A.P. Pollution Control Board II v. Prof. M.V. Nayudu and Ors

Appeal (civil) 368-371 of 1999
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Respondent industry sought to establish a new factory in the State of Andhra Pradesh to produce vegetable oils. The industry purchased land in Peddashpur village, within 10KM of two reservoirs that provided drinking water for 5 million people.

In 1988, the Ministry of Forests and Environment established a “red” list of hazardous industries, including industry which produces “vegetable oils including solvent extracted oils.” This Notification was issued by the Central Government based on its powers under the Water Prevention and Control of Pollution Act of 1974 (“Water Act”), the Air Prevention and Control of Pollution Act of 1981 (“Air Act”), the Water Prevention and Control of Pollution Act of 1977, and the Environment Protection Act of 1986 (“Environment Act”). Under these statutes, the Central Government directed that when the Pollution Control Board (“PCB”) processed No Objection Certificate (“NOC”) applications, it should determine which category (such as the “red” category) the industry belonged to, keeping in mind the pollution-causing potential of the industry.

In 1994, under the directive of the Central government, the State of Andhra Pradesh issued notification GO 192, which prohibited industries from being located within 10 KM of reservoirs (“10 KM rule”).

In 1995, respondent applied for NOC from the State of Andhra Pradesh Pollution Control Board (“Board”). The State notified the Central Government that it wanted to extend an exemption to the 10 KM rule to respondent, which was accepted on the condition that the industry obtain an NOC from the environmental authority of the State. The government then reaffirmed the 10 KM rule in March 1996. The Board subsequently rejected the application because of the 10 KM rule.

Even after their application was rejected, respondent obtained permission for establishing a factory. At that point, the Commission of Industries informed the respondent that it should select an alternative site, but respondent proceeded to obtain permission to change the land use from agricultural to non-agricultural use, executed various civil works, and installed machinery.

Respondent then, once again, applied for an NOC from the Board. In its application, respondent noted that its by-products would include “glycerine, spent bleaching earth and carbon and spent nickel catalysts,” which the Board noted could find their way to lakes either directly or indirectly. The Board thus, again, rejected respondent’s application, noting that it was an industry included in the “red” list.

Respondent then requested an exemption from the 10 KM rule from the State Government because it had already invested a large amount in its operations. The State Government granted the exemption and directed the Board to prescribe precautions to be taken by the respondent to safeguard against pollution. The Board set out a list of precautions because it was required to, but stood firm in rejecting the application for the NOC.

Respondent then filed an appeal with the Appellate Authority under Section 28 of the Water Act, and for the first time provided an affidavit from Dr. Santappa, then a Scientific Officer for a different state Board, in favor of its application. The Appellate Authority allowed the appeal and reversed the orders of the Board, finding that the “Red” list did not apply outside the Doon Valley, and relying on Dr. Santappa’s affidavit, which stated that respondent had used the latest eco-friendly technology. The Appellate Authority also held that under the principle of promissory estoppel, the Board had to grant the NOC because respondent had been granted permission for change of land-use and to erect a factory.

The decision of the Appellate Authority was appealed.

The Court overturned the decision of the Appellate Authority and reinstated the decision of the Board to reject the respondent’s application for an NOC.

The Court sought the opinion of several environmental authorities in order to have the best scientific evidence on the issue at hand. The requested reports were from the National Environmental Appellate Authority (“NEAA”), Dr. Bhowmick of the Bombay University Department of Chemical Technology, and the National Geophysical Research Institute.

The Court first addressed whether it was permissible for the Central Government and the State Government to issue an exemption for an individual hazardous industry within the 10 KM area around a reservoir, even with the requirement that the industry provide safeguards. The Court held that, in light of the Environment Act and the 10 KM rule, which prohibited all industry within said area, the exemption was not appropriate and the NOC could not be granted. The Court reasoned that although Section 3(2)(v) permitted the government to place restrictions specifying where industry could operate only with safeguards, the total prohibition under the 10 KM rule meant that the State Government could not direct the Board to prescribe conditions for the grant of the NOC. It also found that the fundamental objective of the Water Act as to provide clean drinking water to its citizens, and that although Section 19 of the Water Act allowed the State to restrict its application in a particular area, it did not empower the State to gran an exemption to a particular industry in an area where it was totally prohibited. Finally, on this issue, the Court held that granting such an exemption to a particular industry was arbitrary and contrary to the public interest, which constituted a violation of Article 21 of the Constitution (the right to life, which includes the right to clean drinking water).

The Court next considered whether, in light of the reports furnished to the Court, the respondent could claim an exemption from the 10 KM rule and whether such an exemption should have been granted. The Court held that respondent had not met his burden because it had not shown that there would be no danger of pollution to the two reservoirs even if the industry were established within 10 KM of the reservoirs.

The NEAA report found that the industry was hazardous, it had a high pollution potential, and the establishment of any chemical industry carried with it imminent dangers of chemical pollution in the water. Based on this conclusion, and the conclusions of the other reports, the Court found that it could not be said that the two reservoirs would not be endangered. As such, the Court held that the Board could not be directed to suggest safeguards and that there was every likelihood that safeguards could fail either due to accident or human error. Here, the Court relied on the precautionary principle when it stated that it was not willing to rely on the bear assurances of the respondent that care would be taken, because millions of people relied on the reservoirs for drinking water. The Court opined that it would be impossible for the Government to track whether the pollutants were leaking.

Next, the Court held that promissory estoppel did not apply in this case. The Court noted that Section 25 of the Water Act required a person to get consent from the Board before taking any steps to establish industry. Therefore, respondent should not have sought permission for the building or the land change and it should not have proceeded with its civil works and machinery installation because it did not have the consent of the Board. The Court held that because the conduct of the respondent was contrary to the Act, the respondent could not seek an NOC after violating the policy decision of the government.

The Court then recommended that the Law Commission of the Parliament review the environmental laws and the need for creating Environmental Courts.

Finally, the Court ordered the State of Andhra Pradesh to identify industries located within the 10 KM radius of the reservoirs, if any, and take action in consultation with the Board to prevent pollution to the drinking water supply. The State was also ordered to submit a report within four months regarding the pollution or pollution potentials of the industries, if any existed, in that area. The Court reasoned that the Environment Act, the Water Act and Air Act provisions were applicable not only to new industries proposed for establishment, but also to existing industries.

“Exercise of such a power in favour of a particular industry must be treated as arbitrary and contrary to public interest and in violation of the right to clean water under Article 21 of the Constitution of India.” Page 22.

“In fact exemption granted even to a single major hazardous industry may itself be sufficient to make the water in the reservoirs totally unsafe for drinking purposes. Government could not pass such orders of exemption having dangerous potential, unmindful of the fate of lakhs of citizens of the twin cities to whom drinking water is supplied from these lakes. Such an order of exemption passed, ignoring the ‘precautionary principle,’ could be catastrophic.” Page 22.

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