Tuesday, 7 April 2020

RELEVANCE OF COASTAL REGULATORY ZONES IN BANKING

Maradu, a fishing hamlet, in the State of Kerala, had been in news for a few months with the media zooming in on four water front Apartment Complexes. Earlier this year the Apex Court had directed the Kerala State Government to demolish these flats for violation of the provisions of Coastal Regulatory Zone Regulations observing that the area in which the construction activities have been carried out is part of tidal influenced water body and the construction activities in those areas are strictly restricted under the provisions of the CRZ Notifications[i]. These apartments along with the families residing in them, were awaiting verdict of the Apex Court on the mercy petitions filed against its demolition like convicts in death row. Yet another set of persons who were silently awaiting the verdict were the Bankers who had advanced loans for the purchase of flats in these apartments. Once the flats were demolished these Banks and financial institutions are in despair as they have not been left with any security for enforcing recovery of their loans in the event of the flat owners defaulting.
What are Coastal Regulatory Zones?
With the objective of conservation and protection of the coastal environment, Ministry of Environment and Forest and Climate Change had, in the year 1991, issued the Coastal Regulation Zone (CRZ) Notification. The CRZ Notification intended to ensure that the development activities are consistent with the environmental guidelines for coastal areas and impose restrictions on setting up of industries which have detrimental effect on the coastal environment and thereby protect the delicate marine ecosystem against unregulated development in coastal zones. As per the provisions of this Notification ‘Coastal Zone’ is a transition area between marine and territorial zones which includes shore ecosystems, wetland ecosystems, mangrove ecosystems, mudflat ecosystems, sea grass ecosystems, salt marsh ecosystems, and seaweed ecosystems. It includes rivers, creeks and backwaters also.
As per the 1991 Notification the coastal areas were classified into four categories:
1.     CRZ-I – Ecologically sensitive areas such as national parks/marine parks, sanctuaries, reserve forests, wildlife habitats, mangroves, corals/coral reefs, areas close to breeding and spawning grounds of fish etc and such area that lie between high and low tide line which are very much essential for maintaining the ecosystems have been included under this Zone.
2.     CRZ-II - Areas up to the shoreline of the coast that have already been developed have been included under this Zone.
3.     CRZ-III - Rural and urban areas which fall outside CRZ-I and CRZ-II were covered under CRZ-III. These will include coastal zone in the rural areas (developed and undeveloped) and also areas within Municipal limits or in other legally designated urban areas which are not substantially built up.
4.     CRZ-IV - Aquatic areas up to territorial limits are notified under CRZ-IV.
Evolution of CRZs
The original Notification had imposed numerous restrictions and regulations upon construction, mining and other development activities under the CRZ areas with an intention to protect the delicate marine ecosystem critical for the sustaining coastal biodiversity. According to the original Notification, the respective State Governments were required to prepare the Coastal Area Management Plans within a period of one year from the date of Notification. However majority of the States and Union Territories failed to frame the Management Plans until the Hon’ble Supreme Court interfered and put in place deadlines for finalising the Management Plans.[ii]From their inception of these Rules were criticised and described as too narrow and restrictive by various stakeholders. The Notification witnessed more than a dozen amendments, from 1991 to 2011, considerably watering down its severity. However the provisions of these Rules were still considered as restrictive by many stake holders, especially from the manufacturing and industrial sectors, who continued to appeal for modification of the provisions.
In the light of various representations received from stakeholders, the Ministry of Environment, Forest and Climate Change constituted a Committee under the Chairmanship of Dr. Shailesh Nayak to examine various issues and concerns of coastal States and Union territories and various stakeholders, relating to the Coastal Regulation Zone Notification, 2011 and to recommend appropriate changes in the said Notification. The Shailesh Nayank Committee held wide ranging consultations with State Governments and other stakeholders and submitted its recommendations along with a draft Notification, in 2015. The findings of the Committee were deliberated by the Parliamentary Sub Committees with representatives from Coastal States and based on overall imperative of sustainable development of Coastal areas and need for conserving the Coastal environment the Government has notified modified Coastal Regulation Zone (CRZ) Notification on 18th January, 2019.
Under the 2019 Notification, the classification of CR Zones has undergone significant modifications. The CRZ I has been bifurcated as CRZ – I (A) and (B), with Category I (A) covering the ecologically sensitive areas (ESAs) and the geomorphological features which play a role in maintaining the integrity of the coast, including Mangroves, coral reefs, marine parks turtle nesting grounds, areas or structures of archaeological importance and heritage sites etc and Category I(B) covering the intertidal zone i.e. the area between Low Tide Line and High Tide Line (HTL). These tide lines are demarcated by the National Centre for Sustainable Coastal Management based on latest satellite imagery and ground truthing.[iii]
CRZ-II shall constitute the developed land areas up to or close to the shoreline, within the existing municipal limits or in other existing legally designated urban areas, which are substantially built-up with a ratio of built-up plots to that of total plots being more than 50 per cent and have been provided with drainage and approach roads and other infrastructural facilities, such as water supply, sewerage mains, etc. Such land areas which does not fall within the ambit of CRZ II have been classified as CRZ III. It is further categorised into CRZ III (A) and CRZ III (B) based on the density of population in these areas. The water area has been classified as CRZ – IV.
Restrictions under CRZ Notifications
The CRZ guidelines are implemented at the National level by Ministry of Environment, Forest and Climate Change and in the States by the respective State Governments through Coastal Zone Management Authorities based on the coastal zone management plans (CZMP) which guides future development on and regulations regarding the coast.
The 2019 Notification prescribes various restrictions and regulations for construction and development activities in each Zone. Paragraphs 4 and 5 of the 2019 Notifications stipulate various permissible and non-permissible activities under each Zone. The projects/activities, which are located in the CRZ-I (Ecologically Sensitive Areas) and CRZ IV (area covered between Low Tide Line and 12 Nautical Miles seaward) shall be dealt with for CRZ clearance by the Ministry of Environment, Forest and Climate Change. The powers for clearances with respect to CRZ-II and III have been delegated at the State level with necessary guidance[iv]. Prior clearance from State Coastal Management Authority is to be mandatorily obtained before any development activity. Further an NOC from the respective State Coastal Zone Management Authority is a necessary prerequisite for a coastal local body for approving a building plan in a CRZ area. No dwelling units are permissible to be constructed within the No Development Zone (NDZ) except for construction or reconstruction of dwelling units of traditional coastal communities including fisher folk. Temporary tourism facilities are also now permissible in the "No Development Zone" (NDZ) of the CRZ-III areas as per the Notification. However, a minimum distance of 10 m from HTL should be maintained for setting up of such facilities. For islands close to the main land coast and for all Backwater Islands in the main land, in wake of space limitations and unique geography of such regions, bringing uniformity in treatment of such regions, NDZ of 20 m has been stipulated.
(It may be noted that for sake of brevity, only selected restrictions have been mentioned here and does not cover the entire scope of the Notification which is much elaborative.)
Effect of CRZ Violations
It has been reiterated by the Supreme Court in plethora of cases that the Coastal Regulation Zone notifications have been issued in the interest of protecting environment and ecology in the coastal area and construction raised in violation of such regulations cannot be lightly condoned.[v] It is pertinent to note that any constructions effected in violation of the CRZ Notifications will be considered as illegal even if NOC was obtained from the respective Local authority (like Village Panchayat or Municipalities) for such construction.[vi] It has been categorically asserted by Supreme Court that it is not open to the local authority, i.e., Panchayat, to grant any kind of permission without concurrence of State Coastal Zone Management Authority[vii].
Hence reasonable diligence should be exercised in identifying and avoiding properties offered as securities which are in violation of the CRZ guidelines. It is a settled position of law that any constructions made in violation of CRZ Notification cannot be regularised[viii]. To borrow the words of the Apex Court, “he who breaches its terms does so at his own peril[ix].




[i] See Kerala State Coastal Zone Management Authority v. State of Kerala Maradu Municipality, 2019 (7) SCC 248
[ii] Indian Council for Enviro Legal Action v UOI [1996 (5) SCC 281]
[iii] See Paras 5 & 7 of the 2019 Notification
[iv] See PIB Notification on Cabinet Approval of CRZ Notification, available at https://pib.gov.in/newsite/PrintRelease.aspx?relid=186875
[v] See Piedade Filomena Gonsalves v. State of Goa (2004 AIR SC 3112); M/s Vaamika Island (Green Lagoon Resort) v UOI (2013 (10) SCALE 190)
[vi] See Ratheesh K R & Ors v State of Kerala, 2013 (4) Ker. LJ 120
[vii] See supra Note 1
[viii] Antony v. Corporation of Cochin, : 2015(1) KLT 178
[ix] See supra Note 6

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