Karnataka High Court Quashes Pollution Board's Closure Order Against Energy Unit, Directs Fresh Inspection

Granting relief to an oil production unit of M11 Energy Transition Company at Udupi, the Karnataka High Court has set aside the closure orders issued by the Member Secretary of Karnataka State Pollution Control Board (KPSPCB) for want of jurisdiction.M11 Energy Transition Pvt Ltd, a manufacturer of non-edible oil and biodiesel, previously moved the High Court challenging closure orders issued by KSPCB in February 2026, contending that the Member Secretary cannot be the competent authority to direct the shutting down of industrial units. The company prayed before the court to quash the orders dated February 18, 2026, issued under Section 33A of the Water Act and Section 31A of the Air Act, respectively, which ordered the immediate cessation of the company's operations at its Nandikooru unit in Udupi District.The Principal Bench of Chief Justice Vibhu Bakhru and Justice C.M Poonacha took note of KSPCB's 2019 memorandum vesting the power to issue closure orders on the Board Chairman under the Water and Air Act for all industries except Large RED Category Industries.“… Insofar as the petitioner's argument that the impugned orders were not passed by the Chairman of the Pollution Control Board, we find some merit in this contention…the authority to issue such orders rests with the chairman, but the impugned orders were not issued by the KSPCB Chairman…The petitioner's contention that they have already taken measures to address the complaints about pollution, which has not yet been considered by KSPCB also warrants consideration. The petitioner has set out a tabular statement indicating the action taken by it in respect of various complaints….”, the court remarked in its order.The Chairman of the Board alone can issue such directions, the petitioner had earlier contended, based on KSPCB's own office memorandum in 2019. The biodiesel company also cited a precedent from the Karnataka High Court wherein a closure order issued by a Member Secretary was deemed invalid due to lack of jurisdiction [M/s Dani Forging v. State of Karnataka (W.P. No. 5432/2022)]. Accepting the arguments raised by the counsel, the court further observed,“…It is upon KSPCB to examine whether the petitioner has taken the necessary steps for controlling the pollution. So far as the allegations of bias are concerned, a technical committee may be constituted to conduct an inspection for the purpose of issuing a closure order. We set aside the impugned orders and remand the matter to KSPCB to consider it afresh. KSPCB must conduct a fresh inspection, and the Secretary of the District Legal Services Authority shall also be included as a part of the inspection team, and he ought to submit an independent report to this court”.Accordingly, the court listed the matter on 8th April.As per the energy company, they possess a consent for operation in the 'orange' category until 2032. They are in the business of production of refined palm oil (refined non-edible oils from 2024), biodiesel, and glycerin. Despite the submission of periodic compliance reports regarding the set-up of the effluent treatment plant and a closed-loop vacuum system to mitigate odour, the board has unilaterally proceeded against the establishment due to the unlawful intervention of a local MLA, submitted the counsel appearing for the petitioners last week.Before the High Court, the petitioner confronted the version of the Pollution Board on three fronts: i) jurisdictional powers of the member secretary who passed the impugned order, ii) nothing in the order indicates that the draft order was approved by the competent authority, and iii) the enterprise was not allowed to be heard.The counsel also added that the shutdown of the enterprise would affect the livelihood of 700 workers and their dependents. Moreover, the completion of several international biodiesel supply contracts to the tune of 60, 000 Metric Tonnes would also be in limbo, the counsel submitted.During the hearing, the counsel for the Pollution Control Board submitted that they had received various complaints about the foul smell emanating from the company's production unit, which rendered it impossible for people to reside in the Nandikooru area. The board claimed that the effluent discharge from the unit contaminated the groundwater; even the borewells were seen with oily films on top, accompanied by a pungent smell.The pollution board also argued that even in the absence of a draft indication that the chairman has approved the impugned order, it should be deemed as passed by the Chairman.Advocate Shreeram Timmappa Nayak appeared for the petitioner company. Case Title: M/s M11 Energy Transition Pvt Ltd v. Karnataka State Pollution Control BoardCase No: WP 6719/2026

Karnataka High Court Quashes Pollution Board's Closure Order Against Energy Unit, Directs Fresh Inspection

Sebin James

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