Supreme Court upheld Kerala High Judgment imposing fine of Rs. 1 Crore on DLF for violation of environmental norms.

January 11, 2018

A Bench of Supreme Court Judges Justice R F Nariman and Justice Sanjay Kishan Kaul in The Secretary, Kerala State Coastal Management Authority v. DLF Universal Ltd, Civil Appeal No. 117-120 of 2018, has directed DLF Universal Limited to pay fine of Rs. 1 Crore for not taking environmental clearance certificate for a project in Kerala.

The facts of the case are the project in question is of DLF Universal Ltd, which purchased nearly 5.12 acres of property from different vendors in the year 2006 envisaging a multi-storey residential complex of about 185 units located on the eastern bank of Chilavannurkayal (backwaters) in Kerala. The area in question, as apparent from the status report of the Coastal Regulation Zone itself shows that the area falls in the Kochi Corporation and the said area, along with the adjoining panchayats is highly developed.

A lot of low lying areas including tidal marshes and filtration ponds bordering the backwaters are alleged to have been reclaimed for construction and other development activities by various third parties and the area close to the site in question is well developed and built up.

DLF Universal Ltd obtained a building permit for the project in question issued by the Corporation of Cochin on 22.10.2007 under the Kerala Building Rules, 1984. It is also not really disputed that the other linked permissions such as NOC from State Pollution Control Board, NOC from the Fire & Rescue Department and height clearance from the Navy was also obtained. The builders DLF Universal Limited applied for environment clearance to the Ministry of Environment and Forests on 27.11.2007. The intervening factor was a Notification dated 14.9.2006 issued by the Ministry of Environment and Forests in furtherance of the environment protection in exercise of power conferred by sub-section (1) and clause (v) of subsection (2) of Section 3 of the Environment Protection Act, 1986 read with clause (d) of sub-rule (3) of Rule 5 of the Environment Protection Rules, 1986. This Notification was in supersession of the earlier Notification of 27.1.1994. The Notification states that the process was followed duly and in accordance with the objective of the National Environment Policy as approved by the Union Cabinet on 18.5.2006, such process was being modified. All new projects required prior environmental clearance from the Central Government as applicable or as the case may be the State Environment Impact Assessment Authority duly constituted by the Central Government under sub-section (3) of Section 3 of the said Act. The Notification also provided that the SEIAA would base its decision on the recommendation of the State or Union Territory Level Expert Appraisal Committee as to be constituted following the Notification and in the absence of the setting up of these authorities, a category provided would be treated as category 'A' project.

These authorities have been constituted subsequently only on 19.12.2011 and, thus, logically in view of what has been set out hereinabove, the project in question could possibly have been treated as a category 'A' project. The project of DLF was examined by the Central Expert Appraisal Committee (for short in its 63rd meeting and was approved as a "Silver Grading" project. A suggestion was made by the CEAC that some of the project area falls under the Coastal Regulation Zone and thus, the details of the project may be examined by the CRZ Committee of the Ministry and a separate clearance should be acquired under the CRZ project. In furtherance of this recommendation DLF was required to obtain the CRZ status report from the Centre for Earth Science Studies, Thiruvanathapuram, which is stated to be one of the seven authorised/identified agencies. An application is stated to have been made by DLF on 23.9.2008 to CESS, which in turn made a positive recommendation in May, 2009, stating that the project land was situated at CRZ II and there was no area in CRZ (I and i) in the project area or close to it. It may be noted at this stage that there have been some subsequent reports by CESS in September, 2011 and a communication dated 11.8.2014 but the project was more or less over even by the first date or was sufficiently advanced. The purport of the subsequent developments will be considered hereinafter but suffice to say that the first report sought to point out reclamation of backwater by DLF after 2009, earlier reclamation of filtration ponds and paddy fields and shifting of high tide lines. The communication dated 11.8.2014 pertained to alleged replacement of some photographs from the CESS report of May, 2009 and referred to a stream/natural canal at site that had been mapped by the CESS.

It appears that DLF, however, did not wait for the environment clearance and the construction activity went on at rapid pace at site ostensibly on a perceived deemed clearance since there was no communication during this period of time. This is apparent from a visit report dated 29.10.2009 of Kerala Coastal Zone Management Authority. This resulted in the KCZMA/appellant issuing a letter dated 21.1.2010, seeking explanation for having started construction without obtaining the necessary permissions/approval/clearance from KCZMA/appellant.

However, subsequently on 20.3.2010 in its 40th meeting the KCZMA/appellant, post discussion of the site inspection report, decided to recommend the project proposal to the MoEF.

The matter reached in Kerala High Court and the learned single Judge rendered his verdict on 8.12.2014 finding practically everything against DLF and categorised the whole construction as illegal and in violation of law, particularly the CRZ notification, and was thus not capable of being regularised. The illegal structure was directed to be demolished. This order was assailed in writ appeal No.1987/2014 by DLF. A separate writ petition was also filed, being writ petition No.20555/2015, challenging the report dated 21.7.2014 by the three member committee appointed by the KCZMA/appellant. The construction being complete and the flat buyers interest being involved, these apartment buyers also filed writ petition Nos.2810/2015 and 3375/2015 praying for issuance of occupancy certificates.

The Division Bench ultimately by the impugned order while broadly upholding the findings of the learned single Judge and setting aside the order of demolition, directed regularisation subject to fine/compensation amount of Rs.1 crore. This amount was to be deposited before the District Collector, Ernakulam to be kept in a separate account for being used exclusively for building up the environment, maintaining ecological balance in the area situated on the eastern side of the Chilavannur river, with a further direction to the District Collector to submit periodic reports before the Court as to the utilisation of the amount for the activities undertaken, in every six months. The writ petitions filed by the prospective buyers were dismissed but without prejudice to get the occupancy certificates for the building from the local authority subject to the satisfaction of the costs. Writ petition No.20555/2015 was also dismissed.

The Supreme Court set aside the findings of the impugned order while sustaining the fine of Rs.1 crore with the direction for strict adherence to the norms in future and avoidance of such contradictions by the authorities. The Court said that "We also feel it appropriate that in view of the professed policy to have more single window clearance, the methodology of such processing of such applications should be endeavoured to be simplified so that there is less uncertainty and better enforcement. The same may be done within a period three months from the receipt of the copy of the order."

Read the order of Supreme Court of India in The Secretary, Kerala State Coastal Management Authority v. DLF Universal Ltd dated 10.1.2018