📖 Vellore Citizens' Welfare Forum v. Union of India, (1996) 5 SCC 647

Facts Tanneries and other industries in the State of Tamil Nadu were discharging untreated effluent into agricultural fields, roadsides, waterways and open lands. The effluent had ultimately reached the Palar river, the main source of water supply to the residents of the area. Large tracts of agricultural land had become unfit for cultivation and the drinking water had been polluted. A public interest petition was brought on behalf of the affected residents.

Held The Court issued comprehensive directions, including the closure of tanneries that failed to install effluent treatment plants, the levy of pollution fine, and the constitution of an authority to assess the loss and to award compensation.

Ratio The precautionary principle and the polluter pays principle are part of the environmental law of the country. They are accepted as part of customary international law and, there being no inconsistency with municipal law, may be incorporated into it. They flow in any event from Articles 21, 47, 48A and 51A(g) of the Constitution and from the Water Act, 1974, the Air Act, 1981 and the Environment (Protection) Act, 1986. Sustainable development is accepted as a balancing concept between ecology and development. The polluter pays principle means that the absolute liability for harm to the environment extends not only to compensating the victims but also to the cost of restoring the environmental degradation.

📖 Indian Council for Enviro Legal Action v. Union of India, (1996) 3 SCC 212

Facts A group of chemical units at Bichhri village in Rajasthan produced H acid and other chemicals. They discharged highly toxic untreated effluent, and dumped sludge in the open. The effluent percolated into the earth, polluting the aquifer and the wells, turning the water dark and unfit for use, and rendering the soil unfit for cultivation over a wide area. The units had no clearances and operated in defiance of orders.

Held The units were absolutely liable. They were directed to bear the whole cost of removing the sludge and remedying the damage to the soil and the water, and the Central Government was directed to determine and recover the amount.

Ratio The rule in M.C. Mehta v. Union of India applies: an enterprise engaged in a hazardous or inherently dangerous activity is absolutely liable for the harm resulting from it. Under the polluter pays principle, the polluter is liable to pay the cost of reversing the damage caused to the environment, and that liability is not limited to compensating the individuals affected. The principle is that the financial costs of preventing or remedying damage caused by pollution lie with the undertakings that cause it, and not with the public at large.

📖 A.P. Pollution Control Board v. Prof. M.V. Nayudu (Retd.), (1999) 2 SCC 718, decided 27 January 1999

Facts An industry proposing to manufacture vegetable oils, classified as hazardous, sought permission to establish itself within the catchment area of two reservoirs supplying drinking water to the cities of Hyderabad and Secunderabad. The Pollution Control Board refused consent. An appellate authority reversed the refusal, and the matter came to the Supreme Court.

Held The Court set aside the permission and directed a reference to the National Environmental Appellate Authority for a technical opinion before the matter was decided.

Ratio The precautionary principle requires that where there is a threat of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing measures to prevent environmental degradation. It involves a shifting of the burden of proof onto the developer or industrialist, who must show that his action is environmentally benign. Environmental concerns are of a technical character, and the uncertainty of scientific proof and its changing frontiers require decision making bodies that combine judicial and technical expertise, since the ordinary judicial process is not equipped to resolve such questions alone.

📖 M.C. Mehta v. Kamal Nath, (1997) 1 SCC 388

Facts A motel on the bank of the river Beas in Himachal Pradesh had been granted a lease of forest land adjoining its premises. It had encroached on further land, and had used bulldozers and earth movers to alter the course of the river in order to protect itself from flooding. A newspaper article about the matter was treated as a petition.

Held The lease was quashed. The motel was directed to restore the area to its original condition, to pay the cost of restitution, and to show cause why pollution fine should not be imposed.

Ratio The public trust doctrine is part of the law of India. Certain common properties, such as rivers, the seashore, forests and the air, are held by the Government in trusteeship for the free and unimpeded use of the general public. Resources of that character have such importance to people as a whole that it would be wholly unjustified to make them a subject of private ownership. The State as trustee is under a legal duty to protect them, and cannot transfer them to private ownership or commercial use. The doctrine imposes on the State an affirmative duty of supervision, and a lease granted in breach of it is liable to be set aside.

The head

What it covers

Compensation to the individual victims

For death, injury, loss of livelihood, loss of crops and cattle, damage to buildings and wells, and the cost of alternative water supply

The cost of remediation

Removal of contaminated soil and sludge, treatment or replacement of groundwater, restoration of watercourses, and replanting. This is the head that distinguishes environmental liability from ordinary tort damages

Pollution fine

Levied in addition, as a deterrent, and distinct from compensation

The cost of monitoring and of the authority

Frequently placed on the polluter as part of the polluter pays principle

Interest and time bound payment

Awards are ordinarily made payable within a fixed period, with interest on default

Sections 3 and 4, Public Liability Insurance Act, 1991

Section 3(1): where death or injury to any person, other than a workman, or damage to any property has resulted from an accident, the owner shall be liable to give such relief as is specified in the Schedule for such death, injury or damage.

Section 3(2): in any claim for relief under sub section (1), the claimant shall not be required to plead and establish that the death, injury or damage in respect of which the claim has been made was due to any wrongful act, neglect or default of any person.

Section 4: every owner shall take out, before he starts handling any hazardous substance, one or more insurance policies providing for contracts of insurance whereby he is insured against liability to give relief under section 3, and shall renew them from time to time so that the policies are in force throughout the period during which the substance is handled.

⚠ Why environmental compensation is framed as restoration

In an ordinary tort case the object of damages is to put the plaintiff, so far as money can, in the position he would have been in had the wrong not occurred. Applied to a polluted village that object is only half the story, and the smaller half. Compensating the families for their lost crops and their ruined wells leaves the aquifer poisoned and the soil dead, and the next generation inherits both. The polluter pays principle, as the Supreme Court has applied it, answers that by making the cost of reversing the damage part of the liability, whether or not any individual has claimed it and whether or not any individual could. That is why the leading environmental awards are directed at removing sludge, treating groundwater and replanting rather than merely at paying the villagers, and why the National Green Tribunal Act expressly empowers the Tribunal to order restitution of the environment of the affected area as a head of relief in its own right.