TaxTMI 
TaxTMI 
2014 (1) TMI 1893
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....tory body, constituted under the provisions of the Water (Prevention and Control of Pollution) Act, 1974 (for short the Water Act') and the Air (Prevention and Control of Pollution) Act, 1981 (for short the 'Air Act'). The Board, in exercise of its powers, introduced bank guarantee system vide its Resolution No. 17617 dated 18th August, 2003. The said resolution reads as under: A number of Acts & Rules have been enacted for the purpose of preventing pollution from different sources & for protection of the environment. Basing on these Acts, the Central Pollution Control Board, State Govt. & the State Pollution Control Boards are empowered to file complaint cases resulting in the closing down of defaulting industries through disconnection of electricity & water supply. There is hardly any other provision to pressurise defaulting industries to install required pollution control system or to impress upon them to upgrade their existing pollution control systems so as to comply with the prescribed norms. The Hon'ble Supreme Court of India, while dealing with different public interest litigations on environmental matter, has laid down different principles in order....
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....l decide the procedures to be adopted including the quantum of Bank Guarantee submitted to this effect. However, the minimum Bank Guarantee should not be less than 10% of the pollution control equipment necessary for the purpose. The amount so forfeited will be utilised faithfully for pollution control abatement schemes/programmes of the said industry. The original Bank Guarantee will be retained in the Accounts Section of the Head Office and the cashier will be responsible for its safe custody. Photo copies of the said instrument will be tagged to the concerned industry file endorsing simultaneously to the Law Officer. A register will be maintained by the cashier reflecting the following entries. 1. Name of the industry: 2. Name of the Bank standing as guarantor: 3. Reference file No.: 4. Amount of Bank Guarantee: 5. Date of submission: 6. Date of expiry: 7. Orders for release or forfeiture: 8. Remarks 2. In Appeal 68 of 2012, the Board had granted consent to operate under the Air Act in respect of Respondent Unit's Sponge Iron plant on 24th July, 2007, valid till 31st March, 2011. This consent....
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....ard carried out an inspection of the plant of Respondent No. 1 and found operation of the industry satisfactory and that the non-compliances mentioned in the notice letter dated 7th May, 2008 had been complied with. The Board, vide its letter dated 4th June, 2008, directed Respondent No. 1 to install and commission ESP in respect of the two kilns operated at its Sponge Iron plant and phase out the gas cleaning plant within six months. The industry was inspected again on 27th December, 2008 and the inspecting team made the following observations: Both the kilns (50 TPD each) were in operation. Heavy fugitive dust emission was found to be taking place from Product House, I-Bin, coal circuit, kiln feed chutes and cooler discharge building. Most of the tanks/pits (for dust handling purpose) connected to the hoppers of GCPs and bag filters were dry and not covered leading to emission of dust from the pits. There was minor leakage of flue gas from the emergency caps of both kilns though both the GCPs were in operation. Emission from the stack connected to GCPs was visibly high. 6. In its inspection report, various deficiencies were noticed and the Board issued a show cause notice d....
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....dmitted even before the appellate authority that the environmental clearance conditions were not complied well within the stipulated time. Despite that, the appellate authority, vide its order dated 8th November, 2012 allowed the appeal preferred by Respondent No. 1 and set aside the order dated 26th May, 2012 of the Board. 8. Aggrieved by the order dated 8th November, 2012 passed by the appellate authority, the Board has preferred the present appeal contending that the resolution of the Board requiring an industry to furnish a bank guarantee is in accordance with law. The Board has been vested with the power of issuing direction of closing an industry, and therefore, is requiring the industry to furnish a bank guarantee as a condition for grant and continuation of the consent, and it being less rigorous, would be permissible in law. It is a financial tool to achieve sustained compliance with the prescribed environmental parameters. The decision of the Board is not penal but is regulatory and compensatory in nature. Both these aspects are essential requirements for a clean and decent environment and are in consonance with the preambles of the Air Act and the Water Act. The indus....
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....ironment caused by the industry or any damage to the environment has to be made good by the industry. The industry has been a persistent defaulter and any direction to comply with the conditions of the consent order is in conformity with law. 11. The CPCB, in its 126th meeting, approved that the amount of bank guarantee to be furnished by a non-compliant industrial unit to the State Board shall be 10% (minimum) or more in specific cases of the cost of pollution control equipment. In this meeting, it was decided that in case of the non-compliant industrial unit, a bank guarantee would be furnished by the unit concerned to the State Board. This was primarily to achieve compliance of the prescribed environmental standards within a reasonable time frame. The CPCB approved the model prepared by West Bengal Pollution Control Board in that regard. 12. Now, we may notice the facts in Appeal No. 69 of 2012. The necessary facts, as noticed by the appellate authority, are that the respondent-industry, in this case, is engaged in the business of manufacture of sponge iron and billet as well as generation of power in its industrial plant at Purunapani under Joda sub-division of Keonjhar d....
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.... and was adhering to the prescribed standards. Vide its letter dated 8th June, 2010, the Board granted consent to the industry to operate till 30th September, 2010 and directed the industry to complete the required jobs of (i) up-gradation of bag filters as per the recommendations of the I.I.T., Kharagpur; (ii) installation of pneumatic dust handling system at hoppers of all bag filters; and (iii) concreting/black topping of remaining part of the internal roads. This was required to be done by 30th September, 2010 failing which the bank guarantee was liable to be forfeited. The industry, vide its letter dated 21st August, 2010, informed the Board that it had complied with all the recommendations of the team of IIT, Kharagpur, and that no further compliance was required. On 27th November, 2010, the Board granted consent to operate till 31st March, 2011. Thereafter, on 7th July, 2011, the Board issued a show cause notice under Section 31A of the Air Act, directing the appellant to fulfill the requirements, as laid down by the IIT, Kharagpur, failing which a direction for closure of the industry would be issued without giving any further opportunity. In reply, the industry, vide its l....
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.... not adequate and ought to be upgraded with higher capacity ID fan and adequate number of bags. ii. That the installation of bag filters at iron ore circuit and raw material stock house had not started. iii. That out of 850 meters of internal road only 350 meters had been made concrete. iv. That installation of fixed water sprinklers along side of internal road not done. v. That the Ambient Air Quality monitoring result showed that the concentration of SPM did not meet the prescribed norms. 15. Thereafter, in its inspection report dated 22nd April, 2010, it was noticed that during the inspection made on 8th April, 2010, the industry had not complied with the requirements and conditions stated in its earlier letter. It related to installation of pneumatic dust handling system at bag filter hoppers; up-gradation of the bag filter capacity; and monitoring of the ambient air quality result, which showed violation of the prescribed standards. 16. The industry was again inspected on 5th May, 2011 and, in its inspection report dated 27th May, 2011, the Board inter alia noticed the following deficiencies: i. That no action had been taken r....
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....inspect the premises. The industry was again inspected on 24th March, 2012 and the inspection report dated 24th March, 2012 was prepared and the consent to operate was extended till 31st March, 2012 vide order dated 30th March, 2012. 19. The Assistant Environmental Scientist, the Environmental Engineer and the Sr. Environmental Engineer of the Board informed that the industry had failed to comply with the environmental norms and recommendations of IIT, Kharagpur, within the scheduled time-frame and recommended forfeiture of the bank guarantee vide their letter dated 22nd May, 2012. Based upon these recommendations, the Board, vide its letter dated 26th May, 2012, asked the State Bank of India to forfeit the bank guarantee, in furtherance to which the Bank, Respondent No. 2, remitted the amount of Rs. 17.50 lakhs to the Board. 20. Aggrieved by this action of the Board, the industry filed an appeal before the appellate authority, constituted under the Air Act. The appellate authority, vide its order dated 8th November, 2012, accepted the appeal of the industry and set aside the action of the Board in forfeiting the bank guarantee furnished by the industry. 21. Aggrieved by t....
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....e of any pollutant in the atmosphere is air pollution under the Air Act, and any contamination of water or alteration of the physical, chemical or biological properties of water by any means is pollution under the Water Act. 25. In terms of Section 3 of the Air Act, the CPCB, and in terms of Section 4, State Pollution Control Boards are to be constituted. Chapter III of the Air Act deals with functions and powers of the Boards. We may appropriately refer to these Sections at this juncture: 16. Functions of CPCB.- (1) Subject to the provisions of this Act, and without prejudice to the performance, of its functions under the Water (Prevention and Control of Pollution) Act, 1974 (6 of 1974), the main functions of the CPCB shall be to improve the quality of air and to prevent, control or abate air pollution in the country. (2) In particular and without prejudice to the generality of the foregoing functions, the CPCB may- (a) advise the Central Government on any matter concerning the improvement of the quality of air and the prevention, control or abatement of air pollution; (b) plan and cause to be executed a nation-wide programme for the....
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....to collect and disseminate information relating to air pollution; (d) to collaborate with the CPCB in organising the training of persons engaged or to be engaged in programmes relating to prevention, control or abatement of air pollution and to organise mass-education programme relating thereto; (e) to inspect, at all reasonable times, any control equipment, industrial plant or manufacturing process and to give, by order, such directions to such persons as it may consider necessary to take steps for the prevention, control or abatement of air pollution; (f) to inspect air pollution control areas at such intervals as it may think necessary, assess the quality of air therein and take steps for the prevention, control or abatement of air pollution in such areas; (g) to lay down, in consultation with the CPCB and having regard to the standards for the quality of air laid down by the CPCB, standards for emission of air pollutants into the atmosphere from industrial plants and automobiles or for the discharge of any air pollutant into the atmosphere from any other source whatsoever not being a ship or an aircraft: Provided that different stand....
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.... State Board respectively have to perform such other functions and such other acts as may be necessary for the proper discharge of these functions and generally for the purposes of carrying into effect the purposes of the Air Act. If one analyses these provisions co-jointly or conjunctively, it does not admit of any ambiguity that prevention, control or abatement of air pollution is the ethos of the functions of the Boards. In the scheme of the Air Act, every State Government, in consultation with the State Board, is required to issue a notification and declare, in such manner as may be prescribed, any area or areas within the State as air pollution control area or areas for the purpose of this Act. Thus it is only in a duly notified area in terms of Section 19 of the Air Act that the action for violation and for enforcement of the provisions of the Act could be taken by the Board. The prescribed standards under the Air Act shall have over-riding effect over other legislations including the provisions of the Motor Vehicles Act, 1939. Section 21 of the Air Act makes it mandatory that no person shall, without previous consent of the Board, establish or operate any industrial plant in....
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....terms of Section 22A of the Air Act and the court may even restrain such person from discharging any air pollutant. The Board is empowered to take air emission samples and make regular checks that emissions are not beyond the prescribed standards. Orders of the Board are appealable under Section 31 of the Air Act. 28. Section 31A vests a very wide power in the Board where in exercise of its powers and performance of its functions under the Air Act, it may issue any direction in writing to any person, officer or authority and such directions would include closure, prohibition or regulation of any industry or operation and stoppage or regulation of supply of water, electricity or any other service to the industrial plant. This power is unfettered and has an over-riding effect over all the laws subject to the provisions of the Air Act and subject to any specific direction issued by the Central Government in that behalf. The power to issue directions under Section 31A is to be exercised in consonance with the principles of natural justice and is appealable to the National Green Tribunal in terms of Section 31B of the Air Act. Sections 37 to 39 of Chapter VI of the Air Act deal with ....
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....implementation of the entire environmental programme. The powers vested in the Board are thus of a very generic nature and are not restricted in their scope and implementation. These powers have to be construed liberally and not so narrowly to the extent that it would defeat the very purpose of the Air Act. It will be appropriate to construe them in a manner that amplify their scope to the fullest to the extent in line with the object of the Act. 30. It may also be analysed here that Section 31A of the Air Act gives power to the Board to issue directions. Such directions could be issued, notwithstanding anything contained in any other law, by the Board to any person, officer or authority to comply with the provisions of the Air Act. The directions thus issued shall be binding. The legislature has laboured to give wider connotation to these provisions and has, therefore, provided an explanation to Section 31A and clarified that the power to issue directions would include the power to direct closure, prohibition or regulation of any industry, operation or process and even stoppage or regulation of supply of electricity, water or any other service. This power is 'inclusive'....
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.... such default. Both these purposes would squarely fall within the framework of law and the powers and functions of the Board. The purpose of requiring a Unit to furnish a bank guarantee is not penal per se. It is compensatory i.e. an amount which would be required to be spent upon rehabilitation and restoration of the environment due to the damage caused to it by default on the part of the Unit. We shall be deliberating upon this aspect at some length subsequently, but, at this stage suffices it to note that the Board has jurisdiction to grant consent to establish and operate or revoke the same, subject to such terms and conditions as it may deem fit and proper within the ambit and scope of Section 21 of the Air Act. Sub-Section 4 of Section 21 grants a statutory sanction to the Board to record reasons and the conditions, subject to which the order of consent is being given or is being refused. The proviso to Section 21(4) further empowers the Board to cancel the consent even before the expiry of the period for which it is granted, if the conditions subject to which the consent was granted, are not fulfilled. Besides preventing and controlling the pollution, the Board is commanded ....
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....inion that asking for the bank guarantee, as an interim measure, during which the industrial unit is called upon to comply with the conditions of the consent order, does not fall outside the ambit of statutory powers vested in the Board. CONDITION REQUIRING A UNIT TO FURNISH A BANK GUARANTEE - IS IT PENAL? 35. The rights and obligations under the Air Act do not fall in the realm of contract. They are a result of statutory regime contemplated under these Acts. The right to carry on a trade or occupation in terms of Article 19(1)(g) of the Constitution of India is subject to the limitations stated under Article 19(6) of the Constitution. The law has been framed by the State in terms of the Air Act and other related Acts which places a restriction or a limitation on carrying on of trade. This restriction is with regard to such trade being subject to the limitation of the legislations in relation to the prevention and control of pollution. No person can carry on an industry or trade activity without obtaining the consent of a Board in a regulated area. The terms and conditions of consent so imposed by the Board do not attract the principles of contractual jurisprudence but are pu....
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....ovision and the scheme in this regard do not admit of any ambiguity. On the other hand, it deals with the regulatory measures and power to issue directions for implementing the provisions of the Act in terms of Sections 16, 17, 21 and 31A of the Act. They operate in two distinct spheres which are incapable of being interchanged. It is the responsibility of the Board to ensure prevention and control of pollution on the one hand and compliance and implementation of the conditions imposed under Section 21 of the Air Act. While imposing these conditions and dealing with them, particularly their non-compliance, the Board has to keep in mind the three basic and fundamental principles which are now statutorily stated in the Indian Environmental jurisprudence, i.e. sustainable development, polluter pays principle and precautionary principle. We may notice that the provisions of the Air Act, 1981 and the Water Act, 1974 are para materia, except the specific number of Sections, for instance, functions of the Board, establishing or operating an industrial unit, inspection, analysis reports and power to give directions are identically worded. Thus, it is not necessary for us to deal with the p....
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....law to raise the same. There is no element of penalty involved and the recovery of price is not a penal action. It is just compensatory. 39. Upon analysis of the above enunciated law, it is clear that a fine but unambiguous distinction between penalty and compensation has been accepted by courts and tribunals. Distinct and definite consequences flow from these actions. Their distinctions are procedural as well as consequential. A penal action cannot be permitted to take in its orbit, by process of overlapping, an action which is patently compensatory in nature. Striking a balance between environmental interest and sustainable development would require the expert bodies like the Boards to follow a path which would permit industrial growth and still protect the environment without allowing any irretrievable injury to the environment. In view of that, it will certainly be permissible in law for an expert body to provide an opportunity to a unit to attain the prescribed standards of emission or effluent discharge before it is directed to be closed in exercise of the powers vested in the Board. Such approach would be in consonance with the scheme of the Air Act. More so, it will make....
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....ir duties or liabilities are. This is an essential requirement of a good government of laws. It is implied in the constitutional mandate found in Section 265 of our Constitution: "No tax shall be levied or collected except by authority of law 41. We are afraid that the respondents cannot take advantage of the above judgment. It is for the reason that the facts and law of Khemka and Company supra are distinct and distinguishable. In that case, the Court was concerned with interpretation of fiscal laws which are to be construed strictly. Here, we are concerned with a social legislation and have to adopt a purposive construction. There the Court was concerned with a revenue centric law while here we are concerned with a law involving substantial question of environment. There, the Court was also concerned with a pure question of law relating to penalty while we are concerned with the question of compensatory relief to remedy the damage to environment. A taxing statute is to be strictly construed. The subject is not to be taxed without clear words for that purpose and also that every Act of Parliament must be read according to the natural construction of its words. This is a settled....
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....n the NCT of Delhi who had constructed shopping complexes or malls etc. had obtained environmental clearance under the Environmental Protection Act, 1986, and had complied with the EIA Notification of 2006. According to the builders they were not required to obtain clearance under the Air or the Water Act from the Delhi Pollution Control Committee (for short the 'DPCC') and the penalties, fines and the environmental damage in the form of fixed sums of monies or by requiring the builders to furnish bank guarantees as a condition to grant consent under the Acts concerned was impermissible in law. The learned Single Judge of the High Court held that to the extent certain aspects have not been covered by EIA Clearance, it would be certainly open for the DPCC to examine those aspects and decide whether or not to grant consent to establish under the two Acts. Validity of the levy of penalties for environmental damages was discussed in paragraphs 56 to 69 of the judgment and the Court took the view that imposition of a pecuniary liability which takes the form of penalty or fine for breach of a legal obligation could not be levied as there was no statutory basis for a direction iss....
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....templated is penal or compensatory. This issue shall have to be decided with reference to the facts of the case, the provisions of the law applicable and the intent of the authority concerned. Once it falls in the 'compensatory' field, then it will necessarily be beyond the purview of penalty. The Supreme Court, in the case of Karnataka Rare Earth supra, had stated that recovery of price of minerals is compensatory action of the State for the loss of the minerals owned by it and there was no element of penalty. The law, in this regard, was clearly stated by the Supreme Court in the case of Director of Enforcement v. MCTM Corporation Pvt. Ltd. and Ors. (1996 (1) SCR 215) where the gravamen of the department was that the respondents had failed to repatriate the foreign exchange lying in Malaysia, which they had a right to receive in India and thus there was contravention of the provisions of Foreign Exchange Regulation Act, 1947. In that case, the authorities were performing quasi judicial functions and did not act like courts but only as administrators and determined the liability of the contravener for the breach of the obligations imposed under the Act. Explaining the expr....
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.... and 51A(g) of the Constitution under which the State shall endeavour to protect and improve the environment and to safeguard forests and wild life of the country. Further, the Constitution casts a duty on every citizen to protect and improve the natural environment including forests, lakes, rivers, wild life etc. and the Court, thus, concluded that if a person, therefore, is guilty of causing pollution, he has to pay damages (compensation) for restoration of the environment and ecology. This would be besides the damages which he is required to pay to the person who has suffered on account of the act of the offender. This case thus provides a concept for compensation for causing degradation of environment by the polluter or violator. 48. This enunciation clearly shows that what is not compensatory in character can also be termed as a penalty, necessarily meaning that what is compensatory in character would not be a penalty. The term 'compensatory' would include something that is taken for compensating damage to environment or for remedying or abatement of environmental degradation. 49. In the present case, the general Resolution governing industries, particularly the ....
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.... grant of a certain kind of power implies, in cases, exclusion of other powers. This Rule also iterates that everything necessary to carry out the purposes of the grant can be done by the authority entrusted with the power Ref. State of U.P. v. Poosu AIR 1976 SC 1750; State of Karnataka v. Vishwabharathi Housing Co-operative Society AIR 2003 SC 1043. 15. The petitioners' contention, though attractive that the power to issue directions cannot comprehend the issuance of directions to furnish guarantees, cannot be accepted. The power to issue directions, under Section 16 extends to "regulate" the industry or unit. The expression "regulate" in the context, wherever used, has to be given the widest meaning. In a remedial or regulatory enactment, as the Act undeniably is, this expression acts as a crucial power conferral on the authorities - the extent of such power is even closure of the industry or unit. Such being the case, the court cannot limit the options available to statutory authorities to meet emerging challenges, towards ensuring compliance with the provisions. In given cases, the Commissioner may not deem it appropriate to take the extreme step of closing down th....
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..... 10 of 2011 decided on 19th March, 2012, we may notice that the Bench had relied upon the judgment of the High Court in the case of Splendor Landbase Limited v. Delhi Pollution Control Committee supra and expressed a view that the expression 'any direction' appearing in Section 33A of the Water Act was not wide enough to include power to issue directions in relation to furnishing of bank guarantees. The main thrust of the judgment was on the fact that it returned a finding that the industry was able to show cause that it was not causing any pollution or violating any parameters. Firstly, we do not agree with the principle stated in that judgment and secondly, in the present case, the appellant has been able to demonstrate on record that the conditions of consent order were not complied with despite opportunity. EQUITY, WAIVER AND ITS EFFECT: 56. The respondent-company has been engaged in the business of manufacturing sponge iron and billets as well as generation of power in its industrial plant established at Purunapani under Joda sub-division of Keonjhar district. On being satisfied, it was granted the consent by the Board to start its operations. From the records, ....
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....which had been furnished by the industry assuring the Board of complete compliance. The relevant extracts of the bank guarantee that permitted the Board to encash the bank guarantee, in its discretion, reads as under: 2. WHEREAS the industry has undertaken to operate the existing Pollution Control Systems and/or other pollution control measures effectively and install the required pollution control measures within the stipulated time to the satisfaction of the Board in terms of Letter No. 9276 dt. 12.06.2009 of the Board and to meet the standards prescribed by the Board and in case of failure to comply the same during the stipulated period of three years, the bank guarantee can be forfeited by the State Pollution Control Board, Orissa partly/fully depending upon the gravity of the violation. We (State Bank of India, Commercial Branch, Bhubaneswar) do, hereby, undertake to pay to the Board an amount not exceeding Rs. 17,50,000/- as and when demanded by this Board within three years from the date of execution of Bank Guarantee. 3. We, State Bank of India, Commercial Branch, Bhubaneswar, hereby, undertake to pay this guarantee without any demur merely on a demand fro....
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....cted on 8th April, 2010. It was stated in this report that the unit had not taken any steps towards installation of pneumatic dust handling system at the bag filter hoppers. The ambient air quality monitoring result still showed violations. Vide its letter dated 8th June, 2010, the Board informed the industry about the drawbacks noticed during the above inspection and warned the industry that the bank guarantee would be liable to be forfeited and renewal of the consent would not be granted if the needful was not done. This state of affairs persisted. The unit was again inspected on 5th May, 2011 and another letter dated 7th July, 2011, being a show cause notice, was issued by the Board informing the industry of its violations and the proposed action of the Board to pass direction of closure under Section 31A of the Air Act. The industry was called upon to complete the upgradations and modifications of the bag filter system as well as installation of pneumatic dust handling system. This show cause letter dated 7th July, 2011 was responded to in detail by the industry vide its letter dated 16th July, 2011 wherein the industry explained its various difficulties including those with th....
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.... from the hopper of the ESP is transferred through pneumatic dust handling system to the common silo of 120 cubic meter capacity. There was no leakage of flue gas from the slip rings all the rotary kilns. There was also no leakage of the flue gas from the emergency caps of the BC of Kilns. Improvement is required in the house keeping. Regular cleaning of the internal road inside the plant premises shall be done. The unit shall install water meter at various section of the plant to estimate the water use and submit Cess Return to the Board. The unit has not yet applied for Cess to the Board. All the internal drain shall be lined. More plantations along the factory boundary premises and other open spaces is required. Fixed type rotary water sprinklers/gun spray shall be provided at the solid waste dump. Renewal of Consent to Operate may be considered for further years with special conditions under Water, Air and E(P) Act. 59. On 30th March, 2012, the industry was allowed to operate till 31st March, 2013, subject to strict compliance with the conditions stipulated in the consent granted earlier by the Board and it was s....
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.... 6. Hug accumulation of dust was observed at various process areas like ESP area, all kiln area, coal crusher area, iron ore crusher area and other work zone area haphazardly indicating improper dust handling and poor housekeeping practice adopted by the unit. 7. Accumulation of dust on internal roads was also observed causing fugitive dust nuisance during vehicular plying. In view of the persistent defaults, the Committee recommended taking of suitable action against the unit. 62. From the above narration, it clearly shows that the industry has been a persistent defaulter and polluter. The parameters, particularly relating to air and ambient air quality, were found to be violative of the prescribed standards. The Board provided opportunity after opportunity and extended the time in favour of the industry to completely carry out its directions and provide antipollution devices. One of the letters afore noticed written by the industry to the Board further clearly showed that the former never disputed the allegations of the latter. For various reasons, the industry always prayed for extension of time which on most of the occasions was allowed by the Board in the inte....
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....hairman and MD, NTPC v. Reshmi Constructions, Builders and Contractors (AIR 2004 SC 1330), where the Court, as a general principle, has held that one who intentionally accepts the benefits of a contract or conveyance is estopped from denying the validity or binding effect on him of such contract or conveyance. The appellant Board has also relied upon the judgment of the Supreme Court in the cases of Shyam Telelink Limited, now Sistema Shyam Teleservices Limited v. Union of India ( (2010) 10 SCC 165); Rajasthan State Industrial Development and Investment Corporation & Anr. v. Diamond and Gem Development Corporation & Anr. ((2013) 5 SCC 470) and Halsbury's Laws of England, 4th Ed., Volume 16(2), which state that on the principle that a person may not approbate and reprobate a special species of estoppels has arisen. The principle that a person may not approbate and reprobate expresses two propositions: (1) That the person is question, having a choice between two courses of conduct is to be treated as having made an election from which he cannot resile. (2) That he will be regarded, in general at any rate, as having so elected unless he has taken a benefit under ....
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....s, the bank guarantee would be forfeited by the Board, the Bank having undertaken to pay the same when demanded by the Board within the period of the guarantee. The invocation letter issued to the Bank on 26th May, 2012 clearly stated that the industry had failed to comply with such conditions within the stipulated time and several environmental noncompliance's were observed during the tenure of the bank guarantee. This invocation was founded on the satisfaction of the Board. That satisfaction, of course, has to be fair and not subjective, but objectively arrived at. The Board having considered various pros and cons, prepared a cumulative assessment of the breaches committed by the industry and keeping in view its General Resolution, took the decision to invoke the bank guarantee rather than closing the industry at that stage. Such invocation, therefore, is proper, in terms of the bank guarantee and not mala fide. The bank guarantee is an independent contract to the contract or order in furtherance to which it is furnished and can be invoked as per its terms. The purpose is to ensure payment stated in the bank guarantee. There are only two exceptions to the general rule for enc....
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....mbient air quality. The other being that before passing the order dated 26th May, 2012, the Board had taken into consideration the cumulative effect of the various inspections and a co-joint report dated 22nd May, 2012 which was the basis for passing of the impugned order. Both these aspects do not find even a mention in the order of the appellate authority. The other reason can also not be accepted by us because the affidavit filed by the industry before the Board is not the foundation of encashment of bank guarantee. We have already noticed that as per law the bank guarantee is an independent contract and the bank guarantee does not use the expression 'deliberate'. This is the word used in the affidavit. The bank guarantee was required to be invoked/encashed strictly as per its terms. Under the terms of the bank guarantee, the industry had undertaken to operate the existing pollution control systems and/or other pollution control measures effectively to the satisfaction of the Board. In the case of failure to comply the bank guarantee could be forfeited. Thus, the primary and paramount consideration was the satisfaction of the Board in relation to the upkeep and continued....
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....der and in view of the undertaking furnished by the industry cannot be held to be penal and impermissible under the provisions of the Air Act. c. The order of the Appellate Authority suffers from apparent errors of facts and law. The appellate authority has taken into consideration irrelevant matters on the one hand and ignored other relevant matters on the other. The order of the appellate authority, thus, is liable to be set aside. d. The bank had furnished an unequivocal guarantee for payment of the stated amount. In case of failure to comply during the specified period to the satisfaction of the Board, the bank guarantee could be forfeited. The bank guarantee has been invoked by the Board as per terms of the guarantee. Consequently, the Board would be entitled to receive the guarantee amount, however, would be entitled to use the same only for the purposes of compliance and/or for making good the environmental loss or degradation caused by the applicant. e. The applicants' appeal is partially allowed and directions have been issued in the larger public interest. GENERAL DISCUSSION: 68. Having answered the formulated questions and dealt with ....
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....f certain time bound conditions, is an exception, that too a rare one. To adopt exception as a rule is not the intent of this law. We are unable to appreciate the practice adopted by the Boards for granting consents for short terms like on a yearly or six-monthly basis and that too subject to varied conditions. Consent to operate should be granted preferably for a longer period and continuation should require maintenance and operation of the plant ensuring 'no pollution'. It must not be used as a device to hamper industrial development and cause avoidable loss to the industry. The purpose should be prevention and control of pollution. For better management of its affairs and for ensuring prevention and control of pollution, the Board should adopt the practice of granting consents for a substantial and reasonable period while ensuring that the anti-pollution devices and the Effluent Treatment Plants have been installed and the unit is 'compliant' and 'non-polluting' one. The scheme behind Sections 21 to 26 and 31A of the Air Act is that the Board is empowered to grant, refuse, renew and even cancel the consent. Wherever an industry to whom the consent has bee....