Bombay HC stays closure of CG Power, Goodyear units, cites impact on thousands of families

The Bombay High Court has stayed Maharashtra Pollution Control Board (MPCB) orders directing the closure of industrial units operated by CG Power and Industrial Solutions Ltd. and Goodyear South Asia Tyres Pvt. Ltd., observing that shutting down the factories during the festive season would severely affect thousands of families dependent on them for their livelihood.

Justice Ajit B Kadethankar, sitting at the High Court's Aurangabad Bench, granted interim relief while hearing two separate writ petitions challenging the MPCB's closure directions. The orders, issued on November 3 and 4, 2026, had directed the companies to halt industrial operations under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974, read with Section 31A of the Air (Prevention and Control of Pollution) Act, 1981. The directions also included disconnection of electricity and water supplies.

The Court's interim protection was based on prima facie concerns over the procedure followed by the pollution control board, including the opportunity given to the companies to respond to the alleged deficiencies and the timing of the closure action.

Court flags procedural concerns in CG Power case

In the CG Power matter, the MPCB issued a closure order on November 3, directing the shutdown of the company's industrial unit and disconnection of its electricity and water supply following an inspection that had identified certain deficiencies.

The inspection was conducted on June 15, 2026. The objections included an alleged failure to submit a bank guarantee of Rs 1 crore as directed by the Board, the effluent treatment plant (ETP) not being operated round the clock, and the disposal of effluent that did not meet the prescribed standards to a common effluent treatment plant (CETP).

The company submitted that it had already addressed the issues or provided explanations for them. It said the bank guarantee had been extended until May 31, 2027, while the ETP's primary and aeration plants were not operating during the inspection because the neutralisation process was under way. It also maintained that the effluent was being sent to the CETP for further treatment and final disposal.

CG Power said it had responded to the inspection report on June 19 and subsequently submitted a detailed explanation to the authorities. It also stated that a show-cause notice dated September 10 had been uploaded on the MPCB portal but was not directly served on the company. Nevertheless, it submitted a response on September 29.

The company argued that the closure order did not demonstrate that its explanation had been considered. It also pointed out that its consent to operate was valid until June 30, 2027. The company maintained that shutting down the entire unit and disconnecting essential supplies was a disproportionate measure.

Justice Kadethankar noted that the closure order did not record that a show-cause notice had been directly served on CG Power. The Court also observed that the deficiencies, viewed alongside the company's explanations concerning its industrial processes, did not prima facie appear sufficient to justify shutting down the entire unit.

The Court took note of the company's submission that it had already deposited the bank guarantee as directed by an interim order. It observed that the inspection had taken place in June, while the closure action was initiated in November.

Goodyear closure order found prima facie premature

In the separate petition filed by Goodyear South Asia Tyres, the MPCB had issued a closure order on November 4, directing the company to stop all manufacturing activities until further orders.

The company told the Court that the Board had renewed its consent to operate on October 24, 2026, after issuing a show-cause notice and receiving its response. The renewed consent, which covered its operations in the red category, was valid until September 30, 2029.

The company also referred to an inspection carried out by an MPCB officer on August 18, during which eight instances of alleged non-compliance with consent conditions were recorded. It argued that these matters had been addressed in the process leading to the renewal of its consent.

The Court noted that the Board had granted the renewed consent after receiving the company's response to the show-cause notice. It observed that there appeared to be time for the company to rectify any remaining deficiencies and that the recent renewal of consent raised questions about the timing of the subsequent closure direction.

Justice Kadethankar said the action appeared prima facie premature, observing that the Board would not ordinarily have renewed the consent if the company had failed to comply with the relevant conditions or provide satisfactory explanations.

Thousands of employees and families could be affected

The Court also took into account the wider impact of shutting down the two industrial units. Both factories are located in an industrial area near Chhatrapati Sambhajinagar and employ thousands of people.

It observed that the companies might ultimately fail to establish their cases on merits and could face financial penalties or criminal proceedings against personnel found responsible for violations. However, it said the immediate closure of the units during the festive season would have serious consequences for the families whose livelihoods depended on the factories.

“The Petitioners may succeed or may fail to convince the Court on their merit at the conclusion of the hearing. They may even be penalized financially and/or the defaulting personnel would be accused for penal offences. However, 'Closure' of the industries in this festive season would break into a cold sweat those thousands of families whose source of earning depends on the operation of those industries,” the Court observed.

The companies had argued that the closure orders, if allowed to operate while their petitions were pending, would disrupt industrial activity and affect employees who depended on the units for their livelihood.

High Court examines availability of appeal under pollution laws

The Court also considered the legal remedies available to the companies against the MPCB's directions. It noted that an order issued under Section 31A of the Air Act could be challenged through an appeal under Section 31 of that legislation. However, the Water Act did not provide a similar appellate remedy against an order passed under Section 33A.

In this context, the Court referred to the Supreme Court's ruling in Tamil Nadu Pollution Control Board v. Sterlite Industries (I) Ltd., in which the Supreme Court had left open the option of approaching the High Court through a writ petition.

The High Court accordingly granted interim protection and stayed the operation and execution of the MPCB's November 3 closure order against CG Power and its November 4 order against Goodyear.

It also issued notices to the respondents, making them returnable on November 19, 2026. The stay will remain in place in the meantime, pending further proceedings in the two petitions.