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2023 DIGILAW 288 (KER)

Stephan Mathew, S/o. M. M. Mathew v. Secretary, Pothanicad Gramapanchayath, Pothanicad

2023-03-20

C.JAYACHANDRAN, K.VINOD CHANDRAN

body2023
JUDGMENT : (C. Jayachandran, J.) 1. Three writ petitions were disposed of by a learned Single Judge as per common judgment dated 07.04.2022 and we have three appeals before us, numbered as above. One Stephan Mathew is the appellant in all the three appeals. The writ petition first in point of time is W.P(C).no.13342/2021 preferred by the said Stephan Mathew and three others, challenging Ext.P5 'Acknowledgment Certificates' issued to two entities by name 'TVM Boards' and 'PB Boards' (represented by respondents 9 to 13) under the Kerala Micro, Small and Medium Enterprises Facilitation Act, 2019 ['the M.S.M.E. Act', for short]. The writ petitioners sought for a mandamus revoking Ext.P5 Acknowledgment Certificates, simultaneous with issuance of a similar writ directing respondents 1 to authorities to shut down the proposed plywood units of the said two entities. Writ petitions 1975/2022 and 2039/2022 were preferred by M/s. P B Boards and M/s. TVM Boards respectively, seeking police protection to the respective petitioners and their workers and also for developing the property and construction of building therein. In both the writ petitions, the appellant herein was the third respondent. By the impugned common judgment, the first writ petition was dismissed and the two writ petitions seeking police protection were allowed. 2. We may now briefly refer to the contentions in the writ petitions. In the first writ petition preferred by the appellant herein, the contention raised was that preliminary works to set up plywood manufacturing units in the name and style M/s. TVM Boards and M/s. P B Boards are done in violation of all laws and the respondent authorities are not taking any action to prevent the same. The specific contention raised was the possibility of pollution, as is created by other plywood units run by respondents 9 to 13 in the writ petition. It was alleged that land development permit from the Grama Panchayath concerned was not obtained. Violation of the Kerala Panchayath Building Rules and Kerala Land Utilization Order 1967 was alleged. It was contended that the disputed land is not situated in an industrial area. A mass representation was preferred vide Ext.P2, but of no avail. After considerable delay, Ext.P3 resolution was taken by the Grama Panchayath against the alleged illegal activities of the respondents 9 to 13 and directing first respondent/Secretary to initiate urgent steps to stop the illegal works in the disputed land. A mass representation was preferred vide Ext.P2, but of no avail. After considerable delay, Ext.P3 resolution was taken by the Grama Panchayath against the alleged illegal activities of the respondents 9 to 13 and directing first respondent/Secretary to initiate urgent steps to stop the illegal works in the disputed land. On a mass representation preferred, the 8th respondent District Collector issued a direction to the first respondent/Secretary to initiate necessary action. But no action ensued. Respondents 9 to 13 managed to obtain Ext.P5 Acknowledgment Certificates from the 6th respondent (G.M, District Industries Centre) for M/s. P B Boards and M/s. TVM Boards, so as to legitimize their illegal activities. Consequently, the 4th respondent officer of the Pollution Control Board issued Ext.P6 'consent to establish'. The area is a farmers' village and not an industrial one and Ext.P6 consent was issued unmindful of the said fact. On such premise, the reliefs afore-referred were sought for. 3. The 9th respondent filed counter affidavit on behalf of respondents 9 to 13, contending that the writ petition is not maintainable in view of the alternate remedy contemplated under S.12 of the M.S.M.E. Act. The Certificates of Acknowledgment received under the M.S.M.E. Act for the two entities were produced vide Exts.R9(c) and R9(f) respectively. Similarly, the 'consent to establish' issued by the Pollution Control Board were produced at Exts.R9(b) and R9(e) respectively. On the basis of the acknowledgment, it was contended that there exists a deemed sanction to set and run the enterprise for three years, apart from a further period of six months, within which, the necessary licenses need to be procured. S.10(2) of the M.S.M.E. Act was pressed into service to point out the overriding effect of the said Act over the Kerala Panchayath Raj Act 1994, the Kerala Municipality Act 1994 etc. Ext.R9(g) G.O. was also relied upon to contend that no quarrying permit is required for extraction of ordinary earth for construction of buildings as per the M.S.M.E. Act. 4. In Writ Petition Nos.1975/2022 and 2039/2022 preferred by M/s. TVM Boards and M/s. P B Boards respectively seeking police protection, the contentions are more or less similar, where the entitlement to establish the units were premised on the 'consent to establish' issued by the Pollution Control Board, as also, the 'Acknowledgment Certificates' issued under the M.S.M.E. Act. 5. 4. In Writ Petition Nos.1975/2022 and 2039/2022 preferred by M/s. TVM Boards and M/s. P B Boards respectively seeking police protection, the contentions are more or less similar, where the entitlement to establish the units were premised on the 'consent to establish' issued by the Pollution Control Board, as also, the 'Acknowledgment Certificates' issued under the M.S.M.E. Act. 5. The learned Single Judge, while choosing to dismiss WP(C).No.13342/21 preferred by the appellant herein, found that no material was produced before the Court to establish that the Acknowledgment Certificates were obtained fraudulently. Another contention that the partnership firms, M/s.TVM Boards and M/s.PB Boards, were not duly registered under the Act was also repelled for the same reason of having not placed any material in support thereof. In allowing Writ Petition Nos. 1975 and 2039 of 2022, the Acknowledgment Certificates issued under the M.S.M.E. Act, as also, the overriding effect of the Act under S.10 were taken into account. The 'consent to establish' issued by the Pollution Control Board was also taken stock of. On such premise, it was found that the petitioners in the said two writ petitions were entitled to carry out the permitted activities under Ext.P6 consent to establish and Ext.P5 Acknowledgment Certificates and accordingly, granted police protection for the said purpose, as also, against any attack or obstruction from the respondents in the said two writ petitions. 6. Heard Sri.Sonnymon K. Mathew, learned counsel for the appellant in all three cases, Smt.Ranjanie R for the contesting respondents, Sri.T.K.Vipindas for respondents 3, 5, 6, 7 and 8 in Writ Appeal no.1628/2022, Sri.T.Naveen for the 4th respondent/Pollution Control Board and Sri.Babu Joseph Kuruvathazha on behalf of the first respondent/Secretary of the Grama Panchayath. Perused the records. 7. Learned counsel for the appellant submitted that, under the guise of the Acknowledgment Certificates issued under the M.S.M.E. Act, the party respondents are conducting quarrying operations in the disputed land. The Acknowledgment Certificates would not entitle the respondents to indulge in quarrying operations. Nor would the requirements under the Minor Mineral Concession Rules get dispensed with for the purpose of removing earth. That apart, M.S.M.E. Act contemplates a meeting of the nodal agency before issuance of an Acknowledgment Certificate, which was not done. The 8th respondent/District Collector is completely unaware of the issuance of the Acknowledgment Certificates. Nor would the requirements under the Minor Mineral Concession Rules get dispensed with for the purpose of removing earth. That apart, M.S.M.E. Act contemplates a meeting of the nodal agency before issuance of an Acknowledgment Certificate, which was not done. The 8th respondent/District Collector is completely unaware of the issuance of the Acknowledgment Certificates. Finally, it was contended that the District Board constituted under the Kerala Industrial Single Window Clearance Boards and Industrial Township Area Development Act, 1999 ('Act 5 of 2000', for short) cannot issue an Acknowledgment Certificate to start a micro, small or medium enterprise in any area, other than an industrial area. 8. Per contra, learned counsel for the party respondents invited our attention to the various provisions of the M.S.M.E. Act. Based on Ss.3, 5, 6 r/w 2(c) and S.10 of the M.S.M.E. Act, it was submitted that the violation of the State laws alleged is without any basis. Counsel emphasized on the effect of Acknowledgment Certificate as per S.6 of the Act to contend that all licenses and permits as defined in S.2(c) of the Act are required to be produced only within a period of six months, commencing from the expiry of three years period stipulated in S.6(1) of the M.S.M.E. Act. Nevertheless, the party respondents had obtained necessary building permits from the Panchayath, which are produced as Exts.R1(c) and R1(d) respectively by the first respondent/Secretary of the Grama Panchyath concerned, pursuant to our order dated 14.03.2023. 9. On an appreciation of the rival contentions and arguments addressed by the learned counsel, we find no illegality or infirmity in the impugned judgment of the learned Single Judge. Before we address the issue, we will briefly scan through the salient features of the M.S.M.E Act. S.3 prescribes the District Board under Act 5 of 2000 as the nodal agency. Upon receipt of a self certification by the entrepreneur, except in the case of an enterprise included in the 'Red Category', S.5 mandates the nodal agency to issue forthwith an Acknowledgment Certificate. As per S.6 of the M.S.M.E Act, an Acknowledgment Certificate issued under S.5 shall have effect, as if it is an 'approval' as defined in S.2(c) of the Act for a period of three years. The various approvals are required to be obtained only upon the expiry of the said period and within a grace period of six more months therefrom. The various approvals are required to be obtained only upon the expiry of the said period and within a grace period of six more months therefrom. Even an inspection by a competent authority is barred under S.6(2) during the said period of three years. We also note that S.10 provides overriding effect to the M.S.M.E Act, notwithstanding anything inconsistent contained in any other law for the time being in force. 10. The issue involved in W.P(C).no.13342/2021 (W.A.no.1628/2022) is whether the Acknowledgment Certificates issued in terms of the M.S.M.E. Act is liable to be revoked; whereas the issue involved in W.P(C).no.1975 and 2039 of 2022 is the entitlement of the petitioner/entrepreneur for police protection to establish and run the enterprise, which relief is sought for in the context of demonstrations and obstructions caused at the instance of the appellant and others. In so far as the relief in W.P(C).no.13342/2021 is concerned, no material is placed before us to establish that the Acknowledgment Certificates issued to M/s.TVM Boards and M/s.PB Boards are vitiated in any manner. Apart from an allegation in the Writ Petition that there was an unholy nexus between the officials and managing partners of the said firms, precious little is seen done by the appellant to substantiate the same. In the absence of any relevant material which would establish at least prima facie that the Acknowledgment Certificates issued in terms of the M.S.M.E Act is illegal/vitiated, we may have to proceed presuming that the same is valid. 11. Once it is taken that the 'Acknowledgment Certificates' under the M.S.M.E. Act are valid, then the whole issue will revolve around S.6 of the M.S.M.E Act, which deals with effect of Acknowledgment Certificates. This issue is relevant in the context of the writ petitions preferred by the entrepreneurs, as also, the appellant. We recall that the allegation raised by the appellant is that the entrepreneurs are attempting to establish plywood factory without necessary permits and licenses as required by law. S.6 of the M.S.M.E. Act specifically stipulates that an Acknowledgment Certificate issued under S.5 shall, for all purposes, have effect, as if it is an approval as defined in Clause 2(c), for a period of three years from the date of issuance of the Certificate. S.6 of the M.S.M.E. Act specifically stipulates that an Acknowledgment Certificate issued under S.5 shall, for all purposes, have effect, as if it is an approval as defined in Clause 2(c), for a period of three years from the date of issuance of the Certificate. It further stipulates that the approvals referred to in S.2(c) of the Act are required to be obtained only within a period of six months from the date of expiry of the above referred three years period. The Proviso to S.6 prescribes that an Acknowledgment Certificate shall not entitle a person to use the land contrary to the provisions of the Kerala Conservation of Paddy Land and Wetland Act, 2008, as also, in deviation to the master plan notified under the Kerala Town and Country Planning Act, 2016. We, however, notice that both the Acts have no application to the area where the enterprise is sought to be established, since it is admitted that it is within the limits of a Panchayath. There is no contention that the land in question is one to which Kerala Conservation of Paddy Land and Wetland Act applies. Finally, subsection (2) to S.6 even forbids a competent authority from undertaking any inspection in the enterprise during the period of three years afore-referred for the purpose of, or in connection with, any approval as defined in S.2(c). 12. We will now refer to the definition of 'approval' under S.2(c), which is extracted herebelow: “'approval' means licenses, permissions, approvals, clearances, registration, consents, no objection certificate and the like, required under any State law in connection with the establishment or operation of micro small and medium enterprise in the State;” It is clear from the above extracted definition that all requirements to establish and operate a micro, small or medium enterprise in terms of the State laws are dispensed with by virtue of operation of S.6(1) of the M.S.M.E Act for a period of three years. It could thus be seen that the very edifice of appellant's contention that the enterprises are sought to be established/run without obtaining necessary permit/licenses under various laws goes, as having no legs in law. Nevertheless, we notice that the entrepreneur had obtained building permits from the Grama Panchayath concerned, as also, the 'consent to establish' the enterprise from the Pollution Control Board. Nevertheless, we notice that the entrepreneur had obtained building permits from the Grama Panchayath concerned, as also, the 'consent to establish' the enterprise from the Pollution Control Board. The appellant has no case that a license/permit required in terms of any Central Act has not been obtained by the entrepreneur. 13. We also find that there is no requirement of the unit being established in an industrial area for issuance of an Acknowledgment Certificate under the M.S.M.E. Act. Reference to Act 5 of 2000 in the M.S.M.E. Act is only for the purpose of nominating the nodal agency, by which course, the provisions of Act 5 of 2000 will not get engrafted to the M.S.M.E. Act automatically. 14. The allegation that respondents 9 to 13 are conducting quarrying activities in the property is baseless. Pursuant to our directions, the Revenue Divisional Officer, Muvattupuzha filed an affidavit before this Court, where, he had stated in paragraph no.4 that no quarrying works are being carried out in the said properties and that, only leveling and construction works were carried out. Again, we find no merit in the contention that the District Collector, who is to preside the District Board constituted as the nodal agency, is not aware of the issuance of Acknowledgment Certificates. Ext.R9(c) [Ext.P3 in W.P(C).No.1975/22] specifically refers to the fact that the Acknowledgment Certificate is issued under Sub-section 3 of S.5 of the M.S.M.E. Act and the same is issued by the General Manager, District Industries Center, who is very much a member of the District Board under S.4 of the Kerala Industrial Single Window Clearance Boards Act 1999, which Board is constituted as the Nodal agency under S.3 of the M.S.M.E. Act. The said contention is also therefore repelled. 15. The remaining question is the entitlement of the entrepreneur to seek police protection to establish/run an enterprise. Here, we profitably refer to the purpose of the M.S.M.E. Act, 2009, that is to say, 'for exemptions from certain provisions and inspections required for the establishment and operation of micro small and medium enterprises in the State and matters connected therewith'. 15. The remaining question is the entitlement of the entrepreneur to seek police protection to establish/run an enterprise. Here, we profitably refer to the purpose of the M.S.M.E. Act, 2009, that is to say, 'for exemptions from certain provisions and inspections required for the establishment and operation of micro small and medium enterprises in the State and matters connected therewith'. As the name would indicate, the M.S.M.E Act underscores facilitation of the micro, small and medium enterprises, unfettered by the nuances and procedural formalities of licenses/permit for a period of three years, thereby enabling the entrepreneur to commence the business straight away, relegating the requirement to obtain the licenses/permits within the time stipulated in S.2(c). Hazardous industries under the 'Red Category' are exempted from the purview of the Act. How far the Act promotes public interest, especially in the context of dispensing with licenses required to ensure the public safety and health, is not a matter which surfaces for our conservation within the scope of the present proceedings. All what we need to observe is that since the Act intends to facilitate establishment and operation of a micro, small or medium enterprise, as that of the entrepreneur in this case; and the moment he satisfies the basic requirement to establish/operate such an enterprise, namely a valid Acknowledgment Certificate, we cannot refuse the relief of police protection, especially when obstructions are caused against the entrepreneur by ways and means, otherwise than in accordance with law. 16. We also notice that the appellant had approached this Court without exhausting the alternative/ statutory remedy contemplated under S.12 of the M.S.M.E. Act. S.12(2) provides for an appeal by any person aggrieved by the decision of the nodal agency to approach the appellate authority within 30 days from such decision. This remedy is not seen exhausted. For that reason also, Writ Petition No.13342/2021 is liable to fail. 17. We find no reason to interfere with the judgment impugned, with the result, all the appeals would stand dismissed. 18. We however deem it appropriate to leave the statutory remedy to the appellant, dehors the fact that he had not chosen to prefer an appeal within 30 days from the decision of the nodal agency. We condone the delay and permit the appellant to approach the statutory authority. 18. We however deem it appropriate to leave the statutory remedy to the appellant, dehors the fact that he had not chosen to prefer an appeal within 30 days from the decision of the nodal agency. We condone the delay and permit the appellant to approach the statutory authority. In case, the appellant approaches the statutory authority within the period of 30 days from the date of disposal of these writ appeals, the same shall be heard and disposed of by the statutory authority. In as much as the counsel for the respondent/Panchayath had raised a contention that the appellate remedy is available only to the entrepreneur, since an opportunity of being heard is contemplated only to the aggrieved person and the nodal agency in sub section (3) to S.12, we leave open the question of maintainability, if any raised, also to be decided by the appellate authority. The Writ Appeals are disposed of accordingly.