CRZ Notification 2011 : Storage Facility For Edible Oil Not Allowed Outside Port Area; Supreme Court Affirms Quashing Of Post-Facto Clearance

A 3-Judge Bench comprising Justice K.M. Joseph, Justice B.V. Nagarathna and Justice J.B. Pardiwala passed the order while uploading the decision of the National Green Tribunal, Southern Zone (NGT), which set aside the ex post facto clearance granted by the Union Government to an edible oil processing and refining company (appellant) to lay pipeline for transfer of edible oil from Chennai Port to the storage transit terminal. The said clearance was provided on the strength of Paragraph 4.3 of the CRZ Notification, 2011. The NGT had found that the activity of putting up a storage tank transit terminal, is in the teeth of the 2011 Notification.

Factual Background

The appellant is in the business of processing and refining edible oil. It imports edible oil through Chennai Port. In 2014, through public auction it purchased a storage facility located in the Ennore Expressway. In order to lay an underground pipeline of 4.5 km to the facility, it approached the concerned authorities seeking approval. The Chennai Fishing Harbour Management Committee, the NHAI, the Chennai Port Trust granted permission. On 10.07.2015, as per 2011 Notification it made a proposal to the District Coastal Zonal Management Authority (DCZMA), Chennai. The DCZMA recommended the proposal; then Tamil Nadu State Coastal Zonal Management Authority considered the proposal and forwarded it to the MoEF-CC, Union of India through the State Government. Thereafter, the Expert Appraisal Committee, CRZ, sought two clarifications. On 24.08.2016, the Chennai Port Trust issued a certificate and granted permission. While the recommendation was pending before the MoEF-CC, the appellant started laying pipelines. On 19.10.2016 an application was filed before the NGT against the same. Consequently, a Local Commissioner was appointed to inspect the storage facility. The NGT noted that no activity would be carried out at the facility until MoEFF-CC takes a decision. At proceedings dated 08.03.2019, the MoEF-CC granted post facto clearance. On 08.04.2019, an appeal was filed before the NGT. The NGT set aside the proceedings dated 08.03.2019 whereby the appellant was granted clearance to lay pipeline for transfer of edible oil for the Chennai port to the storage terminal tank and for the establishment of the storage transit terminal of the appellant. It held that the activity of putting up a storage tank transit terminal was contrat to the 2011 Notification and thus illegal. The matter reached the Supreme Court. A similar case arose with respect to the sister concern of the appellant and was considered alongside.

Analysis by the Supreme Court

By way of Notification issued in the year 2011 under the Environmental Protection Act, 1986, the Central Government declared certain areas as Coastal Regulation Zone. Clause 2 of paragraph 4 of the Notification provides the procedure for clearance from MoEF-CC to conduct permissible activities. Initially, the 2011 notification did not provide for ex post facto approval. In 2018 paragraph 4.3 was inserted to the Notification, which made provision for post facto clearance for permissible activities. However, projects which are in violation of CRZ norms are disentitled to take advantage of the post facto clearance. The Court looked at the object of the law and enumerated the same as under -

1. ensuring livelihood security to the fisher communities and other communities living in the coastal areas,
2. conservation and protection of coastal stretches,
3. the protection of the unique environment of the coastal stretches and its marine area,
4. promotion or development through sustainable manner based on scientific principles taking into account the dangers of natural hazards in the coastal areas;
5. the aspect of sea level rise due to global warming.

In view of the same, it rejected the contention of the appellant that laying the pipeline would enhance the efficiency of the port; reduce the traffic congestion, and reduce pollution.

It was argued by the appellant that the phrase used for CRZ-I is ‘within’, while for CRZ-II the phrase used is ‘in’. In M. Nizamudeen v. Chemplast Sanmar Limited And Ors., the Supreme Court had interpreted ‘in the port areas’ as ‘in or through the port areas’. The Court noted that the context of the judgment was different and is inapposite to the present case. On perusal of the NGT’s order, it was understood that ‘in’ includes ‘so as to be enclosed, surrounded or inside’. The Court clarified that the words ‘within’ and ‘in’ cannot include what is outside the port.

The Court noted that the distance between the entrance of the storage facility and the sea shore was 160 feet. It is located a few kilometres away from the Chennai port. On perusal of the notification, the Court observed that CRZ II has been classified as areas that have been developed up to or close to the shoreline. Under CRZ III storage facility of non-hazardous materials including edible oil is permitted within a distance of up to 200 m from the high tide line and between 200-500m from the high tide line. Clause (1) of paragraph 8 of the Notification states -

“CRZ-II, -

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

The appellant had argued that the Chennai metro development authority had granted it permission for construction of the storage facility treating the area as a general industrial use zone and is covered by the definition of building in paragraph 8. However, the Court was of the opinion that since the Union Government had granted the approval on the basis that the concerned activity is a permissible activity and regulated by the CRZ Notification, 2011, without relying on the said paragraph, it would not permit the appellant to take recourse to the same.

The Court noted that allowing storage facilities for non-hazardous activities appear to be an indispensable part of the operation of a port. Therefore, only the port authorities would have complete control over the storage facility. The Court observed that the notification does not contemplate the concerned activities in a ‘port area’.

It was taken note of that the appellants had claimed that the authorities are experts and they ought to be given the weight due to them. In this regard the Court noted -

“That the authorities have proceeded on a particular basis, may as well betray their erroneous understanding. That such views do not clinch the issue relating to the construction of the law is elementary. We would think that in the facts of this 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 the basis of the contention, cannot overwhelm our understanding of the notification.”

The Court held that though the storage facility was outside the port area, the pipeline is permitted activity even in CRZ I. Ex-post facto permission could have been granted for permitted activity. But, the pipeline would be meaningful only when they are connected to the storage tank. It was of the opinion that the issue - whether the pipeline can continue to be in operation even if the storage tank is demolished - ought to be left to the DCZMA.

Upholding the order of the NGT, the Court granted the appellant six months time to comply with the NGT’s direction to demolish the storage tanks. It was granted a month’ s time to pay the compensation ordered. However, with respect to the demolition of the pipeline, the appellate was asked to await the decision of the DCZMA.

Case details

K.T.V. Health Food Private Limited v. Union of India And Ors. | 2023 LiveLaw (SC) 77 | Civil Appeal No. 3626 of 2020 | 1 Feb 2023 | Justice K.M. Joseph, Justice B.V. Nagarathna and Justice J.B. Pardiwala

For Appellant(s) Mr. R. Jawaharlal, Adv. Mr. R. Sarvanakumar, Adv. Mr. Siddharth Bawa, Adv. Mr. Mayank Kshirsagar, AOR Mr. Anuj Garg, Adv. Mr. Mohit Sharma, Adv.

For Respondent(s) Ms. Anitha Shenoy, Sr. Adv. Mr. Ritwick Dutta, Adv. Ms. Srishti Agnihotri, AOR Ms. Sanjana Grace Thomas, Adv. Ms. Ayushma Awasthi, Adv. Ms. Namrata Sarah Caleb, Adv. Ms. Mantika Vohra, Adv. Ms. Itisha Awasthi, Adv. Ms. Sruthi K, Adv. Mr. Gurmeet Singh Makker, AOR Mr. Amit Anand Tiwari, A.A.G. Dr. Joseph Aristotle S., AOR Mr. Shobhit Dwivedi, Adv. Mr. T. R. B. Sivakumar, AOR

Coastal Regulation Zone Notification 2011- storage facility for edible oil not allowed outside port areas- the word ‘within’ used for CRZ-I and ‘in’ used for CRZ-II in the CRZ Notification of 2011 cannot be interpreted to include what is outside the port areas-The maker of the notification has not even contemplated the activities in question in a ‘port area’. We must here elucidate and observe that if the contention is to be upheld that a storage tank can be permitted outside the port limits, it will introduce chaos. The question would arise as to up to what distance from the port area it would be considered as the ‘in the port area’. The 2011 Notification cannot receive an interpretation which would leave matters of moment to be afflicted with the vice of uncertainty. This is apart from the importance of avoiding an interpretation which seemingly allows free play in the joints to the Administrator but, atthe same time, vest an arbitrary power in him- Para 58

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