Sterlite Industries (i) Ltd. Etc. Etc. Vs Union of India and Ors. Etc. Etc.

Page 1

Reportable

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL Nos. 2776-2783 OF 2013 (Arising out of SLP (C) Nos. 28116-28123 of 2010)

Sterlite Industries (India) Ltd. Etc. Etc. … Appellants

Versus

Union of India & Ors. Etc. Etc. … Respondents

J U D G M E N T

A. K. PATNAIK, J.

Leave granted.

FACTS:

2. The relevant facts very briefly are that the appellant-

company applied and obtained ‘No Objection Certificate’ on

01.08.1994 from the Tamil Nadu Pollution Control Board (for

Page 2

short ‘the TNPCB’) for setting up a copper smelter plant (for

short ‘the plant’) in Melavittan village, Tuticorin. On

16.01.1995, the Ministry of Environment and Forests,

Government of India, granted environmental clearance to

the setting up of the plant of the appellants at Tuticorin

subject to certain conditions including those laid down by the

TNPCB and the Government of Tamil Nadu. On 17.05.1995,

the Government of Tamil Nadu granted clearance subject to

certain conditions and requested the TNPCB to issue consent

to the proposed plant of the appellants. Accordingly, on

22.05.1995, the TNPCB granted its consent under Section 21

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

short ‘the Air Act’) and under Section 25 of the Water

(Prevention and Control of Pollution) Act, 1974 (for short ‘the

Water Act’) to the appellants to establish the plant in the

SIPCOT Industrial Complex, Melavittan village, Tuticorin

Taluk.

3. The environmental clearance granted by the Ministry of

Environment and Forests, Government of India, and the

consent orders under the Air Act and the Water Act granted

2

Page 3

by the TNPCB were challenged before the Madras High Court

in W.P. Nos.15501, 15502 and 15503 of 1996 by the National

Trust for Clean Environment. While these writ petitions were

pending, the appellants set up the plant and commenced

production on 01.01.1997. Writ Petition No.5769 of 1997

was then filed by V. Gopalsamy, General Secretary, MDMK

Political Party, Thayagam, praying for inter alia a direction to

the appellants to stop forthwith the operation of the plant.

Writ Petition No. 16861 of 1991 was also filed by Shri K.

Kanagaraj, Secretary, CITU District Committee, District

Thoothukudi, for directions to the State of Tamil Nadu,

TNPCB and the Union of India to take suitable action against

the appellant-company for its failure to take safety measures

due to which there were pollution and industrial accidents in

the plant. A Division Bench of the High Court heard Writ

Petition Nos. 15501 to 15503 of 1996, Writ Petition No.5769

of 1997 and Writ Petition No.16861 of 1998 and by the

common judgment dated 28.09.2010, allowed and disposed

of the writ petitions with the direction to the appellant-

company to close down its plant at Tuticorin. By the

3

Page 4

common judgment, the High Court also declared that the

employees of the appellant-company would be entitled to

compensation under Section 25FFF of the Industrial Disputes

Act, 1947 and directed the District Collector, Tuticorin, to

take all necessary and immediate steps for the re-

employment of the workforce of the appellant-company in

some other companies/factories/organizations so as to

protect their livelihood and to the extent possible take into

consideration their educational and technical qualifications

and also the experience in the field. Aggrieved, the

appellant has filed these appeals against the common

judgment dated 28.09.2010 of the Division Bench of Madras

High Court and on 01.10.2010, this Court passed an interim

order staying the impugned judgment of the High Court.

CONTENTIONS ON BEHALF OF THE APPELLANTS:

4. Mr. C.A. Sundaram, learned senior counsel appearing

for the appellants, submitted that one of the grounds stated

in the impugned judgment of the High Court for directing

closure of the plant of the appellants was that the TNPCB

4

Page 5

had stipulated in the Consent Order dated 22.05.1995 that

the appellant-company has to ensure that the location of the

unit should be 25 kms. away from the ecologically sensitive

area and as per the report of NEERI (National Environmental

Engineering and Research Institute) of 1998 submitted to the

High Court, the plant is situated within 25 kms. from four of

the twenty one islands in the Gulf of Munnar, namely,

Vanthivu, Kasuwar, Karaichalli and Villanguchalli, which are

at distances of 6 k.m., 7 k.m. and 15 k.m. respectively from

Tuticorin where the plant is located. He submitted that there

is no notification issued by the Central Government under

Rule 5(1) of the Environment (Protection) Act, 1986

prohibiting or restricting the location of an industry in

Tuticorin area. He submitted that the Government of Tamil

Nadu, however, had issued a notification dated 10.09.1986

notifying its intention under Section 35(1) of the Wildlife

(Protection) Act, 1972 to declare the twenty one islands of

the Gulf of Munnar as a Marine National Park, but no

notification has yet been issued by the Government of Tamil

Nadu under Section 35(4) of the aforesaid Act declaring the

5

Page 6

twenty one islands of the Gulf of Munnar as a National Park.

He explained that prior to the Environment (Protection) Act,

1986 and the Environment (Protection) Rules, 1986, some

environmental guidelines had been issued by the Ministry of

Environment and Forests, Department of Environment,

Government of India, in August, 1985 and one of the

guidelines therein was that industries must be located at

least 25 kms. away from the ecologically sensitive areas and

it is on account of these guidelines that the TNPCB in its

Consent Order dated 22.05.1995 under the Water Act had

stipulated that the plant of the appellants should be situated

25 kms. away from ecologically sensitive areas. He

submitted that this stipulation was made in the Consent

Order under the Water Act because the plant was likely to

discharge effluent which could directly or indirectly affect

the ecological sensitive areas within 25 kms. of the industry,

but in the Consent Order issued on 14.10.1996 to operate

the industry, this stipulation was removed and instead it was

stipulated in clause (20) that the unit shall re-use the entire

quantity of treated effluent in the process and ensure that

6

Page 7

no treated effluent is discharged into inland surface water or

on land or sewer or sea as proposed by the unit. He

submitted that in any case the consent for establishment

issued under the Water Act by the TNPCB would show that

the appellant-company was given the consent to establish its

copper smelter project in SIPCOT Industrial Complex

irrespective of the distance at which the SIPCOT Industrial

Complex was located from any ecological sensitive area and

in the SIPCOT Industrial Complex, many other chemical

industries are located and the High Court appears to have

lost sight of this aspect of the consent given by the TNPCB to

establish the plant.

5. Mr. Sundaram submitted that the second ground given

by the High Court for directing closure of the plant of the

appellants was that this being a project exceeding Rs.50/-

crores, environmental clearance was required to be obtained

from the Ministry of Environment and Forests, Government

of India, after a public hearing which was a mandatory

requirement but no materials were produced before the High

Court to show that there was any such public hearing

7

Page 8

conducted before the commencement of the plant of the

appellant-company. He submitted that when the

environmental clearance was granted to the appellant-

company the Environmental Impact Assessment (for short

‘EIA’) notification dated 27.01.1994 was in force and this

notification did not make public hearing mandatory and only

stated that comments of the public may be solicited if so

recommended by the Impact Assessment Agency within 30

days of the receipt of the proposal. He submitted that the

High Court, therefore, was not correct in taking a view that a

public hearing was mandatory during EIA before

environmental clearance was given by the Ministry of

Environment and Forests, Government of India. He clarified

that by a subsequent notification dated 10.04.1997, a public

hearing was made compulsory but by the time this

notification came into force environmental clearance had

already been granted to the plant of the appellants on

16.01.1995.

6. Mr. Sundaram submitted that the High Court also took

the view in the impugned judgment on the basis of the

8

Page 9

report of the NEERI of 1998 that there was undue haste on

the part of the governmental authorities in granting

permissions and consents to the appellant-company. He

submitted that in an Explanatory Note to the EIA notification

dated 27.01.1994 the Central Government has clarified that

Rapid EIA could also be conducted for obtaining environment

clearance for any new project/activity and therefore the

State Government while granting No Objection Certificate by

its letter dated 01.08.1994 asked the appellants to conduct

Rapid EIA based on one season data and the appellants

carried out Rapid EIA study based on the data collected by

the M/s. Tata Consultancy Service (TCS). He relied on the

affidavit dated 01.12.1998 filed on behalf of the Ministry of

Environment and Forests, Government of India to submit

that Rapid EIA before granting clearance to the plant of the

appellant was conducted in accordance with the guidelines.

7. Mr. Sundaram submitted that the third ground on which

the High Court directed closure of the plant of the appellants

was that the TNPCB stipulated a condition in clause No.20 of

the No Objection Certificate that the appellants will develop

9

Page 10

a green belt of 250 meters width around the battery limit of

the industry as contemplated under the Environmental

Management Plan but subsequently the appellant-company

submitted a representation to TNPCB requesting TNPCB to

reduce the requirement of green belt from 250 meters to the

width of 10-15 meters as development of the green belt of

250 meters width requires a land of around 150 acres and

TNPCB in its meeting held on 18.08.1994 relaxed this

condition and stipulated that the appellant-company will

develop a green belt of minimum width of 25 meters. He

submitted that the land allocated by SIPCOT to the

appellants was not sufficient to provide a green belt of 250

meters width around the plant and hence this was an

impossible condition laid down in the No Objection

Certificate and for this reason the appellants approached the

TNPCB to modify this condition and the TNPCB reduced the

width of the green belt to 25 meters. He further submitted

that generally, the TNPCB and the Ministry of Environment

and Forests, Government of India, have been insisting on a

green belt of 25% of the plant area and the appellants could

10

Page 11

not be asked to provide a green belt of more than 25% of

the plant area.

8. Mr. Sundaram submitted that the last ground, on which

the High Court directed closure of the plant of the appellants

is that the plant of the appellants has caused severe

pollution in the area as has been recorded by NEERI in its

report of 2005 submitted to the High Court and the

groundwater samples taken from the area indicate that the

copper, chrome, lead cadmium and arsenic and the chloride

and fluoride content is too high when compared to Indian

drinking water standards. He referred to the reports of

NEERI of 1998, 1999, 2003 and 2005 submitted to the High

Court and the report of NEERI of 2011 and also the joint

inspection report of TNPCB and CPCB of September 2012

submitted to this Court, to show that the finding of the High

Court that the plant of the appellants had caused severe

pollution in the area was not correct. He vehemently

submitted that though there were no deficiencies in the

plant of the appellants, the TNPCB in its affidavit has

referred to its recommendations as if there were

11

Page 12

deficiencies. He submitted that the recommendations made

by the TNPCB were only to provide the best of checks in the

plant against environmental pollution with a view to ensure

that the plant of the appellants becomes a model plant from

the point of view of the environment, but that does not mean

that the plant of the appellants had deficiencies which need

to be corrected. He submitted that the reports of NEERI of

2005 and 2011 referred to accumulation of gypsum and

phospho gypsum, which come out from the plant of the

appellants as part of the slag but the opinion of CPCB in its

letter dated 17.11.2003 to the TNPCB is that such slag is

non-hazardous and can be used in cement industries, for

filling up lower level area and as building/road construction

material, etc. and has no adverse environmental effects.

9. Mr. Sundaram finally submitted that since none of the

grounds given by the High Court in the impugned judgment

for directing closure of the plant of the appellants are well-

founded, it is a fit case in which this Court should set aside

the impugned judgment of the High Court and allow the

appeals. He submitted that the plant of the appellants

12

Page 13

produces 2,02,000 metric tones of copper which constitute

39% of the total of 5,14,000 metric tones of copper produced

in India and that 50% of the copper produced by the plant of

the appellants is consumed in the domestic market and the

balance 50% is exported abroad. He also submitted that the

plant provides direct and indirect employment to about 3000

people and yields a huge revenue to both the Central and

State Governments. He submitted that closure of the plant

of the appellants, therefore, would also not be in the public

interest.

CONTENTIONS ON BEHALF OF THE WRIT PETITIONERS- RESPONDENTS:

10. Mr. V. Gopalsamy, who was the writ petitioner in Writ

Petition No.5769 of 1997 before the High Court, appeared in-

person and supported the impugned judgment of the High

Court. He submitted that the TNPCB in its No Objection

Certificate dated 01.08.1994 as well as in its Consent Order

dated 22.05.1995 under the Water Act clearly stipulated that

the appellant-company shall ensure that the location of its

unit should be 25 kms. away from ecological sensitive area

13

Page 14

and the Government of Tamil Nadu in their affidavit dated

27.10.2012 have stated that all the 21 islands including the

four near Tuticorin in the Gulf of Munnar Marine National

Park are ecologically sensitive areas. He submitted that

NEERI in its report of 1998 has observed that four out of

twenty one islands, namely, Vanthivu, Kasuwar, Karaichalli

and Villanguchalli, are at distances of 6 kms., 7 kms. and 15

kms. respectively from Tuticorin. He further submitted that

merely because a condition has been subsequently imposed

on the appellant-company by TNPCB not to discharge any

effluent to the sea, the restriction of minimum 25 kms.

distance from ecological sensitive area from location of the

unit of the appellants cannot be lifted particularly when the

Government of Tamil Nadu as well as the Central

Government are treating the Gulf of Munnar as a Marine

National Park and extending financial assistance for the

development of its ecology. He submitted that the proposal

for issuance of a declaration under Section 35(4) of the

Wildlife (Protection) Act, 1972 is pending for concurrence of

the Central Government and, therefore, the ecological

14

Page 15

balance in the area of Gulf of Munnar would be disturbed if

the plant of the appellants continues at Tuticorin and the

High Court was right in directing closure of the plant of the

appellants located at Tuticorin.

11. Mr. V. Gopalsamy submitted that the High Court was

similarly right in directing closure of the plant of the

appellants on the ground that the appellants did not develop

a green belt of 250 metres width around their plant as

stipulated in the No Objection Certificate dated 01.08.1994

of the TNPCB and instead represented to the TNPCB and got

the green belt reduced to only 25 metres width. He

submitted that considering the grave adverse impact on the

environment by the plant of the appellants, a 250 metres

width of green belt was absolutely a must but the TNPCB

very casually reduced the green belt from 250 metres width

to 25 metres. He submitted that it will be seen from the

joint report of TNPCB and CPCB filed pursuant to the order

dated 27.08.2012 of this Court that as a condition of the

renewal of the consent order, the appellant-company has

been asked to develop a green belt to an extent of 25% of

15

Page 16

the total area of 172.17 hectares which works out to 43.04

hectares and yet the TNPCB has found development of green

belt of 26 hectares as sufficient compliance. He submitted

that the appellants would, therefore, be required to develop

a green belt of 17.04 hectares more for compliance of the

condition for renewal of consent stipulated by the TNPCB.

12. Mr. V. Gopalsamy submitted that for their plant, the

appellants have been importing copper concentrate from

Australian mines which are highly radioactive and

contaminated and contain high levels of arsenic, uranium,

bismuth, fluorine and experts of environment like Mark

Chernaik have given a report on the adverse impacts of the

plant of the appellants at Tuticorin on the environment. In

this context, he also submitted that an American company,

namely, the Asarco producing copper had to be closed down

on account of such adverse environmental effects. He

submitted that the claim of the appellants that their plant

has no deficiencies and that it does not have any impact on

the environment is not correct and different reports of the

NEERI would show that the plant of the appellants is

16

Page 17

continuing to pollute the air and has also affected the ground

water of the area by discharging effluent and the High Court,

therefore, rightly directed the closure of the plant. He

submitted that the appellants had initially proposed to

establish the plant in Gujarat but this was opposed

vehemently and the appellants decided to shift the

establishment of the plant to Goa but because of opposition

the plant could not be established in Goa. He submitted that

the appellants thereafter intended to set up the plant at

Ratnagiri in Maharashtra and invested Rs.200 crores in

construction activities after obtaining environmental

clearance but because of the opposition of the farmers of

Ratnagiri, the Maharashtra Government had to revoke the

licence granted to the appellants. He submitted that the

appellants have been able to set up the plant at Tuticorin in

Tamil Nadu by somehow obtaining environmental clearance

from the Ministry of Environment and Forests, Government

of India, without a public hearing and the consents under the

Water Act and the Air Act from the TNPCB and the High

17

Page 18

Court rightly allowed the writ petitions and directed closure

of the plant of the appellants.

13. Mr. V. Prakash, learned senior counsel appearing for the

writ petitioner, National Trust For Clean Environment, in Writ

Petition Nos. 15501 to 15503 of 1996 before the High Court,

submitted that the appellants had made a false statement in

the synopsis at page (B) of the Special Leave Petition that it

has been consistently operating for more than a decade with

all necessary consents and approvals from all the statutory

authorities without any complaint. He submitted that

similarly in ground no. IV at page 45 of the Special Leave

Petitions the appellants have falsely stated that the High

Court has erred in not appreciating that the appellants had

got all the statutory approvals/consent orders from the

authorities concerned as also the Central Government and

the State Government. He submitted that the report of

NEERI of 2011 would show that the appellants did not have

valid consent during various periods including the period

when it filed the Special Leave Petitions. He submitted that

the appellants did not also inform this Court that when they

18

Page 19

moved this Court on 01.10.2010 to stay the operation of the

impugned order of the High Court, the plant of the

appellants had already stopped operation. He vehemently

argued that due to misrepresentation of the material facts

by the appellants in the Special Leave Petitions as well as

suppression of the material facts, this Court was persuaded

to pass the stay order dated 01.10.2010. He argued that on

this ground alone this Court should refuse to grant relief to

the appellants in exercise of its discretion under Article 136

of the Constitution. He relied on the decisions of this Court

in Hari Narain v. Badri Das [AIR 1963 SC 1558], G.

Narayanaswamy Reddy (dead) by LRs. & Anr. v. Government

of Karnataka & Anr. [(1991) 3 SCC 261] and Dalip Singh v.

State of Uttar Pradesh & Ors. [(2010) 2 SCC 114] and

Abhyudya Sanstha v. Union of India [(2011) 6 SCC 145] for

the proposition that this Court can refuse relief under Article

136 of the Constitution where the appellants have not

approached this Court with clean hands and have made

patently false statements in the special leave petition.

19

Page 20

14. Mr. Prakash next submitted that the main ground that

was taken in the writ petitions before the High Court by

National Trust For Clean Environment was that the Ministry

of Environment and Forests, Government of India, and the

TNPCB had not applied their mind to the nature of the

industry as well as the pollution fall out of the industry of the

appellants and the capacity of the unit of the appellants to

handle the waste without causing adverse impact on the

environment as well as on the people living in the vicinity of

the plant. He submitted that this Court has already held that

a right to clean environment is part of the right to life

guaranteed under Article 21 of the Constitution and has

explained the precautionary principle and the principle of

sustainable development in Vellore Citizens Welfare Forum

v. Union of India & Ors. [(1996) 5 SCC 647], Tirupur Dyeing

Factory Owners’ Association v. Noyyal River Ayacutdars

Protection Association [(2009) 9 SCC 737] and M.C. Mehta v.

Union of India Ors. [(2009) 6 SCC 142]. He submitted that

these principles, therefore, have to be borne in mind by the

authorities while granting environmental clearance and

20

Page 21

consent under the Water Act or the Air Act, but unfortunately

both the Ministry of Environment and Forests, Government

of India, and the TNPCB have ignored these principles and

have gone ahead and hastily granted environmental

clearance and the consent under the two Acts. He submitted

that, in the present case, the appellants have relied on the

Rapid EIA done by Tata Consultancy Service, but this Rapid

EIA was based on the data which is less than the month’s

particulars and is inadequate for making a proper EIA which

must address the issue of the nature of the manufacturing

process, the capacity of the manufacturing facility and the

quantum of production, the quantum and nature of

pollutants, air, liquid and solid and handling of the waste.

15. Mr. Prakash referred to the report of NEERI of 1998

submitted to the High Court to show that the inspection

team of NEERI collected waste water samples from the plant

of the appellants and an analysis of the waste water samples

indicate that the treatment plant of the appellants was

operating inefficiently as the levels of arsenic, selenium and

lead in the treated effluent as also the effluent stored in the

21

Page 22

surge ponds were higher than the standards stipulated by

the TNPCB. He also referred to the report of NEERI of

February 1999 in which NEERI has stated that the treated

effluent quality did not conform to the standards stipulated

by the TNPCB.

16. Mr. Prakash further submitted that the counter affidavit

of the Union of India filed on 01.12.1998 before the High

Court also does not disclose whether, apart from the Rapid

EIA of Tata Consultancy Services, there was any independent

evaluation of the Rapid EIA by the environmental impact

assessment authority, namely, the Ministry of Environment

and Forests. He submitted that the TNPCB in its No

Objection Certificate dated 01.08.1994 has stipulated in

Clause 18 that the appellants have to carry out Rapid EIA

(for one season other than monsoon) as per the EIA

notification dated 27.01.1994 issued by the Ministry of

Environment and Forests, Government of India, and furnish a

copy to the TNPCB and this clause itself would show that

TNPCB had not applied its mind as to whether there was a

sufficient rational analysis of the nature of the industry,

22

Page 23

nature of pollutants, quantum of fall out and the plan or

method for handling the waste. He submitted that since

there was no application of mind by either the Ministry of

Environment and Forests, Government of India, before

granting the environmental clearance or by the TNPCB

before granting the consents under the Water Act and the

Air Act, the environmental clearance and the consent orders

are liable to be quashed.

17. In support of his submissions, Mr. Prakash cited East

Coast Railway & Anr. v. Mahadev Appa Rao & Ors. [(2010) 7

SCC 678], for the proposition that for a valid order there has

to be application of mind by the authority, and in the

absence of such application of mind by the authority, the

order is arbitrary and is liable to be quashed. He cited the

decision of the Lords of the Judicial Committee of Privy

Council in Belize Alliance of Conservation Non-governmental

Organizations v. The Department of the Environment and

Belize Electric Company Limited [(2004) 64 WIR 68 para 69]

in which it has been observed that EIA is expected to be

comprehensive in treatment of the subject, objective in its

23

Page 24

approach and must meet the requirement that it alerts the

decision maker to the effect of the activity on the

environment and the consequences to the community. He

also relied on the judgment of the Supreme Court of

Judicature of Jamaica in The Northern Jamaica Conservation

Association v. The Natural Resources Conservation Authority

[Claim No. HCV 3022 of 2005] to argue that a public hearing

was a must for grant of environmental clearance and

submitted that as there was no public hearing in this case

and there was inadequate EIA before the grant of the

environmental clearance for the plant of the appellants, the

High Court has rightly directed closure of the plant of the

appellants.

18. Finally, Mr. Prakash submitted that the finding of the

High Court that the plant of the appellants continues to

pollute the environment has been substantiated by the

inspection report which has been filed in this Court by the

NEERI as well as the TNPCB from time to time. In particular,

he referred to the joint inspection report of the TNPCB and

CPCB to show that the directions issued by the TNPCB to

24

Page 25

improve solid waste disposal has not been complied with.

He submitted that one of the conditions of the consent order

of the TNPCB was that no slag was to be stored in the

premises of the plant but huge quantity of slag has been

stored in the premises of the plant and the direction to

dispose at least 50% more than the monthly generation

quantities of both slag and gypsum has not been complied

with. He vehemently argued that unless the plant is shut

down, the appellants will not be able to clear the huge

quantity of slag and gypsum lying in the plant premises. He

submitted that it is not correct as has been submitted on

behalf of the appellants that the slag is not a hazardous

waste containing arsenic and will certainly jeopardize the

environment. He argued that there was therefore no other

option for the High Court but to direct closure of the plant of

the appellants to ensure clean environment in the area.

CONTENTIONS ON BEHALF OF THE AUTHORITIES:

19. Mr. S. Guru Krishna Kumar, learned counsel appearing

for the TNPCB as well as the State of Tamil Nadu, relying on

25

Page 26

the affidavit filed on behalf of the State of Tamil Nadu on

29.10.2012 submitted that the Gulf of Munnar consisting of

21 islands in 4 groups was notified under Section 35(1) of

the Wildlife (Protection) Act, 1972 on 10th September 1986

as this group of islands consisted of territorial waters

between them and the proposal to declare Gulf of Munnar as

a Marine National Park under Section 35(4) of the said Act

was sent by the Chief Wild Life Warden to the State

Government for approval on 30.04.2003 but the declaration

under Section 35(4) of the said Act has not been finally

made. He further submitted that all the 21 islands including

the 4 islands in the Gulf of Munnar are therefore ecological

sensitive areas. He submitted that notwithstanding the fact

that four of the islands were near Tuticorin, the TNPCB gave

the consent under the Water Act to the appellants to set up

the plant at Tuticorin because the plant has a zero effluent

discharge. He also referred to the compliance affidavit of

the TNPCB filed on 08.10.2012 to show that the TNPCB is

monitoring the emissions from the plant of the appellants to

26

Page 27

ensure that the National Ambient Air Quality Standards are

maintained.

20. Mr. Vijay Panjwani, learned counsel appearing for CPCB,

made a reference to Sections 3, 16 and 18 of the Water Act

which relate to the CPCB and submitted that it was not for

the CPCB but for the TNPCB to issue No Objection Certificate

and consent in respect of the plant set up in the State of

Tamil Nadu. He submitted that under Rule 19 of the

Manufacture, Storage and Import of Hazardous Chemical

Rules, 1989, however, improvement notices can be issued

by the CPCB to any person to remedy the contravention of

the Rules.

CONTENTIONS ON BEHALF OF THE INTERVENER:

21. Mr. Raj Panjwani, learned counsel for the intervener,

submitted that a marine biosphere is an ecological sensitive

area and if in the consent order a condition was stipulated

that the plant of the appellants has to be situated beyond 25

kms. from ecological sensitive area, this condition has to be

complied with. He further submitted that in any case the

27

Page 28

appellants are liable to compensate for having damaged the

environment.

FINDINGS OF THE COURT:

22. Writ Petition No.15501 of 1996, Writ Petition No.15503

of 1996 and Writ Petition No.5769 of 1997 had been filed for

quashing the environmental clearances dated 16.01.1995

and 17.05.1995 granted by the Ministry of Environment and

Forests, Government of India, to the appellants for setting up

the plant at Tuticorin and by the impugned judgment, the

High Court has not quashed the environmental clearance but

has allowed the three writ petitions. Hence, the first

question which we will have to decide is whether the High

Court could have interfered with the environmental

clearances granted by the Ministry of Environment and

Forests, Government of India, and the Government of Tamil

Nadu, Department of Environment.

23. The environmental clearance for setting up the plant

was granted to the appellants under the Environment

(Protection) Act, 1986. Sub-section (1) of Section 3 of the

28

Page 29

Environment (Protection) Act, 1986 provides that subject to

the provisions of the Act, the Central Government shall have

the power to take all such measures as it deems necessary

or expedient for the purpose of protecting and improving the

quality of the environment and preventing, controlling and

abating environmental pollution. Sub-section (2) of Section

3 further provides that in particular, and without prejudice to

the generality of the provisions of sub-section (1), such

measures may include measures with respect to all or any of

the matters specified therein. One such matter specified in

clause (v) of sub-section (2) is restriction of areas in which

any industries, operations or processes or class of industries,

operations or processes shall not be carried out or shall be

carried out subject to certain safeguards. Rule 5(3) of the

Environment (Protection) Rules, 1986 accordingly empowers

the Central Government to impose prohibitions or

restrictions on the location of an industry or the carrying on

processes and operations in an area, by notification in the

Official Gazette. In exercise of these powers under Section

3(2)(v) of the Environment (Protection) Act, 1986 and Rule

29

Page 30

5(3) of the Environment (Protection) Rules, 1986, the Central

Government has issued a notification dated 27.01.1994

imposing restrictions and prohibitions on the expansion and

modernization of any activity or new projects being

undertaken in any part of India unless environmental

clearance has been accorded by the Central Government or

the State Government in accordance with the procedure

specified in the said notification.

24. Para 2 of the notification dated 27.01.1994 lays down

the requirements and procedure for seeking environmental

clearance of projects, and clause (c) of Para 2 provides that

the Impact Assessment Agency could solicit comments of the

public within thirty days of receipt of proposal, in public

hearings, arranged for the purpose, after giving thirty days

notice of such hearings in at least two newspapers, and after

completion of public hearing, where required, convey its

decision. The language of this notification did not lay down

that the public hearing was a must. The Impact Assessment

was done by Tata Consultancy Services as per the

requirements then existing and the Government of India has

30

Page 31

granted the Environmental Clearance on 16.01.1995. The

notification dated 27.01.1994, however, was amended by

notification dated 10.04.1997 and it was provided in clause

(c) of Para 2 of the notification that the Impact Assessment

Agency shall conduct a public hearing and the procedure for

public hearing was detailed in Schedule IV to the notification

by the amendment notification dated 10.04.1997.

Admittedly, in this case, the environmental clearance was

granted by the Ministry of Environment, Government of

India, on 16.01.1995 in accordance with the procedure laid

down by notification dated 27.01.1994 well before the

notification dated 10.04.1997 providing for mandatory public

hearing in accordance with the procedure laid down in

Schedule IV. As there was no mandatory requirement in the

procedure laid down under the Environment (Protection) Act,

1986 and the Environment (Protection) Rules, 1986 and the

notifications dated 27.01.1994 as amended by notification

dated 04.05.1994 that a public hearing has to be conducted

before grant of environmental clearance, the High Court

could not have allowed the writ petitions challenging the

31

Page 32

environmental clearances on the ground that no public

hearing was conducted before grant of the environmental

clearances.

25. An Explanatory Note regarding the EIA notification

dated 27.01.1994 was also issued by the Central

Government and Para 5 of the Explanatory Note clarified

that project proponents could furnish Rapid EIA report to the

Impact Assessment Agency based on one season data, for

examination of the project and Comprehensive EIA report

may be submitted later, if so asked for by the Impact

Assessment Agency and this was permitted where

Comprehensive EIA report would take at least one year for

its preparation. In Para 5 of the affidavit filed by the Union

of India before the High Court in Writ Petition Nos.15501 to

15503 of 1996, the allegation of the writ petitioner that the

Ministry of Environment and Forests have accorded

environmental clearance without applying its mind and

without making any analysis of the adverse impacts on the

marine ecological system has been denied and it has been

further stated that after detailed examination of Rapid

32

Page 33

EIA/EMP, filled in Questionnaire for industrial projects, NOC

from State Pollution Control Board and Risk Analysis, the

project was examined as per the procedure laid down in the

EIA notification dated 27.01.1994 (as amended on

04.05.1994) and the project was accorded approval on

16.01.1995 subject to specific conditions. As the procedure

laid down under the Environment (Protection) Act, 1986 and

the Environment (Protection) Rules, 1986 and the

notifications dated 27.01.1994 as amended by notification

dated 04.05.1994 and as explained by the Explanatory Note

issued by the Government of India permitted Rapid EIA in

certain circumstances, the High Court could not have

allowed the writ petitions on the ground that environmental

clearance was issued to the appellant-company on the basis

of inadequate Rapid EIA, particularly when the Union of India

in its affidavit had clearly averred that the environmental

clearance was granted after detailed examination of Rapid

EIA/EMP, filled in Questionnaire for industrial projects, NOC

from State Pollution Control Board and Risk Analysis in

33

Page 34

accordance with the procedure laid down in EIA notification

dated 27.01.1994 (as amended on 04.05.1994).

26. The High Court has noticed some decisions of this Court

on Sustainable Development, Precautionary and Polluter

Pays Principles and Public Trust Doctrine, but has failed to

appreciate that the decision of the Central Government to

grant environmental clearance to the plant of the appellants

could only be tested on the anvil of well recognized

principles of judicial review as has been held by a three

Judge Bench of this Court in Lafarge Umiam Mining (P) Ltd.

v. Union of India & Others [(2011) 7 SCC 338 at 380]. To

quote Environmental Law edited by David Woolley QC, John

Pugh-Smith, Richard Langham and William Upton, Oxford

University Press:

“The specific grounds upon which a public authority can be challenged by way of judicial review are the same for environmental law as for any other branch of judicial review, namely on the grounds of illegality, irrationality, and procedural impropriety.”

Thus, if the environmental clearance granted by the

competent authority is clearly outside the powers given to it

34

Page 35

by the Environment (Protection) Act, 1986, the Environment

(Protection) Rules, 1986 or the notifications issued

thereunder, the High Court could quash the environmental

clearance on the ground of illegality. If the environmental

clearance is based on a conclusion so unreasonable that no

reasonable authority could ever have come to the decision,

the environmental clearance would suffer from Wednesbury

unreasonableness and the High Court could interfere on the

ground of irrationality. And, if the environmental clearance

is granted in breach of proper procedure, the High Court

could review the decision of the authority on the ground of

procedural impropriety.

27. Where, however, the challenge to the environmental

clearance is on the ground of procedural impropriety, the

High Court could quash the environmental clearance only if

it is satisfied that the breach was of a mandatory

requirement in the procedure. As stated in Environmental

Law edited by David Woolley QC, John Pugh-Smith, Richard

Langham and William Upton, Oxford University Press:

35

Page 36

“It will often not be enough to show that there has been a procedural breach. Most of the procedural requirements are found in the regulations made under primary legislation. There has been much debate in the courts about whether a breach of regulations is mandatory or directory, but in the end the crucial point which has to be considered in any given case is what the particular provision was designed to achieve.”

As we have noticed, when the plant of the appellant-

company was granted environmental clearance, the

notification dated 27.01.1994 did not provide for mandatory

public hearing. The Explanatory Note issued by the Central

Government on the notification dated 27.01.1994 also made

it clear that the project proponents may furnish rapid EIA

report to the IAA based on one season data (other than

monsoon), for examination of the project Comprehensive EIA

report was not a must. In the absence of a mandatory

requirement in the procedure laid down under the scheme

under the Environment (Protection) Act, 1986 at the relevant

time requiring a mandatory public hearing and a mandatory

comprehensive EIA report, the High Court could not have

interfered with the decision of the Central Government

36

Page 37

granting environmental clearance on the ground of

procedural impropriety.

28. Coming now to the ground of irrationality argued so

vehemently by Mr. V. Prakash, we find that no materials

have been produced before us to take a view that the

decision of the Central Government to grant the

environmental clearance to the plant of the appellants was

so unreasonable that no reasonable authority could ever

have taken the decision. As we have already noticed, in

Para 5 of the affidavit filed by the Union of India before the

High Court in Writ Petition Nos.15501 to 15503 of 1996, it

has been stated that the Ministry of Environment and Forests

have accorded environmental clearance after detailed

examination of rapid EIA/EMP, filled in Questionnaire for

industrial projects, NOC from State Pollution Control Board

and Risk Analysis, and that the project was examined as per

the procedure laid down in the EIA notification dated

27.01.1994 (as amended on 04.05.1994) and only thereafter

the project was accorded approval on 16.01.1995. No

material has been placed before us to show that the decision

37

Page 38

of the Ministry of Environment and Forests to accord

environmental clearance to the plant of the appellants at

Tuticorin was wholly irrational and frustrated the very

purpose of EIA.

29. In Belize Alliance of Conservation Non-governmental

Organizations v. The Department of the Environment and

Belize Electric Company Limited (supra) cited by Mr.

Prakash, the Lords of the Judicial Committee of the Privy

Council have quoted with approval the following words of

Linden JA with reference to the Canadian legislation in Bow

Valley Naturalists Society v. Minister of Canadian Heritage

[2001] 2 FC 461 at 494:

“The Court must ensure that the steps in the Act are followed, but it must defer to the responsible authorities in their substantive determinations as to the scope of the project, the extent of the screening and the assessment of the cumulative effects in the light of the mitigating factors proposed. It is not for the judges to decide what projects are to be authorized but, as long as they follow the statutory process, it is for the responsible authorities.”

The aforesaid passage will make it clear that it is for the

authorities under the Environment (Protection) Act, 1986,

38

Page 39

the Environment (Protection) Rules, 1986 and the

notifications issued thereunder to determine the scope of the

project, the extent of the screening and the assessment of

the cumulative effects and so long as the statutory process

is followed and the EIA made by the authorities is not found

to be irrational so as to frustrate the very purpose of EIA, the

Court will not interfere with the decision of the authorities in

exercise of its powers of judicial review.

30. The next question that we have to decide is whether

the High Court was right in directing closure of the plant of

the appellants on the ground that the plant of the appellants

is located at Tuticorin within 25 kms. of four of the twenty

one islands in the Gulf of Munnar, namely, Vanthivu,

Kasuwar, Karaichalli and Villanguchalli. The reason given by

the High Court in coming to this conclusion is that the TNPCB

had stipulated in the Consent Order dated 22.05.1995 that

the appellant-company has to ensure that the location of the

unit should be 25 kms. away from ecologically sensitive area

and as per the report of NEERI, the plant of the appellants

was situated at a distance of 6 kms. of Vanthivu, 7 kms. of

39

Page 40

Kasuwar and 15 kms. of Karaichalli and Villanguchalli and

these four villages are part of the twenty one islands in the

Gulf of Munnar. Hence, the High Court directed closure of

the plant because the appellant-company has violated the

condition of the Consent Order dated 22.05.1995 issued by

the TNPCB under the Water Act.

31. The Consent Order dated 22.05.1995 issued by the

TNPCB under Section 25 of the Water Act states as follows:

“Consent to establish or take steps to establish is hereby granted under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 as amended in 1988) (hereinafter referred to as ‘The Act’) and the rules and orders made thereunder to

The Chief Project Manager, M/s Sterlite Industries (India) Limited (Copper Smelter Project)

SIPCOT Industrial Complex, Meelavittam Village, Tuticorin Taluk, V.O. Chidambaraner District

(hereinafter referred to as ‘The applicant’) authorizing him/her/them to establish or take steps to establish the industry in the site mentioned below:

SIPCOT Industrial Complex, Meelavittam Village, Tuticorin Taluk, V.O. Chidambaraner District.”

40

Page 41

The aforesaid extract from the Consent Order dated

22.05.1995 of the TNPCB issued under the Water Act makes

it clear that the appellant-company was given consent to

establish its plant in the SIPCOT Industrial Complex,

Melavittan Village, Tuticorin Taluk. Along with the Consent

Order under the Water Act, special conditions were annexed

and clause 20 of the special conditions reads as follows:

“20. (i) 1 km away from the water resources specified in G.O.Ms. No.213 E&P Dept Dt. 30.3.89

(i) 25 km away from ecological/sensitive areas.

(ii) 500 metres away from high tide line.”

32. On the one hand, therefore, the appellants were given

consent to establish their plant in the SIPCOT Industrial

Complex, which as per the NEERI report is within 25 kms. of

four of the twenty one islands in the Gulf of Munnar. On the

other hand, a condition was stipulated in the consent order

that the appellants have to ensure that the location of the

unit is 25 kms. away from ecological sensitive area. It thus

41

Page 42

appears that the TNPCB while granting the consent under

the Water Act for establishment of the plant of the

appellants in the SIPCOT Industrial Complex added the

above requirement without noting that the SIPCOT Industrial

Complex was within 25 kms. from ecological sensitive area.

Since, however, the Consent Order was granted to the

appellant-company to establish its plant in the SIPCOT

Industrial Complex and the plant has in fact been established

in the SIPCOT Industrial Complex, the High Court could not

have come to the conclusion that the appellant-company

had violated the Consent Order and directed closure of the

plant on this ground.

33. This is not to say that in case it becomes necessary for

preservation of ecology of the aforesaid four islands which

form part of the Gulf of Munnar, the plant of the appellants

cannot be directed to be shifted in future. We find from the

affidavit filed on behalf of the State of Tamil Nadu on

29.10.2012 that the Gulf of Munnar consisting of 21 islands

including the aforesaid four islands have been notified under

Section 35(1) of the Wildlife (Protection) Act, 1972 on 10th

42

Page 43

September 1986 and a declaration may also be made under

Section 35(4) of the said Act declaring the Gulf of Munnar as

a Marine National Park. We have, therefore, no doubt that

the Gulf of Munnar is an ecological sensitive area and the

Central Government may in exercise of its powers under

clause (v) of sub-section (1) of Rule 5 of the Environment

(Protection) Rules, 1986 prohibit or restrict the location of

industries and carrying on processes and operations to

preserve the biological diversity of the Gulf of Munnar. As

and when the Central Government issues an order under

Rule 5 of the Environment (Protection) Rules, 1986

prohibiting or restricting the location of industries within and

around the Gulf of Munnar Marine National Park, then

appropriate steps may have to be taken by all concerned for

shifting the industry of the appellants from the SIPCOT

Industrial Complex depending upon the content of the order

or notification issued by the Central Government under the

aforesaid Rule 5 of the Environment (Protection) Rules,

1986, subject to the legal challenge by the industries.

43

Page 44

34. The next question with which we have to deal is

whether the High Court could have directed the closure of

the plant of the appellants on the ground that though

originally the TNPCB stipulated a condition in the ‘No

Objection Certificate’ that the appellant-company has to

develop a green belt of 250 meters width around the battery

limit of the plant, the appellants made representation to the

TNPCB for reducing the width of the green belt and the

TNPCB in its meeting held on 18.08.1994 relaxed this

condition and required the appellants to develop the green

belt with a minimum width of 25 meters. We find on a

reading of the No Objection Certificate issued by the TNPCB

that various conditions have been imposed on the industry

of the appellants to ensure that air pollution control

measures are installed for the control of emission generated

from the plant and that the emission from the plant satisfies

the ambient area quality standards prescribed by the TNPCB

and development of green belt contemplated under the

environmental management plan around the battery limit of

the industry of the appellants was an additional condition

44

Page 45

that was imposed by the TNPCB in the No Objection

Certificate. If the TNPCB after considering the

representation of the appellants has reduced the width of

the green belt from a minimum of 250 meters to a minimum

of 25 meters around the battery limit of the industry of the

appellants and it is not shown that this power which has

been exercised was vitiated by procedural breach or

irrationality, the High Court in exercise of its powers of

judicial review could not have interfered with the exercise of

such power by the State Pollution Control Board. The High

Court in the impugned judgment has not recorded any

finding that there has been any breach of the mandatory

provisions of the Air Act or the Rules thereunder by the

TNPCB by reducing the green belt to 25 meters. Nor has

the High Court recorded any finding that by reducing the

width of the green belt around the battery limit of the

industry of the appellants from 250 meters to 25 meters, it

will not be possible to mitigate the effects of fugitive

emissions from the plant. The High Court has merely held

that the TNPCB should not have taken such a generous

45

Page 46

attitude and should not have in a casual way dealt with the

issue permitting the appellant-company to reduce the green

belt particularly when there have been ugly repercussions in

the area on account of the incidents which took place on

05.07.1997 onwards. It was for the TNPCB to take the

decision in that behalf and considering that the appellant’s

plant was within a pre-existing industrial estate, the

appellant could not have been singled out to require such a

huge green belt.

35. This takes us to the argument of Mr. Prakash that had

the Ministry of Environment and Forests, Government of

India, applied its mind fully before granting the environment

clearance and had the TNPCB applied its mind fully to the

consents under the Air Act and the Water Act and considered

all possible environmental repercussions that the plant

proposed to be set up by the appellants would have, the

environmental problems now created by the plant of the

appellants would have been prevented. As we have already

held, it is for the administrative and statutory authorities

empowered under the law to consider and grant

46

Page 47

environmental clearance and the consents to the appellants

for setting up the plant and where no ground for interference

with the decisions of the authorities on well recognized

principles of judicial review is made out, the High Court could

not interfere with the decisions of the authorities to grant

the environmental clearance or the consents on the ground

that had the authorities made a proper environmental

assessment of the plant, the adverse environmental effects

of the industry could have been prevented. If, however,

after the environmental clearance under the Environment

(Protection) Act, 1986, and the Rules and the notifications

issued thereunder and after the consents granted under the

Air Act and the Water Act, the industry continues to pollute

the environment so as to effect the fundamental right to life

under Article 21 of the Constitution, the High Court could still

direct the closure of the industry by virtue of its powers

under Article 21 of the Constitution if it came to the

conclusion that there were no other remedial measures to

ensure that the industry maintains the standards of emission

and effluent as laid down by law for safe environment (see

47

Page 48

M.C. Mehta v. Union of India and others [(1987) 4 SCC 463]

in which this Court directed closure of tanneries polluting the

waters of Ganga river).

36. We have, therefore, to examine whether there were

materials before the High Court to show that the plant of the

appellants did not maintain the standards of emission and

effluent as laid down by the TNPCB and whether there were

no remedial measures other than the closure of the industry

of the appellants to protect the environment. We find on a

reading of the impugned judgment of the High Court that it

has relied on the report of NEERI of 2005 to hold that the

plant site itself is severely polluted and the ground samples

level of arsenic justified classifying the whole site of the

plant of the appellant as hazardous waste. We extract

hereinbelow the relevant observations of NEERI in its report

of 2005 relating to air, water and soil environment in the

Executive Summary:

“Air Environment:

 The emission factors of SO2 from sulphuric acid plant – I (SAP-I) and sulphuric acid plant – II

48

Page 49

(SAP-II) were 0.55 kg/MT of H2SO4 manufactured which is well within the TNPCB stipulated limit of 2kg/MT of H2SO4 manufactured.

 The acid mist concentration of SAP-I was 85 mg/Nm3, which exceeds the TNPCB limit of 50 mg/Nm3. The acid mist concentration from SAP-II was 42 mg/Nm3, which is well within the TNPCB limit. In view of the exceedance of TNPCB limit for acid mist, it is recommended that the performance of acid mist eliminators may be intermittently checked. It is further recommended to install a tail gas treatment plant to take care of occasional upsets.

 Out of the seven D.G. sets, one (6.3 MW) was monitored for particulate matter (PM) emissions. The level of PM was 115 mg/Nm3 (0.84 gm/kWh) which is within the TNPCB stipulated limit of 150 mg/Nm3 for thermal power plants of 200 MW and higher capacity (165 mg/Nm3) but higher than that stipulated for diesel engines / Gen sets up to 800 KW capacity (0.3 gm/kWh). Therefore TNPCB may decide whether the present PM emissions from the DG sets of 6.3 MW capacity is within the limit or otherwise.

 The fugitive emissions were monitored at four sites to assess the status of air quality with respect of SO2, NO2 and SPM. The results of analysis at all fugitive emission monitoring sites indicate that the levels of gaseous pollutants SO2 and NO2, were below the respective NIOSH/OSHA standards for work place environment. The levels of SPM were also within the stipulated TNPCB standards for industrial areas.

49

Page 50

 Impact of stack and fugitive emissions on surrounding air quality was also assessed by monitoring SO2, NO2 and SPM levels at five monitoring locations. The levels of SPM, SO2 and NO2 at all the five sites were far below the TNPCB standards of 120 μg/Nm3 for SO2 as well as NO2 and 500 μg/Nm3 for SPM for industrial zone. Water Environment

 Surface water samples were collected and analyzed for physico-chemical, nutrient demand parameters. The physico-chemical characteristics and nutrient demand parameters, i.e. with special reference to pH (7.9-8.0), TDS (120-160 mg/L), COD (11-18 mg/L) and levels of heavy metals viz. Cd, Cr, Cu, Pb, Fe, Mn, Zn and As in surface water, were found within the prescribed limits of drinking water standards (IS: 10500-1995).

 Total eight groundwater samples were collected (seven from hand pumps and one from dug well) to assess the groundwater quality in the study area. The analysis on physico-chemical characteristics of groundwater samples collected from various locations showed high mineral contents in terms of dissolved solids (395-3020mg/L), alkalinity (63-210 mg/L), total hardness (225- 2434 mg/L), chloride (109-950 mg/L), sulphate (29-1124 mg/L) and sodium (57-677 mg/L) as compared to the drinking water standards (IS:10500-1995). Thus, it could be concluded that water in some of the wells investigated is unfit for drinking. The concentrations of nutrient demand parameters revealed that phosphate was in the range 0.1-0.3 mg/L while nitrate was in the range 1-7.5 mg/L at all

50

Page 51

sampling locations which is within the limits stipulated under drinking water standards (IS:10500-1995). Levels of Chromium, Copper and lead were found to be higher in comparison to the parameters stipulated under drinking water standards (IS:10500- 1995), other heady metal concentrations, viz. iron, manganese, zinc and arsenic were found in the range 0.01-0.05 mg/L, ND-0.01 mg/L and ND-0.08 mg/L respectively which are within the drinking water standards (IS:10500- 1995).

 To assess the impact on groundwater quality due to secured and fill sites and other waste disposal facilities, five samples were collected from monitoring wells (shallow bore wells located around the waste disposal sites). The Physico-Chemical characteristics of well water around secured land fill site and gypsum pond showed mineral contents higher then the levels stipulated in IS: 10500-1995 in terms of dissolved solids (400-3245 mg/L), alkalinity (57-137 mg/L), hardness (290-1280 mg/L), chloride (46-1390 mg/L), sulphate (177-649 mg/L) and sodium (9-271 mg/L). The results of nutrient demand parameters showed phosphate in the range 0.1-0.5 mg/L while nitrate was in the range 0.8-11.7 mg/L at all sampling locations, which are within the levels stipulated in IS:10500-1995, whereas level of arsenic was found in the range of ND-0.08 mg/L as against the stipulated limit of 0.05 mg/L under drinking water standards (IS:10500-1995). Levels of cadmium, chromium, copper and lead were also found to exceed the drinking water standards in some of the wells.

51

Page 52

 The hourly composite wastewater samples were collected at six locations. During the sample collection, flow monitoring was also carried out at the inlet and final outlet of the effluent treatment plant (ETP). The concentrations of total dissolved solid (TDS) and sulphate exceed the limit stipulated by the TNPCB for treated effluent. All the other parameters are within the consent conditions prescribed by TNPCB. The treated effluent is being recycled back in the process to achieve zero discharge.

Soil Environment

 Soil samples were also analyzed for level of heavy metals. The soil samples at the plant site showed presence of As (132.5 to 163.0 mg/kg), Cu (8.6 to 163.5 mg/kg), Mn (283 to 521.0 mg/kg) and Fe (929.6 to 1764.6 mg/kg). Though there is no prescribed limit for heavy metal contents in soil, the occurrence of these heavy metals in the soil may be attributed to fugitive emission, solid waste dumps, etc.”

It will be clear from the extracts from the Executive

Summary of NEERI in its report of 2005, that while some of

the emissions from the plant of the appellants were within

the limits stipulated by the TNPCB, some of the emissions

did not conform to the standards stipulated by TNPCB. It will

also be clear from the extracts from the Executive Summary

52

Page 53

relating to water environment that the surface water

samples were found to be within the prescribed limits of

drinking water (IS:10500-1995) whereas ground water

samples showed high mineral contents in terms of dissolved

solids as compared to the drinking water standards, but

concentrations of nutrient demand parameters revealed that

the phosphate and nitrate contents were within the limits

stipulated under drinking water standards and levels of

chromium, copper and lead were found to be higher in

comparison to the parameters stipulated under drinking

water standards, whereas the heavy metal concentrations,

namely, iron, manganese, zinc and arsenic were within the

drinking water standards. Soil samples also revealed heavy

metals. Regarding the solid waste out of slag in the plant

site, the CPCB has taken a view in its communication dated

17.11.2003 to TNPCB that the slag is non-hazardous. Thus,

the NEERI report of 2005 did show that the emission and

effluent discharge affected the environment but the report

read as whole does not warrant a conclusion that the plant

of the appellants could not possibly take remedial steps to

53

Page 54

improve the environment and that the only remedy to

protect the environment was to direct closure of the plant of

the appellants.

37. In fact, this Court passed orders on 25.02.2011

directing a joint inspection by NEERI (National Engineering

and Research Institute) with the officials of the Central

Pollution Control Board (for short ‘the CPCB’) as well as the

TNPCB. Accordingly, an inspection was carried out during 6th

April to 8th April, 2011 and 19th April to 22nd April, 2011 and a

report was submitted by NEERI to this Court. On

18.07.2011, this Court directed the Tamil Nadu Government

and the TNPCB to submit their comments with reference to

the NEERI report. On 25.08.2011, this Court directed TNPCB

to file a synopsis specifying the deficiencies with reference

to the NEERI report and suggest control measures that

should be taken by the appellants so that this Court can

consider the direction to be issued for remedial measures

which can be monitored by the TNPCB. Accordingly, the

TNPCB filed an affidavit dated 30.08.2011 along with the

chart of deficiencies and measures to be implemented by

54

Page 55

the appellants and on 11.10.2011, this Court directed the

TNPCB to issue directions, in exercise of its powers under the

Air Act and the Water Act to the appellants to carry out the

measures and remove the deficiencies indicated in the chart.

Pursuant to the order dated 11.10.2011, the TNPCB issued

directions to the appellants and on 17.01.2012, the

appellants claimed before the Court that they have removed

the deficiencies pointed out by the TNPCB and on

27.08.2012, this Court directed that a joint inspection be

carried out by TNPCB and CPCB and completed by 14th

September, 2012 and a joint report be submitted to this

Court.

38. The conclusion in the joint inspection report of CPCB and

TNPCB is extracted hereinbelow:

“Out of the 30 Directions issued by the Tamil Nadu Pollution Control Board, the industry has complied with 29 Directions. The remaining Direction No.1(3) under the Air Act on installation of bag filter to converter is at the final stage of erection, which will require further 15 working days to fully comply as per the industry’s revised schedule.”

55

Page 56

From the aforesaid conclusion of the joint inspection report,

it is clear that out of the 30 directions issued by the TNPCB,

the appellant-company has complied with 29 directions and

only one more direction under the Air Act was to be complied

with. As the deficiencies in the plant of the appellants which

affected the environment as pointed out by NEERI have now

been removed, the impugned order of the High Court

directing closure of the plant of the appellants is liable to be

set aside.

39. We may now consider the contention on behalf of the

interveners that the appellants were liable to pay

compensation for the damage caused by the plant to the

environment. The NEERI reports of 1998, 1999, 2003 and

2005 show that the plant of the appellant did pollute the

environment through emissions which did not conform to the

standards laid down by the TNPCB under the Air Act and

through discharge of effluent which did not conform to the

standards laid down by the TNPCB under the Water Act. As

pointed out by Mr. V. Gopalsamy and Mr. Prakash, on

account of some of these deficiencies, TNPCB also did not

56

Page 57

renew the consent to operate for some periods and yet the

appellants continued to operate its plant without such

renewal. This is evident from the following extracts from the

NEERI report of 2011:

“Further, renewal of the Consent to Operate was issued vide the following Proceedings Nos. and validity period:

TNPCB Proceeding Validity Upto

No.T7/TNPCB/F.22276/RL/TTN/W/2007 dated 07.05.2007 No.T7/TNPCB/F.22276/RL/TTN/A/2006 dated 07.05.2007

30-09-2007

No.T7/TNPCB/F.22276/URL/TTN/W/20 08 dated 19.01.2009 No.T7/TNPCB/F.22276/URL/TTN/A/200 8 dated 19.01.2009

31-03-2009

No.T7/TNPCB/F.22276/URL/TTN/W/20 09 dated 14.08.2009 No.T7/TNPCB/F.22276/URL/TTN/A/200 9 dated 14.08.2009

31-12-2009

Thereafter, the TNPCB did not renew the Consents due to non-compliance of the following conditions:

Under Water Act, 1974

i. The unit shall take expedite action to achieve the time bound target for disposal of slag, submitted to the Board, including BIS clearance before arriving at disposal to cement industries, marine impact study before arriving at disposal for landfill in abandoned quarries.

57

Page 58

ii. The unit shall take expedite action to dispose the entire stock of the solid waste of gypsum.

Under Air Act, 1981

i. The unit shall improve the fugitive control measure to ensure that no secondary fugitive emission is discharged at any stage, including at the points of material handing and vehicle movement area.”

For such damages caused to the environment from 1997 to

2012 and for operating the plant without a valid renewal for

a fairly long period, the appellant-company obviously is

liable to compensate by paying damages. In M.C. Mehta and

Another vs. Union of India and Others [(1987) 1 SCC 395], a

Constitution Bench of this Court held:

“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

58

Page 59

the harm occurred without any negligence on its part.”

The Constitution Bench in the aforesaid case further

observed that the quantum of compensation must be co-

related to the magnitude and capacity of the enterprise

because such compensation must have a deterrent effect

and the larger and more prosperous the enterprise, the

greater must be the amount of compensation payable by it.

In the Annual Report 2011 of the appellant-company, at

pages 20 and 21, the performance of its copper project is

given. We extract hereinbelow the paragraph titled Financial

Performance:

“PBDIT for the financial year 2010-11 was Rs.1,043 Crore, 40% higher than the PBDIT of Rs.744 Crore for the financial year 2009-10. This was primarily due to higher LME prices and lower unit costs at Copper India and with the improved by-product realization.”

Considering the magnitude, capacity and prosperity of the

appellant-company, we are of the view that the appellant-

company should be held liable for a compensation of Rs. 100

crores for having polluted the environment in the vicinity of

59

Page 60

its plant and for having operated the plant without a renewal

of the consents by the TNPCB for a fairly long period and

according to us, any less amount, would not have the

desired deterrent effect on the appellant-company. The

aforesaid amount will be deposited with the Collector of

Thoothukudi District, who will invest it in a Fixed Deposit

with a Nationalized Bank for a period of five years. The

interest therefrom will be spent for improving the

environment, including water and soil, of the vicinity of the

plant after consultation with TNPCB and approval of the

Secretary, Environment, Government of Tamil Nadu.

40. We now come to the submission of Mr. Prakash that we

should not grant relief to the appellants because of

misrepresentation and suppression of material facts made in

the special leave petition that the appellants have always

been running their plant with statutory consents and

approvals and misrepresentation and suppression of

material facts made in the special leave petition that the

plant was closed at the time the special leave petition was

moved and a stay order was obtained from this Court on

60

Page 61

01.10.2010. There is no doubt that there has been

misrepresentation and suppression of material facts made in

the special leave petition but to decline relief to the

appellants in this case would mean closure of the plant of

the appellants. The plant of the appellants contributes

substantially to the copper production in India and copper is

used in defence, electricity, automobile, construction and

infrastructure etc. The plant of the appellants has about

1300 employees and it also provides employment to large

number of people through contractors. A number of

ancillary industries are also dependent on the plant.

Through its various transactions, the plant generates a huge

revenue to Central and State Governments in terms of

excise, custom duties, income tax and VAT. It also

contributes to 10% of the total cargo volume of Tuticorin

port. For these considerations of public interest, we do not

think it will be a proper exercise of our discretion under

Article 136 of the Constitution to refuse relief on the grounds

of misrepresentation and suppression of material facts in the

special leave petition.

61

Page 62

41. Before we part with this case, we would like to put on

record our appreciation for the writ petitioners before the

High Court and the intervener before this Court for having

taken up the cause of the environment both before the High

Court and this Court and for having assisted this Court on all

dates of hearing with utmost sincerity and hard work. In

Indian Council for Enviro-Legal Action and Others vs. Union

of India and Others [(1996) 3 SCC 211], this Court observed

that voluntary bodies deserve encouragement wherever

their actions are found to be in furtherance of public interest.

Very few would venture to litigate for the cause of

environment, particularly against the mighty and the

resourceful, but the writ petitioners before the High Court

and the intervener before this Court not only ventured but

also put in their best for the cause of the general public.

42. In the result, the appeals are allowed and the impugned

common judgment of the High Court is set aside. The

appellants, however, are directed to deposit within three

62

Page 63

months from today a compensation of Rs.100 crores with the

Collector of Thoothukudi District, which will be kept in a fixed

deposit in a Nationalized Bank for a minimum of five years,

renewable as and when it expires, and the interest

therefrom will be spent on suitable measures for

improvement of the environment, including water and soil, of

the vicinity of the plant of the appellants after consultation

with TNPCB and approval of the Secretary, Environment,

Government of Tamil Nadu. In case the Collector of

Thoothukudi District, after consultation with TNPCB, finds the

interest amount inadequate, he may also utilize the principal

amount or part thereof for the aforesaid purpose after

approval from the Secretary, Environment, Government of

Tamil Nadu. By this judgment, we have only set aside the

directions of the High Court in the impugned common

judgment and we make it clear that this judgment will not

stand in the way of the TNPCB issuing directions to the

appellant-company, including a direction for closure of the

plant, for the protection of environment in accordance with

law.

63

Page 64

43. We also make it clear that the award of damages

of Rs. 100 Crores by this judgment against the appellant-

Company for the period from 1997 to 2012 will not stand in

the way of any claim for damages for the aforesaid period or

any other period in a civil court or any other forum in

accordance with law.

.……………………….J. (A. K. Patnaik)

………………………..J. (H. L. Gokhale) New Delhi, April 2, 2013.

64