Court To The
Rescue Of Coca Cola
By Karthika Thampan
04 June, 2005
an unprecedented judgement Division
Bench of the Kerala High Court directed Perumatty gramapanchayath (local
council) to renew within one week from Wednesday, the licence granted
by the panchayat to Hindustan CocaCola Beverages Ltd to run its plant
at Plachimada in Palakkad district, in the south Indian state of Kerala.
The court ordered that if a formal licence is not issued by the panchayat
within the time prescribed, it should be deemed that the company possesses
the renewed licence, and the company will have the right to carry on
its functions for a period of two years with effect from June 10, 2004.direction
was issued by the Bench consisting of Justice M. Ramachandran and Justice
Balachandran while allowing a writ petition filed by the company praying
to direct the panchayat to comply with the court's judgment on April
7, 2005, declaring that the company was entitled to function, drawing
half a million litres of ground water per day.
April, 26 the Perumatty
grama panchayath (local council) had refused to renew the licence of
the cola company. The Panchayath unanimously decided to reject an application
submitted by CocaCola on April 13 to renew its licence as it had not
submitted along with the application the clearance of the Kerala State
Pollution Control Board and a licence issued under the Factories Act.
April 7, 2005 the
Division Bench of the Kerala High Court had ordered the panchayath to
grant licence to the company if it submitted an application within two
weeks along with the above certificates. "The company informed
the panchayath that it has the licence issued under the Factories Act
and the clearance of the of the State Pollution Control Board. But it
has not produced the documents to the panchayath." Perumatty Panchayath
president Mr A.Krishnan told the media. The Division Bench also ordered
that the company could extract up to half a million litres of groundwater
a day form the 34 acre premises of its bottling plant at Plachimada
during 200506. The Bench said that "a person has the right to extract
water from his property,unless is prohibited by a statute." The
Perumatty panchayath has filed an appeal in the Supreme Court of India
against the Kerala Hight Court order.
The courts order has drawn flak from all sections of the society. Eminent
jurist JusticeV.R.Krishnayyar has said that the the court order has
nullified panchayat raj laws of India. He said " I have doubts
about the constitutional propriety and the wisdom of the judgement."
president A. Krishnan said that the judgement derails the autonomy of
the local councils. He also said that the panchayath would question
the order in the Supreme Court of India.
has said that the judicial interference in the decision making process
of the local bodies will spell disaster for India, as it will belittle
the entire panchayath raj system. He also said that
to give a corporate body the legal status of an individual is fundamentally
The protracted legal
battle began when the the panchayath cancelled the licence of the company
on April 7, 2003, at the risk of losing almost half of its annual income
some 700,000 rupees or $16300 on the plea that it had received complaints
from local people that the drawing of huge quantity of ground water
by the company had resulted in wells drying up, causing acute drinking
water scarcity in the area. But the factory managed to function till
March 10, 2004 on the strength of a Government order and a stay from
a Single Bench of the Kerala High Court overruling the civic body's
The bottling unit was established in 2000 on 34 acres (15.2 hectares)
of mostly multicropped agricultural land in Palghat District, barely
2 km away from the river Chitturpuzha and near a number of reservoirs
and irrigation canals. Palghat is tradionally called the rice bowl of
Kerala. Every day the company drew nearly 1.5 million litres of groundwater
and about 85 truckloads of products left the factory premises. The company
also resorted to bringing water from borewells in neighbouring villages
because the borewells it had sunk on its premises had failed to provide
the required yield. The company siphons off enough water to meet the
minimum requirements of about 20,000 people. They have not only lost
their water but, with the driedout farms closing, also their jobs. Those
worst affected are up to 10,000 landless labourers.
Then there is pollution.
Chemical effluents produced by bottlewashing contaminate the groundwater.
Early attempts to dry the foulsmelling sludge and market it as fertiliser
failed when farmers started to develop sores on their skin and noticed
that their coconut palms were dying. The plant tried to give it away
but no one wanted it. Lab analysis by the Kerala State Pollution Control
Board has shown dangerous levels of cadmium in the sludge. Another report
done at Exeter University in England at the request of the BBC Radio
4 (whose reporter John Waite visited Plachimada and broadcast his report
in July of 2003) found in water in a well near the plant not only impermissible
amounts of cadmium but lead at levels that "could have devastating
consequences", particularly for pregnant women. The Exeter lab
also found the sludge useless as fertiliser.
December 16, 2003, a Single Bench of the High Court directed the coke
unit to stop exploiting the ground water resources of the panchayath
and find alternative sources for its production needs. Though a Division
Bench set aside the Single Bench ruling, the Kerala State Cabinet on
February 17, 2004 directed the company to stop the operation in view
of the acute drought situation in Palakkad district. Consequently, the
unit stopped operation on March 10, 2004.