K. Balakrishnan Nair, J.

1. The point that arises for consideration in this case in whether a Grama Panchayat can cancel the licence of a factory manufacturing non-alcoholic beverages on the ground of excessive exploitation of ground water. The brief facts of the case are the following:- .

2. The petitioner is Perumatty Grama Panchayat. The 2nd respondent Company is running a factory at Moolathara in Perumatty Grama Panchayat. Its main products are soft drinks and bottled drinking water. The said factory was established after obtaining permission from the Panchayat. It started commercial production in March, 2000 after obtaining license from the petitioner Panchayat. The main raw material used in the manufacture of beverages is water. Substantial portion of the need for water is met by exploiting ground water through bore-wells. The people in the locality raised objection against the exploitation of ground water by the Company. Therefore, the Panchayat passed Ext.P.1 resolution on 7-4-2003, deciding not to renew the licence of the factory. The translation of that resolution reads as follows:

"As the excessive exploitation of ground water by the Coca-Cola Company in Plachim