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Directs State to Ensure All Clearances for -Adani Data Centre Project
The on Monday issued a significant directive to the state government, ordering that construction of the proposed $15-billion -Adani data centre project in Visakhapatnam proceed only after all requisite legal and environmental permissions are in place. The division bench, led by Chief Justice Lisa Gill, made it clear that environmental clearances cannot be bypassed and that the state must ensure full regulatory compliance before any work advances. The court’s ruling came in response to a that raised serious concerns over the project’s use of temple land, its proximity to a protected area, and the scope of existing environmental approvals.
The court declined the petitioner’s request for an that would have halted all construction, instead opting to place the onus on the government to verify and enforce all clearances. This nuanced approach signals a judicial preference for oversight through government accountability rather than an outright stay, a tactic often seen in high-value infrastructure disputes where economic interests and environmental protections collide.
The Legal Challenge: Land, Environment, and
The petition, filed by Bolisetty Satyanarayana, challenges multiple approvals granted for the project which was announced in as part of ’s plan to build an artificial intelligence hub in Visakhapatnam, with a planned investment of $15 billion over five years. The project is being executed through , a joint venture between the and , and aims to deliver a gigawatt-scale data centre campus with nearly 1 GW capacity. Construction had commenced in .
The petitioner’s primary grievances centre on three interconnected issues: the use of 160 acres belonging to the , the adequacy of environmental clearances, and the project’s consumption of water and electricity. During the hearing, counsel for the petitioner, , argued that the temple land could not be without the High Court’s permission, citing an earlier court order. He further contended that the obtained covered only the building construction, not the data centre’s operational phase, and that the site’s proximity to a protected area — about 0.86 km away — should have triggered stricter scrutiny under the .
The state government vigorously contested these claims. Its counsel submitted that no transfer of land had occurred; rather, the temple authorities had leased the land to the under an arrangement that would generate an annual revenue of approximately ₹26 crore for the temple. The state also argued that all necessary approvals were in place, though the court remained unconvinced of the completeness of the clearances.
Court’s Directive: Scrutiny and Compliance
Chief Justice Gill’s bench did not grant the , but the court’s observations were pointed. “Environmental clearances cannot be given a go by,” the bench remarked, emphasizing that the state must ensure work at the site is carried out only with the required permissions. The court directed the state to file a consolidated response from all departments involved in granting approvals, a move that indicates the bench intends to perform a rather than rely on piecemeal assurances.
The court’s refusal to halt construction suggests a reluctance to delay a large infrastructure project that the state considers critical for economic development. However, its insistence on strict compliance sends a clear message that regulatory shortcuts will be closely examined. Legal experts view this as a balancing act — the court is wary of becoming a roadblock to investment but equally determined to uphold environmental and land-use regulations.
Environmental Compliance: A Key Flashpoint
The argument that the current covers only the building and not the data centre’s operations raises a nuanced legal question. Under India’s regime, projects are typically granted approval for the entire facility, including both construction and operation, based on a comprehensive assessment. If the clearance indeed limits itself to the building phase, the project would require a separate operational clearance, which could trigger a fresh public hearing and appraisal by the or even the .
Additionally, the proximity to a protected area — roughly 0.86 km — places the project within the zone that could require a , which is decided at the central level rather than by the state. This would involve a more rigorous review, including consideration of on wildlife and local ecosystems. The petitioner’s counsel argued that the project’s water and electricity requirements, which draw on a nearby reservoir, have not been adequately studied. These concerns resonate with a growing body of case law that holds infrastructure projects to the highest standards of , especially when located near ecologically sensitive areas.
Implications for the Data Centre Industry
The outcome of this case could set an important precedent for the burgeoning data centre sector in India. Visakhapatnam has emerged as a hotspot for data centre investments, with the state targeting 6 GW of capacity under its Data Centre Policy 4.0, which offers incentives such as subsidized land, power tariffs, and single-window clearances. has also announced plans for a ₹1.6 trillion data centre cluster in the city.
If the court finds that the -Adani project’s clearances are deficient, it could slow down approvals for other similar projects, prompting developers to seek more comprehensive assessments upfront. Conversely, a green light from the court may accelerate investments, but with stricter compliance conditions. Legal practitioners in environmental and corporate law should watch for the court’s final order, which is expected next week. The case underscores the importance of obtaining clearances that explicitly cover all phases of a project, and it highlights the risks of relying on that leave operational environmental impacts unaddressed.
Conclusion
The has set the stage for a pivotal examination of how large-scale data centre projects are regulated in India. By holding the state government accountable for ensuring all clearances and by flagging the inadequacy of piecemeal environmental approvals, the court has positioned itself as a guardian of both regulatory integrity and economic development. The petition’s focus on temple land rights and resource consumption reflects a broader societal demand for transparency in mega-projects. As the case progresses, legal professionals across practice areas — from environmental law to land acquisition and corporate compliance — will find the outcome instructive for future infrastructure disputes.
The bench’s approach — neither granting a stay nor imposing an unconditional green light — offers a pragmatic template for courts handling similar matters. The coming weeks will reveal whether the state can demonstrate that the -Adani project truly complies with the letter and spirit of the law, or whether the petition’s concerns will force a recalibration of the project’s approvals.
