The Kerala High Court quashed the State Government’s preliminary sanction granted to M/s Oasis Commercial Pvt. Ltd. for establishing a ₹600-crore ethanol and liquor manufacturing unit in Palakkad district, citing factual inaccuracies and flawed decision-making.
A Division Bench of Justice Sathish Ninan and Justice P. Krishna Kumar allowed a batch of Public Interest Litigations filed by residents of Elappully Grama Panchayat, challenging Government Order No. 45/2025/TAXES dated January 16, 2025, which had accorded initial approval for setting up an ethanol plant, multi-feed distillation unit, IMFL bottling unit, brewery, malt spirit plant, and winery.
The petitioners contended that the Government granted approval on an erroneous premise that the unit would be located at the Kanjikode industrial area, whereas the proposed site was situated in Elappully Panchayat, a water-stressed region. They further raised serious concerns over the project’s requirement of nearly 5,000 KL of water per day, warning of severe groundwater depletion and impact on local residents.
The Court noted that the Government Order relied upon an alleged consent from the Kerala Water Authority (KWA) to supply water to the project. However, KWA clarified before the Court that no formal or binding water consent had been issued and that its earlier communication was only indicative and issued to enable tender participation.
While recognising that prior Government approval is contemplated under Section 14 of the Abkari Act, the Bench held that several factors which weighed with the Government particularly regarding location, water availability, and project feasibility were “not factually correct in their entirety.” As a result, the approval was found to be legally unsustainable.
Quashing the preliminary sanction, the Court clarified that the judgment would not preclude the State Government from reconsidering a fresh application, if made, on the basis of accurate facts and requisite statutory inputs.
Appearances:
For the Petitioner: Adv Shri Thomas Jacob
For the Respondent: Advs Justice Jacob, M Krishnakumar
