File photo of the Supreme Court. (PTI)

Supreme Court Bans Construction In Three States

The Supreme Court of India, in an interim order, banned all construction activity till Oct. 9 in Maharashtra, Madhya Pradesh, Uttarakhand and Chandigarh after they failed to comply with its order to come up with a policy on solid waste management.

A bench, headed by Justice MB Lokur, imposed a fine of Rs 3 lakh each on the states and the union territory. The Supreme Court also imposed a cost of Rs 5 lakh on Andhra Pradesh.

If states have cleanliness, sanitation and interest of the people in mind, they should frame a policy for solid waste management rules, the order said. “The attitude of the states/union territories in not yet framing a policy even after two years is pathetic, to say the least.”

That’s left developers worried as it comes when the sector had just started showing signs of revival after the twin shocks of the note ban and a new housing law. Projects worth Rs 4.64 lakh crore for a total of 575,900 units are already behind schedule, newswire PTI reported quoting Anuj Puri, chairman of property consultant Anarock. This stern stand of the Supreme Court may add to the number, he said, adding that the move though seems justified in the backdrop of rising pollution levels and frequent flooding in our cities.

Laborers work at a construction site in Gandhinagar, Gujarat, India. (Photographer: Adeel Halim/Bloomberg)
Laborers work at a construction site in Gandhinagar, Gujarat, India. (Photographer: Adeel Halim/Bloomberg)

The matter stems from the death of a seven-year-old boy due to dengue in Delhi, according to the PTI report. The Supreme Court had taken cognisance following reports that that victim was allegedly denied treatment by five private hospitals and his distraught parents committed suicide.

The apex’s court’s intention is good, but the blanket ban on construction will choke supply and impact home seekers, said Niranjan Hiranandani, president of the National Real Estate Development Council. “Homebuyers will suffer just because some state governments have not formally notified the policy,” he said. “Perhaps, it would have been better if the court would have penalised the state administration and barred new construction while allowing ongoing projects to be completed.”

The ban on construction is expected hurt the cement and steel industries.

“If it's for a few days, it is a different thing, but if it last long until such a time that states put in a policy for waste management is restored then demand will be very adversely affected in these states,” Sanjay Ladiwala, Chairman of the Cement Stockists and Dealers Association of Bombay, told BloombergQuint.

“Uttarakhand is a relatively smaller consumer but Madhya Pradesh and Maharashtra are relatively large consumers of cement. Putting a stop on construction and infrastructure is quite a big whammy for the industry,” he said.

It will have a bearing on cementmakers, HM Bangur, managing director of Shree Cement Ltd., said in a statement. The company, he said, won’t feel the impact as it doesn’t supply to any of these states.

Among steelmakers, the producers of long products will “see more impact”, said BL Agarwal, managing director at Godawari Power & Ispat Ltd., which largely makes wire rod and wire steel.

The case will now come up for hearing on Oct. 9.