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Indian Case Summary

Perumatty Grama Panchayat vs State Of Kerala on 16 December, 2003 – Case Summary

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In the case of Perumatty Grama Panchayat vs State Of Kerala on 16 December, 2003, the Kerala High Court was tasked with determining whether a Grama Panchayat (a local self-government institution at the village or small town level in India) could cancel the license of a factory manufacturing non-alcoholic beverages on the grounds of excessive exploitation of groundwater.

The petitioner in this case was the Perumatty Grama Panchayat, and the 2nd respondent was a company running a factory at Moolathara in Perumatty Grama Panchayat. The factory, which primarily produced soft drinks and bottled drinking water, was established after obtaining permission from the Panchayat and began commercial production in March 2000. The main raw material used in the manufacture of these beverages was water, a substantial portion of which was sourced from groundwater through bore-wells.

The local community raised objections against the company’s exploitation of groundwater. As a result, the Panchayat passed a resolution on 7 April 2003, deciding not to renew the factory’s license. The Panchayat argued that the company’s excessive exploitation of groundwater was causing acute drinking water scarcity in Perumatty Panchayat and nearby places. The company was issued a notice and asked to show cause why its license should not be cancelled. In response, the company argued that it was operating with all necessary statutory clearances and that the allegations of groundwater depletion and environmental problems were unfounded.

Despite the company’s arguments, the Panchayat decided to cancel the company’s license, citing the company’s excessive exploitation of water and the resultant deterioration of the quality of the limited water available, causing health/environmental problems and acute drinking water scarcity. The company challenged this decision in court, which led to the case being brought before the Kerala High Court.

The Government, acting as the appellate authority, ordered an investigation into the allegations against the company and directed the Panchayat to make a decision based on the investigation’s findings. The Panchayat, aggrieved by this order, filed a writ petition. The Panchayat argued that it was the ultimate authority to decide on matters covered by the impugned order and that the Government could not interfere with its decision.

The court, after hearing arguments from all parties, noted that the case’s central issue was whether the Panchayat’s decision to cancel the factory’s license on the grounds of excessive extraction of groundwater was legal and whether the Government’s interference in this decision was sustainable. The court also noted that the case had become a matter of great public concern, with articles appearing in leading newspapers and journals both justifying and opposing the Panchayat’s stand.

The court’s judgment in this case is not provided in the content extracted from the webpage. However, the case highlights the tension between industrial development and environmental conservation, particularly in the context of water resources management. It also underscores the role of local self-government institutions in regulating industries and protecting local resources.