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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL ORIGINAL JURISDICTION

IA NO.36 AND IA NO.44  IN

WRIT PETITION (C) No.967 OF 1989

Indian Council for Enviro-Legal Action  … Petitioners

Versus

Union of India & Others               … Respondents

JUDGMENT

Dalveer Bhandari, J.

1. This is a very unusual and extraordinary litigation where  

even after fifteen years of the final judgment of this court (date  

of  judgment  13th February,  1996)  the  litigation  has  been  

deliberately kept alive by filing one interlocutory application or  

the other in order to avoid compliance of the judgment.  The  

said judgment of this Court has not been permitted to acquire  

finality till date.  This is a classic example how by abuse of the  

process of law even the final judgment of the apex court can

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be circumvented for more than a decade and a half.  This is  

indeed  a  very  serious  matter  concerning  the  sanctity  and  

credibility of the judicial system in general and of the apex  

court in particular.

2. An  environmentalist  organisation  brought  to  light  the  

sufferings and woes of people living in the vicinity of chemical  

industrial  plants  in  India.   This  petition  relates  to  the  

suffering  of  people  of  village  Bichhri  in  Udaipur  District  of  

Rajasthan.   In  the  Writ   Petition  No.967  of  1989,  it  was  

demonstrated how the conditions of a peaceful, nice and small  

village  of  Rajasthan  were  dramatically  changed  after  

respondent no. 4 Hindustan Agro Chemicals Limited started  

producing certain chemicals like Oleum (concentrated form of  

sulphuric  acid)  and  Single  Super  Phosphate.  Respondent  

numbers 4 to 8 are controlled by the same group and they  

were  known  as  chemical  industries.   The  entire  chemical  

industrial  complex  is  located  within  the  limits  of  Bichhri  

village, Udaipur, Rajasthan. Pursuit of profit of entrepreneurs

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has absolutely drained them of any feeling for fellow human  

beings living in that village.

3. The basic facts of this case are taken from the judgment  

delivered  in  the  Writ  Petition  No.967  of  1989.   In  the  

beginning of the judgment of this court delivered on February  

13, 1996, it is observed as under:

“It highlights the disregard, nay, contempt for  law  and  lawful  authorities  on  the  part  of  some  among the emerging breed of entrepreneurs, taking  advantage,  as  they  do,  of  the  country's  need  for  industrialisation  and  export  earnings.  Pursuit  of  profit has absolutely drained them of any feeling for  fellow human beings - for that matter, for anything  else.  And  the  law  seems  to  have  been  helpless.  Systemic defects? It is such instances which have  led  many  people  in  this  country  to  believe  that  disregard of law pays and that the consequences of  such  disregard  will  never  be  visited  upon  them  -particularly,  if  they are men with means.  Strong  words indeed - but nothing less would reflect the  deep sense  of  hurt,  the  hearing  of  this  case  has  instilled in us.”

4. It  seems  that  the  court  was  prophetic  when  it  made  

observation that at times men with means are successful in  

avoiding compliance of the orders of this court.  This case is a  

classic illustration where even after decade and a half of the

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pronouncement of the judgment by this court based on the  

principle of ‘polluter pays’,  till  date the polluters (concerned  

industries  in  this  case)  have  taken no steps  to  ecologically  

restore  the  entire  village  and  its  surrounding  areas  or  

complied with the directions of this court at all.  The orders of  

this court were not implemented by keeping the litigation alive  

by  filing  interlocutory  and  interim  applications  even  after  

dismissal  of  the  writ  petition,  the  review  petition  and  the  

curative petition by this court.

5. In the impugned judgment, it is mentioned that because  

of the pernicious wastes emerging from the production of 'H'  

acid, its manufacture is stated to have been banned in the  

western countries. But the need of 'H' acid continues in the  

West and that need is catered to by the industries like the  

Silver Chemicals and Jyoti Chemicals in this part of the world.  

6. In  the  impugned  judgment,  it  is  also  mentioned  that  

since the toxic untreated waste waters were allowed to flow  

out freely and because the untreated toxic sludge was thrown  

in the open in and around the complex, the toxic substances

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have percolated deep into the bowels of the earth polluting the  

aquifers and the sub-terrain supply of water. The water in the  

wells and the streams has turned dark and dirty rendering it  

unfit for human consumption. It has become unfit for cattle to  

drink and for irrigating the land. The soil has become polluted  

rendering it unfit for cultivation, which is the main source of  

livelihood  for  the  villagers.  The  resulting  misery  to  the  

villagers  needs no emphasis.  It  spreads  disease,  death and  

disaster in the village and the surrounding areas. This sudden  

degradation of earth and water had an echo in Parliament too  

and the concerned Minister said that action was being taken,  

but nothing meaningful was done on the spot. The villagers  

then rose in virtual revolt leading to the imposition of Section  

144 of the Criminal Procedure Code by the District Magistrate  

in the area and the closure of Silver Chemicals in January,  

1989. It is averred by the respondents that both the units,  

Silver  Chemicals  and  Jyoti  Chemicals  have  stopped  

manufacturing 'H' acid since January, 1989 and are closed.  

We may assume it to be so,  yet the consequences of their  

action remain - the sludge, the long-lasting damage to earth,

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to  underground water,  to  human beings,  to  cattle  and the  

village economy.  

7. The Rajasthan State Pollution Control Board (for short  

“R.S.P.C.B.”)  in pursuance of the show cause notice filed a  

counter affidavit and stated the following averments:  

(a) Re.:  Hindustan  Agro  Chemicals  Limited  (respondent  for  short)  [R-4]:  The unit  obtained  'No-Objection Certificate' from the R.S.P.C.B. for  manufacturing  sulphuric  acid  and  Aluminum  sulphate.  The Board granted clearance  subject  to  certain  conditions.  Later  'No-Objection  Certificate'  was  granted  under  the  Water  [Prevention and Control of  Pollution] Act, 1974  [Water  Act]  and Air  (Prevention and Control  of  Pollution)  Act,  1981 [Air  Act],  again subject  to  certain conditions.  However,  this  unit  changed  its  product  without  clearance  from the  Board.  Instead  of  sulphuric  acid,  it  started  manufacturing  Oleum  and  Single  Super  Phosphate  [S.S.P.].  Accordingly,  consent  was  refused  to  the  unit  on  February  16,  1987.  Directions  were  also  issued  to  close  down the  unit.  

(b) Re.:  Silver  Chemicals [R-5]:  This  unit  was  promoted  by  the  fourth  respondent  without  obtaining  'No-Objection  Certificate'  from  the  Board for the manufacture of 'H' acid. The waste  water generated from the manufacture of 'H' acid  is  highly  acidic  and  contains  very  high  concentration  of  dissolved  solids  along  with  several  dangerous  pollutants.  This  unit  was

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commissioned  in  February,  1988  without  obtaining  the  prior  consent  of  the  Board  and  accordingly, notice of closure was served on April  30, 1988. On May 12, 1988, the unit applied for  consent  under  Water  and  Air  Acts  which  was  refused. The Government was requested to issue  directions for cutting off the electricity and water  to  this  unit  but  no  action  was  taken  by  the  Government. The unit was found closed on the  date of inspection, viz., October 2, 1989.  

(c) Re.:  Rajasthan Multi Fertilizers [R-6]: This unit  was  installed  without  obtaining  prior  'No- Objection  Certificate'  from  the  Board  and  without even applying for consent under Water  and Air Acts. Notice was served on this unit on  February 20, 1989. In reply thereto, the Board  was informed that the unit was closed since last  three years and that electricity has also been cut  off since February 12, 1988.  

(d) Re.:  Phosphates India [R-7]: This unit was also  established  without  obtaining  prior  'No- Objection Certificate'  from the Board nor did it  apply for consent under the Water and Air Acts.  When  notice  dated  February  20,  1989  was  served upon this unit, the Management replied  that this unit was closed for a long time.  

(e) Re.:  Jyoti Chemicals [R-8]: This unit applied for  'No-Objection  Certificate'  for  producing  ferric  alum.  'No-Objection  Certificate'  was  issued  imposing  various  conditions  on  April  8,  1988.  The 'No-Objection Certificate' was withdrawn on  May  30,  1988  on  account  of  non-compliance  with  its  conditions.  The  consent  applied  for  under Water and Air Acts by this unit was also  refused. Subsequently, on February 9, 1989, the  unit applied for fresh consent for manufacturing

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'H'  acid.  The consent  was refused on May 30,  1989. The Board has been keeping an eye upon  this  unit  to  ensure  that  it  does  not  start  the  manufacture  of  'H'  acid.  On  October  2,  1989,  when  the  unit  was  inspected,  it  was  found  closed.  

8. The Government of Rajasthan filed counter-affidavit on  

January 20, 1990. The Para 3 of the affidavit reads as under:-  

"That the State Government is now aware of the  pollution of under-ground water being caused by  liquid  effluents  from  the  firms  arrayed  as  Respondent  Nos.  4  to  8  in  the  writ  petition.  Therefore,  the  State  Government  has  initiated  action  through  the  Pollution  Control  Board  to  check further spread of pollution."

9. The State Government stated that the water in certain  

wells in Bichhri village and some other surrounding villages  

has become unfit for drinking for human beings and cattle,  

though in some other wells, the water remains unaffected.  

10. The Ministry of Environment and Forests, Government of  

India  (for  short  ‘MOEF’)  in  its  counter  affidavit  filed  on  

February  8,  1990  stated  that  M/s.  Silver  Chemicals  was  

merely  granted  a  Letter  of  Intent  but  it  never  applied  for  

conversion  of  the  Letter  of  Intent  into  industrial  licence.

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Commencing production before obtaining industrial licence is  

an  offence  under  Industries  [Development  and  Regulation]  

Act, 1951. So far as M/s. Jyoti Chemicals is concerned, it is  

stated that it has not approached the Government at any time  

even for a Letter of Intent.  The Government of  India stated  

that in June, 1989, a study of the situation in Bichhri village  

and some other surrounding villages was conducted by the  

Centre for Science and Environment.  A copy of their report  

was enclosed with the counter affidavit. The report states the  

consequences emanating from the production of 'H' acid and  

the manner in which the resulting wastes were dealt with by  

Respondents Nos. 4 to 8 thus:  

“The effluents are very difficult to treat as many of  the  pollutants  present  are  refractory  in  nature.  Setting  up  such  highly  polluting  industry  in  a  critical  ground  water  area  was  essentially  ill- conceived.  The  effluents  seriously  polluted  the  nearby drain and overflowed into Udaisagar main  canal, severely corroding its cement-concrete lined  bed and banks. The polluted waters also seriously  degraded  some  agricultural  land  and  damaged  standing  crops.  On  being  ordered  to  contain  the  effluents, the industry installed an unlined holding  pond within its premises and resorted to spraying  the  effluent  on  the  nearby  hill-slope.  This  only  resulted in extensive seepage and percolation of the

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effluents into ground water and their spread down  the  aquifers.  Currently  about  60  wells  appear  to  have been significantly  polluted but every week a  few  new  wells,  down  the  aquifers  start  showing  signs  of  pollution.  This  has  created  serious  problems for water supply for  domestic  purposes,  cattle-watering crop irrigation and other beneficial  uses,  and  it  has  also  caused  human illness  and  even  death,  degradation  of  land  and  damage  to  fruit, trees and other vegetation. There are serious  apprehensions  that  the  pollution and its  harmful  effects  will  spread  further  after  the  onset  of  the  monsoon as the water percolating from the higher  parts  of  the  basin  moves  down  carrying  the  pollutants lying on the slopes - in the holding pond  and those already underground.”

11. This court passed number of orders during the period  

1989-1992.

12. On  February  17,  1992,  this  Court  passed  a  fairly  

elaborate  order  observing  that  respondent  nos.  5  to  8  are  

responsible for discharging the hazardous industrial wastes;  

that  the  manufacture  of  'H'  acid  has  given  rise  to  huge  

quantities of iron sludge and gypsum sludge - approximately  

2268 MT of gypsum-based sludge and about 189 mt. of iron-

based  sludge;  that  while  the  other  respondents  blamed  

respondent  no.9  as  the  main  culprit  but  respondent  no.  9

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denied any responsibility, therefore, according to the Courts,  

the immediate concern was the appropriate remedial action.  

The report of the R.S.P.C.B. presented a disturbing picture. It  

stated  that  the  respondents  have  deliberately  spread  the  

hazardous material/sludge all over the place which has only  

heightened  the  problem of  its  removal  and  that  they  have  

failed to carry out the orders of this Court dated April 4, 1990.  

Accordingly,  this  Court  directed  the  MOEF  to  depute  its  

experts  immediately  to  inspect  the  area  to  ascertain  the  

existence and extent of gypsum-based and iron-based sludge,  

to  suggest  the  handling  and  disposal  procedures  and  to  

prescribe a package for  its transportation and safe storage.  

The  cost  of  such  storage  and  transportation  was  to  be  

recovered from the concerned respondents.  

13. Pursuant to the above order, a team of experts visited  

the area and submitted a report along with an affidavit dated  

March  30,  1992.  The  report  presented  a  highly  disturbing  

picture. It stated that the sludge was found inside a shed and  

also at four places outside the shed but within the premises of

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the complex belonging to the respondents.  It  further stated  

that the sludge has been mixed with soil and at many places  

it is covered with earth. A good amount of sludge was said to  

be lying exposed to sun and rain.  

14. The report stated: "Above all, the extent of pollution in  

the  ground  water  seems  to  the  very  great  and  the  entire  

aquifer may be affected due to the pollution caused by the  

industry.  The  organic  content  of  the  sludge  needs  to  be  

analysed to assess the percolation property  of  the  contents  

from the sludge. It is also possible that the iron content in the  

sludge  may  be  very  high  which  may  cause  the  reddish  

colouration. As the mother liquor produced during the process  

(with  pH-1)  was  highly  acidic  in  nature  and  was  

indiscriminately discharged on land by the unit, it is possible  

that  this  might  have  eroded  soil  and caused  the  extensive  

damage. It  is also possible that the organic contents of the  

mother liquor would have gone into soil with water together  

with the reddish colour." The report also suggested the mode

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of  disposal  of  sludge  and  measures  for  re-conditioning  the  

soil.  

15. In view of the above report, the Court made an order on  

April 6, 1992 for entombing the sludge under the supervision  

of the officers of the MOEF. Regarding revamping of the soil,  

the  Court  observed  that  for  this  purpose,  it  might  become  

necessary to stop or suspend the operation of all the units of  

the  respondent  but  that,  the  Court  said,  requires  to  be  

examined further.  

16. The work of entombment of sludge again faced several  

difficulties.  While  the  respondents  blamed  the  Government  

officers for the delay, the Government officials blamed the said  

respondents of non-cooperation. Several Orders were passed  

by  this  Court  in  that  behalf  and  ultimately,  the  work  

commenced.  

Orders passed in 1993, filing of Writ Petition (C) No. 76 of  1994 by Respondent No. 4 and the orders passed therein:  

17. With  a  view  to  find  out  the  connection  between  the  

wastes and sludge resulting from the production of 'H' acid

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and  the  pollution  in  the  underground  water,  the  Court  

directed on 20th August, 1993 that samples should be taken  

of the entombed sludge and also of the water from the affected  

wells and sent for analysis. Environment experts of the MOEF  

were asked to find out whether the pollution in the well water  

was  on  account  of  the  said  sludge  or  not.  Accordingly,  

analysis was conducted and the experts submitted the Report  

on November 1, 1993. Under the heading "Conclusion",  the  

report stated:  

5.0 Conclusion

5.1 On the basis of the observations and analysis  results,  it  is  concluded  beyond  doubt  that  the  sludge  inside  the emoted pit  is  the  contaminated  one  as  evident  from  the  number  of  parameters  analysed.  

5.2 The ground water is also contaminated due to  discharge of H- acid plant effluent as well as H-acid  sludge/contaminated soil leachiest as shown in the  photographs and also supported by the results. The  analysis  result  revealed  good  correlation  between  the colour of well  water and H-acid content in it.  The analysis results show high degree of impurities  in  sludge/soil  and  also  in  well  water  which  is  a  clear indication of contamination of soil and ground  water due to disposal of H-acid waste.

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The report which is based upon their inspection of  the area in September, 1993 revealed many other  alarming features. It represents a commentary on  the  attitude  and  actions  of  the  respondents.  In  Para-2,  under  the  heading  "Site  Observations  &  Collection of  Sludge/Contaminated  Soil  Samples",  the following facts are stated:  

2.1.  The  Central  team,  during  inspection  of  the  premises  of  M/s.  HACL,  observed  that  H-acid  sludge (iron gypsum) and contaminated soil are still  lying  at  different  places,  as  shown  in  Figure  1,  within the industrial premises(Photograph 1) which  are  the  left  overs.  The  area,  where  the  solar  evaporation pond was existing with H-acid sludge  dumped here and there, was observed to have been  leveled  with  borrowed soil  (Photograph 2).  It  was  difficult to ascertain whether the sludge had been  removed  before  filling.  However,  there  are  visual  evidences of contaminated soil in the area.  

2.2 As reported by the R.S.P.C.B. representatives,  about 720 tonnes out of the total contaminated soil  and sludge scraped from the sludge dump sites is  disposed of in six lined entombed pits covered by  lime/flash  mix,  brick  soling  and  concrete  (Photographs were placed on record). The remaining  scraped  sludge  and  contaminated  soil  was  lying  near  the  entombed  pits  for  want  of  additional  disposal facility. However, during the visit, the left  over  sludge  and  contaminated  soil  could  not  be  traced at site.  Inspection of the surrounding area  revealed that a huge heap of foreign soil of 5 metre  height  heap  of  foreign  soil  of  5  metre  height  (Photograph was placed on record) covering a large  area, as also indicated in Fig. I, was raised on the  sloppy ground at the foot hill  within the industry  premises. The storm water run-off pathway over the  area  showed indication  of  H-acid  sludge  leachate

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coming  out  of  the  heap.  Soil  in  the  area  was  sampled for analysis.  

2.3 M/s.  HACL has a number of  other  industrial  units which are operating within the same premises  without  valid  consents  from the  R.S.P.C.B.  These  plants are sulphuric acid (H2SO4),  fertilizer (SSP)  and vegetable oil extraction. The effluents of these  units  are  not  properly  treated  and  the  untreated  effluent particularly from the acid plant is passing  through  the  sludge  dump  area  playing  havoc  (Photograph  was  placed  on  record).  The  final  effluent  was collected  at  the  outlet  of  the  factory  premises  during  operation  of  these  units,  at  the  time of groundwater monitoring in September 1993,  by the RSPCB. Its quality was observed to be highly  acidic (pH : 1.08, Conductivity : 37,100 mg/1, SO4  : 21,000 mg/1, Fe : 392 mg/1, COD : 167 mg/1)  which was also revealed in the earlier visits of the  Central  teams.  However,  these  units  were  not  in  operation during the present visit.  

Under Para 4.2.1, the report stated inter alia:  

The sludge samples from the surroundings of the  (presently  nonexistent)  solar  evaporation  and  the  contaminated soil  due to  seepage from the newly  raised dump site also exhibited very high values of  the above mentioned parameters. This revealed that  the  contaminated  soil  is  buried  under  the  new  dump found by the team.

25.  So  much  for  the  waste  disposal  by  the  respondents and their continuing good conduct. To  the  same  effect  is  the  Report  of  the  R.S.P.C.B.  which is dated October 30, 1993.  

26.  In view of  the aforesaid Reports,  all  of  which  unanimously point out the consequences of the 'H'

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sum  of  Rupees  sixty  thousand  with  R.S.P.C.B.  before  April  11,  1994  and  the  R.S.P.C.B.  was  directed  to  carry  on  the  construction  work  of  storage  tank  for  storing  and  retaining  ten  days  effluents  from  the  Sulphuric  Acid  Plant.  The  construction of temporary tank was supposed to be  an interim measure pending the construction of an  E.T.P. on permanent basis. The Order dated April  28, 1994 noted the Report of the R.S.P.C.B. stating  that  the  construction  of  temporary  tank  was  completed on April 26, 1994 under its supervision.  The  industry  was  directed  to  comply  with  such  other  requirements  as  may  be  pointed  out  by  R.S.P.C.B.  for  prevention and control  of  pollution  and undertake any works required in that behalf  forthwith.  Thereafter,  the  matter  went  into  a  slumber until October 13, 1995.  

NEERI REPORT:  

27. At this juncture, it would be appropriate to refer  to the Report submitted by NEERI on the subject of  "Restoration  of  Environmental  Quality  of  the  affected  area  surrounding  Village  Bichhri  due  to  past  Waste  Disposal  Activities".  This  Report  was  submitted  in  April,  1994  and  it  states  that  it  is  based upon the study conducted by it during the  period November, 1992 to February, 1994. Having  regard to its technical competence and reputation  as  an  expert  body  on  the  subject,  we  may  be  permitted to refer to its Report at some length:  

18. The  judgment  also  dealt  with  damaging  of  crops  and  

fields. The  finding  of  the  Court  was  that the  entire

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the  respondents  would  have  had  an  opportunity  to  cross-examine  the  experts  to  establish that their Reports are defective and  cannot be relied upon.;  

(3) Long  before  the  respondents  came  into  existence, Hindustan Zinc Limited was already  in existence close to Bichhri  village and has  been discharging toxic untreated effluents in  an unregulated manner. This had affected the  water in the wells, streams and aquifers. This  is borne out by the several Reports made long  prior to 1987. Blaming the respondents for the  said  pollution  is  incorrect  as  a  fact  and  unjustified.  

(4) The respondents have been cooperating with  this Court in all matters and carrying out its  directions  faithfully.  The  Report  of  the  R.S.P.C.B.  dated  November  13,  1992  shows  that  the  work  of  entombment  of  the  sludge  was almost  over.  The  Report  states  that  the  entire  sludge  would  be  stored  in  the  prescribed manner within the next two days.  In view of this report, the subsequent Report  of  the  Central  team,  R.S.P.C.B.   and NEERI  cannot be accepted or relied upon. There are  about 70 industries in India manufacturing 'H'  acid. Only the units of the respondents have  been  picked  upon  by  the  Central  and  Sate  authorities while taking no action against the  other units. Even in the matter of disposal of  sludge, the directions given for its disposal in  the case of other units are not as stringent as  have  been  prescribed  in  the  case  of  respondents. The decision of the Gujarat High  Court  in  Pravinbhai  Jashbhai  Patel  case  shows that the method of disposal prescribed

23

an  absolute  and  non-delegable  duty  to  the  community  to  ensure  that  no  harm  results  to  anyone  on  account  of  hazardous  or  inherently  dangerous  nature  of  the  activity  which  it  has  undertaken.  The  enterprise  must  be  held  to  be  under an obligation to provide that the hazardous  or  inherently  dangerous  activity  in  which  it  is  engaged  must  be  conducted  with  the  highest  standards  of  safety  and  if  any  harm  results  on  account  of  such  activity,  the  enterprise  must  be  absolutely liable to compensate for such harm and  it should be no answer to the enterprise to say that  it had taken all reasonable care and that the harm  occurred without any negligence on its part. Since  the persons harmed on account of the hazardous or  inherently  dangerous  activity  carried  on  by  the  enterprise would not be in a position to isolate the  process  of  operation  from  the  hazardous  preparation  of  substance  or  any  other  related  element that caused the harm the enterprise must  be held strictly liable for causing such harm as a  part of the social cost for carrying on the hazardous  or inherently dangerous activity. If the enterprise is  permitted to carry on an hazardous or inherently.  dangerous  activity  for  its  profit,  the  law  must  presume that such permission is conditional on the  enterprise  absorbing  the  cost  of  any  accident  arising on account of such hazardous or inherently  dangerous  activity  as  an  appropriate  item  of  its  overheads.  Such  hazardous  or  inherently  dangerous activity for private profit can be tolerated  only  on  condition  that  the  enterprise  engaged  in  such  hazardous  or  inherently  dangerous  activity  indemnifies all those who suffer on account of the  carrying  on  of  such  hazardous  or  inherently  dangerous  activity  regardless  of  whether  it  is  carried  on  carefully  or  not….We  would  therefore  hold  that  where  an  enterprise  is  engaged  in  a  hazardous  or  inherently  dangerous  activity  and

24

harm results to anyone on account of an accident  in  the  operation  of  such hazardous or  inherently  dangerous activity resulting for example, in escape  of toxic gas the enterprise is strictly and absolutely  liable to compensate all those who are affected by  the accident and such liability is not subject to any  of  the  exceptions  which  operate  vis-à-vis  the  tortuous principle of strict liability under the rule in  Ryland v. Fletcher (1868) LR 3 HL 330.  

We would also like to point out that the measure of  compensation in the kind of cases referred to in the  preceding  paragraph  must  be  corelated  to  the  magnitude and capacity of the enterprise because  such  compensation  must  have  a  deterrent  effect.  The larger and more prosperous the enterprise, the  greater  must  be  the  amount  of  compensation  payable by it for the harm caused on account of an  accident  in  the  carrying  on  of  the  hazardous  or  inherently dangerous activity by the enterprise.”

22. This court in M.C. Mehta’s case (supra) further observed  

as under:

31. We  must  also  deal  with  one  other  question  which  was  seriously  debated  before  us  and  that  question is as to what is the measure of liability of  an enterprise which is engaged in an hazardous or  inherently dangerous industry,  if  by reason of  an  accident occurring in such industry, persons die or  are injured. Does the rule in  Rylands v. Fletcher  apply or is there any other principle on which the  liability can be determined? The rule in Rylands v.  Fletcher was  evolved  in  the  year  1866  and  it  provides that a person who for his own purposes  brings on to his land and collects and keeps there

25

anything  likely  to  do  mischief  if  it  escapes  must  keep it at his peril and, if he fails to do so, is prima  facie  liable  for  the  damage  which  is  the  natural  consequence of its escape. The liability under this  rule  is  strict  and it  is  no  defence  that  the  thing  escaped without that person's wilful act, default or  neglect  or  even  that  he  had  no  knowledge  of  its  existence. This rule laid down a principle of liability  that  if  a  person  who  brings  on  to  his  land  and  collects and keeps there anything likely to do harm  and  such  thing  escapes  and  does  damage  to  another, he is liable to compensate for the damage  caused.  Of  course,  this  rule  applies  only  to  non- natural user of the land and it does not apply to  things naturally on the land or where the escape is  due to an act of God and an act of a stranger or the  default  of  the  person  injured  or  where  the  thing  which  escapes  is  present  by  the  consent  of  the  person injured or in certain cases where there  is  statutory  authority.  Vide  Halsbury  Laws  of  England, Vol. 45 para 1305. Considerable case law  has developed in England as to what is natural and  what  is  non-natural  use  of  land  and  what  are  precisely the circumstances in which this rule may  be  displaced.  But  it  is  not  necessary  for  us  to  consider  these  decisions  laying  down  the  parameters  of  this  rule  because  in  a  modern  industrial  society  with  highly  developed  scientific  knowledge  and  technology  where  hazardous  or  inherently  dangerous  industries  are  necessary  to  carry  out  part  of  the  developmental  programme,  this  rule  evolved  in  the  19th  Century  at  a  time  when  all  these  developments  of  science  and  technology had not taken place cannot afford any  guidance  in  evolving  any  standard  of  liability  consistent  with  the  constitutional  norms and  the  needs  of  the  present  day  economy  and  social  structure.  We need not feel inhibited by this rule  which  was  evolved  in  this  context  of  a  totally

26

different kind of economy. Law has to grow in order  to satisfy the needs of the fast changing society and  keep  abreast  with  the  economic  developments  taking place in the country. As new situations arise  the  law  has  to  be  evolved  in  order  to  meet  the  challenge of such new situations. Law cannot afford  to remain static. We have to evolve new principles  and lay down new norms which would adequately  deal with the new problems which arise in a highly  industrialised  economy.  We  cannot  allow  our  judicial  thinking to be constricted by reference to  the law as it prevails in England or for the matter of  that  in  any  other  foreign  country.  We  no  longer  need the crutches of a foreign legal order. We are  certainly  prepared  to  receive  light  from  whatever  source it comes but we have to build up our own  jurisprudence  and  we  cannot  countenance  an  argument that merely because the law in England  does not recognise the rule of strict and absolute  liability  in  cases  of  hazardous  or  inherently  dangerous  activities  or  the  rule  as  laid  down  in  Rylands  v.  Fletcher  as  is  developed  in  England  recognises certain limitations and exceptions. We in  India must hold back our hands and not venture to  evolve  a  new  principle  of  liability  since  English  courts have not done so. We have to develop our  own  law  and  if  we  find  that  it  is  necessary  to  construct a new principle of liability to deal with an  unusual situation which has arisen and which is  likely to arise in future on account of hazardous or  inherently  dangerous  industries  which  are  concomitant to an industrial economy, there is no  reason  why  we  should  hesitate  to  evolve  such  principle of liability merely because it has not been  so done in England.

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23. This  Court  applied  the  principle  of  Polluter  pays  and  

observed thus:

“The  polluter  pays  principle  demands  that  the  financial  costs  of  preventing or  remedying  damage  caused by pollution should lie with the undertakings  which  cause  the  pollution,  or  produce  the  goods  which cause the pollution. Under the principle it is  not the role of government to meet the costs involved  in either prevention of such damage, or in carrying  out remedial action, because the effect of this would  be  to  shift  the  financial  burden  of  the  pollution  incident to the taxpayer. The 'polluter pays' principle  was promoted by the Organisation for Economic Co- operation  and  Development  [OECD]  during  the  1970s  when  there  was  great  public  interest  in  environmental  issues.  During this  time there  were  demands  on  government  and  other  institutions  to  introduce  policies  and  mechanisms  for  the  protection of  the environment and the public  from  the  threats  posed  by  pollution  in  a  modern  industrialised  society.  Since  then  there  has  been  considerable discussion of the nature of the polluter  pays principle, but the precise scope of the principle  and its  implications  for  those  involved  in  past,  or  potentially  polluting  activities  have  never  been  satisfactory agreed."

24. After  hearing  the  learned  counsel  for  the  parties  at  

length, this Court gave the following directions:

“1. The Central  Government shall  determine the  amount required for carrying out the remedial  measures  including  the  removal  of  sludge

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lying  in  and  around  the  complex  of  Respondents  4  to  8,  in  the  area  affected  in  village Bichhri and other adjacent villages, on  account of the production of 'H' acid and the  discharges  from the  Sulphuric  Acid  Plant  of  Respondents  4 to  8.  Chapters-VI  and VII  in  NEERI  Report  [submitted  in  1994]  shall  be  deemed to be the show-cause notice issued by  the  Central  Government  proposing  the  determination of the said amount. Within six  weeks from this day, Respondents 4 to 8 shall  submit  their  explanation,  along  with  such  material as they think appropriate in support  of  their  case,  to  the  Secretary,  Ministry  of  Environment  and  Forests,  Government  of  India (for  short,  M.E.F.).  The Secretary shall  thereupon  determine  the  amount  in  consultation with the experts of his Ministry  within  six  weeks  of  the  submission  of  the  explanation  by  the  said  Respondents.  The  orders passed by the Secretary, [M.E.F.] shall  be communicated to Respondents 4 to 8- and  all concerned - and shall also be placed before  this  Court.  Subject  to  the  Orders,  if  any,  passed by this Court, the said amount shall  represent the amount which Respondents 4 to  8 are liable to pay to improve and restore the  environment in the area. For the purpose of  these proceedings, the Secretary, [M.E.F.] and  Respondents  4  to  8  shall  proceed  on  the  assumption that the affected area is 350 ha,  as  indicated  in  the  sketch  at  Page  178  of  NEERI  Report.  In case of  failure  of  the  said  respondents to pay the said amount, the same  shall be recovered by the Central Government  in accordance with law. The factories,  plant,  machinery and all other immovable assets of  Respondents 4 to 8 are attached herewith. The  amount so determined and recovered shall be

29

utilised  by  the  M.E.F.  for  carrying  out  all  necessary  remedial  measures  to  restore  the  soil,  water  sources  and  the  environment  in  general of the affected area to its former state.

2. On  account  of  their  continuous,  persistent  and insolent violations of law, their attempts  to conceal the sludge, their discharge of toxic  effluents from the Sulphuric Acid Plant which  was allowed to flow through the sludge, and  their non-implementation of the Orders of this  Court - all of which are fully borne out by the  expert  committees'  Reports  and  the  findings  recorded  hereinabove  -  Respondents  4  to  8  have earned the dubious distinction of being  characterised as "rogue industries". They have  inflicted  untold  misery  upon  the  poor,  unsuspecting  villagers,  despoiling their  land,  their  water  sources  and  their  entire  environment - all in pursuance of their private  profit.  They have  forfeited all  claims for  any  consideration  by this  Court.  Accordingly,  we  herewith  order  the  closure  of  all  the  plants  and factories of Respondents 4 to 8 located in  Bichhri  village.  The R.S.P.C.B.  is  directed to  seal all the factories/ units/plants of the said  respondents forthwith. So far as the Sulphuric  Acid Plant is concerned, it will be closed at the  end  of  one  week  from  today,  within  which  period Respondent No. 4 shall wind down its  operations so as to avoid risk of any untoward  consequences, as asserted by Respondent No.  4 in Writ Petition (C) No. 76 of 1994. It is the  responsibility  of  Respondent  No.  4  to  take  necessary steps in this behalf. The R.S.P.C.B.  shall seal this unit too at the end of one week  from  today.  The  re-opening  of  these  plants  shall depend upon their compliance with the  directions made and obtaining of all requisite

30

permissions  and  consents  from the  relevant  authorities. Respondents 4 to 8 can apply for  directions  in  this  behalf  after  such  compliance.

3. So far as the claim for damages for the loss  suffered by the villagers in the affected area is  concerned,  it  is  open  to  them  or  any  organisation on their behalf to institute suits  in the appropriate civil  court. If they file the  suit  or suits in forma pauperis,  the State of  Rajasthan shall not oppose their applications  for leave to sue in forma pauperis.

4. The  Central  Government  shall  consider  whether  it  would  not  be  appropriate,  in  the  light of  the experience gained,  that chemical  industries  are  treated  as  a  category  apart.  Since  the  chemical  industries  are  the  main  culprits  in  the  matter  of  polluting  the  environment,  there  is  every  need  for  scrutinising  their  establishment  and  functioning  more  rigorously.  No  distinction  should be made in this behalf  as between a  large-scale  industry  and  a  small-scale  industry or for  that matter  between a large- scale industry and a medium-scale industry.  All chemical industries, whether big or small,  should be allowed to be established only after  taking  into  considerations  all  the  environmental  aspects  and  their  functioning  should  be  monitored  closely  to  ensure  that  they  do not  pollute  the  environment  around  them. It appears that most of these industries  are  water-intensive  industries.  If  so,  the  advisability  of  allowing  the  establishment  of  these industries in arid areas may also require  examination.  Even  the  existing  chemical  industries may be subjected to such a study

32

be  studied  and  examined  indepth  from  all  angles before taking any action.

7. The  Central  Government  may  also  consider  the  advisability  of  strengthening  the  environment protection machinery both at the  Center and the States and provide them more  teeth. The heads of several units and agencies  should  be  made  personally  accountable  for  any lapses and/or negligence on the part  of  their  units  and  agencies.  The  idea  of  an  environmental  audit  by  specialist  bodies  created on a permanent basis with power to  inspect, check and take necessary action not  only against erring industries but also against  erring officers may be considered. The idea of  an environmental audit conducted periodically  and  certified  annually,  by  specialists  in  the  field, duly recognised, can also be considered.  The ultimate idea is to integrate and balance  the concern for environment with the need for  industrialisation and technological progress.”

25. The orders of this Court have not been implemented till  

date because by filing of number of interlocutory applications  

the respondent nos.4 to 8 have kept the litigation alive.  These  

respondents have been successful in avoiding compliance of  

the judgment of this Court for more than fifteen years.   

ORDER IN CONTEMPT PETITION

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26. The  original  record  of  Writ  Petition  No.  967  of  1989  

shows that the R.S.P.C.B. has filed a report of the National  

Environmental  Engineering  Research  Institute,  for  short  

‘NEERI’ in this Court on 6.1.1996.  It is on this report that  

reliance was placed by the Court while disposing off the said  

writ petition.  If the report which was submitted in this Court  

by the R.S.P.C.B.  was different  from the final  report  which  

was submitted by NEERI to the said Board, then it may have  

been possible to contend that the R.S.P.C.B. and its officers  

were  guilty  of  fabrication.   The  affidavit  of  Mr.  S.N.  Kaul,  

Acting Director of NEERI clearly shows that what was filed in  

this Court was the copy of the final report dated 16.5.1994  

which has been prepared by the NEERI.  In other words, the  

NEERI itself states that the report filed in this Court by the  

Board was a copy of the final report and that there was no  

fabrication made therein by the Board or any of its officials.

27. It  appears  that  the  two  scientists  had  inspected  the  

report in the office of the NEERI and then observed that there  

has been a fabrication carried out by the Pollution Control

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Board.  From what has been stated hereinabove, the charge of  

fabrication is clearly unfounded.  It is possible that these two  

scientists may have seen the draft report which would be with  

NEERI but the original report when prepared would be one  

which was, ultimately,  submitted to the sponsoring agency,  

namely,  the  R.S.P.C.B.,  and  it  is  only  a  copy  of  the  same  

which could have been retained by NEERI. Be that as it may,  

it is clear that what has been filed in this Court as being the  

final  report  of  the  NEERI  was  the  copy  of  the  final  report  

which was received by it.   There is no basis for contending  

that any of the respondents have been guilty of fabrication.  

The whole application to our mind is devoid of any merit. The  

contempt petition was dismissed with costs.

IA NO.36 IN WRIT PETITION (C) No.967 OF 1989

28. This Interlocutory Application has been filed on behalf of  

M/s Hindustan Agro Chemical Ltd. (for short “HACL”) whose  

industrial units situated in Udaipur were directed to be closed  

down by this Court on the premise that the said units had  

caused pollution in village Bichhri.  This Court while directing

35

for closure of the industrial units of HACL vide its order dated  

13.2.1996 had further held that the units be not permitted to  

run until they deposit the remediation costs for restoring the  

environment in the area.  The Court accordingly directed for  

the attachment of the properties of HACL.

29. There is a serious attempt to reopen the entire concluded  

case which stands fully  concluded by the  judgment  of  this  

Court delivered on 13th February, 1996.  It may be pertinent  

to mention that even the review and curative petitions have  

also been dismissed.  By this application, the applicant has  

also  made  an  attempt  to  introduce  before  this  Court  the  

opinion of various experts, such as, Dr. M.S. Govil, Mr. S.K.  

Gupta,  Dr.  P.S.  Bhatt  and Ms.  Smita Jain who visited  the  

Bichhri  village  at  the  instance  of  the  applicant  in  the  year  

2004 to provide a different picture regarding the conditions of  

water and soil in the area.  These experts submitted reports to  

demonstrate that now hardly any remediation measures are  

required in Bichhri village or adjoining areas.

36

30. The applicant in this application is seeking a declaration  

that as of now there is no pollution existing in the area which  

may have been caused by HACL and accordingly there is no  

necessity for this Court to sell the assets of HACL in order to  

carry out any remediation in the area.  This application also is  

a serious attempt to discredit the NEERI report of 1996 once  

again.  

31. The sole object of filing of the present application is to  

introduce before this Court recent reports prepared by experts  

at the behest of the applicant to demonstrate to the Court that  

before embarking upon remediation measures and for the said  

purposes putting the properties of the applicant to sell, the  

status and conditions of water, soil and environment in the  

area  as  at  present  be  reviewed  with  a  view  to  realistically  

ascertain whether any measures for remediation are called for  

at all in the area and if yes, then the nature and the current  

cost of the same may be ascertained.

32. The applicant  submitted  that  the  report  of  the  NEERI  

which was the basis for the earlier orders of this Court does

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not specify the nature of remediation measures which were  

considered necessary.   The  report  merely  indicates  a  lump  

sum amount without giving its  break up as being a rough  

estimate of amount considered by them necessary for carrying  

out remediation measures.  

33. It is stated in the application that the Secretary, MOEF  

after  issuing  notices  to  the  parties  called  for  the  expert  

opinion  of  Water  and  Power  Consultancy  (WAPCO)  and  of  

Engineers  India  Limited  (EIL),  both  these  institutions  were  

established  by  the  Government  of  India.  Both  these  

institutions wrote to the Secretary that the data available was  

not sufficient to determine the cost of remediation, if any.  The  

Secretary, who under the directions of the Court was directed  

to determine the amount within six weeks was left  with no  

alternative  but  to  simply  affirm  the  lump  sum  amount  

determined by the NEERI.

34. It  is  stated that now almost fifteen years have passed  

since the final judgment of this Court and the situation in the  

area needs to be inspected again to find out as to whether any

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remediation  is  necessary  or  whether  with  passage  of  time  

nature on its own has taken care of the pollution in the area  

and because of the same no further remediation is required to  

be done in the area.  This submission is being made without  

prejudice  to  the  right  of  the  applicant  to  contend  that  the  

applicant had not caused any pollution in the area but the  

applicant for the limited purpose of this application is ready to  

assume  for  the  sake  of  arguments  that  the  applicant  had  

caused pollution in the area and that the nature in the last so  

many years has taken care of the pollution and on that basis  

there is no pollution existing in the area at present.

35. One of the issues that came up for consideration before  

this  Court  was  the  liability  of  the  Union  of  India  to  take  

remediation measures in the area even if the applicant were  

not  to  pay  the  remediation  costs  as  determined  by  the  

Secretary, MOEF.  In these proceedings the counsel on behalf  

of the applicant made a suggestion to the Court that a fresh  

team be sent to the units of the applicant to find out whether  

there  is  still  any  pollution  existing  in  the  area  and  also

39

whether any remediation as of today is required to be done or  

not.  It was suggested during the course of hearing that the  

remediation  cost  being  sought  to  be  recovered  from  the  

applicant is not some kind of a decree in which the applicant  

is a judgment debtor but is merely a cost which the applicant  

is being made liable to pay on the “Polluter Pays” principle  

and there is no necessity of payment if there is no pollution  

existing.  Till date there is no working out as to how the cost  

of remediation has been worked out by NEERI which had been  

affirmed by the Secretary, MOEF and which had been further  

affirmed by this Court.

36. According to the applicant, on the basis of the reports of  

some experts it is quite evident that there is no pollution in  

and  around  the  factory  premises  of  the  applicant  and  

accordingly there is no need for any remediation to be done in  

the  area and the factory  of  the  applicant  is  required to be  

handed over to the applicant forthwith so that the applicant  

may take  proper  steps  to  re-start  the  factory  and generate

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resources to meet the liabilities of  the financial  institutions  

and banks.  

37. It  is  further  prayed  that  if  this  Court  for  any  reason  

doubts the opinion of the experts placed by the applicant in  

any  manner,  then  this  Court  may  appoint  any  reputed  

expert/experts  to  visit  the  area  and  to  submit  a  detailed  

report to this Court relating to the pollution existing in the  

area as of now.  In other words, the effort is to reopen the  

concluded case and that also after the review and the curative  

petitions have been dismissed by this Court.

38. There are two main prayers in this application, the first  

prayer is that no remediation is required to be done in and  

around the industrial units of the applicant on the basis of  

the  four  reports  placed  by  the  applicant  along  with  this  

application  or  on the  basis  of  the  report  submitted  by the  

expert/experts  appointed  by  this  Court;  and  secondly, that  

the Court may pass consequential order directing for closing  

of these proceedings and thus lift the attachment order dated  

13.2.1996.

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39. Reply  Affidavits  to  the  Interlocutory  Application  have  

been filed by the Union of India and other respondents. In the  

reply  affidavits  of  the  respondents  it  is  mentioned  that  on  

13.2.1996  this  Court  directed  closure  of  the  units  of  the  

applicant for the reason that the said industries had caused  

environmental  pollution  in  and  around  the  areas  where  

applicant’s units are located.  This Court had further directed  

that the units of the applicant would be permitted to operate  

only after depositing necessary costs for taking measures to  

restore the environment of the areas.  The judgment of this  

Court was based upon a report dated 5.4.1994 of the NEERI  

which was filed by the R.S.P.C.B. on 6.1.1996.

40. The applicant questioned the credibility of the NEERI’s  

report.  It is submitted that the remediation cost for restoring  

the environmental  quality  of  the area was only Rs.3 crores  

whereas in the report submitted in this Court the remediation  

cost was stated to be Rs.37.385 crores.  

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41. The applicant prayed that in the interest of justice the  

report dated 25.1.2005 submitted by the expert group to the  

MOEF be ignored and either accept the reports prepared at  

the instance of the applicant or fresh direction be issued for  

constitution of an independent expert group not having any  

association with NEERI to carry out investigation with relation  

to the environment in the village Bichhri.

42. According to the  applicant,  the  report  of  NEERI relied  

upon by this Court was not the authentic report which was  

officially prepared.  Even the copy which was actually filed in  

this matter was without any supporting affidavit and the same  

was merely handed over to this Court at the time of hearing.  

The applicant made his own enquiry and was officially given  

the  report  of  NEERI.   After  comparing  the  report  made  

available to the applicant from the one filed in this matter it  

came to light that the report actually filed in this Court was  

not bearing any resemblance to the conclusion and findings  

mentioned in the actual report.  

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43. It was also submitted that there have also been attempts  

on the part of authorities to shield the role of M/s. Hindustan  

Zinc  Limited  in  causing  environment  damage  in  village  

Bichhri.  This issue needs to be addressed and the same can  

be possible only if an organization having credibility and not  

having any association with the NEERI actually carries out a  

detailed investigation.  

44. Reply affidavit has also been filed by the R.S.P.C.B.  It is  

stated in the said affidavit:

3 (i) That  M/s.  Hindustan  Agro  Chemical  Ltd.,  Village Bichhri, Tehsil Girva, District Udaipur,  Rajasthan;  respondent  no.4,  established  its  Sulphuric Acid and Oleum Plant in the year  1985 without  obtaining  prior  consent  of  the  State Board under the provisions of Sections  25  and  26  of  the  Water  (Prevention  and  Control of Pollution) Act, 1974; and section 21  of the Air (Prevention an Control of Pollution)  Act, 1981;

(ii) That  the  State  Board  vide  its  letter  dated  16.2.1987 refused consent to respondent no.4  under the provisions of section 25 and 26 of  the  Water  Act  for  discharging  trade  effluent  from its Sulphuric Acid Plant.

(iii) That  the  State  Board  issued  directions  vide  order  dated  26.11.1993,  for  closure  of  Sulphuric Acid Plant under the provisions of

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section 33A of the Water Act, 1974 as it was  discharging  trade  effluent  without  proper  treatment  and  in  excess  of  the  prescribed  standards.   The  District  Collector  Udaipur  implemented  the  directions  of  closure  of  Sulphuric  Acid  Plant  passed  by  the  State  Board.

4 (i) That  M/s.  Hindustan  Agro  Chemical  Ltd.,  Village Bichhri, Tehsil Girva, District Udaipur,  Rajasthan;  respondent  no.4  established  its  Solvent  Extraction coupled  with Oil  Refinery  Plant in the year 1991 without obtaining prior  consent  of  the  State  Board  under  the  provisions of section 25 and 26 of the Water  Act and section 21 of the Air Act.

(ii) That  the  State  Board  vide  its  letter  dated  24.7.1992 refused consent to respondent no.4  under the provisions of section 25, 26 of the  Water Act for discharging trade effluent from  its Solvent Extraction Plant.

(iii) That  the  State  Board issued directions,  vide  order dated 26.11.1993, for closure of Solvent  Extraction  Plant  under  the  provisions  of  section  33A  of  the  Water  Act,  as  it  was  discharging  trade  effluent  without  proper  treatment  and  in  excess  of  the  prescribed  standards.   The  District  Collector  Udaipur  implemented  the  directions  of  closure  of  Solvent Extraction Plant passed by the State  Board.  

5 (i) That  respondent  no.4  preferred  a  petition  before this Court being Writ Petition (C) No.76  of 1994 Hindustan Agro Chemical Ltd. & Anr.  v. State of Rajasthan & Ors. challenging the  directions  dated  26.11.1993  of  the  State

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Board closing down Sulphuric Acid Plant and  Solvent Extraction Plant under the provisions  of section 33A of the Water Act, 1974.  It was  alleged  that  the  action  of  the  State  Board  closing down Sulphuric Acid Plant and Solvent  Extraction  Plant  was  arbitrary  and  highhanded.

(ii) That this Court during hearing in the matter  on  7.3.94,  in  WP  (C)  No.76/94  passed  the  following direction inter-alia:-

“We  thought  of  having  the  complaints  of  the  petitioner  as  to  harassment,  examined  by  an  independent  Commissioner  to  ascertain  the  bona  fides  of  the  action taken by the officers of  the  Pollution Control Board and also to  fix  their  responsibility.  But  we  thought that at this stage it would  be  appropriate  to  ask  the  learned  Advocate-General,  who appears  for  the State of Rajasthan, to have the  matter  examined  at  his  instance  and  direct  the  Pollution  Control  Board  to  act  more  constructively  and to suggest measures by which  the Plant could be re-commissioned  immediately.”

(iii) That the said writ petition again came up for  hearing  on  18.3.94  before  this  Court.   This  Court  was  pleased  to  pass  the  following  directions inter alia:-  

“In  the  meanwhile,  the  Pollution  Control Board is not prevented from  and it  shall  indeed by  its  duty  to

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indicate  what,  according  to  it,  are  such  minimal  requirements  for  grant of  permission to re-start  the  industries or to permit any interim  arrangements in this behalf.”

(iv) That in pursuance of the aforesaid order dated  18.3.94,  the  respondent  Board  took  appropriate  steps and granted permission to  restart industry subject to certain conditions  communicated vide permission order.

It  is  submitted  that  the  industry  was  restarted.  However, on subsequent inspection  it  was found that the industry was violating  the  prescribed  norms  and  also  has  not  bothered  to  comply  with  the  conditions  mentioned in the permission order.  As such  an application was moved before this Court for  appropriate directions in the matter.

(v) That despite all efforts for re-commissioning of  the  plants,  respondent  no.4  failed  to  take  measures required for prevention and control  of pollution.

(vi) That this court vide order and judgment dated  13.2.96, dismissed the above mentioned writ  petition in view of the decision in writ petition  (Civil) No.967 of 1989.

6(i) That  M/s.  Hindustan  Agro  Chemical  Ltd.,  Village Bichhri, Tehsil Girva, District Udaipur,  Rajasthan,  respondent  no.4,  established  its  Chlorosulphonic  Acid  Plant  in  June  1992  without  obtaining  prior  consent  of  the  State  Board under the provisions of Section 25 and

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26 of the Water Act and section 21 of the Air  Act.

(ii) That  the  State  Board  issued  directions  vide  order  dated  30.12.1992,  for  closure  of  Chlorosulphonic  Acid  Plant  under  the  provisions of section 33A of the Water Act and  31A of Air Act.  The District Collector Udaipur  implemented  the  directions  of  closure  of  Chlorosulphonic  Acid  Plant  passed  by  the  State Board.

(iii) That  respondent  no.4  preferred  a  petition  before  this  Court  being  Writ  Petition  (C)  No.824  of  1993,  Hindustan  Agro  Chemical  Ltd.  &  Anr.  v.  State  of  Rajasthan  &  Ors.,  challenging the directions dated 30.12.1992 of  the State Board closing down Chlorosulphonic  Acid Plant under the provisions of Section 33A  of the Water Act, and 31A of the Air Act.  It  was alleged that the action of the State Board  closing down Chlorosulphonic Acid Plant was  arbitration and highhanded.  

(iv) That  this  Court  dismissed  the  above  mentioned  writ  petition  by  judgment  dated  13.2.96 in W.P. (Civil) No.824 of 1993 in view  of the decision in Writ  Petition (Civil)  967 of  1989.

7(i) That  M/s  Silver  Chemicals,  Village  Bichhri,  Tehsil  Girva,  District  Udaipur  Rajasthan,  respondent  no.5  came  into  existence  in  February  1988  to  manufacture  H-Acid  and  continued  its  operations  upto  March  1989  without  obtaining  prior  consent  of  the  State  Board under the provisions of section 25 and  26 of the Water Act and Section 21 of the Air  Act.

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(ii) That  the  State  Board  vide  its  letter  dated  9.1.1989  refused  consent  application  submitted by M/s. Silver Chemicals under the  provisions of Section 25/26 of the Water Act  as  the  unit  was  discharging  trade  effluent  beyond the prescribed standard and without  having installed a plant for the treatment of  trade  effluent.   The  State  Board  under  the  provisions  of  section  25(5)  of  the  Water  Act  also  imposed  several  conditions  on  the  industry and informed it that failure to make  compliance of the conditions of the conditions  shall render it liable for prosecution.  

(iii) That  the  industry  however  continued  its  operations  and  looking  to  the  continued  violations  of  the  provisions  of  the  aforesaid  Acts,  the  State  Board  filed  an  injunction  application under the provisions of section 33  of the Water Act for restraining the industry  from  discharging  polluted  trade  effluent  in  excess of the prescribed standards and from  causing  pollution  of  underground  water  n  24.3.89  before  the  court  of  Chief  Judicial  Magistrate, Udaipur.

(iv) That  the  Court  of  Chief  Judicial  Magistrate,  Udaipur  by  order  dated  15.6.1989  issued  injunction  against  M/s.  Silver  Chemicals  restraining it from discharging polluted trade  effluent without any treatment.

(v) That  the  State  Board  also  filed  a  criminal  complaint  No.176/99  against  M/s.  Silver  Chemicals and its Director on 24.3.89 under  the  provisions  of  section  43  and  44  for  violation  of  the  provisions  of  section  24,  25  and 26 of the Water Act.

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(vi) That  the  court  of  Chief  Judicial  Magistrate,  Udaipur  by  order  and  judgment  dated  11.8.2004  has  convicted  M/s.  Silver  Chemicals with fine of Rs.10 lakh each under  section 43 & 44 of the Act.  The Court has also  sentenced Shri O.P.  Agarwal,  Director of the  said  company  with  simple  imprisonment  of  one  year  and  fine  of  Rs.10,000/-  under  section  43  and  simple  imprisonment  of  six  months and fine of Rs.10,000/- under section  44 of the Act.  The company and its Director  have preferred criminal appeal no.92 of 2004  under  section  374  (3)(a)  of  the  Code  of  Criminal Procedure before the Sessions Judge,  Udaipur.  The appeal is pending before the Ld.  Sessions Judge.

8(i) That M/s. Rajasthan Multi Fertilizers, Vilalge  Bichhri,  Tehsil  Girva,  District  Udaipur,  Rajasthan respondent  no.6,  established  NKP  Fertilizer Plant at the site,  without obtaining  previous consent of the State Board under the  provisions of section 25, 26 of the Water Act  and section 21 of the Air Act.

(ii) That  the  State  Board  on  20.2.89  issued  a  notice and directed respondent no.6 to obtain  consent of the State Board under the provision  of the Water Act for discharging trade effluent  from its plant.

9(i) That  M/s.  Phosphate  India,  Vilalge  Bichhri,  Tehsil  Girva,  District  Udaipur,  Rajasthan,  respondent  no.7  established  Single  Super  Phosphate Plant at the site, without obtaining  previous consent of the State Board under the  provisions of section 25, 26 of the Water Act  and section 21 of the Air Act.

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(ii) That  the  State  Board  on  20.2.89  issued  a  show  cause  notice  and  directed  respondent  no.7  to  obtain  consent  of  the  State  Board  under  the  provisions  of  the  Water  Act  for  discharging trade effluent from its plant.

10(i) That  M/s  Jyoti  Chemicals,  Village  Bichhri,  Tehsil  Girva,  District  Udaipur,  Rajasthan;  respondent no.8 established its plant, at the  site, in the year 1987, to manufacture Ferric  Alum without  obtaining  previous  consent  of  the  State  Board  under  the  provisions  of  section 25 and 26 of the Water Act and section  21 of the Air Act.

(ii) That  the  State  Board  vide  its  letter  dated  4.8.1988 issued N.O.C. to respondent no.8 for  adequacy  of  pollution  control  measures  for  Ferric  Alum  Plant.   The  respondent  No.8,  however,  started  manufacturing  H-Acid  and  continued its operation till March, 1989.

(iii) That the State Board vide letter dated 30.5.88  withdrew  the  NOC  for  the  reason  that  respondent no.8 violated the conditions of the  NOC.

(iv) That  the  State  Board  vide  its  letter  dated  30.5.89  also  refused  application  filed  by  respondent no.8 for discharging trade effluent  under section 25, 26 of the Water Act for the  reasons,  inter  alia,  that  it  failed  to  install  pollution  control  measures  and  changed  its  product  from Ferric  alum to  H-Acid  without  the consent of the State Board.

11. That  this  Court  by  its  common  order  and  judgment dated 13.2.96 in the aforesaid Writ

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Petition (Civil)  No.967/89, Indian Council for  Enviro  Legal  Action  v.  Union  of  India  &  Others;  Writ  Petition  (Civil)  No.76/94  Hindustan  Agro  Chemical  v.  State  Pollution  Control  Board  &  Others  and  Writ  Petition  (Civil) No.824/93 Hindustan Agro Chemical v.  State  Pollution  Control  Board  and  Others  attached the  factories,  plant,  machinery and  all  other  immovable  assets  of  respondent  nos.4 to 8.  The State Pollution Control Board  was directed to seal all the factories, plants of  respondent  nos.4  to  8  forthwith.   The  State  Board in compliance of the aforesaid direction  sealed the plants of respondent nos.4 to 8 as  directed by this Court.

45. The written submissions were also filed by the Union of  

India  and  the  R.S.P.C.B.  in  response  to  the  order  dated  

03.05.2005 in IA No.36.  It is stated in the said affidavit:

2. That the Ministry of Environment & Forests,  Government  of  India  vide  its  affidavit  dated  29.1.2005  submitted  a  summary  report  prepared  by  a  consortium  of  SENES  Consultants  Limited,  Canada;  and  NEERI,  Nagpur  before  this  Court.   The  Ministry  of  Environment  &  Forest,  Government  of  India  and  the  Rajasthan  State  Pollution  Control  Board  are  making  joint  submissions  herein  below  for  remediation  of  the  environmental  damage caused in village Bichhri.  Based on  the  recommendations  given  in  the  report  of  July,  2002,  prepared  by  SENES/NEERI  for  remediation  of  degraded  environment  of  Bichhri,  District  Udaipur,  Rajasthan,  the

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following works will be undertaken on priority- wise:

First Priority:

Phase-I:  Source Remediation (Short Term)

• Clean  up  of  water  near  the  plant  site  with  highest H-acid contamination.

• Remediation  of  contaminated  soil  and  sludge  management within the plant site.

Second Priority:

Phase-II:  Hot Spots Remediation (Medium Term)

• Clean up of ground water at hot spots.

Third Priority:

Phase-III:  Residual  Contamination  Remediation  (Long  Term)

• Clean up of residual contaminated water.

Fourth Priority:

Phase-IV (long-term):   

• Clean  up  of  contaminated  soil  outside  plant  boundary.

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3. While dealing with the first phase called as short- term  remedies,  it  has  been  divided  in  two  parts  namely:-

(i) Clean up of water near the plant site with highest  

H-acid contamination.

(ii) Soil and Sludge management within the plant site.

46. The  said  recommendation  given  in  the  SENES/NEERI  

report further suggests as follows:

“Considering  the  available  water  quality  data  the  following  alternatives  were  evaluated  in  the  preliminary review:

• Lime soda process plus Fe coagulation • Reverse osmosis (RO) • Electro-dialysis • Ion exchange • Activated carbon Sorption and • Activated carbon filtration

Similarly,  for  the  second  short-term  measures  namely,  the  remediation  of  soil  and  sludge  management  many  alternative  suggestions  have  been  made.   The  said  report  has  suggested  the  following four alternatives for clean up of soil:

• Excavation  and  relocation  in  a  capped  landfill.

• Ex-situ remediation (soil washing) • Phyto-remediation • Natural attenuation

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4. That out of the aforesaid alternative technologies,  the  most  suitable  alternative  with  regard  to  the  human habitation,  plantation and vegetation etc.,  will  have  to be decided keeping in view the  local  conditions and priority requirement.  This job will  have to be done by Technical Advisory Committee  having sufficient technical know-how in respect of  the remedial  measures.   The committee may also  like to look into the techno-economic feasibility in  this regard.  

5. In  order  to  go  ahead  with  the  above  mentioned  works on priority-wise, the following steps will  be  taken:

a) Reconfirmation of National  Productivity Council  (NPC)  New  Delhi  as  the  Project  Management  Consultant  (PMC)  by  the  Ministry  of  Environment  & Forests  (MoEF).   NPC was  the  PMC  for  the  purpose  of  conducting  feasibility  studies by SENES & NEERI in pursuance of the  directions  dated 4.11.1997 of  this  Court.   The  role of PMC will be to -

i) Co-ordinate  preparatory  activities  such  as  bidding  and  selection  of  a  suitable  expert  agency  for  undertaking  remediation work before execution of the  remediation works.

ii) Organise  Technical  Advisory  Committee  meetings  from  time  to  time  to  guide,  review  and  supervise  the  progress  of  remediation works.

iii) Co-ordinate  activities/works  pertaining  to  actual  remediation  and  submit  progress reports to the MoEF.

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b) Constitution of a Technical Advisory Committee  by  the  MoEF  having  representations  of  MoEF,  CPCB,  Government  of  Rajasthan,  RSPCB,  NEERI,  NPC  &  Technical  Experts  of  National  repute in the relevant fields to –

i) Evaluation  the  recommendations  of  SENES NEERI Report (July 2002);

ii) Finalise  the  detailed  line  of  action  and  plan  for  remediation  of  environmental  damages;

iii) Review the alternative technologies from  the  technologies  recommended  in  the  SENES-NEERI report and to recommend  suitable  technology  for  remediation  of  contaminated water and soil.

iv) Supervise  the  work  of  actual  remediation.

6. As the remediation of environmental  damage  would require a large sum of money…

47. All  issues raised in  this  application  have  been argued  

and determined by an authoritative judgment of  this  Court  

about  fifteen years ago.   This  application has been filed to  

avoid liability to pay the amount for  remediation and costs  

imposed  by  the  Court  on  the  settled  legal  principle  that  

polluter pays principle.  In other words, the applicant through

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this  application  is  seriously  making  an  effort  to  avoid  

compliance  of  the  order/judgment  of  this  Court  delivered  

fifteen years ago.  The tendency must be effectively curbed.  

The applicant cannot be permitted to avoid compliance of the  

final order of this court by abusing the legal process and keep  

the litigation alive.

48. The applicant is in business where sole motto of most  

businessmen is to earn money and increase profits. If by filing  

repeated  applications  he  can  delay  in  making  payment  of  

huge remediation costs then it makes business sense as far as  

the  applicant  is  concerned  but  the  Court  must  discourage  

such business tactics and ensure effective compliance of the  

Court’s order.  It is also the obligation and bounden duty of  

the  court  to  pass such order  where  litigants  are  prevented  

from abusing the system.  

I.A. NO. 44 IN W.P.(C)No.967 OF 1989

49. In  this  matter  the  final  judgment  of  the  court  was  

delivered  on  13.2.1996.   A  Review  Petition  filed  was  also  

dismissed.  Thereafter, a Curative Petition was filed and that

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was  also  dismissed  on  18.7.2002.  The  applicant  did  not  

comply  with  the  orders  passed  by  this  court  even  after  

dismissal of curative petition and has filed this application.

50. This  application  has  been  filed  by  respondent  No.  4,  

Hindustan  Agro  Chemicals  Limited.   By  this  application  

respondent No. 4 sought an investigation into the reports of  

April, 1994 prepared by the NEERI, which was employed by  

the R.S.P.C.B. in September, 1992 to evaluate the extent of  

contamination done by the applicant’s plant in Bichhri village  

in Rajasthan.  

51. It is on the basis of the report that applicant’s units in  

Bichhri village were closed down and the applicant was asked  

to  pay  a  sum  of  Rs.37.385  crores  towards  the  costs  of  

remediation to the government.   The reports of  April,  1994  

had alleged that the applicant’s units polluted the whole area  

by  discharging  its  H-acid  on  the  land  which  would  cost  

Rs.37.385 crores to clean-up.  

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52. According to the applicant various experts employed by  

the applicant had found no evidence of H-acid pollution from  

the applicant’s units in the area.  In the application, serious  

effort has been made to discredit the NEERI report.  It may be  

pertinent to mention all  objections of the said reports were  

heard and disposed by the judgment dated 13.2.1996:

“In  fact,  while  one  report  mentioned  the  cost  of  remediation  to  be  3  crores,  the  one  which  was  presented to the Court showed it as 37.385 crores.

As per the original report it was reported by RSPCB  that  most  of  wells  within  1.5  k.m.  radius  of  the  plants were contaminated while the modified report  says, wells within 6.5 k.m. radius.

While the original report noted that the sludge had  been stored  under  the  supervision  of  the  RSPCB  whereas  the  modified  report  stated  that  the  industry had scattered the sludge in an unmindful- clandestine  manner  causing  gross  pollution  to  avoid penal liability.”

53. According to the reports of the experts, (who visited the  

site  at  the instance  of  the  applicant,  after  the  dismissal  of  

Review and Curative petition) the report of the NEERI filed in  

April 1994 was untenable and unsustainable.   According to  

the  applicant  the  said  report  was  fabricated.   In  the

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application it is also mentioned that this is a fraud in which  

this court had been unwittingly dragged by the officers of the  

RSPCB and the NEERI to destroy several industries and the  

livelihood of about 1700 persons and it has been prayed that  

this court to direct an investigation into the report of April,  

1994 prepared by the NEERI at the instance of the RSPCB to  

examine whether it was false or malafide.  

54. A reply has been filed on behalf of the RSPCB.  At the  

outset  it  has been mentioned that similar  challenge by the  

respondent Nos. 4 to 8 regarding the factum of pollution in  

village Bichhri and it being attributed to the said respondents  

had been dismissed by this court on many occasions.   This  

court  conclusively  reached  the  finding  that  the  respondent  

Nos. 4 to 8, by indiscriminate discharge of their polluted trade  

effluent is in utter disregard and violation of the provisions of  

the Pollution Control and Environmental Protection Laws had  

caused intense severe pollution of underground water and of  

soil in village Bichhri.  The veracity of the report of the NEERI

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has  already  been  upheld  by  this  court.   This  court  on  

4.11.1997 passed the following order:

“… … …In the affidavit of Progress Report, the  Government  of  India  has  proposed  that  for  the  purpose  of  undertaking  the  work  relating  to  remedial  measures  for  the  National  Productivity  Council  (NPC)  may  be  appointed  as  the  Project  Management Consultants and on the basis of the  feasibility  report  submitted  by  the  NPC,  tenders  may be invited for entrusting the remedial work.  It  is  also  proposed  that  a  High  Level  Advisory  Committee would be constituted consisting of the  representatives from (1) Ministry of Environment &  Forests (2) National Productivity Council (3) Central  Pollution  Control  Board  (4)  NEERI  and  (5)  Rajasthan State Pollution Control Board to review  periodically and give directions and also to approve  decisions  to  be  taken.   According  to  the  said  affidavit work would be undertaken in two phases.  The  cost  of  Phase-I  would  be  Rs.1.1  crores  (Rs.50.00  lakhs  for  Project  Management  Consultancy  and  Rs.60.00  lakhs  for  feasibility  studies)  and  the  cost  of  Phase-II  (Actual  Remediation) would come to Rs.40.1 crores.  In the  additional  affidavit  of  Dr.  M.  Sengupta  detailed  reasons  have  been  given  why  it  has  not  been  possible  to  accept  the  report  of  the  Experts  on  which reliance was placed by the respondents.  We  have  perused  the  said  reasons  given  in  the  said  additional affidavit filed on behalf of the Ministry of  Environment and Forests and keeping in view the  reasons given therein.  We are unable to accept the  report of  the Experts on which reliance has been  placed by the respondents.  We accept the proposal  submitted  by  the  Government  of  India  for  the  purpose of taking remedial measures by appointing  National  Productivity  Council  as  the  Project

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Management  Consultant.   In  our  opinion,  the  Ministry of Environment & Forests, Government of  India  has  rightly  made  a  demand  of  Rs.37.85  crores.  

…  …  …Since,  we  have  accepted  the  aforesaid  proposal of the Government of India, we put it to  Shri N.D. Nanavati that in order that further steps  as per the said proposal are taken the respondents  should immediately deposit a sum of Rs.5.00 crores  in  advance  so  that  the  National  Productivity  Council  may  be  asked  to  undertake  the  work  of  Project  Management  Consultant  and  have  the  feasibility studies conducted and prepare the Terms  of Reference for inviting the tenders.  Shri Nanavati,  after taking instructions from the representative of  the  respondents,  expressed  the  inability  of  the  respondents to deposit the said amount and states  that they are in a position to deposit  Rs.5.00 lakhs  only.  In these circumstances, the only alternative  left  is  to  direct  that  the  Ministry  of  Environment  and  Forests  shall  take  the  necessary  steps  to  implement the directions contained in the judgment  of this Court.  All that we will say at this stage is  that  the  decision  regarding  remedial  measures  taken on the basis  of  the  NEERI Report  shall  be  treated  as  final.   The  I.As.  are  disposed  of  accordingly.”

55. In the reply of RSPCB it is mentioned that respondent  

No.  4  had  preferred  a  Contempt  Petition  (Criminal)  No.  

7/1999 entitled  Hindustan Agro Chemical  v.  Alka Kala  

and others and this court dismissed the contempt petition  

with the costs computed at Rs.10,000/- while observing that

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there was no basis for contending that any of the respondents  

have  been  guilty  of  fabrication  and  the  whole  contempt  

application was without any merit.    

56. In the reply it is also mentioned that the respondent Nos.  

4  to  8  had  been  operating  their  industrial  plants  without  

obtaining consent from the State Board, as required under the  

provisions of the Water (Prevention & Control of Pollution) Act,  

1974 and the Air (Prevention & Control of Pollution) Act, 1981  

and  discharging  polluted  trade  effluent  indiscriminately  

without providing any treatment so as to bring it in conformity  

to the prescribed standards.  Discharge of this trade effluent  

by the respondent Nos. 4 to 8 resulted into severe pollution of  

underground water and of soil.  For the above violation, the  

State Pollution Control Board filed a Criminal complaint No.  

176/1999,  under  the  provisions  of  Section  43  read  with  

Sections 24 and 44 read with Sections 25/26 of the Water Act  

before the Court of Chief Judicial Magistrate, Udaipur.  The  

learned Chief Judicial Magistrate, Udaipur by its order dated  

11.8.2004 found the accused guilty and convicted him with

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imprisonment and fine both under Sections 43 and 44 of the  

Water Act.  The said conviction and sentence was upheld by  

the  learned  Session  Judge,  Udaipur  in  its  judgment  dated  

21.7.2005.   Against  the  judgment  dated  21.7.2005  of  the  

learned  Sessions  Judge,  the  accused  preferred  Criminal  

Revision  Petition  No.  634/2004  before  the  Rajasthan  High  

Court at Jodhpur.  The Criminal Revision Petition is pending  

adjudication before the High Court of Rajasthan at Jodhpur.  

57. While  denying  the  averments  of  the  application,  the  

RSPCB has relied on paragraphs 14 and 15 of the affidavit  

dated 18.9.2007 filed by M. Subba Rao, Director, MOEF.  The  

said paras reads as under:

“14. The applicant is making reference and reliance  upon the  recent  affidavit  filed  by  the  Ministry  of  Environment  and  Forests,  Government  of  India  dated 08.03.2007 to contend that the earlier report  submitted  by  the  NEERI  was  a  result  of  falsehood/malafide  on  the  parts  of  some  officers  responsible for preparing the report.  At the outset  it is submitted that neither in the report nor in the  affidavit of the Union of India dated 08.03.2007 it  has been stated that the earlier report submitted by  National  Environmental  Engineering  Research  Institute was incorrect.  The affidavit submitted by  the Union of  India on 08.03.2007 has only given  the present status.  The report submitted by Union

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of India along with the affidavit has not dealt with  the correctness/incorrectness of the earlier reports  submitted by National Environmental  Engineering  Research  Institute  to  this  Hon’ble  Court.   It  is  submitted that on the basis of the affidavit filed by  Union  of  India  on  08.03.2007  and  the  report  submitted therewith,  it  cannot be contended that  the  report  submitted  by  National  Environmental  Engineering Research Institute  in April  1994 was  incorrect.  It is further submitted that the experts of  Union of India have also not gone into an examined  the merits of the earlier reports.

15. It is seen from paras 46-47 of the judgment of  this  Hon’ble  Court  reported  in  the  order  dated  13.2.1996 (reported at (1996) 3 SCC 212 at 227- 231) that a challenge was already attempted by the  respondents  on  the  reports  of  NEERI  before  this  Hon’ble Court at the time of hearing.”

58. It may be pertinent to mention here that on 22.8.1990  

this court had appointed Mr. Mohinder Vyas as Commissioner  

to inspect the wells and assess the degree of pollution created  

by the operation of H-acid plant and the nature and extent of  

the remedial operations.  In pursuance of the directions, the  

Commissioner  visited  the  site  from  31st August  to  4th  

September,  1990,  conducted  detailed  survey  and  also  

collected samples from a number of wells and drains.   The  

Commissioner  in  his  report  dated 20.7.1991 indicated that

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the overall  quality of ground water in the area had become  

highly polluted, the water had become unfit for consumption  

by man or animal and was not even fit for irrigation.  

59. This Court by its order dated 17.2.1992 further directed  

that the MOEF to inspect the area and ascertain about the  

existence and extent of Gypsum and Iron based sludge over  

there.  In pursuance of the above directions, a team of experts  

of  MOEF  visited  the  site  on  6.3.1992  and  assessed  the  

position in regard to storage of sludge collected from various  

sites and presence of sludge in the factory premises.  Samples  

of  water  of  wells  around the factory were also collected for  

analysis.  The Union of India in an affidavit filed before this  

court in pursuance of the said directions stated as follows:

“…  …  …  That  the  report  would  reveal  that  the  extent of pollution in ground water seems to be very  great and the entire aquifer may be effected due to  the pollution caused by the industry.

… … …As the mother liquor produced during the  process (with pH-1.0)  was highly acidic in nature  and was indiscriminately discharged on land by the  unit, it is possible that this might have eroded the  soil  and caused the extensive damage.  It  is also  possible  that  organic  contents  of  mother  liquor

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would have gone into soil with water to give radish  colour.

In another inspection in July, 1992 carried out by a  team  of  experts  of  Ministry  of  Environment  &  Forests and Central Pollution Control Board, it was  observed:

“…  …  …A  part  of  effluent  from  Sulphuric Acid Plant is being discharged  inside the factory.  The effluent dissolves  H-acid  sludge,  which  on  percolation  is  likely  to  cause  further  pollution  of  ground water… … …”

60. In pursuance to the order dated 15.7.1992 of this court,  

the officials of the MOEF conducted inspection on 7.10.1992  

and observed as under:

“… … …Untreated  effluent  from the  solvent  extraction plant and the sulphuric acid plant were  passing through the sludge dump sites unabated,  which was resulting in further leaching of colour to  ground water. … … …”

61. The MOEF in the month of September, 1993 submitted a  

report which reads as under:

“5.0 Conclusion

5.1 On the basis of the observations and analysis  results,  it  is  concluded  beyond  doubt  that  the  sludge inside the entombed pit is the contaminated

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one as is evident from the number of parameters  analysed.  

5.2 The ground water is also contaminated due to  discharge of H-acid plant effluent as well as H-acid  sludge/contaminated  soul  leachates  as  shown  in  the photographs and also supported by the results.  The  analysis  results  revealed  good  correlation  between the colour of well water and H-acid content  in  it.   The  analysis  results  show  high  degree  of  impurities  in  sludge/soil  and  also  in  well  water  which is a clear indication of contamination of soil  and ground water due to disposal of H-acid waste.”

62. The report which was based upon the inspection of the  

area  in  September,  1993  revealed  many  other  alarming  

features.  In para 2, under the heading “Site Observations and  

Collection  of  Sludge/Contaminated  Soil  Samples”,  the  

following facts were stated:

“2.1 The  Central  team,  during  inspection  of  the  premises of M/s. HACL observed that H-acid  sludge  (iron/gypsum)  and  contaminated  soil  are still lying at different places, as shown in  Fig.1,  within  the  industrial  premises  (photograph 1)  which are the leftovers.   The  area,  where  the  solar  evaporation  pond  was  existing with H-acid sludge dumped here and  there, was observed to have been leveled with  borrowed soil (photograph 2).  It was difficult  to  ascertain  whether  the  sludge  had  been  removed  before  filling.   However,  there  are  visual  evidences  of  contaminated  soil  in  the  area.  

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2.2 As reported by the Rajasthan State Pollution  Control Board (RSPCB) representatives, about  720 tonne out of the total  contaminates soil  and  sludge  scraped  from  the  sludge  dump  sites  id  disposed  in  six  lined  entombed pits  covered by lime/fly ash mix, brick soling and  concrete  (photographs  3  and  4).   The  remaining scrapped sludge and contaminated  soil was lying near the entombed pits for want  of  additional  disposal  facility.   However,  during  the  visit,  the  left  over  sludge  and  contaminated soil could not be traced at site.  Inspection  of  the  surrounding  area  revealed  that  a  huge  heap  of  foreign  soil  of  5  meter  height (photograph 5) covering a large area, as  also  indicated  in  Fig.  1,  was  raised  on  the  sloppy  ground  at  the  foothill  within  the  industry premises.   The storm water  run-off  pathway over the area showed indication of H- acid sludge leachates coming out of the heap.  Soil in the area was sampled for analysis.

2.3 M/s. HACL has a number of other industrial  units  which  are  operating  within  the  same  premises  without  valid  consents  from  the  Rajasthan  State  Pollution  Control  Board  (RSPCB).   These  plants  are  Sulphuric  Acid  (H2SO4),  fertilizer  (SSP)  and  vegetable  oil  extraction.  The effluent of these units are not  properly  treated  and  the  untreated  effluent  particularly  from  the  acid  plant  is  passing  through the sludge dump area playing havoc  (photograph 7). The final effluent was collected  at  the  outlet  of  the  factory  premises  during  operation of these units, at the time of ground  water monitoring in September, 1993, by the  RSPCB.  Its quality was observed to be highly  acidic (pH:  1.08, Conductivity:  37,100 mg/l,

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SO4:21,000  mg/l,  Fe:  392  mg/l,  COD:  167  mg/l)  which was also revealed in the earlier  visits  of  the  Central  teams.   However,  these  units were not in operation during the present  visit.”

63. Under para 4.2.1, the reported stated inter alia:

“The  sludge  samples  from  the  surroundings  of  the  (presently  non-existent)  solar  evaporation  and  the  contaminated  soil  due to seepage from the newly  raised dump  site  also  exhibited  very  high  values  of  the  above  mentioned  parameters.   This  revealed  that the contaminated soil is buried under the  new dump found by the team.”

64. In  the  reply  it  is  also  mentioned  that  the  NEERI  

submitted  its  report  in  April,  1994  on  the  restoration  of  

environmental quality of the area surrounding village Bichhri,  

severally affected due to discharge of trade effluent and other  

industrial wasters by respondent Nos. 4 to 8.  The report was  

submitted before this court in pursuance of its directions in  

the matter.  The report states that the studies were carried  

out by the NEERI between September,  1992 and February,  

1994.  The report had been considered by this court at length  

on its own merits and the observations of the court on the

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report  are  contained  in  the  judgment  pronounced  by  it  on  

13.2.1996.   

65. In  the  reply  it  is  also  stated  that  this  court  besides  

considering the report of the NEERI also looked into a number  

of  reports  pertaining  to  inspections,  surveys,  studies  and  

analysis of wastes and waste waters carried out by the experts  

of  the  MOEF,  Central  Pollution  Control  Board  (for  short  

‘CPCB’) and the R.S.P.C.B on various occasions, while hearing  

the  matter  and  pronouncing  the  judgment  therein  on  

13.2.1996.  Therefore, it is totally incorrect and erroneous to  

contend  that  the  order  dated  13.2.1996  was  solely  based  

upon  the  report  submitted  by  the  NEERI.   Para  IV  of  the  

conclusions  of  the  judgment  dated  13.2.1996  observed  as  

follows:

“… … …this court has repeatedly found and  has recorded in the orders that it  is  respondents  who have caused the said damage.  The analysis  reports obtained pursuant to the directions of the  court  clearly  establish  that  the  pollution  of  the  wells  is  on  account  of  the  wastes  discharged  by  respondent Nos. 4 to 8 i.e. production of ‘H’ Acid…  … …”

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66. In its reply the RSPCB further stated that the respondent  

Nos. 4 to 8 filed a Writ Petition No. 338/2000 challenging the  

judgment of this court dated 13.2.1996.  This court dismissed  

the petition, by order dated 18.7.2002, having regard to the  

principles laid down in Rupa Ashok Hurra v.  Ashok Hurra  

& Another (2002) 4 SCC 388.

67. The RSPCB also  stated in  its  reply  that  this  court  by  

order dated 4.11.1997 directed the MOEF to take necessary  

steps to implement the directions contained in the judgment  

dated 13.2.1996 and accepted the proposals submitted by the  

MOEF  for  the  purpose  of  taking  remedial  measures  by  

appointing National Productivity Council (for short NPC), New  

Delhi as Project Management Consultant. Pursuant to these  

directions,  the  MOEF  awarded  the  work  of  conducting  

feasibility  studies  for  suggesting  alternative  methods  for  

remediation  of  affected  environment  in  Bichhari,  to  a  

consortium of consultants namely:  M/s. SENES Consultant  

Limited,  Canada  and  the  NEERI,  Nagpur.   The  above  

consultants in their report stated that an area of 540 hectares

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had  been  affected  due  to  industrial  waste  and  needed  

remediation of contaminated ground water and soil.  The said  

report  categorically  stated  about  contamination  of  ground  

water and of soil by H-acid.  The report has been submitted by  

the MOEF before this court in January, 2005.   This court on  

9.12.2004 made the following order:

“… … …The company  M/s.  Hindustan  Agro  Chemical Limited, which is one of the respondents  in  the  main  Writ  Petition  has  filed  a  Petition  supported by an affidavit of one Shri D.P. Agarwal,  a  Director  in  the  respondent  Nos.  4-8 companies  enclosing therewith certain reports of the experts.  It is the claim of the applicant that at present, the  effects caused by pollution on account of operation  of  the  concerned  industries  do  not  exist  and  remedial  measures,  as  contemplated  in  the  main  judgment  of  this  Court  need  not  be  undertaken.  The  respondents  namely:   UOI,  the  State  of  Rajasthan  and  the  Rajasthan  State  Pollution  Control  Board  as  well  as  the  petitioner  will  give  their responses, if any, to this I.A.  The Government  of India may depute an expert and be along with  the  expert  nominated  by  the  Rajasthan  State  Pollution  Control  Board  and  the  nominee  of  the  State  Rajasthan  shall  visit  the  spot  after  giving  intimation  to  the  Petitioner-Indian  Council  for  Enviro Legal Action and verify the facts stated in  the  affidavit  and report  the  latest  position to  the  Court by the next date of hearing… … …”

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68. An additional affidavit was also filed on behalf of MOEF  

on the same lines and graphic description of existence of the  

pollution has affected the ground water to an extent that the  

entire aquifer may be affected due to the pollution caused by  

the industry.  The report further reveals that the problem in  

relation to the area in question is basically the contamination  

of water and the major factor contributing to the cause has  

been the improper disposal of sludge and liquid wastes from  

the unit.  It has been recommended by the expert team that  

due  to  leachable  components  of  the  sludge  the  industry  

should prepare a double line pit containing impervious liners  

comprising  impervious  clay  and  polyethylene  sheets.   The  

sludge should be placed in this  lined pit  and covered with  

water  proof  layering  to  such  extent  that  no  water  can  

percolate through the stored sludge.  The soil in the premises  

of the industry has also been contaminated by the disposal of  

liquid  effluents  as  well  as  the  sludge  on the  ground.   The  

contaminated soil  needs to be removed and the entire area  

should be revamped.  All industrial activities going on in the  

premises should be stopped to enable the revamping process.

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69. Mr.  Shanti  Bhushan  and  Mr.  Prashant  Bhushan,  

learned senior counsel in the written submissions filed by the  

respondent Nos. 4 to 8 have quoted this court’s direction. The  

same is reproduced as under :-

“The  Central  Government  shall  determine  the  amount  required  for  carrying  out  the  remedial  measures….The  Secretary  shall  thereupon  determine  the  amount  in  consultation  with  the  experts of the Ministry………the said amount shall  represent the amount which respondents 4 to 8 are  liable  to  pay  to  improve  and  restore  the  environment  in  the  area….the  factories,  plant,  machinery  and  all  other  immovable  assets  of  respondents  4  to  8  are  attached  herewith.   The  amount  so  determine  and  recovered  shall  be  utilized by the MEF for carrying out all necessary  remedial  measures  to  restore  the  soil,  water  resources  and  the  environment  in  general  of  the  affected area to its former state.”

70. According to respondent nos. 4 to 8, two reports of the  

NEERI of the same date were at variance with each other.  In  

one  report,  the  cost  of  remediation  is  mentioned  as  Rs.3  

crores whereas in other report presented before the court, the  

amount was 37.385 crores.

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71. Mr. Bhushan, learned senior counsel has submitted in  

his written submission that according to the original report, it  

was reported by the RSPCB that most of the wells within 1.5  

km radius  of  the  chemical  plants  of  the  respondents  were  

contaminated whereas according to the modified report those  

wells were located within 6.5 km radius.

72. Mr.  Bhushan has also  submitted  that  the  sludge  had  

been  stored  under  the  supervision  of  the  RSPCB  whereas  

according to the modified report the industry had scattered  

the sludge in an unmindful clandestine manner causing gross  

pollution to avoid penal liability.

73. Reference has been made to the  opinion of some experts  

whose  opinions  were  obtained  at  the  behest  of  respondent  

nos. 4 to 8.  Their reports are contrary to the earlier reports  

given by the other experts.   

74. In  the  written  submissions  it  is  mentioned  that  M/s  

Hindustan  Zinc  Limited  was  responsible  for  discharging  

noxious and polluting effluents.  

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75. According to the applicant-industry, the RSPCB has not  

taken a consistent stand.  

76. In  the  supplementary  submissions  filed  by  Mr.  K.B.  

Rohatagi,  the  learned  counsel  appearing  on  behalf  of  

R.S.P.C.B.,  it  is mentioned that in Interlocutory Application  

Nos.  36 and 44 the  applicant-industry  has resurrected  the  

same  grounds  which  have  previously  been  settled  by  this  

court in Indian Council for Enviro-Legal Action and others  

v.  Union of India and Others (1996) 3 SCC 212.   

77. Mr.  Rohatagi  also  submitted  in  the  supplementary  

submissions that  the  question  of  liability  and the amounts  

payable  by  the  applicants  based  on  the  NEERI  report  has  

been decided by the judgment in the writ petition.   The review  

petition against the said judgment was also dismissed by this  

court.   On  4.11.1997  the  applicants  had  even  given  an  

undertaking that they would not dispute any fresh estimate  

for  remedial  measures  as  prepared  by  the  NEERI.   The  

question of fraud and tampering of the NEERI report of 1994

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has  been  dealt  with  by  this  court  while  dismissing  the  

contempt  petition  filed  by  the  applicants  against  the  

R.S.P.C.B.  Even the Curative Petition filed by the applicants  

was also dismissed by this court on 18.7.2002.   

78. In the supplementary submissions it is also mentioned  

that  through  Interlocutory  Application  Nos.  36  and  44  the  

applicants are merely trying to evade paying the amounts to  

be  paid  as  remedial  measures  by  reopening  issues  already  

settled by this court.   In the submissions Mr. Rohatagi has  

drawn our attention to para 66 of the said judgment regarding  

the applicant’s liability, which reads as under:

“66. Once the law in Oleum Gas Leak case is held  to be the law applicable, it follows, in the light of  our  findings  recorded  hereinbefore,  that  Respondents  4  to  8  are  absolutely  liable  to  compensate  for  the  harm caused by  them to  the  villagers in the affected area, to the soil and to the  underground water and hence, they are bound to  take all necessary measures to remove the sludge  and  other  pollutants  lying  the  affected  area  (by  affected area, we mean the area of about 350 has  indicated in the sketch at p. 178 of NEERI report)  and  also  to  defray  the  cost  of  the  remedial  measures  required  to  restore  the  soil  and  the  underground water resources.”

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79. It is also submitted in the written submissions that the  

Central Government was directed to determine the amounts  

for remedial measures for the affected area of 350 hectares, as  

mentioned in the NEERI report, after allowing the applicants  

to make a representation.  This court in para 70 of the said  

judgment observed as under:

“Chapters  VI  and  VII  in  the  NEERI  Report  (submitted in 1994) shall be deemed to be the show  cause  notice  issued  by  the  Central  Government  proposing  the  determination  of  the  said  amount.  Within six weeks from this day, Respondents 4 to 8  shall  submit  their  explanation,  along  with  such  material  as  they  think  appropriate  in  support  of  their  case,  to  the  Secretary,  Ministry  of  Environment  and  Forests,  Government  of  India  (MOEF).  The Secretary shall thereupon determine  the amount in consultation with the experts of his  Ministry within six weeks of the submission of the  explanation by the said respondents.   The orders  passed  by  the  Secretary  (MOEF)  shall  be  communicated  to  Respondents  4  to  8  –  and  all  concerned –  and shall  also  be  placed  before  this  Court”

80. This court in the said judgment also directed that the  

factories, plant, machinery and all other immovable assets of  

Respondents 4 to 8 are attached herewith.   The court also  

observed that the amount so determined and recovered shall

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be  utilized  by  the  MOEF  for  carrying  out  all  necessary  

remedial measures to restore the soil, water resources and the  

environment  in  general  of  the  affected  area  in  the  former  

state.  

81. It is also submitted in the supplementary submissions of  

RSPCB that this court in para 70 of the said judgment also  

observed  that  the  applicants  have  inflicted  untold  misery  

upon the poor, unsuspecting villagers, despoiling their land,  

their  water  resources  and  their  entire  environment,  all  in  

pursuance  of  their  private  profit.   They  have  forfeited  all  

claims for any consideration by this court.  

82. In the supplementary submissions filed by Mr. Rohatagi  

it is also mentioned that the court even settled the issue of the  

alleged hostility of the RSPCB towards the applicants and felt  

no reason to suspect the veracity of the reports submitted by  

the  RSPCB.    This  court  in  para  39  of  the  said  judgment  

observed as under:

“If  the  respondents  establish  and  operate  their  plants  contrary  to  law,  flouting  all  safety  norms  provided by law, the RSPCB was bound to act.  On

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that account, it cannot be said to be acting out of  animus or  adopting  a  hostile  attitude.   Repeated  and persistent  violations  call  for  repeated  orders.  That is no proof of hostility.  Moreover, the reports  of  RSPCB  officials  are  fully  corroborated  and  affirmed  by  the  reports  of  the  Central  team  of  experts and of NEERI.  We are also not prepared to  agree with Shri Bhat that since the report of NEERI  was  prepared  at  the  instance  of  RSPCB,  it  is  suspect.”

83. It  is  further  submitted  in  the  supplementary  

submissions that in para 55 of the said judgment this court  

specifically  held  that  Hindustan  Zinc  Limited  is  not  

responsible for the pollution at Bichhri village.  The court has  

observed as under:

“No report among the several reports placed before  us in these proceedings says that Hindustan Zinc  Limited is responsible for the pollution at Bicchhri  village.   Shri  Bhat  brought  to  our  notice  certain  reports stating that the discharges from Hindustan  Zinc  Limited  were  causing  pollution  in  certain  villages  but  they  are  all  downstream,  i.e.,  to  the  north of Bichhri village and we are not concerned  with  the  pollution  in  those  villages  in  these  proceedings.   The  bringing  in  of  Hindustan  Zinc  Limited  in  these  proceedings  is,  therefore,  not  relevant.  If necessary, the pollution, if any, caused  by  Hindustan  Zinc  Limited  can  be  the  subject- matter of a separate proceeding.”

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84. It is also further mentioned in the written submission of  

RSPCB that the issue of quantification of amounts to be paid  

by the industry  has been settled by this court in its  order  

dated 4.11.1997.  The relevant portion of the order reads as  

under:

“… … …remedial measures taken on the basis of  the NEERI report shall be treated as final.

We  accept  the  proposal  submitted  by  the  Government  of  India  for  the  purpose  of  taking  remedial  measures  by  appointing  National  Productivity  Council  as  the  Project  Management  Consultant.   In  our  opinion  the  Ministry  of  Environment and Forests, Government of India has  rightly made a demand for Rs.37.385 crores.”

85. It is also mentioned in the supplementary submissions  

that this court on 3.8.2005 directed that the sale should take  

place  expeditiously  to  realize  the  amount  for  remedial  

measures.   The assessment of areas affected by the pollution  

and settled by the District Collector at 642 hectares was also  

accepted by this court vide its order dated 3.8.2005.  

86. It  may  be  pertinent  to  mention  that  this  court  had  

accepted the affidavit of Mr. S.N. Kaul, Acting Director, NEERI

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regarding  tampering  with  the  report  and  this  court  by  its  

order dated 1.10.1999 observed as under:

“It  appears  that  two  scientists  appointed  by  the petitioner had inspected a report in the office of  NEERI  and then  observed that  there  has  been a  fabrication  carried  out  by  the  Pollution  Control  Board.   From what  has been stated  hereinabove,  the charge of fabrication is clearly unfounded.  It is  possible  that  these  two scientists  may have  seen  the draft report which would be with the NEERI but  the  original  report  when  prepared  would  be  one  which was, ultimately, submitted to the sponsoring  agency,  namely  the  Rajasthan  Pollution  Control  Board and it is only a copy of the same which could  have been retained by the  NEERI.   Be that  as it  may,  it  is  clear  that  what  has  been filed  in  this  Court as being the final report of NEERI was the  copy of the final report which was received by it.  There  is  no  basis  for  contending  that  any of  the  respondents have been guilty  of  fabrication.   The  whole  application  to  our  mind  is  without  any  merit.”

87. It  is  further  submitted  in  his  supplementary  

submissions  that  this  court  in  para  54  of  its  order  dated  

13.2.1996 had upheld the integrity of the reports submitted  

by the NEERI.   Para 54 of order dated 13.2.1996 reads as  

under:

“Moreover, the reports of RSPCB officials are fully  corroborated  and  affirmed  by  the  reports  of  the  central team of experts and of the NEERI.  We are

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also not prepared to agree with Shri Bhat that since  the  report  of  the  NEERI  was  prepared  at  the  instance of RSPCB, it is suspect.  This criticism is  not  only  unfair  but  is  also  uncharitable  to  the  officials of NEERI who have no reason to be inimical  to the respondents.  If, however, the actions of the  respondents invite the concern of the experts and if  they  depict  the  correct  situation  in  their  reports,  they cannot be accused of any bias.

… … … … … …

The  persons  who  made  the  said  reports  are  all  experts in their field and under no obligation either  to the RSPCB or for that matter to any other person  or industry.  It is in view of their independence and  competence that their reports were relied upon and  made the basis of passing orders by this court from  time to time.”

88. In the supplementary submissions it is also mentioned  

that the report of 25th January, 2005 is a joint report by the  

NEERI, R.S.P.C.B. and officers of Department of Environment,  

Government of Rajasthan.  The team collected soil  samples  

from 7 sites,  one  sample  from lake  Udaisagar  and 17 well  

water  samples  from  the  impacted  and  nearby  areas.   The  

report concluded as under:

“All  the well  water  samples in the impacted zone  have also shown colour  from pale  yellow to dark  brown.  As the industries located within the HACL  plant  premises  were  the  only  source  of  H-acid,  HACL alone is responsible for causing pollution by

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H-acid  and  its  derivatives  in  the  impacted  area.  Considering the remediation goal of Omg/l for H- acid and its derivatives are potential carcinogenic,  all  well  waters,  contaminated with H-acid and its  derivatives, require remediation.

… … … … … …

Sudden emergence  of  H-acid  in  wells  W7(Aug.99)  and W9 (Aug. 99) clearly indicate that the plume of  H-acid contaminated groundwater is moving away  from  the  source  of  origin  and  spreading  in  the  direction  of  groundwater  flow.   This  is  further  confirmed  from  another  fairly  conservative  parameter  TDS  whose  emergence  has  been  documented in all the wells (W7, W9, W1, W13 and  W16)  from  time  to  time.  Similar  trend  could  be  observed with respect to sulphate and chloride in  well water samples collected from these five wells.  Comparison of the results obtained in the present  study with that of earlier studies establish that the  ground water plume contaminated by H-acid and  its  derivatives  is  still  moving  in  the  direction  of  ground  water  flow  thereby  contamination  area  being larger than that earlier.  This was predicted  in  the  joint  report  prepared  by  SENES  and  the  NEERI (SENES and the NEERI, 2002).”

89. This report was submitted to the court along with the  

affidavit dated 8.3.2007 filed by the Union of India.

90. In the supplementary submissions it is also submitted  

that  due  to  some  alleged  variations,  the  Director  of  ITRC  

(Indian Toxicological Research Centre) was asked to make a

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rapid assessment on 6.5.2006.  In response, the Director of  

ITRC stated that there may be a variation due to a lapse of  

time  between the  2002  and 2005 reports.   Based  on this,  

MOEF  asked  the  National  Chemical  Laboratory,  Pune  to  

undertake  a  study,  the  results  of  which (placed  before  the  

Court in affidavits of 22.1.07 and 8.3.2007) showed that no  

aspersions  can  be  cast  on  the  NEERI  report  of  1994.  

Further,  it  would be incorrect  to suggest  that  the remedial  

measures  as  imposed  on  the  applicants  were  limited  to  

neutralizing the presence of H-acid in the soil alone, in fact it  

is clear from the judgment of 1996 and subsequent reports  

that what has to be done is:

a) removal  of  sludge which has also percolated  down in the soil; and

b) restoration  of  the  area  including  perforce,  making it possible for farmers and others to  return to the natural uses of the affected land.

91. It  is  further  submitted  in  the  supplementary  

submissions  of  RSPCB  that  the  Interlocutory  Applications  

Nos.  36  and  44  are  just  another  example  of  obstructive  

litigation undertaken to avoid responsibility.  Since 1996 the

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applicants have filed various applications and petitions in this  

court to delay the payment of damages. It is also submitted  

that any delay caused in the payment of damages for remedial  

measures has, therefore, been on the part of the applicants.  

It would be wrong to suggest that the Union is responsible for  

the delay in sale of assets of the industry.   The applicants  

have violated orders of this court in relation to disclosure of  

assets dated 18.8.04, 9.12.04 and 17.3.05, because of which  

it was impossible for the Union of India to sell the applicant’s  

attached properties.  

92. Mr. Rohatagi submitted that the applicants relied upon a  

series of reports by private consultants,  filed subsequent to  

the decision, which are as follows:

a) IIT Bombay Report of May 2005 suggesting that  the  samples  collected  on  5th April,  2005  show  that there is no H-acid or other pollutants.

b) A  report  by  Dr.  BR  Bamniya  dated  22.4.04  stating that no soil pollutants or water pollutants  found and

“…the presence of  H-acid has not been  recorded in any water sample of well and  in tube well.”

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c) Report  of  Expert  Group  on  Water  Pollution  of  March  1981  showing  that  pollution  caused  by  M/s. Hindustan Zinc Ltd. Further no action has  been taken against M/s. Hindustan Zinc Limited  on the basis of that report.

d) Report of M/s. Shah Doctor Associates of April,  1994 critical of the analysis in the NEERI report.

e) Report  of  SP  Mahajan  of  IIT  Bombay  dated  19.8.1999 stating that  no H-Acid found in the  well waters.

93. It  is  further  submitted  in  the  supplementary  

submissions that the NEERI report  of  2005 also dealt  with  

three private reports which were rejected on the basis  that  

they were superficial.   

94. Mr. Rohatagi further submitted that the liability of the  

applicants-industries has been fixed far back in 1996.  Merely  

because  there  may  be  a  diminution  in  respect  of  some  

pollutants due to the passage of time does not, in any way,  

take  away  from  the  responsibility  on  the  applicant  to  

undertake  remedial  measures  for  the  past  and  continuing  

damage  to  the  people  and  the  environment  caused  by  the  

applicants-industries.   The individual claims of farmers may  

be dealt within individual cases, which would not obviate the

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need  for  restoration  of  the  area.   This  flows  from  a  joint  

reading of directions of the court in para 71 of the judgment  

reported in Indian Council for Enviro-Legal Action (supra).

95. According to the RSPCB Interlocutory Application Nos.  

36  and  44  are  blatant  examples  of  vexatious  litigation  

indulged  in  to  avoid  the  responsibility  fixed  by  this  court.  

These applications should be dismissed with heavy costs on  

the applicants.   

96. Mr. M.C. Mehta, Advocate has filed written submissions  

on  behalf  of  Indian  Council  for  Enviro  Legal  Action.   It  is  

reiterated  in  the  submissions  that  these  applications  are  

blatant  disregard  towards  complying  with  the  directions  of  

this court.    They have made mockery with the environmental  

justice delivery system by filing these applications.  They have  

shown no contrition for causing irreparable damage to the life,  

health and property of the people affected by their commercial  

activities.  The applicants are trying to delay the payment of  

Rs.37.385 crores for carrying out remedial measures.   This

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court in para 70 of the judgment reported in Indian Council  

for Enviro-Legal Action (supra) observed as under:

“On account of (the respondents) continuous,  persistent and insolent violations of the law….and  their  non-implementation  of  the  orders  of  this…. (the  respondents)  have  earned  the  dubious  distinction  of  being  characterized  as  “rogue  industries”.  They have inflicted untold misery upon  the  poor,  unsuspecting  villagers,  despoiling  their  land,  their  water  sources  and  their  entire  environment – all in pursuit of private profit.”

97. Mr. Mehta also submitted in his submissions that the  

applicants  (respondent  Nos.  4  to  8)  are  related  to  the  

discharge of untreated chemical effluents in violation of the  

laws  of  the  land  in  Bichhri  and  surrounding  villages  and  

caused grave harm to the environment and people in Bichhri  

and surrounding villages.  

98. In  the  written  submissions  Mr.  Mehta  also  submitted  

that  the  reports  procured by the  respondent  companies  by  

hiring  consultants  do  not  hold  any  weight  due  to  lack  of  

substantial scientific investigations.  They cannot in any way  

question the  credibility  of  nine  scientific  reports,  submitted  

following  extensive  field  visits,  survey  and  research  by

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scientists  from  reputed  scientific  institutions  such  as  the  

CPCB, NEERI, SENES, RSPCB and the Centre for Science and  

Environment and other reports, respectively submitted by the  

district  collector  and the Court  Commissioner  appointed by  

this court.   

99. Mr.  Mehta  also  mentioned  in  his  written  submissions  

that the veracity of the contents of the NEERI report has been  

affirmed  in  at  least  four  subsequent  reports  from  reputed  

scientific organizations, MOEF, State of Rajasthan as well as  

the district collector.  

100. Mr.  Mehta  has  also  submitted  that  assuming,  though  

not conceding, that there is currently no pollution in Bichhri  

village, this cannot absolve the applicants-industries from the  

obligation  to  pay  monies  necessary  for  eco-restoration  and  

damages caused to the life and health of the people as well as  

their  property  in  the  past.  The  polluters/respondents  

recklessly  destroyed  the  environment,  surface  and  

underground water and the soil and killed fruit trees, animals  

and vegetation apart from causing suffering and irreparable

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damages to the lands, property, life and health of the people  

in  flagrant  violation  of  environmental  laws  and  directions  

given by various authorities including the orders of this court.  

The civil and criminal liability upon the respondents for the  

environmental  crimes,  irreparable  damages  caused  to  the  

environment,  flora  and  fauna,  life,  health  and  property  of  

innocent  people  living  in  Bichhri  and  surrounding  villages  

cannot be condoned at any cost.  

101. Mr.  Mehta  submitted  that  even  if  it  was  possible  to  

accept that all H-acid traces have been removed, the presence  

of other contaminants in the affected area (including highly  

toxic  wastes  emanating from the Sulphuric  Acid  Plant  and  

other plants) would necessitate remediation.  The amount can  

be deposited in a Fund and utilized for remediation, providing  

potable  water,  tree  plantation,  and  such  other  measures  

which would be helpful to the environment of the area apart  

from paying damages to the people.   

102. Mr.  Mehta  has  further  submitted  that  this  court  may  

impose  upon  the  errant  industries  as  exemplary  punitive

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damages apart from the amount required for eco-restoration  

by way of remediation of the land, water and the environment.  

This may be considered in the light of the continuing public  

nuisance  and  suffering  due  to  pollution,  severely  degraded  

environment, loss to the property, irreparable damage to the  

ecology and precious natural resources – land, air, aquifers,  

surface water, flora and fauna – for over twenty years since  

the original petition was filed.  The implications of failing to  

remediate the affected land, water and environment over such  

an extensive period of time are far more severe than had the  

applicants-industries immediately complied with the orders of  

this court.  

103. Mr.  Mehta  also  placed reliance  on a  judgment  of  this  

court in the case of M.C. Mehta v.  Kamal Nath and others  

(2000) 6 SCC 213, in which the court observed as under:

“…pollution  is  a  civil  wrong.   By  its  very  nature,  it  is  a  tort  committed  against  the  community as a whole.  A person, therefore, who is  guilty  of  causing  pollution,  has  to  pay  damages  (compensation)  for  restoration of  the  environment  and ecology.  He has also to pay damages to those  who have suffered loss on account of the act of the  offender.  The powers of this court under Article 32

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are not restricted and it can award damages in a  PIL or a Writ Petition as has been held in a series of  decisions.   In  addition  to  damages  aforesaid,  the  person guilty of causing pollution can also be held  liable to pay exemplary damages so that it may act  as a deterrent for others not to cause pollution in  any manner.”

104. Mr.  Mehta  submitted  that  having  regard  to  the  

respondent’s  conduct  in  the  present  case,  it  would  be  

reasonable  to  impose  an  additional  pecuniary  penalty  on  

them.  Reliance is placed on  Minister for the environment  

and  Heritage  v.   Greentree  (No.3)  [2004]  FCA  1317,  

wherein  the  Federal  Court  imposed  a  pecuniary  penalty  

against the respondents totaling $450,000 for having illegally  

cleared   declared  a  Ramsar  wetland.   A  strong  factor  

contributing  to the imposition of  a  substantial  penalty  was  

because  the  actions  of  the  respondent  were  deliberate,  

sustained  and  serious,  they  took  place  over  a  substantial  

period  of  time  and  the  respondents  did  not  exhibit  any  

contrition.  

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105. Mr. Mehta also submitted that the present case would  

warrant a severe penalty because the respondents carried out  

their  activities  without  even  possessing  any  appropriate  

licenses.   Respondents  must  be  required to  pay  exemplary  

damages  so  as  to  act  as  a  deterrent  for  others,  as  also  to  

remedy the harm they have caused to the environment and  

the villagers of Bichhri.  

106. Mr. Mehta has also placed reliance on the famous “Love  

Canal Case” United States v.  Hooker Chems and Plastics  

Corp.,  722  F.  Supp  960  (W.D.N.Y.  1989).  This  case  was  

initiated  after  it  was  discovered  that  a  school,  homes  and  

rental units were built over approximately 21,000 tonnes of  

chemical waste at Niagara Falls, New York.  The Federal Court  

of New York allowed a claim against the defendants based on  

public  nuisance.   This case was ultimately settled with the  

defendant agreeing to pay $129 million to the Environment  

Protection Authority.  This case led to the development of the  

Comprehensive  Response  Compensation  and  Environmental   

Liability  Act,  1980,  more  commonly  referred  to  as  the

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“Superfund”, into which polluters contribute monies to enable  

clean-up of toxic sites.  

107. In the written submissions filed by Mr.  Mehta he has  

also mentioned about principle of accountability and it is the  

duty and obligation of the court to protect the fundamental  

rights  of  the  citizens  under  Article  32  of  the  Indian  

constitution.   Pollution  and public  nuisance  resulting  from  

mis-regulation infringes on the fundamental rights, including  

the right to life under Article 21 of the Indian constitution.  

Mr.  Mehta  also  submitted  that  applicants  are  liable  for  

causing  continuous  suffering  to  the  people  in  Bichhri  and  

surrounding villages.

108. Mr.  Mehta  also  submitted  in  his  written  submissions  

that  in  several  cases  of  environmental  pollution  the  courts  

have  ordered  the  payment  of  damages  by  the  errant  

industries/individuals  responsible  for  causing  pollution  in  

violation  of  environmental  related  issues  and  the  money  

recovered  be  spent  for  remediation  or  eco-restoration  and  

damages be paid to the victims or spent for their benefit.    It

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is the duty of the government to ensure proper administration  

of this fund in a transparent and accountable manner.  The  

establishment of such a fund would ensure that polluters take  

responsibility for their actions and that monies derived from  

penalties,  damages  and  settlement  are  directly  invested  

towards  remediating  the  environmental  damage  that  has  

occurred.  

109. Mr.  Mehta  further  mentioned  in  his  submissions  that  

creation  of  such  a  fund  would  be  consistent  with  the  

precautionary principle which has been evolved and accepted  

by this court.   He has also mentioned that similar funds have  

been set-up in United States of America, Canada, Australia,  

Malaysia and other countries.   

110. Mr.  Mehta  also  made  a  reference  regarding  Public  

Liability Insurance Act, 1991 which makes it mandatory for  

industries handling hazardous material to be insured against  

environmental  hazards.   However,  this  legislation  only  

provides  relief  to  persons  affected  by  accidents  whilst  

handling  hazardous  materials,  who  are  most  likely  to  be

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workers.  Members of the local community would not obtain  

relief  under  this  legislation,  though they are  also adversely  

affected  by  hazardous  industries.   This  is  most  pertinently  

exemplified in the present case.  

111. In  his  written  submissions  Mr.  Mehta  also  submitted  

that the applicants clearly show defiance of the environmental  

laws  and the  orders  of  this  court.    Mr.  Mehta  prayed for  

dismissal of Interlocutory Application Nos. 36 of 2004 and 44  

of  2007  with  heavy  costs  and  direct  the  respondents  to  

deposit Rs.37.385 crores with the MOEF as per the judgment  

of this court.  

112. This case raises many substantial questions of law.  We  

would briefly deal with some of them.

113. We would also like to discuss the concept of Finality of  

the Judgment passed by the Apex Court.

FINALITY OF JUDGMENT

114. The maxim ‘interest Republicae ut sit finis litium’ says  

that it is for the public good that there be an end of litigation  

after  a  long  hierarchy  of  appeals.   At  some  stage,  it  is

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necessary to put a quietus.  It is rare that in an adversarial  

system, despite  the  judges of  the  highest  court  doing their  

best,  one  or  more  parties  may remain unsatisfied  with the  

most  correct  decision.   Opening  door  for  a  further  appeal  

could be opening a flood gate which will cause more wrongs in  

the society at large at the cost of rights.  

115. It should be presumed that every proceeding has gone  

through infiltration several  times before  the  decision of  the  

Apex Court.  In the instant case, even after final judgment of  

this court, the review petition was also dismissed.  Thereafter,  

even  the  curative  petition  has  also  been  dismissed  in  this  

case.  The controversy between the parties must come to an  

end at some stage and the judgment of this court must be  

permitted to acquire  finality.   It  would hardly be proper  to  

permit  the  parties  to  file  application  after  application  

endlessly.  In a country governed by the rule of law, finality of  

the judgment is  absolutely  imperative  and great  sanctity  is  

attached  to  the  finality  of  the  judgment.    Permitting  the  

parties to reopen the concluded judgments of this court by

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filing repeated interlocutory applications is clearly an abuse of  

the  process  of  law  and  would  have  far  reaching  adverse  

impact on the administration of justice.

116. In  Manganese  Ore  (India)  Ltd. v. The  Regional  

Assistant Commissioner of Sales Tax, Jabalpur (1976) 4  

SCC 124 this court held that the doctrine of stare decisis is a  

very valuable principle of precedent which cannot be departed  

from unless there are extraordinary or special reasons to do  

so.

117. In  Green  View  Tea  &  Industries v.  Collector,  

Golaghat  and  Another (2002)  1  SCC  109  this  court  

reiterated the view that finality of the order of the apex court  

of the country should not lightly be unsettled.

118. A   three-Judge  Bench  of  this  court  in  M/s  Northern  

India Caterers (India) Ltd. v. Lt. Governor of Delhi (1980) 2  

SCC 167 held that a party is not entitled to seek a review of  

this court’s judgment merely for the purpose of rehearing and  

for a fresh decision of the case.  Departure from the normal  

principle that the court’s judgment is final would be justified

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only when compelling our substantial circumstances make it  

necessary  to  do  so.   Such  circumstances  may  be  that  a  

material  statutory  provision  was  not  drawn  to  the  court’s  

attention at the original hearing or a manifest wrong has been  

done.

119. Relying  on  Union  of  India  &  Another  v. Raghubir  

Singh  (Dead)  by  L.Rs.  (1989)  2  SCC  754,  this  Court  in  

Krishna Swami v. Union of India and Others  (1992) 4 SCC  

605   held  that  the  plea  for  reconsideration  is  not  to  be  

entertained merely because the petitioner chooses to reagitate  

the  points  concluded  by  the  earlier  decision  in   Sub-

committee on Judicial  Accountability v. Union of  India  

(1991) 4 SCC 699.

120. In  Mohd. Aslam v.  Union of India & Others  (1996) 2  

SCC 749, the Court considered the earlier decisions and held  

that  the  writ  petition  under  article  32  of  the  Constitution  

assailing the correctness of a decision of the Supreme Court  

on merits or claiming reconsideration is not maintainable.

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121. In Khoday Distilleries Ltd. and Another v. Registrar  

General,  Supreme Court of  India (1996)  3 SCC 114,  the  

Court  held  the  reconsideration  of  the  final  decision  of  the  

Supreme Court after review petition is dismissed by way of  

writ  petition under article 32 of the Constitution cannot be  

sustained.

122. In  Gurbachan Singh & Another v.  Union of India &  

Another (1996) 3 SCC 117, the Court held that the judgment  

order of this court passed under Article 136 is not amenable  

to judicial review under Article 32 of the Constitution.  

123. Similar  view  was  taken  in  Babu  Singh  Bains  and  

others  v.  Union of India and Others  (1996) 6 SCC 565, a  

three-Judge  bench  of  this  Court  held  that  a  writ  petition  

under Article 32 of the Constitution against the order under  

Article 136 of the Constitution is not maintainable.

124. Another three-Judge bench of this Court in P. Ashokan  

v. Union of India & Another (1998) 3 SCC 56, relying upon  

the earlier cases held that the challenge to the correctness of  

a  decision  on  merits  after  it  has  become  final  cannot  be

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questioned by invoking Article 32 of the Constitution.   In the  

instant case the petitioner wants to reopen the case by filing  

the interlocutory application.

125. In  Ajit  Kumar  Barat  v.  Secretary,  Indian  Tea  

Association & Others  (2001)  5 SCC 42,  the  Court  placed  

reliance on the judgment of a nine-judge Bench in  Naresh  

Shridhar Mirajkar v.  State of Maharashtra and another  

AIR 1967 SC 1 and the Court observed as under:

“It is difficult to see how this decision can be  pressed into service by Mr. Setalvad in support of  the argument that a judicial order passed by this  Court was held to be subject to the writ jurisdiction  of  this  Court  itself….  In  view  of  this  decision  in  Mirajkar case it must be taken as concluded that  judicial proceedings in this Court are not subject to  the writ jurisdiction thereof.”

126. The Court in the said case observed that having regards  

to the facts and circumstances of the case, this is not a fit  

case to be entertained to exercise jurisdiction under Article 32  

of the Constitution.

127. In Mr. “X” v. Hospital “Z” (2000)9 SCC 439, this Court  

held thus:

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“Writ  petition  under  Article  32  of  the  Constitution against the judgment already passed  by  this  Court  cannot  be  entertained.  Learned  counsel  for  the  petitioner  stated  that  prayer  (a)  which  seeks  overruling  or  setting  aside  of  the  judgment already passed in Mr X v. Hospital Z may  be deleted. This prayer shall accordingly be deleted.  So also, the other prayers which indirectly concern  the  correctness  of  the  judgment  already  passed  shall  stand  deleted.  Learned  counsel  for  the  petitioner  stated  that  the  petition  may  not  be  treated  as  a  petition  under  Article  32  of  the  Constitution but may be treated as an application  for  clarification/directions  in  the  case  already  decided by this Court, viz.,  Mr X v.  Hospital  Z (CA  No. 4641 of 1998).”

128. In  Triveniben v.  State  of  Gujarat (1989)1  SCC 678  

speaking for himself  and other three learned Judges of  the  

Constitution  Bench  through  Oza,  J.,  reiterated  the  same  

principle.  The court observed: (SCC p. 697, para 22)

“…It  is  well  settled  now that  a  judgment  of  court can never be challenged under Articles 14 or  21  and  therefore  the  judgment  of  the  court  awarding  the  sentence  of  death  is  not  open  to  challenge as violating Article 14 or Article 21 as has  been laid down by this Court in Naresh Shridhar  Mirajkar (supra) and also in A.R. Antulay v. R.S.  Nayak, the only jurisdiction which could be sought  to be exercised by a prisoner for infringement of his  rights  can be to challenge the subsequent events  after the final judicial verdict is pronounced and it  is  because  of  this  that  on the  ground of  long or

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inordinate  delay  a  condemned  prisoner  could  approach  this  Court  and  that  is  what  has  consistently been held by this Court. But it will not  be  open  to  this  Court  in  exercise  of  jurisdiction  under  Article  32 to  go  behind or  to  examine  the  final  verdict  reached  by  a  competent  court  convicting and sentencing the condemned prisoner  and  even while  considering  the  circumstances  in  order  to  reach  a  conclusion  as  to  whether  the  inordinate  delay  coupled  with  subsequent  circumstances  could  be  held  to  be  sufficient  for  coming  to  a  conclusion  that  execution  of  the  sentence of death will not be just and proper….”

129. In Rupa Ashok Hurra (supra), this Court observed thus:

24. … when reconsideration of a judgment of this  Court is sought the finality attached both to the law  declared  as  well  as  to  the  decision  made  in  the  case,  is  normally  brought  under  challenge.  It  is,  therefore,  relevant to note  that  so much was the  value attached to the precedent of the highest court  that in The London Street Tramways Co. Ltd. v.  London County Council (1898 AC 375) the House  of Lords laid down that its decision upon a question  of law was conclusive and would bind the House in  subsequent cases and that an erroneous decision  could be set right only by an Act of Parliament.

… … … … … …

26. …This Court will not sit as a court of appeal  from  its  own  decisions,  nor  will  it  entertain  applications to review on the ground only that one  of the parties in the case conceives himself  to be  aggrieved by the decision. It would in our opinion  be  intolerable  and  most  prejudicial  to  the  public

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interest if cases once decided by the Court could be  reopened and reheard:

“There  is  a  salutary  maxim  which  ought to be observed by all courts of last  resort  —  interest  reipublicae  ut  sit  finis  litium.  (It  concerns the State  that there  be an end of lawsuits. It is in the interest  of the State that there should be an end  of  lawsuits.)  Its  strict  observance  may  occasionally  entail  hardship  upon  individual  litigants,  but  the  mischief  arising from that source must be small in  comparison  with  the  great  mischief  which  would  necessarily  result  from  doubt being thrown upon the finality of  the decisions of such a tribunal as this.”  

32. “…When this Court decides questions of law, its  decisions  are,  under  Article  141,  binding  on  all  courts within the territory of India, and so, it must  be  the  constant  endeavour  and  concern  of  this  Court  to  introduce  and  maintain  an  element  of  certainty and continuity in the interpretation of law  in the country. Frequent exercise by this Court of  its  power  to  review  its  earlier  decisions  on  the  ground that the view pressed before it later appears  to  the  Court  to  be  more  reasonable,  may  incidentally  tend  to  make  law  uncertain  and  introduce  confusion  which  must  be  consistently  avoided. That is not to say that if on a subsequent  occasion,  the  Court  is  satisfied  that  its  earlier  decision was clearly erroneous, it should hesitate to  correct the error; but before a previous decision is  pronounced  to  be  plainly  erroneous,  the  Court  must be satisfied with a fair amount of unanimity  amongst  its  members  that  a  revision  of  the  said  view is fully justified. It is not possible or desirable,  and in any case it would be inexpedient to lay down

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any principles which should govern the approach of  the Court in dealing with the question of reviewing  and revising its earlier decisions.”

33. In  Maganlal  Chhaganlal (1974)  2 SCC 402  case a Bench of seven learned Judges of this Court  considered,  inter  alia,  the  question:  whether  a  judgment of the Supreme Court in Northern India  Caterers case (1967) 3 SCR 399 was required to be  overruled. Khanna, J. observed: (SCC p. 425, para  22)

“At  the  same  time,  it  has  to  be  borne  in  mind  that  certainty  and  continuity  are  essential  ingredients  of  rule  of  law.  Certainty  in  law  would  be  considerably eroded and suffer a serious  setback if  the highest court of the land  readily overrules the view expressed by it  in  earlier  cases,  even though that  view  has held the field for a number of years.  In quite a number of cases which come  up  before  this  Court,  two  views  are  possible,  and simply because the Court  considers that the view not taken by the  Court  in  the  earlier  case  was  a  better  view of the matter would not justify the  overruling of the view. The law laid down  by this Court is binding upon all courts  in the country under Article 141 of the  Constitution,  and  numerous  cases  all  over  the  country  are  decided  in  accordance with the view taken by this  Court.  Many people arrange their affairs  and  large  number  of  transactions  also  take place on the faith of the correctness  of the view taken by this Court. It would  create  uncertainty,  instability  and  confusion if the law propounded by this

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Court  on the  basis  of  which numerous  cases  have  been  decided  and  many  transactions have taken place is held to  be not the correct law.”

42. The concern of this Court for rendering justice  in a cause is not less important than the principle  of  finality  of  its  judgment.  “We  are  faced  with  competing  principles  —  ensuring  certainty  and  finality of a judgment of the Court of last resort and  dispensing justice on reconsideration of a judgment  on the ground that it is vitiated being in violation of  the principles of natural justice or giving scope for  apprehension  of  bias  due  to  a  Judge  who  participated  in  the  decision-making  process  not  disclosing his links with a party to the case, or on  account of abuse of the process of the court. Such a  judgment,  far  from  ensuring  finality,  will  always  remain  under  the  cloud  of  uncertainty.  Almighty  alone  is  the  dispenser  of  absolute  justice  —  a  concept which is not disputed but by a few. We are  of the view that though Judges of the highest court  do their best, subject of course to the limitation of  human fallibility,  yet  situations may arise,  in the  rarest  of  the  rare  cases,  which  would  require  reconsideration  of  a  final  judgment  to  set  right  miscarriage of justice complained of. In such case it  would not only be proper but also obligatory both  legally and morally to rectify the error. After giving  our anxious consideration to the question, we are  persuaded to  hold  that  the  duty  to  do justice  in  these rarest of rare cases shall have to prevail over  the policy of certainty of judgment as though it is  essentially  in  the  public  interest  that  a  final  judgment of the final court in the country should  not  be  open  to  challenge,  yet  there  may  be  circumstances,  as  mentioned  above,  wherein  declining  to  reconsider  the  judgment  would  be

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oppressive to judicial conscience and would cause  perpetuation of irremediable injustice.”

130. A four-judge bench of this court in Sumer  v.  State of  

U.P. (2005) 7 SCC 220 observed as under:  

“In  Rupa  Ashok  Hurra  (supra)  while  providing for the remedy of curative petition, but at  the same time to prevent abuse of such remedy and  filing  in  that  garb  a  second  review  petition  as  a  matter of course, the Constitution Bench said that  except  when  very  strong  reasons  exist,  the  court  should  not  entertain  an  application  seeking  reconsideration of an order of this Court which has  become final on dismissal of review petition. In this  view, strict conditions including filing of certificate  by a Senior Advocate were provided in Rupa Ashok  Hurra (supra). Despite it, the apprehension of the  Constitution Bench that the remedy provided may  not open the flood gates for filing a second review  petition has come true as is evident from filing of  large number of curative petitions. It was expected  that  the  curative  petitions  will  be  filed  in  exceptional  and  in  rarest  of  rare  case  but,  in  practice,  it  has  just  been  opposite.  This  Court,  observing that neither it is advisable nor possible to  enumerate  all  the  grounds  on  which  curative  petition may be entertained, said that nevertheless  the petitioner is entitled to relief ex debito justitiae  if he establishes (1) violation of principles of natural  justice in that he was not a party to the lis but the  judgment adversely affected his interests or, if  he  was a party to the lis, he was not served with notice  of the proceedings and the matter proceeded as if  he had notice, and (2) where in the proceedings a  learned Judge failed to disclose his connection with

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the subject-matter or the parties giving scope for an  apprehension of  bias and the judgment adversely  affects  the  petitioner.  To  restrict  filing  of  the  curative  petitions  only  in  genuine  cases,  Rupa  Ashok  Hurra (supra)  provided  that  the  curative  petition  shall  contain  a  certification  by  a  Senior  Advocate  with  regard  to  the  fulfilment  of  all  the  requirements  provided  in  the  judgment.  Unfortunately, in most of the cases, the certification  is casual without fulfilling the requirements of the  judgment.”     

131. In  Sita  Ram  Bhandar  Society,  New  Delhi  v.  

Lieutenant Governor, Government of NCT, Delhi & Others  

(2009)10 SCC 501, this Court held thus:

“41. We must also observe that the petitioner has  been  able  to  frustrate  the  acquisition  and  development of the land right from 1980 onwards  by taking recourse to one litigation after the other.  The record reveals that all the suits/writ petitions,  etc.  that  had been filed  had failed.  Undoubtedly,  every citizen has a right to utilise all legal means  which are  open to him in a bid to vindicate  and  protect  his  rights,  but  if  the  court  comes  to  the  conclusion that the pleas raised are frivolous and  meant to frustrate and delay an acquisition which  is in public interest, deterrent action is called for.  This is precisely the situation in the present matter.

42. The  appeals  are,  accordingly,  dismissed  with  costs  which are  determined at  rupees two lakhs.  The respondents, shall, without further loss of time  proceed against the appellant.”

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132. This court in a recent judgment in  M. Nagabhushana  

v.   State  of  Karnataka  and  others  (2011)  3  SCC  408  

observed that principle of finality is passed on high principle  

of public policy.  The court in para 13 of the said judgment  

observed as under:

“That principle of finality of litigation is based  on high principle of public policy.  In the absence of  such  a  principle  great  oppression  might  result  under the color and pretence of law inasmuch as  there  will  be  no end of  litigation and a rich and  malicious  litigant  will  succeed in  infinitely  vexing  his opponent by repetitive suits and actions.  This  may  compel  the  weaker  party  to  relinquish  his  right.  The doctrine of res judicata has been evolved  to  prevent  such  an  anarchy.   That  is  why  it  is  perceived  that  the  plea  of  res  judicata  is  not  a  technical  doctrine  but  a  fundamental  principle  which sustains the rule of law in ensuring finality  in  litigation.   This  principle  seeks  to  promote  honesty and a fair administration of justice and to  prevent abuse in the matter of accessing court for  agitating  on  issues  which  have  become  final  between the parties.”

133. In order to discourage a litigation which reopens the final  

judgment of this court, while dismissing the petition imposed  

costs of rupees 10 lakhs.

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134. We find full corroboration of this principle from the cases  

of other countries.  We deem it appropriate to mention some  

of these relevant cases in the succeeding paragraphs.

ENGLAND

135. The England cases have consistently taken the view that  

the  judgments  of  final  court  must  be  considered  final  and  

conclusive.   There must be certainty in the administration.  

Uncertainty  can  lead  to  injustice.   Unless  there  are  very  

exceptional or compelling reasons the judgment of apex courts  

should not be reopened.

136. In Regina v.  Gough, [1993] 1 A.C. 646, with regards to  

setting  aside  judgments  due  to  judicial  bias,  the  House  of  

Lords held that there “is only one established special category  

and  that  exists  where  the  tribunal  has  a  pecuniary  or  

proprietary interest in the subject matter of the proceedings  

as  in   Dimes v.  Proprietors  of  Grand  Junction  Canal ,  

(1852)  3  H.L.  Cases  759.  The  courts  should  hesitate  long  

before  creating  any  other  special  category  since  this  will

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immediately create uncertainty as to what are the parameters  

of that category and what is the test to be applied in the case  

of that category.” Lord Goff of Chievely stated that  

“I wish to draw attention to the fact that there are  certain cases in which it has been considered that  the  circumstances  are  such  that  they  must  inevitably shake public confidence in the integrity  of the administration of justice if the decision is to  be  allowed  to  stand.  Such  cases  attract  the  full  force of Lord Hewart C.J.'s requirement that justice  must not only be done but must manifestly be seen  to be done. These cases arise where a person sitting  in a judicial  capacity  has a pecuniary interest  in  the outcome of the proceedings. In such a case, as  Blackburn J. said in  Reg. v. Rand  (1866) L.R. 1  Q.B.  230,  232:  "any  direct  pecuniary  interest,  however  small,  in  the  subject  of  inquiry,  does  disqualify a person from acting as a judge in the  matter."  The principle  is  expressed in  the  maxim  that nobody may be judge in his own cause (nemo  judex in sua causa)... In such a case, therefore, not  only is it irrelevant that there was in fact no bias on  the part of the tribunal, but there is no question of  investigating,  from  an  objective  point  of  view,  whether  there  was any real  likelihood of  bias,  or  any reasonable suspicion of bias, on the facts of the  particular case. The nature of the interest is such  that  public  confidence  in  the  administration  of  justice requires that the decision should not stand”  (p. 661).

137. In  R  v.  Bow  Street  Metropolitan  Stipendiary  

Magistrate, ex parte Pinochet Ugarte (No 2) (1999) 2 W.L.R.

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272, the House of Lords  set aside one of its earlier orders. In  

this case, the majority at the House of Lords had earlier ruled  

whether Augusto Pinochet, the former dictator of Chile, could  

be extradited to Spain in order to stand trial for alleged crimes  

against humanity and was not entitled to sovereign immunity.  

Amnesty International had been an intervener in this case in  

opposition  to  Pinochet.  Lord  Hoffman,  one  of  the  majority  

judges,  was  a  director  of  Amnesty  International  Charitable  

Trust,  an organization  controlled  by  Amnesty  International,  

and  Lady  Hoffman  had  been  working  at  AI’s  international  

secretariat since 1977. The respondent was not aware of Lord  

Hoffman’s  relationship to  AI  during the initial  trial.  In this  

case, the House of Lords cited with approval the respondents’  

concession acknowledging the House of Lords’ jurisdiction to  

review its decisions -  

“In principle it must be that your Lordships, as the  ultimate court of appeal, have power to correct any  injustice caused by an earlier order of this House.  There  is  no  relevant  statutory  limitation  on  the  jurisdiction  of  the  House  in  this  regard  and  therefore  its  inherent  jurisdiction  remains  unfettered.”

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138. According to the English law, the judgment of the Apex  

Court  can  be  reviewed  in  exceptional  circumstances  

particularly  when  the  judge  associated  with  any  of  the  

organizations to be a good ground for reviewing the judgment.

139. In Pinochet  test  in  Regina (Edwards) v  Environment  

Agency and others [2010] UKSC 57, the Supreme Court of  

the United Kingdom overruled an earlier order of costs made  

by  the  erstwhile  apex  court,  the  House  of  Lords,  on  the  

grounds  that  the  House  of  Lords  had  made  a  substantive  

error in the original adjudication. However, this appeal was  

lodged  under  Rule  53  of  the  The  (U.K.)  Supreme  Court  

Rules, 2009,  2009 No. 1603 (L. 17).  Rule 53 provides as  

follows:  

53.  (1)  A  party  who  is  dissatisfied  with  the  assessment of costs made at an oral hearing may  apply for that decision to be reviewed by a single  Justice and any application under this rule must  be made in the appropriate form and be filed within  14 days of the decision.  

(2) The single Justice may (without an oral hearing)  affirm  the  decision  made  on  the  assessment  or  may, where it appears appropriate, refer the matter

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to a panel of Justices to be decided with or without  an oral hearing.  

(3)  An  application  may  be  made  under  this  rule  only on a question of principle and not in respect of  the amount allowed on any item in the claim for  costs.

140. In this case, Lord Hope, citing the  Pinochet  case stated  

that:  

The Supreme Court is a creature of statute. But it  has inherited all the powers that were vested in  the  House  of  Lords  as  the  ultimate  court  of  appeal. So it has the same powers as the House  had to correct any injustice caused by an earlier  order of the House or this Court... In this case it  seems that, through no fault of the appellant, an  injustice may have been caused by the failure of  the House to address itself to the correct test in  order to comply with the requirements of [certain  EU] directives [at para. 35].

CANADA

141. The Canadian Supreme Court is of the same view that  

judicial bias would be a ground for reviewing the judgment.  

In Wewaykum  Indian Band  v.  Canada [2003] 2 SCR 259  

the  court  relied  on Taylor  Ventures  Ltd. (Trustee  of) v.  

Taylor 2005 BCCA 350 where principle of judicial bias has  

been summarized.

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142. The principles stated in  Roberts regarding judicial bias  

were neatly  summarized in  Taylor Ventures Ltd. (Trustee  

of) (supra), where Donald J.A. stated –  

(i) a judge's impartiality is presumed;

(ii) a  party  arguing  for  disqualification  must  establish  that  the  circumstances  justify  a  finding that the judge must be disqualified;

(iii) the  criterion  of  disqualification  is  the  reasonable apprehension of bias;

(iv)  the  question  is  what  would  an  informed,  reasonable and right-minded person, viewing  the  matter  realistically  and  practically,  and  having thought the matter through, conclude;

(iv) the  test  for  disqualification  is  not  satisfied  unless  it  is  proved  that  the  informed,  reasonable  and  right-minded  person  would  think that it is  more likely than not that the  judge, whether consciously or unconsciously,  would not decide fairly;

(v) the  test  requires  demonstration  of  serious  grounds on which to base the apprehension;

(vi) each  case  must  be  examined  contextually  and the inquiry is fact-specific (at para 7).

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143. Cases from Australia also support the proposition that a  

final judgment cannot ordinarily be reopened, and that such  

steps can be taken only in exceptional circumstances.

144. In  State  Rail  Authority  of  New  South  Wales  v.  

Codelfa Constructions Propriety Limited  (1982)  150 CLR  

29, the High Court of Australia observed:

“… it is a power to be exercised with great caution.  There may be little  difficulty  in a case where the  orders have not been perfected and some mistake  or misprision is disclosed.  But in other cases it will  be  a  case  of  weighing  what  would  otherwise  be  irremediable injustice against the public interest in  maintaining  the  finality  of  litigation.   The  circumstances that will justify a rehearing must be  quite exceptional. …”

145. In Bailey v. Marinoff (1971) 125 CLR 529, Judge Gibbs  

of  the  High  Court  of  Australia  observed  in  a  dissenting  

opinion:

“It is a well-settled rule that once an order of a  court  has  been passed  and  entered  or  otherwise  perfected in a form which correctly  expresses the  intention with which it was made the court has no  jurisdiction to alter it.  .. ….The rule tests on the  obvious principle that it is desirable that there be  an end to litigation and on the view that it would be  mischievous if  there were jurisdiction to rehear a  matter decided after a full hearing.  However, the

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rule  is  not  inflexible  and  there  are  a  number  of  exceptions to it in addition to those that depend on  statutory provisions such as the slip rule found in  most rules of court.  Indeed, as the way in which I  have already stated the rule implies, the court has  the power to vary an order so as to carry out its  own meaning or to make plain language which is  doubtful, and that power does not depend on rules  of court, but is inherent in the court….”

And, further:

“The authorities to which I have referred leave  no  doubt  that  a  superior  court  has  an  inherent  power to vary its own orders in certain cases.  The  limits of the power remain undefined, although the  remarks  of  Lord  Evershed  already  cited  suggest  that it is a power that a court may exercise “if, in its  view, the purposes of justice require that it should  do so”.

146. In  DJL  v.  Central Authority  (2000) 170 ALR 659, the  

High Court of Australia observed:

“…It is now recognized both in Australia and  England  that  orders  made  by  ultimate  appellate  courts  may  be  reopened  by  such  courts  in  exceptional circumstances  to repair accidents and  oversights  which  would  otherwise  occasion  a  serious  injustice.  In  my  view,  this  can  be  done  although the order in question has been perfected.  The reopening may be ordered after due account is  taken of the reasons that support the principle of  finality of litigation.   The party seeking reopening  bears  a  heavy  burden  to  demonstrate  that  the

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exceptional course is required “without fault on his  part. …”

147. Lastly, in  Lexcray Pty. Ltd.  v.  Northern Territory of  

Australia 2003 NTCA 11, the Court appeals of the Supreme  

Court of the Northern Territory expressly stated:

“…As a final court of appeal the High Court of  Australia  has  inherent  jurisdiction  to  vacate  its  orders in cases where there would otherwise be an  irremediable injustice….”

148. American  courts  also  follows  a  similar  pattern.   In  

United States of America v. Ohio Power Company 353 US  

98 (1957), the U.S. Supreme Court vacated its earlier order  

denying a timely petition for  rehearing,  on the ground that  

“the interest in finality of  litigation must yield where interests  

of  justice  would make unfair,  strict  application of  Supreme  

Court’s Rules.

149. In  Raymond G. Cahill  v.  The New York, New Haven  

and Hartford Railroad Company 351 US 183, the Supreme  

Court observed:

“…There  are  strong  arguments  for  allowing  a  second  petition  for  rehearing  where  a  rigid

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application  of  this  rule  would  cause  manifest  injustice.”

FIJI

150. The  Supreme  Court  of  Fiji  Islands  incorporating  

Australian  and  British  case  law  summarized  the  law  

applicable to review of its judgments. It has been held that the  

Supreme  Court  can  review  its  judgments  pronounced  or  

orders made by it.  The power of the appellate courts to re-

open  and review their  orders  is  to  be  exercised  with  great  

caution.

151. The cases establish that the power of appellate courts to  

re-open and review their orders is to be exercised with great  

caution. The power,  and the occasions for its exercise were  

considered  in  In Re  Transferred  Civil  Servants  (Ireland)  

Compensation (1929)  AC  242,  248-52;  and State  Rail  

Authority NSW v Codelfa Construction Pty Ltd (1982) HCA  

51  :  (1982)  150  CLR  29,  38-9,  45-6,  where  earlier  Privy  

Council cases are referred to. The principles were summarised

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in Smith  v NSW Bar Association (1992) 176 CLR 252, 265  

where the High Court of Australia said:

"The power is discretionary and, although it exists  up  until  the  entry  of  judgment,  it  is  one  that  is  exercised  having  regard  to  the  public  interest  in  maintaining  the  finality  of  litigation.  Thus,  if  reasons for judgment have been given, the power is  only  exercised if  there  is  some matter  calling  for  review ... these considerations may tend against the  re-opening  of  a  case,  but  they  are  not  matters  which bear on the nature or the review ... once the  case is re-opened ... the power to review a judgment  ...  where the order has not been entered will  not  ordinarily  be  exercised  to  permit  a  general  re- opening  ...  But  ...  once  a  matter  has  been  re- opened, the nature and extent of the review must  depend on the error or omission which has led to  that step being taken."

152. The principles were further considered in Autodesk Inc  

v  Dyason  (No 2) (1993)  HCA 6 :  (1993)  176 CLR 300,  303  

where Mason CJ said:

"What must emerge, in order to enliven the exercise  of the jurisdiction, is that the Court has apparently  proceeded  according  to  some  misapprehension  of  the facts or the relevant law and this ... cannot be  attributed solely to the neglect of the party seeking  the rehearing. The purpose of the jurisdiction is not  to  provide  a  backdoor  method  by  which  unsuccessful  litigants  can  seek  to  reargue  their  cases."

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153. The  ratio  of  these  judgments  is  that  a  court  of  final  

appeal has power in truly exceptional circumstances to recall  

its order even after they have been entered in order to avoid  

irremediable injustice.

154. Reviewing of various cases of different jurisdictions lead  

to  irresistible  conclusion that  though the  judgments  of  the  

apex court can also be reviewed or recalled but it  must be  

done in extremely exceptional circumstances where there is  

gross violation of principles of natural justice.   

155. In a case where the aggrieved party filing a review or  

curative  petition  was  not  a  party  to  the  lis  but  the  

judgment adversely  affected his interest or he was party to  

the lis was not served with notice of the proceedings and the  

matter proceeded as if he had notice.  This court in State of  

M.P. v. Sugar Singh & Others on 9th March, 2010 passed the  

following order in a curative petition :

“Though  there  were  eight  accused  persons,  only  four accused were arrayed as party respondents in  the said appeals namely, Sughar, Laxman, Onkar  and  Ramesh.  Other  accused,  namely,Bhoja,  Raghubir, Puran and Balbir were not impleaded as

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respondents  in  these  Criminal  Appeals  and  consequently notices were not issued to them. This  Court, by judgment on 7th November, 2008 in the  aforesaid Criminal  Appeals,  reversed the acquittal  of the accused by the High Court and found them  guilty of the offences punishable under Section 304  Part-II  read  with  Section  149  of  the  I.P.C.  and  sentenced  them  to  undergo  imprisonment  for  a  period of six years. The conviction of the accused  for the offences punishable under Section 148 as  also Section 326 read with the Section 149 of the  I.P.C.  and the  sentence  imposed by  the  Sessions  Court in regard to the said offences was upheld by  this Court.

We  have  heard  learned  counsel  for  the  petitioners.  The  respondent  State,  though  served  with  a  notice  through  standing  counsel,  has  not  chosen  to  enter  appearance.  These  Curative  Petitions  have  been  filed  by  accused  No.2  (Raghubir)  and  by  accused  no.4  and  5  (Sughar  Singh and Laxman) on the ground that acquittal of  Bhoja,  Raghubir,  Puran  and  Balbir  have  been  reversed without affording an opportunity of being  heard.  We  see  that  there  is  serious  violation  of  principles of natural justice as the acquittal of all  the accused has been set aside even though only  four  of  them  were  made  respondents  before  this  Court  and  the  others  were  not  heard.  We  are,  therefore,  constrained  to  recall  the  3  judgment  passed by this Court in Criminal Appeal Nos.1362- 1363 of 2004 on 7th November, 2008.

Consequently,  the  accused  Sughar  Singh,  Laxman, Onkar and Ramesh, if they are in custody,  are directed to be released forthwith.

In  the  result,  these  Curative  Petitions  are  disposed  of  and  the  Criminal  Appeal  Nos.1362-

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1363 of 2004 are restored to the file for being heard  afresh with a direction that the other four accused  (Bhoja, Raghubir, Puran and Balbir) be impleaded  as  respondents  and  all  accused  be  served  with  fresh notices.”

156. In  the  instant  case,  the  applicants  had  adequate  

opportunity and were heard by the court at length on number  

of occasions and only thereafter the writ petition was disposed  

of.   The  applicants  aggrieved  by  the  said  judgment  filed  a  

review petition.  This review petition was also dismissed.  In  

the  instant  case  even  the  curative  petition  has  also  been  

dismissed.  The applicants now want to reopen this case by  

filing these interlocutory applications.  

157. The applicants certainly cannot be provided an entry by  

back door method and permit the unsuccessful litigant to re-

agitate  and reargue  their  cases.   The  applicants  have  filed  

these applications merely to avoid compliance of the order of  

the  court.  The  applicants  have  been  successful  in  their  

endeavour and have not permitted the judgment delivered on  

3.2.1996 to acquire finality till date.  It is strange that other

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respondents did not implement the final order of this court  

without there being any order or direction of this court.  These  

applications being devoid of any merit deserve to be dismissed  

with heavy costs.

The other important principles which need elucidation are  regarding  unjust  enrichment,  restitution and compound  interests.                                                                                             

158.   Dr.  Arun Mohan, Senior  Advocate of  this court in a  

recently  published book with the  title  “Justice,  Courts  and  

Delays”  analytically,  lucidly  while  taking  in  view  pragmatic  

realities elucidated concepts of unjust enrichment, restitution  

and compound interest.

159. By the judgment dated 13.02.1996 this court fixed the  

liability  but  did  not  fix  any  specific  amount,  which  was  

ordered to be ascertained.  It was on the lines of a preliminary  

decree in a suit which determines the liability, but leaves the  

precise amount to be ascertained in further proceedings and  

upon the process of ascertainment being completed, a final  

decree for payment of the precise amount is passed.  

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160. By judgment dated 4.11.1997 this Court, accepting the  

ascertainment, fixed the amount.  The order reads as under:

“… … …remedial measures taken on the basis  of the NEERI report shall be treated as final.

We  accept  the  proposal  submitted  by  the  Government  of  India  for  the  purpose  of  taking  remedial  measures  by  appointing  National  Productivity  Council  as  the  Project  Management  Consultant.   In  our  opinion  the  Ministry  of  Environment and Forests, Government of India has  rightly made a demand for Rs.37.385 crores.”

161. The exact liability  was quantified which the applicant-  

M/s Hindustan Agro Chemical Ltd. was under an obligation to  

pay.   The liability  to pay arose on that  particular  date  i.e.  

4.11.1997.  In other words, this was in the lines of a final  

decree pursuant to a preliminary decree.   

162. On  that  judgment  being  passed,  the  position  of  the  

applicant in Application No.44 was that of ‘judgment-debtor’  

and the applicant became liable to pay forthwith.

163. Admittedly, the amount has not been paid.  Instead, that  

payment  they  sought  to  postpone  by  raising  various  

challenges in this court and in the meantime ‘utilised’  that

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money, i.e., benefitted. As a consequence, the non-applicants  

(respondents-states herein) were ‘deprived’ of the use of that  

money for taking remedial measures.  The challenge has now  

– nearly 14 years later – been finally decided against them.

164. The appellant they must pay the amount is one thing but  

should they pay only that amount or something more?  If the  

period were a few days or months it would have been different  

but here it is almost 14 years have been lapsed and amount  

has not been paid.  The questions therefore are really three:

1. Can a party who does not comply with the court  

order be permitted to retain the benefits of his own  

wrong of non-compliance?   

2.Whether the successful party be not compensated  

by way of restitution for deprivation of its legitimate  

dues for more than fourteen years?  and

3.Whether the court should not remove all incentives  

for not complying with the judgment of the court?   

Answering  these  questions  will  necessitate  analysis  of  

certain

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concepts.

165. It  is  settled  principle  of  law  that  no  one  can  take  

advantage of his own wrong.

166. Unless courts disgorge all benefits that a party availed by  

obstruction or delays or non-compliance, there will always be  

incentive  for  non  compliance,  and  parties  are  ingenious  

enough to come up with all kinds of pleas and other tactics to  

achieve  their  end  because  they  know  that  in  the  end  the  

benefit will remain with them.

167. Whatever benefits a person has had or could have had  

by not complying with the judgment must being disgorged and  

paid to the judgment creditor and not, allowed to be retained  

by  the  judgment-debtor.   This  is  the  bounden  duty  and  

obligation of the court.

168. In  fact,  it  has  to  be  looked  from  the  position  of  the  

creditor.   Unless the deprivation by reason of delay is fully  

restituted, the creditor as a beneficiary remains a loser to the  

extent of the un-restituted amount.

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UNJUST ENRICHMENT

169.  Unjust  enrichment  has  been  defined  as:  “A  benefit  

obtained from another, not intended as a gift and not legally  

justifiable, for which the beneficiary must make restitution or  

recompense.”   See  Black’s  Law  Dictionary,  Eighth  Edition  

(Bryan A. Garner) at page 1573.

170. A claim for  unjust  enrichment  arises  where  there  has  

been an “unjust retention of a benefit to the loss of another, or  

the  retention  of  money  or  property  of  another  against  the  

fundamental  principles  of  justice  or  equity  and  good  

conscience.”   

171. ‘Unjust enrichment’ has been defined by the court as the  

unjust  retention of  a  benefit  to  the  loss of  another,  or  the  

retention  of  money  or  property  of  another  against  the  

fundamental  principles  of  justice  or  equity  and  good  

conscience. A person is enriched if he has received a benefit,  

and he is unjustly enriched if retention of the benefit would be  

unjust. Unjust enrichment of a person occurs when he has

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and retains  money  or  benefits  which in  justice  and equity  

belong to another.   

172. Unjust enrichment is “the unjust retention of a benefit to  

the loss of another, or the retention of money or property of  

another against the fundamental principles of justice or equity  

and good conscience.” A defendant may be liable “even when  

the defendant retaining the benefit is not a wrongdoer” and  

“even though he may have received [it] honestly in the first  

instance.” (Schock v. Nash, 732 A.2d 217, 232-33 (Delaware.  

1999).  USA)

173. Unjust  enrichment  occurs  when  the  defendant  

wrongfully  secures  a  benefit  or  passively  receives  a  benefit  

which would be unconscionable to retain.   

174. In the leading case of Fibrosa v. Fairbairn, [1942] 2 All  

ER 122, Lord Wright stated the principle thus :

"....(A)ny civilized system of law is bound to  provide  remedies  for  cases  of  what  has  been  called  unjust  enrichment  or  unjust  benefit,  that  is,  to  prevent  a  man from retaining  the  money of, or some benefit derived from another  which it is against conscience that he should  keep.  Such  remedies  in  English  law  are

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generically different from remedies in contract  or in tort, and are now recognized to fall within  a third category of the common law which has  been called quasi-contract or restitution."

175. Lord Denning also stated in Nelson v. Larholt, [1947]  

2 All ER 751 as under:-

“It is no longer appropriate, however, to  draw a distinction between law and equity.  Principles have now to be stated in the light  of their combined effect. Nor is it necessary  to canvass the niceties of the old forms of  action.  Remedies  now  depend  on  the  substance of the right, not on whether they  can be fitted into a particular frame-work.  The right here is not peculiar to equity or  contract  or  tort,  but  falls  naturally  within  the important  category  of  cases where  the  court orders restitution if the justice of the  case so requires.”

176.    The above principle has been accepted in India. This  

Court  in several  cases has applied the doctrine of  unjust  

enrichment.

RESTITUTION AND COMPOUND INTEREST

177. American  Jurisprudence  2d.   Volume  66  Am  Jur  2d  

defined Restitution as follows:

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“The word ‘restitution’ was used in the earlier  common  law  to  denote  the  return  or  restoration of  a  specific  thing  or  condition.  In  modern  legal  usage,  its  meaning  has  frequently been extended to include not only  the restoration or giving back of something to  its  rightful  owner,  but  also  compensation,  reimbursement,  indemnification,  or  reparation  for  benefits  derived  from,  or  for  loss  or  injury  caused  to,  another.   As  a  general principle, the obligation to do justice  rests upon all persons, natural and artificial;  if  one  obtains  the  money  or  property  of  others  without  authority,  the  law,  independently  of  express  contract,  will  compel restitution or compensation.”

178. While Section (§) 3 (Unjust Enrichment) reads as under:

“The phrase “unjust enrichment” is used in  law to characterize  the result  or effect  of  a  failure to make restitution of, or for, property  or  benefits  received  under  such  circumstances  as  to  give  rise  to  a  legal  or  equitable obligation to account therefor.  It is  a general principle, underlying various legal  doctrines  and  remedies,  that  one  person  should  not  be  permitted  unjustly  to  enrich  himself at the expense of another, but should  be  required  to  make  restitution  of  or  for  property  or  benefits  received,  retained,  or  appropriated, where it is just and equitable  that  such  restitution  be  made,  and  where  such  action  involves  no  violation  or  frustration  of  law  or  opposition  to  public  policy, either directly or indirectly.”

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179.     Unjust  enrichment  is  basic  to  the  subject  of  

restitution,  and  is  indeed  approached  as  a  fundamental  

principle  thereof.  They  are  usually  linked  together,  and  

restitution  is  frequently  based  upon  the  theory  of  unjust  

enrichment.  However, although unjust enrichment is often  

referred  to  or  regarded  as  a  ground  for  restitution,  it  is  

perhaps more  accurate  to  regard  it  as  a  prerequisite,  for  

usually  there  can  be  no  restitution  without  unjust  

enrichment. It is defined as the unjust retention of a benefit  

to the loss of another or the retention of money or property  

of another against the fundamental principles of justice or  

equity and good conscience. A person is enriched if he has  

received a benefit, and he is unjustly enriched if retention of  

the benefit would be unjust.  Unjust enrichment of a person  

occurs when he has and retains money or benefits which in  

justice and equity belong to another.  

180.  While  the  term  ‘restitution’  was  considered  by  the  

Supreme Court  in  South-Eastern Coalfields 2003 (8)  SCC  

648  and  other  cases  excerpted  later,  the  term  ‘unjust

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enrichment’  came  to  be  considered  in  Sahakari  Khand  

Udyog Mandal Ltd vs  Commissioner of Central Excise &  

Customs ((2005) 3 SCC 738).

 181. This Court said:

“‘Unjust enrichment’ means retention of a  benefit  by  a  person  that  is  unjust  or  inequitable.  ‘Unjust  enrichment’  occurs  when a person retains  money  or  benefits  which  in  justice,  equity  and  good  conscience, belong to someone else.”

182.     The terms ‘unjust enrichment’ and ‘restitution’ are like  

the two shades of green – one leaning towards yellow and the  

other  towards  blue.   With  restitution,  so  long  as  the  

deprivation of the other has not been fully compensated for,  

injustice to that extent remains.  Which label is appropriate  

under which circumstances would depend on the facts of the  

particular case before the court.  The courts have wide powers  

to grant restitution, and more so where it relates to misuse or  

non-compliance with court orders.

183.     We may add that restitution and unjust enrichment,  

along with an overlap, have to be viewed with reference to the

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two stages, i.e., pre-suit and post-suit.  In the former case, it  

becomes a  substantive  law (or  common law)  right  that  the  

court will consider; but in the latter case, when the parties are  

before the court and any act/omission, or simply passage of  

time, results in deprivation of one, or unjust enrichment of  

the  other,  the  jurisdiction  of  the  court  to  levelise  and  do  

justice is independent and must be readily wielded, otherwise  

it will be allowing the Court’s own process, along with time  

delay, to do injustice.

184 .    For  this  second  stage  (post-suit),  the  need  for  

restitution  in  relation  to  court  proceedings,  gives  full  

jurisdiction  to  the  court,  to  pass  appropriate  orders  that  

levelise.  Only the court has to levelise and not go further into  

the  realm  of  penalty  which  will  be  a  separate  area  for  

consideration altogether.

185.      This  view  of  law  as  propounded  by  the  author  

Graham Virgo in his celebrated book on “The Principle of Law  

of Restitution” has been accepted by a later decision of the  

House  of  Lords  (now  the  UK  Supreme  Court)  reported  as

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Sempra Metals Ltd (formerly Metallgesellschaft Limited)  

v  Her  Majesty’s  Commissioners  of  Inland  Revenue  and  

Another  [2007] UKHL 34 = [2007] 3 WLR 354 = [2008] 1 AC  

561 = [2007] All ER (D) 294.

186.     In  similar  strain,  across  the  Altantic  Ocean,  a  nine  

judge Bench of the Supreme Court of Canada in  Bank of  

America Canada vs  Mutual Trust Co. [2002] 2 SCR 601 =  

2002 SCC 43 (both Canadian Reports) took the view :

“There  seems  in  principle  no  reason  why  compound  interest  should  not  be  awarded.  Had  prompt  recompense  been  made  at  the  date  of  the  wrong  the  plaintiff  should  have  had  a  capital  sum  to  invest;  the  plaintiff  would have received interest on it at regular  intervals and would have invested those sums  also.  By the same token the defendant will  have  had  the  benefit  of  compound  interest.  Although not historically available, compound  interest  is  well  suited  to  compensate  a  plaintiff  for  the  interval  between  when  damages  initially  arise  and  when  they  are  finally paid.”

187. This view seems to be correct and in consonance with  

the principles of equity and justice.

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188. Another way of looking at it  is suppose the judgment-

debtor had borrowed the money from the nationalised bank as  

a clean loan and paid the money into this court. What would  

be the bank’s demand.

189. In other words, if payment of an amount equivalent of  

what the ledger account in the nationalised bank on a clean  

load would have shown as a debit balance today is not paid  

and  something  less  than  that  is  paid,  that  differential  or  

shortfall is what there has been : (1) failure to restitute; (2)  

unfair  gain  by  the  non-complier;  and  (3)  provided  the  

incentive to obstruct or delay payment.

190. Unless this differential is paid, justice has not been done  

to  the  creditor.  It  only  encourages  non-compliance  and  

litigation. Even if no benefit had been retained or availed even  

then, to do justice, the debtor must pay the money.  In other  

words,  it  is  this  is  not  only  disgorging  all  the  benefits  but  

making the creditor whole i.e. ordering restitution in full and  

not dependent on what he might have made or benefitted is  

what justice requires.

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LEGAL  POSITION  UNDER  THE  CODE  OF  CIVIL  PROCEDURE

191. One reason the law has not developed on this is because  

of the wording of Section 34 of the Code of Civil  Procedure  

which still proceeds on the basis of simple interest.  In fact, it  

is  this  difference  which  prompts  much  of  our  commercial  

litigation because the debtor feels – calculates and assesses –  

that to cause litigation and then to contest with obstructions  

and delays will be beneficial because the court is empowered  

to allow only simple interest.  A case for law reform on this is  

a separate issue.

192. In the point under consideration, which does not arise  

from a suit for recovery under the Code of Civil Procedure, the  

inherent powers in the court and the principles of justice and  

equity  are  each  sufficient  to  enable  an  order  directing  

payment of compound interest.  The power to order compound  

interest as part of restitution cannot be disputed, otherwise  

there can never be restitution.

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PRECEDENTS  ON  EXERCISE  OF  POWERS  BY  THE  COURT  TOMAKE  THE  BENEFICIARY  WHOLE  -  RESTITUTION

193. This court in Grindlays Bank Limited vs Income Tax  

Officer, Calcutta  (1980) 2 SCC 191 observed as under :-

“…When passing such orders the High Court  draws  on  its  inherent  power  to  make  all  such  orders  as  are  necessary  for  doing  complete  justice  between the parties.   The  interests  of  justice  require  that  any  undeserved or unfair advantage gained by a  party invoking the jurisdiction of the court,  by  the  mere  circumstance  that  it  has  initiated a proceeding in the court, must be  neutralised.   The  simple  fact  of  the  institution of  litigation by itself  should not  be permitted to confer an advantage on the  party responsible for it. …”

194. In  Ram Krishna Verma and Others  vs  State of U.P.   

and Others (1992) 2 SCC 620 this court observed as under :-

“The  50  operators  including  the  appellants/  private operators have been running their stage  carriages by blatant abuse of the process of the  court  by  delaying  the  hearing  as  directed  in  Jeevan Nath Bahl’s case and the High Court  earlier thereto.  As a fact, on the expiry of the  initial period of grant after Sept. 29, 1959 they  lost the right to obtain renewal or to ply their  vehicles, as this Court declared the scheme to  be operative.   However,  by sheer abuse of the  process of law they are continuing to ply their  vehicles pending hearing of the objections.  This  Court in  Grindlays Bank Ltd. vs  Income-tax

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Officer -   [1990] 2 SCC 191 held that the High  Court  while  exercising its  power  under  Article  226  the  interest  of  justice  requires  that  any  undeserved  or  unfair  advantage  gained  by  a  party invoking the jurisdiction of the court must  be  neutralised.   It  was  further  held  that  the  institution of the litigation by it should not be  permitted to confer an unfair advantage on the  party responsible for it.  In the light of that law  and in view of the power under Article 142(1) of  the Constitution this Court, while exercising its  jurisdiction  would  do  complete  justice  and  neutralise  the  unfair  advantage  gained by the  50  operators  including  the  appellants  in  dragging the litigation to run the stage carriages  on the approved route or area or portion thereof  and  forfeited  their  right  to  hearing  of  the  objections  filed  by  them  to  the  draft  scheme  dated Feb. 26, 1959.   …”

195. This  court  in  Kavita  Trehan vs  Balsara  Hygiene  

Products (1994) 5 SCC 380 observed as under :-

“The jurisdiction to make restitution is inherent  in every court  and will  be exercised whenever  the  justice  of  the  case  demands.   It  will  be  exercised under inherent powers where the case  did not strictly fall within the ambit of Section  144.  Section 144 opens with the words “Where  and in so far as a decree or an order is varied or  reversed  in  any  appeal,  revision  or  other  proceeding or is set aside or modified in any suit  instituted for the purpose, ...”.  The instant case  may not strictly fall within the terms of Section  144; but the aggrieved party in such a case can  appeal  to  the  larger  and  general  powers  of  restitution inherent in every court.”

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196. This  court  in  Marshall  Sons & Co.  (I)  Ltd. v.  Sahi  

Oretrans (P) Ltd. and Another (1999) 2 SCC 325 observed  

as under :-

“From the narration of the facts, though it  appears to us, prima facie, that a decree in favour  of the appellant is not being executed for some  reason or the other, we do not think it proper at  this stage to direct the respondent to deliver the  possession to the appellant since the suit filed by  the respondent  is  still  pending.   It  is  true that  proceedings are dragged for a long time on one  count or the other and on occasion become highly  technical accompanied by unending prolixity, at  every stage providing a legal trap to the unwary.  Because of the delay unscrupulous parties to the  proceedings  take  undue  advantage  and  person  who is  in wrongful  possession draws delight  in  delay in disposal  of  the cases by taking undue  advantage of procedural complications.  It is also  known  fact  that  after  obtaining  a  decree  for  possession of immovable property,  its execution  takes  long  time.   In  such  a  situation  for  protecting the interest of judgment creditor, it is  necessary  to  pass  appropriate  order  so  that  reasonable mesne profit which may be equivalent  to  the  market  rent is  paid by a  person who is  holding over the property.  In appropriate cases,  Court may appoint Receiver and direct the person  who  is  holding  over  the  property  to  act  as  an  agent of the Receiver with a direction to deposit  the royalty amount fixed by the Receiver or pass  such other order which may meet the interest of  justice.  This may prevent further injury to the  plaintiff in whose favour decree is passed and to

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protect the property including further alienation.”

197. In  Padmawati vs  Harijan Sewak Sangh - CM (Main)  

No.449 of 2002 decided by the Delhi high Court on 6.11.2008, the  

court held as under:-

“The case at hand shows that frivolous defences  and frivolous  litigation is  a calculated venture  involving no risks situation.  You have only to  engage professionals to prolong the litigation so  as to deprive the rights of a person and enjoy  the fruits of illegalities.  I consider that in such  cases where Court finds that using the Courts  as a tool, a litigant has perpetuated illegalities  or  has  perpetuated  an  illegal  possession,  the  Court  must  impose  costs  on  such  litigants  which should be equal to the benefits derived by  the litigant and harm and deprivation suffered  by  the  rightful  person  so  as  to  check  the  frivolous litigation and prevent the people from  reaping a rich harvest of illegal acts through the  Court. One of the aims of every judicial system  has  to  be  to  discourage  unjust  enrichment  using Courts as a tool.  The costs imposed by  the Courts must in all cases should be the real  costs  equal  to  deprivation  suffered  by  the  rightful person.”

198. We approve the findings of the High Court of Delhi in  

the aforementioned case.

199. The Court also stated:  “Before parting with this case,

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we consider  it  necessary to observe that  one  of  the main  

reasons  for  over-flowing  of  court  dockets  is  the  frivolous  

litigation in which the Courts are engaged by the litigants  

and which is  dragged as long as possible.   Even if  these  

litigants ultimately loose the lis, they become the real victors  

and  have  the  last  laugh.   This  class  of  people  who  

perpetuate  illegal  acts  by obtaining  stays  and injunctions  

from the Courts must be made to pay the sufferer not only  

the entire illegal gains made by them as costs to the person  

deprived  of  his  right  and  also  must  be  burdened  with  

exemplary costs.  Faith of people in judiciary can only be  

sustained if the persons on the right side of the law do not  

feel that even if they keep fighting for justice in the Court  

and ultimately win, they would turn out to be a fool since  

winning a case after 20 or 30 years would make wrongdoer  

as  real  gainer,  who had reaped the  benefits  for  all  those  

years.  Thus, it becomes the duty of the Courts to see that  

such wrongdoers are discouraged at every step and even if  

they succeed in prolonging the litigation due to their money  

power,  ultimately  they  must  suffer  the  costs  of  all  these

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years  long  litigation.  Despite  settled  legal  positions,  the  

obvious wrong doers, use one after another  tier of judicial  

review mechanism as a gamble, knowing fully well that dice  

is always loaded in their favour, since even if they lose, the  

time  gained  is  the  real  gain.   This  situation  must  be  

redeemed by the Courts.”

200.     Against this judgment,  Special Leave to Appeal (Civil)  

No 29197/2008 was preferred to the this Court.  The Court  

passed the following order:

“We have heard learned counsel  appearing for  the parties.  We find no ground to interfere with  the  well-considered  judgment  passed  by  the  High  Court.   The  Special  Leave  Petition  is,  accordingly, dismissed.”

Interest on interest

201. This court in Alok Shanker Pandey vs Union of India  

& Others (2007) 3 SCC 545 observed as under:-  

“We are of the opinion that there is no hard and  fast  rule  about  how much  interest  should  be  granted  and  it  all  depends  on  the  facts  and  circumstances of the each case.  We are of the

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opinion  that  the  grant  of  interest  of  12% per  annum  is  appropriate  in  the  facts  of  this  particular  case.   However,  we  are  also  of  the  opinion that since interest was not granted to  the appellant along with the principal  amount  the respondent should then in addition to the  interest at the rate of 12% per annum also pay  to  appellant  interest  at  the  same  rate  on  the  aforesaid interest from the date of payment of  instalments by the appellant to the respondent  till the date of refund on this amount, and the  entire amount mentioned above must be paid to  the appellant within two months from the date  of this judgment.

It  may be mentioned that there is misconception  about  interest.   Interest  is  not  a  penalty  or  punishment at all, but it is the normal accretion  on capital.”

Compound Interest

202. To do complete justice, prevent wrongs, remove incentive  

for wrongdoing or delay, and to implement in practical terms  

the concepts of Time Value of Money, restitution and unjust  

enrichment noted above – or to simply levelise – a convenient  

approach is calculating interest.  But here interest has to be  

calculated on compound basis – and not simple – for the latter  

leaves  much  uncalled  for  benefits  in  the  hands  of  the  

wrongdoer.  

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203. Further, a related concept of inflation is also to be kept  

in  mind  and  the  concept  of  compound  interest  takes  into  

account, by reason of prevailing rates, both these factors, i.e.,  

use of the money and the inflationary trends, as the market  

forces and predictions work out.

204.    Some of our statute law provide only for simple interest  

and not compound interest.  In those situations, the courts  

are helpless and it is a matter of law reform which the Law  

Commission must take note and more so, because the serious  

effect it has on administration of justice.  However, the power  

of the court to order compound interest by way of restitution  

is not fettered in any way.  We request the Law Commission to  

consider and recommend necessary amendments in relevant  

laws.

205.    ‘Compound  interest’  is  defined  in  Black’s  Law  

Dictionary, Eighth Edition (Bryan A. Garner) at page 830 as  

‘Interest  paid  on  both  the  principal  and  the  previously  

accumulated interest.’    It is a method of arriving at a figure

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which nears the time value of money submitted under Head-2  

earlier.

206.    As  noted,  compound  interest  is  a  norm  for  all  

commercial transactions.

207.   Graham Virgo in his important book on ‘The Principles  

of the Law of Restitution” at pp26-27 has stated and relevant  

portion is reproduced as under:

“In  Westdeutsche Landesbank Girozentrale v  London  Borough  Council 1996  A.C.  669  the  issue  for  the  House  of  Lords  was  whether  compound interest was available in respect of all  restitutionary  claims.   By  a  majority  it  was  decided  that,  since  the  jurisdiction  to  award  compound  interest  was  equitable,  compound  interest  could  only  be  awarded  in  respect  of  equitable  restitutionary  claims.   Consequently,  where the claim was for money had and received  the  claimant  could  only  obtain  simple  interest  because  this  was  a  common  law  claim.   The  majority supported their conclusion by reference  to  a  number  of  different  arguments.   In  particular,  they asserted that, since Parliament  had decided in 1981 that simple interest should  be awarded on claims at common law, it was not  for  the  House  of  Lords  to  award  compound  interest  in  respect  of  such  claims.  But  the  Supreme  Court  Act  1981  does  not  specifically  exclude  the  award  of  compound  interest  in  respect  of  common  law  claims.   Rather,  it  recognizes  that  the  court  can  award  simple  interest  for  such  claims.   The  equitable

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jurisdiction to award compound interest is still  available in appropriate cases.

In two very strong dissenting judgments,  Lords  Goff  and  Woolf  rejected the  argument  of  the  majority.  They asserted that, since the policy of  the law of restitution was to remove benefits from  the  defendant,  compound  interest  should  be  available in respect of all  restitutionary claims,  regardless  of  whether  they  arise  at  law  or  in  equity.  This argument can be illustrated by the  following example.   In the straightforward case  where the claimant pays money to the defendant  by mistake and defendant is liable to repay that  money, the liability arises from the moment the  money is received by the defendant, who has the  use of it and so should pay the claimant for the  value of that benefit.  This was accepted by all  the judges in the case.  The difficulty relates to  the  valuation  of  this  benefit.   If  the  defendant  was to borrow an equivalent  amount of  money  from a financial institution, he or she would be  liable  to  pay  compound  interest  to  that  institution.  It  follows  that  the  defendant  has  saved that amount of money and so this is the  value of the benefit which the defendant should  restore to the claimant, in addition to the value  of the money which the defendant received in the  first place.   If  it  could be shown that, had the  defendant  borrowed  the  equivalent  amount  of  money,  the  institution  would  only  have  paid  simple interest, it  would be appropriate for the  interest  awarded  to  the  claimant  to  be  simple  rather  than compound.   Usually,  however,  the  interest awarded in commercial transactions will  be compound interest.”

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208.  In Marshall sons and company (I) Limited  v.  Sahi  

Oretrans (P)  Limited and another  (1999)  2 SCC 325 this  

court in para 4 of the judgment observed as under:

“…It is true that proceedings are dragged for a  long  time  on  one  count  or  the  other  and,  on  occasion, become highly technical accompanied by  unending prolixity at every stage providing a legal  trap  to  the  unwary.  Because  of  the  delay,  unscrupulous  parties  to  the  proceedings  take  undue advantage and a person who is in wrongful  possession draws delight in delay in disposal of the  cases  by  taking  undue  advantage  of  procedural  complications.  It  is  also  a  known  fact  that  after  obtaining  a  decree  for  possession  of  immovable  property, its execution takes a long time. In such a  situation,  for  protecting  the  interest  of  the  judgment-creditor,  it  is  necessary  to  pass  appropriate orders so that reasonable mesne profit  which may be equivalent to the market rent is paid  by a person who is  holding over  the property.  In  appropriate cases, the court may appoint a Receiver  and  direct  the  person  who  is  holding  over  the  property to act as an agent of the Receiver with a  direction to deposit the royalty amount fixed by the  Receiver or pass such other order which may meet  the  interest  of  justice.  This  may  prevent  further  injury to the plaintiff in whose favour the decree is  passed  and  to  protect  the  property  including  further alienation. …”

209.   In  Ouseph Mathai and others v. M. Abdul Khadir  

(2002) 1 SCC 319 this court reiterated the legal position that

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the stay granted by the court does not confer a right upon a  

party and it is granted always subject to the final result of the  

matter  in the  court  and at  the risk and costs of  the party  

obtaining the stay.  After the dismissal, of the lis, the party  

concerned is relegated to the position which existed prior to  

the filing of the petition in the court which had granted the  

stay.   Grant  of  stay  does  not  automatically  amount  to  

extension of a statutory protection.   

210.  This court in  South Eastern Coalfields Limited  v.  

State of M.P. and others  (2003) 8 SCC 648  on examining  

the  principle  of  restitution  in  para  26  of  the  judgment  

observed as under:

“In our opinion,  the  principle  of  restitution takes  care of this submission. The word “restitution” in  its etymological sense means restoring to a party on  the modification, variation or reversal of a decree or  order,  what has been lost  to him in execution of  decree  or  order  of  the  court  or  in  direct  consequence of a decree or order (see Zafar Khan  v. Board of Revenue, U.P  -  (1984)  Supp SCC 505)  In  law,  the  term  “restitution”  is  used  in  three  senses:  (i)  return  or  restoration  of  some  specific  thing  to  its  rightful  owner  or  status;  (ii)  compensation  for  benefits  derived  from  a  wrong  done  to  another;  and  (iii)  compensation  or  reparation for the loss caused to another.”

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211.  The  court  in  para  28  of  the  aforesaid  judgment  very  

carefully mentioned that the litigation should not turn into a  

fruitful industry and observed as under:

“… … …Litigation may turn into a fruitful industry.  Though litigation is  not  gambling  yet  there  is  an  element of chance in every litigation. Unscrupulous  litigants  may  feel  encouraged  to  approach  the  courts, persuading the court to pass interlocutory  orders favourable to them by making out a prima  facie case when the issues are yet to be heard and  determined  on  merits  and  if  the  concept  of  restitution is excluded from application to interim  orders,  then  the  litigant  would  stand  to  gain  by  swallowing the benefits yielding out of the interim  order even though the battle has been lost at the  end.  This  cannot  be  countenanced.  We  are,  therefore, of the opinion that the successful party  finally held entitled to a relief assessable in terms of  money at the end of the litigation, is entitled to be  compensated  by  award  of  interest  at  a  suitable  reasonable rate for the period for which the interim  order of the court withholding the release of money  had remained in operation.”

212.  The court in the aforesaid judgment also observed that  

once the  doctrine  of  restitution is  attracted,  the  interest  is  

often a normal relief given in restitution.  Such interest is not  

controlled  by  the  provisions  of  the  Interest  Act  of  1839  or  

1978.

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213.    In  a  relatively  recent  judgment  of  this  court  in  

Amarjeet Singh and others  v.   Devi Ratan and others  

(2010)  1  SCC  417 the  court  in  para  17  of  the  judgment  

observed as under:

“No  litigant  can  derive  any  benefit  from  mere  pendency of case in a court of law, as the interim  order always merges in the final order to be passed  in  the  case  and  if  the  writ  petition  is  ultimately  dismissed,  the  interim  order  stands  nullified  automatically.  A  party  cannot  be  allowed to  take  any benefit of its own wrongs by getting an interim  order and thereafter blame the court. The fact that  the writ is found, ultimately, devoid of any merit,  shows that a frivolous writ petition had been filed.  The maxim  actus  curiae  neminem gravabit,  which  means that the act of the court shall prejudice no  one, becomes applicable in such a case. In such a  fact  situation the court  is  under  an obligation to  undo the wrong done to a party by the act of the  court.  Thus,  any undeserved or  unfair  advantage  gained by a party invoking the jurisdiction of the  court  must  be  neutralised,  as  the  institution  of  litigation  cannot  be  permitted  to  confer  any  advantage on a suitor from delayed action by the  act of the court. … …”

214.   In  another  recent  judgment  of  this  court  in  

Kalabharati  Advertising  v.  Hemant  Vimalnath  

Narichania and others (2010) 9 SCC 437 this court in para  

15 observed as under:

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“No litigant can derive any benefit  from the mere  pendency of a case in a court of law, as the interim  order  always  merges  into  the  final  order  to  be  passed  in  the  case  and  if  the  case  is  ultimately  dismissed,  the  interim  order  stands  nullified  automatically.  A  party  cannot  be  allowed to  take  any benefit of his own wrongs by getting an interim  order and thereafter blame the court. The fact that  the case is found, ultimately, devoid of any merit, or  the party withdrew the writ petition, shows that a  frivolous  writ  petition  had been filed.  The maxim  actus curiae  neminem gravabit,  which means that  the act of the court shall prejudice no one, becomes  applicable in such a case. In such a situation the  court  is  under  an  obligation  to  undo  the  wrong  done to a party by the act of the court. Thus, any  undeserved or unfair advantage gained by a party  invoking  the  jurisdiction  of  the  court  must  be  neutralised,  as the  institution of  litigation cannot  be permitted to confer any advantage on a party by  the delayed action of the court.”

215.  In consonance with the concept  of  restitution,  it  was  

observed  that  courts  should  be  careful  and  pass  an  order  

neutralizing the effect  of  all  consequential  orders passed in  

pursuance of the interim orders passed by the court.  Such  

express directions may be necessary to check the rising trend  

among the litigants to secure the relief as an interim measure  

and then avoid adjudication on merits.

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216.  In consonance with the principle of equity, justice and  

good conscience judges should ensure that the legal process  

is  not  abused  by  the  litigants  in  any  manner.   The  court  

should  never  permit  a  litigant  to  perpetuate  illegality  by  

abusing the legal process.  It is the bounden duty of the court  

to ensure that dishonesty and any attempt to abuse the legal  

process must be effectively curbed and the court must ensure  

that  there  is  no  wrongful,  unauthorized  or  unjust  gain  for  

anyone by the abuse of the process of the court.  One way to  

curb  this  tendency  is  to  impose  realistic  costs,  which  the  

respondent or the defendant has in fact incurred in order to  

defend himself in the legal proceedings.  The courts would be  

fully justified even imposing punitive costs where legal process  

has  been  abused.  No  one  should  be  permitted  to  use  the  

judicial  process  for  earning  undeserved  gains  or  unjust  

profits.   The  court  must  effectively  discourage  fraudulent,  

unscrupulous and dishonest litigation.

217. The court’s constant endeavour must be to ensure that  

everyone  gets  just  and  fair  treatment.   The  court  while

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rendering  justice  must  adopt  a pragmatic  approach and in  

appropriate cases realistic costs and compensation be ordered  

in order to discourage dishonest litigation. The object and true  

meaning of the concept of restitution cannot be achieved or  

accomplished unless the courts adopt a pragmatic approach  

in dealing with the cases.     

218.  This court in a very recent case Ramrameshwari Devi  

and Others   v.  Nirmala Devi and Others 2011(6) Scale  

677 had an occasion to  deal  with similar  questions  of  law  

regarding imposition of realistic costs and restitution.    One  

of us (Bhandari, J.) was the author of the judgment.  It was  

observed in that case as under:

“While  imposing  costs  we  have  to  take  into  consideration  pragmatic  realities  and  be  realistic  what  the  defendants  or  the  respondents  had  to  actually  incur  in  contesting  the  litigation  before  different courts.  We have to also broadly take into  consideration  the  prevalent  fee  structure  of  the  lawyers  and  other  miscellaneous  expenses  which  have to be incurred towards drafting and filing of  the  counter  affidavit,  miscellaneous  charges  towards typing, photocopying, court fee etc.

The  other  factor  which  should  not  be  forgotten  while imposing costs is for how long the defendants  or  respondents  were  compelled  to  contest  and

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defend  the  litigation  in  various  courts.   The  appellants  in  the  instant  case  have harassed the  respondents to the hilt for four decades in a totally  frivolous and dishonest litigation in various courts.  The appellants have also wasted judicial time of the  various courts for the last 40 years.”

219.  We reiterate that the finality of the judgment of the Apex  

Court  has  great  sanctity  and  unless  there  are  extremely  

compelling or exceptional circumstances, the judgments of the  

Apex  Court  should  not  be  disturbed  particularly  in  a  case  

where  review  and  curative  petitions  have  already  been  

dismissed.   

220.  This  Court  has  consistently  taken  the  view  that  the  

judgments  delivered  by  this  Court  while  exercising  its  

jurisdiction under Article 136 of the Constitution cannot be  

reopened  in  a  writ  petition  filed  under  Article  32  of  the  

Constitution.  In view of this legal position, how can a final  

judgment  of  this  Court  be  reopened  by  merely  filing  

interlocutory  applications  where  all  possible  legal  remedies  

have been fully exhausted?  When we revert to the facts of this  

case, it  becomes abundantly clear that this Court delivered

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final  judgment  in  this  case  way  back  in  1996.   The  said  

judgment has not been permitted to acquire finality because  

the respondent  Nos.  4 to 8 had filed multiple  interlocutory  

applications  and  has  ensured  non-compliance  of  the  

judgment of this Court.    

221. On consideration of pleadings and relevant judgments of  

the various courts, following irresistible conclusion emerge:

i) The  judgment  of  the  Apex  Court  has  great  sanctity  and  unless  there  are  extremely  compelling,  overriding  and  exceptional  circumstances,  the  judgment  of  the  Apex  Court should not be disturbed particularly in  a  case  where  review  and  curative  petitions  have already been dismissed

ii) The exception to this general rule is where in  the proceedings the concerned judge failed to  disclose  the  connection  with  the  subject  matter  or  the  parties  giving  scope  of  an  apprehension  of  bias  and  the  judgment  adversely affected the petitioner.

iii) The  other  exception  to  the  rule  is  the  circumstances  incorporated  in  the  review  or  curative  petition  are  such  that  they  must  inevitably  shake  public  confidence  in  the  integrity of the administration of justice if the  judgment or order is allowed to stand.  

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222. These categories are illustrative and not exhaustive but  

only in such extremely exceptional circumstances the order  

can be recalled in order to avoid irremedial injustice.

223.  The  other  aspect  which  has  been dealt  with  in  great  

details is to neutralize any unjust enrichment and undeserved  

gain made by the litigants.   While  adjudicating,  the  courts  

must keep the following principles in view.

1. It is the bounden duty and obligation of the court  to  neutralize  any  unjust  enrichment  and  undeserved gain made by any party by invoking  the jurisdiction of the court.

2. When  a  party  applies  and  gets  a  stay  or  injunction from the court, it is always at the risk  and responsibility of the party applying. An order  of stay cannot be presumed to be conferment of  additional right upon the litigating party.

3. Unscrupulous litigants be prevented from taking  undue advantage by invoking jurisdiction of the  Court.

4. A person in wrongful possession should not only  be removed from that place as early as possible  but be compelled to pay for wrongful use of that  premises fine, penalty and costs.  Any leniency  would  seriously  affect  the  credibility  of  the  judicial system.

5. No  litigant  can  derive  benefit  from  the  mere  pendency of a case in a court of law.

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6. A party cannot be allowed to take any benefit of  his own wrongs.

7. Litigation should not be permitted to turn  into a  fruitful  industry  so  that  the  unscrupulous  litigants  are  encouraged  to  invoke  the  jurisdiction of the court.

8. The institution of litigation cannot be permitted  to confer any advantage on a party by delayed  action of courts.

224. It may be pertinent to mention that even after dismissal  

of review petition and of the curative petition on 18.7.2002,  

the applicants (respondent Nos. 4 to 8) have been repeatedly  

filing one petition or the other in order to keep the litigation  

alive.  It  is indeed astonishing that the orders of this court  

have  not  been implemented till  date.   The  applicants  have  

made all possible efforts to avoid compliance of the judgment  

of this Court.  This is a clear case of abuse of process of the  

court.  

225. The Court in its order dated 04.11.1997 while accepting  

the  report  of  the  MOEF  directed  the  applicant  –  M/s

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Hindustan  Agro  Chemical  Ltd.  to  pay  a  sum of  Rs.37.385  

crores towards the costs of remediation.  The amount which  

ought to have been deposited way back in 1997 has yet not  

been deposited by keeping the litigation alive.  

226.  We  have  carefully  considered  the  facts  and  

circumstances of this case.  We have also considered the law  

declared by this Court and by other countries in a number of  

cases.   We  are  clearly  of  the  opinion  that  the  concerned  

applicant-industry  must  deposit  the amount as directed by  

this  Court  vide  order  dated  4.11.1997  with  compound  

interest. The applicant-industry has deliberately not complied  

with the orders of this court since 4.11.1997.  Thousands of  

villagers  have  been  adversely  affected  because  no  effective  

remedial  steps  have  been  taken  so  far.   The  applicant-

industry has succeeded in their design in not complying with  

the court’s order by keeping the litigation alive.   

227. Both these interlocutory applications being totally devoid  

of  any  merit  are  accordingly  dismissed  with  costs.

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Consequently,  the  applicant-industry  is  directed  to  pay  

Rs.37.385 crores along with compound interest  @ 12% per  

annum from 4.11.1997 till the amount is paid or recovered.   

228. The applicant-industry is also directed to pay costs of  

litigation.   Even  after  final  judgment  of  this  Court,  the  

litigation  has  been  kept  alive  for  almost  15  years.   The  

respondents have been compelled to defend this litigation for  

all these years.  Enormous court’s time has been wasted for  

all these years.  

229.  On  consideration  of  the  totality  of  the  facts  and  

circumstances of this case, we direct the applicant-industry to  

pay  costs  of  Rs.10  lakhs  in  both  the  Interlocutory  

Applications.   The amount of costs would also be utilized for  

carrying  out  remedial  measure  in  village  Bichhri  and  

surrounding  areas  in  Udaipur  District  of  Rajasthan on the  

direction of the concerned authorities.

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230. In case the amount as directed by this Court and costs  

imposed  by this    Court   are not paid within two months,  

the same would be recovered as arrears of the land revenue.

231.  Both  these  interlocutory  applications  are  accordingly  

disposed of.

….……………........................J.               (DALVEER BHANDARI)

…..…………….......................J.                        (H.L. DATTU)

New Delhi; July 18, 2011