Common Judgment:

V.M. Syam Kumar, J.

1. These Writ Appeals are filed challenging the common judgment dated 09.09.2025 of the learned Single Judge in two Writ Petitions viz., W.P.(C) Nos.29169 and 32716 of 2024. Since they raise common questions for consideration, they are heard and hereby disposed of together vide this Common Judgment.

2. The subject matter of these Writ Appeals is the stalemate that had arisen with respect to the construction and establishment of a plywood manufacturing factory within the limits of the respondent Panchayat in W.P.(C) No.32716 of 2024, on account of the disagreement between the Secretary of the Panchayat and the Panchayat Council, in which the Government had intervened by referring the matter to the decision of the Tribunal for Local Self- Government Institutions.

3. While W.P.(C) No.29169 of 2024 was filed by the owner of the proposed plywood factory seeking police protection to carry on the construction work based on the permission/licenses for construction obtained by him, W.P.(C) No.32716 of 2024 was filed by private individuals, inter alia, seeking to set aside the orders issued by the Tribunal for Local Self-Government Institutions as well as the Government, which would pave way for permission to establish the plywood factory, alleging that the same is a polluting industry having the potential to detrimentally impact the local ecology and environment. Larger prayers to strike down Section 191 (4) of the Kerala Panchayat Raj Act, 1994 (for short '1994 Act') as unconstitutional and to declare that the said Section does not empower the Government to pass orders without hearing the affected persons, including the Panchayat, were also raised before the learned Single Judge in the latter W.P.(C).

4. The learned Single Judge vide the impugned judgment dismissed W.P.(C) No.32716 of 2024 filed challenging the permission to establish the factory, inter alia, holding that as long as there are valid licenses and permits issued to establish the factory, the holder of such permits/permission is entitled to construct and run the same. As a corollary, it was held that W.P.(C) No.29169 of 2024, filed by the owner seeking police protection to commence construction of the factory, is fit to be allowed. Aggrieved by the said common judgment, these appeals are filed. W.A.No.2264 of 2025 is filed by respondents No.4 and 5 in W.P.(C) No.29169 of 2024 and W.A.No.2356 of 2025 is filed by the petitioners in W.P.(C) No.32716 of 2024.

5. Heard Mr.Kaleeswaram Raj, Advocate, for the appellants in W.A.No.2356 of 2025 and Mr.Peeyus A. Kottam, Advocate for the appellants in W.A.No.2264 of 2025 and Mr.V.Tekchand, Senior Government Pleader for the State.

6. It is contended by Mr.Kaleeswaram Raj that the learned Single Judge erred in overlooking the fact that the revocation of the relevant building permit (Exhibit P1) by the Panchayat was based on valid grounds and was supported by cogent reasoning. The plywood factory, it is submitted, is situated in the vicinity of a residential area where nearly 130 families reside and they would be adversely affected by its establishment and functioning. According to the learned counsel, the Panchayat has ample power and authority under Section 233 of the 1994 Act to cancel or revoke a building permit. The decision to revoke Exhibit P1 building permit granted to the 4th respondent, as seen in Exhibits P14 and P15, was based on clear findings that the 4th respondent had suppressed material facts and committed fraud in obtaining the permit. In such circumstances, the Panchayat was well within its powers to revoke a permit illegally obtained by suppression of material facts and fraud. Reliance is placed on the dictum laid down in State of U.P. and others v. Maharaja Dharmander Prasad Singh and others [(1989) 2 SCC 505] and Suresh Kumar R. v. State of Kerala [2024 (6) KHC 443], to support the proposition that the power to grant a licence includes the power to cancel, set aside, or reject it. These decisions, it is submitted, also clarify that matters relating to the grant of licences for trades, factories, markets, and other establishments falls squarely within the provisions of Section 276(5)(b) of the 1994 Act. Therefore, when the owner of the establishment had a remedy under Section 276(5)(b), and a reference to the Government under Section 191 of the Act was not maintainable and was also unwarranted, an aspect which the learned Single Judge overlooked.

7. It is further contended that the supervisory power conferred upon the Government under Section 191 of the 1994 Act can be invoked only on the specific grounds mentioned therein and in matters concerning policy decisions of the Panchayat, and not in relation to individual disputes. In the case at hand, it is submitted, the invocation of Section 191 was not in accordance with the statutory provisions and therefore, the impugned orders were vitiated for non-compliance with the procedure prescribed under the Act. The Government cannot arbitrarily interfere in the functioning of the Panchayat, which is an autonomous body, as such interference defeats the very object of the 73rd Constitutional Amendment. Reliance is placed on Ayisha K.V. and others v. State of Kerala and others [2015 (4) KHC 296] to garner support for the contention that the supervisory power under Section 191 is to be exercised only in relation to decisions of the Panchayat and not in individual disputes. It is further submitted that even when Section 191 is invoked, the due procedure under the Act must be followed, and without complying with the procedure prescribed under Section 182(iii) of the Act, the Secretary of the Panchayat cannot resort to proceedings under Section 191. Reliance is placed on the dictum of the Hon’ble Supreme Court in Bhavnagar University v. Palitana Sugar Mill (P) Ltd. and others [(2003) 2 SCC 111] ; Raj Soni v. Air Officer in Charge Administration and another [(1990) 3 SCC 261] and that of this Court in Padmanabhan P.K v. Deputy Director of Panchayaths [2024 (2) KHC 280].

8. It is further submitted by Mr.Raj that Sections 233(3) and 233(4) of the 1994 Act, as amended by the Kerala Investment Promotion and Facilitation Act, 2018, mandate the Grama Panchayat to grant a licence, either absolutely or subject to conditions as it deems fit. Such compulsory grant of licences adversely affects the neighbouring residents and infringes their fundamental right to life under Article 21 of the Constitution. By removing the Panchayat’s discretion to refuse licences on grounds of public safety and health, the impugned provisions fail to maintain a balance between citizens’ rights and developmental interests, and are therefore, liable to be struck down as unconstitutional.

9. Regarding the prayer for police protection that had been sought by the owner of the establishment, which had been granted by the learned Single Judge, Mr.Raj submits that such a writ ought not have been granted as a matter of right or course, especially since the matter had civil overtones which required adjudication by a competent civil court. Reliance is placed in this respect on the dictum in Aravindakshan M.K. v. M.R.Pradeep [2025 KHC OnLine 917]. Thus, it is prayed by Mr.Raj that Writ Appeals may be allowed and the prayers in W.P.(C) No.32716 of 2024 may be granted, and the judgment to the extent it allowed W.P.(C) No.29169 of 2024 may be dismissed.

10. Per contra, Mr.Peeyus Kottam, learned counsel appearing on behalf of the 4th respondent, owner of the establishment, submitted that the judgment of the learned Single Judge was valid, legal and sustainable in law, thus requiring no interference. According to him, the appellants have no locus standi to challenge Exhibits P1, P18 and P19, which are statutory orders issued by the competent authorities in exercise of powers under the 1994 Act and if at all they are aggrieved by the Exhibit P1 building permit issued by the Panchayat Secretary, the remedy was to prefer an appeal under Rule 108 of the Kerala Panchayat Building Rules, 2019.

11. Mr. Kottam further submits that the litigation initiated at the instance of the residents of the locality is premature and was fit to be dismissed on the count that a consent to establish is the very preliminary step for effecting the construction of the unit and after completing the construction, the unit can be started only after obtaining consent to operate is issued by the Pollution Control Board after due inspections and study. The construction of the building is in the preliminary stage and is governed by the provisions of the 1994 Act and the Rules thereunder. As per Rule 9(3) of the Rules of 2019, the power to issue building permits is vested in the Secretary. This question is no longer res integra and has been considered by this Hon'ble Court in the judgment reported in Sinoj Thomas vs. Balal Grama Panchayat [2023 (4) KHC 484] wherein it has categorically held that the power to issue building permits is solely vested with the Secretary and the Panchayat has no right to interfere with such rights vested with the Secretary.

12. It is submitted by Mr.Kottam that the contention put forth that Exhibit P1 building permit was issued under Section 233 of the 1994 Act is per se illegal and misleading, as the same is issued under Rule 6(17) and Rule 9(4) of the Kerala Panchayat Building Rules, 2019. Sections 232 to 234 of the 1994 Act, it is submitted, come under the heading ‘Dangerous and offensive Trade and Factories’ which is a totally unrelated subject. It is after completing the construction that an application is to be submitted under Section 233 and the procedure for considering such an application as stipulated therein. Sections 232 and 233 will thus come into play only when the applicant seeks a licence to commence a factory or to install machinery after obtaining consent to operate from the Pollution Control Board (PCB), a stage that has not yet arisen. Contentions raised by the appellants in that respect are, hence, per se illegal and unsustainable. Reliance is placed in this respect on the dictum in Dharmadom Paristhithi Samrakshna Samithi v. Dharmadom Grama Panchayath [2010 (2) KHC 522].

13. Since the stand of the Government assumes much relevance in the factual matrix of the case at hand, we heard the learned Senior Government Pleader as well as the Standing Counsel for the PCB. The learned Senior Government Pleader submits that the principal contention taken by the appellants in the Writ Petition as well as in the Writ Appeal that the decision taken by the Government by referring the matter to the Tribunal is bad as the same is issued in violation of the principles of natural justice, is unsustainable. It is submitted that a reading of Section 191(1) would show that the Government may either suo motu or on a reference by President, Secretary or a member, or on a petition received from a citizen, cancel or vary a resolution passed or decision taken by the Panchayat if in their opinion such decision or resolution is not legally passed or taken; or is in excess of the powers conferred by the Act or law, is likely to endanger human life, health, public safety, communal harmony or may lead to riot or quarrel or is in violation of the directions or provisions of grant issued by Government in the matter of implementing the plans, schemes or programmes. In this present case, the Secretary, based on Rule 4 of the Kerala Panchayat Raj (Procedure to be adopted on illegal Resolutions) Rules 2003, requested the Panchayat Committee meeting regarding the illegality perceived by him, overlooking which the Panchayat had resolved to uphold its earlier decision. It is thereafter that the Secretary, as per Sub Rule (3) of Rule 4, forwarded the resolution of the Panchayat to the Government for its decision. The Government under Section 191(2) of the 1994 Act referred the matter to the Tribunal. The parties to the case had been heard in detail before the Tribunal and given that there is no stipulation under Section 191 to the effect that a hearing has to be afforded at the Government level before a decision is taken under Sub Section (2) of Section 191, the contention regarding violation of the principles of natural justice was liable to be rejected and had been rightly done so by the learned Single Judge. The learned Senior Government Pleader further submitted that, as per Rule 4 of Building Rules, 2019, it is stipulated that construction or reconstruction or making additions or extensions or alterations of any building can be carried out only when the building permit is obtained from the Secretary. As per Rule 9(3), the Secretary, after approving the site and the site plan and other specifications stipulated in the said Rule, issues permits to execute the work. It is based on the power granted as per the said Rule read with Sections 235 F and G of the 1994 Act, the Secretary of the Panchayat has been granted authority to issue building permits. Any person aggrieved by the issuance of the permit has to file an appeal against the order passed by the Secretary to the Tribunal for Local Self Government Institutions under the 1994 Act. The said course, as envisaged in law, had not been adopted. It is submitted that the Panchayat Committee has no power to interfere with the statutory functions ordained upon the Secretary by the Act and Rules, and this mandate is clearly stipulated in Section 185 B of the 1994 Act.

14. As regards the challenge to the Kerala Investment Promotion and Facilitation Act, 2018, it is submitted by the learned Senior Government Pleader that after the amendment to Section 233 (3) of the Kerala Investment Promotion and Facilitation Act, 2018, the word “refuse” has been omitted. By the said omission, the intention of the legislature is that giving sanction or approval should be the rule. It is pertinent to note that even after the amendment, the Panchayat's power to impose conditions envisaged under Section 233(4) while granting permission has not been altered. The legislative power to effect the said amendment is not open to challenge, as the matter falls within the purview of Entry 5, List II, State List, Seventh Schedule of the Constitution. Hence, the learned Senior Government Pleader submitted that the amendments made in Section 233 of the 1994 Act are constitutionally valid.

15. The granting of permission under Sub Section (3) of Section 233 of the 1994 Act, it is submitted, has to be preceded by consideration of the reports stated in Sub-Section (4) of Section 233. The same includes the reports of experts regarding various parameters for the establishment of factories, workshops, workplaces, or premises, including the possibility of nuisance or pollution, the adequacy of fire-fighting equipment in such establishments, etc. It is only on such consideration that the Panchayat is to grant the permissions stipulated under Sub Section (3). When experts, after due consideration, render their opinion in the matter, it is not open to the Panchayat to sit in judgment over the same and/or to delay or refuse a license based on considerations which are not germane to the establishments of factories, workshops, work places, etc. Reliance is also placed by the learned Senior Government Pleader on Section 276(5) of the 1994 Act, by which a notice issued or an order passed or action taken by the Panchayat with regard to grant of permission or license for traders, factories, markets and other establishments is appealable before the Tribunal for Local Self Government Institutions, which legally mandated route had not been admittedly adopted by the appellants. Thus, the learned Senior Government Pleader prayed that the impugned judgment does not merit interference and the appeals are only to be dismissed. Reliance is also placed on the dictum laid down in Tomy Thomas v. State of Kerala and others [2019 (4) KHC 553 (FB)].

16. We have heard all sides in detail and have considered the contentions put forth. The relevant documents produced by both sides, as well as the precedents relied on, have been studied.

17. At the threshold we note that among the bouquet of contentions put forth by the appellants in these appeals include those regarding the constitutional validity of the amendments made to the 1994 Act especially the validity of Section 191 (4) and 233 (3) & (4) thereof, Section 2 of the Kerala Investment Promotion and Facilitation Act, 2018, Rule 12(3) of the Kerala Panchayat Raj (Issue of Licence to Factories, Trades, Entrepreneurship Activities and other Services) Rules, 1996 and Clause 8 (c) of the GO bearing No.GO (P) No.80/2017/LSGD dated 31.10.2017. We note that the said challenges inter alia concerning constitutionality and vires of the relevant provisions/norms are already pending consideration before this Court in another set of Writ Appeals/Petitions. There are conflicting decisions with regard to Section 233 (as amended by Act 14 of 2018). The Full Bench in Tomy Thomas (supra) held that the intention of Legislature to bring drastic amendment to the relevant provisions is clear and explicit from the amendments and as of now, power of Village Panchayat to refuse permission to establish factory, workshop or workplace has been taken away by Legislature. Whereas in Salu Sugathan Someni v. Najeem M. decided by a Division Bench in W.A.No.1503 of 2019 on 20.12.2021, it was observed as follows :

                  "The grant or refusal shall also be within the time stipulated in the Rules, failing which the applicant would be entitled to carry on with his activity deeming the permission under S.233 of the Act of 1994. Hence according to us, prior to amendment even if the authorities under sub-section (4) conceded to the establishment sought for under S.233, the Village Panchayat had the power to refuse such permission on the basis of the objections pointed out by the Secretary. After the amendment, which obviously was in promotion of establishment of industries, there is a definite time frame for the various stages of processing of the application and the ultimate grant with or without condition which also implied refusal in a contingency on valid grounds. There is also a mandate that when the abatement of nuisance, as pointed out by the Secretary or which occurs to the Village Panchayat on a consideration of the various reports under sub-section (4), is possible, then the Village Panchayat is obliged to grant the permission under S.233 with such conditions as required by the expert body to abate or avert the nuisance. However, this does not denude the power of the Panchayat to refuse permission which not only is implied in the power to grant but also would be in consonance with the functioning of the Panchayat as self government institutions; as envisaged in the Constitution. In the above circumstance, we direct the Registry to place the matter before the Hon'ble the Chief Justice for constitution of a Full Bench to consider whether Tomy Thomas v. State of Kerala [ 2019 (3) KLT 987] requires a re-consideration. "

                  We hence, had to consider whether a decision on the said issues of constitutionality/vires is relevant and needs to be awaited before the disposal of these appeals at hand.

18. After an anxious consideration of the above question, which included deliberations at the bar, we decided that in the facts and circumstances of these appeals, the larger questions aforesaid touching on constitutionality and vires of the provisions/norms, need not stand in the way of the disposal of these appeals. The prime reasons for concluding so had been that in the appeals at hand, an entrepreneur had been waiting since 2024 after obtaining due permissions and licenses to commence a commercial activity as envisaged under law, in a State where industrial growth is important and the only hurdle on his way had been the primarily factual objections raised by some of the residents of the locality, as reflected in the Writ Petition filed by them, to which the Panchayat appears to have acceded to. Further the fact that both sides had been elaborately heard by the Tribunal for Local Government Institutions, during which all the factual contentions had been deliberated and considered before arriving at the decision seen to have been arrived at have also duly weighed with us. We are of the view that in these proceedings we need to assess whether the Tribunal has decided the issue in accordance with law. Moreover, the pendency of constitutional challenges cannot deter us from deciding the correctness of the decision of the Tribunal as even otherwise the decision of the Panchayat is open to judicial review.

19. It is not disputed that the Panchayat had issued a building permit to the entrepreneur as early as 18.06.2024. A ‘Consent to Establish’ had been issued to him by the Kerala State Pollution Control Board on 06.04.2024. The construction of the factory had commenced based on the permit issued, and in the course of such construction, obstructions were made, against which an injunction order dated 12.07.2024 was obtained by the entrepreneur from the jurisdictional civil court. It is thereafter that the Panchayat council decided to cancel the building permit, which is the starting point of this litigation.

20. We note that the Secretary of the Panchayat, perceiving illegality in the Panchayat council decision to cancel a building permit after its due issuance, had, as empowered under Section 182(iii), brought the matter to the notice of the Government. Such a course adopted by the Secretary, as rightly concluded by the learned Single Judge, cannot be termed illegal, as it was done in circumstances which revealed that all the competent expert bodies had, after inspection, permitted such establishment. Upon receipt of such reference by the Secretary, that the Government had, as empowered under Section 191 (2) of the Act, referred the matter to the Tribunal. Apart from the purported constitutional validity of the provision thus empowering the Government to cancel and suspend resolutions etc. of the Panchayat or to refer the question for a decision by the Tribunal, nothing has been produced before us, nor before the learned Single Judge, to challenge the validity or sustainability of such reference of the question by the Government to the Tribunal. In the facts and circumstances of the case, the reference to a statutorily empowered and neutral quasi-judicial body, invoking the powers vested by the Act, cannot be termed illegal or perverse. Further, no malafides or perverseness in such action of the Government has been reliably pointed out or established. Once the reference to the Tribunal has taken place, the Tribunal's decision, which is sought to be quashed, becomes relevant.

21. The Tribunal has in its order produced as Exhibit P18 in W.P.(C) No.32716 of 2024 considered the issue in detail and we note that it has opined as follows:

                  “ The records reveal that the applicant had obtained all necessary no-objection certificates. There was also report from the environmental engineer which ruled out the chance for pollution due to the functioning of the factory. The minutes of the single window clearance board revealed that all statutory authorities conducted joint inspection and it was decided that direction can be given to the Secretary to permit the construction without causing any pollution and on providing facility for proper waste disposal.”

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                  “Once a reference is forwarded to this Tribunal, the legality of decisions taken by the Panchayat and the view taken by the Secretary alone need to be looked into by this Tribunal for answering the reference. It is settled proposition that in view of the amendment to Section 233 of Panchayat Raj Act, the Village Panchayat cannot refuse permission to establish a factory, workshop or workplace and such power has been taken away by the legislature. But in the present case, the establishment permit was not granted so far and the application is pending. On the other hand, the building permit granted by the Secretary has been cancelled by the Village Panchayat without jurisdiction. Hence both the decisions taken by the Panchayat were illegal and were violative of Section 185B of the Panchayat Raj Act. Thus both the decisions of the Panchayat Committee were illegal.”

22. It is after due consideration of the above order of the Tribunal, that the learned Single Judge concluded that there is no reason to interfere with the Government Orders issued based on the same revoking Exhibit P14 and Exhibit P15 orders issued by the Panchayat. The learned Single Judge held that no illegality has been noted in the orders passed by the Government or the Tribunal, and concluded that the petitioner in W.P.(C) No.29169 of 2024 is entitled to construct and run his factory as long as he holds valid licences and permits.

23. The learned Single Judge had concluded that the objections of the Panchayat for cancellation of the building permit are not legally sustainable and that the entrepreneur is entitled to be granted police protection to proceed with the construction of his establishment in accordance with law. The said conclusion was arrived at, inter alia, noting that the entrepreneur is entitled to construct and operate his factory, provided he holds valid licenses and permits and that the Minutes of the meeting of the Panchayat Committee clearly indicated that when the Panchayat decided to cancel the building permit granted to the entrepreneur, overlooking the powers of the Secretary in issuance of such permits. The reliance placed on the dictum in Sinoj Thomas (supra) in this respect, we note, is apposite. Further, the Secretary of the Panchayat, in the meeting convened in that respect, gave his opinion, disagreeing with the resolution to cancel the building permit. The said opinion given by the Secretary against the resolution fell specifically within the ambit of the proviso to Section 182(iii), and hence the arguments put forth based on Section 182 are unsustainable, as has been rightly concluded by the learned Single Judge. We find the said reasoning of the learned Single Judge valid and legal, and there is no cause put forth before us to interfere with the same.

24. No perversity or illegality has been pointed out to us to interfere with the findings of the learned Single Judge. The contention that the independence of the Local Government Body had been interfered with by the Government, as put forth based on the dictum in Ayisha K.V. (supra), is not applicable to the facts and circumstances of the case. Similarly, the proposition that the power to grant a licence includes the power to cancel, set aside, or reject it put forth by the appellant, based on the dictum in Maharaja Dharmander Prasad Singh (supra) and Suresh Kumar R. (supra) cannot be pressed into service in the facts and circumstances of the case at hand wherein the power of the secretary to issue building permits and the limits on the power of the Panchayat to interfere with such poser of the secretary has been circumscribed by legal norms and well settled judicial precedents.

25. The learned Single Judge, we note, had correctly taken note of the Tribunal's finding, which was based on the report of the environmental engineer, who had ruled out the possibility of pollution emanating from the proposed factory's operation. It is trite and settled that once a body competent to consider the matter gives its opinion on technical matters, Courts have a limited scope of judicial review in such matters. It has been held by the Hon’ble Supreme Court in Sterlite Industries (India) Ltd. v. UOI [(2013) 4 SCC 575] that environment clearance granted by expert authorities can only be quashed on well-recognised principles of judicial review ie, if there is any illegality, irrationality, procedural impropriety or Wednesbury unreasonableness in granting such permission. Decisions based on technical evaluations are considered the "forte" of the Government or its specialised implementing agencies, and such matters must be left to their mature wisdom. The court can intervene  only  when  there  is  irrelevant  consideration  or  the nonconsideration of material evidence. [[See N.D.Jayal and another v. Union of India and others [(2004) 9 SCC 362]]. We record that the owner of the plywood factory has not yet applied for licence as the construction of the factory is under progress. Likelihood  of  nuisance  and  environmental  impact  shall  be considered by the Pollution Control Board as and when such application is made upon obtaining the views of the Panchayat.

                  In view of the above, we find no reason to interfere with the findings and conclusions arrived at by the learned Single Judge. The Writ Appeals fail, and they are dismissed.