A.P. Pollution Control Board v. Prof. M.V. Nayudu (Retd.)

A company wanted to build a castor-oil-derivatives factory near the Himayat Sagar and Osman Sagar lakes that supply drinking water to Hyderabad and Secunderabad. The Pollution Control Board refused consent, but the appellate authority and the High Court ruled for the company. Rather than decide the licence dispute itself, the Supreme Court explained the precautionary principle and the reversed burden of proof in detail, and referred the scientific questions to an expert appellate authority.

Quick Revision

Parties

A.P. Pollution Control Board — appellant in five of the six appeals; the statutory authority that refused the respondent company's application for consent under the Water Act.

Society for Preservation of Environment & Quality of Life (SPEQL), represented by Sri P. Janardan Reddi — appellant in the sixth appeal; a public interest petitioner whose writ petition against the industry was dismissed by the High Court.

Prof. M.V. Nayudu (Retd.) & Others — respondents; public interest petitioners (along with the Gram Panchayat, Peddaspur) whose writ petitions before the Andhra Pradesh High Court challenged the industry's proposed location.

M/s Surana Oils and Derivatives (India) Ltd. (the respondent company) — the company that wanted to set up the castor-oil-derivatives factory; it sought and, in the High Court, obtained a direction that the Board grant it consent.

Procedural History

The judgment has no numbered paragraphs, so its own account of the proceedings is given in date order without paragraph citations.

1. In January 1995 the respondent company was incorporated to manufacture B.S.S. Castor Oil derivatives, and it applied to the Ministry of Industries for a letter of intent under the Industries (Development and Regulation) Act, 1951.
2. On 26 September 1995 the company purchased 12 acres in Peddashpur village, Shamshabad Mandal, and in November 1995 it applied for establishment consent through the Single Window Clearance Committee, Commissionerate of Industries, Government of Andhra Pradesh.
3. On 28 November 1995 the Government of Andhra Pradesh recommended the letter of intent to the Government of India, in relaxation of the location restriction, on condition that the company first obtain an NOC (no-objection certificate) from the A.P. Pollution Control Board.
4. On 9 January 1996 the Government of India issued the letter of intent, conditional on the company obtaining confirmation of environmental site approval and a certificate from the State Board that its pollution-control measures met the Board's requirements.
5. On 24 May 1996 the Single Window Clearance Committee's pre-scrutiny rejected the application, because the site fell within the 10-kilometre catchment radius prohibited by Government Order (GOMs) No. 111 dated 8 March 1996.
6. On 31 March 1996 the Commissionerate of Industries rejected the location and directed the company to find an alternative site; on 7 September 1996 the District Collector nonetheless permitted the conversion of the site for non-agricultural use.
7. On 7 April 1997 the company applied afresh to the Board for consent to establish, under Section 25 of the Water (Prevention and Control of Pollution) Act, 1974 (the Water Act).
8. On 3 July 1997 the Government of Andhra Pradesh, by GOMs No. 153 (later amended by GO No. 181 dated 7 August 1997), exempted the company from the 10-kilometre rule in GOMs No. 111.
9. On 30 July 1997 the Board rejected the company's application. It held the unit a polluting industry falling in the red category under the classification adopted by the Ministry of Environment and Forests. It said it would not be desirable to locate it in the Himayat Sagar catchment, and it noted that the proposal had already been rejected at the pre-scrutiny stage.
10. The company appealed under Section 28 of the Water Act. Before the appellate authority (Justice M. Ranga Reddy, retired), the company filed affidavits of Prof. M. Santappa (Scientific Officer, Tamil Nadu Pollution Control Board), Dr. Siddhu (former Director General, Council of Scientific and Industrial Research, and Chairman of the company's Board of Directors) and its Managing Director, describing the technology adopted from the Indian Institute of Chemical Technology (IICT), Hyderabad.
11. On 5 January 1998 the appellate authority allowed the company's appeal. It held that the industry was not a polluting industry, and that the Ministry's notification of 1 February 1989, categorising hydrogenated vegetable-oil industries as red category, applied only to the Doon Valley (Uttar Pradesh) and Dahanu (Maharashtra). It held this did not cover the Himayat Sagar or Osman Sagar catchments, and it directed the Board to give consent, subject to conditions, in line with GOMs No. 153 as amended.
12. Some of the public interest writ petitions (W.P. Nos. 17832, 16969 and 16881 of 1997, and a connected petition by the Gram Panchayat) had already been filed before this order; after it, a further writ petition (W.P. No. 2215 of 1996) contended that the appellate authority's order was arbitrary and contrary to the High Court's earlier interim orders. The company itself filed W.P. No. 11803 of 1998 for a direction that the Board give consent, as a consequence of the appellate authority's order.
13. On 1 May 1998 a Division Bench of the Andhra Pradesh High Court dismissed the three public interest writ petitions and the Gram Panchayat's writ petition. It held that the writ petitioners in the public interest cases could not be said to lack locus standi to file them.
14. The High Court also held that the Board could not have suddenly refused consent after its Technical Committee had earlier suggested safeguards, calling this double standards. It also held that it could not sit in appeal over the appellate authority's order on what was a highly technical matter.
15. The High Court relied on Dr. Sidhu's report that even a hazardous by-product could be controlled if the safeguards in Rules 5, 6 and 11 of the Hazardous Waste (Management and Handling) Rules, 1989 were followed. It noted that the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 also permit industrial activity if their safeguards are taken, and that the Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1991 supplement those Rules with a four-tier crisis management system.
16. The High Court allowed the company's writ petition and directed the Board to grant consent, subject to such conditions as it thought fit.
17. Against the High Court's judgment, the Board filed five Civil Appeals (arising from S.L.P.(C) Nos. 10317-10320 of 1998, against dismissal of the public interest writ petitions, and S.L.P.(C) No. 10330 of 1998, against the direction to grant consent), and SPEQL filed a sixth Civil Appeal (arising from S.L.P.(C) No. 13380 of 1998). Leave was granted in all the special leave petitions.

Facts

1. Under Ministry of Environment and Forests notifications dated 27 September 1988 and 1 February 1989, the Board contended that vegetable and vanaspati hydrogenated oil industries were listed in the red hazardous category. It also contended that the 1989 notification prohibited locating such an industry as the company proposed.
2. On 31 March 1994, based on an Expert Committee's interim report to the Hyderabad Metropolitan Water Supply and Sewerage Board, the State Government issued GOMs No. 192, prohibiting various kinds of development within 10 kilometres of the Himayat Sagar and Osman Sagar lakes, to protect the water quality of these reservoirs supplying Hyderabad and Secunderabad.
3. On 8 March 1996, based on a second interim report, the Government issued GO No. 111, reiterating the 10-kilometre prohibition of GOMs No. 192 but making some concessions for residential development.
4. On 31 May 1994 (as the judgment states the date), the Gram Panchayat approved plans for establishing the factory.
5. In its consent application of 7 April 1997, the company listed its by-products as glycerine, spent bleaching earth and carbon, and spent nickel catalysts. According to the Board, these gave rise to three sources of pollution.
6. The three sources were: nickel solid waste, a heavy metal and a hazardous waste under the Hazardous Waste (Management and Handling) Rules, 1989; potential discharge or run-off of oil and other waste products; and emission of sulphur dioxide and oxides of nitrogen.
7. Before the appellate authority, Prof. Santappa's report said the company used technology from IICT, Hyderabad, and that it would not discharge acidic effluents. It said the saleable solid by-products would be collected in drums and sold rather than falling on the ground, and that the company had complied with the conditions the Technical Committee proposed at its meeting on 16 July 1997.
8. The proposed unit would manufacture 15,000 tonnes per annum of B.S.S. grade Castor Oil and 600 tonnes per annum of Glycerine, under the Government of India's letter of intent dated 9 January 1996.

Issues Raised

1. Was the Board's order dated 30 July 1997, refusing consent under Section 25 of the Water Act, valid?
2. Was the appellate authority's order dated 5 January 1998 under Section 28 of the Water Act, allowing the company's appeal, correct?
3. Was Government Order (GOMs) No. 153 dated 3 July 1997, exempting the company from the 10-kilometre rule in GOMs No. 111, valid?
4. Did the proposed industry breach the Water Act, its rules, or the notifications and standards issued under it?
5. Could the appellate authority decline to interfere with the Board's technical findings merely because the matter was highly technical?
6. Is the respondent industry a hazardous one, and what is its pollution potential, given the nature of the product, the effluents and its location?
7. Is the industry's operation likely to affect the sensitive catchment area and pollute the Himayat Sagar and Osman Sagar lakes that supply drinking water to Hyderabad and Secunderabad?
8. Can the Supreme Court, under Article 32 or Article 136, or a High Court under Article 226, refer complex scientific and technological questions arising in an environmental dispute to the appellate authority under the National Environmental Appellate Authority Act, 1997, for investigation and opinion?
9. Should the company be permitted trial runs of about three months, to allow pollution levels to be monitored and analysed?

The Court said it was not going into all these aspects for the present, confining itself to the issues on the technological side. It ultimately referred only issues 6 and 7 to the appellate authority, leaving issue 9 to that authority as well, and leaving issues 1 to 5 and 8 for its own later consideration.

Arguments Contended

The reported judgment does not set out each side's detailed arguments; it records only that the Court heard preliminary submissions from Shri R.N. Trivedi, Additional Solicitor General, for the Board, Shri M.N. Rao, senior counsel, for the respondent company, and Shri P.S. Narasimha for SPEQL and others, without detailing those submissions. The positions the parties had taken in the licensing proceedings, as recorded in the Facts and Procedural History, were as follows.

For the appellant (A.P. Pollution Control Board / SPEQL)

• The industry fell in the red hazardous category under the Ministry of Environment and Forests' notifications of 27 September 1988 and 1 February 1989.
• The site fell within the 10-kilometre catchment radius prohibited by GOMs No. 111 dated 8 March 1996, and the State's earlier relaxation of the location restriction was itself conditional on the Board's clearance.
• The company could not have started civil works or construction of the factory without the Board's clearance, since the State's relaxation from the location restriction was subject to that clearance.
• The identified pollution sources were nickel solid waste, potential discharge or run-off of oil and waste products, and emission of sulphur dioxide and oxides of nitrogen.

For the respondent company

• It had adopted eco-friendly technology from IICT, Hyderabad, supported by the affidavits of Prof. Santappa and Dr. Siddhu.
• It would not discharge acidic effluents; its solid by-products were saleable and would be collected and sold, none falling on the factory premises.
• It had complied with all conditions the Technical Committee proposed at its meeting on 16 July 1997.
• The 1 February 1989 notification, putting hydrogenated vegetable oils in the red category, applied only to the Doon Valley and Dahanu, not to the Himayat Sagar or Osman Sagar catchment.
• The dispute was highly technical, and the courts should not interfere with the outcome of the licensing process.

Court's Reasoning

The judgment is a single opinion delivered by M. Jagannadha Rao, J., for the Bench of himself and Majmudar, J. It has no numbered paragraphs; the steps below are cited to the judgment's own section headings, in the order the judgment presents them.

M. Jagannadha Rao, J. (for the Bench)

1. Noted: opening the judgment, the Court quoted an ecological epigraph. It said the world's ecological systems are so interconnected that every action has consequences for the whole. (Rao, J., opening)
2. Noted: handling highly technical or scientific data is a global problem for environmental courts. (Rao, J., discussing environmental courts and tribunals)
3. Noted: Lord Woolf, in his Garner lecture Are the Judiciary Environmentally Myopic?, identified the difficulty courts have moving beyond traditional Wednesbury (a narrow standard of review that intervenes only if a decision is so unreasonable no reasonable authority could have made it) review. He proposed a tribunal with a wider discretion over its own procedure, to bring specialist environmental experience to bear. (Rao, J., same discussion)
4. Noted: Lord Woolf proposed a single combined forum — a multi-faceted, multi-skilled body combining the roles of existing Courts, Tribunals and Inspectors. This would avoid overloading institutions not designed for environmental disputes and let judges play a different role. (Rao, J., same discussion)
5. Noted: Lord Woolf said environmental law still lacks clear boundaries, and it may be best to let those boundaries develop through judicial decision. Urgent environmental decisions often have no safe way to preserve the status quo. Allowing a project risks irreparable environmental damage, and stopping it risks irreparable economic damage. (Rao, J., same discussion, citing Robert Cranworth QC, who proposed a two-tier tribunal not limited to Wednesbury grounds)
6. Noted: in the United States, the Carnegie Commission on Science and Technology (1993) studied whether courts could competently decide complex science-based cases. This was against concerns that judges lack technical training and that expert witnesses' testimony is sometimes unreliable. (Rao, J., same discussion)
7. Noted: scientific opinions in environmental matters are often uncertain, and this creates real problems for courts. Held, quoting the U.S. Supreme Court in Daubert vs. Merrel Dow Pharmaceuticals Inc.: "there are important differences between the quest for truth in the Court-room and the quest for truth in the laboratory." (Rao, J., discussing the uncertain nature of scientific opinions)
8. Noted: as Brian Wynne wrote, "Uncertainity, resulting from inadequate data, ignorance and indeterminacy, is an inherent part of science." Uncertainty becomes a real problem once scientific knowledge is used as the basis for policy or judicial decisions, because scientists may later revise or discard a model, while agencies and courts must decide on the knowledge available at the time. (Rao, J., same discussion)
9. Noted: science's own limits compound this. Hazard identification often works backward from an observed effect to its cause. Toxicity tests are usually done on animals or cells, not humans. Epidemiological studies cannot always isolate the effect of one substance or accurately assess past exposure, and the long latency of many carcinogens delays the point at which regulation becomes possible. (Rao, J., same discussion)
10. Held: this scientific uncertainty is what led international conferences to develop new legal doctrines and evidentiary rules for the environment — the precautionary principle and a new rule on the burden of proof. (Rao, J., same discussion)
11. Noted: between the Stockholm Conference of 1972 and the Rio Conference of 1992, environmental concepts changed greatly because of this changing scientific uncertainty. In Vellore Citizens' Welfare Forum v. Union of India [1996 (5) SCC 647], a three-Judge Bench (Kuldip Singh, J.) held that the precautionary principle, the polluter pays principle, and a new burden of proof are part of India's environmental law. (Rao, J., discussing the Vellore case)
12. Noted: Vellore drew this from Articles 47, 48-A and 51-A(g) of the Constitution and from statutes such as the Water Act, 1974 and the Environment (Protection) Act, 1986. It also held these principles part of Customary International Law, so there is no difficulty accepting them as part of domestic law, and it directed the authority under Section 3(3) of the Environment (Protection) Act, 1986 to implement both principles. (Rao, J., same discussion)
13. Held: since Vellore explained these principles only briefly, it is now necessary to explain their meaning in more detail so that courts, tribunals and environmental authorities can properly apply them. (Rao, J., same discussion)
14. Noted: a basic shift in the approach to environmental protection occurred between 1972 and 1982. The earlier approach was the assimilative capacity principle, drawn from Principle 6 of the 1972 Stockholm Declaration. It assumed science could tell policy-makers how much impact the environment could absorb, with time to act before harm occurred. (Rao, J., discussing the shift to the precautionary principle)
15. Noted: by the 11th Principle of the 1982 U.N. World Charter for Nature, and again in Principle 15 of the 1992 Rio Declaration, the emphasis shifted to the precautionary principle. Where there are threats of serious or irreversible damage, the lack of full scientific certainty is not a reason to postpone cost-effective measures to prevent environmental degradation. (Rao, J., same discussion)
16. Noted: as Charmian Barton wrote, if a decision-maker cannot reach a determination with confidence on the available record, it is sensible to err on the side of caution and prevent activities that may cause serious or irreversible harm. An informed decision can follow later once more data is available. (Rao, J., same discussion)
17. Held: the real basis of the precautionary principle is the inadequacy of science. It is based on the theory that it is better to err on the side of caution and prevent environmental harm which may indeed become irreversible. (Rao, J., same discussion)
18. Held: the principle requires anticipating harm and choosing the least environmentally harmful option. It means protecting the environment for its own sake, not only for health, property or economic interests. Precautionary duties are triggered not only by a concrete danger but also by a justified concern or risk potential. (Rao, J., same discussion)
19. Noted: the UNEP Governing Council recommended the principle in 1989, and the Bamako Convention lowered its threshold further by dropping the qualifying words serious or irreversible. Summing up, the principle is still described as evolving in customary international law, and the consequences of applying it will depend on the facts of each case (citing the First Report of Dr. Sreenivasa Rao Pemmaraju, Special Rapporteur, International Law Commission, dated 3 April 1998). (Rao, J., same discussion)
20. Held, quoting Vellore at p. 658 (1996) 5 SCC 647: "The `onus of proof' is on the actor or the developer/industralist to show that his action is environmentally benign." (Rao, J., discussing the special burden of proof in environmental cases)
21. Noted: the inadequacies of science that produced the precautionary principle, in turn, produced this reversed onus of proof (burden of proof). The party who wants to preserve a less-polluted status quo should not have to carry the evidentiary burden; the party who wants to change it must bear that burden (citing Wynne, and James M. Olson, Shifting the Burden of Proof, 20 Envtl. Law 891 (1990)). (Rao, J., same discussion)
22. Noted: there is an identifiable risk of serious or irreversible harm in cases such as extinction of species, widespread toxic pollution, or major threats to essential ecological processes. In such cases it may be appropriate to place the burden of proof on the person or entity proposing the potentially harmful activity (citing the Pemmaraju Report). (Rao, J., same discussion)
23. Held: if the environmental risk of regulatory inaction is uncertain but non-negligible, regulatory action is justified. The person seeking to alter the status quo must discharge the burden by showing the absence of a reasonable ecological or medical concern. (Rao, J., same discussion)
24. Held: if the evidence presented does not allay this uncertainty, the presumption operates in favour of environmental protection. This standard was applied in Ashburton Acclimatisation Society v. Federated Farmers of New Zealand [1988 (1) NZLR 78], and is decided, per Barton, according to a reasonable persons' test. (Rao, J., same discussion)
25. Noted: the appellate systems under India's environmental statutes are deficient in combining judicial and technical inputs. The qualifications for appellate authorities under Section 28 of the Water Act, Section 31 of the Air (Prevention and Control of Pollution) Act, 1981 and Rule 12 of the Hazardous Waste (Management and Handling) Rules, 1989 are not clearly spelled out. (Rao, J., surveying judicial and technical inputs in appellate authorities)
26. Noted: in Andhra Pradesh the Section 28 appellate authority is a retired High Court Judge with no technical panel to assist him, while in Delhi (notification dated 18 February 1992) the same authority is the Financial Commissioner, leaving neither a judicial nor a technical member. (Rao, J., same discussion)
27. Noted: under the National Environmental Tribunal Act, 1995, Section 10(1)(b) read with Section 10(2)(b) or (c) even permits a Secretary or Additional Secretary who has served two years as Vice-Chairman to become Chairman, in place of a Judge. (Rao, J., same discussion)
28. Noted: good governance is an accepted principle of international and domestic law. It comprises the rule of law, effective institutions, transparency, accountability, respect for human rights and meaningful citizen (including scientist) participation in decisions affecting their lives. (Rao, J., discussing the principle of good governance)
29. Noted: good governance requires the State to take legislative, administrative and other action to prevent environmental harm, as Article 7 of the draft approved by the Working Group of the International Law Commission in 1996 also records. (Rao, J., same discussion)
30. Held: environmental Courts, Authorities and Tribunals must have adequate judicial and scientific inputs. It is not enough to leave complicated environmental disputes to officers drawn only from the Executive, and such bodies should not be restricted to Wednesbury limitations. (Rao, J., same discussion)
31. Noted: the Land and Environment Court of New South Wales, Australia, established in 1980, is an ideal model in the Court's opinion. It is a superior court of record with four Judges and nine technical and conciliation assessors, combining appeal, judicial review and enforcement jurisdiction. (Rao, J., same discussion)
32. Noted: this Court had already envisaged such a combination twice before. In M.C. Mehta v. Union of India (the Shriram Foods & Fertilizers case) [1986 (2) SCC 176 at 202], Bhagwati, C.J. suggested "Environmental Courts on the regional basis with one professional Judge and two experts", drawn from the Ecological Sciences Research Group, with a right of appeal to this Court. (Rao, J., same discussion)
33. Noted: in the Vellore case, Kuldip Singh, J. had criticised the Central Government's inaction in appointing the Section 3(3) authority. He directed that it be "headed by a retired Judge of the High court and it may have other members", preferably experts in pollution control and environmental protection. (Rao, J., same discussion)
34. Noted: tracing the result of that direction, the Court found notifications appointing such authorities with a retired High Court Judge. These were the Loss of Ecology (Prevention and Payment of Compensation) Authority for Tamil Nadu (No. 671(E), 30 September 1996), the Environmental Impact Assessment Authority for the National Capital Territory (No. 704(E), 9 October 1996), and an authority for the shrimp industry nationally (No. 88(E), 6 February 1997). (Rao, J., same discussion)
35. Held: the Government of India should amend the environmental statutes, rules and notifications. Every environmental Court, Tribunal and appellate authority should always have a Judge (High Court or Supreme Court, sitting or retired) and a Scientist or group of Scientists of high standing. (Rao, J., same discussion)
36. Held: there is an immediate need for this under Section 28 of the Water Act and Section 31 of the Air Act, in every State and Union Territory. The same is needed under Rule 12 of the Hazardous Waste Rules, 1989. The Court requested the Central and State Governments to take urgent action. (Rao, J., same discussion)
37. Noted: the appellate authority under the National Environment Appellate Authority Act, 1997 comes very near to this ideal. Its Chairman must be a sitting or retired Supreme Court Judge or High Court Chief Justice, and its Vice-Chairman a high-ranking administrator with technical expertise. (Rao, J., same discussion)
38. Noted: that authority has up to three Technical Members, with professional knowledge of conservation, environmental management, or land planning and development. It hears appeals from persons aggrieved by an order granting environmental clearance. (Rao, J., same discussion)
39. Noted: the Court also recalled that in the Shriram Foods case [1986 (2) SCC 176 at 262] it had said there should be a right of regular appeal to the Supreme Court, built into the relevant statutes. This is a matter for the Governments to consider, by legislation or by amending the notifications. (Rao, J., same discussion)
40. Noted: the principle of inter-generational equity is of recent origin. Principles 1 and 2 of the 1972 Stockholm Declaration view the environment as a resource base for the survival of both present and future generations. (Rao, J., discussing inter-generational equity)
41. Noted: those Principles require natural resources to be safeguarded through careful planning for the benefit of present and future generations. (Rao, J., same discussion)
42. Noted: several international conventions recognise this principle. Imaginative proposals include giving individuals or groups locus standi (legal standing to sue) to act as representatives of future generations, or appointing an Ombudsman for their rights (proposals of Sands and Brown Weiss, cited in the Pemmaraju Report). (Rao, J., same discussion)
43. Noted: in many matters before the Supreme Court under Article 32 or Article 136, and before High Courts under Article 226, complex issues of environment, pollution, science and technology arise. The Court sometimes finds it difficult to give solutions consistent with public interest, environmental protection and sustainable development. (Rao, J., discussing reference to the National Environmental Appellate Authority)
44. Noted: referring such matters to professional bodies, and then handling the monitoring and objections that follow, also creates difficulty, given the Court's heavy workload, a factor Lord Woolf too had noted. (Rao, J., same discussion)
45. Noted: a similar question arose in Paramjit Kaur v. State of Punjab [1998 (5) SCALE 219 = 1998 (6) J.T. 338], decided by this Court on 10 September 1998. There, in writ petitions under Article 32 alleging human-rights violations in Punjab, the Court had on 12 December 1996 asked the National Human Rights Commission (headed by a retired Chief Justice of India) to examine the allegations. (Rao, J., same discussion)
46. Noted: the Commission rejected objections to its jurisdiction on 4 August 1997. It held that once the Supreme Court referred the matter to it, it was acting sui juris (in its own right) as an instrumentality of the Supreme Court, and that the limitation period under the Protection of Human Rights Act, 1993 did not apply. (Rao, J., same discussion)
47. Noted: the Commission also held that the Supreme Court retained seisin (continuing control over the case), and that any Commission determination would need the Supreme Court's approval. This Court accepted the Commission's reasoning in its order in Paramjit Kaur, of 12 December 1998, as the judgment states. (Rao, J., same discussion)
48. Held: this same approach applies to environmental concerns before this Court. Environmental and human-rights concerns are equally important and both trace to Article 21: environment concerns life, human rights concern liberty. (Rao, J., same discussion)
49. Held: in the interest of protecting the environment, and also ensuring sustainable development, the Court can refer scientific and technical aspects of a dispute for investigation and opinion to expert bodies. This includes the appellate authority under the National Environmental Appellate Authority Act, 1997, whose opinion remains subject to the Court's approval. (Rao, J., same discussion)
50. Held: on the analogy of Paramjit Kaur, such a reference is lawful. It can be made in matters before the Supreme Court under Article 32 or Article 136, or before High Courts under Article 226. (Rao, J., same discussion)
51. Noted: after this view was put to counsel, draft issues for reference were prepared. After argument on which issues were suitable, both sides agreed on two issues to be referred to the appellate authority under the National Environmental Appellate Authority Act, 1997. (Rao, J., discussing the order of reference)
52. Noted: the respondent company had also asked to be allowed trial runs of about three months, to monitor and analyse pollution results, which the appellant Board and the private respondents opposed. The Court did not decide this itself, since it did not know whether such trial runs would affect the environment or cause pollution, and left the question to the appellate authority to decide after hearing the parties. (Rao, J., same discussion)

Authorities

• Vellore Citizens' Welfare Forum v. Union of India [1996 (5) SCC 647]: followed. It held the precautionary principle, the polluter pays principle and the reversed burden of proof to be part of India's environmental law. Its explanation is developed further in this judgment (discussion of the Vellore case and the special burden of proof).
• Daubert v. Merrel Dow Pharmaceuticals Inc. (1993) 113 S.Ct. 2786: quoted on the difference between scientific and legal ascertainment of truth (discussion of the uncertain nature of scientific opinions).
• Ashburton Acclimatisation Society v. Federated Farmers of New Zealand [1988 (1) NZLR 78]: cited as applying the presumption in favour of environmental protection where uncertainty is not resolved (discussion of the special burden of proof).
• M.C. Mehta v. Union of India (the Shriram Foods & Fertilizers case) [1986 (2) SCC 176]: relied on; quoted (at p. 202) for the suggestion of regional Environmental Courts with a Judge and two experts, and (at p. 262) for the suggestion of a right of appeal to the Supreme Court (discussion of good governance).
• Paramjit Kaur v. State of Punjab [1998 (5) SCALE 219 = 1998 (6) J.T. 338]: followed by analogy; the Court's reference of human-rights allegations to the National Human Rights Commission is treated as the model for referring environmental-scientific questions to the National Environmental Appellate Authority.
• Also cited in footnotes: none.

Provisions mentioned

• Section 25, Water (Prevention and Control of Pollution) Act, 1974: requires prior consent of the State Pollution Control Board before establishing an industry likely to discharge effluent; the company's consent application and the Board's refusal were both made under this section.
• Section 28, Water Act, 1974: provides an appeal against the Board's orders to an appellate authority; the company's successful appeal against the Board's refusal was under this section.
• Section 31, Air (Prevention and Control of Pollution) Act, 1981: the equivalent appellate provision under the Air Act, cited for the same want of clear qualification requirements for its appellate authority.
• Rule 12, Hazardous Waste (Management and Handling) Rules, 1989: provides for an appellate authority under those Rules, again without clearly spelled-out qualifications.
• Rules 5, 6 and 11, Hazardous Waste (Management and Handling) Rules, 1989: the High Court held that following these safeguards can control a hazardous by-product.
• Manufacture, Storage and Import of Hazardous Chemical Rules, 1989: permit industrial activity if their safeguards are taken, as the High Court noted.
• Chemical Accidents (Emergency Planning, Preparedness and Response) Rules, 1991: supplement the above Rules on accident preparedness with a four-tier crisis management system, as the High Court noted.
• Section 3(3), Environment (Protection) Act, 1986: lets the Central Government constitute an authority with powers under the Act; Vellore had directed such an authority to be constituted and headed by a retired High Court Judge.
• Section 10, National Environmental Tribunal Act, 1995: sets out the Tribunal's composition; Section 10(1)(b) read with Section 10(2)(b)/(c) is noted as allowing a non-Judge administrator to become Chairman.
• National Environmental Appellate Authority Act, 1997: establishes the appellate authority (retired Supreme Court Judge or High Court Chief Justice as Chairman, plus technical members) to which the Court refers the two technical issues in this case.
• Articles 21, 32, 136 and 226 of the Constitution: Article 21 (life and liberty) is the shared root of environmental and human-rights concerns. Articles 32 and 136 give the Supreme Court's own jurisdiction, and Article 226 the High Courts' jurisdiction, under which such a reference may be made.
• Industries (Development and Regulation) Act, 1951: the Act under which the company applied for its letter of intent to manufacture.
• Protection of Human Rights Act, 1993: its limitation period was held inapplicable to the National Human Rights Commission's examination of a Supreme Court reference in Paramjit Kaur, the analogy relied on here.

Judgement

1. The Court referred two issues to the appellate authority under the National Environmental Appellate Authority Act, 1997, for its opinion. The first: whether the respondent industry is hazardous and what its pollution potential is, given the nature of the product, the effluents and its location. The second: whether its operation is likely to affect the sensitive catchment area and pollute the Himayat Sagar and Osman Sagar lakes.
2. The appellate authority was empowered to inspect the factory premises, call for documents from the parties or from any other body, authority, or the State or Union Government, examine witnesses if needed, and obtain data or technical advice from any source it thought fit.
3. The authority was directed to give the parties or their counsel an opportunity to file objections, lead oral or documentary evidence, and be heard.
4. The question whether the company should be permitted trial runs of about three months was left to the authority to decide, after hearing the parties.
5. The appellate authority was requested to give its opinion within three months from receipt of the order, and could seek further clarification or directions from the Supreme Court if needed.
6. The respondent company was directed to make available to the authority photocopies of the paper books filed in the Supreme Court, and other papers filed in the High Court or before the Section 28 appellate authority.
7. The Registry was directed to communicate a copy of the order to the appellate authority, and the matter was to be listed again after three months, as part-heard.
8. The Court directed that copies of the judgment be communicated to the Secretary, Environment & Forests, Government of India; to the Secretaries of Environment & Forests in all State Governments and Union Territories; and to the Central Pollution Control Board, New Delhi.
9. The Central Pollution Control Board was further directed to communicate the judgment to all State Pollution Control Boards and other authorities dealing with environment, pollution, ecology, forest and wildlife. The State Governments were also to communicate it to their own Boards and authorities, so that appropriate action could be taken expeditiously.
10. The judgment records no order as to costs.

Legal Principle / Ratio

Where a proposed activity threatens serious or irreversible environmental harm, the lack of full scientific certainty is not a reason to postpone preventive measures. The burden falls on the developer or industrialist to prove that the activity is environmentally benign, not on those opposing it. This precautionary principle has replaced the older assimilative capacity principle.

When a case under Article 32, Article 136 or Article 226 raises complex scientific or technical environmental questions, a court may refer those questions to an expert statutory body combining judicial and technical expertise. This includes the appellate authority under the National Environmental Appellate Authority Act, 1997, for investigation and opinion, subject to the court's final approval.

Key holding: "...it is better to err on the side of caution and prevent environmental harm which may indeed become irreversible."

Subsequent Treatment

Later judgments that name this case, taken only from their own text.

Narmada Bachao Andolan v. Union of India — AIR 2000 SC 3751; (2000) 10 SCC 664; Supreme Court of India; B.N. Kirpal, J. (author); decided 18 October 2000.

• Noted: Senior counsel Sh. Shanti Bhushan relied on this case for the proposition that, in environmental matters, the onus of proof is on the person who wants to change the status quo, so the respondents had to satisfy the Court there would be no environmental degradation.
• Noted: the Court summarised this case's facts. These were the company's application to the Board, the refusal on red-category and catchment grounds, the appellate authority's reversal, and the High Court proceedings.
• Noted: the Court also summarised this judgment's reasoning on the precautionary principle and the polluter pays principle, including the point that the onus of proof had shifted onto the developer or industrialist.
• Held: the precautionary principle, and the corresponding burden of proof on the party wanting to change the status quo, will ordinarily apply where the extent of likely damage is not known. In that situation, the burden of showing the ecological balance will be maintained falls on the industry or unit likely to cause pollution.
• Held: where the effect on ecology or environment is already known, the question is instead what mitigative steps can offset it, and the principle of sustainable development then applies.
• Held: this Court's own case was a polluting industry where the extent of damage was uncertain. The Sardar Sarovar dam is neither a nuclear establishment nor a polluting industry, and India has over 40 years of experience showing that large dam construction does not lead to ecological disaster. On this basis the Court held that this judgment would have no application to the dam case.

Hanuman Laxman Aroskar v. Union of India — AIRONLINE 2019 SC 318; Supreme Court of India; Hemant Gupta and Dhananjaya Y. Chandrachud, JJ. (author Chandrachud, J.); decided 29 March 2019. This case is named only in a footnote to the Court's statement that Section 20 of the National Green Tribunal Act, 2010 requires the Tribunal to apply the principles of sustainable development, the precautionary principle and the polluter pays principle. The Court added that several of its decisions have given meaning to these principles. The footnote lists six cases together: Vellore Citizens Welfare Forum, M.C. Mehta v. Kamal Nath, M.C. Mehta v. Union of India, this case, Narmada Bachao Andolan, and Indian Council for Enviro-Legal Action v. Union of India. This case is not otherwise discussed.

Pragnesh Shah v. Arun Kumar Sharma — Civil Appeal Nos. 7724-7725 of 2021; Supreme Court of India; Dhananjaya Y. Chandrachud, J.; decided 12 January 2022. This case is cited only in an editorial footnote to a quoted passage on the precautionary principle (Rio Principle 15), noting that the same passage is reported at page 733 of this case's citation; it is not otherwise discussed.

Comparative Analysis

• Narmada Bachao Andolan shows the limit of this judgment's reversed burden of proof. It applies where the extent of environmental damage is genuinely uncertain, as with the proposed castor-oil industry here. It does not apply where decades of experience already show a type of project's environmental effects, as the Court held for large dams.
• Both this judgment and Narmada keep the precautionary principle and the concept of sustainable development analytically separate. Precaution and the reversed burden of proof govern uncertain risk, while sustainable development governs how to mitigate a known and accepted risk.
• Hanuman Laxman Aroskar and Pragnesh Shah, by contrast, treat this judgment only as one item in a list of settled precautionary-principle authorities, without engaging with its facts. This shows the case functioning as settled doctrine, rather than as a precedent still being actively distinguished or extended.

Critical Analysis

Analysis based on the judgment text.

• The judgment is essentially a reference order, not a final decision. Of the issues it itself lists — the validity of the Board's rejection, the correctness of the appellate authority's order, the validity of the GOMs No. 153 exemption, alleged statutory breaches, and whether being highly technical is a valid reason for non-interference — the Court decides none. It confines itself to the two technical issues sent to the appellate authority and defers the rest.
• The Court's own account of the precautionary principle admits it is still evolving in customary international law. It also says the consequences of applying it will depend on the facts of each case. This gives lower courts a doctrine without a fixed content or a mechanical test to apply.
• The recommendations for restructuring appellate tribunals — dual judicial-technical composition, review beyond Wednesbury limits, and a right of appeal to the Supreme Court — are addressed to the Central and State Governments only as requests. Their effect depends entirely on future executive or legislative action that the judgment cannot itself compel.

Significance

• The judgment gives full doctrinal content to the precautionary principle and the reversed burden of proof, which Vellore Citizens' Welfare Forum v. Union of India had stated only briefly, and it explains why the assimilative capacity principle was replaced by precaution.
• It is one of the earliest instances of the Supreme Court referring scientific and technical questions in an environmental case to a specialised statutory appellate authority for expert opinion. It draws an explicit analogy with the reference of human-rights allegations to the National Human Rights Commission in Paramjit Kaur v. State of Punjab.
• It introduces the principle of inter-generational equity into Indian environmental jurisprudence, tracing it to Principles 1 and 2 of the 1972 Stockholm Declaration.
• Its detailed recommendations for combining judicial and technical expertise in environmental appellate authorities and tribunals anticipated the eventual creation of a specialised environmental tribunal in India.

Exam-Important Points

• Facts in one line: the Pollution Control Board refused consent for a factory near two drinking-water lakes. The appellate authority and the High Court ruled for the company, and the Supreme Court referred the scientific questions to the National Environmental Appellate Authority instead of deciding them itself.
• The judgment has no numbered paragraphs; cite the opinion of Rao, J., by the judgment's own section headings, not by paragraph number.
• This case gives the precautionary principle and the reversed burden of proof (first stated briefly in Vellore) their detailed content: lack of scientific certainty is no reason to postpone precaution, and the developer must prove the activity is environmentally benign.
• Know the difference: the assimilative capacity principle (older approach, assumed science could tell how much harm the environment could absorb) was replaced by the precautionary principle (assumes scientific uncertainty and errs on the side of caution).
• Classic exam trap: this is a reference order, not a final decision — the Court refers only two issues (is the industry hazardous, and will it pollute the lakes) to the National Environmental Appellate Authority, and leaves the licence dispute itself undecided.
• The Court draws an analogy with Paramjit Kaur v. State of Punjab, where human-rights allegations were referred to the National Human Rights Commission, to justify referring environmental-science questions to an expert statutory body.
• The judgment also introduces inter-generational equity (Stockholm Declaration, Principles 1 and 2) and recommends that environmental appellate authorities and tribunals always combine judicial and technical (scientific) membership, not be confined to Wednesbury review.

Prepared from the full text of the judgment. The judgment has no numbered paragraphs, so no paragraph numbers are cited.