M.C. MEHTA versus KAMAL NATH AND ORS.

Citation: [2002] 2 S.C.R. 477 · Decided: 15-03-2002 · Supreme Court of India · Bench: M.B. SHAH · Disposal: Disposed off

Judgment (excerpt)

l 
M.C. MEHTA 
A 
v. 
KAMAL NATH AND ORS. 
MARCH 15, 2002 
[M.B. SHAH AND DORAISWAMY RAJU, JJ.] 
B 
Environmental Law : 
Exemplary damages-Imposition of-Polluter Company-Held guilty of 
endangering environment-Undertaking by Company to bear a fair share of C 
the project cost of ecological restoration-Held, Company liable to pay 
exemplary damages-Quantified at Rs. I 0 lakhs. 
Exemplary damages-Imposition-Purpose of-Held, is not only to 
·punish the individual concerned, but also to serve as a deterrent to others. D 
This Court in MC. Mehta v. Kamal Nath, [1997] l SCC 388 (main case) 
had enumerated various activities of Span Motels Private Limited (SMPL) 
to be illegal which constituted interference with the natural flow of river Beas 
resulting in degradation of environment, and ordered SMPL to pay 
compensation for restitution of the environment and ecology and issued notice 
as to why pollution fine be not levied on it, in addition. 
E 
SMPL challenged the legality of proposed levy of fine on the ground 
that it could not be punished with fine without trial before competent Court 
and unless that court found it guilty. This Court accepting the plea ofSMPL 
withdrew the notice for levy of fine but issued fresh notice for payment of 
exemplary damages in addition to damages. 
F 
Thereafter SMPL contended that they could not be held guilty of having 
committed any illegality and of having interferred with or endangering the 
environment or ecology to warrant exemplary damages; and that it would 
be unjust and harsh to impose any further liability in the form of exemplary 
damages in view of the fact that the Company had undertaken to bear a fair G 
share of the project cost of ecological restoration. 
Quantifying the exemplary damages and leaving the quantum of liability 
of damages to be determined separately, the Court 
HELD : 1.1. The question as to the imposition of exemplary damages H 
477 
478 
SUPREME COURT REPORTS 
[2002] 2 S.C.R. 
A and the liability of Span Motels Pvt. Ltd. (SMPL) has to necessarily depend 
upon the earlier findings of this Court that the Motel by constructing walls 
."'-
J 
and bonds on the river banks and in the river bed had interfered with the 
flow of the river and their liability to pay the damages on the principle of 
"Polluter pays" and also as an inevitable consequence thereof. The basis for 
B 
their liability to be saddled with the exemplary costs has been firmly and 
irreversibly laid down in the main judgment itself and there is no escape for 
SMPL, in this regar;d. The Court has to necessarily proceed further only on 
those facts and position of law, found and declared. It is impermissible to claim 
for a reversal of the findings or any reconsideration of the nature, character 
,... 
and legality or propriety of activities of SMPL. (484-F; 485-B; 484-A-B] 
c 
~ 
1.2. It would be both in public interest as well as in the interest of justice 
to fix the quantum of exemplary damages payable by SMPL at Rupees Ten 
Lakhs only. This amount is fixed keeping in view the undertaking given by 
r 
them to. bear a fair share of the project cost of ecological restoration which 
would be quite separate and apart from their liability for the exemplary 
D damages. The amount of special damages of Ten Lakhs rupees, shall be 
remitted to the State Government in the Department of Irrigation and Public 
Health to the Commissioner/Secretary for being utilized only for the flood 
protection works in the area of Beas river affected by the action of SMPL. 
~ 
~ 
(485-D-E; 485-G) 
E 
2. The rnrious laws in force to prevent, control pollution and protect 
environment and ecology provide for different categories of punishment in 
the nature of imposition of fine as well as or imprisonment or either of them, 
depending upon the nature and extent of violation. Keeping in view all these 
and the very object underlying the imposition of imprisonment and fine under 
>-. 
F 
the relevant laws to be not only to punish the individual concerned but also 
to serve as a d.eterrent to others to desist from indulging in such wrongs which 
are almost similar to the purpose and aim of awarding exemplary damages. 
[485-C-D) 
CIVIL ORIGINAL JURISDICTION : Writ Petition (C) No. 182 of 
G 1996. 
(Under Article 32 of the Constitution of India) 
N.C. Kochhar, V.C. Mahajan, G.L. Sanghi and Rajeev Dutta, M.C. 
) 
Mehta, Vijay Panjwani, Naresh K. Sharma, C.V. Subba Rao, B.V. Balaram 
H Das, N.S. Vashisht, Ms. Geetanjali Mohan

Excerpt shown. Read the full judgment & AI analysis in Lexace.