K.T.V. Health Food Pvt. Ltd. vs. Union of India and Ors.
Background
The appellant companies imported edible oil through Chennai Port and built an underground pipeline plus a storage/transit terminal near the port to move the oil from the port to their factory. They obtained various local permissions and, later, an "ex post facto" (after-the-fact) environmental clearance from the Union Government under a special provision of the 2011 CRZ Notification. A rival party challenged this before the National Green Tribunal (NGT), which held that while the government could grant such retrospective clearance, the storage terminal itself was illegal because it was not located "in" the Chennai Port as the CRZ rules required. It was built on land outside the port's own boundary, even though close to it. The NGT ordered the storage tanks and pipeline demolished and imposed compensation on one of the appellants. The appellants challenged this before the Supreme Court, arguing that "in" the port should be read broadly enough to include their site, especially since the government's own environmental appraisal committee and coastal authorities had approved the project.
Decision Breakdown
The Supreme Court rejected the appellants' broad reading of the word "in the port," holding that if such an expansive interpretation were accepted, there would be no principled limit on how far from the actual port boundary a storage facility could be built, creating uncertainty and effectively rewriting the Notification. Past administrative approval of the project by the concerned authorities did not bind the Court's own interpretation of the law. However, the Court did not require immediate demolition: it gave the appellants six months to comply with the NGT's demolition order for the storage tanks, and directed that the fate of the pipeline (which runs through a zone where such pipelines are otherwise permitted) be decided separately by the District Coastal Zone Management Authority within about two months. The appeals were thus only partly allowed, with no order on costs.
Lesson Learnt
A government environmental clearance is not the final word. Courts can still strike down approvals that stretch a beneficial-sounding coastal regulation beyond its actual wording, and a technically legal component of a project (like a permitted pipeline) can be assessed separately from an illegal one (like a wrongly-sited storage tank).