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

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.

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

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

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

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

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.

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

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

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

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/-

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,

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

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,

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

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

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

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

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

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.

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