Karnataka High Court
Nsl Renewable Power Pvt Ltd vs State Of Karnataka on 27 June, 2024
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 27TH DAY OF JUNE, 2024
BEFORE
THE HON'BLE MR. JUSTICE R.NATARAJ
WRIT PETITION NO.55953 OF 2016 (GM-FOR)
BETWEEN:
NSL RENEWABLE POWER PVT. LTD.,
REGD. OFFICE AT NSL ICON,
NO. 8-2-684/2/A, PLOT NO. 1 TO 4,
4TH FLOOR, ROAD NO. 12,
BANJARA HILLS,
HYDERABAD-500034.
REP. BY ITS SENIOR MANAGER (LIAISON),
SRI. M. VENKAT
...PETITIONER
(BY SRI. K.N.PHANINDRA, SENIOR ADVOCATE FOR
SMT. VAISHALI HEGDE, ADVOCATE)
AND:
1. STATE OF KARNATAKA,
REP. BY ITS SECRETARY,
DEPARTMENT OF FORESTS,
ECOLOGY AND ENVIRONMENT,
4TH FLOOR, M.S. BUILDING,
DR. AMBEDKAR ROAD,
BANGALORE-560 001.
2. THE PRINCIPAL CHIEF CONSERVATOR OF FORESTS,
"ARANYA BHAVAN",
18TH CROSS,
MALLESWARAM,
BANGALORE-560 003.
2
3. THE DEPUTY CONSERVATOR OF FORESTS
DAVANAGERE REGIONAL DIVISION,
DAVANAGERE-577 005.
...RESPONDENTS
(BY SRI. S.T. NAIK, ADDITIONAL GOVERNMENT ADVOCATE FOR
RESPONDENT NOS.1 TO 3)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF
THE CONSTITUTION OF INDIA PRAYING TO QUASH THE
DEMAND NOTICE DATED 19.09.2016 BEARING
NO.A2/LAND/KALLUGANI/CR-50/2008-09 VIDE ANNEXURE-A
AND THE REVISED DEMAND NOTICE DATED 19.09.2016
BEARING NO.A2/LAND/KALLUGANI/CR-50/2008-09 VIDE
ANNEXURE-A1 BOTH ISSUED BY THE 3rd RESPONDENT AND ALL
FURTHER PROCEEDINGS/ACTIONS THERETO.
THIS PETITION HAVING BEEN HEARD AND RESERVED
FOR ORDER ON 02.04.2024 AND COMING ON FOR
PRONOUNCEMENT OF ORDER THROUGH VIDEO CONFERENCE
THIS DAY, THE COURT MADE THE FOLLOWING:-
ORDER
The petitioner has challenged the demand notice dated 19.09.2016 bearing No.A2/Land/Kallugani/CR- 50/2008-09 and the revised demand notice dated 19.09.2016 bearing No.A2/Land/Kallugani/CR-50/2008-09 calling upon it to pay a sum of Rs.1,82,01,430/- along with interest at the rate of 12% per annum.
2. The petitioner had proposed to establish a wind power project in Guheshwaragudda Reserve Forest in 3 Jagalur Taluk, Davanagere District and hence, sought for prior approval under Section 2 of the Forest Conservation Act, 1980 (henceforth referred to as 'Act, 1980') from the Ministry of Environment, Forests and Climate Change, Government of India (MOEF). After considering the proposal, MOEF passed an order dated 17.03.2003 conveying its Final Approval (Stage - II) under Section 2 of the Act, 1980 for diversion of 19.94 hectares of land in Guheshwaragudda Reserve Forest in favour of the petitioner for establishment of 17.25 MW wind farm. The State Government passed an order dated 12.05.2003 granting sanction for establishment of the wind farm. The forest land was leased for a period of ten years. Thereafter, MOEF issued guidelines dated 17/18.09.2003 regarding collection of Net Present Value (NPV) from user agencies in view of the Orders dated 30.10.2002 and 01.08.2003 passed by the Hon'ble Supreme Court of India in T.N. Godavarman case (W.P.(Civil) No.202/1995). It is claimed that NPV was to be charged on all those cases which were granted in-principle approval after 30.10.2002. 4 The rate of NPV ranged between Rs.5.80 lakhs per hectare to Rs.9.20 lakhs per hectare. The respondent No.3 issued a notice dated 15.12.2004 demanding the petitioner to pay a sum of Rs.1,19,68,800/- being the NPV for 19.940 hectares of forest land leased in favour of the petitioner. The petitioner paid the said sum under protest by a banker's cheque. The petitioner had informed that it had filed an application before the Hon'ble Supreme Court regarding the liability to pay NPV and that the application was pending. It claimed that in order to avoid stoppage of the project, it had paid the NPV 'Under Protest'. The petitioner claimed that the Hon'ble Supreme Court passed an order dated 24.04.2008 in W.P.(Civil).No.202/1995 on the applications filed by it as well as other applicants and directed that the applicants who were permitted to establish wind energy project should pay 50% of NPV at the minimum rate charged, provided minimum tree felling was involved. The MOEF thereafter addressed a letter dated 29.12.2008 to all State Governments about the Order dated 24.04.2008 passed by the Hon'ble Supreme 5 Court that NPV is payable at 50% of the minimum rate irrespective of the eco-class in which the project lay. Following this, the MOEF issued another set of guidelines dated 05.02.2009 post the judgment of the Hon'ble Supreme Court dated 28.03.2008 by which, the rates of NPV was re-fixed on the basis of scientific data taking into account the economical role and value of forests. In this guidelines, the lowest rate of NPV specified therein was Rs.4,38,000/- per hectare. It was clarified in this guideline that NPV in respect of wind energy projects was to be levied at 50% of minimum rate of NPV irrespective of the eco-class, in which the project lay.
3. The petitioner contends that it had commissioned the project in the land leased to it but had utilized 17.577 hectares of forest land out of 19.94 hectares, which was granted. In addition, the petitioner had utilized 19.42 hectares of land for establishment of the project. The period of lease of 19.94 hectares expired on 11.05.2013. The petitioner contends that though it sought 6 refund of the excess amount of NPV paid, the same was not considered. Thereafter, the petitioner sought renewal of the forest clearance in respect of 17.577 hectares and 19.42 hectares of additional land that was utilized.
4. The petitioner contends that the Hon'ble Supreme Court passed another Order dated 02.12.2013 in W.P.(Civil).No.202/1995 and specifically clarified that the applicant therein should be given the benefit of claiming only 50% NPV even though the project may have started prior to the Order dated 24.03.2008 by which, the aforesaid exemption of 50% NPV was granted. Subsequently, MOEF passed an Order dated 26.05.2015 conveying its in-principle Stage-I approval for renewal of 37 hectares (17.577 + 19.42 hectares) of forest land at Guheshwaragudda in favour of the petitioner. Two conditions were imposed in the approval, which were as follows:
"Condition No.5 : The user agency shall pay NPV at full rate. The State Government shall also realize interest at 12% per annum 7 compounded annually on the Net Present Value amount from the date the amount became due till date of realizing of the same from the user agency.
Condition No.6 : The user agency shall pay a penalty of not less than two times of NPV for the excess forest land utilized by the user agency in violation of Forest Conservation Act, 1980 in addition to the levy of regular Net Present Value."
5. The MOEF addressed a letter dated 22.07.2015 clarifying that NPV at full rate is to be levied on the user agency as per condition Nos.5 and 6, referred above, which meant 100% of the minimum rate of NPV irrespective of the eco-class in which, the project lay instead of 50% of NPV at the minimum rate charged. The respondent No.2 thus addressed a letter dated 11.08.2015 to the respondent No.3, with a copy marked to the petitioner and directed the respondent No.3 to take necessary action for realization of NPV at full rate from the petitioner along with interest at 12% per annum. Subsequent thereto, the respondent No.1 addressed a 8 letter dated 27.08.2015 to the Principal Chief Conservator of Forest (PCCF), Bengaluru, intimating that the petitioner company had paid a sum of Rs.1,19,68,800/- instead of Rs.43,66,860/- being 50% of NPV at the rate of Rs.4,38,000/- per hectare and therefore, excess of Rs.76,01,940/- was paid. The State Government directed the PCCF, Bengaluru, to adjust or give credit of Rs.76,01,940/- and collect the balance amount as per the condition No.5 imposed by MOEF in its order dated 26.05.2015. Later, the respondent No.3 issued a demand notice dated 08.01.2016 calling upon the petitioner to pay a sum of Rs.5,29,96,652/- as per condition Nos.5 and 6 referred above. The respondent No.3 had calculated the full amount of NPV instead of 50% at the rate of Rs.4,38,000/- per hectare for an extent of 19.42 hectares of additional land utilized land along with penalty at the rate of two times of NPV at Rs.4,38,000/- per hectare and gave credit of Rs.76,01,940/- that was paid earlier. The petitioner sought time to make the said payment and accordingly the time was extended upto 26.05.2016. 9 Thereafter, the petitioner paid the entire amount as demanded. The petitioner contends that when such being the facts, the Accountant General had raised an audit objection regarding the manner in which the respondent No.3 had calculated and levied the NPV on the petitioner at the rate of Rs.4,38,000/- per hectare instead of Rs.5,80,000/- per hectare, thus resulting in a short levy of Rs.2,22,00,000/-. A letter in that regard was addressed to the respondent No.2 on 19.07.2016. The respondent No.3 therefore, summoned the officers of the petitioner on 08.08.2016 and orally asked the petitioner to pay up the amount and directed not to operate the nine Wind Turbine Generators. The petitioner claims that under compelling circumstances, it furnished an undertaking dated 08.08.2016 to pay the amounts as claimed in the audit objections. Thereafter, the respondent No.2 addressed a letter dated 30.08.2016 to the respondent No.1 and had marked a copy to the petitioner, wherein it was narrated about the grant of forest land to the petitioner and audit objections regarding short levy of Rs.2.2 crores. The 10 respondent No.2 referred to the letter dated 09.08.2016 of the Deputy Conservator of Forest, wherein he had stated that the action taken by his office with regard to complying the stipulated conditions in Stage - I approval of MOEF was as per law and that the audit observation be dropped. Thus, the respondent No.2 had requested the respondent No.1 to apprise the Accountant General of the facts of the case and to obtain necessary directions. The petitioner contends that to its shock and surprise, the respondent No.3 issued a demand notice dated 19.09.2016 and revised demand notice dated 19.09.2016 calling upon the petitioner to pay a sum of Rs.1,82,01,430/- along with interest at 12% per annum upto the date of payment. The petitioner contends that this demand was in the light of the audit objections and audit note raised by the Accountant General, Karnataka. Thereafter, the respondent No.3 informed the petitioner by letter dated 24.09.2016 that permission has been granted to start nine Wind Turbine Generators that were stopped, subject to payment of all dues on or before 24.10.2016. The 11 petitioner therefore, submitted a detailed representation dated 17.10.2016 denying its liability to pay the amount as demanded and specifically informed the respondents that NPV had to be charged at the rate of Rs.4,38,000/- per hectare, which was the minimum rate.
6. The petitioner being aggrieved by the said demand dated 19.09.2016 and revised demand dated 19.09.2016 has filed this writ petition.
7. The learned Senior counsel for the petitioner submitted that as per the Guidelines dated 05.02.2009 issued by the MOEF, in respect of wind energy project 50% of the minimum rate of NPV irrespective of the eco-class in which the project lay had to be collected. He submitted that the minimum NPV was a sum of Rs.4,38,000/- per hectare and therefore, even as per condition Nos.5 and 6 referred above, the petitioner was liable to pay NPV of Rs.4,38,000/- per hectare on 19.42 hectares of land and penalty of two times of NPV for the excess forest land utilized. He therefore, contended that the audit objection 12 that the petitioner was liable to pay NPV at the rate of Rs.5.80 lakhs per hectare is incorrect. He also referred to the Order passed by the Hon'ble Supreme Court dated 02.12.2013 on I.A.Nos.2785, 3025 and 3390 in W.P.(Civil) No.202/1995, where it was held, "Considering the fact that Central Empowered Committee had recommended that wind energy projects be given extra 50 percent of the Net Present Value at the minimum rate for the reason that wind energy projects were eco- friendly, we are the opinion that the project of the applicant should be given the said benefit of paying only 50 percent Net Present Value even though the project may have started prior to the order dated 24th March, 2008."
8. Learned Senior counsel therefore, contends that even if condition Nos.5 and 6 of the in-principle approval dated 26.05.2015 is taken into account, the NPV had to be calculated at 100% of the minimum rate and not at Rs.5,80,000/- per hectare. He contends that the petitioner has already paid up a sum of Rs.5,29,96,000/- 13 on 26.07.2016 and therefore, the impugned demand was incorrect.
9. The petition is opposed by the respondents who have filed a detailed statement of objections. The respondents contend that the Hon'ble Supreme Court vide its order dated 30.10.2002, had directed all States and Union Territories to collect the NPV for the forest land approved for non-forestry purposes between Rs.5.80 lakhs and Rs.9.20 lakhs per hectare. It is contended that the Government of India, Ministry of Environment and Forest, New Delhi, vide its letter dated 11.08.2003 had directed the state Governments to comply the order of the Hon'ble Supreme Court dated 30.10.2002. The State Government vide its letter dated 17.01.2004 had thus issued order of collection of NPV in compliance with the aforesaid order. The respondents admitted that the petitioner sought permission to establish a wind power project at Guheshwaragudda Reserve Forest and permission was granted by the MOEF vide letters dated 12.12.2002, 14 17.03.2003 and 05.08.2004. It is contended that the petitioner was directed to pay NPV of Rs.1,19,68,800/- for diversion of 19.94 hectares of forest land and the petitioner deposited the said amount. It is contended that the petitioner had encroached into and utilized 19.42 hectares of additional forest land, which came to the notice of the MOEF during an inspection. Thereafter, an FIR was lodged but was not proceeded with as the proposal for renewal of 37 hectares was submitted to the MOEF. The MOEF taking into consideration the earlier lease, extended the project period for a further period of 20 years which was subject to compliance of 17 conditions. The petitioner made a representation to the MOEF on 07.07.2015 to modify the condition relating to payment of NPV as per the order dated 28.03.2008. A clarification was issued by MOEF vide letter dated 29.12.2008 that NPV at full rate should be levied on the petitioner and that the petitioner was not entitled to the benefit of the order of the Hon'ble Supreme Court dated 28.03.2008. It contended that the respondent No.2 erroneously directed the respondent No.3 15 to take necessary action for realization of NPV at full rate and interest at 12% per annum compounded annually by the user agencies as the minimum rate of NPV was Rs.4,38,000/- per hectare as per the order of the Hon'ble Supreme Court dated 28.03.2008. It is contended that the Hon'ble Supreme Court vide its order 28.03.2008 had specifically stated in para (iii) that, "these NPV rates may be made applicable with prospective effect except in specific cases such as Lower Subhanshri Project, mining leases of SECL, field firing ranges, wherein pursuant to the orders passed by this Hon'ble Court, the approvals have been accorded on lumpsum payment/no payment towards NPV."
10. The respondent No.3 thereafter issued a demand notice dated 08.01.2016 demanding NPV in respect of renewal of 37 hectares of land being utilized by the petitioner and that the same was paid. It is contended that during the audit scrutiny, the mistakes and lapses committed by the respondents was noticed and hence, 16 Principal Accountant General, Bengaluru, by its letter dated 19.07.2016 addressed to the Additional Chief Secretary, Department of Forest, sought explanation for short levy of NPV and penal charges amounting to Rs.2.22 crores. On receiving the said communication, the respondents initiated action to recover the pending dues from the petitioner by raising a demand dated 19.09.2016 and the revised demand dated 19.09.2016.
11. It is contended that the petitioner had encroached into the forest land and suppressed this fact when it filed an application in W.P.(Civil) No.202/1995. Therefore, it was denied the benefit of the orders of the Hon'ble Supreme Court in respect of calculating the NPV for the Windmill project by the MOEF vide letter dated 22.07.2015. It is contended that the Principal Accountant General had rightly held that minimum rate of NPV applicable to the petitioner was Rs.5.80 lakhs per hectare. It is also contended that the Hon'ble Supreme Court had specifically stated in its order dated 28.03.2008 that the 17 revised NPV is applicable prospectively. It is contended that since the petitioner had undertaken to pay the balance amount, it is bound to pay the same.
12. It is further contended that the petitioner had encroached and utilized excess area of 19.42 hectares and had installed nine additional towers outside the lease area with effect from March, 2004 itself and therefore, the petitioner was liable to pay NPV at Rs.5.80 lakhs per hectare as per the rates fixed by the Government of Karnataka by its notification dated 17.01.2004, which was in force. Therefore, it is contended that the petitioner cannot take advantage of the order passed by the Hon'ble Supreme Court revising the rates of NPV and therefore, contended that the petitioner is not entitled to any reliefs in this petition.
13. I have considered the submissions of the learned Senior Counsel for the petitioner as well as the learned Government Advocate. I have also perused the 18 documents enclosed with the writ petition as well as the statement of objections.
14. The Hon'ble Apex Court, while considering I.A. Nos.1224 and 1225 filed by applicants who were engaged in generating electricity from wind turbines in T.N. Godavarman Thirumulpad vs. Union of India and Others, accepted the suggestion of the Central Empowered Committee to grant 50% exemption from payment of NPV and passed an order dated 24.04.2008 and held that Wind Energy Project proponents shall be granted exemption of 50% of the NPV provided, there is minimal tree felling. Following this, the Government of India in terms of its letter dated 29.12.2008 clarified that in respect of wind energy projects, the NPV is payable at 50% of the minimum rate of the NPV, irrespective of the eco-class in which the project was established. As per the chart prescribed in the guidelines dated 05.02.2009 issued by the Government of India, the minimum NPV was a sum of Rs.4,38,000/- per hectare. As rightly contended by the 19 learned Senior Counsel for the petitioner, the benefit of this reduced 50% of minimum NPV was given to all wind energy projects established prior to 24.03.2008 by the Hon'ble Apex Court while considering I.A. Nos.2785, 3025 and 3390 in T.N. Godavarman Thirumulpad's case referred supra. Later, the Government of India presumably, having been informed that the petitioner had encroached into additional 19.42 hectares of forest land, granted in-principle approval (Stage-I) for renewal of 37 hectares of forest land by the petitioner for the wind farm project in terms of the communication dated 26.05.2015, but mistakenly imposed a condition that the petitioner should pay the NPV at full rate. Soon thereafter, the Chief Conservator of Forests (Central) addressed a letter dated 22.07.2015 to the Additional Chief Secretary to Government of Karnataka, Forest, Ecology and Environment Department clarifying that, the condition to pay NPV at full rate meant 100% of the minimum rate of NPV charged as per the earlier letter dated 29.12.2008. This therefore meant that NPV had to be paid at 20 Rs.4,38,000/- per hectare. Consequent thereto, the petitioner has paid up the 100% of the NPV amounting to Rs.5,29,96,652/- as demanded by respondent No.3 vide his letter dated 08.01.2016. It now appears that the Principal Accountant General (E&RSA), Karnataka, Bangalore have raised an audit objection on 19.07.2016 that a sum of Rs.2,22,00,000/- was short levied on the petitioner by not complying with condition No.5 in the in-principle approval dated 26.05.2015 that NPV at full rate was payable. Consequent to this, the respondents have issued a notice of demand dated 19.09.2016 demanding the sum of Rs.1,82,01,430/- by factoring NPV at Rs.5,80,000/- per hectare. This apparently was without reference to the clarification dated 22.07.2015 referred above, which clarified that condition No.5 mentioned in the in-principle approval meant 100% of the minimum NPV which was Rs.4,38,000/- per hectare. This clarification was also in line with the guidelines prescribed by the Government of India on 29.12.2008. Therefore, the demand of NPV by the respondents at Rs.5,80,000/- per 21 hectare is wholly incorrect and deserves to be interfered with. Hence, the following:
ORDER i. The writ petition is allowed.
ii. The impugned Demand Notice dated 19.09.2016 bearing No.A2/ Land/ Kallugani/ CR-50/2008-09 and the Revised Demand Notice dated 19.09.2006 bearing No.A2/ Land/ Kallugani/CR-50/2008-09 issued by respondent No.3 are quashed.
iii. The respondent No.3 is directed to adjust the amounts already paid by the petitioner towards NPV at 100% of Rs.4,38,000/- per hectare along with interest, if any payable and refund any excess amount to the petitioner. This shall be complied within a period of two months from the date of receipt of a copy of this order. 22 iv. Before parting from the case, the petitioner, who was granted permission to divert 19.94 hectares for Non-Forestry purpose, had encroached into an additional 19.42 hectares. It is not known whether the petitioner has raised compensatory Afforestation over an equivalent area of identified non-forest land at its cost. Therefore, respondent No.3 shall ascertain this and ensure compliance.
v. In view of disposal of the main petition, I.A.1/2021 for vacating interim order does not survive for consideration and is accordingly dismissed.
Sd/-
JUDGE PMR/LG