Ventures Cannot Be Shut Because Of Protests Without Basis: Kerala High Court Directs Panchayat To Allow Entrepreneurs To Setup Hot Mix Plant

The Bench in the judgment specifically called the facts in the petition, ‘a sad story of two entrepreneurs who invested crores of rupees’ noting that that when an industrial unit satisfies every statutory command and secures all necessary licenses, it cannot be forced to shut down solely based on public protests that lack scientific or environmental backing. It noted that tolerating such extra-legal interference would deter investment, wither employment opportunities, and teach law-abiding enterprises the "wrong lesson" that legal compliance offers no protection.

Justice P.V. Kunhikrishnan observed, “…When approvals granted under the existing legal framework are rendered meaningless by extra-legal pressure, the very legitimacy of that framework is called into question. Public dissent has its rightful place in a constitutional democracy, but without a lawful basis, a venture that satisfies every statutory command cannot be shut down on the basis of public protest. If such a course is tolerated, investment will be deterred, employment opportunities will wither, and law-abiding enterprises will be taught the wrong lesson that compliance is not protection. The petitioner's grievance is therefore not merely personal; it reflects a systemic concern that governmental assurances, once acted upon, may evaporate at the threshold of implementation".

“…Our state, Kerala, is known as God’s Own Country. It is famous for its lush green beauty. But the state also wants industries that don't affect this natural charm. However, there is a general allegation that industries will not progress in Kerala because of people's protests and trade unionism, but, in reality, our industrial growth has been commendable in recent times. The credit goes to all Keralites and, of course, to political parties and their leaders who were in power at different periods, irrespective of the colour of their parties…”, it noted further.

Senior Advocate Renjith Thampan appeared for the petitioner and Advocate M.H. Hanil Kumar appeared for the respondent.

The brief facts of the case involve two entrepreneurs, Sudheer S. and Thajudheen A., who invested several crores of rupees to establish a modern Hotmix Plant in Nellanad Grama Panchayat. Despite obtaining a No-Objection Certificate from the District Medical Officer and "Consent to Operate" from the Pollution Control Board, the local Panchayat refused to permit operations, citing localised public protest from neighbors residing approximately 150 meters away.

The petitioners argued that they had even upgraded to an ultra-modern batch mix plant costing over Rs. 5 crore to ensure minimal impact, yet remained stifled by the local authority's refusal to grant a final license.

The petitioners had previously approached the Tribunal for Local Self-Government Institutions and the High Court multiple times. Previously, the High Court had set aside a prior rejection by the Panchayat and directed a fresh reconsideration of the application.

However, the Panchayat again rejected the application via a resolution, claiming that the 2018 amendments to the Kerala Panchayat Raj Act which limit the Panchayat’s power to reject applications did not apply to this unit because the machinery was allegedly installed in 2017.

The Court speaking in favour of the petitioners, asserted that it is the duty of elected representatives to convince the electorate that once statutory clearance is obtained, industrial growth, which is the need of the hour, must be allowed to proceed.

“This is the General Election time in Kerala. The political parties and the candidates should tell the electorate and get their mandate by saying that, if they are elected, no entrepreneur in Kerala who has obtained all statutory clearances from all authorities, including pollution and environment authorities, will be forced to close down their unit because of the protest of a handful of people if their apprehension has no basis. It is the duty of the elected representatives to convince the electorate at the time of the election itself that, once statutory clearance is obtained, nothing will happen, and industrial growth is the need of the hour in our state”, it noted.

In its reasoning, the Court found the Panchayat’s stand to be factually and legally untenable. “…the wider message conveyed to law-abiding investors is that compliance may still not secure their operational endeavours. It is this larger constitutional concern and the petitioners’ plea for the protection of their legally sanctioned enterprise that now fall for consideration in this Writ Petition. I am of the considered opinion that the Panchayat has to issue permission strictly in accordance with Section 233 of the Act, 1994, in the light of the amended Act 14 of 2018, which is applicable here. The Panchayat cannot reject an application submitted under Section 233 of the Act 1994, in the light of Act 14 of 2018, because by Act 14 of 2018, the words “or refusing” have been consciously omitted by the legislature from the erstwhile sub-section (4) of Section 233 of the Act 1994”, it noted.

Cause Title: Sudheer S. & Anr. v. State of Kerala & Ors. [Neutral Citation: 2026:KER:28842]

Appearances:

Petitioners: Senior Advocate Renjith Thampan, Ajith Krishnan, Advocate.

Respondents: M.H. Hanilkumar, Kaleeswaram Raj, Thulasi K. Raj, Aparna Narayan Menon, Chinnu Maria Antony, Advocates.

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