Bharti Realty Ltd. vs Delhi Pollution Control ...
2011 Latest Caselaw 3275 Del

             *IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                  Date of decision: 12th July, 2011
+                                      W.P.(C) 465/2011

         BHARTI REALTY LTD.                                   ..... Petitioner
                     Through:                 Mr. V.P. Singh & Mr. Aashish
                                              Gupta, Adv.
                                         Versus
         DELHI POLLUTION CONTROL
         COMMITTEE                             ....Respondents
                     Through: C. Mohan Rao, Mr. Lokesh Sharma,
                              Adv. along with Mr. Dinesh Jindal,
                              Law Officer, DPCC.

                                           AND

                                       W.P.(C) 1041/2011

         LODHI PROPERTY CO. LTD.                ..... Petitioner
                     Through: Mr. B.B. Gupta with Harsh Hari
                              Haran & Mr. Umesh Aggarwal,
                              Adv.
                                         Versus
         DELHI POLLUTION CONTROL
         COMMITTEE                             .... Respondents
                     Through: C. Mohan Rao, Mr. Lokesh Sharma,
                              Adv. along with Mr. Dinesh Jindal,
                              Law Officer, DPCC.



W.P.(C) 465/2011 & W.P.(C) 1041/2011
                                                                          Page 1 of 16
 CORAM :-
HON'BLE MR. JUSTICE RAJIV SAHAI ENDLAW
1.       Whether reporters of Local papers may     Not necessary
         be allowed to see the judgment?

2.       To be referred to the reporter or not?    Not necessary

3.       Whether the judgment should be reported        Not necessary
         in the Digest?

RAJIV SAHAI ENDLAW, J.

1. The petitioner in W.P.(C)465/2011 acquired Plot No.1 Shopping

Mall, Vasant Kunj, New Delhi from the DDA and after obtaining inter

alia Environment Clearance dated 28 th November, 2006 from the Ministry

of Environment & Forests has raised construction of its corporate office

thereon. The writ petition has been filed impugning the order dated 31 st

October, 2008 of the respondent Delhi Pollution Control Committee

(DPCC) directing the petitioner to pay Environmental Damages of 0.5% of

the total project cost of `90 crores and to furnish a Bank Guarantee, also

of 0.5% of the total project cost of `90 crores, valid for three years.

Though the petitioner had in compliance of the said order paid the damages

of `45 lacs and furnished the Bank Guarantee for `45 lacs but this writ

W.P.(C) 465/2011 & W.P.(C) 1041/2011

petition has been filed seeking refund of the said `45 lacs and return of the

Bank Guarantee, owing to this Court in Splendor Landbase Ltd. v. Delhi

Pollution Control Committee 173 (2010) DLT 52 having held that the

respondent DPCC is not empowered to levy such damages and/or to

demand such Bank Guarantee.

2. The petitioner in W.P.(C)1041/2011 is a Developer of a hotel at Plot

No.27, Lodhi Road, New Delhi and similar damages of `2 crores were

levied on it also vide order dated 6 th February, 2008 which were paid.

Buoyed by the judgment of this Court in Splendor (supra), the writ petition

claiming refund of `2 crores has been filed. Though the Bank Guarantee

was also obtained from the said petitioner but the same has since been

returned.

3. Notices of both the petitions were issued. Pleadings were completed

in W.P.(C)465/2011. The counsel for the respondent DPCC has in the

course of hearing filed the counter affidavit in W.P.(C)1041/2011 also.

W.P.(C) 465/2011 & W.P.(C) 1041/2011

4. The counsels for the petitioners have contended that they are

similarly situated as the petitioner in Splendor and other connected

petitions and the same order ought to follow.

5. The counsel for the respondent DPCC has at the outset stated that

the respondent DPCC has preferred an intra court appeal against the

judgment of the Single Judge in Splendor and other connected petitions

and which is listed next before the Division Bench on 24 th August, 2011. It

was argued that the present petitions be adjourned till the decision of the

appeal aforesaid.

6. However the aforesaid contention of the counsel for the respondent

DPCC was not accepted. I am of the view that no purpose would be served

by keeping these petitions pending. It is deemed expedient that the

Division Bench considers all matters, from all facets and hears all counsels

in one go rather than in stages. The same is also necessary to avoid

multiplicity of litigation on the same issues. It was thus put to the counsel

for the respondent DPCC as to why not the present petitions be also

allowed and the respondent DPCC prefers intra court appeals in these cases

W.P.(C) 465/2011 & W.P.(C) 1041/2011

also so that the same can be heard on 24 th August, 2011 along with appeals

in Splendor and in other connected writ petitions.

7. The counsel for the respondent DPCC has then argued:-

a. that the judgment in Splendor would not bind the present

cases as the same is per incuriam for not considering Indian

Council for Enviro-Legal Action v. Union of India (1996) 3

SCC 212. Attention is invited to para 60 of the said judgment

laying down that the Central Govt. is empowered under the

Environment Protection Act, 1986 to take all measures as it

deems necessary or expedient to protect and improve the

quality of environment, including imposition of costs,

remedial measures on the offending industry. It is contended

that the provisions of the Water (Prevention and Control of

Pollution) Act, 1974 and Air (Prevention and Control of

Pollution) Act,1981 whereunder damages subject matter of

these petitions were imposed are in pari materia to the

provisions of Environment Protection Act, 1986 and thus the

W.P.(C) 465/2011 & W.P.(C) 1041/2011

power to levy damages and demand Bank Guarantee is to be

read under Water & Air Acts also. It is contended that all the

judgments of the Apex Court relied upon in Splendor relate to

taxation and are not applicable to matters as concerned. It is

further contended that Article 265 of the Constitution does not

apply to levy of damages for violation of statutory provisions.

It is argued that thus this Bench should re-look into the matter;

b. It is contended that in Splendor and other connected petitions,

the challenge was to the show cause notice and in none of

those cases any payments had been made or Bank Guarantee

furnished. It is argued that in both these petitions the

petitioners have already complied with the demand of the

respondent DPCC and cannot be permitted to challenge the

same now or to seek refund. It is further argued that while the

petitioner in W.P.(C)465/2011 had made payment without

prejudice to its rights and contentions, the petitioner in

W.P.(C)1041/2011 volunteered to deposit the amounts to

W.P.(C) 465/2011 & W.P.(C) 1041/2011

avoid closure and cannot now seek refund. It is urged that

both the petitioners as businessmen took a business decision

to make the payment instead of facing prosecution and closure

and cannot be now permitted to reprobate;

c. It is contended that no refund can be claimed by way of writ

petition, especially when the judgment on the basis of which

the claim for refund is stated to have arisen has not attained

finality as yet;

d. Attention is invited to a judgment dated 6 th July, 2011 in

W.P.(C)202/1995, titled Lafarge Umiam Mining Pvt. Ltd. v.

T.N. Godavarman Thirumulpad of the Apex Court

observing that penalty can be imposed on polluters;

e. Principles of waiver, acquiescence and estoppel are invoked to

contend that the same deprive the petitioners from any relief.

Attention is also invited to judgment dated 16 th January, 2009

of this Court in W.P.(C) 7516/2007 titled Regent Automobiles

Pvt. Ltd. v. Govt. of NCT of Delhi and other connected writ W.P.(C) 465/2011 & W.P.(C) 1041/2011

petitions observing that in a given case the Commissioner in

exercise of powers under the Delhi Common Effluent

Treatment Plants Act, 2000 may not deem it appropriate to

take the extreme steps of closing down the unit but may issue

specific directions and as a measure to ensure compliance,

require furnishing of a Bank Guarantee;

f. It is contended that the damages levied in both cases are fair

and the petitioners having taken advantage thereof by warding

off any other action against themselves, are now not entitled

to maintain this petition.

8. Per contra, the counsels for the petitioners have contended:-

(i) That the respondent DPCC cannot withhold the monies which

the judgment in Splendor holds the respondent DPCC to be

not entitled to;

(ii) That the property of the petitioner in W.P.(C)465/2011 is

situated in the close vicinity of the property subject matter of

Splendor;

W.P.(C) 465/2011 & W.P.(C) 1041/2011

(iii) Reliance is placed on Mafatlal Industries Ltd. v. Union of

India (1997 ) 5 SCC 536 on the aspect of powers of this

Court to direct refund of the amounts wrongly collected;

(iv) That the judgment in Regent Automobiles (supra) has been

considered in Splendor;

(v) That the amounts collected from the petitioners have not been

taken as Environmental Damage but as condition of grant of

operating licence;

(vi) That the aforesaid amounts were demanded when the

construction was complete and as such the petitioners were

left with no option but to pay the amount;

(vii) That the Supreme Court in Indian Council for Enviro-Legal

Action (supra) was concerned with Section 3 of the

Environment Protection Act and of which there is no

equivalent under the Water & Air Act;

W.P.(C) 465/2011 & W.P.(C) 1041/2011

(viii) That in Splendor and other connected writ petitions the

question of refund did not arise because of the interim

protection afforded by this Court in those cases against similar

demand as impugned in the present cases;

(ix) That Supreme Court in Indian Council for Enviro-Legal

Action had returned a finding of damage to environment

having been caused whereas there is no such finding in the

present cases. Reference is made to Vellore Citizens Welfare

Forum v. Union of India AIR 1996 SC 2715 to contend that

the damage has to be ascertained and which has not been

ascertained in the present cases and to Deepak Nitrite Ltd. v.

State of Gujarat (2004) 6 SCC 402 to contend that there is no

basis for levy of damages at 0.5% of the project cost;

(x) Reliance is placed on ABL International Ltd. v. Export

Credit Guarantee Corporation of India Ltd. 109 (2004) DLT

415 to contend that refund under Article 226 can be directed

in matters other than tax also;

W.P.(C) 465/2011 & W.P.(C) 1041/2011

(xi) It is contended that the payments being under coercion and

protest and being in pursuance to an illegal order, no question

of estoppel arises.

9. Propriety demands that all the aforesaid contentions be considered

by the Division Bench which is seized of the matter and not by this Bench.

The contentions of the counsels have been noticed only to make a record

thereof; else, Co-ordinate Benches cannot consider the matter when the

same is pending consideration in appeal.

10. However it falls for consideration by this Bench, whether owing to

the petitioners having already made the payments and furnished the Bank

Guarantee demanded and having not considered the need to challenge the

same and having preferred these petitions only after the judgment in

Splendor, disentitles the petitioners from maintaining these petitions.

11. The conduct of the petitioners does show that the petitioners at the

contemporaneous time were satisfied with the demand and readily

complied with the same. Even though the petitioner Bharti Realty Ltd.

made payment without prejudice, it did not immediately thereafter also W.P.(C) 465/2011 & W.P.(C) 1041/2011

make any challenge. However one cannot also lose sight of the fact that the

said law is still at its nascent stage; there are no precedents, no past

practices. The petitioners thus could not be expected to know whether the

respondent DPCC was entitled to levy such damages or demand Bank

Guarantee. For a person to relinquish a right or claim, he must know the

same; a person cannot relinquish what he does not know he has. This is not

a case of ignorance of law. Even the Courts are still grappling with as to

what is the law in this regard. I am thus unable to hold that the petitioners

are disentitled from preferring these petitions or from claiming the reliefs

claimed for the reason of having accepted the demand. It cannot also be

lost sight of that the projects of the petitioners were at crucial stage then

with the petitioners having sunk in money and efforts in development also

besides the cost of the land. The Apex Court in National Insurance Co.

Ltd. v. Boghara Polyfab Private Ltd. (2009) 1 SCC 267 has held that

whether a case of coercion is made out is a question of fact and dependent

upon several factors. The present, for the reasons aforesaid, is a case of

petitioners being coerced into making the payments and furnishing the

W.P.(C) 465/2011 & W.P.(C) 1041/2011

Bank Guarantee, which this Court has held the respondent DPCC to be not

entitled to seek.

12. The respondent DPCC cannot also be so allowed to illegally enrich

itself, if not entitled in law to the monies. The orders/demands impugned in

this petition, as per judgment in Splendor were beyond the jurisdiction of

respondent DPCC and thus non est. No benefit of such a void

demand/order can be retained by the respondent DPCC which is "State"

within the meaning of Article 12 of the Constitution of India.

13. I am otherwise also of the opinion that if the petitioners have

violated the Air & Water Acts, then they ought to face the consequences

thereof as follow in law and cannot buy their way out of the said

consequences. To hold, the respondent DPCC entitled to retain the monies,

tantamounts to holding that the respondent DPCC would not be entitled to

take any other action which it may be entitled in law to take against the

petitioners for violations if any committed by the petitioners. The same

cannot be permitted.

W.P.(C) 465/2011 & W.P.(C) 1041/2011

14. The next question which arises is, of the relief to be granted. This

Court in Splendor and in other connected writ petitions was not concerned

with the question of refund. The question of entitlement of the petitioners

to interest also arises.

15. I am of the view that the petitioners cannot be held entitled to any

interest. The petitioners even though without prejudice, chose to comply

with the demand rather than challenge the same at the

contemporaneous/relevant time. These petitions have also been filed after

considerable time (though within three years of the payment); in such

situation, the petitioners cannot be entitled to any interest.

16. If the petitioners are to be held entitled to refund of the amounts

paid, liberty has to be necessarily granted to the respondent DPCC to

proceed afresh against the petitioners for the violations if any committed

by the petitioners. This Court in Splendor and other connected petitions

also left it open to the respondent DPCC to take action in accordance with

law.

W.P.(C) 465/2011 & W.P.(C) 1041/2011

17. The petitions are therefore allowed with the following directions:-

A. The respondent DPCC to within six weeks of today refund to

each of the petitioners the amounts aforesaid collected from

them and to also within the said time release the Bank

Guarantee obtained from the petitioner in W.P.(C)465/2011;

B. Upon failure to refund/release within the time aforesaid, the

respondent DPCC shall be liable for interest at 10% per

annum on the amounts and on the value of Bank Guarantee,

from the expiry of six weeks herefrom and till the date of

refund/discharge;

C. The respondent DPCC is also granted liberty to proceed in

accordance with law for the violations/breaches if any

committed by the petitioners. It is made clear that such

actions to be taken by the respondent DPCC shall not be

defeated for the reason of delay in initiating the same since

the respondent DPCC had withheld the said actions owing to

W.P.(C) 465/2011 & W.P.(C) 1041/2011

the petitioners at the contemporaneous time having made the

payment/given the Bank Guarantee.

No order as to costs.

RAJIV SAHAI ENDLAW (JUDGE) JULY 12, 2011 pp..

(corrected and released on 28th July, 2011).

W.P.(C) 465/2011 & W.P.(C) 1041/2011