essar oil v state of gujarat

8/9/2019 Essar Oil v State of Gujarat

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SCA/24233/2007 1 JUDGMENT

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

SPECIAL CIVIL APPLICATION No. 24233 of 2007

For Approval and Signature:

HONOURABLE MR.JUSTICE M.S.SHAH

AND

HONOURABLE MR.JUSTICE RAVI R.TRIPATHI

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1Whether Reporters of Local Papers may be alloed to seethe !udgment "

# $o be referred to the Reporter or not "

%Whether their Lordships ish to see the fair copy of the !udgment "

&Whether this case involves a substantial 'uestion of laas to the interpretation of the constitution of (ndia) 1*+,or any order made thereunder "

+ Whether it is to be circulated to the civil !udge "

=================================================ESSAR OIL LTD & 1 P!"#"#o$!%'(

V!%')'STATE OF GUJARAT THRO* SECRETAR+ & 3 R!',o$-!$"'(

================================================= Appearance :-R .S /A/A0A$() SR A2034A$5 ith -R .567R 8A/29( for /A/A0A$( ASS34(A$5S forPetitioners; : 1 < #-R .A-AL $R(052() A2034A$5 85/5RAL ith -S SA/855$A 0(S95/) A8P for Respondents; :1) &)2S AFF/3$ F(L52 /; for Respondents; : 1)/3$(45 S5R052 6 2S for Respondents; : # < %

=================================================

CORAM HONOURABLE MR.JUSTICE M.S.SHAH

/$-

HONOURABLE MR.JUSTICE RAVI R.TRIPATHI

D/"! 2204200ORAL JUDGMENT

P!% HONOURABLE MR.JUSTICE M.S.SHAH(

$his petition under Article ##> of the 4onstitution is

directed against denial of sales


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petitionerB or the petitioner 4ompanyB; under the 8overnment of

8u!arat 4apital (nvestment (ncentive Premier Prestigious Scheme)

1**+@#,,, hereinafter referred to as the said SchemeB;

# $he facts leading to filing of this petition may be set out

in three parts @ the first part relating to initial setting up of the

pro!ect and the scheme floated by the State 8overnment for

granting incentives to the industries coming up in the bacCard

areasD the second part narrating the events hich prevented the

petitioner 4ompany from completing the pro!ect ithin the time

limit and the conse'uent impact by denial of the benefits of the

sales


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8overnment of (ndia to issue suitable orders to allo the first

petitioner to maCe geophysical survey in -arine /ational

ParCHSanctuary area $he proposal as forarded by the 4hief

4onservator of Forests) hopal to the 8overnment of (ndia on

1+,+1**+ 3n ,I,*1**+) the State 8overnment in its Forests

and 5nvironment 2epartment informed the 8overnment of (ndia in

the -inistry of 5nvironment and Forests) inter alia) that the

approval in principle as granted to the petitioner 4ompany to

install Single uoy -ooring H 4rude 3il $erminal H etty and

connecting pipeline in the /ational -arine ParC and Sanctuary

area in 0adinar) 2istrict amnagar on the terms and conditions to

be decided in due course by the State 8overnment

%% $he State 8overnment in the (ndustries and -ines

2epartment vide Resolution dated 11,*1**+ introduced a scheme

called 4apital (nvestment (ncentive to PremierHPrestigious 7nit

Scheme) 1**+,I1**+ upto 1+,I#,,, (t is not

necessary to refer to all the clauses of the Scheme Suffice it to

state that the petitioner fell in the category of premier unit ie ne

industrial unit having a pro!ect cost of more than Rs1),,,H< crores

and employing 1,, orCers on a regular basis and folloing the

employment policy of the State 8overnment 4lause v; of the

Scheme defined premier unit in the folloing terms :<

v; PR5-(5R 7/($

A ne industrial unit or industrial comple? fulfillingthe folloing criteria ill be considered forgranting status of Premier 7nitB

a; $he industrial unit shall have a pro!ect cost ofRs+,, crores or more Such units having pro!ectcost of Rs1),,, crores and above shall be entitledfor e?tended period to avail incentive as providedunder para >


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b; 3nly one unit per taluCa ill be eligible forthe Premier 7nit status (n banned area no unit ispermitted

c; $he unit shall employ at least 1,, orCers ona regular basis and shall follo the employmentpolicy of the State 8overnmentB

Part@(( of the said Scheme provided that the rate of incentive

ould depend on the location) investment and status of the pro!ect

$he incentives offered ere sales


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commercial production as shon belo :

a; $he unit ith pro!ect cost above Rs1,,crores but belo Rs%,, crores should go into

commercial production on or before 1+th

August #,,#

b; $he unit ith pro!ect cost more than Rs%,,crores should go into commercial productionon or before 1+th February #,,%

Such units shall have to apply to industries4ommissioner for e?tending date of commercialproduction by %1st August #,,,B

Kemphasis supplied

%+ (t is the petitionerEs case that the petitioner had

obtained provisional registration as a Premier 7nit by (ndustries

4ommissioner letter dated #+,>1*** Anne?ure @ (; that more

than #+G of the pro!ect cost as incurred before 1+,I#,,, and

that as per the above clause of the Scheme) the petitioner unit ith

pro!ect cost of more than Rs%,,H< crores as re'uired to go intocommercial production on or before 1+,##,,% $he time limit as

subse'uently e?tended upto 1+,I#,,% vide 8overnment

Resolution dated 1#,&#,,1 Page


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falling under -arine /ational ParC H -arine Sanctuary for various

purposes sub!ect to certain terms and conditions including

obtaining permission of the 4entral 8overnment under the Forest

4onservation Act) 1*I, and also getting clearance under the 4RM

Regulations and the petitioner 4ompany as granted the 4entral

8overnment permission under the Forests 4onservation Act on

,I1#1*** and the 4RM clearance as granted on ,%11#,,,)

before the petitioner 4ompany could act on the basis of the

aforesaid permission and clearance) by !udgment dated 1%) 1I) #,)

#Jth uly #,,, and ,%rd August #,,, in Public (nterest Litigation

being Special 4ivil Application /os1JJI) +&J> and +*#I of #,,,) a

2ivision ench of this 4ourt to hich one of us as a party @ Ravi

R $ripathi) ; restrained the State 8overnment from granting any

more authoriNation and permission for laying don any pipeline in

any part of the sanctuary of the /ational ParC and in case any

applications are pending) the same shall be decided Ceeping in vie

the interpretation placed by the 2ivision ench on Section #* of the

Wild Life Protection; Act) 1*J# in light of the observations made in

the !udgment

&# $he aforesaid Public (nterest Litigation as commenced

for maCing grievance against consideration of the application of

harat 3man Refineries Ltd for laying a pipeline in the -arine

ParC H Sanctuary area $he present petitioner 4ompany as not a

party to any of the above petitions 2uring the course of hearing)

the 4ourt had put a 'uery to the learned counsel for the State

8overnment as to hether any more applications of this nature

applications for laying pipeline through the /ational -arine ParC H

Sanctuary area; ere pending before the State 8overnment and

hether the State 8overnment as inclined to grant any more

authoriNations and permissions for laying such pipelines (n

response to the 'uery) the learned 8overnment counsel had placed

a copy of the letter dated #+,J#,,, sent to him by the 7nder


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Secretary to the 8overnment along ith a copy of the letter dated

,I,*1**+) hich as sent to the Secretary of -inistry of

5nvironment and Forests) 8overnment of (ndia) by the 7nder

Secretary) Forests and 5nvironment 2epartment) 8overnment of

8u!arat $he 4ourt noted that there ere to more proposals

pending ith the State 8overnment @ one from 5ssar 3il Ltd ie

the present petitioner 4ompany and the other from 8u!arat

Poshitra Port Ltd $he 4ourt noted the fact that four pipelines ere

already in e?istence and the fifth one as the pipeline to be laid

don by harat 3man Refineries Ltd for hich the authoriNation

as granted in February #,,, and hich as the sub!ect matter of

challenge in those three petitions $he 4ourt thereupon observed

that enough is enoughB) and then restrained the State 8overnment

from giving any more authoriNation and permission for laying don

any pipeline in any part of the Sanctuary or the /ational -arine

ParC

&% Aggrieved by the above directions hich ere given bythe 4ourt ithout giving the petitioner company an opportunity of

being heard) the petitioner 4ompany filed revie applications

hich came to be disposed of by order dated #%,##,,1 on the

ground that the grievance as beyond the scope of revie

&& $he petitioner 4ompany) therefore) moved the 9onEble

Supreme 4ourt by filing Special Leave Petition 4ivil; /o%>+& of#,,1 3n 11,+#,,1) the Ape? 4ourt granted stay of the 9igh

4ourt !udgment in so far as the petitioner as concerned (t

appears that in vie of the above stay order granted by the 9onEble

Supreme 4ourt) the petitioner 4ompany moved the State

8overnment for permitting the petitioner 4ompany to proceed ith

the construction of !etty and laying the pipeline y letter dated

#*1,#,,1) the State 8overnment in the Forests and 5nvironment

2epartment specifically called upon the petitioner 4ompany to

ensure that no construction activities ere commenced before


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obtaining all necessary clearances from different 8overnment

departments) agencies and the conditions stipulated by the -inistry

of 5nvironment and Forests) 8overnment of (ndia as ell as the

Forests and 5nvironment 2epartment of the State 8overnment

ere strictly complied ith (n vie of absence of any permission

from the 4hief Wild Life Warden) 8u!arat State under Section #* of

the Wild Life Protection; Act) 1*J#) the petitioner could not

commence the construction of !etty or laying don the pipeline in

the /ational -arine ParC H Sanctuary area and) therefore) could not

commence commercial production

&+ $he petitioner had already applied for registration

before 1+,I#,,, and had incurred more than #+G cost before

1+,I#,,, 3n 1I,J#,,1) the petitioner as accordingly granted

the pipeline registrationB valid upto 1+,I#,,% ithin hich the

petitioner 4ompany as re'uired to start commercial production

$he petitioner again made a representation to the (ndustries

4ommissioner on ,J,+#,,# re'uesting him to grant the e?tension

for a further period of three years ie upto August #,,> to

commence commercial production for the purpose of availing the

incentive benefit under the Scheme and pointed out that the delay

in completing the pro!ect and conse'uent delay in starting

commercial production as due to the factors beyond the control of

the petitioner y letter dated #I,+#,,#) the (ndustries

4ommissioner re!ected the re'uest $he petitioner) therefore)

submitted a representation dated 1*,>#,,# to the 4hief -inister

pointing out the circumstances hich had delayed the completion

of the pro!ect Similar representations ere thereafter made on

1&,%#,,%) ,#1##,,% and #>1##,,% (t appears that the said

representations ere not responded to


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+, A,!6 Co)%" J)-98!$"= G%/$" of P!%8#''#o$ /$-Co88!$!8!$" of P%o-)"#o$

+1 7ltimately on 1*,1#,,&) the 9onEble Supreme 4ourt

'uashed and set aside the !udgment dated ,%,I#,,, of this 4ourt

and directed the State 8overnment to issue the authoriNation in the

re'uisite format under Sections #* and %+ of the Wild Life

Protection; Act ithin a fortnight after disapproving the

interpretation placed by the 9igh 4ourt on the provisions of the

Wild Life Protection; Act) 1*J# $he 9onEble Supreme 4ourt has

taCen the vie in the !udgment dated 1*,1#,,& that the

permission granted by the State 8overnment on 1*1,#,,J as

the permission contemplated by Section #* of the Wild Life

Protection; Act $he Ape? 4ourt concluded the !udgment reported

in #,,& #; S44 %*# in terms of the folloing directions :<

>& As far as the appellant 5ssar 3il Ltd; isconcerned) hoever) the ay is no clear toproceed ith the pro!ect in accordance ith the

permissions granted to it under the WPA) F4A and5PA $he State 8overnment ill issue theauthoriNation in the re'uisite format underSections #* and %+ ithin a fortnight We)therefore) allo the appeals to the e?tent statedith no order as to costsB

+# (n compliance ith the above !udgment) by letter dated

1#,##,,&) the State 8overnment authoriNed the 4hief Wild Life

Warden) 8u!arat State under Sections #* and %+ >; of the Wild LifeProtection; Act to permit the petitioner 4ompany for laying oil

pipeline in the /ational -arine ParC H Sanctuary area $he 4hief

Wild Life Warden issued the re'uisite permission on #J,##,,&

+% (n vie of the above permission granted by the 4hief

Wild Life Warden under Sections #* and %+ of the Wild Life

Protection; Act) the petitioner 4ompany again sent representations

dated ,>,&#,,&) 1#,J#,,& and #J,J#,,& to the 8overnment

re'uesting for e?tending the time limit for commencement of


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commercial production for the purpose of sales ta? deferment

incentive scheme (t appears that in vie of the above

representations) the State 8overnment in the (ndustries and -ines

2epartment vide Resolution dated 1,,+#,,> Anne?ure11#,,>) the petitioner 4ompany commenced

production and started paying sales, S):8#''#o$' o$ :!/5f of "! P!"#"#o$!% Co8,/$;

At the hearing of this petition) -r .S /anavati) learned

counsel for the petitioner 4ompany has referred to the aforesaid

events and has taCen us through the !udgment of the 2ivision

ench of this 4ourt rendered on 1%th ulyH%rd August) #,,, and the

decision of the Ape? 4ourt dated 1*,1#,,& and has made the

submissions :


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>1 3nly on account of the in!unction granted by this 4ourt

on 1%th ulyH%rd August) #,,, hich as ultimately set aside by the

9onEble Supreme 4ourt on 1*,1#,,&) the State 8overnment had

not granted any permission or authoriNation for proceeding ith

construction of the !etty and laying the pipeline 5ven after interim

stay of the 9igh 4ourt !udgment as granted by the 9onEble

Supreme 4ourt on 11,+#,,1) the State 8overnment did not direct

the 4hief Wild Life Warden to grant the permission $he

permission by the 4hief Wild Life Warden as granted only on

#J,##,,& and therefore) the entire period from 1%,J#,,, upto

#J,##,,& ought to be e?cluded hile considering the 'uestion

hether the petitioner 4ompany had commenced commercial

production ithin the time limit stipulated by the concerned

8overnment Resolutions (t is submitted that if the above period is

e?cluded or in other ords) if three years and #%, days are added)

it ould e?tend the time limit for commencing commercial

production upto #nd April) #,,J Since the petitioner had already

commenced the production on #>11#,,>) the petitioner had

complied ith the terms and conditions of the incentive scheme and

therefore) the petitioner cannot be denied the benefits of the

incentive scheme on the ground of delay in commencing the

commercial production hich delay as only on account of the

in!unction hich as granted by this 4ourt in Public (nterest

Litigation to hich the petitioner 4ompany as not even !oined as a

party

># While in the memo of the petition some

allegationsHsubmissions have been made attributing the delay to the

Forests and 4onservation 2epartment of State 8overnment) but the

petitioner 4ompany is not interested in pursuing those allegations

and in fact ould liCe to ithdra those allegations and the

petitioner ould liCe to invoCe the folloing ma?ims of e'uity :


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i; An act of the 4ourt shall pre!udice no manB) and

ii; $he la does not compel a man to do that hich he

cannot possibly performB

>% (n vie of the permission granted by the State

8overnment on 1>1,1**J) the petitioner had commenced the

construction orC of laying of ater intaCe !etty and product !etty

in the -arine /ational ParC and in the -arine Sanctuary area $he

petitioners ere not only prevented from doing so) but the Forest

2epartment launched prosecution against the petitioners under

various provisions of the Wild Life Protection; Act and

5nvironment Protection Act against the contractor doing the orC

on behalf of the 4ompany and therefore) the petitioners had no

other alternative but to stop the orC and could not commence the

orC even after the 4entral 8overnment granted its formal

approval under the provisions of the Forests 4onservation Act on

,I1#1*** and the 4RM permission as granted on ,%11#,,, and

even thereafter) hen the !udgment dated 1%th ulyH%rd August) #,,,

of this 4ourt as stayed by the 9onEble Supreme 4ourt on

11,+#,,1) no permission as granted by the 4hief Wild Life

Warden and in fact by letter dated #*1,#,,1) the State

8overnment informed the petitioner 4ompany not to do any orC

ithout obtaining the re'uisite permissions and clearances under

various statutes $he petitioner had done all that as re'uired to

be done by the petitioner for obtaining such permissions and

clearances) but if the authorities did not grant such permissions for

no fault of the petitioner) the petitioner could not be blamed nor

could the petitioner be held to be ineligible for availing of the

incentive under the Scheme for hich pro!ect) the petitioners had

already incurred e?penditure of Rs +%II crores as recorded in the

!udgment of the Ape? 4ourt (n fact the petitioners have already

incurred capital e?penditure of appro?imately Rs >,,, crores by

the end of #,,> and have commenced production in /ovember


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#,,> Apart from the fact that the petitioner had obtained the

provisional premier registration under the 1**+1*** Anne?ure& $he 4ourts have held that no act of the 4ourt shall

pre!udice any party nor does the la compel any party to do that

hich cannot possibly be performed Strong reliance is placed on

the decision of the Ape? 4ourt in South 5astern 4oalfields Ltd 0s

State of -P) #,,%; I S44 >&I and more particularly on the

observations made in Para #I thereof

>+ Reliance is also placed on the decision of the 9onEble

Supreme 4ourt in Ra! .umar 2ey 0s $arapada 2ey) 1*IJ; & S44

%*I particularly the observations made in Para > thereof Reliance

is also placed on the decision in areilly 2evelopment Authority 0s

-ethodist 4hurch of (ndia) 1*II; Supp S44 1J& for the purpose

of contending that in such matters) the period during hich the

orC of construction has been stopped) has to be e?cluded hile


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determining hether there as any breach of condition stipulated

in the contract

J S):8#''#o$' o$ :!/5f of "! S"/"! Go!%$8!$"

3n the other hand) -r .amal $rivedi) learned Advocate

8eneral assisted by -s Sangeeta 0ishen) learned A8P has opposed

the petition and made the folloing submissions :<

J1 $he petition suffers from delay) laches and

ac'uiescence $he petitioners ere already informed by the(ndustries 4ommissioner as far bacC as on #I,+#,,# that it as

not possible to accord any e?tension of the time limit for

commencing commercial production as per the prevailing policy

Since no petition as filed at the relevant time) the present petition

filed in September #,,J as delayed by more than five years

J# $he petitioner has not made reference to the earlier

round of litigation) herein another 2ivision ench of this 4ourt

had passed order dated #,,&1*** directing the petitioner herein

not to carry on any construction activity in -arine /ational ParC H

-arine Sanctuary area against the statutory provisions including

the provisions contained in the Wild Life Protection; Act) 1*J#

$he petitioner had not challenged the said order before the higher

forum

J% 0ide 8overnment Resolution dated 1,,+#,,>) the

State 8overnment has formed a 4ommittee to e?amine various

issues pertaining to the petitionerEs group and to recommend to the

8overnment ho the issues can be sorted out $he issues raised by

the petitioner in the present petition have also been included in the

sub!ect matters to be e?amined by the 4ommittee and therefore

also) the present petition may not be entertained


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16/29


DISCUSSION

I 9aving heard the learned counsel for the parties) e

have given an?ious and thoughtful consideration to the issues

involved in this petition

* As far as the preliminary contention raised by the

learned Advocate 8eneral is concerned) though the petition filed in

September #,,J may appear to be prima facie delayed) the delay is

sufficiently e?plained After the (ndustries 4ommissioner re!ected

the application for e?tension on #I+#,,#) the petitioner 4ompany

made a representation to the 4hief -inister on 1*>#,,# pointing

out the circumstances hich ere delaying completion of the

pro!ect $hat as also the time hen the litigation as pending

before the 9onEble Supreme 4ourt and the very fact that after the

Supreme 4ourt rendered the decision on 1*1#,,& and the 4hief

Wild Life Warden granted the permission on #J##,,&) pursuant to

the petitioner 4ompanyEs representations in #,,&) the State

8overnment itself constituted a 4ommittee on 1,,+#,,> to looC

into) inter alia) the petitionerEs grievance indicates that the issue

as alive and the State 8overnment as ready to consider the

petitionerEs re'uest for suitable reliefs ut since the 4ommittee

constituted as far bacC as in -ay #,,> made no progress) the

petitioner could not be e?pected to ait indefinitely because the

very purpose of availing of the sales ta? deferment incentive ould

be frustrated) if the petitioner has to go on paying sales


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Legislations $hat petition came to be disposed of on #,,I1***

ith a direction to the 5ssar 3il Ltd petitioner herein; to furnish

an undertaCing to the effect that until sanction by the appropriate

authority as re'uired by la is granted) no construction ill be

carried out $he State 8overnment had granted the permission on

1>1,1**J) the 4entral 8overnment had granted the permission on

,I1#1*** and the 4RM permission as granted on ,%11#,,,

What prevented the petitioner 4ompany from carrying on the

construction as the restraint order passed by this 4ourt on 1%th

ulyH%rd August) #,,, in a P(L to hich the petitioner 4ompany as

not even !oined as a party) that too on the basis of the

interpretation of the provisions of Section #* of the Wild Life

Protection; Act) 1*J# hich did not commend to the 9onEble

Supreme 4ourt and therefore) it as only on 1*,1#,,& that the

9onEble Supreme 4ourt after placing correct interpretation on the

provisions of the Wild Life Protection; Act directed the State

8overnment to continue to act on the basis of the permission

granted by the State 8overnment as far bacC as on 1>1,1**J and

further directed the State 8overnment to authoriNe the 4hief Wild

Life Warden) 8u!arat State under Sections #* and %+ of the Act for

permitting the petitioner to lay the oil pipeline We) therefore) see

no ground to dismiss the petition on the ground of suppression of

facts

11 As regards the contention that the State 8overnment

itself has appointed a 4ommittee to looC into the matter) e ould

have ordinarily accepted the said submission and re'uired the

petitioner to ait for some time) but the very fact that in spite of

constitution of the 4ommittee as far bacC as in -ay #,,>) no

progress has been made and in the meantime) the petitioner has

already commenced commercial production and is re'uired to pay

ta?) e have taCen up this petition for final hearing to decide the

'uestion raised in the petition


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1# As regards the contention that the petitioner has

already started paying ta? and has ac'uiesced into the matter and

therefore) the petition may not be entertained) the very fact that

upon commencement of commercial production the petitioner has

started paying ta? is not a factor hich could go against the

petitioner 3n the contrary) the petitionerEs not paying the ta? even

after commencement of commercial production ould have been an

act contrary to the provisions of the statute because so far the

petitioner has not been granted the benefit of sales&I) the Ape? 4ourt made the folloing observation


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in Paras #J and #I :<

#J Section 1&& 4P4 is not the fountain source ofrestitution) it is rather a statutory recognition of apre


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4ourt is not a rule confined to an erroneous act ofthe courtD the Eact of the courtE embraces ithin itsseep all such acts as to hich the court may forman opinion in any legal proceedings that the 4ourt

ould not have so acted had it been correctlyapprised of the facts and the la $he factorattracting applicability of restitution is not the actof the 4ourt being rongful or a mistaCe or errorcommitted by the courtD the test is hether onaccount of an act of the party persuading the 4ourtto pass an order held at the end as not sustainable)has resulted in one party gaining an advantagehich it ould not have otherise earned) or theother party has suffered an impoverishment hichit ould not have suffered but for the order of the4ourt and the act of such party $he 'uantum ofrestitution) depending on the facts andcircumstances of a given case) may taCe intoconsideration not only hat the party e?cludedould have made but also hat the party underobligation has or might reasonably have made$here is nothing rong in the parties demandingbeing placed in the same position in hich theyould have been had the 4ourt not intervened byits interim order hen at the end of the

proceedings the 4ourt pronounces its !udicial verdict hich does not match ith andcountenance its on interim verdict Whenevercalled upon to ad!udicate) the 4ourt ould act incon!unction ith hat is the real and substantial !ustice $he in!ury) if any) caused by the act of thecourt shall be undone and the gain hich the partyould have earned unless it as interdicted by theorder of the court ould be restored to orconferred on the party by suitably commanding theparty liable to do so Any opinion to the contrary

ould lead to un!ust if not disastrousconse'uencesB

Kemphasis supplied

1+ /o e may turn to the Ape? 4ourt !udgment in 5ssar

3il Ltd) #,,& #; S44 %*# highlighting the facts shoing ho the

9igh 4ourt !udgment dated 1%th ulyH%rd August) #,,, had affected

the present petitioner) hich as not a party to any of the petitions

P(L; in hich the said !udgment as rendered by this 4ourt


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1+1 $he Ape? 4ourt observed in Para %* of the !udgment

dated 1*1#,,& that it as the appellantEs case and the records

shoed that it as encouraged by the State 8overnment to set up a

ma!or venture at 0adinar in amnagar 2istrict of 8u!arat as a 1,,G

e?ported oriented unit for refining of petroleum products ith a

capacity of * million tons per annum at an estimated pro!ect cost of

Rs1*,,H< crores $he then 4hief -inister of the State of 8u!arat

had ritten a letter dated 11,&1**, to the -inistry of Planning)

8overnment of (ndia stating that the pro!ect as e?pected to

generate foreign e?change earnings of above Rs%,,,H< crores

ithin a period of five years (t as anticipated by the State

8overnment that the pro!ect ould completely change the face of

the 0adinar area) hich as traditionally a bacCard area of

8u!arat and therefore) the pro!ect ould offer direct and indirect

employment and ould encourage groth of various other ancillary

industries in that region $he letter further stated that the pro!ect

had the full support of the 8overnment of 8u!arat and it as being

accorded the highest priority and that the appellantEs proposal for

setting up the oil refinery should be cleared by the 8overnment of

(ndia urgently $he clearance for setting up the oil refinery as

accordingly granted by the 8overnment of (ndia

1+# $he Ape? 4ourt then recorded the subse'uent history

leading upto the State 8overnment permission on 1>1,1**J under

Section #* of the Wild Life Protection; Act) 1*J# and also the

approval of the 4entral 8overnment granted on #J111***J and

,I1#1*** $he Ape? 4ourt also observed in Para +# of the

!udgment as under :<

3ne ould have thought that the clearance underthe WPA Wild Life Protection Act; as completedby this (n fact) according to the appellant) they


22/29


had invested Rs+%II&1 crores in setting up thepro!ect on &+,, acres of land in amnagar district$he labour colonies had been built up for 1,),,,labourers and other constructions ere ell under

ay (t has also claimed that for the purposes of thepro!ect the appellant has obtained finances interalia from (2() (4(4() nationalised banCs) (F4() L(4and 8(4B

1+% $he Ape? 4ourt further noted that on ,&11#,,,) the

appellant rote to the State 8overnment that since all clearances

had been received) it should be permitted to set up its pro!ect

9oever) the 4onservator of Forests rote to letters dated

#,11#,,, and %,11#,,, to the appellant stating that the

appellant had not been granted approval under the Wild Life

Protection; Act as had been found by the 9igh 4ourt in the

impugned decision $he Ape? 4ourt also observed < $he 9igh

4ourt erred in re!ecting the application for revie (t as an

opportunity for the 9igh 4ourt to rectify the error made earlier in

deciding against the appellant ithout hearing it We are also

handicapped by the absence of any discussion by the 9igh 4ourt on

the factual controversy in the appellantEs case $his has resulted in

an unnecessarily arduous e?ercise and an entirely avoidable delayB

$he Ape? 4ourt also observed that it as clear from the

evidence on record that the State 8overnment and the appellant

petitioner 4ompany herein; had taCen precautions after consulting

e?perts to see that the pipeline route causes minimal and reversible

damage to the ildlife and that the permissions given by the

4entral 8overnment under the F4A and 5PA ere on the basis of

the laying of the pipeline as proposed $here as no challenge to

these permissions and a change in the layout ould set these

permission at naught $he Ape? 4ourt also observed that the 9igh

4ourt erred in re!ecting the reports of the e?perts ho had opined

in favour of harat 3man Refineries Ltd and the appellant the

present petitioner;


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1> When this 4ourt as hearing and finally disposing of

the Public (nterest Litigation challenging the permission granted by

the State 8overnment under the Wild Life Protection; Act toharat 3man Refineries Ltd for laying don the pipeline in -arine

/ational ParC H Sanctuary area) this 4ourt granted permanent

in!unction adversely affecting the present petitioner 4ompany

hich as not a party to the petition $he State 8overnment gave

an impression that the case of 5ssar 3il Ltd ie the present

petitioner 4ompany; as still pending and it as for this reason

that this 4ourt said 5nough is 5noughB 9ad the attention of this4ourt been invited to the State 8overnment permission dated

1>1,1**J in favour of 5ssar 3il Ltd and also the approval granted

by the 4entral 8overnment on #J111**J and ,I1#1***) this

4ourt ould not have treated the petitioner 4ompanyEs case as a

case of pending application !ust as this 4ourt did not restrain

harat 3man Refineries Ltd from laying don the pipeline (n case

this 4ourt had been informed by the State 8overnment that thepermission had already been granted to the present petitioner

4ompany) this 4ourt ould have not issued any direction to the

State 8overnment not to grant permission in any other case ie

5ssar 3il Ltd and another 4ompany hich ere the only to cases

shon to the 4ourt as pending cases When the present petitioner

4ompany moved revie application) this 4ourt re!ected that

application as beyond the scope of revie) and the Ape? 4ourt

observed that the 9igh 4ourt re!ected the opportunity of rectifying

the error We are) therefore) of the vie that the test laid don by

the Ape? 4ourt for attracting applicability of the principle of

restitution is reasonably satisfied in the facts of the present case (t

as on account of the above relevant facts not having been brought

to the notice of the 2ivision ench of this 4ourt that resulted into

the petitioner 4ompany being restrained by this 4ourt from laying

don any pipeline in the -arine /ational ParC H Sanctuary area

notithstanding the permission hich as already granted by the


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State 8overnment under the Wild Life Protection; Act as far bacC

as on 1>1,1**J and the permissions granted by the 4entral

8overnment on #J111**J and ,I1#1*** We are) therefore) of

the vie that the petitioner has made out a case for invoCing the

doctrine of restitution for the purpose of availing of the benefit of

the incentives under the State 8overnment 4apital (nvestment

(ncentive Premier Prestigious 7nit Scheme) 1**+@#,,,) more

particularly) for the purpose of considering the 'uestion hether

the petitioner had commenced commercial production ithin the

stipulated time limit

1J Similarly) in areilly 2evelopment Authority 0s

-ethodist 4hurch of (ndia) 1*II; Supp S44 1J&) the respondent @

-ethodist 4hurch of (ndia as granted permission on 11111*I%

to complete the construction of a -edical 4ollege and -ission

9ospital ithin a period of three years) sub!ect to various

conditions @ one of them as to complete the orC of construction

ithin a period of three years ith effect from 11111*I% 3n#&,11*I&) the 2evelopment Authority passed a contrary order

re!ecting the building plan on certain grounds As there ere to

conflicting orders) the respondent tooC up the matter ith the State

8overnment hich remitted the matter to the 2evelopment

Authority for consideration afresh and the 2evelopment Authority

thereafter tooC a fresh decision on %,,+1*I+ to the effect that

approval and permission granted on 11111*I% ould standrestored and accordingly) the subse'uent order dated #&,11*I&

rescinding permission be treated as ineffective $hereafter) the

2evelopment Authority proceeded to pass the impugned order

dated 1*,J1*IJ directing the demolition of the structure on the

ground that the construction had not been completed ithin the

prescribed period $he 9igh 4ourt) therefore) held that in

computation of the period of three years for completion of the

proposed building) the period during hich the orC of

construction had been stopped #&,11*I& to %,,+1*I+; had to


25/29


be e?cluded $he appeal filed by the 2evelopment Authority came

to be dismissed by the Ape? 4ourt $he other issues raised in that

matter are not relevant for the purposes of the present petition

$he fact remains that the Ape? 4ourt confirmed the decision of the

9igh 4ourt taCing the vie that the period during hich the orC

of construction had been stopped) had to be e?cluded (n the facts

of the present case also) the State 8overnment had granted the

permission on 1>1,1**J and the 4entral 8overnment had granted

the permission on ,I1#1*** $he very fact that the 4hief Wild

Life Warden issued the permission on #J,##,,& after the decision

of the Ape? 4ourt on 1*,1#,,& is itself sufficient to sho that the

re'uest made by the petitioner for e?cluding the intervening period

beteen 1%th ulyH%rd August) #,,, and #J,##,,& is reasonable

1I At this stage) e may refer to one ob!ection raised by

the learned Advocate 8eneral (t as vehemently submitted that if

the period from 1%,J#,,, to #J,##,,& is e?cluded as re'uested

for by the petitioner) it ould not only have the effect of e?tendingthe period ithin hich the commercial production as re'uired to

be commenced) but it ould also pro


26/29


advantage of deferment and therefore) the petitioner may not get

the benefit of deferment even upto 1&,I#,#,) but hatever may

be the actual position) under no circumstances) the petitioner ill

claim any deferment benefit beyond 1&,I#,#,

#, Apropos the submission of the learned Advocate

8eneral that the State 8overnment is no providing infrastructure

facilities in the bacCard areas also) -r /anavati has submitted

that hen the petitioner made heavy investments for the pro!ect in

0adinar) it as a bacCard area and the petitioner had to provide

all the infrastructure facilities liCe roads) ater and electricity onits on and) therefore) merely because the infrastructure facilities

are no being provided by the State 8overnment to set up

industries in the ersthile bacCard areas) that cannot be held out

as a ground against the petitioner to reduce the 'uantum of

incentives payable to the petitioner under the (ncentive Scheme

Without pre!udice to the above submission) -r /anavati

states that although the petitioner is entitled to get the full benefits

under the (ncentive Scheme ie 1#+G of the eligible capital

investment) the petitioner is ready to maCe the folloing

concessions if the State 8overnment does not challenge the

decision of this 4ourt and ithin one month from today the State

8overnment grants the petitioner the benefit of sales


27/29


amount otherise computable at 1#+G of the eligible capital

investment made by the petitioner in the unit under

consideration

For maCing the above concessions) -r /anavati has relied on

the affidavit dated 1+&#,,I of the Sr 0ice President @ 4orporate @

Legal of the petitioner 4ompany

#1 (n response to the above suggestions) -r .amal $rivedi)

learned Advocate 8eneral has submitted that hile the petitioner

should not be refunded the sales


28/29


8overnment shall stipulate the folloing conditions) provided the

final eligibility certificate is issued ithin one month from the date

of receipt of the !udgment :<

i; $he petitioner shall not be given the benefit of deferment of

Sales


29/29


revie application in #,,,) this 4ourt did not avail of the

opportunity for rectifying the error made by this 4ourt earlier in

deciding against petitioner < 5ssar 3il Ltd ithout hearing it

#& $he petition is alloed in the aforesaid terms Rule is

made absolute to the aforesaid e?tent ith no order as to costs

K-S S9A9)

KRA0( R $R(PA$9()

mrpandyaQHsundar

essar oil v state of gujarat

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