The Kerala High Court urged political parties to assure voters that entrepreneurs will not face shutdowns due to baseless protests. It added that once a unit has all legal clearances, local bodies cannot deny licences based on flimsy objections.
Ahead of the Legislative Assembly elections, the Kerala High Court urged political parties to reassure voters that entrepreneurs in the State need not fear their businesses being shut down because of unfounded public protests.
The Court stressed that once an industrial unit has obtained all required legal clearances, no local authority may refuse it a licence to operate solely on the basis of flimsy public objections.
Justice P.V. Kunhikrishnan warned that forcing a lawful business to close due to unwarranted protests by a few would undermine the rule of law and deter investment in the State.
The Court added,
“This is the General Election time in Kerala. The political parties and the candidates should tell the electorate and get their mandate by saying that, if they are elected, no entrepreneur in Kerala who has obtained all statutory clearances from all authorities, including pollution and environment authorities, will be forced to close down their unit because of the protest of a handful of people if their apprehension has no basis. It is the duty of the elected representatives to convince the electorate at the time of the election itself that, once statutory clearance is obtained, nothing will happen, and industrial growth is the need of the hour in our state,”
The Court acknowledged that public dissent is an essential part of democracy but said it cannot trump legally granted permissions.
Preventing entrepreneurs from operating their permitted industries would harm the State’s industrial growth, the Court noted.
The Court stated,
“If such a course (bowing down to public pressure to shut down industries that have been set up after securing all clearances) is tolerated, investment will be deterred, employment opportunities will wither, and law-abiding enterprises will be taught the wrong lesson that compliance is not protection,”
The remarks arose from a petition filed by two entrepreneurs who sought to run a hot mix plant (used to produce road construction materials).
They said they had obtained all necessary approvals, including consent from the Pollution Control Board and a no-objection certificate from health authorities.
In 2017 they applied to the Nellanad Grama Panchayat for permission to set up the plant. When the Panchayat did not respond within the statutory period, the petitioners treated the delay as “deemed permission” under Section 236 of the Kerala Panchayat Raj Act, 1994, and proceeded to establish the plant.
Subsequently, the Panchayat informed them that the application had been rejected because of public protests.
The petitioners secured interim relief from the tribunal for local self-government institutions and, with police protection ordered by the High Court, were able to continue operations.
They later formed a partnership, modernized equipment worth crores, and filed for approval of the revised operations. Again, when the Panchayat failed to decide in time, the petitioners treated the application as deemed permitted.
Yet in 2023 the Panchayat issued a stop memo, and locals’ protests obstructed the plant’s functioning, prompting further tribunal and High Court intervention.
After filing fresh applications under the 1994 Act, the Panchayat declined to grant approval, citing residents’ health concerns regarding the hot mix plant. The petitioners challenged that refusal in the High Court, which directed the Panchayat to reconsider.
The Panchayat maintained that a 2018 amendment to Section 233 preventing outright rejections of factory approvals and allowing only conditional approvals did not apply because the machinery at issue had been installed before 2018.
The petitioners returned to the High Court contesting that stance.
In its April 1 ruling, the High Court observed that the petitioners’ experience highlighted a broader problem: official assurances that disappear when enforcement is needed.
The Court rejected the Panchayat’s argument, noting the latest application was filed in 2025 and therefore fell within the scope of the 2018 amendment.
Consequently, the Court held that the Panchayat could no longer reject the application outright but could impose conditions when granting permission.
The Court held,
“Therefore, the Panchayat must allow the application and, if necessary, may also impose conditions while granting permission. It should be done forthwith to strengthen faith in the rule of law and to boost the morale of genuine entrepreneurs who want to invest in Kerala,”
The High Court directed the Panchayat to reconsider the petitioners’ most recent application in accordance with the law.
Senior Advocate Renjith Thampan and Advocate Ajith Krishnan represented the petitioners.
Advocate M.H. Hanilkumar appeared for the Nellanad Grama Panchayat, and Advocate Kaleeswaram Raj represented other respondents.
Case Title: Sudheer S & ors v State of Kerala & ors
FOLLOW US FOR MORE LEGAL UPDATES ON YOUTUBE
