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2004 (5) TMI 612

..... tition was filed before the High Court in public interest alleging large scale pollution caused by industries located in the Gujarat Industrial Development Corporation (GIDC) Industrial Estate at Nandesari. It is alleged that effluents discharged by the said industries into the effluent treatment project had exceeded certain parameters fixed by the Gujarat Pollution Control Board (GPCB) thereby causing damage to the environment. Some of the industries have set up their own effluent treatment plants in their factory premises, while some of them have not. The High Court, by an order made on 17.4.1995, directed that the chemical industries in Nandesari should be made parties to the proceedings thereby 252 industrial units located in the Nandes .....

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..... carry on their activities, called for turnover figures and profitability data. On 9.5.1997 the High Court passed an order directing the industries to pay 1% of the maximum annual turnover of any of the preceding three years towards compensation and betterment of environment within a stipulated time. It is against this order that the appellants are before us. The High Court in its impugned order followed a decision of the High Court of Gujarat in Pravinbhai Jashbhai Patel & Anr. Vs. State of Gujarat & Ors., 36 Guj. Law Reports1210, wherein it was noticed that the industrial units though aware of the requirements of law had not complied with the same nor did they meet the GPCB parameters and they were irresponsible in not wanting or c .....

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..... appellants that a court has no power to either impose penalty or fine or make any levy for general betterment unless the statute authorized the same; that, however, in awarding damages it is permissible to make the same exemplary or penal; that award of damages is way of restitution for the damage caused to victims and for restoration or restitution and for restoration of ecology by way of punishment; that, unless a finding is given by the High Court that there had been degradation of environment, question of restitution or awarding damages could not arise; that there is no finding of degradation of environment and, therefore, it is not open to the High Court to impose 1% of the turnover by way of damages. The appellants relied upon a decis .....

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..... whether he took reasonable care while carrying on his activity; consequently, the polluting industries are absolutely liable to compensate for the harm caused by them to villagers in the affected areas, to the soil and to the underground water and hence, they are bound to take all necessary measures to remove sludge and other pollutants lying in the affected areas; that the 'polluter pays principle' as interpreted by this Court means that the absolute liability for harm to the environment extends not only to compensate the victims of pollution but also the cost of restoring the environmental degradation; that remediation of the damaged environment is part of the process of sustainable development and as such the polluter is liable .....

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..... ing with the norms prescribed by GPCB and High Court, in fact, noticed that a number of units have voluntarily agreed to pay 1% of the turnover of a year out of the last three years and there was consensus between all the industries and for betterment of environment, they voluntarily stated before the Court that 1% shall be paid; that one may say that even some of the units having no treatment plant or having inadequate facilities appeared before the High Court stating that they would voluntarily stop manufacturing till installation of proper treatment plant and were in a position to discharge trade effluent meeting with GPCB norms. Thus, in these cases, the High Court restrained firstly several industries from removing their products from .....

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..... ge as a result of violation of prescribed norms. He also adverted to various decisions of this Court in M.C. Mehta vs. Union of India, 1987 (1) SCC 395, to support the proposition that the measure of compensation must be co-related to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect and such damage not only extends to restitution for the harm to the environment to compensate the victims of the pollution but also cost of restoring the environment by degradation. This Court reiterated the principle of "polluter to pay" to the effect that one of the principles is to levy damages of a certain percentage of total turnover and the right to a clean and hazardless environment has been rec .....

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..... units by their activities in not observing the norms prescribed by the GPCB as reported by the Modi Committee appointed by the High Court or by an expert body like NEERI and that exercise need not be undertaken by the High Court as if the present proceeding is an action in tort but an action in public law. A broad conclusion in this regard by the High Court would be sufficient. We, therefore, direct the High Court to re-examine this aspect of the matter as to whether 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 1% of the turnover itself wo .....

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