K.T.V. HEALTH FOOD PVT. LTD. versus UNION OF INDIA AND ORS on 1 February 2023

246

[2023] 9 S.C.R.

A

K.T.V. HEALTH FOOD PVT. LTD.

v.

UNION OF INDIA AND ORS.

CIVIL APPEAL NO.3626 OF 2020

BFEBRUARY 01, 2023

[K. M. JOSEPH, B. V. NAGARATHNA ANDJ. B. PARDIWALA, JJ.]

Environment Protection Act, 1986 – 2011 Notification issuedunder the 1986 Act – Respondent No.1 granted ex post factoCclearance to the appellant purportedly invoking paragraph-4.3 ofthe aforesaid Notification, for laying of pipeline for the transfer ofedible oil from the Chennai Port to the storage terminal tank andfor the establishment of the storage transit terminal – NGT heldthat the activity of putting up a storage tank transit terminal beingDcontrary to the 2011 Notification was illegal as the storage terminalwas not located ‘in’ the Chennai Port, in which case alone, it wouldhave been permissible under the permitted activities of CoastalRegulation Zone II – Construction of the storage facility and thepipeline were directed to be removed, environmental compensationimposed – Appellant inter alia contended that CRZ-II being lessEsensitive than CRZ-I, in CRZ-I, the “storage of edible oil inter aliais permitted within the notified ports” while, in CRZ-II, storage ofnon-hazardous cargo such as edible oil, fertilizers and foodgrainis permitted ‘in notified ports’ – And since the word ‘within’ which isused in CRZ-I is not employed in regard to the similar activity inFCRZ-II and instead the word ‘in’ is used, they must receive a differentmeaning – Held: Objects of the notification include guarding againstthe dangers of natural hazards in coastal areas and the sea levelrise due to global warming – The coastal regulation appears to bebased on considerations which appear to accommodate conflictinginterests premised on considerations of what is felt as indispensablyGnecessary and the nature of the zone in question – Words ‘within’and ‘in’ cannot include what is outside the port – The maker of thenotification has not even contemplated the activities in question ina ‘port area’ – A storage tank cannot be permitted outside the portlimits – If the same is allowed, it will introduce chaos – Questionwould arise as to up to what distance from the port area it would beH

considered as the ‘in the port area’ – The 2011 Notification cannotreceive an interpretation which would leave matters of moment tobe afflicted with the vice of uncertainty – As far as the pipeline isconcerned, it is located in a zone where it is permitted activity – Asto whether the pipeline can continue to be used if the storage tanksare demolished is a matter which must engage the attention of theauthorities – Appellants may approach the relevant District CoastalZonal Management Authority – Appellants given six months periodto demolish the storage tanks to comply with the impugned order ofthe NGT – Appellant in the first appeal to pay the compensationordered within a month – Major Port Trust Act, 1964 – s. 35 –Customs Act – ss.2(11), (12), (13), 7(a), 57 – Indian Ports Act, 1908– National Green Tribunal Act, 2010.

Customs Act – ss.7(a), 57 – Indian Ports Act, 1908 – MajorPort Trust Act, 1964 – s. 35 – Held: Every port falling under theIndian Port Act and the Major Port Act may not be on their ownbecome a customs port – A customs port u/s.2(12) comes into beingon a port being appointed as such u/s.7(a) – The case of the appellantbased on the license u/s.57 of the Customs Act may make it a customsarea as it includes a warehouse but, it is inconceivable as to how itwould transform it into ‘in a notified port’ – Environment ProtectionAct, 1986.

Partly allowing the appeals, the Court

Conclusion

Partly allowing the appeals, the Court

HELD: 1.1 The Central Government declared certain areasas Coastal Regulation Zone (‘CRZ’). The CRZ in the First Clauseconsists of the land area from high tide line to 500 meters on theland along the sea front. The High Tide line is the line based onthe highest water mark during the spring tide. We may only furthernotice that among the other 4 categories of CRZ, the CRZincludes the water and the bed area between the LTL (LOW TIDELINE)(which line is based on the lowest height of the water bodyduring the spring tide) to the territorial water limit (12 nauticalmiles) in the case of the sea and the water bed and area betweenthe LTL at the bank to the LTL on the opposite of the bank of thetidal influenced water bodies. CRZ has been classified under para7 into CRZ I, CRZ II, CRZ III, CRZ IV and CRZ V. This Court isconcerned with CRZ II. Paragraph-3 provides for prohibitedactivities within CRZ. This Court may notice that it is divided ABC

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Ainto 14 categories and the noticeable feature is that certainexceptions to the prohibitions are also declared. Of relevance tothe cases before us, are certain Clauses in paragraph-3. [Paras21 and 22][262-F-H; 263-A-B, E]

1.2 Paragraph-3(xi) provides for prohibition of constructionBactivity in CRZ1 except those specified in para 8 of thenotification. This Court need not be detained with various othersclauses. Regulation 4 deals with permissible activities in CRZarea. It is declared that activities which are enumerated underparagraph-4 shall be regulated except those prohibited inparagraph-3. This means what is prohibited in paragraph-3 cannotCeither be permitted or regulated within the meaning of paragraph-4. Since Clause 2 of paragraph-4 provides that the activitiesdescribed thereunder would require clearance from MoEF, thequestion would arise as to whether for the other activities, whichare permissible, does it require clearance? Paragraph-4.2Dprovides the answer. It provides for the procedure for clearanceof permissible activities. Various formalities have to beundergone. Originally, the 2011 notification did not provide forany ex post facto approval. It is in the year 2018, i.e., on 09.03.2018that paragraph-4.3 came to be inserted in the 2011 Notification.It will at once be noticed that thereunder violation of ‘norms’Ewould disentitle a person to post facto clearance. The norms arelaid down in Paragraph-8. Paragraph-8 provided for regulation ofactivities permissible under the 2011 Notification. It declares thatthe development or construction activities in different categoriesof CRZ shall be regulated by the concerned CZMA in accordanceFwith the norms. [Paras 27-29][264-G-H; 266-F-G; 267-D-E]

1.3 CRZ-III, comprised of area up to 200 meters from HTLon the landward side in the case of sea front inter alia. It is markedas the NDZ [or No Development Zone}. It was, inter alia, providedthat NDZ shall not apply “in such area falling within any notifiedGport”. There are various restrictions therein. Certain activitieswere shown as permitted activities in the NDZ. They included inClause (e) facilities for receipt and storage of petroleum productsand liquified gas as specified in Annexure-II. Interestingly, inregard to the area between 200 meters to 500 meters falling inCRZ-III, paragraph-8 permitted storage of non-hazardous cargoH

such as edible oil, fertilizers, foodgrains ‘in’ notified ports. [Para31][269-D-E]

1.4 It will be noticed that the Certificate is silent as regardsthe storage facility and it being in the port. The Certificate doesnot exactly declare that there is no space at the Chennai port.Appellants may be correct in contending that edible oil is nothazardous and that edible oil imports may be necessary to meetthe requirement of a growing population. It may be true that thereis no manufacturing process which may be involved inconstructing or maintaining the storage facility. [Para 35][270-G-H; 271-A]

1.5 A perusal of the 2011 notification reveals the followingas the avowed objects: (i) ensuring livelihood security to the fishercommunities and other communities living in the coastal areas,(ii) conservation and protection of coastal stretches; (iii) theprotection of the unique environment of the coastal stretchesand its marine area; (iv) promotion or development throughsustainable manner based on scientific principles taking intoaccount the dangers of natural hazards in the coastal areas; (v)the aspect of sea level rise due to global warming. Therefore,This Court is unable to agree with the appellants that as the layingof the pipeline would result in greater efficiency in the functioningof the port or for that matter, it would reduce the traffic congestion,and what is more, thereby there would be a reduction in thepollution 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 andgive effect to it. It is equally the duty of the Court to eschew fromits consideration matters which may not be strictly germane tothe object. [Para 36][271-C-F]

1.6 In paragraph- 8(I)(i)(b), construction of pipelines, interalia, was permitted. It is thereafter that in paragraph-8(II), underCRZ-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 relevantcontents of CRZIII. CRZ-III of the 2011 Notification was dividedinto area ‘A’, which, inter alia, dealt with areas up to 200 metersfrom HTL on the landward side in the case of sea front. The saidClause proclaimed further that the said area would be a No AB

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ADevelopment Zone (NDZ). This Court notices that in CRZ-IIIthe NDZ was not to be applicable in ‘such areas’ within any portlimits. Thus, the expression ‘within’ made its appearance inrelation to notified port limits again. In the permitted activitiesin the NDZ under area ‘A’, viz., up to 200 meters as aforesaid,this Court finds Clause (e), which permitted facilities for receiptBand storage of petroleum products and liquified petroleum gasas specified in Annexure-II. Area B of CRZ-III is described asthe area comprised from 200 meters to 500 meters. Since theCRZ itself would terminate upon the 500 meters distance beingobtained, this constituted, in other words, the residuary area, ofCCRZ-III. Under the same we notice that again facilities for receiptand storage of petroleum products and liquified natural gas asspecified in Annexure-II was permitted. This Court may bear inmind that the very same activity had also been contemplated inarea A of CRZ-III, viz., the area comprised to 200 meters of thehigh tide line of the landward area in the case of the sea front,Dinter alia. Interestingly, when it comes to storage of nonhazardouscargo, such as edible oils fertilizers and food grain ‘in’ the notifiedports, it was permitted activity in area ‘B’ of CRZ-III under Clause4 thereof, that is, an area located between 200 metres to 500metres. It must be noticed that CRZ-III had been classified inEparagraph-7 essentially as relatively undisturbed area, which didnot belong to either CRZ-I or II, which included the coastal zonein rural areas, both developed and undeveloped and also areaswithin municipal limits or in other legally designated urban areas,which were not substantially built up. This Court has alreadynoticed the classification of CRZ-II earlier, as areas which hadFbeen developed up to or close to the shore line. Can it then besaid that storage of non-hazardous cargo, such as edible oil,fertilizers food grain, permitted in the notified ports in CRZ-III,Area ‘B’, be also permitted in CRZ-III Area ‘A’? Going by thecontents of CRZ-III under activities which were permitted in theGNDZ, we are unable to find any clause which permitted suchstorage of non-hazardous cargo including edible oil, inter alia.Therefore, in the NDZ area falling under area ‘A’ of CRZ-III, itmay have been impermissible. [Para 42][274-E-H; 275-A-E]1.7 Going by the definition of the word ‘in’, it includes ‘soHas 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 storageof non-hazardous material is permitted inside the notified port.This Court notices that the definition of the word ‘within’ alsoincludes the word meaning inside. No doubt, Justice OliverWendell Holmes declared: “A word is not a crystal, transparentand unchanged; it is the skin of a living thought and may varygreatly in color and content according to the circumstances andtime in which it is used.” [Para 45][276-G-H; 277-A]

1.8 Chennai Port is a Port, which is, admittedly, a majorport within the meaning of Major Ports Act, 1964. Anotherenactment, which deals with ports, is the Indian Ports Act, 1908.The appellants would contend that, while the storage facility maynot be located within the Chennai Port, it is licenced under Section57 of the Customs Act as a customs station. In the Major PortsAct, the word ‘port’ is defined in Section 2(q). [Para 47][277-D-E]

1.9 It is not the case of the appellants that the storage islocated within the limits of the Chennai Port as contemplated inSection 2(q). It is, therefore, not inside the said Port. However,it is appellants case that the storage facility is located in theCustoms notified area. This is based on the license issued underSection 57 of the Customs Act. Thus, every port falling underthe Indian Port Act and the Major Port Act may not be on theirown become a customs port. A customs port under Section 2(12)comes into being on a port being appointed as such under Section7(a). A customs station no doubt, includes any customs port anda land customs station. The case of the appellant based on thelicense under Section 57 of the Customs Act may make it acustoms area as it includes a warehouse but it is inconceivableas to how it would transform it into ‘in a notified port’. [Paras 49and 52][277-H; 278-A; 279-A-B]

1.10 CRZ-II has been classified in para 7 as areas that havebeen developed up to or close to the shore line. The storagetank of the appellant in the first case appears to be located at adistance of 160 feet from the shore line. At the same time, it islocated a few kilometres away from the Chennai port. This Courthas already noticed that under CRZ III, the facility of storage ofnon-hazardous materials including edible oil is permitted only at ABC

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Aa distance between 200-500 meters. This is even though bothhandling and storage of petroleum products is permitted, bothwithin a distance of up to 200 meters from the high tide line asalso between 200-500 meters from the high tide line. It may defylogic. At least at first blush. This Court has already set out theobjects of the notification. They include guarding against theBdangers of natural hazards in coastal areas and the sea level risedue to global warming. This is no doubt also to be balanced withthe need for sustainable development. The coastal regulationappears to be based on considerations which appear toaccommodate conflicting interests premised on considerationsCof what is felt as indispensably necessary and the nature of thezone in question. Allowing storage facilities for non-hazardousactivities like edible oil, is, apparently, considered as anindispensable part of the operation of a port. The Port Authoritieswould have full control over the storage facility located within itslimits. No doubt, Section 35 of the Major Port Trust Act, 1964,Dinter alia, empowers the port to execute works outside its limitsfor securing and storing goods to be landed or to be shipped.The storage tanks in question are not works executed by theport. [Para 55][280-A-F]

1.11 Paragraph-8(I)(i)(b), undoubtedly, related to permittingEof pipelines being constructed in CRZ-I. Paragraph-8(I)(ii) relatedto CRZ-I. The further reference is only to paragraph 8(II)(vi)which permits the activity in question ‘in’ notified ports. Theaspect relating to buildings being permitted on the landward sideof the existing road dealt with in paragraph 8(II)(i) was not theFbasis for the decision even according to the counter affidavit.This is apart from the fact that impugned decision of the firstrespondent does not proceed on the basis of paragraph 8 (II)(i).This is also apart from noticing the contention of RespondentNo.5 that storage facility being specifically dealt with, ‘building’

under paragraph-8(II)(i), would not include storage facility. WeGwould therefore, think that we must not be persuaded to allowthe appellants or allow them to lean on paragraph 8(II)(i) of the2011 Notification. The authorities are experts. They have appliedtheir minds. Their understanding should govern. At least, itshould be given the weight that is due to them. [Paras 57 andH58][281-B-E]

1.12 That the authorities have proceeded on a particularbasis, may as well betray their erroneous understanding. Thatsuch views do not clinch the issue relating to the construction ofthe law is elementary. This Court would think that in the facts ofthis case and on a construction of the statute or the law in question,viz., the 2011 notification, the understanding of the authorities ifthat be the basis of the contention, cannot overwhelm ourunderstanding of the notification. This Court again reiterate thatthe words ‘within’ and ‘in’ cannot include what is outside the port.The maker of the notification has not even contemplated theactivities in question in a ‘port area’. This Court must hereelucidate and observe that if the contention is to be upheld that astorage tank can be permitted outside the port limits, it willintroduce chaos. The question would arise as to up to whatdistance from the port area it would be considered as the ‘in theport area’. The 2011 Notification cannot receive an interpretationwhich would leave matters of moment to be afflicted with thevice of uncertainty. This is apart from the importance of avoidingan interpretation which seemingly allows free play in the joints tothe Administrator but, at the same time, vest an arbitrary powerin him. Ex post facto permission can be given for permittedactivity as found by the NGT itself. No doubt, the pipeline, mayhave meaning only as so far as it is connected to the storagetank. As to whether the pipeline can continue to be used if thestorage tanks are demolished is a matter which must engage theattention of the authorities. In regard to the pipelines, it wouldbe the District Coastal Zonal Management Authority, which couldtake a decision. [Para 59 and 60][283-A-D, F-G]

1.13 As regards the pipelines which have been drawn, theappellants may approach the relevant District Coastal ZonalManagement Authority within a period of one month from today.The District Coastal Zonal Management Authority will considerany application made in regard to the continued use of the pipelineand take a decision in accordance with law within a further periodof six weeks from the date of the receipt of the application. Theappellants are accordingly given a period of six months from todayto comply with the impugned order of the NGT. This is in regardto the direction to demolish the storage tanks. The appellant in ABC

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K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA AND

CIVIL APPELLATE JURISDICTION : Civil Appeal No.3626of 2020.

From the Judgment and Order dated 30.09.2020 of the NationalGreen Tribunal, Southern Zone, Chennai in Appeal No.04 of 2019.

With

Civil Appeal No.3639 of 2020

Ranjit Kumar, Dhruv Mehta, Sr. Advs., R.Sarvana Kumar,R.Jawahar Lal, Siddharth Bawa, Anuj Garg, Mohit Sharma, MayankKshirsagar, Advs. for the Appellant.

Ms. Aishwarya Bhati, A.S.G., Amit Anand Tiwari, A.A.G., Ms.Anitha Shenoy, Sr. Adv., Ritwick Dutta, Ms. Srishti Agnihotri, Ms.Ayushma Awasthi, Ms. Sanjana Grace Thomas, Ms. Namrata SarahCaleb, Ms. Itisha Awasthi, Ms. Sruthi K., Ms. Mantika Vohra, GurmeetSingh Makker, Ms. Archana Pathak Dave, Navanjay Mahapatra,Chinmayee Chandra, Ms. Preeti Rani, Dr. Joseph Aristotle S., Ms.Devyani Gupta, Ms. Tanvi Anand, Shobhit Dwivedi, T. R. B. Sivakumar,Advs. for the Respondents.

The Judgment of the Court was delivered by

K. M. JOSEPH, J.

1. The Appeals are lodged under Section 22 of the National GreenTribunal Act, 2010.

C.A. NO. 3626 OF 2020 (THE FIRST APPEAL)

2. The appellant challenges the Order passed by the NationalGreen Tribunal (NGT), Southern Zone. By the impugned Order, the NGThas allowed the appeal filed by Respondent No.5 and set asideproceedings dated 08.03.2019. By the said proceedings, Respondent No.1had granted ex post facto clearance purporting to invoke paragraph-4.3of the Notification issued in the year 2011 (hereinafter referred to as,‘the 2011 Notification’) under the Environment Protection Act, 1986(hereinafter referred to as, ‘the Act’). By the said clearance, the appellantwas given clearance for the laying of pipeline for transfer of edible oilfrom the Chennai Port to the storage terminal tank and for theestablishment of the storage transit terminal of the appellant. The NGThas found that while the ex post facto clearance could be granted under A

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Aparagraph-4.3, and that it would have prospective operation, however,the activity of putting up a storage tank transit terminal, being contraryto the 2011 Notification, the same was illegal. It was found to be illegalin turn, on the ground that the storage terminal was not located ‘in’ theChennai Port, in which case alone, it would have been permissible underthe permitted activities of Coastal Regulation Zone II (for short,‘CRZBII’).

THE FACTS

3. The appellant is in the business of processing and refining edibleoil. Towards the said business, the appellant imports edible oil. The edibleCoil is imported through the Chennai Port. On 05.11.2014, in the publicauction, the appellant purchased an existing storage facility. It was locatedat Old Door No. 4061/A and New Survey No. 4061/2 in the EnnoreExpressway. The appellant thereafter, according to it, started the processto seek approvals for laying an underground pipeline of 4.5 kilometres tothe said storage facility. On payment of Rs.5097921/-, the Chennai FishingDHarbour Management Committee granted permission to lay theunderground pipeline. The NHAI granted permission to lay theunderground pipeline. On 03.03.2015, allegedly based on inspection ofthe storage facility, and on payment of charges, including service tax,the Chennai Port Trust granted permission for laying the undergroundEpipeline from the Chennai Port to the storage facility. On 10.07.2015,purporting to act under paragraph-4 of the 2011 Notification, the appellantmade a proposal to the District Coastal Management Authority, Chennai(hereinafter referred to as ‘the DCZMA’). It would appear that the saidBody recommended the proposal. The third respondent, viz., the TamilNadu State Coastal Zonal Management Authority (hereinafter referredFto as, ‘the State Authority’) considered the proposal and it forwardedthe same through the second respondent, viz., the State of Tamil Naduto the first respondent, viz., the Union of India, in the Ministry ofEnvironment and Forests and Climate Change. Respondent No.4, viz.,the Expert Appraisal Committee, CRZ, sought two clarifications. OnG24.08.2016, the Chennai Port Trust issued a Certificate and permittedthe laying of the pipeline, which, according to the appellant, was basedon the need to avoid usage of tanker lorries and as it resulted in betterhandling of vessels at the Port. While the recommendation of the thirdrespondent was pending before the first respondent, appellant startedlaying the pipeline with the prior permission of the NHAI, the ChennaiH

K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA ANDORS. [K. M. JOSEPH, J.]

Fishing Harbour Committee and the Port Trust. On 19.10.2016,Respondent No. 5 filed O.A. No. 238 of 2016 against the activities ofthe appellant in question. A Local Commissioner was appointed, whoinspected the Facility. We may, at this juncture, notice the followingphysical 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 12threspondent and Bay of Bengal, the State Highway (Ennore ExpressHighway) runs North to South. The State Highway measures about120 Feet in width and from the road, there is a space of about 40Feet up to the sea shore. Thus, the distance between the entranceof the 12th respondent and the seashore is about 160 Feet.”

[The appellant was the 12[th] Respondent]

4. The NGT disposed of the said O.A. noting that the storagefacility was closed and that till the first respondent took a decision, noactivity will be carried out. It would appear that Respondent No. 4recommended the proposal for CRZ clearance, subject to certainconditions. This was even after finding that there was no provision in the2011 Notification, but taking inspiration from the provisions of the 2006Notification.On 06.02.2018, the 2011 Notification was amended by theinsertion of paragraph-4.3. Based on the said amendment, the StateAuthorities recommendations were called for. On 27.12.2018, the storagefacility was inspected by the DCZMA. The Tamil Nadu State PollutionControl Board, it would appear, intimated the third respondent that exceptfor not obtaining prior clearance, there was no other violation. Accordingly,the State Authority recommended the proposal. It is on this basis, thefirst respondent granted post facto clearance by proceedings dated08.03.2019. The appellant obtained consent to operate from the PollutionControl Board. On 08.04.2019, the fifth respondent filed the appeal beforethe NGT and the NGT has allowed application, as already noticed.

CIVIL APPEAL NO. 3639 OF 2020 (THE CONNECTEDAPPEAL)

5. The appellant-company is a sister concern of the appellant inthe first Appeal. It has also constructed a storage facility, being engaged A

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Ain the business of edible oil, for the purpose of storing the imported edibleoil at a distance of nearly 600 meters from the location of the storagetank of the appellant in the first Appeal. It has also drawn a pipelinefrom the storage tank to the facility it has put up for storing edible oil, fortransmission to its factory. We must mention here that the idea was toimport edible oil, unload it at Chennai Port, take the edible oil by a pipelineBto the storage facility and from there, transmit the same by tanker lorriesto their factories, wherein the manufacturing activities were being carriedout.

6. The issues arising in both the Appeals are common and, hence,we discuss the issues with reference to the first Appeal.CTHE SALIENT FEATURES OF THE ORDER DATED08.03.2019 BY THE FIRST RESPONDENT

7. The salient Features of the Order dated 08.03.2019 passed bythe First Respondent:D

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.

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iv.The project will reduce traffic to the Chennai Port Trust.

v.As per CRZ Notification, vide para 8, storage of non-hazardous cargo such as edible oil, fertilizers and food graincan be established ‘only in notified ports’.F

8. There are other aspects and specific conditions, apart fromgeneral conditions. It is also made clear that the clearance is subject tothe final Order of this Court in the matter of Goa Foundation v. Unionof Indiain Writ Petition (Civil) No. 460 of 2004.

THE IMPUGNED ORDERSG

9. The NGT found merit in the contention of the appellants thatthe first respondent had the power to grant ex post facto clearance.However, it would have only prospective operation. The clearance could,however, be supported, if the activity which was permitted, was one,which was contemplated under the 2011 Notification. The Tribunal wentH

on to note that the storage facilities were not located ‘in’ the ChennaiPort. In fact, it was on the basis that under paragraph-8 of the 2011Notification, storage of edible oil, inter alia, was permissible ‘in’ thelimits of a notified port. The attempt of the appellants to support theclearance with reference to the fact that under permitted activities inCRZ I, storage of non-hazardous cargo, including edible oil, was permitted‘within’ the limits of a port anda distinction, therefore, existed betweenthe words ‘within’ and ‘in’, did not find favour with the NGT. It was thecontention of the appellants that being two different words and ameaningful interpretation being warranted in the case of CRZ I, theactivity to be permitted had to be strictly within the limits of the port.Both, taking into account the difference in the words used, as also thefact that CRZ II contemplated a less harsh regime, the case of theappellants was that a purposeful interpretation would warrant the viewthat the storing of the edible oil in the CRZ II area, could be permittedeven outside the limits of the port. It is this argument that failed.

10. The NGT has found the impugned Order of the first respondentillegal. The construction of the storage facility and the pipeline weredirected to be removed. The appellant in the first appeal was directed topay environmental compensation in a sum of Rs.25 lakhs. We may onlyelucidate that the appellant in the connected appealhad initially succeededbefore the Tribunal. However, it was after allowing a Review Petition,which decision was not challenged and, on hearing the Appeal again,that the present impugned Order came to be passed.Noting that theappellant in the connected case was earlier visited with environmentalcompensation, no compensation was imposed on it.

11. We heard Shri Ranjit Kumar, learned Senior Counsel for theappellant in the first appeal and also Shri Dhruv Mehta, learned SeniorCounselfor the appellant in the other appeal. We further heard Ms.AnithaShenoy, learned senior Counsel on behalf of respondent No.5 and ShriAnand Tiwari, learned Counsel on behalf of respondents 2 and 3. Wealso further heard Mr. Archana Pathak Dave, learned Counsel on behalfof Union of India.

12. Shri Ranjit Kumar, learned Senior Counsel would submit thatthe appellant was engaged in the manufacture of edible oil. In order toavoid the traffic snarls and the congestion it caused in the Chennai Port,it was the Chennai Port itself which suggested that the appellant may AB

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Adraw the pipeline from the Port area so that the edible oil which wasdownloaded on import could be taken to a storage facility and fromthere carried to the factory of the appellant. He would submit that theprovisions of 2011 Notification would reveal that paragraph-3 declaresactivities which are prohibited. The storage tank has been put up inCRZ-II area. There are construction activities permitted in CRZ-I areaBwhich is the most fragile area. He would take us through the Notificationand point out that on a combined reading of paragraphs-3, 4, 7 and 8, thefollowing will be the upshot.In regard to CRZ-II, it is less sensitive thanCRZ-I.In CRZ-I, the “storage of edible oil inter alia is permitted withinthe notified ports”. In CRZ-II on the other hand, storage of non-hazardousCcargo such as edible oil, fertilizers and foodgrain ispermitted ‘in notifiedports’. Since the word ‘within’ which is used in CRZ-I is not employedin regard to the similar activity in CRZ-II and instead the word ‘in’ isused,the principal contention is that they must receive a differentmeaning. He would further contend that this Court may adopt purposiveinterpretationand, in this regard, he drew our attention to the judgment ofDthis court inM. Nizamudeen v. ChemplastSanmar Limited and Others1.The words ‘in notified ports’, occurring in pargraph-8 (II) (vi) of the2011 Notification must be construed to mean “in or around the notifiedports”.He would submit that storage tanks have been constructed notwithin the Chennai Port but on a purposive interpretation, the storageEtank must be treated as “in” the Chennai Port though it isnot inits notifiedlimits. The storage container was located in the Customs Notified Areaof the Chennai Port. He would contend that CRZ-II even permits facilityfor the storage of petroleum products and liquified natural gas.If that isso, he poses the question that having regard to the fact that CRZ-IIgenerally provides for a less harsh regulatory regime and CRZ-I, it mayFresult in an absurdity to not permit storage of non-hazardous cargo whichincludes edible oil in CRZ II. He would refer to the company that edibleoil keeps in the clause,namely, fertilizers and foodgrains. He would pointout that it may be absurd to disallow storage of foodgrains, fertilizersand edible oil in CRZ-II. This is all the more reason to place awiderGmeaning on the word ‘in’ the notified port.

13. Shri Ranjit Kumar, learned Senior Counsel, drew support fromthe decisions of this Court as indicated herein. In Electrosteel SteelsLimited v. Union of India and Others2, this Court held that the Act does1 (2010) 4 SCC 240H2 (2021) SCC OnLine 1247

not prohibit grant of ex post facto environmental clearance. It also heldthat the Court cannot be oblivious to the interest of the economy or needto protect the livelihood of hundreds of employees and others employedin the project, if such project complies with environment norms.

14. The said view has been followed in the judgment in PahwaPlastics Pvt. Ltd. and Another v. Dastak NGO and Others3 andGajubha Jadeja Jesar v. Union of India and Others4. It is, therefore,contended that there was no occasion for the NGT to interfere.

15. Relying on the Judgment inAlembic Pharmaceuticals Ltd. v.Rohit Prajapati and Others5, it is contended that the impugned Orderdoes not do justice to the Principle of Proportionality. It is pointed outthat in the said case, on payment of environmental compensation, theindustry was permitted to continue.

16. Shri Dhruv Mehta, learned Senior Counselin the other casewould adopt the arguments. He would further contend that the principlesof contemporaneous exposito are attracted.In this regard, Shri DhruvMehta, learned Senior Counsel sought to draw considerable support fromthe decision of this Court in K.P. Varghese v. Income Tax Officer,Ernakulam and Another6. This is on the basis that the understandingof all the authorities including respondent No.1 in the impugned Order isthat construction of the container for storage facility is permissible underCRZ-II. The Tribunal clearly erred in interfering with the views of allthe authorities.

17. Shri Dhruv Mehta, learned Senior Counsel, would also contendthat the matter may be viewed in the context of Principles of SustainableDevelopment and Polluter Pays Principle.

18. Shri Anand Tiwari, learned counsel appearing on behalf ofrespondent 2 and 3 would also support the appellants.He would contendthat a purposive interpretation is to be placed. Smt. Archana PathakDave, learned Counsel for the Union of India equally supported the standof the Government of India.

19. Smt. Anitha Shenoy, learned Senior Counsel appearing on behalfof 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

A

B

C

D

E

F

G

H

Athat the matter relates to the defending of the environment. In constructingoutside the limits of the notified port, a fact, which is not disputed by theappellant, there is an indefensible violation of a law which subservesasalutary and sublimeobject.She would draw support from the body ofcase law consisting essentially of the views of this Court indicating thatthis Court has firmly set its face against the trampling of law relating toB-the environment [SeeIndian Council for EnviroLegal Action v. Unionof India7, S. Jagannathan v. Union of India and others8, Piedade9Filomena Gonsalves v. State of Goa, Vaamika Island (Green Lagoon10Resort) v. Union of India, Kapico Kerala Resorts (P) Ltd. v. State11of Kerala, Kerala State Coastal Zone Management Authority v.CState of Kerala12]. She would submit the word ‘in’ cannot mean ‘out’.In other words, it certainly cannot countenance the storage facility beinglocated outside the notified port. In the facts of this case, it is at quiet along distance from the Chennai Port and the laws relating to environmentshould be strictly construed.DANALYSIS

20. The 2011 Notification has been issued under Section 3 of theAct. The first notification in regard to the notification of Coastal Zonewas issued in the year 1991. There were amendments. It is thereafterthat the notification was issued in the year 2011. The 2011 notificationEcame 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 CoastalRegulation Zone (‘CRZ’, for short). The CRZ in the First Clause consistsFof the land area from high tide line to 500 meters on the land along thesea front. The High Tide line is the line based on the highest water markduring the spring tide. We may only further notice that among the other4 categories of CRZ,the CRZ includes the water and the bed areabetween the LTL (LOW TIDE LINE) (which line is based on the lowestGheight of the water body during the spring tide) to the territorial water 7 (1996) 5 SCC 2818 (1997) 2 SCC 879 (2004) 3 SCC 44510 (2013) 8 SCC 76011 (2020) 3 SCC 18H12 (2019) 7 SCC 248

limit (12 nautical miles) in the case of the sea and the water bed andarea between the LTL at the bank to the LTL on the opposite of thebank of the tidal influenced water bodies. CRZ has been classified underpara 7 into CRZ I, CRZ II, CRZ III, CRZ IV and CRZ V. Since, we areconcerned with CRZ II we may notice the elements which constitutethe same.

“7. Classification of the CRZ – For the purpose of conservingand protecting the coastal areas and marine waters, the CRZarea shall be classified as follows, namely:- XXXX

XXXXXXXX

(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 inother existing legally designated urban areas which are substantiallybuilt-up and has been provided with drainage and approach roadsand other infrastructural facilities, such as water supply andsewerage mains;”

22. Paragraph-3 provides for prohibited activities within CRZ.We may notice that it is divided into 14 categories and the noticeablefeature 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 declaredas prohibited activitieswithin the CRZ,-

(i) Setting up of new industries and expansion of existing industriesexcept,- (a) those directly related to waterfront or directly needing foreshorefacilities; Explanation: The expression “foreshore facilities” means thoseactivities permissible underthis notification and they requirewaterfront for their operations such as ports and harbours, jetties,quays, wharves, erosion control measures, breakwaters, pipelines, A

B

C

D

E

F

G

H

Alighthouses, navigational safety facilities, coastal police stationsand the like.;”

23. Paragraph-3 (i) (b) permits projects of department of Atomicenergy.Paragraph-3 (i) (d) permits projects of greenfield project alreadypermitted at Navi Bombay. 3 (i) (e) allows construction, repair work ofBdwelling units of local community including fishermen in accordancewith Local Town and Country Planning Regulation.

24. Paragraph 3 (ii) deals with a prohibited category which readsas follows:

C“(ii) manufacture or handling oil storage or disposal of hazardoussubstance as specified in thenotification of Ministry of Environmentand Forests, No. S.0.594 (E), dated the 28[th ]July, 1989, S.0. No.966(E), elated the 27[th ] November, 1989 and GSR 1037 (E), datedthe 5[th] December, 1989 except,-”

D25. However, by way of exception to the prohibition 3 (ii) (a)permits transfer of hazardous substances from ships to ports terminalsand refineries and vice versa. Clause 3 (ii) (a) reads as follows:

“(a) transfer of hazardous substances from ships to ports, terminalsand refineries and viceversa;”E26. Paragraph-3 (viii), enacts the following prohibitions:

“(viii) Port and harbour projects in high eroding stretches of thecoast, except those projects classified as strategic and defencerelated in terms of EIA notification, 2006 identified by MoEF basedon scientific studies and in consultation with the State GovernmentF”or the Union territory Administration.

(Emphasis supplied)

27. Paragraph-3 (xi) provides for prohibition of construction activityin CRZ1 except those specified in para 8 of the notification. We needGnot be detained with various others clauses. Regulation 4 deals withpermissible activities in CRZ area. It is declared that activities whichare enumerated under paragraph-4 shall be regulated except thoseprohibited in paragraph-3. This means what is prohibited in paragraph-3cannot either be permitted or regulated within the meaning of paragraph-

4. Paragraph-4 reads as follows:H

4. Paragraph-4 reads as follows:H

“4. Regulation of permissible activities in CRZ area.- The followingactivities shall beregulated except those prohibited in para 3 above,-

(i) (a) clearance shall be given for any activity within the CRZonly if it requires waterfront and foreshore facilities; (b) for those projects which are listed under this notification andalso attract EIA notification,2006 (S.O.1533 (E), dated the 14[th]September, 2006), for such projects clearance under EIAnotification only shall be required subject to being recommendedby the concerned State or Union territory Coastal ZoneManagement Authority (hereinafter referred to as the CZMA).

(c) Housing schemes in CRZ as specified in paragraph 8 of thisnotification; (d) Construction involving more than 20,000sq mts built-up areain CRZ-! 1 shall be considered inaccordance with EIA notification,2006 and in case of projects less than 20,000sq mts built-upareashall be approved by the concerned State or Union territoryPlanning authorities inaccordance with this notification afterobtaining recommendations from the concerned CZMA and priorrecommendations of the concern CZMA shall be essential forconsidering the grant of environmental clearance under EIAnotification, 2006 or grant of approval by the relevant planningauthority.

(e) MoEF may under a specific or general order specify projectswhich require prior public hearing of project affected people.

(f) construction and operation for ports and harbours, jetties,wharves, quays, slipways, shipconstruction yards, breakwaters,groynes, erosion control measures;

(ii) the following activities shall require clearance from MoEF,namely:- (a) those activities not listed in the EIA notification, 2006.

(b) construction activities relating to projects of Department ofAtomic Energy or Defence requirements for which foreshorefacilities are essential such as, slipways, jetties, wharves,quays; A

B

C

DEF

G

H

Aexcept for classified operational component of defence projects.Residential buildings,office buildings, hospital complexes,workshops of strategic and defence projects in terms ofEIAnotification, 2006.;

(c) construction, operation of lighthouses; B

(d) laying of pipelines, conveying systems, transmission line; (e) exploration and extraction of oil and natural gas and allassociated activities and facilities thereto; (f) Foreshore requiring facilities for transport of raw materials,Cfacilities for intake of cooling water and outfall for discharge oftreated wastewater or cooling water from thermal powerplants.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 AtomicDEnergy; (h) Facilities for generating power by non-conventional energyresources, desalination plants and weather radars;

(i) Demolition and reconstruction of (a) buildings of archaeologicalEand historical importance, (ii) heritage buildings; and buildings underpublic use which means buildings such as for thepurposes ofworship, education, medical care and cultural activities;”

28. Since Clause 2 of paragraph-4 provides that the activitiesdescribed thereunder would require clearance from MoEF, the questionFwould arise as to whether for the other activities, which are permissible,does it require clearance? Paragraph-4.2 provides the answer.It providesfor the procedure for clearance of permissible activities.Variousformalities have to be undergone. Originally, the 2011 notification did notprovide for any ex post facto approval. It is in the year 2018, i.e., on09.03.2018 that paragraph-4.3 came to be inserted in the 2011GNotification. It read as follows:

“4.3 Post facto clearance for permissible activities.-

(i) all activities, which are otherwise permissible under theprovisions of this notification, but have commenced constructionHwithout priorclearance, would be considered for regularisation only K.T.V. HEALTH FOOD PVT. LTD. v. UNION OF INDIA ANDORS. [K. M. JOSEPH, J.]

in such cases wherein the project applied for regularization in thespecified time and the projects which are in violation of CRZnorms would not be regularised;

(ii) the concerned Coastal Zone ManagementAuthority shall givespecific recommendations regarding regularisation of suchproposals and shall certify that there have been no violations ofthe CRZ regulations, while making such recommendations;

(iii) such cases where the construction have been commencedbefore the date of this notification without the requisite CRZclearance, shall beconsidered only by Ministry of Environment,Forest and Climate Change, provided that the request for suchregularisation 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 laiddown in Paragraph-8. Paragraph-8 provided for regulation of activitiespermissible under the 2011 Notification. It declares that the developmentor construction activities in different categories of CRZ shall be regulatedby the concerned CZMA in accordance with the following norms. InCRZ-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 underCRZ-l; (d) installation of weather radar for monitoring of cyclonesmovement and prediction by Indian Meteorological Department; (e) construction of trans harbour sea link and without affectingthe tidal flow of water, between LTL and HTL.

(f) development of green field airport already approved at onlyNavi Mumbai; ABC

D

E

F

G

H

(ii) Areas between LTL and HTL which are not ecologicallysensitive, necessary safety measures will be incorporated whilepermitting the following, namely:- A

(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 livingwithin the biosphere reserves after obtainingapproval fromconcerned CZMA.

B

(c) necessary safety measure shall be incorporated whilepermitting such developmental activities in the area falling inthe hazard zone; C

(d) salt harvesting by solar evaporation of seawater; (e) desalination plants; D

(f) storage of non-hazardous cargo such as edible oil, fertilizersand food grain withinnotified plants; (g) construction of trans harbour sea links, roads on stilts orpillars without affecting thetidal flow of water.”

E30. In CRZ-II, the norms were as follows:

“II. CRZ-11,-

(i) buildings shall be permitted only on the landward side of theexisting road, or on thelandward side of existing authorizedstructures; F

(ii) buildings permitted on the landward side of the existing andproposed roads or existing authorized structures shall be subjectto the existing local town and country planning regulationsincluding the ‘existing’ norms of Floor Space Index or FloorArea Ratio:

G

Provided that no permission for construction of buildings shallbe given on landward sideof any new roads which areconstructed on the seaward side of an existing road:

(iii) reconstruction of authorized building to be permitted subjectwith the existing Floor Space Index or Floor Area Ratio Normsand without change in present use;

(iv) facilities for receipt and storage of petroleum productsand liquefied natural gas asspecified in Annexure-II appendedto this notification and facilities for regasification of LiquefiedNatural 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, fertilizersand food grain innotified ports;

(vii) facilities for generating power by non-conventional powersources and associated facilities;”

31. CRZ-III, comprised of area up to 200 meters from HTL onthe landward side in the case of sea front inter alia. It is marked as theNDZ [or No Development Zone}. It was,inter alia, provided that NDZshall not apply “in such area falling within any notified port”. There arevarious restrictions therein. Certain activities were shown as permittedactivities in the NDZ. They included in Clause (e) facilities for receiptand storage of petroleum products and liquified gas as specified inAnnexure-II. Interestingly, in regard to the area between 200 meters to500 meters falling in CRZ-III, paragraph-8 permitted storage of non-hazardous cargo such as edible oil, fertilizers, foodgrains ‘in’ notifiedports.

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 theharshest regime having regard to the fact that the areas are ecologicallysensitive and the geomorphological features play a role in the maintainingthe integrity of the coast. They included mangroves.In case, the area ofmangroves was more than 1000 sq.mts, a buffer of 50 mts. along themangroves was to be provided. Sand dunes came under CRZ-I, as didcorals and coral reefs and associated biodiversity.

34. It may be true that the appellant had secured permission ofthe local authority. Shri Ranjit Kumar may be correct in contending also A

B

C

D

E

F

G

H

Athat the laying of the pipeline ensured that additional vehicle load wasnot thrust on the Chennai port. There may be merit also in the contentionof the appellants that the no objection certificate may indicate that thepipeline would lead to increased evacuation of edible oil through thepipeline, leading to increased port efficiency. As found by the NGT andnot disputed by the fifth respondent also the power to grant post factoBapproval flowed from paragraph-4.3 inserted in the 2011 Notification,though in the year 2018. The case of the appellant that the storage facilityis located in CRZ II is beyond dispute. The storage facility being locatedon the landward side may be correct. The appellants assertion thatbetween the storage facility and the Bay of Bengal there exists theCEnnore Express Highway appears to be correct. We proceed on thebasis further that the distance between the entrance of the storage facilityand the sea shore is ‘160 feet’.Laying of pipeline is permissible in CRZI. Appellant’s contention that there is no space at the Chennai port issought to be buttressed with reference to certificate dated 24.08.2016.We may notice its contents:D

“The cargo through put and number of vehicles moving inand out of Chennai Port has increased manifold over the pastyears. In order to reduce the road traffic and resultant congestion,the port has been encouraging alternate modes of cargo evacuationlike Rail evacuation and evacuation through pipeline.E

Accordingly Chennai Port has permitted M/s. KTV HealthFood Private Limited to lay pipeline from BD2 berth where thefirm is laying a 10 inch pipeline for evacuation of the cargo. Thiswill result in increased evacuation of edible oil through pipelinethus avoiding inter carting using tanker lorries.F

This will in turn result in better turnaround of the vesselsthereby enabling the port to handle more and more volume ofedible oil cargo and vessels thus increasing the port efficiency.This certificate is issued to enable the firm to obtain the requiredstatutory clearances for laying the pipeline.”

G

35. It will be noticed that the Certificate is silent as regards thestorage facility and it being in the port. The Certificate does not exactlydeclare that there is no space at the Chennai port. Appellants may becorrect in contending that edible oil is not hazardous and that edible oilimports may be necessary to meet the requirement of a growingH

population. It may be true that there is no manufacturing process whichmay be involved in constructing or maintaining the storage facility.

36. The contention of the appellants that by decongesting the trafficand allowing the edible oil to be transferred through pipelines for onwardtransmission to the factories of the appellant, the baneful impact flowingfrom tanker lorry traffic by way of pollution is reduced, overlooks thetrue purport of the 2011 notification. We must demystify the object ofthe law as contained in the coastal regulation notification. As far aspollution is concerned, it is the subject matter of laws specifically relatingto regulation and prohibition of activities on the said score. A perusal ofthe 2011 notification reveals the following as the avowed objects: (i)ensuring livelihood security to the fisher communities and othercommunities living in the coastal areas, (ii) conservation and protectionof coastal stretches; (iii) the protection of the unique environment of thecoastal stretches and its marine area; (iv) promotion or developmentthrough sustainable manner based on scientific principles taking intoaccount the dangers of natural hazards in the coastalareas; (v) the aspectof sea level rise due to global warming. Therefore, we are unable toagree with the appellants that as the laying of the pipeline would result ingreater efficiency in the functioning of the port or for that matter, itwould reduce the traffic congestion, and what is more, thereby therewould be a reduction in the pollution may not by itself be relevant or forconcluding the issue. It is the duty of the Court to glean the true object ofa law and give effect to it. It is equally the duty of the Court to eschewfrom its consideration matters which may not be strictly germane to theobject. Hence, we proceed on the basis that the argument based onincreased efficiency of the port and avoidance of traffic congestion, andthe decreased pollution in the landward area, as it were, may not be bythemselves relevant.

37. The next argument is the argument based on the differencebetween the words ‘within’ as found in CRZ-I as contrasted with theword ‘in’ in CRZ-II. We are called upon to employ a purposefulinterpretation bearing in mind also the distinction in the words used. Muchreliance has been placed on the judgment reported in M. Nizamudeen(supra).The said matter arose under the coastal regulation notificationissued in the year 1991.The MoEF granted permission to the respondenttherein for construction for setting up of a marine terminal facility nearthe sea shore for receiving and transferring VCM which was one of the AB

C

D

E

F

GH

Araw materials for manufacturing PVC. Under the terms of the 1991notification, certain activities were prohibited under paragraph-2. Theyincluded manufacturing or handling or storage or disposal of hazardoussubstances as provided therein except transfer of hazardous substancesfrom ships to ports, terminals and refineries and vice versa ‘in the portareas’.B

38. The question fell for consideration as to the interpretation tobe placed on the words ‘in the port areas’. We feel advised to refer tothe following portions of the judgment reported in M. Nizamudeen(supra):

C

“36. It was contended by the Senior Counsel for the appellant-petitioner that transfer of VCM in CRZ area is completelyprohibited and VCM cannot be carried through the CRZ exceptin the port area. Their argument is that VCM can be broughtonshore by pipeline to the port area but not in the CRZ area. Thearguments of learned Senior Counsel have put in issue the scopeof expression, “except transfer of hazardous substances from shipsto 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 toascertain the true meaning and intention of the executive in bringingthis exception.

D

E

37. In the original 1991 Notification there was no exception clause.It appears to have been added for the purpose of enabling transferof hazardous substances from ships to ports, ships to terminalsand ships to refineries and vice versa. Is such transfer of hazardoussubstances confined to terminals and refineries located in the portFareas? The answer in the affirmative may make the said provisionunworkable and would also result in absurdity inasmuch as thehazardous substance would be brought into the port, refinery orterminal in the port area from the ship and would remain thereand could not be taken beyond the port area because of theprohibition. This surely could not have been the intention of theGexecutive in adding the exception clause.

38. It is well settled that if exception has been added to remedythe mischief or defect, it should be so construed that it remediesthe mischief and not in a manner which frustrates the very purpose.Purposive construction has often been employed to avoid a lacuna H

and to suppress the mischief and advance the remedy. It is againa settled rule that if the language used is capable of bearing morethan one construction and if construction is employed that resultsin absurdity or anomaly, such construction has to be rejected andpreference should be given to such a construction that brings itinto harmony with its purpose and avoids absurdity or anomaly asit may always be presumed that while employing a particularlanguage in the provision absurdity or anomaly was never intended.

39. Notwithstanding imperfection of expression and that exceptionclause is not happily worded, we are of the view that by applyingpurposive construction, the expression, “in the port areas” shouldbe read as “in or through the port areas”. The exception in Para 2(ii) then would achieve its objective and read, “except transfer ofhazardous substances from ships to ports, ships to terminals andships to refineries and vice versa, in or through the port areas”.This construction will be harmonious with Para 3 (2) (ii) whichpermits the activity of laying pipelines in the CRZ area.”

39. On the one hand, thelearned counsel for the appellants wouldplace considerable reliance on the view taken by this Court. Per contra,Smt. Anitha Shenoy, learned Senior Counsel, would submit that theaforesaid decision turned on the facts obtaining therein and, in particular,the expression ‘in the port areas’, whereas the language used inparagraph-8 (II) (vi) and also the context should persuade this Court toplace an interpretation advancing the object of a notification such as the2011 Notification.

40. A perusal of paragraph-36 of the Judgment would show thatthe contention of the appellant therein was that the transfer of the rawmaterial in the CRZ area was completely prohibited and it could not becarried through the zone except ‘in the port area’. This Court understoodthe terms of the notification to be that it permitted transfer of thehazardous substances from the ships to the ports, ships to terminals andfinally, ships to the refineries. The vice versa was also found to bewithin the contemplation of the notification as permitted activities. TheCourt posed the question whether the transfer was to be confined torefineries and terminals which were located in the port area. In otherwords, if the argument of the appellant therein was accepted, it couldhave resulted in confining the transfer of the raw material from the shipby pipeline to the port area but it could not be taken to a refinery located ABC

D

EF

GH

Aoutside the port area.But the provision did contemplate transporting ofthe material from the ship to the refineries as also to terminals and viceversa. It was in this context that the Court proceeded to hold that apurposive construction was needed to avoid a situation of absurdity. Muchturned on the presence of the words ‘in the port area’. Therefore, keepingin mind the clear object of the Notification, which was self-evident, theBCourt added the words ‘or through’ to the words‘in the port area’. Thisfacilitated the transfer of the raw material from the ships to a refinery ora terminal which neednot have to be located in the port area. We mustunderstand the decision of this Court in M. Nizamudeen (supra) in theaforesaid context. The rationale and principle appear inapposite to theCcases before us.

41. Paragraph-8 (I) (f) relating to CRZ-I, may be recaptured:

“(8). Norms for regulation of activities permissible under thisnotification,- DCRZ-I

(ii) Areas between LTL and IITL which are not ecologicallysensitive, necessary safety measures will be incorporated whilepermitting the following, namely:- (f) storage of non-hazardous cargo such as edible oil,fertilizers and food grain within notified ports;”

E

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 inparagraph-8 (II), under CRZ-II, Clause VI contemplated permitting ofFstorage of non-hazardous cargo, such as edible oil, fertilizers and foodgrain ‘in’ notified ports. We may broaden our inquiry into the relevantcontents of CRZ-III. CRZ-III of the 2011 Notification was divided intoarea ‘A’, which,inter alia, dealt with areas up to 200 meters from HTLon the landward side in the case of sea front. The said Clause proclaimedfurther that the said area would be a No Development Zone (NDZ). WeGnotice that in CRZ-III the NDZ was not to be applicable in ‘such areas’within any port limits.Thus, the expression ‘within’ made its appearancein relation to notified port limits again. In the permitted activities in theNDZ under area ‘A’,viz., up to 200 meters as aforesaid, we find Clause(e), which permitted facilities for receipt and storage of petroleum productsand liquified petroleum gas as specifiedin Annexure-II. Area B of CRZ-H

III is described as the area comprised from 200 meters to 500 meters.Since the CRZ itself would terminate upon the 500 meters distance beingobtained, this constituted, in other words, the residuary area, of CRZ-III. Under the same we notice that again facilities for receipt and storageof petroleum products and liquified natural gas as specified in Annexure-II was permitted. We may bear in mind that the very same activity hadalso been contemplated in area A of CRZ-III, viz., the area comprisedto 200 meters of the high tide line of the landward area in the case of thesea front, inter alia. Interestingly, when it comes to storage of non-hazardous cargo, such as edible oils fertilizers and food grain ‘in’ thenotified ports, it was permitted activity in area ‘B’ of CRZ-III underClause 4 thereof, that is, an area located between 200 metres to 500metres.It must be noticed that CRZ-III had been classified inparagraph-7 essentially as relatively undisturbed area, which did not belong to eitherCRZ-I or II, which included the coastal zone in rural areas, both developedand undeveloped and also areas within municipal limits or in other legallydesignated urban areas, which were not substantially built up. We havealready noticed the classification of CRZ-II earlier, as areas which hadbeen developed up to or close to the shore line. Can it then be said thatstorage of non-hazardous cargo, such as edible oil, fertilizers food grain,permittedin the notified ports in CRZ-III, Area ‘B’, be also permitted inCRZ-III Area ‘A’? Going by the contents of CRZ-III under activitieswhich were permitted in the NDZ, we are unable to find any clausewhich permitted such storage of non-hazardous cargo including edibleoil,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 ininterpretation of the Notification we are concerned with, a pursuitof apurposive interpretation or a search for arationale which the Court findsfair may meet with limitations which flow from the object of the makerof the notification being confined to the plain meaning of the words used.No doubt, a situation found in the facts of the case reported inM. Nizamudeen (supra) may call for a different approach.

44. Reverting back to the controversy, projected from the differencebetween the words ‘within’ and ‘in’, we may notice the followingdiscussion of the NGT, which is a specialised Body, consisting of aJudicialMember and a Technical Member in a statutory appeal under the Act.

ABC

D

EF

G

H

“54. In compact Oxford English Dictionary, the meaning of theword ‘in’ is defined as follows:- A

‘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 expected toBhappen. 4) expressing a state, condition, or quality. 5)expressing inclusion or involvement. 6) indicating the meansof expression used: put in writing. 7) indicating a person’soccupation or profession. 8) expressing a value as aproportion of whole. Adverb 1) expressing movement thatresults in being inside or surrounded. 2) expressing the stateCof being enclosed or surrounded. 3) present at one’s home oroffice. 4) expressing arrival at a destination. 5) [of the tide]rising or at its highest level. Adjective informal fashionable.

- Phrases be in for be going to experience something,especially something unpleasant. in on knowing a secret. inDthat for the reason that. in with i11fo1mal enjoying friendlyrelations with. the ins and outs informal all the details. - OriginOld English”

55. The word ‘within’ has been defined in the same Dictionary asfollows:- E

“within Preposition 1) inside. 2) inside the range or boundsof we were within sight of the finish. 3) occurring inside aparticular period of time. 4) not further off than (used withdistances). Adverb: 1) inside; indoors. 2)internally orinwardly.”

F

56. Meaning of these words when compared, it will be clear thatwhat was intended by these words is something will have to bedone within the area, if it relates to the area and in the area ifrelates to the area and not beyond that area.”

G45. Going by the definition of the word ‘in’, it includes ‘so as to beenclosed, surrounded or inside’. One way of looking at the word ‘in’ thenotified port in para 8 (II) (vi) would be that storage of non-hazardousmaterial is permitted inside the notified port. We notice that the definitionof the word ‘within’ also includes the word meaning inside. No doubt,Justice Oliver Wendell Holmes declared: “A word is not a crystal,Htransparent and unchanged; it is the skin of a living thought and may vary greatly in color and content according to the circumstances andtime in which it is used.”

46. Smt. Anita Shenoy, learned Senior Counsel, would assert thatwhat is ‘out’ cannot be considered as being ‘in’. She expatiates by pointingout that the storage facility of the appellants is located a few kilometresaway of the notified limits of the Chennai Port. She poses the questionthat on such facts could this Court be persuaded to still hold that it isinside the notified port, viz., the Chennai Port. It would involve doingviolence to the clear words. The word ‘within’ and ‘in’ therefore, in thecontext of the Notification must be given the same meaning.TheNotification and the policy is not under a shadow, by way of a challengeto the Notification. It is the plain duty of the Court to give effect to thelaw as it is found. No doubt, as pointed out by Shri Dhruv Mehta, if it isfound otherwise acceptable, an interpretation which accords withconstitutional principles, may appeal to the Court, even if there is nochallenge 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 belocated within the Chennai Port, it is licenced under Section 57 of theCustoms Act as a customs station. In the Major Ports Act, the word‘port’ is defined in Section 2 (q). It reads as follows:

“(q) “port” means any major port to which this Act applies withinsuch limits as may, from time to time, be defined by the CentralGovernment for the purposes of this Act by notification in theOfficial Gazette, and, until a notification is so issued, within suchlimits 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 PrincipalCommissioner of Customs or Commissioner of Customs may,subject to such conditions as may be prescribed, licence a publicwarehouse wherein dutiable goods may be deposited.”

49. It is not the case of the appellants that the storage is locatedwithin the limits of the Chennai Port as contemplated in Section 2 (q). It A

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Ais, therefore, not inside the said Port. However, it is appellants case thatthe storage facility is located in the Customs notified area. This is basedon the license issued under Section 57 of the Customs Act. Under Section15 of the Customs Act, the date for determination of the rate of duty andtariff valuation of any imported goods in the case of goods cleared froma warehouse, under Section 68, is declared to be the date, on which, aBbill for entry for home consumption, in respect of such goods, is presentedunder Section 15.Goods, which are imported may be cleared immediatelywith reference to their being entered for home consumption under Section46, and the relevant date, would then be the date of presentation of thebill of entry. An importer may wish to warehouse the goods. It is in suchCcases that it is only upon the bill for entry for home consumption ispresented that the crucial date emerges. It is in this context that to regulateand control the collection of duty apart from other aspects that a licenseis procured under Section 57 of the Act. Section 2 sub-Section (11) ofthe Customs Act, defines the words‘customs area’. It reads as follows:

D“2(11) “customs area” means the area of a customs station or awarehouse and includes any area in which imported goods orexport goods are ordinarily kept before clearance by CustomsAuthorities”

50. Section 2 sub-Section (12) defines ‘customs port’,Ewhereas,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 appointedunder clause (aa) of that section to be an inland container depot”

(13) “customs station” means any customs port, customs airport,Finternational courier terminal, foreign post office or land customsstation”

51. Section 7(a), to which reference may be necessary in view ofthe definition of the words ‘customs port’, reads as follows:

G“7. Appointment of customs ports, airports, etc.-(1) The Boardmay, by notification in the Official Gazette, appoint- (a) The ports and airports which alone shall be customs portsor customs airports for the unloading of imported goods andthe loading of export goods or any class of such goods;”H

52. Thus, every port falling under the Indian Port Act and theMajor Port Act may not be on their own become a customs port. Acustoms port under Section 2(12) comes into being on a port beingappointed as such under Section 7(a). A customs station no doubt, includesany customs port and a land customs station. The case of the appellantbased on the license under Section 57 of the Customs Act may make ita customs area as it includes a warehouse but it is inconceivable as tohow it would transform it into‘in a notified port’.

53. An argument, which is raised by the learned Senior Counselfor the appellants is traceable to Clause (1) of paragraph-8 falling underCRZ-II. It reads as follows:

“CRZ-11, -

(i) buildings shall be permitted only on the landward side of theexisting road, or on the landward side of existing authorizedstructures;”

It is the contention of the appellants that even if it is found that thestorage facility cannot be treated as permitted in the port, as it does notfall in the port, both having regard to the fact that CRZ-II constitutes anarea 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 ofpetroleum products and liquified natural gas can be permitted, and lastly,as a storage facility would constitute a building, which, in the facts ofthis case, is located on the landward side of the existing road, the NGTwas wrong. The argument appears to be that the Chennai metrodevelopment authority which is a local body has granted permission forthe construction of the storage facility treating the area as a generalindustrial use zone. This means that the building was permissible underthe Town planning law. The argument is further sought to be buttressedwith reference to the definition of the word building which encompassesa 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 incongruouswith 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, AB

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Abuilding cannot include the storage facility, which has been expresslyarticulated and permitted as long as it is ‘in’ a notified port.

55. We notice certain salient features. CRZ-II has been classifiedin para 7 as areas that have been developed up to or close to the shoreline. The storage tank of the appellant in the first case appears to beBlocated 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 havealready noticed that under CRZ III, the facility of storage of non-hazardous materials including edible oil is permitted only at a distancebetween 200-500 meters.This is even though both handling and storageof petroleum products is permitted, both within a distance of up to 200Cmeters from the high tide line as also between 200-500 meters from thehigh tide line. It may defy logic. At least at first blush. We have alreadyset out the objects of the notification.They include guarding against thedangers of natural hazards in coastal areas and the sea level rise due toglobal warming. This is no doubt also to be balanced with the need forDsustainable development. The coastal regulation appears to be based onconsiderations which appear to accommodate conflicting interestspremised on considerations of what is felt as indispensably necessaryand the nature of the zone in question. Allowing storage facilities fornon-hazardous activities like edible oil, is, apparently, considered as anindispensable part of the operation of a port. The Port Authorities wouldEhave full control over the storage facility located within its limits. Nodoubt, Section 35 of the Major Port Trust Act, 1964, inter alia, empowersthe port to execute works outside its limits for securing and storing goodsto be landed or to be shipped. The storage tanks in question are notworks executed by the port.F

56. As far as the case that is sought to be built up on the basis thatsince CRZ-II permitted buildings on the landward side of the existingroad, we must notice that this is not the basis for the decision of the firstrespondent which was successfully impugned before the NGT. We, infact, queried Smt. Archana Pathak Dave, learned counsel for the firstGrespondent as to whether this was the basis.She did not appear to supportthe decision on the basis that it forms the basis for the decision. We maynotice further, the following pleading of the first respondent which hasbeen adverted to by the NGT in their reply affidavit before the NGTeven:

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“5. It is submitted that the said activity under scrutiny is apermissible activity and regulated under para No. 8 (I) (i) (b),para No. 8 (I) (ii) (f) and para No. 8. II. (vi) of the CRZNotification, 2011.”

57. Paragraph-8 (I) (i) (b), undoubtedly, related to permitting ofpipelines 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 theactivity in question ‘in’ notified ports.The aspect relating to buildingsbeing permitted on the landward side of the existing road dealt with inparagraph 8 (II) (i) was not the basis for the decision even according tothe counter affidavit. This is apart from the fact that impugned decisionof 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.5that storage facility being specifically dealt with, ‘building’ underparagraph-8 (II) (i), would not include storage facility. We wouldtherefore, think that we must not be persuaded to allow the appellants orallow 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 their minds.Theirunderstanding should govern. At least, it should be given the weight thatis due to them. This forms the premise. Moreover, he refers to the13judgment of this Court inK. P. Varghese v. ITO. K. P. Varghese (supra)involved the interpretation of Section 52 (2) of the Income Tax Act,1961. This Court took the view inter alia that to invoke Section 52(2), itwas not enough only to show that the fair market value of the capitalasset as on the date of the transfer exceeded the full value of theconsideration declared by the assessee by not less than 15 per cent ofthe value so declared. This Court eschewed a purely literal interpretationon the basis that it led to manifestly unreasonable and absurdconsequences. It was found that Parliament did not intend to target bonafide transactions, where the assessee had truthfully declared the actualconsideration. 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 after theintroduction of the provision, the Central Board of Direct Taxes issuedstatutory circulars under Section 119 of the Income Tax Act explaining A

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Athe scope of central. It was specifically held that the circulars wouldbind the Revenue even if they were not found to be in accordance withthe 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,Bas we shall presently point out, binding on the Tax Department inadministering or executing the provision enacted in sub-section(2), but quite apart from their binding character, they are clearlyin the nature of contemporanea expositio furnishing legitimateaid in the construction of sub-section (2). The rule of constructionby reference to contemporanea expositio is a well-establishedCrule for interpreting a statute by reference to the exposition it hasreceived from contemporary authority, though it must give waywhere the language of the statute is plain and unambiguous. Thisrule has been succinctly and felicitously expressed in Crawfordon Statutory Construction, (1940 Edn.) where it is stated in paraD219 that”administrative construction (i.e. contemporaneousconstruction placed by administrative or executive officerscharged with executing a statute) generally should be clearly wrongbefore it is overturned; such a construction, commonly referredto as practical construction, although non-controlling, is neverthelessentitled to considerable weight; it is highly persuasive”.

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The validity of this rule was also recognised in BaleshwarBagarti v. Bhagirathi Dass [ILR 35 Cal. 701] where Mookerjee,J., stated the rule in these terms:

“It is a well-settled principle of interpretation that courts inFconstruing a statute will give much weight to the interpretationput upon it, at the time of its enactment and since, by those whoseduty it has been to construe, execute and apply it.”

and this statement of the rule was quoted with approval by thisCourt in Deshbandhu Gupta & Co. v. Delhi Stock ExchangeGAssociation Ltd. [(1979) 4 SCC 565] It is clear from these twocirculars that the Central Board of Direct Taxes, which is thehighest authority entrusted with the execution of the provisions ofthe Act, understood sub-section (2) as limited to cases where theconsideration for the transfer has been understated by the assesseeand this must be regarded as a strong circumstance supportingHthe construction which we are placing on that sub-section.”

59. The principle is inapposite in the facts. That the authoritieshave proceeded on a particular basis, may as well betray their erroneousunderstanding. That such views do not clinch the issue relating to theconstruction of the law is elementary. We would think that in the facts ofthis 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 thebasis of the contention, cannot overwhelm our understanding of thenotification. We again reiterate that the words ‘within’ and ‘in’ cannotinclude what is outside the port. The maker of the notification has noteven contemplated the activities in question in a ‘port area’. We musthere elucidate and observe that if the contention is to be upheld that astorage tank can be permitted outside the port limits, it will introducechaos. The question would arise as to up to what distance from the portarea it would be considered as the ‘in the port area’.The 2011 Notificationcannot receive an interpretation which would leave matters of momentto be afflicted with the vice of uncertainty. This is apart from theimportance of avoiding an interpretation which seemingly allows freeplay in the joints to the Administrator but, at the same time, vest anarbitrary power in him.

60. As far as the pipeline is concerned, no doubt, it is permitted inCRZ I and arguments were addressed before us that even if the storagefacility is to be demolished, making use of the edible oil brought throughthe pipelines, which are, no doubt, located underground, the oil could becollected at the spot from where it is currently located viz., where thepipeline ends and transported therefrom to the factory. There is no disputethat the pipeline is located in a zone where it is permitted activity. Therecan be no dispute that ex post facto permission can be given for permittedactivity as found by the NGT itself. No doubt, the pipeline, may havemeaning only as so far as it is connected to the storage tank. As towhether the pipeline can continue to be used if the storage tanks aredemolished is a matter which must engage the attention of the authorities.We would think that in regard to the pipelines, it would be the DistrictCoastal 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 appellantsmay approach the relevant DistrictCoastal Zonal Management Authoritywithin a period of one month from today.The District Coastal ZonalManagement Authority will consider any application made in regard to AB

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Athe continued use of the pipeline and take a decision in accordance withlaw within a further period of six weeks from the date of the receipt ofthe application.

62. In view of the request made by the appellants that they maybe permitted to continue to use the pipeline along with the storage facilityBfor a period of one year, we would think that theinterest of justice dorequire grant of some time.The appellants are accordingly given a periodof six months from today to comply with the impugned order of theNGT. This is in regard to the direction to demolish the storage tanks.The appellant in the first appeal is given a month’s time to pay thecompensation ordered, if not already paid.C

63. As far as the direction to demolish the pipeline, the matter willawait the decision to be taken by the District Coastal Zonal ManagementAuthority.

64. The appeals are partly allowed. There will be no order as toDcosts.

Divya Pandey

(Assisted by : Ms. Shevali Monga, LCRA)

Appeals partly allowed.

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