2004 (5) TMI 612 - SC - Indian Laws

Summary

Issues:
1. Pollution caused by industries in Gujarat Industrial Development Corporation (GIDC) Industrial Estate at Nandesari.
2. High Court's order directing industries to pay compensation for environmental damage.
3. Applicability of 'polluter to pay' principle.
4. Compliance with Gujarat Pollution Control Board (GPCB) norms by industrial units.
5. High Court's authority to impose penalties for environmental betterment.

Analysis:

1. Pollution caused by industries in GIDC Industrial Estate:
The High Court of Gujarat received a petition alleging large-scale pollution by industries in the Nandesari Industrial Estate. Effluents discharged into the effluent treatment project exceeded GPCB parameters, causing environmental damage. The High Court directed 252 industrial units to be parties to the proceedings along with relevant authorities and financial institutions. A Committee and NEERI were appointed to assess pollution levels and treatment facilities. The High Court ordered industries to pay compensation for environmental betterment based on turnover.

2. High Court's order for compensation:
The High Court based its decision on previous judgments recognizing citizens' fundamental right to a pollution-free environment. It ordered industries to pay 1% of their annual turnover for environmental betterment. The appellants challenged this order, arguing that damages should only be awarded for proven environmental degradation. The Court directed the High Court to investigate and determine if environmental damage occurred due to industrial activities, emphasizing the need for a correlation between harm caused and compensation awarded.

3. Applicability of 'polluter to pay' principle:
The principle of 'polluter to pay' was invoked by the High Court to hold industries accountable for environmental damage. The Court emphasized the need for practical and simple methods to enforce environmental norms. It highlighted that damages should be proportional to the harm caused and directed the High Court to re-examine the applicability of the 1% turnover formula for compensation.

4. Compliance with GPCB norms:
The industrial units in question were found to have not complied with GPCB standards, leading to pollution. The Court stressed the importance of adhering to environmental regulations and the liability of polluting industries to compensate for harm caused. The High Court's orders aimed to ensure compliance and environmental betterment through penalties and compensation.

5. High Court's authority for penalties:
The appellants contested the High Court's authority to impose penalties for general betterment without statutory authorization. The Court emphasized the need for a finding of environmental degradation before awarding damages. It directed the High Court to conduct a comprehensive investigation to determine the extent of damage caused by industrial activities and the appropriate compensation measures.

In conclusion, the Supreme Court directed the High Court to reassess the environmental damage caused by industrial units and determine suitable compensation measures based on a correlation between harm and penalties. The judgment emphasized the importance of enforcing environmental norms, holding polluters accountable, and ensuring sustainable development through practical and effective legal mechanisms.