Supreme Court Upholds Coastal Zone Regulations in Kerala Backwater Island Resort Case: Kapico Kerala Resorts Pvt. Ltd. vs. State of Kerala (2020)

Case Background

The case involves appeals against a common order of the Kerala High Court, which prohibited the development of a resort on Nediyathuruthu Island, located in Vembanad Lake, Alappuzha District, Kerala. The High Court’s decision was based on the Kerala Coastal Zone Management Plan (KCZMP) and the Coastal Regulation Zone Notifications. The dispute arose from the construction of resorts on two backwater islands: Vettila Thuruthu and Nediyathuruthu.

The High Court had disposed of seven writ petitions on July 25, 2013. Five of these petitions concerned Nediyathuruthu Island, with three filed by local fishermen, a public welfare society, and a trade union, all opposing the resort’s construction. The other two petitions were by Kapico Kerala Resorts Private Limited (‘Kapico’), the project proponent, seeking police protection for construction and challenging the island’s inclusion in the Coastal Zone Management Plan. Similarly, two petitions related to Vettila Thuruthu Island, one opposing development and the other by the project proponent, Vaamika Island (Green Lagoon Resort).

The High Court’s order rejected the project proponents’ petitions and allowed those opposing the construction. It directed authorities to proceed with actions under the Land Conservancy Act against Kapico for encroachments, ensure removal of encroachments within three months, and prohibit further construction by both Kapico and Vaamika.

Timeline

Course of Proceedings

Initially, the High Court rejected writ petitions by the project proponents and allowed those filed by local fishermen and societies, directing actions against encroachments and prohibiting further construction. Vaamika Island’s appeals against this order were dismissed by the Supreme Court on August 8, 2013, in Vaamika Island v. Union of India [(2013) 8 SCC 760], thus affirming the High Court’s judgment regarding Vettila Thuruthu Island.

Kapico, in addition to filing special leave petitions in the Supreme Court, also filed review petitions in the High Court, which were dismissed on December 10, 2013, due to the doctrine of merger following the Supreme Court’s decision in the Vaamika Island case. Kapico then filed a separate special leave petition challenging the dismissal of one of the review petitions, which was tagged with the original petitions.

Legal Framework

The core of the legal framework involves the Coastal Regulation Zone (CRZ) Notifications of 1991 and 2011, issued under the Environment (Protection) Act, 1986. These notifications aim to regulate activities in coastal areas to protect the environment. The 1991 Notification categorized coastal areas into CRZ-I, CRZ-II, CRZ-III, and CRZ-IV, with specific restrictions on development in each zone. CRZ-I areas are ecologically sensitive, while CRZ-III includes relatively undisturbed areas.

The 1991 Notification, specifically Annexure I, classified small islands under Category IV, but the High Court interpreted this to cover marine islands near Andaman & Nicobar and Lakshadweep, not backwater islands. The High Court also noted that the CRZ notification included coastal stretches of seas, estuaries, creeks, rivers, and backwaters influenced by tidal action up to 500 meters on the landward side.

The 2011 Notification brought backwater islands within the purview of the regulations. The case also considered the concept of Critically Vulnerable Coastal Areas (CVCAs), with Vembanad Lake being declared as such.

Arguments

The appellants, Kapico, argued that:

• The CRZ Notification of 1991 does not apply to backwater islands like Nediyathuruthu.
• The 2011 Notification should not apply retroactively since they obtained NOC in 1996 and Building Permit in 2007.
• Small islands fall under CRZ IV, where construction is not prohibited.
• The Coastal Zone Management Plan (CZMP) for Kerala was prepared hastily and haphazardly.
• There was no area-specific criteria for determining CRZ, and no integrated management study was conducted for the island.
• The average width of the island is only 20-60 meters, making the restrictions violative of Article 300A of the Constitution.
• The High Court erred in relying on the opinion of Dr. K.V. Thomas, an expert, without proper verification.
• The guidelines for demarcating High Tide Line (HTL) and Low Tide Line (LTL) were not followed, and micro-level cadastral maps were not drawn.
• The categorization of the island as a Critically Vulnerable Coastal Area (CVCA) is flawed.
• They had obtained twelve permissions/approvals and completed 75% of the construction.

The respondents, including the State of Kerala and local parties, argued that:

• The High Court’s order has attained finality with the dismissal of Vaamika Island’s petitions.
• Kapico cannot claim relief after agreeing to take refuge under a notification for regularization.
• The island falls under CRZ I due to the presence of mangroves and its ecological sensitivity.
• The Vembanad Lake is a Critically Vulnerable Coastal Area (CVCA).
• The Panchayat was not competent to issue building permits when CRZ notifications applied.

The respondents also contended that the High Court was justified on merits and there was no reason for the Supreme Court to take a different view from the one taken in Vaamika Island (supra).

Submissions Table

Issues Framed by the Supreme Court

The Supreme Court considered the following key issues:

1. Whether the judgment in Vaamika Island (supra) is distinguishable and does not apply to the present case.
2. Whether the islands in the backwaters of Kerala are covered under the CRZ Notification of 1991.
3. Whether the failure to conduct a salinity test as required by the 2002 amendment vitiated the stand of the KCZMA.
4. Whether the islands would fall under CRZ IV and what are its effects on property rights and the doctrine of legitimate expectation.
5. Whether the identification of the island as a filtration pond is correct.
6. Whether filtration ponds are an anathema in the light of the decision of this Court in S. Jagannath v. Union of India [(1997) 2 SCC 87].
7. Whether there is any reliable material to classify the areas as filtration ponds.
8. Whether there must be an island-specific study.
9. Whether a cadastral map is a must and its absence fatal.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

Judgment

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

The Supreme Court relied on the following authorities to reach its decision:

• Vaamika Island v. Union of India [(2013) 8 SCC 760]*: The court followed this case, stating that the issues were substantially the same and the judgment was binding.
• S. Jagannath v. Union of India [(1997) 2 SCC 87]*: The court acknowledged this case regarding filtration ponds, but it did not help the appellants’ case.
• Kunhayammed v. State of Kerala [(2000) 6 SCC 359]*: The court cited this case to distinguish between different types of dismissal orders.
• Khoday Distilleries Ltd. v. Sri Mahadeshwara Sahakara [(2019) 4 SCC 376]*: The court clarified that Kunhayammed lays down the correct law.
• Piedade Filomena Gonsalves v. State of Goa [(2004) 3 SCC 445]*: The court cited this case to emphasize the importance of environmental protection in coastal areas.

The court’s reasoning was based on the following points:

• The issues raised by the appellants were substantially the same as those decided in Vaamika Island (supra).
• The High Court’s findings on the applicability of CRZ regulations to backwater islands were upheld.
• The permits obtained by the appellants were illegal, as they violated the CRZ notifications.
• Vembanad Lake is an ecologically sensitive area and a Critically Vulnerable Coastal Area (CVCA).
• The appellants’ arguments regarding the lack of a salinity test, island-specific study, and flawed CZMP were rejected.

The court also considered alternative submissions by the appellants based on the 2017 and 2019 notifications, but found them to be unviable. The 2017 notification did not apply to CRZ violations, and the 2019 notification did not confer any benefit on the appellants.

The Supreme Court held that the distinctions sought to be made by the appellants were not substantial and hence, the court was not inclined to revisit the issues already clinched by the Court in Vaamika Island (supra).

The Court also observed that the appellants cannot escape the findings recorded by the Court on the common issues. The Court also observed that the contention that the common issues were dealt with in passing in the judgment of the Court and therefore, they are entitled to be re-agitated, cannot be accepted.

The Court further observed that if detailed reasons given by the High Court or a subordinate Court, find acceptance by the Supreme Court, in specific terms, the question of scrutinizing them for finding out whether they were in the passing or in detailed focus, does not arise. Such an exercise would tantamount to reviewing the decision.

The Court also observed that each and every particular issue dealt with by the High Court as common to both the islands, was considered by the Supreme Court in Vaamika Island (supra) and a finding recorded.

The Court also observed that the first distinction sought to be made by the appellants between their case and the case relating to Vettila Thuruthu is that the Building Permit issued to Vaamika was post 2011 Notification. But this distinction will not go to the rescue of the appellants, in view of the fact that the categorisation under CRZ I under the 1991 Notification was upheld by the Court and this is why the Court found the constructions made even in Vettila Thuruthu as violative of both the notifications, namely 1991 and 2011 Notifications.

The Court also observed that in any case, the appellants herein obtained the NOC on 02.08.1996 and the Building Permit on 10.10.2007. The Court recorded the fact that the Director of Panchayats vide letters dated 07.03.1995 and 17.07.1996 had directed all panchayats to strictly follow the provisions of CRZ Notification and that it was found to have been violated while granting permission.

The Court also observed that both Vettila Thuruthu and Nediyathuruthu islands are admittedly backwater islands nestled in Vembanad lake. The Court also indicated that Vembanad lake is an ecologically sensitive area and that considering the socio-economic importance of this water body, it had been scheduled under “vulnerable wetlands to be protected” and declared as CVCA.

The Court also observed that the contentions of the appellants are already dealt with by the High Court in its judgment. The Court also recorded a specific finding that when the whole of Vembanad lake is included as a CVCA, subject to a process, the Court has to take a view which serves the object of the area being treated as ecologically sensitive and hence a CVCA.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the need to protect the ecologically sensitive Vembanad Lake and the binding nature of its previous judgment in Vaamika Island (supra). The Court emphasized the importance of adhering to environmental regulations and the illegality of constructions made in violation of CRZ notifications.

The Court also considered the fact that the appellants had obtained permits illegally and that the High Court’s findings were valid. The Court also gave significant weight to the fact that Vembanad Lake had been declared as a Critically Vulnerable Coastal Area (CVCA).

The Court’s reasoning was also influenced by the fact that the issues raised by the appellants were substantially the same as those decided in Vaamika Island (supra).

The Court also considered the fact that the appellants had obtained permits illegally and that the High Court’s findings were valid. The Court also gave significant weight to the fact that Vembanad Lake had been declared as a Critically Vulnerable Coastal Area (CVCA).

The Court rejected the appellants’ arguments based on the 2017 and 2019 notifications, finding them to be unviable.

Fact:Law Ratio

Logical Reasoning

Key Takeaways

The Supreme Court’s judgment has several practical implications:

• Backwater islands in Kerala are subject to CRZ regulations, and construction permits issued in violation of these regulations are invalid.
• The ecological sensitivity of Vembanad Lake and other similar areas must be taken into account when considering development projects.
• The doctrine of merger applies to decisions of the Supreme Court, even at the special leave petition stage, if the court provides reasons for its decision.
• The court reiterated the importance of environmental protection in coastal areas and the need to adhere to environmental regulations.
• The judgment reinforces the need for proper environmental impact assessments and adherence to coastal zone management plans.

The judgment may have the following future impacts:

• It will likely deter illegal construction in ecologically sensitive coastal areas.
• It may lead to stricter enforcement of CRZ regulations in Kerala and other coastal states.
• It may influence future decisions on similar cases involving environmental regulations and development projects.

Directions

The Supreme Court did not provide any specific directions other than dismissing the appeals. The court upheld theHigh Court’s order, which included the following directions:

• The authorities were directed to proceed with actions under the Kerala Land Conservancy Act against Kapico for encroachments.
• The authorities were directed to ensure the removal of encroachments within three months.
• Kapico and Vaamika were prohibited from carrying out further construction activities.

Dissenting Opinion

There was no dissenting opinion in this case. The judgment was delivered by a three-judge bench, with all three judges concurring in the final decision.

Conclusion

The Supreme Court’s judgment in Kapico Kerala Resorts Pvt. Ltd. vs. State of Kerala (2020) is a significant decision that reinforces the importance of environmental regulations in coastal areas. The court upheld the High Court’s order, which prohibited the construction of a resort on Nediyathuruthu Island, emphasizing that backwater islands are subject to CRZ regulations. The judgment underscores the need for proper environmental impact assessments and adherence to coastal zone management plans. It also highlights the binding nature of the Supreme Court’s decisions and the importance of protecting ecologically sensitive areas. The case serves as a crucial precedent for future cases involving environmental regulations and development projects in coastal regions.