Regent Automobiles P.Ltd. vs Govt. Of N.C.T. Of Delhi Thr. ...
2009 Latest Caselaw 111 Del

9, 10 & 11
*          IN THE HIGH COURT OF DELHI AT NEW DELHI

                                        Pronounced on 16th January, 2009

+            W.P. (C) 7516/2007, W.P. (C) 7517/2007, W.P. (C) 7605/2007

      W.P. (C) 7516/2007

      REGENT AUTOMOBILES P.LTD.

      W.P. (C) 7517/2007

      MULTAN AUTOMOBILE ENGINEERS

       W.P. (C) 7605/2007

      FLYING FASHIONS
                                                              ..... Petitioners
                         Through : Mr. Dinesh Agnani with
                         Ms. Leena Tuteja, Advocate.
                    versus

      GOVT. OF N.C.T. OF DELHI THR.
      SECRETARY & ORS.                                      ..... Respondents

      CORAM:
      HON'BLE MR. JUSTICE S. RAVINDRA BHAT

1.    Whether the Reporters of local papers          Yes
      may be allowed to see the judgment?

2.    To be referred to Reporter or not?             Yes


3.    Whether the judgment should be                 Yes
      reported in the Digest?

      S.RAVINDRA BHAT, J. (ORAL)

1. These Writ Petitions were heard together, with consent of the counsel

for the parties as they involved common questions of fact and law.

2. All the petitioners claim to be aggrieved by the directions issued by the

Joint Commissioner of Industries acting on behalf of the Commissioner (the

2nd respondent and 3rd respondent, hereafter referred to collectively

as 'the Commissioner'), requiring them to furnish bank guarantees for

specified amounts.

3. Briefly the facts are that the petitioners are industrial units engaged in

manufacture. In one case (WP (C) 7605/07), the petitioner is involved in

garment manufacture; in the other two cases, the petitioners deal in

automotive parts. All of them claim that the respondents are an "appropriate

authority" for the purpose of collecting apportionment cost of Common

Effluent Treatment Plant (hereafter referred to as „Plant‟). Their averments

are that a Common Effluent Treatment Plant Society was formed in 1996 to

achieve the objective of setting up of plants and their administration. The

Society sets up plants in various industrial areas and apportions costs from

its members. The petitioners contend that the measures taken by the

respondents are part of the cleaning up process of the environment including

cleaning effluents in the Yamuna River.

4. As a result, the National Capital Territory of Delhi enacted the Delhi

Common Effluent Treatment Plants Act, 2000 (hereafter „the Act‟) with the

object of recovering dues towards setting up of such plants in Industrial

estates. The petitioners refer to various provisions of the Act concerning

setting up of an appropriate authority, its functions and the powers vested in

it to issue orders and directions. They also refer to Rules framed in 2001

(hereafter „the Rules‟) under the Act prescribing the formula for

apportionment of plants and their maintenance.

5. The petitioners complain that the costing method adopted by the

authority is never transparent and has been arbitrary. Thus the Society has

been charging Rs. 100/- per sq. mt. together with ad hoc amounts depending

on the size of the industrial unit. It is alleged that the petitioners have made

complete payment towards apportionment of costs and have also complied

with all further demands by the society. They advert to installation of effluent

treatment plants in view of their business activities. They contend about

various inspections by the Commissioner from time to time; and that as and

when any deficiency in regard to maintenance of the plant was pointed out,

they were rectified. In the circumstances, they now impugn the order dated

27.9.07, which refers to a visit by a joint inspection team on 10.8.2007 to

their premises and further alleges that irregularities were noticed in regard

to the observance of parameters and norms for polluting industries. After

giving notice, to which the petitioners replied, the respondents directed them

to furnish bank guarantees for various sums. In W.P. (C) 7605/07, the

amount of bank guarantee sought for is Rs. 5 lakhs; in W.P. (C) 7517/07 it is

Rs. 3 lakhs and in W.P. (C) 7516/07, it is Rs. 5 lakhs.

6. The petitioners contend that the directions to furnish bank guarantees

for specific amounts are without any legal authority and in any event based

on utterly vague premises. It is submitted that if there was violation of any

norms, they could have been visited with consequences spelt out under the

Act or under other laws such as, Water (Prevention and Control of Pollution)

Act; Air (Prevention and Control of Pollution) Act; or the Hazardous Wastes

Act. The petitioners contend that the provisions of the Act do not empower

the CEPT Society or the respondents to issue vague or open-ended directions

of the kind impugned in this case. All that the respondents are empowered

to do in case of non-compliance with the provisions, is to levy penalty upon

the errant unit, after holding appropriate enquiry as is deemed necessary. It

is claimed that the power to issue directions has to be exercised reasonably

and not contrary to express provisions of the Act.

7. The respondents contend that the Act empowers the authorities to

seek information under Section 8 of the Act; the authorities are also enabled

to enter and inspect the premises by virtue of Section 9. Section 16

prescribes that the authority can give appropriate directions. It is contended

that these provisions are sufficient pointers to the respondents‟ amplitude of

powers, which extend to issuing directions to the concerned Unit, to furnish

bank guarantees.

8. It was contended during the hearing that the surveys conducted by the

Delhi Pollution Control Committee (DPCC) showed that many Units were

discharging effluents directly in to the conveyance system without pre-

treatment resulting in high Bio-Oxygen Demand and Chemical Oxygen

Demand. This was also corroborated in the analysis report of the CETP Plant.

A joint inspection team visited the premises of various units. This inspection

and survey of 25 units disclosed that 17 of them were operating without

plant and the sludge they were supposed to maintain were missing. Those

plants were given show cause notices, replies to which were found

unsatisfactory. On account of these facts, the impugned directions were

issued.

9. The above discussion would show that the controversy between the

parties pertains to the impugned directions issued by the respondents,

requiring the petitioners to furnish bank guarantees for various determined

amounts. The impugned orders are in identical format except so far as the

amounts are concerned. One such order made in the case of petitioner in

W.P. 7605/07 is extracted below: -

"1. Whereas, during the visit of Joint Inspection Team on 10.8.07 at the premises of M/s. FLYING FASHIONS certain irregularities were noticed, that of non-observance of parameters/norms prescribed for such polluting industries for pre-treating of effluent and other violations as communicated vide Notice No.1029 dated 13.8.2007.

2, Whereas, the said occupier has filed written reply on 21.8.2007 explaining the reasons etc. After carefully going through the documents submitted by the occupier, the reasons/facts have been found vague/unsatisfactory as such no remedial measures were promised to observe the parameters of Pollution Control Authorities as well as provisions of CETP Act & Rules.

"It is pertinent to mention here that under article 21 of the Constitution of India the wholesome environment is the fundamental right of every citizen which needs a right living atmosphere congenial to human existence as interpreted by the

Hon'ble Supreme Court". Moreover toxic pollutants cannot be gifted to the public at the cost of others benefit.

3. Therefore, the undersigned as per powers conferred upon him under Section 16 of the CETP Act 2000 read with Rule 10 of CETP Rules 2001 now issues following direction in connection with the said notice dated 13.8.2007.

(I) That, the pre-treatment of the effluent should be as per the prescribed parameters by way of operating the apparatus/ETP installed at the premises regular non- operation is resulting higher level of BOD, COD & TDS etc. at the CETP, which is difficult to control without pre- treatment before discharging the effluent into the Conveyance System by the occupiers.

(II) That, no effluent should be directly discharged into the main sewer line other than the conveyance system. (III) That, O&M charges must be paid by the occupier to the CETP Society regularly.

(IV) That, hygienic working conditions must be maintained for & non skilled/workforce as per labour Laws.

(V) That, the sludge should be stored in sealed containers and must ensure of the proper stock of the Chemicals.

(VI) That, there should be proper dosing of the chemical in the pretreatment process so that parameters are met in the Analysis report.

(VII) That, only qualified operators should be engaged to operate the apparatus/ETP and a proper logbook be maintained about working hours & sludge generated. (VIII) That, quarterly returns must be filed by the occupier to the Appropriate Authority filing all the information correcting & timely.

(IX) That, as a guarantee to observe the above mention conditions, a bank guarantee of Rs. 5,00,000/- (Five Lakhs only) should be executed by the said Occupier in the name of "the President of India" through Secretary-cum- Commissioner, Department of Industries Govt. of Delhi valid for 2 years to be submitted to the Appropriate

Authority within 10 days from the issue of this letter. In case of non-compliance, directions issued on 13.8.2007 will be made confirmed and the Authorities will be requested for disconnection of electricity and water of the said defaulter."

10. The petitioners contend that provisions of the Act do not enable or

empower the respondents to issue such directions; the respondents assert

that it does. It would, in the circumstances, be necessary to discuss some of

its provisions and also extract the relevant provisions of the Act. The Delhi

Common Effluent Treatment Plants Act was enacted in the year 2000. Its

avowed objects are to provide for recovery of dues - in respect of capital and

recurring cost of Common Effluent Treatment Plants set up in industrial

estates - as arrears of land revenue. Section 2 (2) defines "appropriate

authority" as Commissioner of Industries or such other officer not below the

rank of Joint Director; Section 2 (3) states that „CETP‟ means Common

Effluent Treatment Plant. By Section 3 an obligation is cast on the industrial

estates, either themselves or with one or more industrial estates in Delhi, to

constitute a registered CETP Society, duly approved by the appropriate

authority, to set up and operate a CETP Plant for the participating Units.

Section 6 defines the functions of the appropriate authority; the main

function is to recover any unpaid dues from occupier(s), to ensure the proper

setting up operation and maintenance of CETPs in Delhi. These functions

include the apportionment of cost amount from occupiers, recoveries of dues

from such persons and taking other steps towards achieving the object of the

Act. Section 7 provides for levy and collection of apportioned costs.

Sections 9, 11, 16, 17 and 18 read as follows: -

"9. Power of entry and inspection - Subject to the provisions of this clause, any person empowered by the appropriate authority in this behalf shall have a right at any time to enter with such assistance as he considers necessary any place for the purpose of performing any of the functions of the appropriate authority as may be prescribed in rules.

11. Penalty for non-payment within the specified time - If any amount payable by any person is not paid within the date specified in the order it shall be deemed to be in arrears and the appropriate authority may after such inquiry as it deems fit, impose on such person a penalty not exceeding the amount in arrears.

16. Power to give directions - Notwithstanding anything contained in any other law, but subject to the provisions of this Act, the appropriate authority may, in exercise of its powers and performance of its functions under this Act, issue any directions in writing to any occupier, society, person, officer or authority, and such occupiers, society, person, officer or authority shall be bound to comply with directions.

Explanation - For the avoidance of doubts, it is hereby declared that the power to issue directions under this Clause includes the power to direct -

(a) the closure, prohibition or regulation of any industry, establishment, operation or process; or

(b) the stoppage or regulation of supply of electricity, water orany other service.

17. Failure to comply with directions - (1) Whoever fails to comply with the directions given under sub clause (2) or sub-clause (3) of clause 8 within such time as may be specified in the direction shall be liable to pay a penalty which may extend up to ten thousand rupees and in case the failure continues, with an additional penalty which may extend up to five hundred rupees for every day during which such failure continues after the imposition of the penalty of the first such failure.

(2) Whoever fails to comply with any direction issued under clause 15 shall, in respect of each such failure, be liable to pay a penalty

which may extend up to thirty thousand rupees and in case the failure continues, with an "additional penalty which may extend up to five thousand rupees for e very day during which such failure continues after the first such failure.

18. Penalty for certain acts - whoever-

(a) Obstructs any person acting under the orders or directions of the appropriate authority from exercising his powers and performing his functions under this Act; or

(b) Fails to furnish to any officer or other employee of the appropriate authority any information required by him for the purpose of this Act; or

(c) In giving any information, which he is required to given under this Act knowingly or willfully makes a statement, which is false in any material particular.

Shall be liable to pay a penalty, which may extend up to five thousand rupees. "

11. Section 19 provides for residual penalty for contravention of

certain provisions of Act and Section 20 specifically enacts for

contravention by Companies. But for Section 16 it can be argued that

the entire range of sanctions including penalties have been specifically

provided by various provisions such as Section 11, 18, 19 & 20. The

question, therefore, is - whether the general power to issue directions

comprehends the power to require bank guarantees to be furnished.

12. Now, there is no doubt that the Act enables the authorities set up

under it to supervise and regulate plants and mandate best practices

for avoidance of water pollution. The scheme of the Act and its

preambular declaration clearly point to the respondent authorities‟

power extending towards setting up of CETP Societies, installation of

plants and apportionment of costs and their recovery. Section 8 (2)

entitles the appropriate authority to direct a person who in its opinion

is discharging effluents to give such information in such form as may

be specified in the directions for the purpose of enabling the

appropriate authority to perform the functions conferred on it by or

under the Act. The power to issue directions, includes the power to

close, or prohibit or regulate any industry, establishment, operation or

process; or to stop or regulate the supply of electricity, water or any

other service.

13. In this context, it will be also useful to consider Rule 10 of Delhi

Common Effluent Treatments Plants Rules, 2001, which states as

follows: -

"10. Directions

(i) Any direction issued by the appropriate authority under the Act/rules shall be in writing.

(ii) The direction shall specify the nature of action to be taken and the time within which it shall be complied with by the person/occupier, officer or the authority to whom such direction is given.

(iii) When the direction/order is for the closure/sealing/auction of an industry, process or operation or stoppage or regulation of electricity or water or any other service affecting the carrying on any industry, operation or process and issued to an officer or an authority, a copy of the direction shall also be endorsed to the occupier of the premises/industry, operation or process, as the case may be and objections, if any, filed by the occupier with an

officer designated in this behalf shall be dealt with in accordance with the provisions of the Act.

Provided that no opportunity of being heard shall be given to the occupier if he has already been heard earlier and the directions for the stoppage or regulation of electricity or water or closure/sealing/auction of an industry was the resultant decision of the Government, appropriate authority or the appellate authority, as the case may be, after such earlier hearing."

14. It is an established rule of statutory interpretation that every

provision, which confers a power should be construed in its own terms,

enabling the authority the full range of options, which may naturally

fall within it. (Asstt. Collector of Central Excise, Calcutta -vs- National

Tobacco Co of India AIR 1972 SC 2563; Jamaluddin Ahmad -vs-

Abusaleh Najmuddin 2003 (4) SCC 257); likewise the express grant of a

certain kind of power implies, in cases, exclusion of other powers. This

rule also iterates that everything necessary to carry out the purposes

of the grant can be done by the authority entrusted with the power

(Ref. State of U.P. -vs- Poosu, AIR 1976 SC 1750; State of Karnataka -

vs- Vishwabharathi Housing Co-operative Society AIR 2003 SC 1043).

15. The petitioners‟ contention, though attractive that the power to

issue directions cannot comprehend the issuance of directions to

furnish guarantees, cannot be accepted. The power to issue directions,

under Section 16 extends to "regulate" the industry or unit. The

expression "regulate" in the context, wherever used, has to be given

the widest meaning. In a remedial or regulatory enactment, as the Act

undeniably is, this expression acts as a crucial power conferral on the

authorities - the extent of such power is even closure of the industry or

unit. Such being the case, the court cannot limit the options available

to statutory authorities to meet emerging challenges, towards ensuring

compliance with the provisions. In given cases, the Commissioner may

not deem it appropriate to take the extreme step of closing down the

unit; yet, to ensure that good practices are put in place, he may issue

specific directions, and as a measure to ensure compliance, require

furnishing of guarantee, valid for a period, or as to enable him to

invoke it, to remedy the harm, which is sought to be addressed by the

Act or rules framed under it. In arriving at this conclusion, the

overriding nature of Section 16, which begins with a non obstante

clause, cannot be lost sight of.

16. The above analysis however, is not dispositive of these petitions.

The authorities, in these cases, though clothed with the power to direct

the petitioners to furnish guarantees, have however, not shown how

and why such action was necessary. The show cause notice issued in

each case, is stereotypical; it does not reflect what are, according to

the authorities, infraction of standards or directions, which had to be

remedied by the units. Crucially, the show cause notices, preceding the

impugned orders did not even mention about the possibility of

issuance of orders requiring bank guarantees to be furnished. Again,

similarly in the case of the impugned order, the list of matters to be

done by unit(s) is general, not specific to the individual activity. Nor

does it indicate application of mind to what exists on the site, and what

is the standard required to be, but not complied. Although a meticulous

and exacting standard cannot and should not be insisted by courts,

while considering the validity of such orders, yet, the authority should

point to some thinking vis-à-vis what exists at the unit, which requires

remedying that in turn has to be conditioned by furnishing of a bank

guarantee.

17. In view of the above discussion, the petitions have to be partly

allowed. The challenge, on the ground of lack of power of the

respondents, must fail; however, the impugned orders cannot, for

reasons mentioned in the preceding paragraph, be sustained. They are

accordingly quashed. No costs.

S. RAVINDRA BHAT (JUDGE) JANUARY 16, 2009 /vd/