The Supreme Court on Monday upheld a judgment of the Kerala High Court quashing the Pudussery grama panchayat's order cancelling the licence of Pepsico India Holdings Private Limited for running its factory at Kanjikode in Palakkad. The panchayat cancelled the licence in 2003 stating that there was scarcity of drinking water in the areas near the company due to over-exploitation of groundwater. Acting on a petition from the company, the High Court by its judgment dated April 10, 2007 set aside the panchayat's order holding that the panchayat had no power to revoke the licence as it had been granted by the Kerala Industrial Single Window Clearance Board. The Kerala government's review petition was dismissed on September 14, 2007. The present special leave petition by Kerala is directed against this judgment. The SLP came up for hearing on Monday before a Bench of Justice Arijit Pasayat and Justice P. Sathasivam. The Bench after hearing Additional Solicitor-General Gopal Subramaniam appearing for Kerala and senior counsel K.K. Venugopal for Pepsico, dismissed the SLP observing that it would not interfere with the High Court judgment. In its SLP, Kerala government said that the panchayat had to cancel the licence issued to the company in larger public interest, that being the matter of drinking water of the people in the panchayat area. It said the company was issued licence in November 2000 for extracting groundwater on the basis of a misrepresentation that there was enough groundwater in Kinfra Park area. Kerala submitted that the daily requirement of water by the company had increased beyond 18 lakh litres per day. The indiscriminate extraction and exploitation of huge quantity of groundwater round the clock by the company from the plant area led to fall in water level in open wells and drying up of good number of wells in the area and consequent scarcity of drinking water. It said that panchayat being a unit of self-government, by virtue of the provisions of the Constitution, was vested with duty and responsibility to prevent illegal extraction of groundwater by private persons/agencies in the panchayat area. The SLP sought quashing of the impugned judgment.