Karela Fry

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Lavasa with breakfast

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Lavasa, hill homes for the well-heeled, first hit the headlines because it was sponsored by Supriya Sule, the daughter of Sharad Pawar. She was said to have exited the board some time back. Lavasa was in the headlines in mid-November for a “literature festival” which featured famous writers such as Anupam Kher, Bachi Karkaria and B. G. Verghese. Then suddenly, on November 26, we heard from Hindu Business Line and others that

The Environment Ministry has issued show-cause notices to Lavasa Corporation and Jindal Steel and Power Ltd (JSPL) on Friday for flouting green norms in their projects.

Lavasa, a subsidiary of Hindustan Construction Company Ltd (HCC), is building the Lavasa Lake City near Pune, whereas Jindal is setting up a 6 million tonne per annum (mtpa) integrated steel and power plant at Kerjang, Angul in Orissa.

The Ministry, in the show-cause notice issued to Lavasa on Thursday, asked why the unauthorised structures constructed without any environmental clearance between March 2004 and September 2006 in Mulshi and Velhe taluks of Pune should not be removed in their entirety.

Stating that the constructions were in violation of the Environment Impact Assessment Notification 2006, the Ministry asked Lavasa to stop construction till it replied to the notice. The Ministry has given 15 days to respond to the notice.

The violations allegedly committed by Lavasa include having constructed at a height of above 1,000 meters against a clearance for construction of up to 900 meters. The Maharashtra Government assessment found that in 47.3 hectares of the project construction was above the permissible limit.

It is also alleged that Lavasa did not seek clearance from the Ministry despite the company not meeting the requirements of the 2004 amendment to the EIA Notification 1994. Besides, the company is also alleged to have made changes to the project during the first phase of development starting March 2004 apart from doing construction after the EIA Notification 2006 came into effect.

Two days later, we heard of a long campaign, never covered by the press, and a little whiff of a family feud from HT:

Within 24 hours of receiving the environment ministry notice, Lavasa Corporation has stopped all work at its hill city in Mose valley of Pune district. A spokesperson of Hindustan Construction Company, promoters of Lavasa Corporation, said although the notice “shocked” the firm, all the vehicles, manpower and earthmoving machinery were being withdrawn from the 25,000-acre site.

Besides social activists, such as Medha Patkar and Anna Hazare, opposing the project, Maharashtra deputy chief minister Ajit Pawar said earlier in the day that the promoters were answerable if they had committed mistakes while building the hill city.

The spokesperson said although the company was preparing to reply in the stipulated 15 days, its other business activities were going on as usual.

Patkar, leader of the National Alliance for People’s Movement, also confirmed that she had received several phone calls from farmers and agitators in the valley confirming the stoppage of work.

She said she wanted the entire construction work to be demolished and farmers compensated adequately. “We will not tolerate if the government regularises the illegal construction by charging fine.”

Meanwhile, chief minister Prithviraj Chavan called Hazare on the phone. Hazare earlier announced to undertake an indefinite fast from December 1 on the issue. He said Chavan had requested him for some more time to look into the matter.

Hazare was critical of both the government and the company, asking, “Is there a rule of law in the state?”

That large monetary interests were at stake became clear in Lavasa’s reply to the ministry’s show cause notice, according to the Hindu:

In its reply to the show cause notice issued by the Environment Ministry, Lavasa Corporation Limited has accused Union Environment Minister Jairam Ramesh of acting with mala fide intent. He issued the notice in haste, breaching the “principles of natural justice,” it said.

“Our clients deny each and every allegation made by you in the above notice,” the reply by Agarwal Law Associates, representing the LCL, said. It claimed that Mr. Ramesh took the decision because of pressure from “political activists” like Medha Patkar. The notice was issued with the motive of causing huge irreparable financial loss to LCL. The notice came at an important time when LCL was about to go in for an IPO of close to Rs.2,000 crores, it pointed out.

The show cause notice that threatened to demolish the illegal construction ignored issues of “financial stakes and larger public interest,” the reply said. The vast development done by Lavasa was ignored. So was the projected loss in employment and education. Some 8,174 jobs had been created so far, it claimed.

Thousands of third party rights had been created and these innocent persons would be unnecessarily harmed.

Today the matter has moved to court, as BS reports:

Lavasa Corporation, an arm of Hindustan Construction Corporation (HCC) engaged in development of a hill city in Maharashtra, moved the high court here today with a plea that the showcause notice served on it by the Ministry of Environment and Forests (MoEF) be stayed. MoEF had asked Lavasa to maintain status quo at the site.

The petitioner has made Union Minister Jairam Ramesh, MoEF director Bharat Bhushan and the Maharashtra government as respondents. In its notice, MoEF had said the constructions at the site were in violation of the Environment Impact Assessment Notification, 2006. The notice issued on November 26 also stopped any construction and development activities till the company’s reply in the matter.

Besides, the company was asked to furnish the details of the project, including clearances obtained, status of the project with photographs/satellite images indicating the constructions as on March 18 and July 7 in 2004 and June14 in 2006. In its reply to the MoEF notice on Monday, the company had accused Ramesh of malafide intent, arguing the notice was issued to stall its Initial Public Offering plan. It also said the ministry had no jurisdiction in the matter.

Finally the cat is out of the bag. Sharad Pawar came into the open. Here is a report from DNA:

Two days after his ministry issued a show cause notice to the developers of the hill city, terming all construction work unauthorised, Sharad Pawar, the powerful NCP chief, came out in support of the project on Tuesday.

Pawar also expressed reservation about the notice. “I can’t understand the notice to Lavasa. The ongoing project has already sold around 1,600 houses and there are labourers working there,” an agency quoted him as saying. On Monday, during his interaction with Union finance minister Pranab Mukherjee, he had also raised the issue of witch-hunt against the corporate world and wanted the government not to “over-use CBI”.

Dec 23, 2010

Lavasa’s appeal to stay the ministry’s order was not upheld by the court, as IE reports:

The Bombay High Court today directed the Ministry of Environment and Forest to take a final decision by January 10 on the showcause notice issued to Lavasa Corporation over its township project near Pune.

The High Court directed Ministry officials to camp with experts at the site for three days to study the alleged impact of the project on the environment.

“It shouldn’t be a casual visit. See the entire complex, don’t just take an aerial view of it,” directed the division bench of Justices B H Marlapalle and U D Salvi.

The High Court was hearing a petition filed by Lavasa Corporation, challenging the Ministry show cause notice which claimed that clearances had not been given under the 1994 and amended 2004 notifications.

Jan 18, 2011

The Hindu reports:

The Environment Ministry has handed the Lavasa Lake City a lifeline, even as it declared the project unauthorised.

If the Lavasa Corporation is prepared to pay a fine, set up an Environmental Restoration Fund and follow strict terms and conditions, the Ministry is prepared to consider the future of the housing project on merits, the final order issued by the Ministry on Tuesday said. In the meanwhile, the stop work order remains in place, so that status quo is maintained at the construction site.

The Ministry has been investigating the Rs. 3,000 crore project’s compliance with environmental norms since it issued a show cause notice and stop work order in November 2010, based on complaints by civil society activists.

The Ministry found that the project, involving the development of hill station townships near Pune, is in violation of the Environmental Impact Assessment notification of 1994, its 2004 amendment and the fresh EIA notification of 2006. A site visit by a Ministry team earlier this month also found that the project has caused considerable environmental damage.

Despite these violations, the Ministry could allow the project to continue, thanks to the investments and labour which have already gone into the project, third party rights which are accrued, the employment generated, and the “claimed upliftment of the area”.

Apart from the “substantial penalty” for violation of green laws, Lavasa has been told to create an Environmental Restoration Fund, with “sufficiently large corpus” to be managed by an independent body of stakeholders under Ministry supervision. The Ministry is also imposing “stringent” conditions to ensure that no further environmental degradation takes place, while a time bound schedule is set up to rectify the damage that has already been done.

Jan 27, 2011

Moneycontrol reports:

The Bombay HC has granted six weeks time to Lavasa to submit relevant documents pertaining to land transactions, investment details and future investment details among others.

However, the MoEF counsel has categorically said “no question of settlement” with Lavasa during these six weeks. He said that there has been instruction of out of court settlement given by the MoEF. The case is likely to be heard during the second week of March.

The Ministry of Environment and Forests (MoEF) had earlier asked Lavasa to pay penalty of an unspecified sum. Secondly, Lavasa was also required to set up an environmental fund that would come directly under the MoEF. Finally, Lavasa was only allowed site activity on certain MoEF;s terms and conditions. Certainly if Lavasa would have agreed to these terms and conditions, it would mean to have agreed to the jurisdiction of the MoEF.

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