TaxTMI 
TaxTMI 
2014 (1) TMI 1913
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....de, Advocates, Mr. Gaurav Gupta, Mr. Ishan Jain and Mr. U.C. Mital, Advocates, Ms. Alpana Poddar, Advocate JUDGMENT JUSTICE SWATANTER KUMAR, (CHAIRPERSON): 1. By this common order, we shall dispose of two appeals, being Appeals No. 68 of 2012 and 69 of 2012, as common questions of law on somewhat similar facts and grounds arise for consideration in both these appeals. Appeal 69 of 2012 was argued as the lead case. FACTS: 2. We may, at the outset, refer to the facts of both the cases giving rise to the present appeals. The State Pollution Control Board, Odisha, (for short the 'Board'), is a statutory 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....
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.... up gradation of the existing pollution control system. Simultaneously the industry will be asked to furnish Bank Guarantee of a stipulated amount for implementing the action plan. If the industry fails to comply within the timeframe, the amount of Bank Guarantee will be forfeited. Alternately if compliance is ensured in time the amount of Bank guarantee will be released. The industries, those will be asked to furnish Bank Guarantees are to be decided on case by case basis through a committee. Chairman, State Pollution Control Board has been authorised by the Board to constitute a committee, that will 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 endorsi....
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....t to such conditions, as may be imposed, Respondent No.1 had to furnish a performance bank guarantee for a sum of five lakh rupees, valid for three years and an affidavit in the prescribed proforma. 5. Respondent No.1, in compliance with the letter dated 7th May, 2008 of the Board, furnished the performance bank guarantee and the affidavit on 8th May, 2008, undertaking that in the event of deliberate violation of the conditions stipulated, the bank guarantee amount may be forfeited in part or in full. On this condition, the industry was permitted to function on 12th May, 2008. 6. The Board 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 oper....
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.... with the environmental clearance conditions, and as a result thereof, the Board, vide its letter dated 26th May, 2012 requested the Indian Overseas Bank to forfeit the bank guarantee amount of five lakh rupees. The Bank, vide its letter dated 5th July, 2012 intimated the Board that the bank guarantee amount of five lakh rupees stood forfeited and submitted a bank draft of five lakh rupees in that behalf. The action of the Board was challenged by Respondent No.1 by filing an appeal before the appellate authority under the Air Act. 8. It is the case of the Board that Respondent No.1 admitted 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. 9. 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 wit....
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....lt on the part of the industry and in fact it had made all efforts to take anti-pollution measures. The industry is not a polluting industry, and therefore, the encashment of the bank guarantee is bad in law. According to the respondents, the order of the appellate authority does not call for any interference. 11. In this appeal and in all the matters before the Tribunal, the stand of the Central Pollution Control Board (for short the 'CPCB') is that a bank guarantee can be asked for as it is in line with the doctrine of corporate social responsibility. The degradation of environment 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. 12. 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 ....
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....eted by January, 2010 and water sprinklers and black topping/concreting the road would be done by the end of March, 2010 positively. The Board then asked the industry to furnish a compliance report. The industry asked for extension of time to comply with these conditions. Vide letter dated 17th May, 2010, the industry informed the Board of the requisite steps that it had taken, including installation of fixed topping/water sprinklers along side the internal roads to contain fugitive emissions due to vehicular traffic. The industry put up a claim that it had complied with the conditions 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) upgradation 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 lette....
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....ts letter dated 11th April, 2012, requested the Board to return the bank guarantee since it had complied with all the conditions. The Board did not return the bank guarantee in terms of the request of the industry and instead decided to invoke the same. At this stage, it may be noticed that the Board had inspected the industry on 29th January, 2010 to verify the non- compliance of the consent-conditions and to assess the present operational status. An inspection report dated 17th/20th February, 2010 was prepared wherein it was stated as under: i. That the dust extraction system was 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. 16. Thereafter, in its inspection report dated 22nd April, 2010, it was noticed tha....
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....cember, 2011. On this assurance, the consent was renewed till 31st March, 2012 vide order dated 23rd September, 2011. The relevant direction of the said order reads as under: "You are directed to complete the installation of PDHS at ESP/BFs hoppers within 3 months from the date of issue of this order. In case of non-compliance to the above is observed the Board may issue appropriate direction/initiate legal action as deemed proper." 19. The industry, vide its letter dated 21st March, 2012, informed that it had complied with the conditions and requested the Board to 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 31 st March, 2012 vide order dated 30th March, 2012. 20. 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 recomm....
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.... which are already heavily industrialised. The problem in relation to air pollution was felt to be more acute in those heavily industrialised areas which are densely populated. The Air Act was thus to provide for prevention, control and abatement of air pollution and also for establishment of the Boards to attain the said objective and to perform the functions connected therewith. 25. A very significant aspect of these Acts was the constitution of the Boards to exercise the powers vested and the functions which they were required to perform under the respective Acts. Presence 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. 26. 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 pe....
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....t the purposes of this Act. 17. Functions of State Boards. (1) subject to the provisions of this Act, and without prejudice to the performance of its functions, if any, under the Water (Prevention and Control of Pollution) Act, 1974 (Act 6 of 1974), the functions of a State Board shall be- (a) to plan a comprehensive programme for the prevention, control or abatement of air pollution and to secure the execution thereof-, (b) to advise the State Government on any matter concerning the prevention, control or abatement of air pollution; (c) 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 pollu....
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....asis has been laid in Section 17 of the Air Act on the advisory functions of the State Boards where it is required to advise the State Government concerned with respect to suitability of any premises or location for carrying on any industry which is likely to cause air pollution. The State Board is also required to inspect air pollution control areas to ensure adherence to air quality standards. The State Board has also to perform functions, as may be prescribed by the CPCB or the State Government. 28. Most importantly, under both Sections 16 and 17 of the Air Act, the CPCB and the 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....
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....complied with at all times. The conditions imposed by the Board in terms of Sub-sections (6) and (7) of Section 21 of the Air Act shall be binding even if they are varied in accordance with the prescribed procedure or even upon transfer of interest in the industrial plant. The Board has the power to inspect an industrial unit wherever it apprehends that emission of any air pollutant in excess of the prescribed standards is likely to occur by reason of any person operating an industrial plant or otherwise in any air pollution control area. The Board may thereupon approach the court in 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. 29. 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 ind....
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.... perform acts which may be in aid thereto and for carrying out effectively the purposes of the Air Act. Once it prepares a comprehensive programme for prevention, control and abatement of air pollution, and emission standards are prescribed, the Board then is required to issue the order of consent to various applicant-units to establish and operate their activities. The matter is not put to rest at that stage but the Board is required to ensure implementation of the terms and conditions of the consent order. It may then do such acts and deeds as may be necessary to ensure effective 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. 31. 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, notwithstandi....
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....o ensure that anti-pollution devices and anti-pollution measures are adopted to prevent and control pollution. For this purpose, the Board may require an industry to furnish a bank guarantee which would serve dual purposes. On the one hand, it would provide incentive to an industry to install anti-pollution devices so as to ensure non- encashment of the bank guarantee, while on the other, in the event of default, resulting in pollution, the Board would be able to spend that money for remedial purposes to control environmental degradation or damage that has taken place as a result of 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 ....
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....and even anticipate the likely damage to environment by such disobedience and thus to remedy the wrong in a timely manner. It has been stated, time and again, that the Board has not been constituted to perform empty formalities. In fact, it has to prevent, control and abate environmental pollution and for achieving the purposes and carrying out the purposes of the Act effectively, it frames guidelines for taking effective measures. (Refer: Bihar State Pollution Control Board & Anr. v. Hiranand Stone Works & Ors. (AIR 2005 Pat 62) 35. For these reasons, we are of the considered opinion 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? 36. The rights and obligations under the Air Act do not fall in the realm of contract. They are a result of sta....
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....ging sludge, trade affluent or trade waste into the river or on open land causing pollution, which a Board has to remove essentially to control and prevent the pollution, then the amount spent by the Board, is thus, spent by encashing the bank guarantee or is adjusted thereat and this exercise would fall in the realm of compensatory restoration and not a penal consequence. In gathering the meaning of the word 'penalty' in reference to a law, the context in which it is used is significant. 39. The Air Act provides a clear exposition of both penalty and compensatory concepts. Section 37 of the Air Act deals with the penalties that can be imposed by the Court of competent jurisdiction for violation of the provisions of Sections 21, 22 and 31A of the Air Act. This provision 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 o....
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....of the Air Act. The Supreme Court in the case of Karnataka Rare Earth (supra) was dealing with the penalty and compensation payable under the Mines and Minerals Development and Regulation Act, 1957 and the rules framed thereunder. The Court was concerned as to whether the amounts payable to the State for loss of minerals owned by it, claimed by the State, would be a penalty or compensation and held as under: "We are clearly of the opinion that the marginal note 'penalties' cannot be pressed into service for giving such colour to the meaning of sub-Section (5) as it cannot have in law. The recovery of price of the mineral is intended to compensate the State for the loss of the mineral owned by it and caused by a person who has been held to be not entitled in 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." 40. 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 we....
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.... cannon of construction of statutes that neither a pecuniary liability can be imposed nor an offence created by mere implication. It may be debatable whether a particular procedural provision creates a substantive right or liability. But, I do not think that the imposition of a pecuniary liability, which takes the form of a penalty or fine for a breach of a legal obligation, can be relegated to the region of mere procedure and machinery for the realization of tax. It is more than that. Such liabilities must be created by clear, unambiguous, and express enact- ment. The language used should leave no serious doubts about its effect so that the persons who are to be subjected to such a liability for the infringement of law are not left in a state of uncertainty as to what their 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"" 42. 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 ....
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.... of the single Judge Bench in the case of Delhi Regent Automobiles Private Limited v. Government of NCT of Delhi (Writ Petition No.7516 of 2007) where the Court took the view that power to direct furnishing of a bank guarantee was covered under the full range of the powers vested in the authorities and rejected the challenge to the power of the authorities. They have also relied upon a judgment of the Calcutta High Court which did not discuss the legal issue and also did not interfere in the direction requiring the units to furnish a bank guarantee. 44. In the case of Splendor Land Base Limited (supra), the learned Single Judge dealt with different questions arising in the case. Suffices it for us to notice that the cases related to the builders of various properties in 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 envi....
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....d consent to them on certain conditions, none of which is punitive. They squarely fall within the power of the Board to prevent and control pollution in consonance with the scheme of the Acts concerned. Thus, on facts, the judgments of the High Court in Splendor (supra) do not have any application to the present case. In any case, we are of the considered view that asking for a bank guarantee as an interim measure for due performance of the conditions of the consent order being compensatory in nature, is not punitive. 46. We have already noticed above that there is a clear distinction between a penal and a compensatory provision. In such matters, the paramount question that would normally fall for determination before a court or tribunal would be whether the action contemplated 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 comp....
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.... would not fall within the ambit of Article 142 of the Constitution of India. Following the principle stated in M.S. Ahlawat v. Union of India, it was observed that under Article 142 of the Constitution, the Court cannot altogether ignore the substantive provisions of a statute and pass orders concerning an issue which can be settled only through a mechanism prescribed in another statute. Having said so, the Court, while referring to the case of Vellore Citizens' Welfare Forum v. Union of India & Ors. clearly stated the principle that the violator can be directed to pay compensation by way of costs for the restitution of the environment and ecology of the area. In addition to the specific provisions of the statute and the rules, the Court also referred to Articles 48A 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 ....
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....e petitioners in those cases were directed to furnish bank guarantees. The challenge was that the direction to furnish bank guarantees for specific amounts was without any legal authority. Rejecting this argument, the Court while referring to the provisions of Section 16 of that Act, which is para material to Section 31A of the Air Act, came to the following conclusion: "14. It is an established Rule of statutory interpretation that every provision, which confers a power should be construed in its own terms, enabling the authority the full range of options, which may naturally fall within it. Asstt. Collector of Central Excise, Calcutta v. National Tobacco Co. of India AIR 1972 SC 2563; Jamaluddin Ahmad v. Abusaleh Najmuddin 2003 (4) SCC 257; likewise the express 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 t....
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....le to the functions and powers of the Board on the one hand and to the object of the Act on the other. Once this twin test is satisfied, then validity of such condition can hardly be questioned. We have already held that such nexus in the present case does exist. The purpose was to prevent and control pollution while permitting the industries to operate, as opposed to the closure of the industries and thus, obstructing the sustainable development. For these reasons, we hold that the plea of the respondent that the direction for furnishing of the bank guarantee was punitive or penal, is liable to be rejected. 56. In regard to the judgment of a Bench of this Tribunal in the case of Hindustan Coco Cola Beverages Pvt. Ltd. vs. West Bengal Pollution Control Board, Appeal No. 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 ma....
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....ant pollution from the industry. While considering the application of the industry to operate the plant, as submitted in March, 2009, the Board, in furtherance to its Resolution, asked the industry to furnish a bank guarantee for an amount of Rs. 17.50 lakhs which was to remain in force for a period of three years from the date of its execution and, in the meanwhile, all necessary steps were required to be taken by the industry to ensure that no environmental pollution was being caused. In furtherance to this letter of the Board, the industry, vide its letter dated 18th June, 2009, without demur or protest and, in fact, in continuation to its request for extension to operate, furnished the bank guarantee along with an affidavit. It will be useful to refer to the affidavit 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 mea....
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....e the job and had left half way and after persuasion and with extra support extended by the industry, the contractor had resumed the work and the industry required further time. The request for further extension of time was allowed by the Board vide its letter dated 5th January, 2010 to rectify the defects aforestated by 31st March, 2010 positively and to furnish a compliance report. The industry was again inspected on 29th January, 2010. During this inspection, certain observations were made by the Inspecting Team and it was found that various requisite steps had still not been taken by the industry and furthermore the ambient air quality monitoring result showed existence of pollution and emissions were in excess of the prescribed parameters. Still, another inspection was conducted 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 guara....
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....d which was communicated to the industry on 27th March, 2012. In this report, it was noticed that the bank guarantee was valid till 12th June, 2012 and whatever direction had been issued had been complied with and the plant was operating efficiently. In this report, it was also communicated that the ambient air quality at certain points was exceeding the prescribed parameters. The observations and recommendations, as stated in this inspection report, were as follows: "OBSERVATIONS & RECOMMENDATIONS: 1. The unit has completed all the installation of the bag filters as per the recommendation of IIT, Kharagpur. All the bag filter houses have also been provided with the pneumatic dust handling system and stored in a common silo. 2. The flue dust collected 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 u....
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....he Inspecting Team made the following observations: "1. There was visibly flue gas emission at emergency cap of DRI kiln-III. 2. The emission from the common stack connected to common ESP of kiln - I & II was visually high indicating malfunctioning of ESP. 3. Fugutive dust emission was observed from CD area of kiln - III, common product house and coal crusher area indicating the bag filters at these locations were not working properly. 4. Leakage of flue gas was taking place from slip rings of DRI kiln-I. 5. PDHS system installed at the hoppers of ESP of kiln - III was found to be in defunct condition for which heavy dust nuisance in fugitive forms was observed to be taking place. 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 takin....
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....has been legally established as true. Similarly, 'waiver' is actual intent to abandon or surrender his right by a person i.e. a right or an objection may be available to a person in law but the person consciously not only waives that objection or right but in fact, acts to the contrary. Like in the present case, if the respondents actually believed that they could raise an objection with regard to the condition to furnishing of the Bank Guarantee, they ought to have raised it right at the very initial stage but they not only failed to raise such objection albeit acted to the contrary by submitting a Bank Guarantee without demur and protest. At this stage, we may also refer to the judgment of the Supreme Court in the case of Chairman 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....
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....d, thus, was fully justified in invoking the bank guarantee. Ancillary but the most significant question that now arises for consideration is whether the bank guarantee had been invoked as per its terms. Clause 2 of the bank guarantee which we have reproduced above states that the industry had three obligations - (a) to operate and instal the existing and the requisite pollution control system and/or other pollution control measures effectively within the stipulated time, and (b) this was to be to the satisfaction of the Board in terms of its letter dated 12th June, 2009, and (c) the industry was to meet the standards prescribed by the Board. 65. In case of failure to comply with the same during the stipulated period of three years, 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 non- compliances were observed during the tenure of the bank guarantee. This invocation was founded on the....
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.... violation on the part of the industry to invite the consequences of invocation of bank guarantee in terms of the affidavit filed by the industry before the Board. Both these reasons cannot be sustained by us. Of course, the Inspection Report dated 1st March, 2012 had indicated that the industry was working satisfactorily. But the appellate authority ignored two very important facts from its consideration. One that there were more than eight inspections that had been conducted by various technical teams of the Board and in most of them not only breach of the terms and conditions of the consent order was noticed but it was also clearly mentioned that there was serious pollution caused by the industry particularly in relation of the ambient 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 befor....
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.... discussion and the directions that the Tribunal needs to pass in the facts of the present case and in the larger administration of environmental justice, we may answer the issues/questions formulated by us in paragraph 24 of this judgment. The answers are as follows: - a. Resolution of the Board for imposing a condition upon the industrial plants/units to furnish a bank guarantee as an interregnum for compliance and/or in the nature of compensation cannot be held to be without the authority of law or jurisdiction, in so far as it is not penal or punitive. b. In the facts and circumstances of the present case, invocation of the bank guarantee by the Board for non-compliance of the conditions stated in the consent order 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 ban....
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....al plant located in an air pollution control area without previous consent of the Board. The legislative intent behind this provision would lead to decipher two concepts - one, the consent for the purpose of establishing an industrial plant while the other for operation of that plant. The purpose of this Section is to ensure that when a unit or an industrial plant is given consent to operate, the unit ought to have satisfied all the conditions stated in the order of consent to establish and would have installed the requisite effluent treatment plants and other anti-pollution devices to ensure that it causes no pollution. It necessarily implies that this is the rule and permitting a unit to operate, subject to satisfaction of 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 an 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 '....