The Jammu and Kashmir High Court Division Bench comprising Chief Justice Dr Pushpendra Singh Bhatti and Justice Rajnesh Oswal, hearing PIL No. 8/2017 on Kashmir flood management, sought a response from the Divisional Commissioner, Kashmir on concerns over industrialisation of the flood-absorption basin at Nowgam.

The Environmental Policy Group (EPG) raised the issue through an affidavit filed August 27, highlighting critical issues with industrialization in the flood zone. The court directed a response within one week, with the matter listed for October 29.

The proposed Plug-and-Play Industrial Park is estimated at Rs 104.02 crore and spread over approximately 50 acres. EPG objected to the location of a major permanent industrial estate in an area identified as part of the flood-absorption basin.

The Srinagar Master Plan–2035, approved by the State Administrative Council through Decision No. 40/5/2019 on February 13, 2019, specifically directed: "No development/construction activity be permitted along the NH Bypass from Pantha Chowk to Nowgam which forms a part of flood absorption basin."

EPG argued that permanent construction could reduce natural flood-storage capacity, affect drainage, expose industrial infrastructure and workers to greater flood risks, and contribute to increased flood pressure elsewhere in the city. The Group advocated a "No Net Loss of Flood Storage" principle, stating irreversible construction should not proceed until the statutory, planning and hydrological status of the site is clearly established.