Kerala Panchayat Loses Battle, But Coke Factory Cannot Start Yet
Thiruvananthapuram: The Perumatty village panchayat in Palakkad district
of Kerala has lost its legal battle for the right to water with Hindustan
Coca-Cola Beverages Private Ltd., the soft-drink manufacturer. A Division
Bench of the Kerala High Court ruled on April 7 that a "water-based
industry, with a huge investment, has [a right] to receive water to
quench its thirst without inconveniencing others". It said the panchayat
was wrong in rejecting the company's application for renewal of its
operational licence before it made "a scientific assessment" about
the reasons for the water scarcity experienced in the region. It asked
the local body to renew the licence if the company made an application
within two weeks from April 7, provided it has the licence issued
under the Factories Act and has the clearance from the State Pollution
Control Board. The court allowed the company to extract up to five
lakh litres of groundwater every day from the 34-acre (13.6 hectare)
premises of its bottling plant, its largest unit in India, located
at Plachimada in the panchayat, during 2005-06.
The plant, which was established in March 2000, was shut down in March
2004, following protests from the local people, a battle with the
panchayat which had refused to renew its licence and a government
order (GO) banning it from drawing groundwater because of the severe
drought conditions in the region. In April 2003, the local body filed
a writ petition in the High Court against a GO overriding its decision
to withdraw the company's licence (Frontline, January 30, 2004).
The Division Bench's ruling was based on scientific data provided
by a multi-agency expert committee appointed by it to ascertain whether
the level of exploitation of groundwater by the company was indeed
the reason for the water scarcity in the region. The committee, which
submitted its final report to the court in February, found that the
rainfall in the region in the two years from 2002 "was much less than
the mean value" and that this deficiency in rainfall was the "most
significant factor" that caused the water scarcity. It also pointed
out that "the unregulated withdrawal of groundwater" from the wells
within the factory complex and outside during the water deficit period
had aggravated the scarcity situation further.
Significantly, on December 16, 2003, a Single Bench of the High Court
had directed Coca-Cola to stop overexploiting the groundwater resources
of the village and find alternative water sources for its high production
needs. The court had held that "groundwater was a public property
held in trust by a government" and that it had no right to allow a
private party to overexploit the resources to the detriment of the
people. It said the company could be permitted to draw groundwater
like any other landowner, but what was objectionable was its right
"to claim a huge share of it". The Bench ruled that it should be allowed
to use only a quantity of groundwater equal to the amount "normally
used for irrigating crops in a 34-acre plot". It also had said that
the panchayat should not interfere in the functioning of the Coca-Cola
unit if the company could find alternative sources of groundwater
for its use. Coca-Cola appealed against the Single Bench's directive.
Through its April 7 order, the Division Bench, comprising Justice
M. Ramachandran and Justice K.P. Balachandran, overturned the Single
Bench's ruling, saying that "a person has the right to extract water
from his property, unless it is prohibited by a statute. We hold that
ordinarily a person has a right to draw water, in reasonable limits,
without waiting for permission from the panchayat and the government.
This alone could be the rule, and the restriction, an exception".
It also said that even reference to the mandatory function of a panchayat
as envisaged in the Panchayati Raj Act, namely the maintenance of
traditional drinking water sources, could not prevent the owner of
a well from extracting water as he wished. "The panchayat has no ownership
about such private water sources, in effect denying the proprietary
rights of the occupier," the order said.
"We do not find justification for upholding the finding of the learned
Judge that extraction of groundwater is illegal. It is definitely
not something like digging out a treasure-trove. We cannot endorse
the finding that the company has no legal right to extract this `wealth'.
If such restriction is to apply to a legal person, it may have to
apply to a natural person as well. Abstract principles cannot be the
basis for the court to deny basic rights, unless they are curbed by
valid legislation," the Bench said.
It also ruled that "it will be the essential duty of the company"
to utilise a reasonable amount of water it draws from the Plachimada
watershed for the benefit of the general public who are apprehensive
of water shortage, as directed by the local body from time to time.
"This work of water supply is to be undertaken, and commenced before
June 30, 2005. The restriction imposed for its own consumption will
not be applicable when water is drawn for this additional requirement,"
the court said.
The Bench said that it based its ruling on the final report of the
scientific investigation ordered by it "on the groundwater potential
of the area and the shortage and scarcity of drinking water in the
nearby areas due to the current level of extraction by the Coca-Cola
factory", "as the issue very much revolved round the balancing of
ecological rhythm, the aspirations of the people in the locality,
the duties and responsibilities that were expected to be discharged
by a gram panchayat, especially in the wake of decentralisation of
powers and the predicament of an industrial unit, which had been cordially
invited to invest substantial funds, ensuring them freedom of functioning."
The local body will be entitled to carry out inspection on the use
of water without unduly interfering with it or inconveniencing the
company. The Judges said that the Single Bench order would have resulted
in a chaotic situation because the right to fix the quantity of water
that the company may be permitted to draw was given to the panchayat
although no reason was provided for giving agriculture more priority
than an industrial activity or the fact that agricultural needs differed
from crop to crop was not taken into account.
The Division Bench said that the findings of the Single Bench were
not precise and might not be practical. After upholding the right
to use a reasonable amount of water, the court could not rule that
the Perumatty panchayat was obliged to renew the licence and that
it should not interfere with the functioning of the company if the
company did not extract groundwater and depended on other sources
for its water needs. "The absolute prohibition is neither called for,
nor legal," it said.
It said: "There is basis in the submission by the company that as
per the Single Bench order any other local body authority could have
also objected to the drawing of water for being used by an industry
situated at a distance. The restrictions would have applied to them
as well, as an individual was not entitled to draw water without the
permission of the authorities. The net result will be that bringing
water from any other source too would have become illegal and unauthorised."
AS per the final report of the committee, which was headed by the
Director of the Centre for Water Resources, Development and Management
(CWRDM), Kozhikode, and had experts from the State Pollution Control
Board, the State Ground Water Department, the CWRDM and Coca-Cola
as members, out of the annual available groundwater resources of 66.7
million cubic metres (MCM) in the Chittur block, of which Plachimada
forms a part, 62.5 MCM was needed to meet the requirements of the
domestic and irrigation sectors. The requirement of the company (at
the average rate of five lakh litres a day) was only 5 per cent of
the remaining 4.2 MCM meant for other purposes in the region. Similarly,
the company's requirement is only 4.97 per cent of the 3.67 MCM estimated
annual groundwater resources of the Plachimada watershed. The committed
groundwater resources required to meet the domestic and irrigation
requirements until 2025 is 3.42 MCM. The requirement of Coca-Cola
is 0.1825 MCM, or 73 per cent of the remaining 0.25 MCM of groundwater.
The committee said that estimates of annual available groundwater
and the groundwater drawal to be reserved for meeting the committed
domestic and irrigation needs up to 2025, which were arrived at both
at the Chittur block level (macro scale) and the Plachimada watershed
level (micro level), showed that the Coca-Cola factory could be safely
permitted to withdraw five lakh litres of water a day without affecting
both domestic and irrigation water requirements. "At the same time
the conclusion is valid only under normal rainfall conditions. Groundwater
withdrawal by Coca-Cola has to be strictly controlled in those years
in which the rainfall is much less than the mean value," the report
The court accepted the scheme of controlled regulation drawn up by
the investigation team, which suggests gradual, structured reduction
in the amount of water than can be extracted by the company during
the December-May non-monsoon season depending on the deviation in
the June-November monsoon rainfall pattern below the mean value. The
report says that its recommendations will protect the interests of
the domestic and irrigation water supply sectors adequately. They
will also ensure that the developmental opportunities, which industrial
establishments can create in an area that is otherwise predominantly
agrarian, are fully utilised. The Bench described the report as "fair,
it appears to be authentic, based on the data collected, mature and
therefore acceptable". Moreover, it said, the constitution of the
committee or its recommendations were never challenged by the panchayat,
which was a party in the case.
Although the battle is won, Coca-Cola may not be able to quench the
needs of its bottling plant yet. The company is yet to comply with
the directions of a Supreme Court Monitoring Committee on Hazardous
Wastes. The committee directed it to install a reverse osmosis system
or an equivalent process for water purification "to ensure that water
used for effluent treatment is returned to its original condition
for re-use" and to ensure "water supply to all persons in the vicinity
of the plant".
Officials of the State Pollution Control Board, which was entrusted
with the task of monitoring compliance, said the company had refused
to obey the directives maintaining that it was not affecting the groundwater
sources in the region and that since the factory had remained closed
for over two years, it was under no obligation to supply drinking
water to the local people.
Coca-Cola may soon be dragged to the Supreme Court. The swelling ranks
of protesters, who have been holding an agitation outside the factory
gates demanding the closure of the company for over two years now,
have threatened to appeal against the High Court verdict in the apex
court. Member of Parliament and Janata Dal (Secular) State president
M.P. Veerendra Kumar, whose party runs the Perumatty panchayat, said
the local body would go on appeal and that the agitation by the local
tribal people and Dalits would continue. The cause of the struggle
was not within the purview of the judiciary; it involved the survival
of the local people, he said.
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