This move puts a question mark on the company's future here.
Top sources in the groundwater authority told FE that the decision was taken late on Saturday in public interest and water resources minister Tiruvanchoor Radhakrishnan gave consent to the proposed order, which was expected to be notified soon in the gazette.
The notification under the Kerala Groundwater Control and Regulation Act would be based on the recommendation of the authority that it was necessary to regulate groundwater extraction owing to water scarcity in the vicinity.
It is learnt that the government was looking at five other areas in the districts of Thrissur, Palakkad, Kannur, Kozhikode and Thiruvanthapuram and would take a decision soon.
The order will cripple the prospects of reopening the plant, which has remained closed since March 2004.
A massive agitation started on April 22, 2002, in front of the company continues till date.
The anti-coke campaign charged that there was acute water scarcity in the vicinity, following the drawing of groundwater by the company.
The Perumatty panchayat, where the plant is situated, had earlier refused to renew the licence of the company and on a petition, a single bench of the Kerala High Court had in December 2003 ruled against the company drawing groundwater, leading to the closure of the plant in March 2004.
This was, however, challenged by the company. A division bench, based on study had ruled that the company could draw 5 lakh litres of groundwater daily.
However, the panchayat refused to renew the licence, which was challenged by the company. Presently all these matters are before the Supreme Court.
Meanwhile, things had turned against the company after it was found that the sludge flushed out by the company had toxic material, which allegedly polluted the wells in the vicinity.
The Kerala Pollution Control Board also issued orders against the company as it had failed to meet pollution control norms.