M/S. SANVIRA INDUSTRIES v/s RAIN CII CARBON (VIZAG) LTD.

&
ORS.

Facts of the Case

The case at hand centers on the allocation of raw petroleum coke (RPC), a by-product of
petroleum refining used in various industrial processes, and its environmental impact due to
emissions of sulfur and harmful particulate matter. M/s. Sanvira Industries, the appellant, is
dissatisfied with the Delhi High Court's decision regarding the allocation of pet-coke.

A previous significant Supreme Court order dated 09.10.2018 established limits (1,40,000
metric tons per annum) on RPC imports based on individual company production capacity,
significantly affecting pet-coke allocation. Importers were required to obtain Consent to
Operate certificates from State Pollution Control Boards or Pollution Control Committees
(SPB and PCC) for eligibility, a critical factor in allocation decisions. . . . . . . . . . . . . . . . . .

On 04.05.2020, the Andhra Pradesh State Pollution Control Board (APSPCB) certified
Sanvira's calcined petroleum coke production capacity as 3,30,000 metric tons per annum,
along with a power generation capacity of 16 MW. However, this certification came after the
significant 09.10.2018 date. . . . a . . . a . . a . . . a . . a . . a . . . a . . . . a . . . . a . . . . . a . a . .

Rain CII challenged Sanvira's increased allocation, arguing that the Committee consistently
rejected capacity enhancement requests based on post-09.10.2018 increases. The Division
Bench of the Delhi High Court ultimately ruled that the Supreme Court's 09.10.2018 order
considered the total capacity of all calciners as of that date and that Sanvira's increased
capacity did not automatically entitle it to a larger allocation. Hence, this petition.

The case highlights the significance of the 09.10.2018 date in determining pet-coke
allocations and the importance of consistent and timely certification of production capacities
by relevant authorities, emphasizing the court's commitment to fair and environmentally
conscious allocation decisions.

Legal Issues under Interpretation

In this case, the legal issues under consideration revolve around the allocation and utilization
of imported raw pet-coke (RPC) in India. The key points of contention include:

• Capacity Determination: The primary issue centers on how the production capacity of
various calciners, including Sanvira Industries, is determined. This includes the dispute
over whether Sanvira's claim of an increased capacity of 3,30,000 MT as of 09.10.2018,
based on the APPCB certificate, should be considered for RPC allocation, despite its
initial recorded capacity being 2,00,000 MT. a a a a a a a a a a a
• Interpretation of Court Orders: Another significant legal issue involves the interpretation
of previous court orders, especially those dated 28.01.2019 and 08.07.2019, which
clarified the total import limit of RPC but did not explicitly address capacity changes.
 The debate centers on whether these orders restrict capacity adjustments after
09.10.2018. . . . . . . . . . . . . . . . . a a a a a a a a a a a a a a a a a a a a a a a a a a a a a a

• Consistency in Allocation Criteria: The case raises concerns about the consistency of
allocation criteria, particularly the change from a unit-based certification of capacity to
certification by State Pollution Control Boards (SPCBs). The question is whether this
change in criteria for capacity certification affects the allocation of RPC to various units,
and if it aligns with the original intent of limiting imports to 1.4 MMTPA based on
industry capacity. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . .

Laws Involved

The provided text does not explicitly mention specific statutes or laws by their formal names.
However, it refers to legal principles and procedures related to the allocation of raw pet-coke
and the interpretation of relevant regulations. While not exhaustive, some statutes and legal
principles that could be relevant in this context include:

• Environmental Protection Laws: Various environmental laws and regulations may be

pertinent, especially those related to air quality and emissions control. These laws may
include the Air (Prevention and Control of Pollution) Act, 1981, and other state-specific
pollution control laws.
• Supreme Court Orders: The text repeatedly references Supreme Court orders,
particularly the one dated 09.10.2018. These orders could involve interpretations of
multiple statutes and legal principles related to environmental protection, industrial
regulations, and imports.
• Regulatory Authorities: The involvement of State Pollution Control Boards (SPCB) and
Pollution Control Committees (PCC) suggests the application of state-specific pollution
control regulations and laws.

Point of Law decided

In the judgment, the court primarily focused on a pivotal legal issue concerning the allocation
of import quotas for Raw Petroleum Coke (RPC) to industrial units, with a particular
emphasis on Sanvira Industries in India. The central legal points addressed include:

• Import Quota Determination Based on Capacity: The court confirmed that the total
annual RPC import limit, set at 1.4 Million Metric Tonnes (MT), was anchored in the
production capacity of all calciners as of October 9, 2018. This capacity determination
was established through a prior court order, which considered the disclosed capacities of
all calciners at that specific date.

• Significance of State Pollution Control Board (SPCB) Certificates: The court

underscored the critical role of SPCB certificates, which certify the permissible
production capacity of calcined petroleum coke. Regarding Sanvira Industries, the initial
SPCB certificate had verified a capacity of 2,00,000 MT per annum. Any claims for an
increased capacity made after October 9, 2018, were deemed inadmissible by the court.
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• Implications of Clarifications and Alterations: The court examined a clarification issued
by the Andhra Pradesh Pollution Control Board (APPCB) on May 4, 2020, indicating
that Sanvira's installed capacity as of October 9, 2018, was 3,30,000 MT per annum.
However, the court emphasized the centrality of the Consent to Operate (CTO)
document, which had initially certified a capacity of 2,00,000 MT per annum for Sanvira
as of October 9, 2018. The court did not treat the clarification from APPCB, suggesting
a higher capacity, as conclusive since it postdated the relevant date. . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . .
• Proportionate Share Subject to Court Approval: The court also stressed that if any
industrial unit's production capacity had increased beyond the certified capacity as of
October 9, 2018, the allocation of RPC would only be considered after obtaining
clearance from the court. This implies that any modifications to the certified capacity
would necessitate court approval before affecting RPC allocations.

In summary, the court's judgment underscores the critical role of the certified production
capacity as of the specific date, October 9, 2018, in determining RPC import quotas for
industrial units. Additionally, it highlights that any subsequent alterations to the certified
capacity must receive court endorsement before influencing the allocation process.

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Rules of interpretation used by the Court

The It can be seen that the Supreme Court has had a long though before passing the said
order. The Supreme Court has passed the order after using these rules of interpretation:

• Literal Rule: Throughout the judgment, there is a consistent adherence to the literal rule
of interpretation. This approach involves interpreting the words and phrases in the statute
and legal documents based on their plain and ordinary meanings. For instance, terms like
"import of pet-coke," "feedstock," and "capacity" are understood in their straightforward
sense within the context of the statute and other relevant documents.
• Mischief Rule: The judgment also delves into the problem or "mischief" that the statute
aimed to address. Specifically, it explores the issues surrounding the restrictions on the
import of pet-coke and its intended use as feedstock. By considering the purpose and
challenges the law sought to resolve, the judgment aligns with the mischief rule of
interpretation, which involves understanding the legislative intent behind the statute.
• Purposive Interpretation: Although not explicitly mentioned, the judgment also thought
about what the law was trying to achieve, especially when it came to restricting the use
of pet-coke as fuel. This lines up with purposive interpretation, which tries to figure out
the bigger goals and aims of the law.

Conclusion

The court has used a sensible approach to understand and apply the rules in this case. They
decided that how much a company can import of a certain material should be based on how
much they could produce back in October 2018. This decision makes sense because it keeps
things fair and doesn't allow companies to suddenly claim they can produce more just to get
more imports.

The court also said that certificates from the State Pollution Control Board are very important
to prove how much a company can produce. If a company says they can produce more after
October 2018, the court won't just accept it without checking. They want to make sure it's
true and fair for everyone.

The court didn't give much importance to a clarification made after the important date in
favour of a higher production capacity. They did this to keep things clear and avoid changing
things retroactively. If a company wants to produce more, they need to get approval from the
court first.
In conclusion, it appears that the court has applied a reasonable and contextually appropriate
approach to interpretation in this case. In my opinion, the court has used the right methods
to make sure things are fair and clear in this case. They want to make sure companies follow
the rules, but they also allow for changes if they are done properly through legal channels.