastewater or cooling water from thermal powerp lants.
MoEF may specify for category of projects such as at (f), (g) and
(h) of para 4;
(g) Mining of rare minerals as listed by the Department of Atomic
Energy;
(h) Facilities for generating power by non-conventional ene rgy
resources, desalination plants and weather radars;
(i) Demolition and reconstruction of (a) buildings of archaeological
and historical importance, (ii) heritage buildings; and buildings under
public use which means buildings such as for thepurposes of
worship, education, medical care and cultural activities;”
28. Since Clause 2 of paragraph-4 provides that the activitie s
described thereunder would require clearance from MoEF, the question
would arise as to whether for the other activities, which are permissible,
does it require clearance? Paragraph-4.2 provides the answer.It provides
for the procedure for clearance of permissible acti vities.Various
formalities have to be undergone. Originally, the 2011 notification did not
provide for any ex post facto approval. It is in the year 2018, i.e., on
09.03.2018 that paragraph-4.3 came to be inserted i n the 2011
Notification. It read as follows:
“4.3 Post facto clearance for permissible activities.-
(i) all activities, which are otherwise permissible under the
provisions of this notification, but have commenced construction
without priorclearance, would be considered for regularisation only
267
in such cases wherein the project applied for regularization in the
specified time and the projects which are in violation of CRZ
norms would not be regularised;
(ii) the concerned Coastal Zone ManagementAuthority shall give
specific recommendations regarding regularisation of such
proposals and shall certify that there have been no violations of
the CRZ regulations, while making such recommendations;
(iii) such cases where the construction have been commenc ed
before the date of this notification without the requisite CRZ
clearance, shall beconsidered only by Ministry of Environment,
Forest and Climate Change, provided that the request for su ch
regularisation is received inthe said Ministry by 30th June, 2018.”
(Emphasis supplied)
29. It will at once be noticed that thereunder violation of ‘norms’
would disentitle a person to post facto clearance. The norms are laid
down in Paragraph-8. Paragraph-8 provided for regulation of activities
permissible under the 2011 Notification. It declares that the development
or construction activities in different categories of CRZ shall be regulated
by the concerned CZMA in accordance with the following norms. In
CRZ-I, the norms were as follows:
“l. CRZ-1,-
(i) no new construction shall be permitted in CRZ-1 except,-
(a) projects relating to Department of Atomic Energy;
(b) pipelines, conveying systems including transmission lines;
(c) facilities that are essential for activities permissible under
CRZ-l;
(d) installation of weather radar for monitoring of cycl ones
movement and prediction by Indian Meteorological Department;
(e) construction of trans harbour sea link and without affecting
the tidal flow of water, between LTL and HTL.
(f) development of green field airport already approved at only
Navi Mumbai;
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
(ii) Areas between LTL and HTL which are not ecological ly
sensitive, necessary safety measures will be incorporated w hile
permitting the following, namely:-
(a) exploration and extraction of natural gas;
(b) construction of dispensaries, schools, public rainshelter,
community toilets, bridges, roads, jetties, water supply, drainage,
sewerage which are required fortraditional inhabitants living
within the biosphere reserves after obtainingapproval from
concerned CZMA.
(c) necessary safety measure shall be incorporated whi le
permitting such developmental activities in the area falling in
the hazard zone;
(d) salt harvesting by solar evaporation of seawater;
(e) desalination plants;
(f) storage of non-hazardous cargo such as edible oil, fertilizers
and food grain withinnotified plants;
(g) construction of trans harbour sea links, roads on stilts o r
pillars without affecting thetidal flow of water.”
30. In CRZ-II, the norms were as follows:
“II. CRZ-11,-
(i) buildings shall be permitted only on the landward side of the
existing road, or on thelandward side of existing authorize d
structures;
(ii) buildings permitted on the landward side of the existing and
proposed roads or existing authorized structures shall be subject
to the existing local town and country planning regulations
including the ‘existing’ norms of Floor Space Index or Floor
Area Ratio:
Provided that no permission for construction of buildings shall
be given on landward sideof any new roads which are
constructed on the seaward side of an existing road:
269
(iii) reconstruction of authorized building to be permitted subject
with the existing Floor Space Index or Floor Area Ratio Norms
and without change in present use;
(iv) facilities for receipt and storage of petroleum produc ts
and liquefied natural gas asspecified in Annexure-II appended
to this notification and facilities for regasification of Liquefied
Natural Gas subject to the conditions as mentioned in sub-
paragraph (ii) of paragraph 3;
(v) desalination plants and associated facilities;
(vi) storage of non-hazardous cargo, such as edible oil, fertilizers
and food grain innotified ports;
(vii) facilities for generating power by non-conventional power
sources and associated facilities;”
31. CRZ-III, comprised of area up to 200 meters from HTL on
the landward side in the case of sea front inter alia. It is marked as the
NDZ [or No Development Zone}. It was,inter alia, provided that NDZ
shall not apply “in such area falling within any notified port”. There are
various restrictions therein. Certain activities were shown as permitted
activities in the NDZ. They included in Clause (e) facilities for receipt
and storage of petroleum products and liquified gas as spec ified in
Annexure-II. Interestingly, in regard to the area between 200 meters to
500 meters falling in CRZ-III, paragraph-8 permitted stora ge of non-
hazardous cargo such as edible oil, fertilizers, foodgrains ‘in’ notified
ports.
32. Having set out the relevant provisions of the 2011 notification,
we may proceed to examine the contentions of the parties.
33. The appellants would contend that CRZ-I provides for the
harshest regime having regard to the fact that the areas are ecologically
sensitive and the geomorphological features play a role in the maintaining
the integrity of the coast. They included mangroves.In case, the area of
mangroves was more than 1000 sq.mts, a buffer of 50 mts. along t he
mangroves was to be provided. Sand dunes came under CRZ-I, as d id
corals and coral reefs and associated biodiversity.
34. It may be true that the appellant had secured permission of
the local authority. Shri Ranjit Kumar may be correct in contending also
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
that the laying of the pipeline ensured that additional vehicle load was
not thrust on the Chennai port. There may be merit also in the contention
of the appellants that the no objection certificate may indicate t hat the
pipeline would lead to increased evacuation of edible oil throug h the
pipeline, leading to increased port efficiency. As found by the NGT and
not disputed by the fifth respondent also the power to grant p ost facto
approval flowed from paragraph-4.3 inserted in the 2011 Notification,
though in the year 2018. The case of the appellant that the storage facility
is located in CRZ II is beyond dispute. The storage facility being located
on the landward side may be correct. The appellants assertion that
between the storage facility and the Bay of Bengal there exi sts the
Ennore Express Highway appears to be correct. We proceed on t he
basis further that the distance between the entrance of the storage facility
and the sea shore is ‘160 feet’.Laying of pipeline is permissible in CRZ
I. Appellant’s contention that there is no space at the Ch ennai port is
sought to be buttressed with reference to certificate dated 24.08.2016.
We may notice its contents:
“The cargo through put and number of vehicles moving in
and out of Chennai Port has increased manifold over the past
years. In order to reduce the road traffic and resultant congestion,
the port has been encouraging alternate modes of cargo evacuation
like Rail evacuation and evacuation through pipeline.
Accordingly Chennai Port has permitted M/s. KTV Health
Food Private Limited to lay pipeline from BD2 berth where the
firm is laying a 10 inch pipeline for evacuation of the cargo. This
will result in increased evacuation of edible oil through pipeline
thus avoiding inter carting using tanker lorries.
This will in turn result in better turnaround of the vessels
thereby enabling the port to handle more and more volume of
edible oil cargo and vessels thus increasing the port eff iciency.
This certificate is issued to enable the firm to obtain the required
statutory clearances for laying the pipeline.”
35. It will be noticed that the Certificate is silent as regards the
storage facility and it being in the port. The Certificate does not exactly
declare that there is no space at the Chennai port. Appe llants may be
correct in contending that edible oil is not hazardous and that edible oil
imports may be necessary to meet the requirement of a growing
271
population. It may be true that there is no manufacturing process which
may be involved in constructing or maintaining the storage facility.
36. The contention of the appellants that by decongesting the traffic
and allowing the edible oil to be transferred through pipelines for onward
transmission to the factories of the appellant, the baneful impact flowing
from tanker lorry traffic by way of pollution is reduced, overlooks the
true purport of the 2011 notification. We must demystify the object of
the law as contained in the coastal regulation notification. As far as
pollution is concerned, it is the subject matter of laws specifically relating
to regulation and prohibition of activities on the said score. A perusal of
the 2011 notification reveals the following as the avowed ob jects: (i)
ensuring livelihood security to the fisher communit ies and other
communities living in the coastal areas, (ii) conservation and protection
of coastal stretches; (iii) the protection of the unique environment of the
coastal stretches and its marine area; (iv) promotion or de velopment
through sustainable manner based on scientific principles taki ng into
account the dangers of natural hazards in the coastalareas; (v) the aspect
of sea level rise due to global warming. Therefore, we ar e unable to
agree with the appellants that as the laying of the pipeline would result in
greater efficiency in the functioning of the port or for tha t matter, it
would reduce the traffic congestion, and what is more, thereby t here
would be a reduction in the pollution may not by itself be relevant or for
concluding the issue. It is the duty of the Court to glean the true object of
a law and give effect to it. It is equally the duty of the Court to eschew
from its consideration matters which may not be strictly germane to the
object. Hence, we proceed on the basis that the argument base d on
increased efficiency of the port and avoidance of traffic congestion, and
the decreased pollution in the landward area, as it were, may not be by
themselves relevant.
37. The next argument is the argument based on the difference
between the words ‘within’ as found in CRZ-I as contraste d with the
word ‘in’ in CRZ-II. We are called upon to employ a purposeful
interpretation bearing in mind also the distinction in the words used. Much
reliance has been placed on the judgment reported in M. Nizamudeen
(supra).The said matter arose under the coastal regulation notification
issued in the year 1991.The MoEF granted permission to the respondent
therein for construction for setting up of a marine terminal facility near
the sea shore for receiving and transferring VCM which was one of the
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
raw materials for manufacturing PVC. Under the terms of t he 1991
notification, certain activities were prohibited under paragraph-2. They
included manufacturing or handling or storage or disposal of hazardous
substances as provided therein except transfer of hazardous substances
from ships to ports, terminals and refineries and vice versa ‘in the port
areas’.
38. The question fell for consideration as to the interpretation to
be placed on the words ‘in the port areas’. We feel advis ed to refer to
the following portions of the judgment reported in M. Nizamudeen
(supra):
“36. It was contended by the Senior Counsel for the appellant-
petitioner that transfer of VCM in CRZ area is comp letely
prohibited and VCM cannot be carried through the CRZ except
in the port area. Their argument is that VCM can be br ought
onshore by pipeline to the port area but not in the CRZ area. The
arguments of learned Senior Counsel have put in issue the scope
of expression, “except transfer of hazardous substances from ships
to ports, terminals and refineries and vice versa in the port areas”
which was added in Para 2(ii) on 9-7-1997. We are called upon to
ascertain the true meaning and intention of the executive in bringing
this exception.
37. In the original 1991 Notification there was no exception clause.
It appears to have been added for the purpose of enabling transfer
of hazardous substances from ships to ports, ships to termina ls
and ships to refineries and vice versa. Is such transfer of hazardous
substances confined to terminals and refineries located in the port
areas? The answer in the affirmative may make the said provision
unworkable and would also result in absurdity inasmuch as the
hazardous substance would be brought into the port, refinery or
terminal in the port area from the ship and would remain t here
and could not be taken beyond the port area because of the
prohibition. This surely could not have been the intention of the
executive in adding the exception clause.
38. It is well settled that if exception has been added to r emedy
the mischief or defect, it should be so construed that it remedies
the mischief and not in a manner which frustrates the very purpose.
Purposive construction has often been employed to avoid a lacuna
273
and to suppress the mischief and advance the remedy. It is again
a settled rule that if the language used is capable of bearing more
than one construction and if construction is employed that results
in absurdity or anomaly, such construction has to be rejected and
preference should be given to such a construction that brings i t
into harmony with its purpose and avoids absurdity or anomaly as
it may always be presumed that while employing a particul ar
language in the provision absurdity or anomaly was never intended.
39. Notwithstanding imperfection of expression and that exception
clause is not happily worded, we are of the view that by applying
purposive construction, the expression, “in the port areas” should
be read as “in or through the port areas”. The exception in Para 2
(ii) then would achieve its objective and read, “except transfer of
hazardous substances from ships to ports, ships to terminals and
ships to refineries and vice versa, in or through the port areas”.
This construction will be harmonious with Para 3 (2) (ii) whi ch
permits the activity of laying pipelines in the CRZ area.”
39. On the one hand, thelearned counsel for the appellants would
place considerable reliance on the view taken by this Court. Per contra,
Smt. Anitha Shenoy, learned Senior Counsel, would submit tha t the
aforesaid decision turned on the facts obtaining therein and, in particular,
the expression ‘in the port areas’, whereas the lan guage used in
paragraph-8 (II) (vi) and also the context should persuade this Court to
place an interpretation advancing the object of a notification such as the
2011 Notification.
40. A perusal of paragraph-36 of the Judgment would show that
the contention of the appellant therein was that the transfer o f the raw
material in the CRZ area was completely prohibited and it could not be
carried through the zone except ‘in the port area’. This Court understood
the terms of the notification to be that it permitted transfer of the
hazardous substances from the ships to the ports, ships to terminals and
finally, ships to the refineries. The vice versa was also found to be
within the contemplation of the notification as permitted activities. The
Court posed the question whether the transfer was to be confi ned to
refineries and terminals which were located in the port ar ea. In other
words, if the argument of the appellant therein was accept ed, it could
have resulted in confining the transfer of the raw material from the ship
by pipeline to the port area but it could not be taken to a refinery located
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
outside the port area.But the provision did contemplate transporting of
the material from the ship to the refineries as also to terminals and vice
versa. It was in this context that the Court proceeded to hol d that a
purposive construction was needed to avoid a situation of absurdity. Much
turned on the presence of the words ‘in the port area’. Therefore, keeping
in mind the clear object of the Notification, which was self-evident, the
Court added the words ‘or through’ to the words‘in the port area’. This
facilitated the transfer of the raw material from the ships to a refinery or
a terminal which neednot have to be located in the port area. We must
understand the decision of this Court in M. Nizamudeen (supra) in the
aforesaid context. The rationale and principle appear inapposite to the
cases before us.
41. Paragraph-8 (I) (f) relating to CRZ-I, may be recaptured:
“(8). Norms for regulation of activities permissible under t his
notification,-
CRZ-I
(ii) Areas between LTL and IITL which are not ecologically
sensitive, necessary safety measures will be incorporated while
permitting the following, namely:-
(f) storage of non-hazardous cargo such as edible oil,
fertilizers and food grain within notified ports;”
42. We also do bear in mind that in paragraph-8 (I) (i) (b),
construction of pipelines, inter alia,was permitted. It is thereafter that in
paragraph-8 (II), under CRZ-II, Clause VI contemplated permitting of
storage of non-hazardous cargo, such as edible oil, fertilizers and food
grain ‘in’ notified ports. We may broaden our inquiry into the relevant
contents of CRZ-III. CRZ-III of the 2011 Notification was divided into
area ‘A’, which,inter alia, dealt with areas up to 200 meters from HTL
on the landward side in the case of sea front. The said Clause proclaimed
further that the said area would be a No Development Zone (NDZ). We
notice that in CRZ-III the NDZ was not to be applicable in ‘such areas’
within any port limits.Thus, the expression ‘within’ made its appearance
in relation to notified port limits again. In the permitted activities in the
NDZ under area ‘A’,viz., up to 200 meters as aforesaid, we find Clause
(e), which permitted facilities for receipt and storage of petroleum products
and liquified petroleum gas as specifiedin Annexure-II. Area B of CRZ-
275
III is described as the area comprised from 200 meters to 500 meters.
Since the CRZ itself would terminate upon the 500 meters distance being
obtained, this constituted, in other words, the residuary ar ea, of CRZ-
III. Under the same we notice that again facilities for receipt and storage
of petroleum products and liquified natural gas as specified in Annexure-
II was permitted. We may bear in mind that the very same activity had
also been contemplated in area A of CRZ-III, viz., the area comprised
to 200 meters of the high tide line of the landward area in the case of the
sea front, inter alia . Interestingly, when it comes to storage of non-
hazardous cargo, such as edible oils fertilizers and food gra in ‘in’ the
notified ports, it was permitted activity in area ‘B’ of CRZ-III under
Clause 4 thereof, that is, an area located between 200 metres to 500
metres.It must be noticed that CRZ-III had been classified inparagraph-
7 essentially as relatively undisturbed area, which did not belong to either
CRZ-I or II, which included the coastal zone in rural areas, both developed
and undeveloped and also areas within municipal limits or in other legally
designated urban areas, which were not substantially built up. We have
already noticed the classification of CRZ-II earlier, as areas which had
been developed up to or close to the shore line. Can it then be said that
storage of non-hazardous cargo, such as edible oil, fertilizers food grain,
permittedin the notified ports in CRZ-III, Area ‘B’, be also permitted in
CRZ-III Area ‘A’? Going by the contents of CRZ-III under act ivities
which were permitted in the NDZ, we are unable to find any clause
which permitted such storage of non-hazardous cargo including edible
oil,inter alia.Therefore, in the NDZ area falling under area ‘A’ of CRZ-
III, it may have been impermissible.
43. We have made this discussion only to remind ourselves that in
interpretation of the Notification we are concerned with, a pursuitof a
purposive interpretation or a search for arationale which the Court finds
fair may meet with limitations which flow from the object of the maker
of the notification being confined to the plain meaning of the words used.
No doubt, a situation found in the facts of the cas e reported in
M. Nizamudeen (supra) may call for a different approach.
44. Reverting back to the controversy, projected from the difference
between the words ‘within’ and ‘in’, we may notice the following
discussion of the NGT, which is a specialised Body, consisting of aJudicial
Member and a Technical Member in a statutory appeal under the Act.
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
“54. In compact Oxford English Dictionary, the meaning of the
word ‘in’ is defined as follows:-
‘in Preposition 1) so as to enclosed, surrounded, or inside. 2)
expressing a period of time during which an event takes place .
3) expressing the length of time before an event is expe cted to
happen. 4) expressing a state, condition, or qualit y. 5)
expressing inclusion or involvement. 6) indicating the means
of expression used: put in writing. 7) indicating a person’s
occupation or profession. 8) expressing a value as a
proportion of whole. Adverb 1) expressing movement that
results in being inside or surrounded. 2) expressing the state
of being enclosed or surrounded. 3) present at one’s home or
office. 4) expressing arrival at a destination. 5) [of the tide]
rising or at its highest level. Adjective informal fas hionable.
- Phrases be in for be going to experience somethin g,
especially something unpleasant. in on knowing a secr et. in
that for the reason that. in with i11fo1mal enjoying fr iendly
relations with. the ins and outs informal all the details. - Origin
Old English”
55. The word ‘within’ has been defined in the same Dictionary as
follows:-
“within Preposition 1) inside. 2) inside the range or bounds
of we were within sight of the finish. 3) occurring inside a
particular period of time. 4) not further off than (us ed with
distances). Adverb: 1) inside; indoors. 2)internall y or
inwardly.”
56. Meaning of these words when compared, it will be clear that
what was intended by these words is something will have to be
done within the area, if it relates to the area and in the area if
relates to the area and not beyond that area.”
45. Going by the definition of the word ‘in’, it includes ‘so as to be
enclosed, surrounded or inside’. One way of looking at the word ‘in’ the
notified port in para 8 (II) (vi) would be that storage of non-hazardous
material is permitted inside the notified port. We notice that the definition
of the word ‘within’ also includes the word meaning inside. No doubt,
Justice Oliver Wendell Holmes declared: “A word is not a crystal,
transparent and unchanged; it is the skin of a living thought and may
277
vary greatly in color and content according to the circumstance s and
time in which it is used.”
46. Smt. Anita Shenoy, learned Senior Counsel, would assert that
what is ‘out’ cannot be considered as being ‘in’. She expatiates by pointing
out that the storage facility of the appellants is located a few kilometres
away of the notified limits of the Chennai Port. She poses the question
that on such facts could this Court be persuaded to still hold that it is
inside the notified port, viz., the Chennai Port. It would involve doing
violence to the clear words. The word ‘within’ and ‘in’ therefore, in the
context of the Notification must be given the same meaning.The
Notification and the policy is not under a shadow, by way of a challenge
to the Notification. It is the plain duty of the Court to give effect to the
law as it is found. No doubt, as pointed out by Shri Dhruv Mehta, if it is
found otherwise acceptable, an interpretation which accords with
constitutional principles, may appeal to the Court, even if t here is no
challenge mounted.
47. A detour may be apposite. Chennai Port is a Port, which is,
admittedly, a major port within the meaning of Major Ports Act, 1964.
Another enactment, which deals with ports, is the Indian Ports Act, 1908.
The appellants would contend that, while the storage facility may not be
located within the Chennai Port, it is licenced under Sect ion 57 of the
Customs Act as a customs station. In the Major Ports Act, t he word
‘port’ is defined in Section 2 (q). It reads as follows:
“(q) “port” means any major port to which this Act applies within
such limits as may, from time to time, be defined by the Central
Government for the purposes of this Act by notification in the
Official Gazette, and, until a notification is so issued, within such
limits as may have been defined by the Central Government under
the provisions of the Indian Ports Act.”
48. Section 57 of the Customs Act, 1962 reads as follows: -
“57. Licensing of public warehouses. —The Principal
Commissioner of Customs or Commissioner of Customs may,
subject to such conditions as may be prescribed, licence a public
warehouse wherein dutiable goods may be deposited.”
49. It is not the case of the appellants that the storage is l ocated
within the limits of the Chennai Port as contemplated in Section 2 (q). It
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
is, therefore, not inside the said Port. However, it is appellants case that
the storage facility is located in the Customs notified area. This is based
on the license issued under Section 57 of the Customs Act. Under Section
15 of the Customs Act, the date for determination of the rate of duty and
tariff valuation of any imported goods in the case of goods cleared from
a warehouse, under Section 68, is declared to be the date, on which, a
bill for entry for home consumption, in respect of such goods, is presented
under Section 15.Goods, which are imported may be cleared immediately
with reference to their being entered for home consumption under Section
46, and the relevant date, would then be the date of presentation of the
bill of entry. An importer may wish to warehouse the goods. It is in such
cases that it is only upon the bill for entry for home cons umption is
presented that the crucial date emerges. It is in this context that to regulate
and control the collection of duty apart from other aspects that a license
is procured under Section 57 of the Act. Section 2 sub-Section (11) of
the Customs Act, defines the words‘customs area’. It reads as follows:
“2(11) “customs area” means the area of a customs stati on or a
warehouse and includes any area in which imported goods or
export goods are ordinarily kept before clearance by Cust oms
Authorities”
50. Section 2 sub-Section (12) defines ‘customs por t’,
whereas,Section 2 sub-Section (13), defines ‘customs station’:
“(12) “customs port” means any port appointed under clause (a)
of section 7 to be a customs port, and includes a place appointed
under clause (aa) of that section to be an inland container depot”
(13) “customs station” means any customs port, customs airport,
international courier terminal, foreign post office or land customs
station”
51. Section 7(a), to which reference may be necessary in view of
the definition of the words ‘customs port’, reads as follows:
“7. Appointment of customs ports, airports, etc.-(1) The Board
may, by notification in the Official Gazette, appoint-
(a) The ports and airports which alone shall be customs ports
or customs airports for the unloading of imported goods and
the loading of export goods or any class of such goods;”
279
52. Thus, every port falling under the Indian Port Act and the
Major Port Act may not be on their own become a customs por t. A
customs port under Section 2(12) comes into being on a port being
appointed as such under Section 7(a). A customs station no doubt, includes
any customs port and a land customs station. The case of the appellant
based on the license under Section 57 of the Customs Act may make it
a customs area as it includes a warehouse but it is inconceiva ble as to
how it would transform it into‘in a notified port’.
53. An argument, which is raised by the learned Senior Counsel
for the appellants is traceable to Clause (1) of paragraph-8 falling under
CRZ-II. It reads as follows:
“CRZ-11, -
(i) buildings shall be permitted only on the landward side of the
existing road, or on the landward side of existing authorized
structures;”
It is the contention of the appellants that even if it is found that the
storage facility cannot be treated as permitted in the port, as it does not
fall in the port, both having regard to the fact that CRZ-II constitutes an
area where the regime is less harsh than the one contemplated in CRZ-
I and also bearing in mind that edible oil is non-hazardous cargo and still,
what is more important, in CRZ-II, facilities for receipt and storage of
petroleum products and liquified natural gas can be permitted, and lastly,
as a storage facility would constitute a building, which, in the f acts of
this case, is located on the landward side of the existing road, the NGT
was wrong. The argument appears to be that the Chenn ai metro
development authority which is a local body has granted permission for
the construction of the storage facility treating the ar ea as a general
industrial use zone. This means that the building was permissible under
the Town planning law. The argument is further sought to be buttressed
with reference to the definition of the word building which encompasses
a storage facility.
54. This argument is sought to be met by Smt. Anita Shenoy ,
learned Senior Counsel, by pointing out that it would be plainly incongruous
with the use of the words ‘storage facilities’ as contained in paragraph-
8 (II) (vi), falling under permitted activities under CRZ-II with the word
‘building’, which must make the position clear that placed side-by-side,
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
building cannot include the storage facility, which has been e xpressly
articulated and permitted as long as it is ‘in’ a notified port.
55. We notice certain salient features. CRZ-II has been classified
in para 7 as areas that have been developed up to or close to the shore
line. The storage tank of the appellant in the first ca se appears to be
located at a distance of 160 feet from the shore line. At the same time,
it is located a few kilometres away from the Chennai port . We have
already noticed that under CRZ III, the facility of st orage of non-
hazardous materials including edible oil is permitted only at a distance
between 200-500 meters.This is even though both handling and storage
of petroleum products is permitted, both within a distance of up to 200
meters from the high tide line as also between 200-500 meters from the
high tide line. It may defy logic. At least at first blush. We have already
set out the objects of the notification.They include guarding against the
dangers of natural hazards in coastal areas and the sea level rise due to
global warming. This is no doubt also to be balanced with the need for
sustainable development. The coastal regulation appears to be based on
considerations which appear to accommodate conflictin g interests
premised on considerations of what is felt as indispensably nec essary
and the nature of the zone in question. Allowing storage faci lities for
non-hazardous activities like edible oil, is, apparently, considered as an
indispensable part of the operation of a port. The Port Authorities would
have full control over the storage facility located within its limits. No
doubt, Section 35 of the Major Port Trust Act, 1964, inter alia, empowers
the port to execute works outside its limits for securing and storing goods
to be landed or to be shipped. The storage tanks in question a re not
works executed by the port.
56. As far as the case that is sought to be built up on the basis that
since CRZ-II permitted buildings on the landward side of the existing
road, we must notice that this is not the basis for the decision of the first
respondent which was successfully impugned before the NGT. We, in
fact, queried Smt. Archana Pathak Dave, learned counsel for the first
respondent as to whether this was the basis.She did not appear to support
the decision on the basis that it forms the basis for the decision. We may
notice further, the following pleading of the first respondent which has
been adverted to by the NGT in their reply affidavit befo re the NGT
even:
281
“5. It is submitted that the said activity under scrut iny is a
permissible activity and regulated under para No. 8 (I) (i) (b),
para No. 8 (I) (ii) (f) and para No. 8. II. (vi) of the CRZ
Notification, 2011.”
57. Paragraph-8 (I) (i) (b), undoubtedly, related to permitting of
pipelines being constructed in CRZ-I. Paragraph-8 (I) (ii) related to CRZ-
I.The further reference is only to paragraph 8 (II) (vi) which permits the
activity in question ‘in’ notified ports.The aspect relating t o buildings
being permitted on the landward side of the existing road dealt with in
paragraph 8 (II) (i) was not the basis for the decision even according to
the counter affidavit. This is apart from the fact that impugned decision
of the first respondent does not proceed on the basis of paragraph 8 (II)
(i). This is also apart from noticing the contention of Respondent No.5
that storage facility being specifically dealt with, ‘ building’ under
paragraph-8 (II) (i), would not include storage faci lity. We would
therefore, think that we must not be persuaded to allow the appellants or
allow them to lean on paragraph 8 (II) (i) of the 2011 Notification.
58. Another argument, which has been raised by Shri Dhruv Mehta,
appears to stem from the law relating to contemporanea expositio .
The authorities are experts. They have applied thei r minds.Their
understanding should govern. At least, it should be given the weight that
is due to them. This forms the premise. Moreover, he refers to the
judgment of this Court in K. P. Varghese v. ITO13. K. P. Varghese (supra)
involved the interpretation of Section 52 (2) of the Income Tax A ct,
1961. This Court took the view inter alia that to invoke Section 52(2), it
was not enough only to show that the fair market value of the ca pital
asset as on the date of the transfer exceeded the f ull value of the
consideration declared by the assessee by not less than 1 5 per cent of
the value so declared. This Court eschewed a purely literal interpretation
on the basis that it led to manifestly unreasonable and absurd
consequences. It was found that Parliament did not intend to target bona
fide transactions, where the assessee had truthfully declared the actual
consideration. This Court drew upon the speech of the Finance Minister,
the Heydon’s Rule or the Mischief Rule and the importance of the word
‘declared’ figuring in Section 52 (2) and the fact that soon aft er the
introduction of the provision, the Central Board of Direct Taxes issued
statutory circulars under Section 119 of the Income Tax Act explaining
13(1981) 4 SCC 173
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
the scope of central. It was specifically held that t he circulars would
bind the Revenue even if they were not found to be in accordance with
the correct interpretation of the provision. It is apart from all these that,
no doubt, this Court went on to hold as follows: -
“These two circulars of the Central Board of Direct Taxes are,
as we shall presently point out, binding on the Tax Department in
administering or executing the provision enacted in sub-section
(2), but quite apart from their binding character, they are clearly
in the nature of contemporanea expositio furnishing legitimate
aid in the construction of sub-section (2). The rule of construction
by reference to contemporanea expositio is a well-established
rule for interpreting a statute by reference to the exposition it has
received from contemporary authority, though it must give way
where the language of the statute is plain and unambiguous. This
rule has been succinctly and felicitously expressed in Crawford
on Statutory Construction, (1940 Edn.) where it is stated in para
219 that”administrative construction (i.e. contempor aneous
construction placed by administrative or executive officers
charged with executing a statute) generally should be clearly wrong
before it is overturned; such a construction, commonly referred
to as practical construction, although non-controlling, is nevertheless
entitled to considerable weight; it is highly persuasive”.
The validity of this rule was also recognised in Baleshwar
Bagarti v. Bhagirathi Dass [ILR 35 Cal. 701] where Mookerjee,
J., stated the rule in these terms:
“It is a well-settled principle of interpretation t hat courts in
construing a statute will give much weight to the interpretat ion
put upon it, at the time of its enactment and since, by those whose
duty it has been to construe, execute and apply it.”
and this statement of the rule was quoted with approval by t his
Court in Deshbandhu Gupta & Co. v. Delhi Stock Exchange
Association Ltd. [(1979) 4 SCC 565] It is clear from these two
circulars that the Central Board of Direct Taxes, which is the
highest authority entrusted with the execution of the provisions of
the Act, understood sub-section (2) as limited to cases where the
consideration for the transfer has been understated by the assessee
and this must be regarded as a strong circumstance supporti ng
the construction which we are placing on that sub-section.”
283
59. The principle is inapposite in the facts. That the autho rities
have proceeded on a particular basis, may as well betray their erroneous
understanding. That such views do not clinch the issue relatin g to the
construction of the law is elementary. We would think that in the facts of
this case and on a construction of the statute or the law in question,viz.,
the 2011 notification, the understanding of the authorities if that be the
basis of the contention, cannot overwhelm our understanding of the
notification. We again reiterate that the words ‘within’ and ‘in’ cannot
include what is outside the port. The maker of the notification h as not
even contemplated the activities in question in a ‘port ar ea’. We must
here elucidate and observe that if the contention is to be upheld that a
storage tank can be permitted outside the port limits, it will introduce
chaos. The question would arise as to up to what distance from the port
area it would be considered as the ‘in the port area’.The 2011 Notification
cannot receive an interpretation which would leave matters of moment
to be afflicted with the vice of uncertainty. This is a part from the
importance of avoiding an interpretation which seemingly allows free
play in the joints to the Administrator but, at the same t ime, vest an
arbitrary power in him.
60. As far as the pipeline is concerned, no doubt, it is permitted in
CRZ I and arguments were addressed before us that even if the storage
facility is to be demolished, making use of the edible oil brought through
the pipelines, which are, no doubt, located underground, the oil could be
collected at the spot from where it is currently located viz., where the
pipeline ends and transported therefrom to the factory. There is no dispute
that the pipeline is located in a zone where it is permitted activity. There
can be no dispute that ex post facto permission can be given for permitted
activity as found by the NGT itself. No doubt, the pipeline, may have
meaning only as so far as it is connected to the storage tank. As to
whether the pipeline can continue to be used if the storage tanks are
demolished is a matter which must engage the attention of the authorities.
We would think that in regard to the pipelines, it would be the District
Coastal Zonal Management Authority,which could take a decision.
61. The upshot of the above discussion is as follows:
As regards the pipelines which have been drawn, the appellants
may approach the relevant DistrictCoastal Zonal Management Authority
within a period of one month from today.The District Coastal Z onal
Management Authority will consider any application made in regard to
K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND
ORS. [K. M. JOSEPH, J.]
the continued use of the pipeline and take a decision in accordance with
law within a further period of six weeks from the date of the receipt of
the application.
62. In view of the request made by the appellants that the y may
be permitted to continue to use the pipeline along with the storage facility
for a period of one year, we would think that theinterest of just ice do
require grant of some time.The appellants are accordingly given a period
of six months from today to comply with the impugned order of the
NGT. This is in regard to the direction to demolish the storag e tanks.
The appellant in the first appeal is given a month’s time to pay the
compensation ordered, if not already paid.
63. As far as the direction to demolish the pipeline, the matter will
await the decision to be taken by the District Coastal Zonal Management
Authority.
64. The appeals are partly allowed. There will be no orde r as to
costs.
Divya Pandey Appeals partly allowed.
(Assisted by : Ms. Shevali Monga, LCRA)