Cap on Liquidated Damages: A Deterrent to Delay

(By Meera Shankar, Executive Director (Retd.) NBCC (India) Ltd., New Delhi)

If there is one clause in construction contracts that continues to mystify Owners and Builders alike it is the Liquidated Damages clause. It is an integral part of all such contracts and there is scarcely any arbitration where the clause is not invoked - yet the true import and purpose of the clause still remains elusive.

In this article I have attempted to show how the liquidated damages clause, ironical as it may seem, has a more significant role than merely determining the compensation to be paid by the Contractor in case he delays.The clause endeavours to address the issue of ‘delay’- the bane of all construction contracts -- firstly by prompting the contractor, under the threat of penalty, to perform in a timely fashion. Secondly and more importantly by specifying a ceiling on the damages, it puts the Owner on notice that if he fails to act in the face of wanton delay by the Contractor, he too shall face consequences. The first deserves no elaboration. I will therefore straightaway come to the second .

One of the important features of the LD clause, as it is widely known, is the cap on amount of damages that can be levied by the aggrieved party on the defaulting party in the case of a breach. The damages are generally stipulated as a rate for each day or week of delay by the contractor in completing the works and therefore necessarily begins from a specified date.(Hudson’s Building and Engineering Contracts). Needless to say therefore that if due to some act of prevention, which may include the ordering of extras by the Owner, the contractor is prevented by completing the work by the specified date, the LD clause will cease to apply and the Owner will lose the right to levy Liquidated damages.(Ibid)

Now I come back to the issue of the ceiling on Liquidated Damages that is imposed by the clause itself. What is the sanctity of the cap? Is it meant to be sacrosanct?

The answer to these questions can be found in S.74 of the Indian Contract Act., which reads:

“74. When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, or if the contract contains any other stipulation by way of penalty, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named or, as the case may be, the penalty stipulated for.”                                               (emphasis mine)

So, if S.73 of the Act provides for compensation for loss or damage caused by a breach of promise, S.74 clarifies that if the parties have predetermined the compensation to be paid for a specified breach, then the party aggrieved by the breach is not entitled to receive compensation in excess of the amount so specified. If any doubt existed with regard to the interpretation of this legal provision, it was unequivocally settled by the Supreme Court in ‘Sir Chunilal Mehta & Sons Ltd. v. Century Spinning & Manufacturing Co. Ltd.(1962 KLT OnLine 1121 (SC) = AIR 1962 SC 1314) way back in 1962. A five Judge Bench held that “Where the parties have deliberately specified the amount of liquidated damages there can be no presumption that they, at the same time, intended to allow the party who has suffered by the breach to give a go-by to the sum specified and claim instead a sum of’ money which was not ascertained or ascertainable at the date of the breach.”

The net result of the law as laid down is that regardless of the length of the delay due to reasons attributable to the Contractor, the latter’s maximum liability to the Owner on this account will be restricted to the ceiling amount.This takes me to the question what is the purpose of the ceiling in the LD clause ? There can be no quarrel with the fact that delay in any contract,let alone a construction contract, is not a good thing. It hurts the Owner the most, because delay brings with it an escalation of costs. It inconveniences the neighbours who have to endure disturbances for a longer period. And if it is a public utility project, delay effects the public in more ways than one. It deprives them of the early use of the utility, it hampers the free flow of traffic and more importantly the tax payer ends up paying a lot more for the utility than was originally envisaged.To my mind therefore, the ceiling on LD is intended to serve as a disincentive to the Owner for prolonging the contract, when confronted with an incorrigibly recalcitrant contractor. By telling the Owner that this is the maximum you can recover from the contractor, regardless of the length of the delay caused by the latter, the clause is a warning to the Owner that if you continue to persist with a non performing contractor beyond a reasonable length of time, you shall do so at your own peril. It is not as if the contract itself does not provide remedies for such situations. When the amount of LD payable by the contractor has reached the limit, the best-case scenario for the Owner would be to terminate the defaulting contractor’s contract and award the balance work to another at the risk and cost of the former. But invariably the Owner procrastinates and allows the recalcitrant contractor one extension after another. They do so firstly, because it is cumbersome to go through the process of terminating an existing contractor and awarding it to another contractor. Secondly, such action requires timely and proper application of mind to the causes of the delay. If the Contractor is able to prove that the delay was caused even partially by the Owner himself, the latter would be held accountable for wrongful termination. The Owner therefore finds it easier and also safer to play ball and to postpone any adverse decision against the contractor. Lastly and more importantly he remains brazen in his belief that in the end, despite the ceiling, he would be able to recover the losses or at least much of it through means I have discussed below. It is my earnest belief if the contract provision with regard to ceiling on LD is strictly enforced and the Owner finds that no matter what the extent of delay by the Contractor, he will not be compensated beyond the ceiling limit, he will shed his lethargy and work towards an early completion of the project.

Unfortunately in practice seldom will you find a case where the Owner has restricted his claim for delay, to the amount stipulated in the LD clause. In other words he by-passes with impunity his contractual promise to limit his claim in the event of delay by the Contractor. To escape the constraints of the clause these claims are often camouflaged in euphemistic terms, for instance, as damages for extended financing, increased project administration costs, loss of profits that would have been earned from the project, cost of facilities provided during the extended period, etc.These are in effect claims arising of alleged delay in completion and as such included within the ambit of the LD clause and therefore inadmissible in terms of the Contract. Thus Owners often find ways to circumvent the ceiling and end up claiming and often even getting compensation for delay far in excess of the cap, thereby defeating the very purpose for which the ceiling was imposed. This may be largely because the rigors of the settled legal position are not brought to the notice of the adjudicating forum.

Moving away from the issue of Liquidated Damages, I would like to briefly touch upon yet another factor that an over indulgent Owner needs to be wary about. If after endless extensions spanning over years, the Owner finally decides that enough is enough and proposes to terminate the contract and recover the risk and cost charges from the contractor, there is every possibility of it being turned down. It is well settled in law that a claim for damages is assessed as on the date of the breach. In Murlidhar Chiranjilal v. Harishchandra Dwarkadas & Anr.(AIR 1962 SC 366), the Hon’ble Supreme Court has held that a duty is cast on the Plaintiff “to take all reasonable steps to mitigate the loss consequent on the breach and debars him from claiming any part of the damage which is due to his neglect to take such steps.” In Saco Rubber (P) Ltd. v. U.O.I. (72 (1998) DLT 521) the Claimant had entered into a running contract with the Government for the supply of canvas shoes in July 1982,but the Claimant failed to complete the supply and the contract was rescinded by the Government. In 1992 the UOI raised counter claims against the Claimant towards the loss incurred on the risk purchase. The Claim was disallowed as it was not based on the market rate prevailing as on the date of the breach.

Since my article is aimed primarily at drawing attention to the LD clause, I have dealt at length with the consequences when the Owner procrastinates in taking action on delays committed by the Contractor. But for prolongation of construction contracts, the Owner is sometimes as much to blame as the Contractor,if not more.In the race to boost work orders Government entities often rush to award work even before, the land is acquired, proper exploration of the soil etc., is completed, finances are planned and arranged or designs are prepared. The fate of such ill planned projects can well be imagined.

Despite a significant improvement in recent years in India’s standing in the ‘ease of doing business’ criteria, a lot still needs to be done. Enforcement of contracts is one of the areas where India is woefully down the ladder. According to the Business Standard in the beginning of 2020, India was at 163rd position in a list of 190 countries. An effective contract enforcement system is expected among other things, to increase adherence to contracts. As long as we continue to allow a two year contract to run into 7 years or more, India’s dream of becoming a favoured destination for international business will only remain a pipe dream.

Reliefs to be Sought for in a Suit for Specific Performance

(By Sunil Prakash, Advocate, Madras High Court )

In a suit for specific performance, when there are conflicting rights of parties namely, that of the agreement holder and the subsequent purchaser, what relief, the agreement holder should seek, apart from the relief of specific performance of sale agreement? It assumes significance, since the subsequent sale to a bona fidepurchaser for value, who was not put on notice of the earlier sale agreement, results in negation for the relief of specific performance. As there is inter play of rights between the agreement holder and the subsequent purchaser, the subsequent purchaser for value, who was not put on notice is protected under Section 19(b) of the Specific Relief Act, 1963. This article intends to examine the said issue.

The issue raised in the article is based on the decision of the Hon’ble Supreme Court in B.Vijaya Bharathi v. P. Savitri¹wherein it was held that the subsequent purchaser had purchased the property, even prior to the filing of suit and also there was no conveyance in favour of the agreement holder. The agreement holder, who though aware of the conveyances in favour of the subsequent purchaser of the same property, even prior to the filing of the suit, did not seek any relief for their cancellation. It would stand in the way to decree a suit for specific performance, unless the sale deeds in favour of subsequent purchasers are also set aside.

The Three Judge Bench of Hon’ble Supreme Court inDurga Prasad v. Deep Chand ²
 has decided the proper form of Decree in a suit for specific performance and it was held that the subsequent purchaser should join with the vendor in executing the conveyance in favour of the agreement-holder. It would assume more significance to analyze, if the proper form of Decree is to be considered in consonance with the pleadings, evidence and nature of reliefs sought for or can it be moulded by using the discretionary powers of the Court.

On perusal of facts in Durga Prasad(supra), in my humble view no law was laid down. A cursory reading of paragraph 5 of the said judgment would reveal that there was a compromise between the agreement holder and the subsequent purchaser. The compromise was that the subsequent purchaser had agreed to transfer conveyance in favour of the agreement holder. The only issue that the Court set out to decide was, as to who would be entitled to the consideration of `62,000/- for the re-conveyance which is deposited in Court., namely, whether the subsequent purchaser, or the vendor/custodian. It was held that the subsequent purchaser would be entitled to `58,000/- and the remaining `4000/- would go to the custodian of the vendor’s properties. The Court while disposing posed a question as to what should be the proper form of decree and while embarking on such an exercise, it had held that the vendor and the subsequent transferee to join in the conveyance so as to pass title to the agreement holder.

Scenarios:

1) If the possession is with the vendor, a mere relief seeking enforcement of the sale agreement simpliciter would give complete relief to the party, as the vendor is duty bound to execute sale deed and deliver possession as defined in Section 55(1)(f) of Transfer of Property Act, 1882.

2) If after the sale agreement, possession of the property is passed on to the subsequent purchaser, a mere relief for specific performance of the sale agreement without relief of possession, will disentitle the agreement holder from obtaining actual possession of the property. The agreement holder should also specifically seek relief of possession along with the relief for enforcement of sale agreement, as the subsequent purchaser is not bound by the sale agreement which is sought to be enforced. This is mandatory for complete and effective relief.³

3) When the property which is sought to be conveyed in the sale agreement, along with its possession, is held jointly by the vendor along with the other persons having right, title and interest in the property, then the agreement holder should also seek relief of partition of the property and possession of the vendor’s share along with the relief for enforcement of sale agreement. It would also be gainful to look into Section 22 of Specific Relief Act, 1963, which provides for possession or partition in certain cases, in addition to the relief of specific performance of the sale agreement or refund of the earnest money. However under Section 22(2) there must be a specific prayer for the relief of possession, partition and refund of earnest money.

4) If prior to the filing of suit, the property has been purchased by the subsequent purchaser and he has also been put into possession, the agreement holder is also aware of the said factum, but no averments/allegations has been pleaded and no reliefs claimed against the subsequent purchaser, then in the said scenario the agreement holder would be constrained to make necessary pleadings and lead evidence.

Any amount of evidence without pleadings is not admissible in law. The title of the property is incidentally decided as the validity of sale in favour of subsequent purchaser is normally put to test, only if there are specific averments/allegations made by the agreement holder against the subsequent sale (prior to the suit but after agreement of sale). The subsequent purchaser cannot be expected to prove negative and a mere denial, about the existence of earlier agreement of sale is sufficient to shift the burden of proof on the agreement holder. The suit for specific performance will partly take the character of suit for declaration and without testing the validity of sale, the Hon’ble Courts would be constrained to decide and grant necessary reliefs to the vendor based on the agreement of sale.

Setting aside alienation will assume more significance, since there is a valid sale transaction for consideration and also valuable third party right has come into play. It would also be gainful to look into Section 34 of the Specific Relief Act, 1963 which specifies that mere declaration would not be sufficient, without a consequential prayer. Hence in my humble view, there will be a bar under Section 34 (second para) of the Act to decree the suit and grant necessary reliefs in the said circumstances. If the principle laid down in Durga Prasad (supra) is applied with full vigor, then it might run counter to the concept of pleadings, evidence and provision of law in a given circumstances.

Unless we are clear about the reliefs, subsequent suit for compensation would be a bar after the dismissal of suit for specific performance. It would also be gainful to look into Section 21 of Specific Relief Act, 1963, which also provides for compensation in certain cases, in addition to the relief of specific performance of the sale agreement. However, under Section 21(5) there must be a specific prayer for the relief of compensation to be sought for.

Reasoning:

When no relief is sought for against any party to the suit, it would amount to no cause of action against the said party.⁴ A party to the suit cannot introduce a new case without making any attempt to get the same duly incorporated in the plaint in accordance with law.⁵ The pleadings and evidence normally determines the issue in dispute hence the courts cannot grant relief when there is no foundation in the pleading and the other party had no opportunity to negate.⁶

The reasoning of one decision cannot be applied in the absence of similarity of circumstances in another case. Normally the decision has to be read in the context of the questions which have arose for consideration in the subsequent case.⁷ The judgment of the Court could be read only in the context of the issue which arose for consideration. It cannot be said to be a law when the matter ended in a compromise.⁸ The decision of a Court which does not proceed on consideration of an issue cannot be deemed to be a law to have a binding effect.⁹ It would not be right to extract portions from such a judgment, and then build upon it.¹⁰

The observations and the directions came to be made more in the peculiar facts and circumstances of the case in order to do complete and substantial justice between the parties in exercise of the discretionary jurisdiction under Article 136 and 142 of the Constitution of India. There is no discussion of the law either and therefore it has no precedential value as laying down any law.¹¹ The non-executant of a deed, must approach the Court under Section 34 of the Specific Relief Act, 1963 seeking cancellation and the said action would be in personam.¹² A small reprieve was granted by the Court on the peculiar facts by clearly holding that the said order is not intended to be used as a precedent.¹³

If the vendor denies his exclusive right, title and interest in the property which is sought to be conveyed in the sale agreement, then the right, title and interest of the vendor is to be determined before deciding on the relief for enforcement of sale agreement.¹⁴

There cannot be a differential treatment in granting reliefs in civil suits namely suit for injunction without the relief of declaration and suit for declaration without the relief of possession is not maintainable and vice versa(even if party proves his title/possession).¹⁵

Author’s view:

In my humble view, no inference could be drawn that the party need not seek any declaratory reliefs challenging the termination of agreement and sale deed in favour of the subsequent purchaser by followingDurga Prasad(supra) as straight jacket principle. In doing so it would certainly run contrary to the principle of pleadings and evidence which normally plays a crucial role while deciding the civil suits. Such inference have been drawn by almost all the High Courts on various occasions but it was not brought to the knowledge of the said Courts that the judgment in Durga Prasad’scase (with due respect) was based on a compromise between parties, and no law was actually laid down, to act as a precedent.

I am therefore of the humble view that the law laid down inVijay Barathi(supra) which has correctly held that relief of setting aside alienation has to be sought for along with the relief for enforcement of sale agreement is to be followed as precedent. As the right, title and interests of the parties are decided, the agreement holder should also seek necessary declaratory reliefs by challenging the sale deeds. If the sale agreement is terminated, then the agreement holder should also necessarily seek declaratory relief challenging the termination of agreement.¹⁶ It therefore become imperative to seek said reliefs in a suit for specific performance based on the circumstances 1) to set-aside the alienation 2) relief of possession, if subsequent purchaser has been put into possession of the property 3) relief of partition, if vendor holds right only in part of the property 4) to set-aside the termination of sale agreement and 5) additional relief of compensation, if relief of specific performance cannot be granted or as additional relief (not mandatory).

Foot Notes:

1.Vijaya Bharati v. Savitri (2017 (3) KLT OnLine 2137 (SC) = AIR 2017 SC 3934).

2.  Lala Durga Prasad v. Lala Deep Chand (AIR 1954 SC 75).

3. Babulal v. Hazari Lal Kishore (1982 KLT OnLIne 1015 (SC) = AIR 1982 SC 818).

4.  2020 (2) MWN (Civil) 533.

5. 1999 (78) DLT 659.

6.  Firm Srinivas Ramkumar v. Mahbir Prasad (1951 KLT OnLine 804 (SC) = AIR 1951 SC 177 (F.B.))

      Shehla Burney v. Syed Ali Mossa Raza (2011 (2) KLT Suppl.38) SC = (2011) 6 SCC 529).

      Sheikh Abdul Khayum v. Mulla Alibhai (AIR 1963 SC 309).

      Scotts Engineering v. Rajesh P.Surana(2008 (3) KLT Suppl.1235 (SC) = (2008) 4 SCC 256).

7. AIR 1990 Pun.117 (F.B.).

      Fida Hussain v. Muradabad Development Authority (2011 (3) KLT Suppl.64 (SC) =
(2011) 12 SCC 615).

        Regional Manager v. Pawan Kumar Dubey (1976 KLT OnLine 1003 (SC) = (1976) 3 SCC 334 (F.B.)).

8. Director of Settlements v. Apparao(2003 (1) KLT SN 35 (C.No.48) SC = (2002) 4 SCC 638 (F.B.)).

9. Municipal Corporation of Delhi v. Gurnam Kaur (1988 (2) KLT SN 63 (C.No.90) SC =
(1989) 1 SCC 101).

10. 2006 (6) A.L.T. 593 (D.B.).

11. M/s. EXL Careers & Anr. v. Frankfinn Aviation Services Private Limited(2020 (4) KLT 898 (SC)
= dated 05.08.2020 (SC) (F.B.)

12. Deccan Paper Mills Co. Ltd. v. Regency Mahavir Properties & Ors. (2020 (5) KLT 108 = dated
19.8.2020 (SC) (F.B.)).

13.            Shri Parshwatilak Shwetamber Murtipujak Tapagacch Jain Trust v. The State of Maharashtra & Ors. in SLP (Civil) D.No.17041/2020, dated 21.08.2020 (SC) (F.B.).

14. Dharmambiri Rana v. Pramod Kumar Sharma (2017 (4) KLT OnLine 2116 (SC) =
AIR 2017 SC 5431).

15. Arulmigu Chokkanatha Swamy Koil Trust v. Chandran(2017 (1) KLT OnLine 2070 (SC) = AIR 2017 SC 1034).

      Meharchand Das v. Lal Babu Sidhique(2007) 14 SCC 253).

      Gian Kaur v. Raghubir Singh (2011 (4) KLT Suppl. 55 (SC) = (2011) 4 SCC 567).

16. I.S.Sikandar v. Subramani (2013) 15 SCC 27).

        2017 (2) CTC 656 (SC).

Mental Health – A Perspective

(By V.Ramkumar Nambiar, Advocate, High Court of Kerala)

The Mental Health Care Act 2017 was enacted to provide for mental health care and services for persons with mental illness and to protect, promote and fulfill the right of such persons during delivery of mental health care and services and for matters connected therewith or incidental thereto. The United Nations Convention on the Rights of Persons with Disability, which was ratified by the Government of India in October, 2007, made it obligatory on the Government to align the policy and laws of the country with the Convention. Though there was already the Mental Health Act 1987, it was felt that there was a need to amend the said Act laying emphasis on the rights of persons with mental illness which was specifically absent in the earlier enactment. Further the question of amendments were also being considered as regards the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act 1995. Thereafter the Rights of Persons with Disabilities Act, 2016 was enacted. As the Mental Health Act 1987 could not protect the rights of persons with mental illness and was insufficient to promote their access to mental health care in the country, the Mental Health Care Act 2017 was enacted and it was brought into force on 7.7.2018 notified in the official gazette on 29.5.2018. The new Mental Health Care Act 2017 lays emphasis on the rights of persons with mental illness and the choice of such persons to appoint nominated representatives and to get themselves admitted in any mental health care establishments.

2. Section 2(s) of the Mental Health Care Act 2017 defines mental illness as follows: “Mental Illness – means a substantial disorder of thinking, mood perception, orientation or memory that grossly impairs judgment, behaviour, capacity to recognize reality or ability to meet the ordinary demands of life, mental conditions associated with the abuse of alcohol and drugs, but does not include mental retardation which is a condition of arrested or incomplete development of mind of a person specially characterized by sub-normality of intelligence”. 

3. Section 2(p) defines Mental Health Establishment as follows: “Mental Health Establishment” – means any health establishment including Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy Establishment, by whatever name called, either wholly or partly , meant for the care of persons with mental illness,  established, owned, controlled or maintained by the appropriate Government, local authority, trust whether private or public, corporation, co-operative societies, organization or any other entity or person, where persons with mental illness are admitted and reside at, or kept in, for care, treatment, convalescence and rehabilitation, either temporarily or otherwise ; and includes any general hospital or general nursing home established or maintained by the appropriate Government , local authority, trust, whether private or public, corporation, co-operative society, organization, or any other entity or person ; but does not include a family residential place where a person with mental illness reside with his relatives or friends. 

4. The Mental Health Care Act 2017 is essentially enacted taking care to protect and  safeguard the rights of the mentally ill persons. Section 65 under Chapter 10 of the Mental Health Care Act 2017 stipulates that no person or organization shall establish or run a mental health establishment unless it has been registered with the authority under the provisions of the Mental Health Care Act 2017. The word “Authority” has been explained to mean the Central Authority, if the mental health establishment is under the control of the Central Government and the State Authority in respect of mental health establishment of the State. Section 65(2)  stipulates that every person or organization who proposes to establish or run a mental health establishment shall register the said establishment with the authority under the provisions of the Act.

5. It is to be noted that Section 65(2) stipulates mandatory registration of mental health establishments. 

6. The next aspect is regarding admission of a person in the mental health establishment. The Mental Health Care Act 2017 postulates different kinds of admissions. Section 85 of the Act deals with the admission of person with mental illness as an independent patient in a mental health establishment. This postulates the ability of a person with mental illness having capacity to take mental health care and treatment decisions. It is relevant to note that Section 86(b) states that even an independent patient shall not be given treatment without his informed consent. Section 89 stipulates admissions and treatment of persons with mental illness with high support needs upon application by nominated representatives of the persons up to 30 days, Section 90 stipulates treatment beyond 30 days. Section 100 prescribes the duties of police officers in respect of mentally ill persons. This section clothes a police officer to take into protection a person whom he has reason to believe is suffering from mental illness or is being illtreated or neglected by persons who are duty bound to take care of them and take such person to a Mental Health Establishment. The police officer may also file a report  under Section 101 about the mentally ill person before the Jurisdictional Magistrate to proceed in accordance with Section 102. Section 101 stipulates about the report to the Magistrate of a person with mental illness in private residence who is ill treated  or neglected. Section 101(2) stipulates that  “Any person who has reason to believe that a person having mental illness and is being ill treated or neglected by any person having responsibility or care of such person shall report the fact to the police officer  in charge of the police station within whose jurisdiction the person with mental illness resides”. This proviso deals with rights of “any person” who has reason to believe that a person having mental illness and is being ill treated or neglected by any person having responsibility or care of said person, he  shall report the fact to the police officer  in charge of the police station within whose jurisdiction, the person with mental illness resides. This indicates that as far as the rights of a person who intends to help or take care of a mentally ill person is concerned, he can only report about the same before a Police Officer or the Jurisdictional Magistrate under Section 101(3). Section 101(3) stipulates that if the Magistrate has a reasonto believe based on the report of a police officer or otherwise, that any person with mental illness within the local limits of his jurisdiction is being ill treated  or neglected, the Magistrate may cause the person with mental illness to be produced before him and pass an order  in accordance with the provisions of Section 102 of this Act.

7. Section 102 stipulates the procedure for a Magistrate when any person with mental illness is brought before him and the procedure to convey or admit such a person in such mental health establishment. The above provisions have been enacted for the main purpose of ascertaining that there is an independent enquiry about the condition of the person and to secure his rights guaranteed to him under the Constitution of India.

8. It is therefore clear that the admission of a mentally ill person at a registered establishment can either be by independent admission or through his nominated represen-tatives or by a police officer or by orders from the Magistrate. Any other form of admission by private parties which was prevalent in the repealed Mental Health Act 1987 cannot be legally sustainable, after the coming into force of Mental Health Care Act 2017. Our High Court in the decision reported in 2020(1) KLT155 inPrasad M.N & Anr. v. State of Kerala & Ors. had held that a reading of sub-section (3) of Section 101 would crucially mandate that if the Magistrate has reason to believe, based on the report of a police officer or otherwise that any person with mental  illness within the local limits of its jurisdiction is being ill-treated or neglected, then the Magistrate may cause the person with mental illness to be produced before him and pass an order in accordance with the provisions of Section 102. Therefore, one of the prime requisites for fulfilling the jurisdictional facts for invocation of the provisions contained in Section 101(3) of the Mental Health Care Act 2017 is that the Magistrate should have reason to believe based either on the report of a police officer or otherwise that a person with mental illness within the local limits of his jurisdiction is being ill-treated or neglected etc., then only the Magistrate can assume jurisdiction. It is only after crossing the threshold situation envisaged in Section 101 of the Mental Health Care Act 2017 that the learned Magistrate will have to deal with the aspect dealt with in Section 102 of the Act. A reading of Section 102 would make it clear that the Magistrate will get jurisdiction to order for conveying or admitting the person to the Mental Health establishment only if the Magistrate should have reason to believe that the person concerned is either suffering from mental illness or that in his considered opinion the person concerned may have mental illness etc. Therefore the crucial element to be satisfied before issuing an order in terms of Section 102(1) of the Mental Health Care Act 2017 is that the Magistrate should have ‘reason to believe’ on the basis of objective materials and considerations that the person concerned is either having mental illness or may have mental illness before invoking the power under Section 102(1) of the Act so as to order that the person concerned should be conveyed to a mental health institution as envisaged therein.  Branding a person as a mentally ill person and passing an order under Section 102(1) of the Mental Health Care Act 2017 directing that he should be sent to the mental health establishment and assessment and treatment etc., involves extremely grave, adverse consequences on the affected person concerned and if it is so done without any objective material and relevant consideration, then it would be not only grossly illegal and irrational, but would also amount to the invasion of the constitutionally guaranteed right to dignified life and a right for privacy of a person and would thus be not only in violation of the provisions contained in the Mental Health Care Act 2017 but also in grave derogation of the right to dignified life guaranteed under Article 21 of the Constitution of India. This Hon’ble Court, after relying on the decision reported in 2018(3) KLT 934 (SC) (Dr.Sr.Tessy Jose v. State of Kerala),held that ‘knowledge’will stand on a higher level of the state of mind in comparison to ‘reason to believe’ . Whereas, ‘reason to believe’ as understood in Section 26 of the I.P.C. is another fact of the state of mind and is not the same thing as suspicion of doubt. So in substance “reason to believe” means that a person must have reason to believe in the circumstances are such that a reasonable person would by probable reasoning conclude or infer regarding the nature of the thing concerned and the circumstances are such as to create a cause to believe that by a chain of probable reasoning leading to the conclusion or inference about the nature of the thing. In other words, the learned Magistrate should have reason to believe on the basis of objective materials and consideration that the person concerned is either having mental illness or may have mental illness before invoking the power under Section 101(1) of the Act so as to order that the person concerned should be conveyed to a mental health institution as envisaged therein. This emphasis was made taking into consideration that the Mental Health Care Act 2017 lays emphasis on the rights of the mentally ill person and cannot be used as a tool to convey persons to a mental health institution for the mere asking . The rights guaranteed under Article 19 and 21 of the Constitution of India ought to be protected and it is only after being satisfied with the materials on record that a person can be ordered to be conveyed to a mental health institution or establishment. So long as the prime jurisdictional facts required for the invocation of proceedings under Section 101 and consequently that of Section 102 are conspicuously absent, the powers under the aforementioned Sections cannot and ought not to be exercised. The invocation of the Writ Jurisdiction under Article 226 of the Constitution of India for conveying any person with mental illness to a mental health institution in the absence of exercise of jurisdiction under Section 100 to 102 or ill use of the jurisdiction under the aforesaid provisions, will therefore have to be exercised with extreme care and caution taking note of the fact the possible violation of the rights of the alleged mentally ill person guaranteed under Article 21 of the Constitution of India.

9. Our High Court had earlier during the pendency of the Mental Health Act 1987 held in Joseph v. State of Keralareported in 2013(3) KLT 707 that “While admission on the basis of reception orders in terms of Part III would necessarily fall within the continued gaze of the judiciary in terms of the provisions in that Part, it is also necessary that no mental health centre, that is to say, a psychiatric hospital or a psychiatric nursing home, either in Government sector or otherwise, admits any person in violation of the statutory requirements as contained in Part I or Part II of Chapter IV of the Act, as the case may be. All cases of admission on voluntary basis shall be strictly in conformity with the prescriptions in Ss.15 & 16 and no admission shall be made without following the due procedure in S.17 of the Act. No admission under special circumstances which falls under Part II of Chapter IV, shall be made in violation of the terms of S.19. This means that a mentally ill person who does not, or is unable to  express his willingness for admission as a voluntary patient, may be admitted and kept as an inpatient in a psychiatric hospital or a psychiatric nursing home only on an application made in that behalf by a relative or a friend of the mentally ill person if the medical officer in charge is satisfied that in the interest of the mentally ill person, it is necessary so to do. Such an application in terms of sub-section (1) of S.19 has to be in the prescribed form and be accompanied by two medical certificates, from two medical practitioners, of whom one shall be a medical practitioner in the service of Government, to the effect that the condition of such mentally ill person is such that he should be kept under observation and treatment as an inpatient in a psychiatric hospital or in a psychiatric nursing home. However medical officer in charge of a psychiatric hospital or a psychiatric nursing home concerned may, if satisfied that it is proper so to do, cause a mentally ill person to be examined by two medical practitioners working in the hospital or in the psychiatric nursing home instead of requiring such certificates. The aforenoted provisions are made in Chapter IV of the Act to ensure, among other things, that the treatment, care and management of mentally ill persons are appropriately carried out in consonance with the fundamental right to life guaranteed under Part III of the Constitution of India and the concept of “human rights” in the realm of the Human Rights Act 1993 and the obligations of India in the international regime, in connection with human right issues. Similarly, such management should be in consonance with the assured concept of dignity which is a seminal principle and constitutional value declared through the Preamble to the Constitution of India ”.

10. It is also apposite to note that the Hon’ble Supreme Court of India in Shafin Jahan v. Ashokan (2018 (2) KLT 571) has held that the Constitutional Courts may also act as Parens Patriaeso as to meet the ends of justice. But, the said exercise of power is not without limitation. The Courts cannot in every and any case invoke the Parens Patriaedoctrine. The said doctrine has to be invoked only in exceptional cases where the parties before it are either mentally incompetent or have  not come of age and it is proved  to the satisfaction of the Court that the said parties have no parent/legal guardian or have an abusive or negligent parent/legal guardian. The Hon’ble Apex Court has further held that it is obligatory to state here that expression of choice in accord with law is acceptance of individual identity. Curtailment of that expression and the ultimate action emanating there from  on the conceptual structuralism of obeisance to the societal will destroy the individualistic entity of a person, the social values and morals have their space, but they are not above the constitutionally guaranteed freedom. The said freedom is both a constitutional and human right. Deprivation of that freedom which is ingrained in choice on the plea of faith is impermissible. The Hon’ble Supreme Court of India in Justice K.S.Puttaswamy v. Union of Indiareported in 2017 (4) KLT 1,held that the autonomy  of the individual is the ability to make decisions on vital matters of concern to life. The intersection between one’s mental integrity and privacy entitled individual to freedom of thought, the freedom to believe in what is right and the freedom of self determination.

11. The Mental Health Care Act 2017 which emphasizes  the rights of a mentally ill person has introduced many novel aspects including the right to make an advance directive as provided under Section 5 of the Act. Section 5 stipulates that every person who is not a minor shall have a right to make an advance directive in writing specifying  the way in which the person wishes to be cared and treated for mental illness, the way a person wishes not to be cared for and treated for mental illness etc , in the event of him/her falling mentally ill at a future point of time. The manner in which an advance directive could be made and the procedure of maintaining an online register by the board under the Act has also been enumerated. This is a unique provision whereby any or all persons can issue advance directives to clearly specify as to what needs to be done in the event of any person becoming mentally ill. The checks and balances of the use or abuse of the said right has also been being considered and enumerated in the Mental Health Care Act 2017. The Act also elucidates the appointment of a nominated representative under the Act for the purpose of giving due care to the mentally ill person. The Act also specifies the rights of mentally ill person as regards the right to information under Section 22 of the Act, the right to confidentiality under Section 23 of the Act, the restriction on release of information in respect of mental illness under Section 24 of the Act, the right to access medical records under Section 25 of the Act, the right to personal contacts and communication under Section 26 of the Act, the right to legal aid under Section 27 of the Act and the right to make complaints about deficiencies in the provision of services under Section 28 of the Act.

12. The ambiguity as far as dealing with complaints by a mentally ill person regarding provision of services before the concerned board created under Section 74 of the Act is a question that would have to be considered  by the Courts of law. Section 73 underChapter XI of the Act postulates about the constitution of Mental Health Review Boards. Section 74 speaks about the composition of such a review board.

13. Section 74 reads as follows: Composition of Board: (1) Each board shall consist of  - (a) A District Judge, or an officer of the State Judicial Services who is qualified to be appointed as District Judge or a retired District Judge who shall be chairperson of the Board, (b) representative of the District Collector or District Magistrate or Deputy Commissioner of the districts in which the Board is to be constituted, (c) two members of whom one shall be a psychiatrist and the other shall be a medical practitioner, (d) two members who shall be persons with mental illness or care  givers or persons representing organizations of persons with mental illness  or care-givers or non-governmental organizations working in the field of mental  health, (2) A person shall be disqualified to be appointed as the chairperson or a member of a Board or be removed by the State Authority, if he – (a) has been convicted and sentenced to imprisonment for an offence which involves  moral turpitude, or, (b) is adjudged as an insolvent or, ((c) has been removed or dismissed from the service of the Government or a body corporate owned or controlled by the Government; or (d) has such financial or other interest as is likely to prejudice the discharge of his functions as a member; or (e) has such other disqualifications as may be prescribed by the Central Government , (3) A chairperson or member of a Board may resign his office by notice  in writing under his hand addressed to the Chairperson of the State Authority  and on such resignation being accepted, the vacancy shall be filled by appointment of a person, belonging to the category under sub-section (1) of Section 74. 

14. On a perusal of the above section, it would appear at first blush that as per Section 74(1)(d), that two members who shall be persons with mental illness, shall be mandatorily a part of the Board. This would militate against the fundamental principles of law of having two mentally ill persons taking part in the decisions of the Review Board.  This is a question that would have to be brought to the notice of the Constitutional Courts and tested on the anvil of Law as to whether such a provision could be constitutionally valid . But another way of appreciating this aspect, according to some, would be by arguing that , being a rights perspective based Legislation, the Legislature in its wisdom had deliberately introduced this clause so that the two mentally ill persons in the Board would empathize with the complaints of the mentally ill persons when they approach the Review Board with complaints of the kind of treatment received from the Mental Health Establishment under Section 77 of the Act. Be that as it may, the legal competency for a mentally ill person to sit in the Board and take binding decisions as regards the treatment given to another patient and such other matters would be questionable in a Court of Law and justiciable, despite an  Appeal being provided to the High Court under Section 83 of the Act as against the decisions of the Review Board. For whatever reason, despite the coming into force of the Act in 2018, such a Review Board has not been constituted as yet by our State despite Writ Petitions having been filed before our High Court, which are pending consideration.

15. It may not be out of place to point out at this stage that Section 33 of the said Act provides the power to the Central Government to establish an authority to be known as the ‘Central Mental Health Authority’. Section 34 under Chapter VII of the Mental Health Care Act 2017 stipulates the composition of the Central Mental Health Authority. Sub-Clause (m) of Section 34  stipulates that two persons representing persons who have or have had mental illness, to be nominated by the Central Government-Members. Section 46 under Chapter VIII of the Mental Health Care Act 2017 stipulates the composition of the State Mental Health Authority whereby under sub-clause (1) of Section 46 stipulates that two persons representing persons who have or have had mental illness to be  nominated by the State Government-Member. A reading of the above Sections 34 and 46 indicate that both the Central Mental Health Authority and the State Mental Health Authority could have two persons representing persons who have or have had mental illness to be nominated by the appropriate Government. If this provision is taken into consideration, then the question of having two members who shall be persons with mental illness or care-givers as stipulated in Section 74 sub-clause(d) would be questionable. There is no reasonable rationale as to why Section 74 alone should include two persons with mental illness and not a representative. This is a question that the Constitutional Courts will and ought to consider in the event of the same being challenged.

16. Though under Section 14, in Chapter IV of the Mental Health Care Act, there is a provision for appointment and revocation of a nominated representative and the procedure for appointment of such nominated representatives and its removal and the functions of the nominated representative, the Mental Health Care Act 2017 is conspicuously silent regarding the appointment of a guardian for the mentally ill person, especially in order to execute any document in respect of the assets belonging to the mentallyill person. For this purpose, the reliance can now only be placed under the “Rights of Persons with Disabilities Act 2016” which has repealed the earlier Act “The Persons with Disabilities (Equal Opportunity, Protection of Rights and Full Participation) Act 1995 (1 of 1996). Under this “Rights of Persons with Disabilities Act 2016”, Section 2(s) defines person with disability to mean a person with long term physical, mental, intellectual or sensory impairment which, in interaction with barriers, hinders his full and effective participation in society equally with others. Earlier in “The Persons with Disabilities (Equal Opportunity, Protection of Rights and Full Participation) Act 1995 (1 of 1996), mental illness and mental retardation were defined under Section 2(i) as ‘disability’.  Under the new Act - “The Rights of Persons with Disabilities Act 2016”  since mental illness per sehas not been included, Section 2(s) “Persons with Disability”  is now being interpreted to include mental illness also.  As a result, for appointment of a guardian for a mentally ill person, Section 14 under the Rights of Persons with Disabilities Act 2016 provides for a provision for appointment of a guardian by the District Court or any designated authority as notified by the State Government. Therefore for the purpose of appointment of a guardian for a mentally ill person, one has to take recourse to the District Court under the Rights of Persons with Disabilities Act 2016 and not under the Mental Health Care Act 2017. It is also beneficial to note at this stage that while considering the application for appointment of guardian under this Act, the Section also refers to “ in Consultation with such person, in such manner as may be prescribed by the State Government”. Now , if an application is preferred before the District Court under Section 14 with regard to a mentally ill person for the purpose of providing adequate and appropriate support to take legally binding decisions on his behalf, whether the word “Consultation” would mean “concurrence” or merely “dissemination of Information” will also have to be considered and interpreted by the Courts of Law.   However, a further  incongruity which has now crept in is that the State Government has recently  under Section 14(3) of the said Act notified the District Collector as the Appellate Authority for preferring an Appeal under Section 14(3) as against an order by the District Court under Section 14(1). This is not constitutionally valid as the District Collector cannot be an Appellate Authority over a District Judge and therefore provisions will have to be made to either denotify  the District Collector as the Appellate Authority or notify some other authority  under Section 14(1) instead of the District Court. This has ultimately resulted in an imbroglio which ought to be considered and remedied.

17. As far as the persons with mental retardation is concerned, the same now comes under the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act 1999 under Section 2(g) of the said Act.  Section 14 of the said Act also provides for appointment of guardian for persons with disability including mental retardation.  The application for appointment of the mentally retarded person under the said Act will have to be filed under Section 14 of the said Act before the District Collector (District Magistrate or a District Commissioner) of the District who is the head of a Local Level Committee under the said Act. It is thus clear that appointment of guardians for a mentally retarded person under the  National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act 1999 can be entertained only by the District Collector as the Chairman of the Local Level Committee. It has been noticed that many such applications for appointment of guardian under the said Act are pending consideration before the District Collectors  in various districts and Writ Petitions are being filed to direct the authorities to dispose such applications expeditiously.

18. A pertinent question had also been considered by the Division Bench of our High Court as to whether there is any Legislation governing a person in a “permanent vegetative state” or in other words a “Comatose state”. In the decision Shobha Gopalakrishnan v. State of Kerala reported in 2019 (1) KLT 801, the Division Bench of our High Court has held that no appointment of any Guardian to such person lying in a “Comatose state” is seen envisaged under the Mental Health Care Act 2017 and no enabling provision in this regard is brought to the notice of this Court by any of the parties and therefore proceeded to issue guidelines ,in such a judicial vacuum, under Article 226 of the Constitution of India.

19. The ideal solution for any possible misinterpretations of the provisions of all the three Acts is to codify all the three enactments and enact one new  comprehensive legislation covering all sorts of illnesses under one Umbrella with clear provisions for appointment of guardian and such other authorities in one enactment. For this, an in-depth study of the various laws including the three enactments will have to be undertaken and effort should be made to bring in a new legislation, for which there should be a political Will and a commitment to the less fortunate brethren of our society. As Amicus Curiae, in the mental health matters in our High Court from 2005 onwards it has been my humble duty and endeavour to ensure that all mentally ill persons , are given due care, protection, treatment and rehabilitation as far as possible, within my limited means. The designated Judges over the past 15 years have also been extremely pro-active in ensuring that proper treatment, care, protection and rehabilitation is afforded to such persons expeditiously and effectively without laying too much emphasis on procedural Law.  I have attempted to place on record only some of the aspects in the above three enactments which may  possibly  be of some help to my colleagues in our profession.

Independence of Judiciary in India and Proposal of Prof.K.T.Shah
In the Constituent Assembly

(By Devi A.R., Section Officer, Law Department, Govt.Secretariat, Thiruvananthapuram)

The term independent indicates the existence of particular fact or a system by itself, without the support of any external factors and uninfluenced by those factors at any instance. When it comes to the independence of judiciary it can be defined as a judicial system which is not influenced by other branches of the Government. The concept of independence of judiciary may be well located in the Montesquieu’s theory of separation of power and it is also deep routed to the principles of rule of law.

In Indian democratic system independence of judiciary is profoundly imparted and the system is supposed to keep this judicial independence alive even in any worse political situation. Independence of judiciary is considered as the basic structure of the constitution and it is so declared by the Apex Court through its judicial pronouncements.

Coming straight off to the recent controversy over the nomination of the former Chief Justice of Supreme Court to Rajya Sabha by the Honb’le President of India, this nomination was widely discussed in every organ of the State and it remained in discussions for a long  time in the fourth estate of the State. Legally speaking such a nomination is not against the exsisting constitutional provision or any other law for the time being in force even then the principles of separation of powers got trembled by such nomination. The situation were more or less similar when the retired Chief Justice was appointed as the executive head of the State. Regarding the post retirement appoint-ment of Supreme Court Judge the basic law governing is Art.124(7). The provision envisages that “No person who has held office as a Judge of the Supreme Court shall plead or act in any court or before any authority within the territory of India”.

This legal provision neither expressly or impliedly avert the nomination of a retired Chief Justices of the Supreme Court to the Rajya Sabha or being appointed as the executive head of a State. Application of various rules of interpretation also cannot provide a different conclusion on it. In this circumstances the discussion warrants the appraising of the opinion of the constitution framers regarding the constitutional provision concerned. Art.124(7) of the Constitution of India corresponds to Article 103(7) of the draft constitution,1948.On 24th May 1948 the constituent assembly debated over Article 103.Regarding clause (7) various amendments were proposed in the constuient assembly. Some members including K.T.Shah proposed that that judges should be debarred from holding any executive office  after retirement. But many others contended that it will be unfair to limit the activities of  Judges post-retirement. The Chairman of the Drafting Committee agreed to the second view. He was of the opinion that only a retired judge would possess the experience and capability necessary to perform public service. Consequently, the amendments proposed by K.T.Shahand others who supported him were negatived.

On reading the constituent assembly Debates on the post retirement appointment of the Judges of the highest court, it is clear that some of the constitution framers had a strong view that the retired Judges should be debarred from the holding any executive office.Amendment No.1843 proposed by K.T.Shah*in the constituent assembly is an attention-grabbing one. He proposed that:  “That after clause (2) of Article 103, the following new clause be added:-  ‘(2A) Any person who has once been appointed as Judge of any High Court or Supreme Court shall be debarred from any executive office under the Government of India or under that of any unit, or, unless he has resigned in writing from his office as Judge, from being elected to a seat in either House of Parliament, or in any State Legislature.”  

He substantiated his amendment in the following words:

“This follows the general principle I have been trying to lay before the Houses viz., or keeping the Judiciary completely out of any temptation, and contact with the executive or the legislative side. Whether during his tenure of office, or in the ordinary course of judgeship or even on retirement, I would suggest that there should be a constitutional prohibition against his employment in any executive office, so that no temptation should be available to a judge for greater emoluments, or greater prestige which would in any way affect his independence as a judge. I further suggest also that a judge should be free to resign his office and then it would be open to him to have all the rights of an ordinary citizen, including contesting a seat in the legislature, but certainly not during his tenure of office.  I consider that these are so obvious that no further words need be added to support it. I would only say once more that in the past we had bitter experience of high-placed Government servants who had risen fairly high in the scale of service, used to secure on retirement influential positions in Britain or directorships in concerns operating in this country. On account of the official position which they had held here in the past, they were able to exercise an amount of undue influence. Such practices the Congress and other parties had frequent occasion to object to. As such I suggest that that practice should now be definitely avoided….”

On analysing the amendment proposed by K.T.Shah it seems to be highly recommendable for its insertion in our present Constitution. We already have the precedent of 42nd amendment of the Constitution to the extent that it inserted the term ‘secularism’ in the preamble. The inclusion of the secularist ideology in the Constitution was a negatived proposal  in the constituent assembly. Now, the Parliament may adopt the suggestion put forwarded by Prof.K.T.Shah in the constituent assembly, via amendment No.1843, with or without modification by exercising the legislative wisdom.But there is no doubt about the fact that such an inclusion will definitely strengthen the principles separation of powers, rule of law and ultimately the Indian democracy.

*https://www.constitutionofindia.net/constitution_assembly_debates volume/8/1949-05- 24#8.90.62

The Law of Environmental Clearance -- Yesterday, Today And Tomorrow

(By P.B.Sahasranaman, Advocate, High Court of Kerala)

Environment Impact Assessment (EIA) is an early warning system. Before the commencement of a development activity an assessment of the adverse effect of the
project on the environment has been made mandatory. Till 1994, the EIA in India was purely an administrative decision. It was in 1994 the first notification for EIA was mandated for Environmental Clearance (EC) for huge projects scheduled to it. The said notification was replaced in 2006¹ prescribing certain procedure in the process for EIA. This notification was amended several times based on various directions from the Courts. Supreme Court
in 2012²  in public interest issued a general direction on mining making it applicable to all minor mineral quarries which have less than five hectares. The ambiguity in the classification of the “Building and Construction project” and “ township and area development project” has been pointed out by the Supreme Court while considering the project of Okhla Bird Sanctuary in 2011³. Several High Courts, as well as the National Green Tribunal,(NGT), has imposed more conditions for the protection of the environment.Based on the same amendments were carried out by the Ministry of Environment, Forest and Climate Change (MoEF&CC) from time to time.

The present proposal now made by the Ministry of Environment, Forest and Climate Change⁴ by March 2020 notification are to streamline the process of issuance of EC, conducting of EIA, decentralisation and implementation of the directions issued by the Courts. The proposal is based on the principle of sustainable development by which the environment is protected without affecting the environment.It refers to two judgments. The Jharkhand High Court⁵ has held that the consideration for the proposal for Environment Clearance must be examined on its merits, independent of any proposed action for alleged violation of the environmental laws. The NGT⁶ also held that MoEF shall strengthen the monitoring mechanism for compliance of conditions of Prior Environment Clearance.

Before the commencement of any development of any land,the EC has been made mandatory for certain projects. If a project is halted while implementing there will be an economic loss. For huge projects, a draft EIA has to be prepared and the public is
consulted to know the veracity of the project. Till now several project proponents got the EIA prepared by some agency who used to give tailor-made reports. Certain reports are cut and paste of similar projects. To stop such practice, the 2020 notification mandates accreditation with the National Accreditation Board for Education and Training of Quality Council of India or any other agency, as may be notified by the Ministry from time to time for such consultant organisations. Such institutions are accountable for the preparation of EIA based on real facts.

The categorisation of projects as A, B1 and B2 is done based on the magnitude of the project on the ecology. Public consultation is undertaken for all “Category A and B1” projects. The EIA will not be complete without any public participation. The locally affected persons and other stakeholders who are nearby are consulted. The environmental
aspects highlighted are again consulted with the experts. Finally, the view of the project proponent is ascertained. Previously the project proponent used to manage such public hearing with his men to avoid a negative view of the project. The 2020 notification
mandates the making available the soft copy of the project, EIA and other reports in web sites. The entire hearing to be video graphed to make it more transparent.

The application for environmental clearance for the Athirappilly Hydro Electric Project was under consideration before the MoEF.The public hearing was mandated for such projects from 1997. Kerala High Court⁷ has declared that public hearing is required for the said project. The Electricity Board contended otherwise. The public hearing was
conducted on 06.02.2002. Since the majority of the people have objected to the project the hearing panel unanimously found that the Rapid EIA prepared was incomplete and recommended for comprehensive and participatory EIA. Thereafter the report was
prepared and a hearing was conducted. But this time the Report was not published and therefore the public hearing was found to be not meaningful, the Kerala High Court declared⁸.

The 2006 notification schedule contains only eight types of projects whereas the 2020 notification schedules forty-three projects. It includes even the Municipal waste management, ship breaking, elevated roads, flyovers, etc. The old notification does not define the terms used in it. The result is that various interpretations are given by different Courts. To avoid that the new notification defines sixty terms making more transparency
in the law and reducing the litigations.

Mining is an activity which degrades the environment, which comes within the ambit
of EIA notification. No EIA is required if the mining area is less than 5 ha. But permissions can be granted on the basis of District Survey Report of such minor minerals. At present most of the District Survey Reports prepared will not show the crucial details of the
mineral wealth available. The 2020 proposal gives a definite mandatory requirement for such Reports which must show the mineral wealth available for mining.

The new notifications exempt small scale units engaged in certain works. Extraction of ordinary clay or sand by manual mining, by the Kumhars (Potter) to prepare earthen pots, lamp, toys, etc., as per their customs are not in the same footing as other mining operations. Mining without using any machinery is exempted. Removal of sand deposits on the agricultural field after a flood by farmers, customary extraction of sand and ordinary earth from sources situated in Gram Panchayat for personal use or community work in the village, community works like desilting of village ponds or tanks, construction of village roads, ponds, bunds undertaken in Mahatma Gandhi National Rural Employment and Guarantee Schemes, other Government-sponsored schemes, and community efforts, Community works like desilting of village ponds or tanks, construction of village roads, ponds, bunds undertaken in Mahatma Gandhi National Rural Employment and Guarantee Schemes, other Government-sponsored schemes, and community efforts, Manual extraction of Lime shells (dead shell), shrines, Digging of the foundation for buildings, etc., within the intertidal zone by the traditional community, etc., are some of the projects exempted from the obtaining of prior EC or permissions. No EIA or public consultation is required for such projects.

The present law requires that building and construction projects above 20,000 sq.mts. require Environmental Clearance. This was amended⁹ on 15.11.2018 increasing the limit to 50,000 sq.mts. which was under challenge in Delhi High Court. The new notification retains the 20,000 sq.mts. limit and the EC can be obtained from State Authority.

The new proposed notification also put a duty of regulation of the project on the authority which grants clearance. The regulatory authority based on the information available or environmental issues brought to the notice after the issuance of EC may impose additional conditions as it deems fit. Such an inherent power on the authority will protect the environmental hazard which has arisen subsequently, like natural disasters.

In so far as Kerala is concerned EC was made mandatory for Government projects by a notification issued on 13.01.1978¹⁰. All development schemes costing more than ten lakhs should be referred to the Committee on Environmental Planning and Co-ordination for review and assessment of environmental implications to integrate environmental concerns. Their clearance is mandatory for such a project. But that notification is ignored even by the State. But Supreme Court by its judgment rendered on 2013¹¹ directed to demolish the rainbow model restaurant constructed on the banks of Periyar River in Aluva. Thereafter the Kerala Government has withdrawn the said 1978 order for the reason that it stands against development!

Litigations were launched in Supreme Court on EIA on projects like Sardar Sarovar Dam-¹²,Konkan Railway-¹³, Koodankulam Thermal project-¹⁴,etc. After the dismissal of the cases, the projects were launched and it has proven that it benefitted the general public. Projects like Silent valley and AthirappillyHydro Electric project were shelved by the peoples’ movement for the reason that it will harm the ecology. Making more clarity on the law constructions is very much essential so that demolitions like the one happened in Maradu¹⁵, where the stakeholders do not know that it is violative.

The present proposal is legislation for tomorrows’ generation based on the principle of sustainable development. Investment harming environment is not possible. There is no conflict with the State legislations like Building Rules which is intended to protect the environment. If the State Government feels that the conditions imposed by the Central legislation are insufficient, it is up to the State to impose more restrictions. But the minimum standards prescribed in the EIA cannot be diluted. The regulatory authority is empowered to impose more conditions if the conditions already imposed is not sufficient.It strengthens the monitoring mechanism.The notification only supports the environmentally friendly projects and not projects which harms the ecology.

It may be noted that Government of India has inherent powers under Rule 5(4) of the Environment (Protection) Rules, 1986 to dispense with the requirements of notice for making changes in the conditions even without a draft notification. But the Government of India would like to know the public view on the same and issued the draft notification.

Foot note:

1.   S.O.1533 (E) dated the 14th September, 2006.

2.   Deepak Kumar v. State of Haryana (2012 (1) KLT Suppl.60 (SC) = (2012) 4 SCC 629).

3.   IN RE.v. Construction of Park At Noida Near Okhla Bird Sanctuary Anand Arya & Others

      (2011) 1 SCC 744), 2.

4.   S.O.1199(E), dated 23.03.2020. Gazette of India, 1071, dated 23.03.2020.

5.   Hindustan Copper Limited v. Union of India. JHC , LAWS (JHAR) - 2014-11-33.

6.   Sandeep Mittal v. MoEF&CC. OA No.837/2018.

7.   Chalakudy Puzha Samrakshna Samithi v. State. O.P.Nos.1774 of 2001, dated 17.10.2001.

8.  Athirappilly Grama Panchayat v. Union of India. W.P.(C) No.11254 of 2005, dated 23.03.2006.

9.  Notification 15th November 2018 - S.O. 5736(E).

10.S.O.944 (E) , dated 15.12.1990.

11.Association for Envioronment Protection v. State of Kerala (2013 (3) KLT 201 (SC).

12.Narmada Bachao Andolan v. UOI. (2001 (1) KLT OnLine 1014 (SC).

13.Goa Foundation v. Konkan Railway Corporation (1992 (2) KLT OnLine 1024 (Bom.).

14.G.Sundarrajan v. Union of India reported in (2013 (2) KLT SN 119 (C.No.152) SC).

15.Kerala Coastal Zone Management Authority v. Maradu Municipality (2019 (2) KLT 835 (SC)).