JOLLY GEORGE AND ANR. versus GEORGE ELIAS AND ASSOCIATES AND ORS. on 12 April 2023

[2023] 3 S.C.R. 413

JOLLY GEORGE AND ANR.

v.

GEORGE ELIAS AND ASSOCIATES AND ORS.

(Special Leave Petition (Civil) Nos. 1333-1335 of 2022)

APRIL 12, 2023

[V. RAMASUBRAMANIAN AND PANKAJ MITHAL, JJ.]

Kerala Micro Small and Medium Enterprises FacilitationAct,2019 – ss.2,5,6 and 10 – Kerala Panchayat Raj Act, 1994 –Kerala Panchayat Building Rules, 2019 – Rule 68 – ‘GEA’purchased Hot Mix Plants for undertaking road works – Theyobtained an acknowledgement certificate u/s. 5 of the Act of 2019and submitted an application to the Panchayat for the grant of alicense for installation of the Plant – They obtained “Consent toEstablish” from the Kerala State Pollution Control Board – Theirapplication before the Panchayat was rejected by the GramPanchayat – Held: It is admitted that ‘GEA’ have obtained consentto establish, from the Kerala State Pollution Control Board and alsoobtained an Acknowledgment Certificate under s. 5(3) of Act of2019 – Acknowledgement certificate shall have effect as if it is anapproval as defined in s. 2(c) – S. 10 of the Kerala MSME Act notonly confers overriding effect to the Act on other laws, but alsomakes a specific reference to the Act of 1994 – s. 10(2) of the KeralaMSME Act makes it clear that the provisions of the Act of 1994,shall be read as amended to be in conformity with the provisions ofthe Kerala MSME Act – Thus, the prayer of ‘GEA’ is deserves to begranted in light of the statutory prescription.

Disposing of the appeals, the Court

HELD: 1. A bare reading of the order of the Single Judgeand the Division Bench would show that the most vital aspecthas been lost sight of. Admittedly, the writ petitioners haveobtained consent to establish, from the Kerala State PollutionControl Board. It is also admitted that the writ petitioners haveobtained an Acknowledgment Certificate under Section 5(3) ofthe Kerala MSME Act. It is seen from Section 6(1) extractedabove that an Acknowledgement Certificate shall have effect asif it is an approval as defined in Section 2(c). What is held against

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Athe writ petitioners today is the requirement of a permission underthe Act of 1994. But Section 10 of the Kerala MSME Act notonly confers overriding effect to the Act on other laws, but alsomakes a specific reference to the Act of 1994. The prayer madeby the writ petitioners in their second writ petition, deserved tobe granted, clearly in the light of the statutory prescription. [ParasB8, 9, 10 and 11][417-G-H; 418-A, E, G; 419-E]

2. The Kerala MSME Act overrides the 1994 Act and a fewother local enactments. This is why the writ petitioners have taken“consent” from the Pollution Control Board. Once consent istaken from the Pollution Control Board, the necessity for readingCdown Section 10 of the Kerala MSME Act, for the purpose ofprotecting the environment, does not arise. [Para 16][420-E-F]

T.N. Godavarman Thirumulpad vs. Union of India andOrs. (2011) 7 SCC 338 : [2011] 7 SCR 954; MunicipalCorporation of Greater Mumbai (MCGM) vs. AbhilashDLal & Ors. (2020) 13 SCC 234 : [2019] 14 SCR 659;A.P. Pollution Control Board vs. Prof. M.V. Nayudu(Retd.) and Ors. (1999) 2 SCC 718 : [1999] 1 SCR235 – referred to.

Case Law Reference

CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 2764-F2766 of 2023.

From the Judgment and Order dated 09.12.2021 of the High Courtof Kerala at Ernakulam in WA Nos. 607, 756 and 741 of 2021.

With

GCivil Appeal No. 2767 of 2023.

M/s. Kmnp Law, Ms. Uttara Babbar, V Shyamohan, Ms. AnshikaBajpai, Martin G George, Ms. Riya Kalra, K. Parameshwar, HarishVasudevan, Ms. Arti Gupta, Ms. Kanti, Kuriakose Varghese, C. K. Sasi, H

Abdulla Naseeh V T, Ms. Meena K Poulose, M/s. Lawfic, SriramParakkat, M.S. Vishnu Sankar, Adithya Santosh, Ms. Athira G. Nair,Sreenath S, Jogy Scaria, Pradeep Kumar Gupta, Ms. Beena Victor, VivekGuruprasad Ballekere, Keerthipriyan E, Ms. M Priya, Advs. for theappearing parties.

The Judgment of the Court was delivered by

V. RAMASUBRAMANIAN, J.

Leave granted.

2. George Elias and Associates, which is respondent No.1 in thefirst set of three appeals and which is the appellant in the fourth appeal,filed two writ petitions in WP (C) Nos.10381 and 17920 of 2020 on thefile of the High Court of Kerala at Ernakulam praying respectively for(i) setting aside an Order of the Committee of the Kalloorkad GramPanchayat refusing to grant license to them for establishing a Hot MixPlant; and (ii) for a declaration that by virtue of the certificate grantedunder the Kerala Micro Small and Medium Enterprises Facilitation Act,2019[1], all licenses and approvals including the license of the Panchayatshould be deemed to have been obtained.

3. By a common order dated 18.03.2021, the learned Judge of theHigh Court of Kerala disposed of both the writ petitions permitting thewrit petitioners to prefer an application for permission under Rule 68 ofthe Kerala Panchayat Building Rules, 2019[2] within two weeks and furtherdirecting the Secretary of the Panchayat to grant necessary permissionsubject to the conditions, if any, that may be imposed by the Panchayat.The learned Judge held that inasmuch as the writ petitioners had obtainedconsent from the State Pollution Control Board, the Secretary of thePanchayat cannot refuse permission under Rule 68 of the Rules, 2019,though he can impose general conditions.

4. Challenging the said order of the learned Judge, three intra-court appeals came to be filed. One of the intra-court appeals was filedby the writ petitioners themselves, as they were not satisfied with theoutcome. The other writ appeals were filed by some people in the locality,who objected to the establishment of the Hot Mix Plant.

1 For short, “Kerala MSME Act”

2 For short, “Rules of 2019”

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A5. By a common order dated 09.12.2021, the Division Bench ofthe Kerala High Court dismissed the appeals. Therefore, people of thelocality have come up with the first three appeals challenging the commonorder passed by the Division Bench of the Kerala High Court in thethree intra-court appeals. The writ petitioners have also come up withone appeal, which is the fourth one, as they are aggrieved by not gettingBfull relief from the High Court.

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6. We have heard the learned counsel appearing for all the parties.

7. The controversy to be resolved in these appeals can be betterunderstood if we take a glance at the brief facts leading to this litigation.CThese brief facts are as follows:

(i) George Elias and Associates, whom we shall describe asthe writ petitioners, are engaged in undertaking road worksin different parts of the State of Kerala. They purchasedHot Mix Plants for carrying out the road works for whichthey bagged contracts.

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(ii) By an Agreement dated 06.03.2019, the writ petitionerswere awarded the contract for road work in CherthalaAroorkutty. Within a few months, the Kerala MSME Actcame into force and hence the writ petitioners obtained whatEis known as an Acknowledgement Certificate under Section5 of the said Act.

(iii) The writ petitioners also submitted an application to theKalloorkad Panchayat for the grant of a license, forinstallation of the Hot Mix Plant. The application was madeon 05.02.2020.F

(iv) On 04.03.2020 the Kerala State Pollution Control Boardgranted “Consent to Establish”.

(v) Since there was no response from the Panchayat, to theapplication for license, the writ petitioners claimed the benefitGof the deeming provision under Rule 12(3) of the KeralaPanchayat Raj (Issue of License to Factories, Trades,Entrepreneurship Activities and Other Services) Rules,1996. Accordingly, the writ petitioners transported theequipments for installing the Hot Mix Plant, to the propertyfrom which they proposed to operate it.

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(vi) Objections were raised by some members of the localityAowing allegiance to some political parties which led to ameeting of conciliation. However, the Gram Panchayatrejected the application by an Order dated 12.05.2020.

(vii) Therefore, challenging the said order dated 12.05.2020 thewrit petitioners filed the first writ petition bearing WP (C)BNo.10381 of 2020. The writ petitions were admitted and aninterim stay of operation of the order of the Gram Panchayatwas also granted.

(viii) Subsequently, a few writ petitions came to be filed, thedetails of which may not be necessary to be recorded here.CSuffice it to say that in one of the writ petitions, the HighCourt granted police protection to the writ petitioners to setup the Plant, after getting consent from the Pollution ControlBoard.

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(ix) Eventually, the writ petitioners filed the second writ petitionseeking a declaration that by virtue of the AcknowledgementCertificate obtained under the Kerala MSME Act, a licenseunder the Kerala Panchayat Raj Act, 1994[3] was notnecessary.

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(x) The learned Single Judge, without actually getting into thequestion relating to the overriding effect of Kerala MSMEAct, held that the Hot Mix Plant of the writ petitioners wasa portable equipment and that it does not fall within thedefinition of the word “building” under the Rules of 2019.The learned Single Judge also held that after the grant of“Consent to Establish” by the Pollution Control Board,permission of the Panchayat was only formal. This viewwas also confirmed by the Division Bench. This is why theparties have landed up before this Court.

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8. A bare reading of the order of the learned Single Judge and theDivision Bench would show that the most vital aspect has been lost sightof. Admittedly, the writ petitioners have obtained consent to establish,from the Kerala State Pollution Control Board. It is also admitted thatthe writ petitioners have obtained an Acknowledgment Certificate under G

3 For short, “Act of 1994”

ASection 5(3) of the Kerala MSME Act. Section 6 of the Kerala MSMEAct reads as follows:

“6. Effect of the Acknowledgement Certificate.—(1) Anacknowledgment certificate issued under section 5 shall, for allpurposes, have effect as if it is an approval as defined in clauseB(c) of section 2, for a period of three years from the date of itsissuance and after the expiry of the said period of three years,such enterprise shall have to obtain required approvals as definedin clause(c) of section 2, within six months from the date of suchexpiry:

CProvided that the acknowledgement certificate shall not entitle aperson to use a land contrary to the provisions contained in theKerala Conservation of Paddy Land and Wetland Act, 2008 (28of 2008) and it shall also not entitle a person to use the land indeviation to the land use specified in the master plan notified underthe Kerala Town and Country Planning Act, 2016 (9 of 2016),Dwherever such plan is in force.

(2) During the period of three years specified in sub-section (1),no competent authority shall undertake any inspection for thepurpose of, or in connection with, any approval as defined inclause (c) of section 2.”E9. It is seen from Section 6(1) extracted above that anAcknowledgement Certificate shall have effect as if it is an approval asdefined in Section 2(c). Section 2(c) reads as follows:-

“2.(c) “approval” means licenses, permissions, approvals,Fclearances, registration, consents, no objection certificate and thelike, required under any State law in connection with theestablishment or operation of micro small and medium enterprisein the State;”

10. What is held against the writ petitioners today is the requirementof a permission under the Act of 1994. But Section 10 of the KeralaGMSME Act not only confers overriding effect to the Act on other laws,but also makes a specific reference to the Act of 1994. Section 10 of theKerala MSME Act reads as follows:

“10. Overriding effect of this Act on other laws.— (1) Theprovisions of this Act shall have overriding effect, notwithstandingH

anything inconsistent therewith contained in any other law, for thetime being in force.

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(2) In particular and without prejudice to the generality of theforegoing provisions of this Act, such provisions shall have effectnotwithstanding anything inconsistent therewith contained in thefollowing enactments and the provisions of these enactments shallbe read as amended in conformity with the provisions of this Act,namely:—

1. The Kerala Panchayat Raj Act, 1994 (13 of 1994)

2. The Kerala Municipality Act, 1994 (20 of 1994)

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3. The Kerala Shops and Commercial Establishments Act,1960 (34 of 1960)

4. The Kerala Lift and Escalators Act, 2013 (18 of 2013)

5. Travancore - Cochin Public Health Act, 1955 (XVI of1955)D

6. Madras Public Health Act, 1939 (3 of 1939)”

11. Therefore, the prayer made by the writ petitioners in theirsecond writ petition, deserved to be granted, clearly in the light ofthe statutory prescription. But unfortunately, both the learned SingleJudge and the Division Bench completely overlooked this most vitalaspect.

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12. However, Shri K. Parameshwar, learned counsel appearingfor the objectors contended that two issues arise for consideration namely(i) whether a self-certification obtained by respondent No.1 under theKerala MSME Act is sufficient in itself to set up a Hot Mix Plant; and(ii) whether in the light of such self-certification, no permission from thePanchayat is required under the Act of 1994 and Rules of 2019.

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13. According to the learned counsel for the objectors, Rule 3 ofthe Kerala Micro Small Medium Enterprises Facilitation Rules, 2020,requires all persons seeking Acknowledgment Certificate under Section5(3) to furnish a duly filled self-certification in Form-I. This formcontains an undertaking from the applicant to comply with the KeralaPanchayat Building Rules, 2019 and hence it is contended that the writpetitioners cannot avoid the requirement of permission from the localPanchayat.

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A14. But the said argument cannot be sustained for the simple reasonthat the Rules framed under the Act cannot annul the effect of thestatutory provisions. Section 10(2) of the Kerala MSME Act makes itclear that the provisions of the Act of 1994, shall be read as amended tobe in conformity with the provisions of the Kerala MSME Act. Therefore,the objectors cannot fall back upon the Rules to nullify the effect of theBprovisions of the Act.

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15. It is contended by Shri K. Parameshwar, learned counsel thatthough his clients have not challenged the constitutional validity of Section10 of the Kerala MSME Act, this Court can read down the overridingand absolute clauses in public interest. According to the learned counsel,Cthe Panchayat has a public duty to safeguard the areas and personswithin its jurisdiction against environmental pollution and that theprecautionary principle requires to be applied. The learned counsel reliedupon the decisions of this Court in Municipal Corporation of GreaterMumbai (MCGM) vs. Abhilash Lal & Ors.[4] and A.P. Pollution ControlDBoard vs. Prof. M.V. Nayudu (Retd.) and Ors.[5]

16. But the above argument is completely misconceived. Section10 of the Kerala MSME Act does not override the provisions of any ofthe pollution control laws such as Environment (Protection) Act, 1986,Air (Prevention and Control of Pollution) Act, 1981, Water (PreventionEand Control of Pollution) Act, 1974. The Kerala MSME Act overridesthe 1994 Act and a few other local enactments. This is why the writpetitioners have taken “consent” from the Pollution Control Board. Onceconsent is taken from the Pollution Control Board, the necessity forreading down Section 10 of the Kerala MSME Act, for the purpose ofprotecting the environment, does not arise.F

17. The argument that Panchayat being the grassroot institution,has the right of participation in decision making, is again misconceived. AllPanchayats want motorable roads. But if they do not want road constructionmaterials to be manufactured within their Panchayat, we do not knowwhere from these materials can be imported. Therefore, the reliance placedGby the learned counsel for the objectors on the decision of this Court inLafarge Umiam Mining Private Limited in T.N. GodavarmanThirumulpad vs. Union of India and Ors.[6], is also misplaced.

4 (2020) 13 SCC 2345 (1999) 2 SCC 718H6 (2011) 7 SCC 338

18. In fact, arguments were advanced also on the question whetherthe Hot Mix Plant is portable or whether it is a temporary or permanentstructure etc. But we do not think that it is necessary to go into the saidquestion, because the Acknowledgement Certificate obtained under theKerala MSME Act, alone is sufficient to clinch the issue in favour of thewrit petitioner.

19. In view of the above, the writ petitioner who is respondentNo.1 in three of these appeals and the appellant in one of these appealsis entitled to the reliefs sought in both the writ petitions. Accordingly, theappeal filed by the writ petitioner George Elias and Associates is allowed,the impugned orders are set aside and the writ petitions filed by GeorgeElias and Associates are allowed. The appeals filed by the objectors,namely, the people of the locality are dismissed. There will be no orderas to costs.

Ankit Gyan(Assisted by : Aarsh Choudhary, LCRA)

Appeals disposed of.

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