In a major blow to soft drink major Hindustan Coca Cola Beverages Ltd, Kerala high court on Tuesday directed the company to stop drawing groundwater for use in its bottling plant at Plachimedu in Palakaad district by January 16, 2004.

The court also directed the Perumatty gram panchayat, under whose jurisdiction the cola plant is located, and the state government to ensure that the plant does not extract groundwater after the specified time limit.

"Ground water under the land of the company does not belong to it. Normally, every land owner can draw 'reasonable' amount of groundwater which is necessary for its domestic and agricultural requirements. But here, 510 kilo litres of water is extracted per day, converted to products and transported, thus breaking the natural water cycle," Justice K Balakrishnan Nair observed while delivering the judgment on a petition filed by the panchayat.

Extraction of groundwater, even upto the admitted limit by the company, was 'illegal', the court held. The company had no legal right to extract this much natural wealth and the panchayat and the government were bound to prevent it.

The court held that the groundwater belongs to the general public and the company had no right to claim a huge share of it. The government also has no power to allow a private party to extract such huge quantity of groundwater.

The court allowed the company a month's time to enable it to find out alternative sources of water.

It also made it clear that the panchayat should renew the company's licence if it was not extracting groundwater and was depending on other sources to meet its requirements.

Justice Nair also directed the panchayat to ensure that all wells, including borewells, of the company were closed down in a month from now.

The judgement was delivered on a petition by the panchayat challenging the government order permitting the company to function despite the closure notice issued by the panchayat on the grounds of health hazards and over exploitation of groundwater.

Controversy has dogged the plant following reports that toxic elements, including cadimum and lead, had been found in the sludge supplied as manure to farmers in the area.