In a significant development, the Gujarat High Court on Monday ordered the suspension of all commercial and development activity inside the 21 units at the Adani Group’s Adani Ports and Special Economic Zone (APSEZ) at Mundra in Kutch district with immediate effect.

A division bench of the High Court, comprising Chief Justice Bhaskar Bhattacharya and Justice J.B. Pardiwala, passed the order following a public interest litigation (PIL) filed by the villagers of Navinal, located inside the Mundra SEZ, alleging serious violations of the Environment Impact Assessment (EIA) notification, 2006 by the company and the units there.

“The court observed that the SEZ and several units had come up there, developed the plots allotted to them and earned profits from commercial production before the SEZ received the deemed environment clearance from the Union Ministry of Environment and Forests (MoEF). This is in clear violation of the basic core of the EIA notification,” said Anand Yagnik, counsel for the petitioners.

The industrial units, including the developer APSEZ and firms like Aadi Group, Empezar Logistics, Avesta Process Equipment and Modular, Ashapura Garments, Terram Geosynthetics, Thermax Limited (SEZ Unit), SKAPS Industries, Oilfield Warehouse & Services, Dorf Ketal Speciality Catalyst, Anjani Udyog and Oriental Carbon Chemicals have been asked to shut operations.

“Today [Monday], the High Court has pronounced an order against 12 manufacturing units in Mundra SEZ. These units have been directed not to undertake any construction/operational/manufacturing activity till an environmental clearance is granted to Mundra SEZ. The Court has directed the MoEF to decide on granting of EC, to Mundra SEZ within 30 days,” stated an official company statement.

But, none of the berths at the company’s Mundra port have been affected by this order. The operations at Mundra port were normal, the statement claimed.

The SEZ received a deemed environment clearance from the MoEF in May 2012, but prior to this, the SEZ and several units inside it had become functional and started making profits from commercial operations. In violation of the EIA notification, the SEZ developer and several units had developed their piece of land and were doing commercial business, Mr. Yagnik asserted.

He added that, “According to the EIA notification, environment clearance has to be obtained prospectively and the same can’t be applied retrospectively.”

Mr. Yagnik said the court has directed the Centre, the MoEF and the Gujarat government to consider issuing granting deemed clearance to the remaining units in the next 30 days. He informed that the High Court has also ordered to consider the recommendations and report submitted by the Sunita Narain committee appointed by the MoEF.

The Adani Group has pumped in around Rs. 20,000 crore in Mundra and about Rs. 7,000 crore for the SEZ, with a proposed area of some 18,000 hectares.