The court held that a government order granting preliminary sanction for establishment of a distillery must be based on accurate facts, particularly concerning location and resource management.

JUDGMENT

Sathish Ninan, J.

These writ petitions are filed as Public Interest Litigations by the residents of Elappully Grama Panchayat, Palakkad District, either individually or through association. Their common grievance and challenge is against the Government Order No.45/2025/TAXES dated 16.01.2025(marked as Ext.P1 in the writ petitions except W.P(PIL)20/2025 wherein it is Ext.P3) granting “preliminary sanction” to a Private Limited Company, M/s Oasis Commercial Pvt. Ltd. (hereinafter referred to as, “the Company”) for the establishment of an Ethanol plant, Multi-feed distillation unit, Indian Made Foreign Liquor bottling unit, Brewery, Malt Spirit plant and Brandy/Winery Plant at Kanjikode, in Palakkad district.

2. The Company submitted an application dated 30.11.2023 to the Commissioner of Excise, seeking permission to install 500 KL capacity ethanol-cum-multi-feed distillation and IMFL bottling unit, brewery, malt plant, winery and grape spirit plant. The investment is to be approximately of 600 crores.

3. The Excise Commissioner forwarded the application to the Government, along with his recommendation dated 06.02.2024, to give initial sanction for the project. The recommendation was supported by the reports of the Deputy Excise Commissioner, Palakkad, dated 08.12.2023 and of the Joint Excise Commissioner, Central Zone dated 19.01.2024. The Government, after considering the recommendation, issued the impugned order granting “preliminary sanction” for the establishment.

4. We have heard the learned Senior Counsel Sri.M.R.Hariraj, and Sri.Thomas Jacob and Sri.P.S.Biju, learned counsel for the respective petitioners, Sri.S.Kannan, learned Senior Government Pleader and Sri.M.Krishna Kumar and Sri.Justine Jacob, learned counsel for the respective respondents. We have also considered the rival pleadings and also perused the related Government file which was provided to us by the learned Senior Government leader.

5. The learned Senior Counsel contended that the Government Order granting “preliminary sanction” has no legal backing. The Government Order pre-empts the statutory authorities and the Local Self Government Institutions from exercising powers vested in them under the relevant statutes with regard to grant of various statutory sanctions.

6. The petitioners allege that the inputs, which have been taken into consideration by the Government while granting sanction, are factually incorrect. The Government Order has been issued on the premise that the Unit is sought to be established at Kanjikode industrial area. As is evident from the materials, the property upon which the Unit is sought to be established is situated at Elappully Grama Panchayat which is approximately 5 kilometres away from Kanjikkode.

7. Palakkad is a dry area. The proposed unit would require at least 5000 KL water per day which would result in depletion of ground water, putting life of the inhabitants at peril. It is also alleged that, without consideration of the aforesaid fact the Kerala Water Authority has agreed that they would spare the required water for the project. It is also pointed out that the said consent was granted by the water authority as per its letter dated 16.06.2023 upon the application submitted by the Company to the Water Authority on the same day.

8. It is also contended that, the Government while granting sanction, has taken into consideration the representation by the Company that it has been shortlisted by the Oil Marketing Companies under the National Policy on Bio-fuels, regarding usage of ethanol blended petrol. The agreement, a copy of which has been produced in the writ petitions, required the entire quantity of ethanol manufactured in the unit to be supplied to the oil marketing c