LexDEEPAK NITRITE LTD. versus STATE OF GUJARAT AND ORS.
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... • DEEPAK NITRITE LTD. A V. ST ATE OF GUJARAT AND ORS. MAY 5, 2004 [S. RAJENDRA BABU, CJ. AND G.P. MATHUR, J.] B Environment Protection: Environment Protection Act, 1986: Section 3. Pollution Control- "Polluter-to-pay principle-Applicability of- C Held. Damages/compensation could only be awarded if it was proved that 1he damage to the environment was caused by the industrial unit or the person concerned-However, to say that mere violation of the law in not observing the norms ll"OU!d result in degradation of environment would not be correct-Since there was no such finding, High Court directed to further D investigate each of the cases-However, such investigation should not be as if it were in tort but an action in public law-A broad conclusion in this regard by the High Court would be sufficient. Pollution Control- "Polluter-to-pay principle-Compensation- Quantum of-Held: Compensation to be awarded must have some broad E correlation not only with the magnitude and capacity of the enterprise but also with the harm caused by it-May be, in a given case the percentage of the turnover itself may be a proper measure because the method to be adopted in awarding damages on the basis of 'polluter-to-pay' principle has got to be practical, simple and easy in application-Doctrine- F Polluter to pay principle. A writ petition was filed before the High Court in public interest alleging large-scale pollution caused by industries located in the Gujarat Industrial Development Corporation Industrial Estate. It was alleged that effluents discharged by the said industries into the effluent treatment project had exceeded certain parameters fixed by the Gujarat Pollution Control Board . The High Court passed an order directing the industries to pay G I 'Yo of the maximum annual turnover of any of the preceding three H 49 50 SUPREME COURT REPORTS (2004] SUPP. 2 S.C.R. A years towards compensation and betterment of environment within a stipulated time. Hence the appeals. Disposing of the appeals, the Court B HELD: I. The fact that the industrial units in question have not conformed to the standards prescribed by the Gujarat Pollution Control Board (GPCB) cannot be seriously disputed in these cases. But the question is whether that circumstance by itself can lead to the conclusion that such lapse has caused damage to the environment. No C finding is given on that aspect which is necessary to be ascertained because compensation to be awarded must have some broad correlation not only with the magnitude and capacity of the enterprise but also with the harm caused by it. Maybe, in a given case the percentage of the turnover itself maybe a proper measure because the method to be adopted in awarding damages on the basis of'polluter-to-pay' principle D has got to be practical, simple and easy in application. The appellants also do not contest the legal position that if there is a finding that there has been degradation of environment or any damage caused to any of the victims by the activities of the industrial units certainly damages have to be paid. However, to say that mere violation of the law in not E observing the norms would result in degradation of the environment would not be correct. [56-C-D] 2. The High Court is directed to further investigate in each of these cases and find out broadly whether there has been any damage F caused by any of the industrial units by their activities in not observing the norms prescribed by the GPCB and that exercise need not be undertaken by the High Court as if the present proceeding were an action in tort but an action in public law. A broad conclusion in this regard by the High Court would be sufficient. The High Court is, therefore, directed to reexamine this aspect of the matter as to whether G there is degradation of environment and as a result thereof any damage is caused to any victim, and what norms should be adopted in the matter of awarding compensation in that regard. In this process it is open to the High Court to consider whether I% of the turnover itself would be an appropriate formula or not as applicable to the present H cases. [56-F-H; 57-AI • ) DEEPAK NITRITE LTD. v. STATE [RAJENDRA BABU, CJ.] 51 > CIVIL APPELLATE JURISDICTION : Civil Appeal No. 1521 of A 2001. From the Judgment and Order dated 26.3.97 and 9.5.97 of the Gujarat High Court in C. Appln. No. 322/97 with C. Appln. Nos. 2108 and 2949/ 97 in S
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