Baramati Agro Ltd. v. Maharashtra Pollution Control Board & Ors.

13. First is the non-consideration of the reply of the petitioner. The Board issued a notice on 4 September 2023. The Petitioner responded on 7 September 2023 with a short reply. After that, the Petitioner submitted a detailed reply on 13 September 2023 dealing with each of the allegations. The reply of 7 September 2023 was an outline, elaborated in the reply of 13 September 2023. The impugned order dated 27 September 2023 refers to the reply submitted by the Petitioner on 7 September 2023. In the preamble of the impugned order, reference is made to 9 documents and vide reference no.6 to reply dated 7 September 2023, but it does not refer to the reply of 13 September 2023. The order lists the allegations made in the show cause notice and states that the reply was submitted, but the reply of 13 September 2023 is not referred to at all. In the reply affidavit filed in this Petition, the Board has only stated that there was an omission to mention the reply of 13 September 2023 in the order and the same; however, it was taken into consideration. This explanation is not satisfactory. Nonreference to the reply of 13 September 2023 cannot be a typographical error. In this reply, there were various positions that the Petitioner had pointed out which had a bearing on the allegations against the Petitioner. Therefore, the explanation of the Board that the reply of 13 September 2023 was taken into consideration cannot be accepted. Though it is correct that an order passed under section 33A of the Act of 1974 and section 31A of the Act of 1987 is not to read like a judgment of the court, in the case at hand, there is no reference to one reply of the Petitioner, and only the allegations are repeated, it cannot be said that the reply was considered, and the non-mentioning of the reply of 13 September 2023 is only a clerical error.

14. Therefore, two key aspects come to the forefront. Firstly, the proceedings, the authorisation from the competent authority, and the issuance of the order were concluded with remarkable speed. Furthermore, the time to shut down the operational distillery was limited to a mere seventy-two hours. Secondly, the impugned order fails to make any reference to the main reply filed by the Petitioner. This has resulted in the neglect of various crucial considerations necessary for justifying the closure order. The initial decision-making process becomes flawed when these criteria are not adhered to.

15. Under section 33A of the Act of 1974, the Board has the power to give directions. This provision reads thus:- “ 33A. Power to give directions.—Notwithstanding anything contained in any other law, but subject to the provisions of this Act, and to any directions that the Central Government may give in this behalf, a Board may, in the exercise of its powers and performance of its functions under this Act, issue any directions in writing to any person, officer or Authority, and such person, officer or Authority shall be bound to comply with such directions. Explanation.—For the avoidance of doubts, it is hereby declared that the power to issue directions under this section includes the power to direct— (a) the closure, prohibition or regulation of any industry, operation or process; or (b) the stoppage or regulation of the supply of electricity, water or any other service.” *** Identical power exists under the Act of 1981 in Section 31A. This provision reads thus:- “ 31A. Power to give directions.—Notwithstanding anything contained in any other law, but subject to the provisions of this Act, and to any directions that the Central Government may give in this behalf, a Board may, in the exercise of its powers and performance of its functions under this Act, issue any directions in writing to any person, officer or Authority, and such person, officer or Authority shall be bound to comply with such directions. Explanation.—For the avoidance of doubts, it is hereby declared that the power to issue directions under this section includes the power to direct— (a) the closure, prohibition or regulation of any industry, operation or process; or (b) the stoppage or regulation of supply of electricity, water or any other service.” *** The Board thus has the power to direct closure, prohibition or regulation of any industry, operation or process.

16. The petitioner contends that it has given answers to all the allegations in the reply and during the personal hearing, and according to the Petitioner, they have not contravened even in the reply affidavit. The first allegation against the Petitioner is of interception of tankers carrying spent wash. These drivers, upon interception, stated that they were carrying spent wash from the Petitioner’s Unit. In the reply affidavit, the officer of the Board stated that on 22 August 2023, he noticed suspicious activity whereby two tankers were intercepted, and it was found that they were carrying spent wash from the Petitioner's factory. The learned Counsel for the Board contended that this clearly shows that this spent wash was being dumped outside the unit; therefore, there is a clear breach of the Consent. It was contended that even the Petitioner had not denied this incident. The Petitioner, in its reply of 13 September 2023, which is elaborated before us, has sought to explain that a new lagoon was being constructed at the unit. On completion of such construction, a pipeline would have to be installed connecting the new lagoon with the old lagoon. The old lagoon was acting and would continue to act as the MEE Feed Tank. Meanwhile, until this pipeline was installed, tankers transferred the spent wash from the new lagoon to the old lagoon. Shifting of spent wash-through tankers was a temporary activity. It was stated that the tankers, without authorisation or permission of the Petitioner's officers, changed course and took the spent wash to a plot of land at village Vahyali. The drivers of the tankers stated that the diversion of spent wash was done at the behest of a local villager, and the Petitioner had no role to play. It is contended that the Petitioner is not even named in the FIR. It is stated that disciplinary action has been taken against the security officer, and the services of the tanker operator have been discontinued. The Petitioner has also sought to contend that the Petitioner uses the spent wash for its internal process and is not taken outside the unit. The entire spent wash is incinerated inside the unit. Therefore, we find that assuming that the tankers were intercepted, the Petitioner had an explanation for the same, which the Board has to consider along with the Petitioner’s explanation and decide whether this was a one-time default or it is a continuous or serious violation that would entail the closure of the unit or any other measure would have sufficed against the Petitioner.

17. The next ground is that during the visit on 22 August 2023, it was found that the Petitioner was operating its unit at 50% capacity, and the spent wash stored was 3,696 CMD, which shows that the Petitioner was not operating at zero liquid discharge regularly. The Respondent- The Board contends before us that this is a violation of the Consent. The Petitioner's response is that during summer and scanty rainfall, the unit could not get sufficient water from the nearby dams and, consequently, could not operate up to its optimum consented capacity. The Petitioner states that raw spent wash is processed through Multi Effect Evaporator (MEE) whereby a portion of spent wash is converted into water vapour, and the balance is concentrated spent wash and is used as a source of fuel and burnt into boilers to generate steam which is reused in the distillery process. It is stated that these processes are ongoing activities, and sometimes, if the boilers are shut down, the spent wash is required to be stored, and during monsoon, the spent wash increases its volume due to increased rainwater. So, according to the Petitioner, that spent wash is used in its internal system and, therefore, the position of spent wash stored in lagoons can undergo change and, therefore, there is no nexus between the unit operating in 50% of the consented capacity and the spent wash stored in the lagoons. The Board has derived this conclusion from the visit to the unit on 22 August 2023 and as the water was seen there. According to the Petitioner, one visit cannot be the foundation of a negative conclusion.

18. This is the explanation given by the Petitioner. This aspect, we find, has not been satisfactorily dealt with in the impugned order nor the reply of the Respondent-Board. Whether there was seasonal variation in the degree of the spent wash, whether from one visit directly, an inference can be drawn that a mismatch between the unit operating at consented capacity and quantity of spent wash are all factors that needed to be seen. If there was a mismatch, a corrective action could have been directed. If not in the impugned order, it could have been stated in the reply, but it is missing.

19. Another ground held against the Petitioner is that the spent wash is stored in lagoons unscientifically, which may lead to groundwater contamination. The Respondent- Board, in the reply affidavit, has stated that there is a mistake in the impugned order wherein it mentions that spent wash is stored in impervious lagoon unscientifically and it should have been non-impervious lagoons and absence of the word “non” in the impugned order is a typographical error. The Petitioner has taken a serious exception to the explanation the Respondent-Board gave that the absence of the word “non” is a typographical error. The Petitioner contends that the words “impervious lagoon” appears in the inspection report dated 22 August 2023 and even in the show cause notice dated 4 September

2023. It is contended that the inspection report is a hand-written document, so there cannot be a typographical error. The Petitioner has also asserted in the rejoinder that the said lagoons are, in fact, impervious. This is yet another instance of a crucial omission that is sought to be explained as a typing error.

20. Therefore, as of today there is no material is on record to show that the Petitioner has been storing spent wash in the nonimpervious lagoons. The learned counsel for the Respondent- Board also sought to contend that there is groundwater pollution and storing spent wash in lagoons is not permitted. However, the impugned order states to the contrary that - the spent wash in two impervious lagoons may lead to groundwater contamination. The Petitioner also contends that storing spent wash in the lagoon is not an impermissible activity and that it could be stored for a limited duration of up to five days under the EC and Consent itself. Therefore, the Board had to consider the nature of the lagoon and whether, in fact, ground contamination was taking place or not or even when it records that the lagoons were impervious. Even for invoking the Precautionary Principle, elementary enquiry was necessary. This scrutiny is entirely absent from the impugned order and the reply filed before us.

21. The next ground against the Petitioner is that the Petitioner has provided a spent wash tanker filling station adjacent to the lagoon. The Petitioner's explanation is that the said filling station is not a spent wash filling station but is used for water filling, which is supplied to the trees. It is stated by the Petitioner that, in order not to have any objection, without prejudice, the Petitioner has even removed the said water-filling station. The impugned order and the reply, except stating that there was a spent wash tanker filling station, do not elaborate on it. Even the subsequent development of removing this station is also something the Board needs to consider.

22. As regards the allegation that bio compost is still found stored in compost yard unscientifically during the rainy season, the Petitioner has sought to explain that it was temporarily accumulated and the Petitioner has removed the said compost and used it for the trees and plants and there is no compost stored, and the Petitioner has sought to rely upon the photographs.

23. The next allegation against the Petitioner is that an online continuous monitoring system is not provided or connected to the 45 TPH Boiler. The Respondent-Board states that providing an online monitoring system is crucial as it enables the Board to monitor the Petitioner's activities, which is an essential condition in Clause-XX of the EC. According to the Board, the Petitioner has admitted that the Petitioner does not have this online monitoring system. It is stated that from 28 November 2022, the system has not been provided and that the order for it is stated to be placed by the Petitioner for the same only in October 2023. Therefore, according to the Board, there has been a clear and direct breach of the conditions of EC for more than a year.

24. This aspect could also have been seen on a larger canvas of substantial compliance and the object of this condition. According to the Petitioner, apart from the online monitoring system, there are other methods by which monitoring can be done, and these measures are in place. It is stated that a logbook is maintained for spent wash, and various other means are available. The Petitioner has stated that outflow from MEE and inflow to the incinerator is monitored. The monitoring system by a flow meter, which is monitored through a software system in which information is available, and the Petitioner has been providing the spent wash generator data to the Board, which has not been questioned so far. The Petitioner also contends that the Petitioner has already purchased the hardware for this system, placed an order for the software, and has written to the Central Pollution Control Board, and the Central Pollution Control Board has informed the Petitioner on 3 October 2023 that its request for online connectivity will be considered within fifteen days. Therefore, the Petitioner seeks to advance a contention of substantial compliance, stating that one of the directions could have been issued to the Petitioner, giving time to install the system instead of directing closure. On this aspect, we find the scrutiny and the application of mind by the Board is missing as to what would have been the proper course of action.

25. One more allegation against the Petitioner is that the Petitioner has not replaced the wet scrubber to bag filter for the 10 TPH boiler. According to the Board, this inaction on the part of the Petitioner is a direct violation of the Environmental Clearance, more particularly Clause-V thereof. According to the Respondent-Board, once there are violations of this nature, the order of closure is proper, and the Petitioner should first comply with this condition and then apply for restarting. The Petitioner contends that the wet scrubber is in respect of bio compost, and bio compost has to be discarded within two years from the date of EC, which has not lapsed. According to the Petitioner, even otherwise, the Petitioner has phased out 10 TPH boiler, which was not in operation and without prejudice, the Petitioner has also stated that it is in the process of replacing the wet scrubber by bag filter. The order was already placed to ensure no adverse action was taken against the Petitioner on this count. Apart from reiterating the ground raised in the impugned order, the reply does not address this aspect. Again, this is an area where the Board's scrutiny is missing.

26. Regarding the allegation of storing coal and boiler ash in the compost yard, it is stated that coal was temporarily stored in the compost yard due to the ongoing construction of a new coal yard. The coal was stored on an impervious flooring base connected to a leachate tank, and even this has been shifted to a covered place. According to the Petitioner, these facts have not been controverted in the reply affidavit. The Petitioner also states that boiler ash has been treated similarly, and subsequently, an entity called RK Agro Industries has started lifting the boiler ash, and even this has been redressed. The Petitioner has placed photographs on record to demonstrate all these steps taken.

27. One of the aspects that the Board had to consider, which we find not being adverted to even in the reply filed before us, is the doctrine of proportionality. Sections 33A of the Act of 1974 and section 31A of the Act of 1987 provide three options to the Board: regulation, prohibition and closure. The order of immediate closure of a unit under the Act of 1974 and the Act of 1987 and withdrawal of Consent is a stringent step. The Board has the discretion to choose the appropriate option. The discretion conferred on an authority under the statutes is not unfettered. Administrative law in our country has developed various guiding principles for the use of discretionary powers by administrative authorities. One such established principle is the "doctrine of proportionality." This doctrine focuses on the decision-making process, more particularly the approach to setting priorities while making decisions. Principally, a decision-making process involves allocating relative significance to the factors and considerations relevant to the issue at hand. The doctrine of proportionality focuses on the primary aspect of this process, emphasising balancing a set of acceptable priorities. So that its power or discretion is used fairly, it is crucial for the authority to ensure the chosen measure is commensurate with the nature of the violation and the characteristics of the offender, avoiding any undue harshness. Thus, the principle of proportionality mandates that administrative measures should not exceed what is strictly necessary to achieve the desired outcome.

28. The Petitioner has placed before us various incidents where the Board has not taken deterrent measures of closure, which are as follows: “(a) Shriram Jawahar SSK Udyog (Sugar Unit)- Directions dated 6 June 2023 (b) Jai Bhawani SSK (Sugar Unit)- Directions dated 31 May 2023

(c) Malegaon SSK Ltd.- Directions dated 16 June

(d) Vitthalrao Vikhe Patil SSK Ltd.- Directions dated

(e) Karmaveer Shankarrao Kale SSK (Distillery Unit)directions dated 11 April 2023 (f) Sharad Sahkari Sakhar Karkhana Ltd.- Directions dated 15 March 2023 (g) Yashwantrao Mohite Krishna SSK Ltd.- Directions dated 19 January 2023 (h) Someshwar SSK Ltd.- Directions dated 6 June

(i) Brima Sugar Maharashtra Distilleries Ltd. –

Directions dated 26 May 2023 (k) Jarandeshwar Sugar Mills Pvt. Ltd. –Directions dated 24 May 2023.” All these directions were issued between January 2023 and September 2023. The Petitioner has asserted that in some of these cases, direct effluent/ spent wash was being discharged into flowing rivers or other water bodies, which were serious violations; however, these units were simply directed to rectify the same or very minimal action was taken against them. Even in the cases where there is a direct allegation of a serious violation, the action of closure is not taken. The Petitioner contends that there is no allegation or any report of any direct pollution of a grave nature that a closure is to be ordered in the Petitioner's case. Though the Board has tried to justify the actions, contending that there cannot be a comparison and each case has to be decided on its own merits, the Respondent- Board has not controverted these assertions of the Petitioner.

29. The Petitioner has also relied upon the Enforcement Policy of the Maharashtra Pollution Control Board, Mumbai, issued vide notification dated 29 February 2016. It refers to the order passed by the National Green Tribunal directing the Board to frame a policy. The Enforcement Policy 2016 is framed to integrate various aspects, including inspections, monitoring, standards, compliances, directions, remedial measures and filing of complaints before various Courts. It deals with effective consent management, laying down the conditions for prevention, defining specific violations and classifying violations upon degree. In the definition of specific violation, the definitions have been incorporated in the Enforcement Policy with respect to the level of non-compliance. First is average compliance, where the compliance level is 75% and below 100%. Second is medium compliance, where the compliance level is from 25% but is less than 75%, and third is substantial non-compliance, where the compliance level is less than 25%, including environmental damage. Then, fourth is substantial/ total compliance, where the compliance level is 100%. There is also a category of zero liquid discharge and disposal on land. Accordingly, violations have been categorised as substantial non-compliance, medium compliance, average compliance and total compliance. The Enforcement Policy 2016 lays down the procedure for enforcing compliance with various environmental norms, particularly the Act of 1974 and the Act of

1987. The Enforcement Policy 2016 contemplates warning notice after the visit, show cause notice, proposed directions based on the analytical report and conditional directions to secure compliance within the stipulated period. After proposed directions, based on the reply after the grant of an opportunity of hearing, final conditional directions with a time frame to comply with the conditions to be imposed within a particular time. If compliance is not done, a prohibitory order can be issued to stop polluted discharge or emissions under the Act of 1974 and the Act of 1987. If compliance is not done even after the prohibitory order, an application under these Acts can be filed before the Court of Judicial Magistrates for an appropriate order. The Enforcement Policy 2016 further contemplates conditional directions where serious non-compliances are observed based on the regular visit /surprise visit and investigation where exceedance is above 75%, directions of closure or disconnection of electricity can be issued till effective steps are taken. In grave and sudden circumstances, final directions can be immediately issued.

30. The Counsel for Respondent-Board contends that this Policy cannot take away the power of the Board under sections 31A and 33A of the Acts, and it is merely without an internal regulatory mechanism. Assuming it to be so, but it does not mean that the Policy is meaningless to be disregarded at will. The Policy is framed pursuant to the order passed by the National Green Tribunal to categorise the degree of violations and communicate appropriate responses to the degree of violations. The Policy also contemplates that for non-compliance with the conditions of consent, the bank guarantees will be proportionately forfeited, and proportionate time will be granted to secure compliance. Balancing compliance against non-compliance in percentage has to be seen as to the installation of equipment for pollution control devices and overall steps taken by the unit against infractions.

1. Pointing to the consequences of the impugned order, the Petitioner seeks to place on record that the Petitioner is a significant contributor of ethanol to the Central Government and the largest ethanol supplier in Maharashtra. The Petitioner is also a major contributor of ethanol in the Ethanol Blending Programme of the Central Government. The Petitioner has supplied 27.89 crore litres of ethanol to oil management companies in the last three years. The Petitioner states that if the Unit is closed, it will directly hamper the ethanol supply made by the Petitioner to the Central Government. The Petitioner states that reducing crushing would necessarily impact the local farmers. The Petitioner states that 291 workers working in the Petitioner's Unit and 807 workers working in the sugar factory would be adversely impacted. The Petitioner contends that the Petitioner has taken the lead in tree planting. The Petitioner has planted 12,530 trees, invested Rs.122.85 crore towards technological advancements, and invested in equipment and infrastructure to protect the environment. The Petitioner has stated that the Petitioner has set up two carbon dioxide refinery plants on the premises of the said unit. These are some considerations to be balanced with the degree of violations and degree of immediate threat in deciding the course of action.

32. The Enforcement Policy itself contemplates proportionality in the actions of the Board. It is not established before us that any infraction of any degree of Consent or EC will ipso facto result in the order of urgent and immediate closure of a unit, regardless of any other circumstances. It cannot be argued that the Board can issue an order of closure merely because it has the power to do so. The Board had to consider whether, even proceeding on the basis that all the allegations in the show cause notice were proved against the Petitioner, whether the action of closure was warranted. It cannot be debated that the Board, an authority entrusted with the duty and power to deal with air and water pollution, has a range of options to achieve its statutory objective. The doctrine of proportionality also applies to the Board like any other authority. Therefore, the Board was obligated to scrutinise the relative merits of varying objectives and their consequences to ensure they were assessed and balanced fairly. While it is correct that the selection of options and their severity is within the purview of the Board and it is guided by the Precautionary principle, such choices must correspond to the breach of conditions and prevailing circumstances. The adopted measure should not be unduly severe. The impugned order does not state the presence of actual groundwater contamination or the petitioner's failure to take remedial action despite repeated warnings. As to whether stringent immediate action of closure is required, whether phase-wise approach is necessary, and giving time for compliance monitoring the Petitioner's measures, the doctrine of proportionately will have to be applied in deciding the measures to be taken. Neither the impugned order nor the reply show that this crucial aspect has been considered.

33. Thus, we find that several errors have crept in the impugned order. They primarily stem from the expeditiousness of the decision-making process and the failure to duly consider the Petitioner's reply. The Petitioner has sought to address the violations levelled against it and has contended that it has substantially complied with the stipulated conditions of the Environmental Clearance. The impugned action directs the stringent measure of closure of the operational unit primarily on a single inspection report and the breaches. It is also not established before us the Petitioner has a history of recalcitrance. Even for the sake of argument, assuming that the Enforcement Policy is not mandatory, it should not be entirely disregarded unless the prevailing facts and circumstances provide sufficient justification for such a course of action. This holds especially true when the principle of proportionality is involved. The Petitioner is stated to have undertaken several corrective measures that would require scrutiny by the Board. Considering the totality of the circumstances which we have narrated above, according to us, the proper course of action is to set aside the impugned order restoring the proceeding from the stage of the show cause notice dated 4 September 2023 and direct the Board to take a fresh decision after giving an opportunity to the Petitioner and setting up a time-table for the disposal of the said proceeding. In the facts and circumstances, the Board should pass a reasoned order.

34. To conclude, the Board, while taking the impugned decision in an expedited manner, has overlooked various important factors, such as the Petitioner's second reply, the Enforcement Policy, and the principle of proportionality. The Board had to consider aspects such as the extent of violations, degree of environmental threats, the option of setting compliance timelines, and the possibility of alternative deterrent measures. Neither the impugned order nor the reply affidavit show that a considered decision-making process was adopted before taking the decision. Therefore, it is necessary to remand this matter to the Board for decision afresh after taking into account the observations made in this judgment and after evaluation of the remedial actions taken by the Petitioner.

35. Accordingly, the impugned order dated 27 September 2023 is quashed and set aside. The show cause notice dated 4 September 2023 is restored to the file of the Respondent- Board. The Petitioner may file an additional reply, if any, within two weeks. The Respondent- Board will direct inspection to be carried out as to the steps taken by the Petitioner within two weeks thereafter. After the inspection report is so received, an opportunity of hearing be given to the Petitioner with a copy of the inspection report within two weeks from the date of receipt of the report. After the opportunity is so given, the Respondent Board will pass a reasoned order as per law on its own merits after considering all the relevant aspects, including the Enforcement Policy.

36. Accordingly, the Writ Petition is disposed of. Rule is made absolute in the above terms. No order as to costs. (MANJUSHA DESHPANDE, J.) (NITIN JAMDAR, J.)

PRAKASH PAWAR