M/s. Munjal Showa Limited vs Appellate Authority And Ors

Civil Writ Petition No. 21652 of 2011 was filed by M/s. Munjal Showa Ltd. before the High Court of Punjab & Haryana at Chandigarh, raising a challe to the orders dated 11th August, 2010 and 4th November, 2011, annexures P-25 & P-38, respectively to the Writ Petition and further with a prayer that the industry of the petitioner should not be closed down in exercise of powers conferred by the Haryana State Pollution Control Board under Sections 33, 43 and 44 of the Water (Prevention & Control of Pollution) Act, 1974, for short (the 'Act of 1974') hereafter. Vide order dated 21st January, 2013, the High Court was pleased to transfer this case to the National Green Tribunal (for short, "NGT"). Upon transfer, it came to be registered as Appeal No. 3 of 2013 under the provisions of the National Green Tribunal Act, 2010 (for short, "Act of 2010") and the Rules framed thereunder.

According to the appellant, it is a public limited company incorporated under the Companies Act, 1956. It deals in the business of manufacturing shock absorbers and gas springs for two wheelers and four wheelers at its factory in Gurgaon and has been engaged in this business for the last 25-26 years. In addition thereto, it also does electroplating processes and has assembling and testing facilities etc. The appellant supplies its product to major car manufacturers like M/s. Maruti Udyog Ltd., M/s. Hero Honda Motors Ltd., M/s. Honda Motor Cycle and Scooters India Ltd., M/s. Majestic Auto Ltd., M/s. Honda SIEL Car India Ltd., M/s. Hero Motors Ltd. and M/s. Mahindra 2 Wheelers Ltd. According to the appellant, there were certain unregulated industries operating in the same vicinity where its unit was located. Those unregulated units did not have proper treatment facilities for disposal of their untreated waste water resulting in contamination due to effluents in the area for a couple of years and this was not noticed by the regulatory authorities. In June, 2009, it came to the notice of the respondent Board that there is concentration of Hexavalent Chromium in water used in the area. A complaint was also lodged by nearby borewell user, namely, Mr. Mahavir Singh and even the appellant was informed of that fact. Analysis report of the borewell showed that the value of concentration was 80 mg/L and in another sample it was 38.12 mg/L as against the prescribed value of NIL. A show cause notice dated 11th July, 2009 was issued to the appellant by the respondent Board. It was also directed by the Board to deposit an FDR of Rs. 2 Crores or Bank Guarantee of Rs. 5 Crores valid up to 21st March, 2012 and to submit Remediation Plan to treat the water. Vide show cause notice dated 11th July, 2009, the appellant without any consultation with the respondent Board and authorities took up the responsibility of its remediation on its own, as it is a social cause and started engaging experienced consultants to rectify the problem and submitted its proposed Remediation Plan and a Bank Guarantee of Rs. 5 Crores vide its letter dated 22nd July, 2009.

There were certain improvements in the quality of the ground water by using the Pump & Treat method used by the appellant and he brought these improvements to the notice of the Deputy Commissioner, Gurgaon vide letter dated 15th July, 2009. Thereafter on 28th July, 2009, a detailed Remediation Plan along with a presentation was submitted by M/s. Anant Consultants and Engineers, Faridabad to the Board. Various technical consultants and technical experts all over the country and abroad were approached for importing online instruments for measuring the Hexavalent Chromium. Even at the time of initiation of Writ Petition, the appellant has not been able to procure any instrument. Despite having taken steps and submitted documentary proofs, the respondent Board issued another show cause notice dated 12th August, 2009 for submission of Remediation Plan. The appellant stated that it had started rectifying the problem of contamination with their Pump and Treat method and imported equipment from Lanxess, Germany for removing Hexavalent Chromium from the pumped ground water and recharging the ground water, free of Hexavalent Chromium in a systematic manner. Another show cause notice dated 10th September, 2009 was issued to the appellant by the respondent Board alleging certain deficiencies in the Remediation Plan. The appellant approached M/s. Ronuk Metafin Private Limited for purchasing a Chrome Recovery Plant.

Despite the above compliance with the directions issued from time to time by the Board to the appellant, the respondent Board illegally and malafidely passed an order dated 31st December, 2009 ordering closure of the petitioner unit and in furtherance to which the Plating plant of the appellant was sealed on 31st December, 2009 after sunset. Immediately thereafter on 4th January, 2010, the representatives of the appellant unit approached the chairman of the Board personally and submitted a detailed letter dated 3rd January, 2010 showing compliance to the directions issued by the Board and tremendous improvements in reducing the contamination from 80 mg/L to 15.75 mg/L from 17.5 mg/L to 1.19 mg/L in the borewells of the complainants. The analyses were also performed by the Board. The appellant submitted two letters dated 6th and 7th January, 2010, wherein it was clearly stated that the appellant plant will rectify the remaining contamination by March, 2012, which was the date till when the Bank Guarantee had been furnished. However, the Board issued a letter dated 7th January, 2010 to the appellant refusing to accept the commitment and directed it to complete the Remediation Process in a short span by 31st December, 2010 instead of 31st March, 2012 as stated by the appellant. The Board forced the appellant representatives to submit an affidavit without any expert technical evaluation for consistent/stable remediation. Having no other alternative for getting closure order suspended, the appellant furnished an affidavit on 8th January, 2010 under the pressure of the Board and on the basis of which the closure order was directed to be suspended.

According to the appellant, there is no provision either in the Act or in the Rules for obtaining such a huge bank guarantee or its forfeiture. Even the policy/agenda of the Board does not permit Board to obtain a bank guarantee of such a huge amount of Rs. 5 Crores. As per the policy of the Board, it could ask for a bank guarantee for maximum amount to Rs. 2 Lakhs, which subsequently was extended to Rs. 5 Lakhs only. The requirement of the respondent Board asking for a bank guarantee for Rs. 5 Crores from the appellant, thus, was a direction without authority. The appellant unit has been submitting progress reports from time to time to the respondent Board and even the officers/officials of the Board inspected the Unit. The appellant claims that it had approached various technical experts in India and abroad as well, including IITs, National Geophysical Research Institute (NGRI), Hyderabad for seeking their guidance. It also entered an MOU with IIT, Madras and NGRI, Hyderabad as well. The appellant was not able to bring complete remediation within a short span up to 31st December, 2010 and it was not even practically possible. The respondent Board did not hear the request of the appellant. It is the case of the appellant unit that it is the responsibility of the respondent Board to encourage, conduct and participate investigation and research relating to problems of pollution and to impart its guidance to the industrial unit as per provisions of Section 17 of the Act of 1974. In the present case, the Board has taken a very harsh view in respect of the effort put in by the appellant unit. The Board has acted arbitrarily and malafidely. The appellant had been asked to test the tubewell water within a radius of 10 km from the appellant unit and this condition itself was unreasonable. The respondent Board persisted with its view and issued another show cause notice dated 11th August, 2010 alleging that there was non-compliance by the appellant and the deficiencies pointed out in the show cause notice were directed to be removed within 15 days. It also informed that for non-compliance there shall be forfeiture of 25% of the bank guarantee and the petitioner would be directed to deposit Rs. 1.25 Crores in 15 days. The show cause notices dated 9th August, 2010 and 11th August, 2010 were received by the appellant unit on 16th August, 2010 in the same envelope. After the order dated 9th/11th August, 2010 was passed against the appellant, it preferred its statutory appeal dated 23rd August, 2010 bearing Appeal No. 79 of 2010 before the Appellate Authority i.e. Haryana State Pollution Control Board. To this appeal, reply was filed on behalf of the Board. During the pendency of the appeal, the Appellate Authority upon hearing both the sides, granted interim order dated 31st August, 2010. During the course of hearing the respondent Board was also required to explain as to what was the criteria for obtaining a bank guarantee of Rs. 5 Crores and for its partial forfeiture. A vague reply was filed on behalf of the Board. In the reply submitted before the Appellate Authority, the Board had stated that the appellant unit had installed ETP to treat its effluent and RO Plant. Water Harvesting system was also installed and no bore was found through which the appellant unit was discharging its untreated/treated effluent and there were several other units within Village Sehraul which are discharging their effluent. The appellant also submitted details of the subsequent developments and improvements carried out by the appellant unit. It was stated on record that various remediation activities to resolve the problem of Hexavalent Chromium in the vicinity were taken by the appellant. During the pendency of the appeal the respondent board constituted a team to conduct an inspection of the unit on 2nd February, 2011 to obtain samples. The samples were analyzed and were within the permissible limits as per the norms vide report dated 10th February, 2011. According to the appellant for the reasons stated hereafter the Appellate Authority ought to have set aside the order passed by the Board and facts of which are as under:

"(i) there are more than a dozen dyeing/printing/ washing units operating in all illegal manner without ETP, etc.; (ii) during inspection, no bore was found through which the petitioner unit might be discharging untreated/treated effluent; (iii) legally the amount of Bank Guarantee demanded by respondent Board could be Rs. 5.00 Lacs; (iv) there were no hard and fast rule laid down for charging particular amount of bank guarantee; (v) the learned Appellate Authority itself observed that demanding bank guarantee of Rs. 5 Crores against the notified policy of Rs. 5 Lacks is simply arbitrary, non-transparent and bordering on coerciveness; (vi) the learned Appellate Authority itself admitted that the petitioner unit made serious efforts to achieve the targets of Remediation Plan and that advice as per Section 17 of the Water Act was not rendered by respondents upto 22.06.2011; and (vii) the latest analysis reports dated 10.02.2011 are within limits."

However, the Appellate Authority upheld the order of forfeiture of Rs. 1.25 Crores of bank guarantee given by the petitioner vide order dated 4th November, 2011. The said amount has been encashed. The appellant also challenged the order dated 4th November, 2011, primarily on the grounds afore-stated. The appellant also submits that there is no appropriate rule/policy or authority to ask for a bank guarantee to an extent of Rs. 5 Crores.

The Remediation Process had been completed and target had been achieved by the appellant industry. There is no scientific study regarding any contamination of Hexavalent Chromium by respondent Board in the vicinity of the appellant unit or in the borewells of the complainants. Despite this, the appellant had taken it as a social cause and the Appellate Authority should have taken note thereof. The appellant unit claimed that it had been controlling the pollution of water as well as air and was also complying with each and every direction issued by the Board and carrying on the business for the last 24-25 years. The action of the Board and the order of the Appellate Authority were based on extraneous considerations and were illegal and biased. On the one hand, it had issued the show cause notice dated 11th August, 2010 giving 15 days time to the appellant while on the other it passed the order dated 9th August, 2010 forfeiting the 25% amount of the bank guarantee. In view of the above facts and the grounds stated the appellant challenged the order dated 4th November, 2011 passed by the Appellate Authority as well as the order passed by the Board dated 9th/11th August, 2010 in the present appeal.

Affidavits and written submissions had been filed on behalf of the respondent Board. It is averred on behalf of the Board that complaints were received from the village of Sarhaul, Gurgaon that the appellant unit had been discharging its untreated effluent, generated from electroplating process through borewell into the ground water, due to which the ground water has become unfit for human consumption. These complaints were received in the year 2009 and a team of officers of the Board was appointed on 5th June, 2009 to conduct inspection of the unit and to collect samples of six borewells and soil samples. The samples were analysed and it showed that Hexavalent Chromium was as high as 80 mg/L against the permissible limit that should be NIL and in any case should not exceed 0.1 mg/L even as per the case of the appellant. In the tubewell of Mr. Mahavir Yadav whose plot was located in front of the appellant unit was 80 mg/L and it was 38.12 mg/L against the same limit in the tubewell of Mr. Virender Yadav at depth of about 500 feet. Samples were collected from the tubewells of the appellant unit and result showed the Hexavalent Chromium to be as high as 10.87 mg/L. The rainwater harvesting well of the unit was also found to contain 17.517 mg/L of Hexavalent Chromium.

Samples were taken again in October and December, 2009, which also showed excessive Hexavalent Chromium. The inspection team had taken photographs, as well as water and soil samples and placed on record the reports of the samples so taken. There are a number of analysis reports on record. Some of them are as follows:

Type of sample: - Monitoring

Haryana State Pollution Control Board

Laboratory (HQ)

C-11, Sector-6, Panchkula, Haryana

Issued to M/s                                       R.O. Gurgaon                                                              Report No. -131

Vill-Sehraul, Gurgaon                                                 Dated 11-Jun-09

Description:- Received 06-Jun-09 a sample of Water Collected by Sh. S.C. Mann, Sc-C (H.Q.) Sh. Chand Saini, EE, Sh. Chanderbhan JEE

Collected from Tube well of Sh. Mahavir Yadav of the factory on 05-Jun-09 the sample has been analysed from 06-Jun-09 to 11-jun-09

Sr. No.

Parameters Name

Result

Result

Result/ Limit

Test Method

1

Sample Number

173

2

Sample collected from

Tube well (bore well)

3

Sample quantity (ltr)

2

4

Appearance

Yellow

5

Odour

Mild

6

Hexavalent Chromium as (Cr+6)(mg/l

80.0

7

Total Chromium as (Cr+6)(mg/l)

82.64

8

Nickel (as Ni) mg/l

0.49

9

Conductivity Micro. S/cm

1644.0

Sample collected/Not collected by us Sample Consumed in Testing JSASSA SSA Laboratory Incharge Sukh Ram Raaj Sharma Harish Chandra Dr. Badhur Singh

Gurgaon

CC to Member Secretary CC to Regional Office

The test report relate only to the Particular Sample submitted for testing Sukh Ram Raaj Sharma Harish Chandra

Type of sample: - Monitoring

Haryana State Pollution Control Board

Laboratory (HQ)

C-11, Sector-6, Panchkula, Haryana

Issued to M/s                                       R.O. Gurgaon                                                  Report No. -133

Vill-Sehraul, Gurgaon                                      Dated 11-Jun-09

Description:- Received 06-Jun-09 a sample of Water Collected by Sh. S.C. Mann, Sc-C (H.Q.) Sh. Chand Saini, EE, Sh. Chanderbhan JEE

Collected from Tube well (Bore Well) Water of Sh. Virender Yadav of the factory on 05-Jun-09 the sample has been analysed from 06-Jun-09 to 11-jun-09

Sr. No.

Parameters Name

Result

Result

Result/ Limit

Test Method

1

Sample Number

175

2

Sample collected from

Tube well (Bore Well)

3

Sample quantity (ltr

2

4

Appearance

Yellow

5

Odour

Mild

6

Hexavalent Chromium as (Cr+6)(mg/l)

38.12

7

Total Chromium as (Cr+6)(mg/l)

39.43

8

Nickel (as Ni) mg/l

0.016

9

Conductivity Micro. S/cm

1003.0

Sample collected/Not collected by us

Sample Consumed in Testing JSA SSA SSA Laboratory Incharge Dr. Badhur Singh

Gurgaon

CC to Member Secretary CC to Regional Office

The test report relate only to the Particular Sample submitted for testing

Based on the above facts, on 11th July, 2009, the Board issued a show cause notice under Section 33A of the Act of 1974, requiring the appellant unit to show cause as to why the unit not be closed. Besides this, the direction for deposit of FDR of Rs. 2 Crores or Bank Guarantee of Rs. 5 Crores valid up to 21st March, 2012 was also stipulated. Apart from this, the unit was asked to submit Remediation Plan to treat the whole aquifer in surrounding area as deep as 500 feet and to also submit an affidavit. On 22nd July, 2009 the unit submitted the Remediation Plan and Bank Guarantee along with an affidavit. Since the Remediation Plan submitted by the appellant unit was found deficient, unit was asked to remove deficiencies. On 30th November, 2009, samples were again taken by the Committee and those were again found to have excessive Hexavalent Chromium. This fact was also disclosed to the appellant unit and an order of closure dated 31st December, 2009 was passed. On 4th January, 2010, a representative of the appellant approached the Chairman of the Board and brought to his notice that there is reduction in Hexavalent Chromium. The unit also committed before the Board that it will rectify the remaining contamination by March, 2012. On 7th January, 2010, the Board refused to accept commitment and directed to complete Remediation Plan by 31st December, 2010 instead of 31st March, 2012, as asked for. Vide its affidavit dated 8th January, 2010, the appellant unit gave an undertaking to reduce Hexavalent Chromium contamination in the ground water as follows:

"25% reduction by 31.03.2010 (value will be 24.75 mg/l)

50% reduction by 30.06.2010 (value will be 16.5 mg/l)

75% reduction by 30.09.2010 (value will be 8.25 mg/l)

100% reduction by 31.12.2010 (value will be Nil)

It was further undertaken, in the event of not adhering to the above statement, the Bank Guarantee submitted by appellant unit may be forfeited."

Considering the affidavit and undertaking of the appellant, the closure order dated 31st December, 2009 was suspended with stipulation that in case it is found that unit is not showing adequate progress in implementing the commitments mentioned in the affidavit, the unit will be closed besides forfeiting 100% Bank Guarantee and prosecuting action shall also be taken against the unit. Thus, an affidavit was filed on 8th January, 2009. Since, the appellant unit failed to achieve the reduction target from April to July, 2010 i.e. 50% (16.5 mg/l), the order for forfeiture of the Bank Guarantee was passed. The appeal against order dated 11th August, 2010 was dismissed by the Appellate Authority on 4th November, 2011.

The Board has also stated that it is empowered to demand the Bank Guarantee for the amount that it considers appropriate and the Bank Guarantee furnished by the appellant itself is evident of the fact. The appellant industry is a persistent defaulter and has committed grave offence against the environment. The security amount was increased keeping in view the gravity of the offence. The unit had taken advantage of the closure order and it was kept under suspension. In this scenario, such a demand is permissible. As per the new policy passed by Technical Advisory Committee of the Board on 11th June, 2015 such industry shall be closed permanently and shall not be considered for grant of consent to operate. It is stated that action against other units was also taken and other polluting industries were small one and even they were closed. The board has filed a list of closed industries which are 15 in number. That the appellant unit cannot claim any advantage of the judgment of the Tribunal in the case of HSPCB v. M/s. Haryana Organics as the facts of that case were different and even in that case, the Board had asked for a Bank Guarantee to be furnished.

The complaints made by the villagers were found to be genuine and it was found that the ground water has become unfit for human consumption and it remained so for a considerable time.

It may also be noticed that prior to its affidavit dated 17th May, 2013, the Board had also filed an affidavit dated 4th January, 2012 providing detailed reasons for its action of closing the appellant unit and encashment of bank guarantee. The appellant had furnished an affidavit dated 8th January, 2010 where it had provided for a time schedule to remove the content of Hexavalent Chromium from the ground water in four phases. The bank guarantee was also furnished to secure the said undertaking. The appellant having failed to comply with its undertaking and/or to adhere to the time frame the bank guarantee was forfeited. The unit was ordered to be closed vide order dated 31st December, 2009 and the order of closure was placed under suspension vide order dated 8th January, 2010. The appellant industry is involved in highly polluting electroplating process which has caused pollution to the groundwater by discharging untreated trade effluent directly into the aquifer. The industry was given time to take remedial steps but despite expiry of a year, they failed to adhere to the schedule. On the basis of the Polluter Pays Principle, and while referring to the various judgments of the Supreme Court of India, particularly, in the case of Research Foundation for Sciences v. Union of India, (2005) 13 SCC 186, 201, MC Mehta v. Union of India 1987 (I) SCC 395, Deepak Nitrite Ltd. v. State of Gujarat 2004(6) SCC 402, Vellore Citizens' Welfare Forum v. Union of India 1996(5) SCC 647, A.P. Pollution Control Board v. Prof. M.V. Nayudu 2001(2) SCC 62, Tirupur Dyeing Factory Owners Association v. Noyyal River Ayacutdars Protection Association, (2009) 9 SCC 737, it is contended that on being examined through the standard of any settled principle of environmental law, the appellant industry was liable to pay damages for continuously polluting the groundwater and also for failing to comply with the conditions stated in the order dated 8th January, 2010 suspending the direction in relation to closure of the industry. But for the bank guarantee furnished, and the undertaking given by the industry, it would not have been permitted to operate at all, as it was a case of complete non-compliance. The industry had failed to adhere to the settled norms despite being conscious of its illegal activity, continued to discharge the untreated trade effluent. It did not operate its effluent treatment plant only to save expense on the running of ETP and continued with its illegal discharge of trade effluent which rendered the groundwater unfit for human consumption. It is stated that the unit had installed ETP but the same was not adequate and still was not being operated by the appellant industry. Even on surprise checking, the unit was found operating and discharging its untreated trade effluent without treating the same, which led to the passing of the order of closure. Looking at the volume of the damage caused, it is only the appellant unit which had caused the damage and the other industries involved are small-scale units and do not cause pollution to that extent. The appellant industry had abandoned its own tubewell, installed in its own premises, as, its water had been rendered unfit for human consumption. It had got installed a new tubewell at a much greater depth so as to draw potable water. In the sample analysis report of the water collected from the premises of the appellant, the content of Hexavalent Chromium was detected to be as high as 10.87 mg/L and the rain water harvesting well of the company also contained Chromium to the extent of 17.517 mg/L. The real intention of the appellant industry was to complete the paper work but not to take actual effective steps to implement the Remediation Plan. In the year 2009, upon inspection it was found that there was absolutely no progress at the site for the installation of additional ETP. No flow meter had been installed which could have shown the quantity of the effluent being treated. Keeping in view the discrepancies, deficiencies and default the closure order was issued which was fully justified. The total Remediation Plan was to be executed by the industry in four phases, for removal of Hexavalent Chromium and this was put forward by the industry itself. The Board granted time up to December, 2010 and it is specifically disputed that the affidavit dated 8th January, 2010 was filed by the industry under any pressure whatsoever. In fact, it was a voluntary act on the part of the industry with an intention to continue operation. In the inspection of April, 2010, it was noticed that the company had achieved the target for reduction in the levels of Hexavalent Chromium regarding the first phase and therefore, satisfactory progress was noticed. Another inspection was carried out on 15th July, 2010 and the samples were collected and it was found that the unit had failed to achieve the target reduction percentage, which was to be achieved by 3rd June, 2010. The Hexavalent Chromium was much beyond the target of the value. The RO plant of ETP was not in operation. Under these circumstances, the Court had passed the order dated 9th August, 2010 directing forfeiture of the bank guarantee to the extent of 25%. This action of the Board suffered from no illegality. Keeping in view the extent of the pollution and volume of effluent being discharged and repeated defaults on the part of the industry, the bank guarantee of Rs. 5 Crores was fully justified as it was a performance guarantee. Non-compliance by the industry would result in invocation of the bank guarantee. It was an exceptional case and therefore, the bank guarantee of the exceptional amount varied from the general condition relating to bank guarantee and in the present case, was asked for. It was not only the case of discharging of untreated trade effluent but was a case, where there was great risk to the residents around the industry. Thus, according to the Bench the order passed by the Board, does not suffer from any nonconformity or illegality.

The unit was also inspected on 2nd February, 2011 and when the water samples of the tubewells of the unit and the tubewells located in the surrounding area were analysed it showed higher values of BOD & COD in both the tubewells. In tubewell no. 1, the value was 24.5 mg/L and in tubewell no. 6 it was 455 mg/L against the permissible limit of NIL. High COD values have also been reported in tubewell no. 1 & 6 to the extent of 93.2 mg/L and 1521.6 mg/L, respectively. The tubewell of the private parties/complainants showed the value of BOD as 95.0 mg/L and 68.0 mg/L, respectively and that of COD at 282.4 mg/L and 210.8 mg/L. Another inspection was carried on 19th January, 2012 and the analysis report showed that Hexavalent Chromium has been detected in tubewells of the private parties/complainants in the village near the location of the industry and even it contains excess of heavy metals including Chromium, COD etc. Again, the unit was inspected on 24th April, 2012 and samples were collected. Sampling was again carried out on 21st January, 2013, 1st April, 2013 and 18 th April, 2013. According to the Board, these latest results show that the Hexavalent Chromium as Cr+6 is NIL in the tubewells of the abovesaid unit and Sh. Pravin etc. The groundwater was found to contain excess of heavy metals including total Chromium as Cr, SS, BOD, COD, O&G etc. The unit had existing effluent treatment plant and subsequent to the completion of the modification in the year 2010, the Chromium levels in the outlet of the ETP decreased and in April, 2013, the parameters are found to be within the prescribed limit/norms. The Board is using the forfeited amount for preservation of environment, prevention and control of pollution under various schemes such as contributing financially an amount of approximately Rs. 10 Lakhs for installation of Common Effluent Treatment Plant in Gurgaon, approximately Rs. 1 Crore for installation of Ambient Air Quality Monitoring Station at Gurgaon.

The parties to the lis had filed written submissions and even argued the matter at some length. From the pleaded case and arguments of the respective parties, the following issues fall for consideration of the Tribunal:

Whether the Haryana State Pollution Control Board had the authority to require the appellant industry to furnish a bank guarantee of Rs. 5 Crores or any other amount in accordance with law?

Whether the orders passed by the Board dated 11th August, 2010 and 4th November, 2011 are illegal, arbitrary and are liable to be set aside for the reasons stated in the appeal?

Whether the appellant industry has been causing pollution by discharging its untreated trade effluent directly into the aquifer and by other means. If so, what directions are required to be issued by the Tribunal in that behalf?

ISSUE NO. 1: Whether the Haryana State Pollution Control Board had the authority to require the appellant industry to furnish a bank guarantee of Rs. 5 Crores or any other amount in accordance with law?

The contention raised on behalf of the appellant industry is that there is no rule which empowers the Board and that the Board has no policy under which it could ask the appellant to furnish a bank guarantee, and in any case, to the extent of Rs. 5 Crores. This action of the Board is, therefore, unjustifiable. On the other hand, the contention on behalf of the Board is that under the provisions of the Act of 1974, the Air (Prevention and Control of Pollution) Act, 1981 and the Environmental Protection Act, 1986 it has the power to impose any conditions including requiring a bank guarantee while permitting any industrial unit to carry on its manufacturing activity generating emission or trade effluent. In fact, the Board has from time to time passed various resolutions including resolution no. 129 in the meeting held on 29th April, 2004 as well as resolution with reference to agenda no. 145.4, wherein in exercise of its statutory powers it decided to consider the revocation of closure order against the industries subject to their filing and undertaking along with performance guarantee in the form of bank guarantee for upgradation, installation of effluent treatment plant, Ambient Air Control Measures affixing time frame by the Competent Authority. These resolutions provided the guidelines in relation to furnishing of the bank guarantee, their language and terms and conditions and encashment thereof. It provided that the bank guarantee to be furnished by the defaulting industry would not contain any uncertain terms and stipulations with regard to encashment/forfeiture of the bank guarantee in the event of default.

Undisputedly the appellant industry had furnished the bank guarantee with the stipulation that it was liable to be encashed/forfeited in the event of default and at the discretion of the Board. Along with this, the appellant industry had also furnished an affidavit. Both these documents have been furnished voluntarily and unequivocally. The bank guarantee was to continue to be enforceable till all the terms and conditions of the Board were met by the appellant industry or discharge thereof by the Board. Further, that all the terms and conditions of the letter dated 11th July, 2009, have been fully and properly carried out by the appellant industry. The demand has to be made by the Board. Upon demand from the Board, the bank was to pay the amount claimed under the guarantee. Along with the bank guarantee the General Manager of the appellant industry, authorized signatory had also filed an affidavit making it clear that they were submitting a bank guarantee and would comply with the Remediation Plan and would continue maintaining and providing a clean environment.

The contentions on behalf of the appellant that the Board has no authority, no law to require the appellant industry to furnish a bank guarantee for compliance of conditions as stated in the letter dated 11th July, 2009, is without any substance and in fact this is no more res integra and stands completely answered by a larger bench judgment of the Tribunal in the case of State Pollution Control Board, Odisha v. M/s. Swastik Ispat Pvt. Ltd., , 2014 All (I) NGT Reporter (1) (Delhi). By this judgment the precise issue for determination before the Tribunal was whether the Board in terms of the provisions of the Act of, 1981, has the power to ask for bank guarantee as an interim measure, during which the industrial unit is called upon to comply with the conditions of the order issued by the Board. Answering the question in the affirmative the bench held as under:

Section 31A vests a very wide power in the Board where in exercise of its powers and performance of its functions under the Air Act, it may issue any direction in writing to any person, officer or authority and such directions would include closure, prohibition or regulation of any industry or operation and stoppage or regulation of supply of water, electricity or any other service to the industrial plant. This power is unfettered and has an over-riding effect over all the laws subject to the provisions of the Air Act and subject to any specific direction issued by the Central Government in that behalf. The power to issue directions under Section 31A is to be exercised in consonance with the principles of natural justice and is appealable to the National Green Tribunal in terms of Section 31B of the Air Act. Sections 37 to 39 of Chapter VI of the Air Act deal with certain penal actions which can be taken by the Board. If any person fails to comply with the provisions of Sections 21 and 22 or directions issued under Section 31A of the Air Act, he could be punished with imprisonment which may extend to a term not less than one year and six months but may extend to six years and with fine. Section 39 of the Air Act imposes a generic punishment of imprisonment uptil three months or with fine which may extend to Rs.10,000/- or with both wherever a person contravenes any of the provisions of the Air Act. No court, inferior to that of a Judicial Magistrate or a Metropolitan Magistrate of the first class shall take cognisance of any offence except on a complaint filed by the Board or any officer authorised in this behalf who has given notice of not less than sixty days of the alleged offence.

From the above analysis, it is clear that the Board has preventive, punitive and curative powers. While reading the object and reasons in conjunction with Sections 16 to 18 and Section 31A of the Air Act, it is clear that the powers of the Board to issue directions are to be exercised with the primary object of prevention, control and abatement of air pollution. The most fundamental aspect of environmental law is prevention and control of pollution and to provide clean and healthy environment and wholesome water to the society at large. As already noticed, the provisions of Section 17(1)(a) casts upon the Board an obligation to do things and perform such acts as may be necessary for the proper discharge of its functions and generally for the purpose of carrying out the purposes of the Air Act. Upon analysis of the language of these provisions, it is evident that besides performing the specific acts and functions, the Board is entitled to do things or perform acts which may be in aid thereto and for carrying out effectively the purposes of the Air Act. Once it prepares a comprehensive programme for prevention, control and abatement of air pollution, and emission standards are prescribed, the Board then is required to issue the order of consent to various applicant-units to establish and operate their activities. The matter is not put to rest at that stage but the Board is required to ensure implementation of the terms and conditions of the consent order. It may then do such acts and deeds as may be necessary to ensure effective implementation of the entire environmental programme. The powers vested in the Board are thus of a very generic nature and are not restricted in their scope and implementation. These powers have to be construed liberally and not so narrowly to the extent that it would defeat the very purpose of the Air Act. It will be appropriate to construe them in a manner that amplify their scope to the fullest to the extent in line with the object of the Act.

It may also be analysed here that Section 31A of the Air Act gives power to the Board to issue directions. Such directions could be issued, notwithstanding anything contained in any other law, by the Board to any person, officer or authority to comply with the provisions of the Air Act. The directions thus issued shall be binding. The legislature has laboured to give wider connotation to these provisions and has, therefore, provided an explanation to Section 31A and clarified that the power to issue directions would include the power to direct closure, prohibition or regulation of any industry, operation or process and even stoppage or regulation of supply of electricity, water or any other service. This power is 'inclusive' and not exhaustive. An inclusive definition or explanation would take within its ambit the power to do things besides what has been spelt out. Such inclusion is specific and must not be restricted by undue limitations. In the case of State of Bombay v. Hospital Mazdoor Sabha (AIR 1960 SC 610), the Supreme Court, while dealing with an inclusive definition under the Industrial Disputes Act, 1947 held that it was obvious that the words used in an inclusive definition denote extension and cannot be treated as restrictive in any sense. Where we are dealing with an inclusive definition, it would be inappropriate to put a restrictive interpretation upon terms of wider denotation. The legislature, in its wisdom, has used different expressions like closure, prohibition and regulation. While the first two are specific terms, regulation is a generic term. It would take within its ambit other regulatory factors or directions which may not amount to prohibition or closure. It may be something short of these expressions and would still achieve the object of ensuring prevention and control of pollution and taking steps necessary for that purpose. Such an approach would be in consonance with the maxim Noscitur a sociis. The Wharton's Law Lexicon, 15th Edition explains 'regulation' as a word of broad import having wide meaning comprehending all facets not only specifically enumerated in the Act but also embracing within its fold the powers incidental to the regulation envisaged in good faith in the interest of the general public.

Keeping in view the legislative scheme and the object of the Air Act, it is evident that the Board is not incapacitated to issue a direction which may not be prohibitory or of closure in substance and application, but may be regulatory with an object to ensure that anti-pollution devices and anti-pollution measures are adopted to prevent and control pollution. For this purpose, the Board may require an industry to furnish a bank guarantee which would serve dual purposes. On the one hand, it would provide incentive to an industry to install anti-pollution devices so as to ensure non-encashment of the bank guarantee, while on the other, in the event of default, resulting in pollution, the Board would be able to spend that money for remedial purposes to control environmental degradation or damage that has taken place as a result of such default. Both these purposes would squarely fall within the framework of law and the powers and functions of the Board. The purpose of requiring a Unit to furnish a bank guarantee is not penal per se. It is compensatory i.e. an amount which would be required to be spent upon rehabilitation and restoration of the environment due to the damage caused to it by default on the part of the Unit. We shall be deliberating upon this aspect at some length subsequently, but, at this stage suffices it to note that the Board has jurisdiction to grant consent to establish and operate or revoke the same, subject to such terms and conditions as it may deem fit and proper within the ambit and scope of Section 21 of the Air Act. Sub-Section 4 of Section 21 grants a statutory sanction to the Board to record reasons and the conditions, subject to which the order of consent is being given or is being refused. The proviso to Section 21(4) further empowers the Board to cancel the consent even before the expiry of the period for which it is granted, if the conditions subject to which the consent was granted, are not fulfilled. Besides preventing and controlling the pollution, the Board is commanded by the Legislature to ensure that the conditions of the consent order are satisfied and are enforced. These conditions would obviously relate to the twin objects of ensuring emissions as per prescribed standards and prevention of damage to the environment. This is the paramount duty of the Board. The intention of the Legislature to ensure implementation of these facets is further elucidated by the language of Section 31A of the Air Act where the Board can issue directions as afore-mentioned in exercise of its powers and performance of its functions under the Act. Thus, there has to be a direct nexus between the directions contemplated under Section 31A of the Air Act and the powers and functions of the Board as contemplated under Sections 16, 17 and other relevant provisions of the Air Act. Once these Sections are read co-jointly, then it becomes clear that a direction which would ensure compliance of the conditions of the consent order and further the cause of prevention and control of pollution would be a direction permissible under law.

The procedure normally adopted by the Board is to permit the industrial operations for a definite period upon furnishing of Bank Guarantee for compliance and compensation, if required, and during integrin permitting the industry to comply with the various directions and the conditions stated in the consent order including installation of anti-pollution devices. This helps the sustainable development as industrial activity is not straightaway closed or prohibited but is permitted to carry on subject to compliance with the conditions imposed. Thus, it clearly falls in the domain of regulatory regime as opposed to prohibitory or closure regime.

The Board is a statutorily constituted expert body and is, therefore, competent to examine and even anticipate the likely damage to environment by such disobedience and thus to remedy the wrong in a timely manner. It has been stated, time and again, that the Board has not been constituted to perform empty formalities. In fact, it has to prevent, control and abate environmental pollution and for achieving the purposes and carrying out the purposes of the Act effectively, it frames guidelines for taking effective measures. (Refer: Bihar State Pollution Control Board & Anr. v. Hiranand Stone Works & Ors. (AIR 2005 Pat 62)

For these reasons, we are of the considered opinion that asking for the bank guarantee, as an interim measure, during which the industrial unit is called upon to comply with the conditions of the consent order, does not fall outside the ambit of statutory powers vested in the Board.

The Ld. Counsel appearing for the appellant industry relied upon a four member bench judgment of the Tribunal in the case of Haryana State Pollution Control Board v. M/s. Haryana Organics, 2013 (2) All India NGT (Delhi) 19 to contend that the Board could not have asked for the bank guarantee in the facts of present case.

The reliance upon this judgment of the Tribunal by the Ld. Counsel appearing for the appellant is misconceived and misplaced. In fact, in para 23 of the judgment the Bench has categorically upheld and recognised the power of the Board to ask for bank guarantee in order to ensure due compliance of the direction issued in the facts of that case. Para 23 of the said judgment read as follows:

"23. If we read all the relevant provisions together with with Section 33-A of the Water Act, it is clear that State Board has power to issue any direction to secure performance of its functions under the Water Act. It is imperative that the directions to be issued by the State Board must have reasonable nexus with due performance of its functions under the Water Act. The Bank guarantee was obtained from M/s. Haryana Organics in order to ensure due compliance of the directions to install RO/Nano filtration system for the purpose of securing zero discharge of the industrial effluents. In our opinion, the Bank Guarantee was sought to achieve particular purpose and if any deficiency was noticed by the HSPCB, till the removal of such deficiency, the Bank Guarantee could have been renewed by extending validity thereof."

Of course, after recording the above findings in the facts of that case, the Bench had expressed the opinion that the bank guarantee could not have been encashed in the manner in which it was encashed in the facts of the case of M/s. Haryana Organics, which we would be discussing in the later part of this judgment. From the above enunciated principles of law, it is clear that the power of the Board to ask for the furnishing of a bank guarantee for due performance of the conditions imposed in an order, which are for prevention and control of pollution cannot be questioned. All that the Board had to establish is that there should be due nexus between the imposition of condition requiring the furnishing of bank guarantee and performance of the conditions required to be satisfied by the industry. It is also evident that, the industry which avoids the order of closure on the basis of furnishing of a bank guarantee can hardly question the same or its validity at a subsequent stage. The industry has taken advantage of such a concession on the basis of the terms and conditions stated therein, and would in fact, in law be stopped from challenging the validity of such a condition. In the facts of the present case, it is evident that the appellant industry was a seriously polluting industry and had contaminated not only the groundwater of its own land but even that of the tubewells in the neighbourhood. In normal course, the tubewell water was turned unfit for human consumption and even poisonous. For carrying out of the Remediation Plan and for removing the pollution, the bank guarantee had been furnished. Thus, we answer this issue on facts and law both against the appellant industry and in favour of the Board.

ISSUE NO. 2: Whether the orders passed by the Board dated 11th August, 2010 and 4th November, 2011 are illegal, arbitrary and are liable to be set aside for the reasons stated in the appeal?

The challenge to the above two orders are primarily on the ground that they are arbitrary and have been passed without taking into consideration the pleas advanced by the appellant and the industry had been found to be non-polluting. Further, it is also contended that the order is based on extraneous consideration. The bank guarantee was asked for without any authority in law. Furthermore, the period provided for implementation of Remediation Plan was too short and it was not possible to carry out the same, thus encashment of the bank guarantee or any part thereof is unjustifiable. The appellant unit had installed the ETP. There were other industries, atleast a dozen of them causing such pollution. However, the liability has been fastened only upon the appellant against whom the action has been taken. Lastly, it is submitted that there has been violation of Principles of Natural Justice. The appellant has also contended that the appellant industry was operating for last 25 years with the consent of the Board and as such the Board could not have taken punitive and coercive measures against the industry, as the bank guarantee and the affidavit were a result of undue influence and pressure by the Board.

As far as the question of violation of Principles of Natural Justice is concerned, this contention of the appellant industry is not supported by the record before the Tribunal. The appellant industry was found to be polluting in the year 2009 where-after show cause notice was served upon the industry. The premises of the industry were subjected to an inspection by the Regional Officer. Reports of the inspections along with analysis reports were submitted to the Head Office. Copies thereof had been provided to the appellant industry. Thereafter, the order of closure dated 31st December, 2009 was passed which was again kept in abeyance at the behest and request of the appellant industry to submit the bank guarantee, affidavit and Remediation Plan and implement the same.

It was only after the Remediation Plan was not given effect to appropriately and the industry continued with high level pollution of Hexavalent Chromium that the impugned order had to be passed. Not only this, even other show cause notices dated 11th July, 2009, 12th August, 2009, 10th September, 2009, 9th August, 2010 and 11th August, 2010 were given to the appellant industry. It had filed replies to those show cause notices and at no point of time it had ever disputed that it was not discharging untreated trade effluent and the effluent contained Hexavalent Chromium in larger quantity much in violation to the prescribed parameters as afore-noticed. The Industry of its own accord had submitted the Remediation Plan and assured the Board of proper implementation thereof.

The Board had issued the show cause notice dated 11th July, 2009 to which the appellant industry had submitted a Remediation Plan to treat the whole aquifer in the surrounding areas upto the depth of 500 feet. This was submitted along with the bank guarantee and the affidavit dated 22nd July, 2009. The bank guarantee was valid upto 31st March, 2012. The Bank had agreed and undertaken to pay the amount due and payable under the guarantee without any demur merely on receipt of the original demand on or before 31st March, 2012 from the Board stating that the amount claimed is due by way of loss or damage caused to or suffered or would be caused to or suffered by the Board by reason of any breach by the said company of the terms and conditions contained in the letter. It was further to the meeting held with the Chairman of the Board and furnishing of these documents that the order of closure dated 31st December, 2009 was kept in abeyance but this was strictly on the basis that the appellant industry would comply with the Remediation Plan and within the stipulated period. On 31st December, 2009, the Board passed a detailed order giving the entire history of the case, breaches committed by the appellant industry and persistent pollution being caused by the industry. It was specifically contained in the said order that the action plan submitted with targeted dates of completion of various remedial measures including withdrawal, treatment and recharging of treated water into the aquifer to remediate the polluted underground water. These steps the industry had failed to take and further no steps have been taken for installation of additional ETP of 1000 KL per day capacity for treatment of Hexavalent Chromium in the tubewell water and consequently it had been directed that the electroplating process of the appellant industry in Gurgaon be closed under Section 33A of the Act of 1974. On 3rd January, 2010, the industry had responded to the said order and requested for suspension of the order. Vide its letter dated 6th January, 2010, similar request was made and the unit stated that it was making best efforts on war footing to remediate the groundwater condition in the shortest practicable time. Vide its letter dated 7th January, 2010, the Board had informed the industry that the time period mentioned for taking the remedial action was too long and was not acceptable to the Board. It was further stated that the progress reports should be submitted and target should be achieved on quarterly basis from 31st March, 2010 to 31st December, 2010. It was clearly stated that the performance will be linked with the forfeiture of the bank guarantee submitted by the appellant industry. Another affidavit was submitted by the industry on 8th January, 2010 stating the plan for reduction of Hexavalent Chromium in the groundwater and Village Sehraul. Reduction in Hexavalent Chromium was directly related to the time period mentioned in the affidavit. Finally by December 2010 100% reduction in Hexavalent Chromium in the groundwater of MSL and Village Sehraul and surrounding areas was assured by the industry. It was specifically stated in this affidavit that in the event the industry is not adhering to the above statement, the bank guarantee submitted by the industry may be forfeited as per the rules of the Board. Further, vide its letter dated 8th January, 2010, the Board had clearly stipulated as follows:

"In case the unit fails to comply the above mentioned conditions within time frame and not complied with the commitment of their undertaking given in their undertaking/affidavit dated 8.1.2010, the unit will be closed and also prosecuted besides forfeiting the bank guarantee/security of Rs. 5 crore deposited by the unit. 25% of bank guarantee will be forfeited in case of non-compliance of commitment at (i) of the affidavit dated 8.1.2010 & (ii) of the affidavit dated 8.1.2010, 75% of bank guarantee will be forfeited in case of non-compliance of commitment at (iii) of the affidavit dated 8.1.2010, 100% of bank guarantee will be forfeited in case of non-compliance of commitment at (iv) & (v) of the affidavit/undertaking dated 8.1.2010. The backlog of (i) to (v) if any shall be completed within the next quarter including the cumulative work of next quarter after the forfeiture of the bank guarantee in above said manner. In case it is found that the unit is not showing adequate progress in implementing the commitments mentioned in the affidavit/undertaking dated 8.1.2010, the unit will be closed besides forfeiting 100% bank guarantee and prosecution action shall also be taken against the unit. Further, in case any complaint is received from the surrounding areas including vill. Sehraul the unit will be closed besides taking further action as per law."

The appellant industry had assured the Board that it would carry out the Remediation Plan as proposed and would ensure that there was no Hexavalent Chromium in and around and particularly in the premises of the complainant. This the industry could not achieve. The industry was subjected to inspections. Vide its inspection conducted on 15th July, 2010 where the samples were analyzed, number of deficiencies and non-compliance on the part of the industry were noticed. Again the appellant industry had failed to achieve the requisite targets as contemplated in the order of 30th June, 2010. Different inspections conducted from time to time, analysis reports and defaults on the part of the appellant industry led to passing of the order dated 11th August, 2010. The operative part of the said order reads as under:

"Therefore in view of deficiencies in performance as was required to be achieved by M/s Munjal Showa Ltd. Gurgaon by 30.6.2010, the Competent Authority has decided to forfeit 25% of Bank guarantee i.e. Rs. 1.25 crore (Rupees One Crore Twenty Five Lac) of Rs. 5.0 crore (Rupees Fice Crore) deposited by the unit vide letter No. MSL/PERS/HSPCB/SC/2009/537 dated 22.7.2009 (received vide Accounts Receipt No. 2192 dated 3.8.2009) as per policy of the Board, as the unit has failed to comply with the conditions of the suspension of closure orders and commitments of their undertaking given in their affidavit on dated 6.1.2010 and 8.1.2010. M/s Munjal Showa Ltd. Plot No. 9-11, Sector 18 Gurgaon is directed to deposit the Bank Draft of Rs. 1.25 crore (Rupees One Crore Twenty Five Lac) in favour of the HSPCB within 15 days positively in lieu of forfeiture of Bank Guarantee of 25% of the total bank guarantee of Rs. 5.0 crore (rupees five crore) as per policy of the Board, as the unit has failed to comply with the conditions of the suspension of closure orders and commitments of their undertaking/affidavit dated 8.1.2010, failing which action will be taken as per law/rules. Further, M/s Munjal Showa Ltd., Gurgaon shall comply with all conditions mentioned in suspension of closure order dated 8.1.2010 and commitment made in their affidavit dated 8.1.2010 in a time bound manner.

The above order clearly shows that the appellant industry had failed to satisfy the conditions on the basis of which the closure order of the appellant industry was kept in abeyance and the industry was permitted to carry on its manufacturing activities. There was clear nexus between the prevention and control of pollution caused by the appellant industry with the imposition of the conditions requiring the appellant industry to furnish the bank guarantee. As already held above, this squarely fall within the domain of the powers and functions conferred upon by the Board in terms of the Water and Air Act. The appellant industry took full advantage of approaching the Board and requesting it to keep the order of closure dated December, 2009 in abeyance with a clear undertaking and assurance that they would comply with the conditions imposed upon them including that of furnishing of a bank guarantee. It not only undertook to remove the Hexavalent Chromium from its own premises and tubewells but even that of the complainants of the village Sehraul. The samples of the groundwater have been analyzed time and again and high presence of Hexavalent Chromium was noticed. The Appellate Authority in its order dated 4th November, 2011 has specifically noticed that it was undisputable that Hexavalent Chromium will affect the health of the persons who get exposed to the same as it affects lungs, throat, eyes and skin, etc. The Chief Medical Officer, Gurgaon also stated that the presence of Hexavalent Chromium in high concentration is hazardous to health. The appellant industry has been causing pollution for years. Presence of such high degree of Hexavalent Chromium and other pollutants in the groundwater was a contribution majorly by the appellant industry. But for the furnishing of bank guarantee, the affidavit and the Remediation Plan, the industry could not have been able to avoid the consequences of the closure order passed by the Board. In fact, the appellant industry never challenged the legality and correctness of the closure order dated December 2009 but accepted the same and requested the Board for its deferment. In other words, the appellant industry acquiesced to the said order, accepted it and acted thereupon by furnishing the above documents and further agreed to the conditions of forfeiture or inaction of the bank guarantee in the event of default. The appellant industry's acquiescence, acceptance and having taken advantage of the order dated 8th January, 2010 vide which the closure order was deferred. In our considered view this would stop the appellant industry from alleging anything to the contrary.

Equally without merit is the other limb of arguments advanced on behalf of the appellant that there were a dozen other industries which were carrying on their manufacturing and electroplating activities and were adding to the Hexavalent Chromium in the groundwater and that no action had been taken against such industries. Firstly, the appellant industry cannot shift its burden to other small scale industries. It is the largest contributor of pollution in that area and from the data afore-referred it is clear that the pollution caused by this industry was immense and had been there for years together. Secondly, the Board had denied the contention that no action had been taken against other industries. However, other industries are stated to be deying and washing units in village Sehraul and there are no small scale industries dealing with electroplating activities. In fact, the Board had filed the list of 15 industries which are involved in carrying on dyeing and washing units in that area and all of them had been served with the show cause notices for closure and appropriate action was being taken against those industries. In fact, the Board has also placed on record the copy of the order dated 15th July, 2009 where one of the bigger units out of these Rama Dyeing, Mitesh Process, Coloure Impex, Super Dyer, Pooja Dyeing, Nancy Wash, Shahshi Dyeing, Maha Shakti Thread Mills, Gulmor Threads, Sandeep Dyeing, Sonu Dyeing, P.K. Dyers, S.K. Colour Fashion, Mohan Dyeing House and Balaji Washing Lane in village Sarhraul were ordered to be closed in terms of the provisions of Section 33A of the Act of 1974. There is no rebuttal on this record and we have no reason to disbelieve the affidavit filed by the Board. The argument on behalf of the industry that it had been operating for years after obtaining consent to operate from the Board and which should be considered to mean that the appellant industry was not a contributor to any pollution, is ill founded and contrary to the record. No doubt, for reasons best known to the Board itself despite such heavy pollution and addition to Hexavalent Chromium to the groundwater, tubewells, etc. it kept on giving its consent to operate to the industry, it is not only unfortunate but we are at a loss to understand why the Board permitted such an industry to carry on its manufacturing and electroplating activity. The inspection reports of 2009 prior thereto and even thereafter particularly reports dated 11th June, 2009 had shown Hexavalent Chromium in intolerable limits. It had severely contaminated the groundwater and as one of the inspection reports noticed that the water had even turned poisonous. The tubewells of two complainants, Shri Mahabir Singh Yadav and Shri Virender Singh Yadav had shown presence of Hexavalent Chromium as high as 80 mg/l and 17.5 mg/l even at a depth of 500 feet and rain harvesting well of the appellant industry itself. There is no explanation whatsoever on record before the Tribunal which could by any stretch of imagination justify such inaction and dereliction of its statutory duties by the Board and its officers. The Board was expected to examine the matter on different occasions when it came up for consideration of the Board itself and particularly the Chairman of the Board. We have no hesitation in observing that the Regional Officers of the Board and the Board itself had failed to perform its statutory duties and functions and it is not understandable as to how this industry could be permitted to operate for all these years and continue to contaminate the groundwater, tubewells and adversely affect not only the quality of the groundwater but even the health of the people living in the surrounding areas. We would direct the Chairman of the HSPCB to personally conduct an enquiry into the matter, fix responsibility and take action in accordance with law.

Another Principle that we are required to deliberate upon is the Principle of Strict Liability.

The Principle of Strictly Liability had been explained by the Hon'ble Supreme Court of India in the case of M.C. Mehta v. Union of India explaining the application of principle laid down in Rylands v. Fletcher the Hon'ble Supreme Court explained that it has to be kept in mind that in India the liability to pay compensation to affected persons is strict and absolute. The enterprise must be held to be under an obligation to provide that hazardous or inherently dangerous activity in which the enterprise is engaged must be conducted with the highest standard of safety on account of the accident in the operation of such activity. The Principle of Strict Liability has constantly been applied in India in relation to Environmental Jurisprudence.

The Indian Legislature has not left application of the Principle of Strict Liability to the discretion of the Tribunal but has specifically incorporated this Principle under Section 17 of the Act of 2010. Section 17(3) of the Act of 2010 specifically provides to the Tribunal in case of an accident applies the Principle of "No Fault". This prevents the dimensions of applicability of the Principle of "No Fault" or strict liability to the cases falling under the jurisdiction of the Tribunal. The Bench of the Tribunal in the case of Raghunath s/o Rakhamaji Lohakare v. Maharashtra Prevention of Water Pollution Board, 2014 (3) ALL INDIA NGT REPORTER (PUNE) while explaining this Principle held as under:-

"21. The Hon'ble Supreme Court in the case of "Indian Council For Enviro Legal Vrs. Union of India and Ors., 1996 AIR 1446-SCC(3)212" has dealt with the similar issues. The Hon'ble Supreme Court in the "Oleum Gas Leak case, has ruled that :

"We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis- à-vis the tortuous principle of strict liability under the rule in Ryland Vrs. Fletcher (supra).

"We would also like to point out that the measure of compensation in the kind of cases referred to in the preceding paragraph must be correlated to the magnitude and capacity of the enterprise because such compensation must have a deterrent effect. The larger and more prosperous the entire, greater must be the amount of compensation payable by it for the harm caused on account of an accident in the carrying on of the hazardous or inherently dangerous activity by the enterprise"

Once the law in "Oleum Gas Leak case" and also "Indian Counsel for Enviro Legal Vrs. Union of India (Bichhri case), invite of the above discussion, the industries in MIDC Waluj area in the catchments of the wells and percolation tank referred above are absolutely liable to compensate for the harm caused by them to the villagers in the affected area, to the soil and to the ground water. The issue No.3 is accordingly settled in "AFFIRMATIVE"."

The Bench at Delhi while explaining the Principle held as under in the case of M/s. DSM Sugar Distillery Divison v. Shailesh Singh & Ors., RA No. 13/2015 in OA No. 35/2015, decided on 10th December, 2015:-

"12. The Review Applicant is a distillery unit. In normal course of business such industry is termed as a highly polluting industry. On one hand, there is a statutory obligation upon this industry to carry on its activity strictly in accordance with prescribed standards, while on the other hand, in the interest of environment, strict vigil is to be maintained over such industry by the regulatory authorities. Like any other case, contention in this case has also been raised in regard to burden of proof in relation to pollution or environmental degradation resulting from carrying on of the distillery manufacturing activity by the Review Applicant. Certainly, there is no specific provision in the NGT Act which provides for discharge of onus between the parties to the lis. The provisions of the Indian Evidence Act, 1872 are stricto sensu not applicable to the proceedings before this Tribunal. Section 20 of the NGT Act requires the Tribunal to decide cases with reference to three settled principles of environmental jurisprudence i.e. Sustainable Development, Precautionary Principle and Polluter Pays Principle. In our considered view, the substantive onus would be upon the industry to show that it is operating its business in accordance with the prescribed norms, conditions of the consent order and/or not causing pollution to the environment. This aspect of the matter need not detain us any further as a Bench of the Tribunal has discussed the entire law relating to onus and application of the 'Strict Liability Principle' to environmental cases at some length in the case of Krishan Kant Singh v. M/s. Triveni Engg. Industries Ltd., Original Application No. 317 of 2014 pronounced on the same day, wherein the court held as under:

"8. One of the main contentions raised before the Tribunal, more often than not, is 'on whom lies the burden of proof in environmental cases'? This question to some extent even arises in the present case as well. Thus, we shall first proceed to examine the application and extent of the 'principle of onus of proof' in environmental cases. The Environment (Protection) Act, 1986 (for short the 'Act of 1986') was enacted to provide for the protection and improvement of the environment and for matters connected therewith. The purpose was to implement the decisions that were taken at the United Nations Conference on the Human Environment held at Stockholm in June, 1972 in relation to steps for the protection and improvement of human environment. Similarly, the Water (Prevention and Control of Pollution) Act, 1974 (for short the 'Water Act), in its preamble states that it is an Act to provide for prevention and control of water pollution and the maintaining or restoring of wholesomeness of water while noticing that it was expedient to provide prevention and control of water pollution. Similarly, the preamble to the provisions of the Air (Prevention and Control of Pollution) Act, 1981 (for short the 'Air Act') also states that it is an Act to provide for the prevention, control and abatement of air pollution and for establishment of Boards with powers and functions relating thereto and for matters connected therewith.

Under the Act of 1986, in terms of Section 3, Central Government is required to take such measures as may be necessary or expedient for the purpose of protecting and improving the quality of the environment as well as preventing, controlling and abating environmental pollution. Section 5 vests the Central Government with very wide powers of rigorous consequences, enabling it to issue directions in exercise of these powers and performance of its functions under the Act and such directions could relate to closure, prohibition or regulation of any industry, operation or process, or even stoppage or regulation of supply of electricity or water or any other service to such industry. Under the provisions of this Act and the Environmental Clearance Regulations, 2006, project or activities specified in the Schedule thereto can be commenced and or completed only with prior Environmental Clearance granted by the competent authority.

Both Air Act and Water Act contain prohibitory, regulatory and punitive provisions. Section 25 of the Water Act mandates that no person shall, without the previous consent of the State Board establish or take any steps to establish any industry, operation or process or any treatment and disposal system or any extension or addition thereto, which is likely to discharge sewage or trade effluent into the stream or well or sewer or on land. It further even prohibits any person from bringing into use any new or altered outlet for the discharge of sewage or to make any new discharge of sewage except with the consent of the Board and subject to provisions of the Act. The Board constituted under this Act has to perform various functions as stipulated under Sections 16 & 17 of the Act and to prescribe and lay down standards of discharge of sewage or trade effluent is one of its primary functions. The Boards have to ensure adherence of such prescribed standards as well as to ensure prevention and control of pollution and in fact that there is no pollution of river, water bodies, ground water or any other water bodies etc. The Water Act was amended by the amending Act 53 of 1988, to provide the Board with proper functioning abilities as well as to enable it to issue directions of very serious nature, including closure of an industry and disconnection of essential supplies to it as envisaged under Section 5 of the Act of 1986.

Similarly, the Air Act provides power to the Boards to issue directions for a complete restriction of an activity in the notified air pollution control area. Section 21 of the Act prohibits any person from establishing and operating any industrial plant in an air pollution control area, without the previous consent of the State Board and subject to provisions of Section 21. Sections 16 and 17 of the Air Act enumerates the functions of the Central Board and the State Board respectively, of which one of the paramount function is to lay down standards for the quality of air and standards for emission of air pollutants. The consent to be granted by the Boards necessarily has to require any person to release only that much emission which would be within the prescribed limits, thus, preventing air pollution and consequently various health hazards. Like Section 33A of the Water Act, Section 31A of the Air Act was introduced by the amendment Act 47 of 1987 which vested the Board with power to issue directions of closure, prohibition or regulation of any industry, operation or process or disconnection of essential supplies to an industry or a plant.

All the above Acts and their provisions clearly demonstrate the legislative intent to prohibit establishment or carrying on of any activity like industrial, manufacturing or any other activity, carrying of which would result in toxic emissions in the air, discharge of sewage or trade effluent on the land or water or if it falls within the air controlled area.

The purpose is two-fold; one to completely regulate such activity and the other to ensure prevention and control of pollution and restoration of environment. A person could carry on or establish any industry or other activities only with the previous consent of the respective Boards. The consent is contemplated at both stages i.e. at the stage of establishing such industry, plant, etc. as well as at the time of operationalization of the plant. The industry so established would carry on such activity only by adhering to the conditions of the order of the consent and its emission and discharge of effluent or sewage has to be strictly within the prescribed parameters. Thus, the law imposes duel obligation upon the person or industry. Firstly, it has to take the consent of the Board and secondly, it must ensure adherence to the prescribed parameters and the law in force while carrying on its activity. In either event, the responsibility is exclusively that of the person or industry to comply with the law and to demonstrate at all relevant times that it continues to comply with those directions and laws in force.

The above statutory scheme and the environmental laws have to been seen and examined in the background of the Fundamental Duty imposed under Article 51(A) (g) of the Constitution of India, which imposes a constitutional duty upon every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wildlife and to have compassion for living creatures. For a citizen to claim enforcement of the Fundamental Right to a decent and clean environment granted under Article 21 of the Constitution and to expect the State to discharge its constitutional responsibility within the ambit of Article 48A, the citizen has to keep in mind that the expectation of framers of the Constitution was also that the citizens would perform their constitutional duty for the protection of the environment.

The cumulative effect of the above Constitutional and statutory provisions is that there would be definite liability upon the person who intends to alter the environmental conditions by his activity or a project, to maintain the requisite parameters and ensure that there are no adverse impacts upon the environment and ecology, particularly as defined under the Act of 1986. This in a way is sufficiently indicative of the application of Rule of Strict Liability.

The Rule of 'No Fault' or 'Strict Liability' was enunciated by the House of Lords in the case of Rylands v. Fletcher, (1868) L.R. 3 H.L. 330, wherein it was stated that if the defendant was not negligent or rather, even if the defendant did not intentionally cause the harm, he could still be held liable under this Rule for the damage or adverse impact of his activity. To succeed in such an action in tort, the claimant was expected to show:

That the defendant brought something onto his land;

That the defendant made a "non-natural use" of his land (per Lord Cairns, LC);

The thing was something likely to do mischief if it escaped;

The thing did escape and cause damage.

The rationale behind the rule of Strict Liability is that the activity going within its fold are those entailing extraordinary risk to others, either in seriousness or the frequency of the harm threatened. Extending the basis of such liability, Blackburn, J. held as under:

"We think that the rule of law is, that the person who for his own purposes brings on his lands and keeps there anything likely to do mischief if it escapes, must keep it in at his peril, and if he does not do so, is prima facie answerable for all the damage which is the natural consequence of its escape. He can excuse himself by showing that the escape was owing to the plaintiff's default; or perhaps that the consequence was of vis major, or the act of god; but as nothing of this sort exists here, it is unnecessary to inquire what excuse would be sufficient."

In the recent past, there has been a basic shift in the approach to environment protection. Earlier, the concept was based on the 'Assimilative Capacity' Rule as is evident from Principle 6 of the Stockholm Declaration of United Nations Conference on Human Environment in 1972. This principle assumed that science could provide policy makers with the information and means necessary to avoid encroaching upon the capacity of the environment to assimilative impacts and it also presumes that relevant technical expertise would be available when environmental harm was predicted and there would be sufficient time to avoid such harm. Under the 11th Principle of the United Nations General Assembly Resolution on World Charter for Nature, 1982, the emphasis shifted to the 'Precautionary Principle', which was then reiterated in the Rio Conference of 1992 in its Principle No. 15. The inadequacy of science is the real basis that has lead to the 'Precautionary Principle'. 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.

The Precautionary Principle suggests that where there is identifiable risk of serious or irreversible harm, including, for example, extinction of species, widespread toxic pollution, in major threats to essential ecological processes, it may be appropriate to place the burden of proof on the person or the entity proposing the activity that is potentially harmful to the environment. In the event of uncertainty, presumption should operate in favour of environmental protection and primary onus would shift in light of the presumption in favour of the environment and statutory obligation of the industry as afore referred. The test to be applied is that of a 'reasonable person'.

The 'Precautionary Principle' thus, demonstrates that an activity which poses danger and threat to the environment is to be prevented. Under this Principle, the State Government and the Local Authorities are supposed to first anticipate and then prevent the cause of environmental degradation by checking the activity. Lack of scientific knowledge as to whether particular activity is causing degradation should not stand in the way of government in analysing such harm. 'Onus of Proof' under this Principle is on the actor or the developer to show that the action is environmentally friendly. We must notice here that the provisions of the Act of 2010 under Section 20 mandates that the Tribunal has to apply the 'Precautionary Principle' while adjudicating the cases under the environmental jurisprudence.

The law in relation to burden of proof in environmental cases has developed in India very fast and has added new dimensions to this concept. In the case of M.C Mehta v. Union of India, AIR 1987 SC 1086, Hon'ble Supreme Court was dealing with the issue as to what is the measure of liability of an enterprise, which is engaged in a hazardous or inherently dangerous industry, if by any reason of an accident occurring in such industry, it causes damage to environment and human health. Hon'ble Apex Court considered the Rule of Strict Liability as laid down under the English Law in the case of Rylands v Fletcher (supra) and formed a view that the Rule had lost its potentiality in the context of current environmental jurisprudence. Hon'ble Supreme Court of India thus provided new dimensions for determining such a liability and its extent, including application of rule of burden of proof. The Court held as under:

"Considerable case law has developed in England as to what is natural and what is non-natural use of land and what are precisely the circumstances in which this rule may be displaced. But it is not necessary for us to consider these decisions laying down the parameters of this rule because in a modem industrial society with highly developed scientific knowledge and technology where hazardous or inherently dangerous industries are necessary to carry out part of the developmental programme. This rule evolved in the 19th Century at a time when all these developments of science and technology had not taken place cannot afford any guidance in evolving any standard of liability consistent with the constitutional norms and the needs of the present day economy and social structure. We need not feel inhibited by this rule which was evolved in this context of a totally different kind of economy. Law has to grow in order to satisfy the needs of the fast changing society and keep abreast with the economic developments taking place in the country. As new situations arise the law has to be evolved in order to meet the challenge of such new situations. Law cannot afford to remain static. We have to evolve new principles and lay down new norms which would adequately deal with the new problems which arise in a highly industrialised economy. We cannot allow our judicial thinking to be constricted by reference to the law as it prevails in England or for the matter of that in any other foreign country. We no longer need the crutches of a foreign legal order. We are certainly prepared to receive light from whatever source it comes but we have to build up our own jurisprudence and we cannot countenance an argument that merely because the new law does not recognise the rule of strict and absolute liability in cases of hazardous or dangerous liability or the rule as laid down in Rylands v. Fletcher as is developed in England recognises certain limitations and responsibilities. We in India cannot hold our hands back and I venture to evolve a new principle of liability which English courts have not done. We have to develop our own law and if we find that it is necessary to construct a new principle of liability to deal with an unusual situation which has arisen and which is likely to arise in future on account of hazardous or inherently dangerous industries which are concomitant to an industrial economy, there is no reason why we should hesitate to evolve such principle of liability merely because it has not been so done in England. We are of the view that an enterprise which is engaged in a hazardous or inherently dangerous industry which poses a potential threat to the health and safety of the persons working in the factory and residing in the surrounding areas owes an absolute and non-delegable duty to the community to ensure that no harm results to anyone on account of hazardous or inherently dangerous nature of the activity which it has undertaken. The enterprise must be held to be under an obligation to provide that the hazardous or inherently dangerous activity in which it is engaged must be conducted with the highest standards of safety and if any harm results on account of such activity, the enterprise must be absolutely liable to compensate for such harm and it should be no answer to the enterprise to say that it had taken all reasonable care and that the harm occurred without any negligence on its part. Since the persons harmed on account of the hazardous or inherently dangerous activity carried on by the enterprise would not be in a position to isolate the process of operation from the hazardous preparation of substance or any other related element that caused the harm must be held strictly liable for causing such harm as a part of the social cost for carrying on the hazardous or inherently dangerous activity. If the enterprise is permitted to carry on an hazardous or inherently dangerous activity for its profit, the law must presume that such permission is conditional on the enterprise absorbing the cost of any accident arising on account of such hazardous or inherently dangerous activity as an appropriate item of its over-heads. Such hazardous or inherently dangerous activity for private profit can be tolerated only on condition that the enterprise engaged in such hazardous or inherently dangerous activity indemnifies all those who suffer on account of the carrying on of such hazardous or inherently dangerous activity regardless of whether it is carried on carefully or not. This principle is also sustainable on the ground that the enterprise alone has the resource to discover and guard against hazards or dangers and to provide warning against potential hazards. We would therefore hold that where an enterprise is engaged in a hazardous or inherently dangerous activity and harm results to anyone on account of an accident in the operation of such hazardous or inherently dangerous activity resulting, for example, in escape of toxic gas the enterprise is strictly and absolutely liable to compensate all those who are affected by the accident and such liability is not subject to any of the exceptions which operate vis-a-vis the tortious principle of strict liability under the rule in Rylands v. Fletcher (supra)".

(emphasis supplied)

Development as well as industrialisation in a society project new challenges in the field of environmental justice. Sustainable development is an appropriate answer, but it has to be applied in its correct perspective, while ensuring that there is no irreversible damage to the nature, environment and ecology. As already discussed the Precautionary Principle is one of the most significant tools with the Courts and Tribunals to protect the environment, right at the initial stage rather than look for remedies post environmental damage and then to find most of times, that the damage is irreversible. This would lead to serious and adverse impacts upon environment and human health. Onus of proof is one of the important aspects of the Precautionary Principle. This was dwelled upon by Hon'ble Supreme Court of India in the case of Vellore Citizens Welfare Forum v. Union of India and others, (1996) 5 SCC 647, where the Court after noticing the dimensions of the Precautionary Principle as afore- stated, not only opined that onus of proof is on the actor or the developer/industrialist to show that his action is environmentally benign, but also that the Polluter Pays Principle is a sound principle of law to be applied by Courts, of course, while observing that the principle enunciated should be simple, practical and suited to the conditions obtaining in this country. These principles were also the subject matter of discussion by the Hon'ble Supreme Court of India in the case of A.P. Pollution Control Board v. Prof. M.V. Nayadu (Retd.) & Ors., (1999) 2 SCC 718, but in that case greater emphasis was given by the Hon'ble Supreme Court of India on the special nature of onus of proof in cases involving violations relating to environment. The Court held as under:

"36. It is to be noticed that while the inadequacies of science have led to the 'precautionary principle', the said 'precautionary principle' in its turn, has led to the special principle of burden of proof in environmental cases where burden as to the absence of injurious effect of the actions proposed, is placed on those who want to change the status quo (Wynne, Uncertainty and Environmental Learning, 2 Global Envtl. Change 111 (1992) at p. 123). This is often termed as a reversal of the burden of proof, because otherwise in environmental cases, those opposing the changes would be compelled to shoulder the evidentiary burden, a procedure which is not fair. Therefore, it is necessary that the party attempting to preserve the status quo by maintaining a less-polluted state should not carry the burden of proof and the party who wants to alter it, must bear this burden. (See James M. Olson, Shifting the Burden of Proof, 20 Envtl. Law p.891 at 898 (1990). (Quoted in Vol. 22 (1998) Harv. Env. Law Review p. 509 at 519, 550).

The precautionary principle suggests that where there is an identifiable risk of serious or irreversible harm, including, for example, extinction of species, widespread toxic pollution in major threats to essential ecological processes, it may be appropriate to place the burden of proof on the person or entity proposing the activity that is potentially harmful to the environment. (See Report of Dr. Sreenivasa Rao Pemmaraju, Special Rapporteur, International Law Commission, dated 3.4,1998, para 61).

It is also explained that if the environmental risks being run by regulatory inaction are in some way "ascertain but non-negligible", then regulatory action is justified. This will lead to the question as to what is the non-negligible risk'. In such a situation, the burden of proof is to be placed on those attempting to alter the status quo. They are to discharge this burden by showing the absence of a 'reasonable ecological or medical concern. That is the required standard of proof. The result would be that if insufficient evidence is presented by them to alleviate concern about the level of uncertainty, then the presumption should operate in favour of environmental protection. Such a presumption has been applied in Ashburton Acclimatization Society v. Federated Fanners of New Zealand [1988] 1 NZLR 78. The required standard now is that the risk of harm to the environment or to human health is to be decided in public interest, according to a 'reasonable persons' test. (See Precautionary Principle in Australia by Chairman Barton) (Vol. 22) (1988) Harv. Env. L. Rev. 509 at 549)".

(Emphasis supplied)

Another aspect which requires our attention is that in terms of Section 19 of the Act of 2010, this Tribunal is not bound by the procedure laid down by the Code of Civil Procedure, 1908 as well as by the rules of evidence contained in Indian Evidence Act, 1872 and it has to evolve its own procedure in consonance with the Principles of Natural Justice. These provisions are suggestive of an approach which the Tribunal should adopt in order to protect the environment, while keeping in mind the principles stated under Section 20 of the Act of 2010. This Tribunal had an occasion to deal with the concept of burden of proof in environmental cases in the case of M/s. Sterlite Industries (India) Ltd. v. Tamil Nadu Pollution Control Board, 2013 ALL (I) NGT REPORTER (DELHI) 368, where the Tribunal held as under:-

The normal rule of evidence is that one who pleads must prove before the Court or the Tribunal i.e. the onus of proving, while claiming relief, is on the person who approaches the Court/Tribunal. However, this rule may not be applicable to this Tribunal stricto sensu.

This Tribunal has been established both with original and appellate jurisdiction relating to environmental laws. The NGT Act, 2010 was enacted for effective and expeditious disposal of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal rights relating to environment. In relation to NGT, the legislature, in its wisdom, has specifically excluded the application of the procedure under the Code of Civil Procedure, 1908 and the Indian Evidence Act, 1872 (for short 'the Evidence Act') in terms of Section 19(1) and 19(3) of the NGT Act. On the contrary, Section 19(2) of the NGT Act empowers the Tribunal to have the power to regulate its own procedure. In terms of its Section 19(5), NGT is a judicial Tribunal.

Section 20 of the NGT Act further recognises the application of the principles of sustainable development, precautionary principle and polluter pays principle by the Tribunal while adjudicating upon disputes on environment.

Once the applicability of specific rules of evidence, as prescribed under the Evidence Act, is excluded, the Tribunal has to state its own procedure, including recording of evidence, but the same essentially has to be in consonance with the principles of natural justice. It will have to be examined on a case to case basis as to when the onus will shift from the applicant to non-applicant. In environmental cases, normally the damage to environment or public health is evident by itself, res ipsa loquitur. The cases of environmental degradation, damage and health hazards are obvious by themselves as a result of some industrial activity or development. In that event and keeping in view the very object of the NGT Act, it will be unacceptable to require the applicant to discharge his primary onus by strict number of events and their details.

In Ravi Kapur v. State of Rajasthan (2012) 9 SCC 284, it was held that the doctrine of res ipsa loquitur serves two purposes. Firstly, that an accident may by its nature be more consistent with being caused by negligence for which the opposite party is responsible than by any other cause and that in such a case, the mere fact of the accident is prima facie evidence of such negligence. Secondly, it is to avoid hardship in cases where the claimant is able to prove the accident but cannot prove how the accident occurred. Recourse to this principle is also permissible where there is no direct evidence brought on record. These stated principles apply more often than not to motor accident cases and can squarely be applied to cases of environmental pollution resulting from industrial activities or development.

Under the provisions of the NGT Act, any aggrieved person can approach the Tribunal for redressal of his grievances in relation to environment within the ambit and scope of Sections 14, 16 and 18 of the NGT Act. The legislative object appears to be to catalyse the access to environmental justice, which need not be circumscribed by strict rule of locus standi in legal prescriptions.

Once an applicant approaches the Tribunal with a complaint of environmental injury or environmental degradation or health hazards resulting from negligence, or incidental occurrence of emission or discharge of gases or effluents in violation of the prescribed standards, then such an applicant discharges the primary onus by instituting a petition in the prescribed form, supported by an affidavit, which then shifts upon the industrial unit, developer or the person carrying out the activity complained of, to establish by cogent and reliable evidence that it has not caused pollution or health hazards by carrying out its activities; all the expected norms of discharge have been strictly adhered to by that unit; and any harm, if caused, was neither the result of any negligence nor violation of prescribed standards. Upon discharge of such onus, which is certainly much heavier, by the developer/industrial unit, it will then again be for the applicant to establish to the contrary. In other words, heavy onus lies upon the industrial unit or the developer to show by cogent and reliable evidence that it is non-polluting and non-hazardous or is not likely to have caused the accident complained of.

The view we are taking finds strength from the observations stated by the Supreme Court in its judgment in the case of Narmada Bachao Andolan v. Union of India (supra) where the Court, while referring to the case of Vellore Citizens' Welfare Forum supra and the report of the International Law Commission, held as under:

"119. It is this decision which was the subject-matter of challenge in this Court. After referring to the different concepts in relation to environmental cases like the 'precautionary principle' and the 'polluter pays principle', this Court relied upon the earlier decision of this Court in Vellore Citizens' Welfare Forum v. Union of India (AIR 1996 SC 2715) and observed that there was a new concept which places the burden of proof on the developer or industrialist who is proposing to alter the status quo and has become part of our environmental law. It was noticed that inadequacies of science had led to the precautionary principle and the said 'precautionary principle' in its turn had led to the special principle of burden of proof in environmental cases where burden as to the absence of injurious effect of the actions proposed is placed on those who want to change the status quo. At page 735, this Court, while relying upon a report of the International Law Commission, observed as follows:

'The precautionary principle suggests that where there is an identifiable risk of serious or irreversible harm, including, for example, extinction of species, widespread toxic pollution is major threats to essential ecological processes, it may be appropriate to place the burden of proof on the person or entity proposing the activity that is potentially harmful to the environment.'

It appears to us that the 'precautionary principle' and the corresponding burden of proof on the person who wants to change the status quo will ordinarily apply in a case of polluting or other project or industry where the extent of damage likely to be inflicted is not known. When there is a state of uncertainty due to lack of data or material about the extent of damage or pollution likely to be caused then, in order to maintain the ecology balance, the burden of proof that the said balance will be maintained must necessarily be on the industry or the unit which is likely to cause pollution. On the other hand where the effect on ecology or environment of setting up of an industry is known, what has to be seen is that if the environment is likely to suffer, then what imitative steps can be taken to offset the same. Merely because there will be a change is no reason to presume that there will be ecological disaster. It is when the effect of the project is known then the principle of sustainable development would come into play which will ensure that imitative steps are and can be taken to preserve the ecological balance. Sustainable development means what type or extent of development can take place which can be sustained by nature/ ecology with or without mitigation."

Therefore, the stated principle could be a valid dictum for environmental adjudicatory process."

Besides the fact that substantive onus would fall upon the industry to show that it has complied with the statutory requirements and is operating within the prescribed norms, the industry has to be aware of the fact that compensation for causing environmental degradation and its restoration could be imposed upon it in terms of Sections 15 & 17 of the Act of 2010. This shows and supports the application of Principle of 'Strict Liability'. Even prior to coming into force of the Act of 2010, the Courts in India, particularly the Hon'ble Supreme Court of India, had taken a view that the Courts and even the Government bodies, Pollution Control Boards have the power to impose fines on the violators of environmental laws and demand monetary damages from them for aesthetic harms to public assets such as rivers, etc. [Ref: M.C. Mehta (supra) and Municipal Council of Ratlam v. Vardhichand, AIR 1980 SC 1622].

In view of the above analysis, it may be possible to state the general rules that may be applied in cases falling under Environmental justice but even these cannot be stated without exception. To provide a strait-jacket formula is not possible by the Tribunal; still in order to add clarity, it would be useful to state unambiguously the scope of the rule of burden of proof in environmental cases in our country. The Principle of 'No Fault' or 'Strict Liability' is applicable in cases before the Tribunal wherever it relates to a person or an industry dealing with hazardous or inherently dangerous substance or activity. The concept of 'no fault' liability has been included in the statutory scheme of the Act of 2010. Section 17(3) of the Act of 2010 requires that the Tribunal in cases of accident would apply the principle of no fault liability. These terms have been used in complete contradistinction to the language of Section 15 of the Act of 2010, which also deals with grant of relief, compensation and restitution of environmental damage to the property and victims of pollution.

As we have already noticed, that the statutory provisions/environmental laws in India place an unequivocal obligation upon the person or industry not to carry out any activity which is hazardous or otherwise polluting, except with the consent of the Board. Therefore, the onus to show that the activity is being carrying on with the consent of the Board or the competent authority and that such activity is being continued strictly in terms of the consent order within the prescribed parameters of emissions or discharge, is upon the industry/unit. In such cases, the primary burden of proof, as distinguished from the substantive burden of proof, would lie upon the applicant who approaches the Tribunal. The primary burden would be with reference to preponderance of probabilities, while the substantive burden to prove to the contrary would shift and lie upon the industry. The industry would have to discharge its burden on both these aspects afore-stated."

The scheme of Section 15 and 17 read with Section 14 of the NGT Act clearly places the onus upon a polluter to show that it is not causing pollution. It is for the reason that every industry is expected to take the consent of the Board and operate only within the prescribed parameters and the conditions of the consent order. In both these respects, apparently, the unit had failed for all these years.

There is hardly any controversy on the factual aspects that the appellant industry has caused all the pollution of the water particularly the ground water. It had been carrying on its business for a long time including that of electro plating, release of it polluted trade effluent directly into the aquifer was the main cause of all the pollution of the ground water. As already noticed, complaints particularly in relation to contamination of the ground water have been received by the Board from time to time which on due inspection were found to be correct.

Thus, even on the Principle of Strict Liability, the Appellant industry would be responsible for payment of Environmental Compensation. Though, the Respondents/Complainants have not asked for any specific relief or environmental compensation but the encashment of the Bank Guarantee as claimed by the Board is primarily for the purpose of preventing and controlling the pollution of water and its restoration in terms of the provisions of the Act of 2010.

Now, we will deal with the challenge to the order of the Appellate Authority dated 4th November, 2011. The grounds on which the Appellant industry has raised a challenge to this order, as we have already noticed in the opening part of the judgment, means and all the grounds raised therein have already been dealt with on merits.

However, some emphasis was placed by the Appellant on the ground that there are certain observations made in the impugned order dated 4th November, 2011 in favour of the Appellant industry and still the appeal has been rejected. It is true that in the impugned order some observations have been made which can be considered to be favourable to the appellant industry but upon reasoning those observations stand completely superseded and varied by the definite findings recorded by the Appellate Authority. For instance at the time of inspection no bore was found through which the appellant industry might be discharging its untreated effluent. This observation would not advance the case of the Appellant any further. It has been specifically found in the inspection report that various parameters at least till 2011 were found to be beyond the prescribed limit and there was presence of Hexavalent Chromium in the effluent stored in the premises of the industry as well as in the ground water of the adjacent areas. Earlier and in the years the industry had been discharging its effluent directly into the aquifer and this crucial situation caused by the appellant industry cannot be ignored at any cost. The Appellate Authority also observed that the policy placed on record shows that the Respondent Board could not ask for a Bank Guarantee upto 5 Lac.

The Appellate Authority appears to have made a passing observation, that asking for a bank guarantee of Rs. 5 Crores appears to be arbitrary. However, while discussing the complete details of this aspect para 26 onwards of its judgment, the Appellate Authority concurred with the submissions made in paras 7 to 9 by the respondent Board in their written submission in compliance with the order of the Appellate Authority dated 21st November, 2010. The Appellate Authority, thus, returned a finding that the bank guarantee was asked for a specific purpose and was strictly not covered by the policy. The requirement of a bank guarantee was fully justified in the facts and circumstances of the case and the fact that the appellant industry was a highly polluting industry and had actually polluted the groundwater for a very long time. The Board has rightly encashed 25 per cent of the Bank Guarantee and not 100 per cent. The Board had issued a Show Cause Notice and clearly recorded in its orders that 25 per cent of the Bank Guarantee would be encashed. The Appellate Authority directed that 75 per cent amount of the Bank Guarantee shall be refunded to the Appellant. The Bank Guarantee was obtained for a specific purpose not covered by a general policy and the demand was met with by the Appellant Industry without demur and protest. In our considered view, the order of the Appellate Authority even at this point does not call for any interference. In fact, the Board had not challenged the said order on that ground. The Appellate Authority specifically noticed that contamination of deep aquifer in and around the Appellant's unit and adjoining village Sehraul by Hexavalent Chrome is primarily by electroplating process. This process has been used for the past 22 years as is admitted by the Appellants by its letter dated 22nd July, 2009. The test results showed contamination up to the depth of 500 feet. It is also undisputed that even till institution of the Writ Petition the industry tried to carry out its remediation plan in entirety, of course the Hexavalent Chromium was found to be lesser.

The attempt of desperation on the part of the Appellant Industry in putting the blame upon the Board for not rendering the advice in terms of Section 16 of the Act of 1974 is of no consequence. The Appellant Industry had already submitted a remediation plan and partly implemented the same as well. Once the remediation plan has been accepted by the Board and even time frame was fixed, we fail to understand what further advice the Board was required to provide to the Appellant industry. The Appellant industry has failed to place any document on record that it asked for any further advice from the Board. In any case, the industry cannot claim this when the Show Cause Notice has been issued to it for the closure of the industry. The remediation plan had admittedly been implemented by the industry. According to it the target period is impracticable. Firstly, it does not appear to be so and secondly, the Appellant industry did not take any appropriate steps because of the date fixed for completion of the remediation plan. It did not take recourse to any of them.

The industry was expected and required to comply with the directions. Thus, we see no reasons to interfere with the order of the Appellate Authority dated 4th November, 2011.

ISSUE NO. 3: Whether the appellant industry has been causing pollution by discharging its untreated trade effluent directly into the aquifer and by other means. If so, what directions are required to be issued by the Tribunal in that behalf?

On its own showing the appellant industry has been carrying on the business of manufacturing of shock absorbers and gas springs for two wheelers and four wheelers at its factory along with electroplating unit for the last 25-26 years. The HSPCB had issued consent to operate from time to time which as already noticed above was an irresponsible act on behalf of the Pollution Control Board. In the year 2009 (5th July, 2009), it came to light that the industry was carrying on this activity round the clock. It had a borewell by which it was releasing its effluents into aquifer. It had not only contaminated the groundwater, its own tubewell but even the groundwater and tubewells of the complainants i.e. Shri Mahabir Singh Yadav and Shri Virender Singh Yadav. It is only after the show cause notice dated 10th September, 2009 was issued to the industry and the order of closure was passed on 31st December, 2009, which was kept in abeyance, vide order dated 8th January, 2010, that remedial steps had been taken to some extent by the appellant industry. However, even thereafter, it was noticed by the concerned Board and authorities that the conditions issued by the Board had not been complied with and there were other deficiencies also noticed in the working of the appellant industry. The conditions of suspending of closure order related to stage-wise reduction of Hexavalent Chromium and by 31st December, 2010 it was required of the industry to reduce Hexavalent Chromium 100%. It was required to submit quarterly progress report. Even that the industry failed to submit to the Board in the concerned quarters. The analysis reports taken in 2009 prior thereto and even subsequent thereafter showed presence of Hexavalent Chromium beyond the prescribed parameters. The analysis reports of the samples collected in June 2009 showed very high content of Hexavalent Chromium to the extent of 80 mg/L from the tubewell of Shri Mahavir Singh Yadav and from the pond of the village Sehraul. Suspended solid and COD were found to be excessive from the tubewell, borewell of Shri Virender Singh Yadav. Hexavalent Chromium was found to be 38.12 mg/L in the public sewer outside the factory premises. In the tubewell, borewell of the factory itself Hexavalent Chromium was found to be 10.87 mg/L. However, the analysis reports of the samples collected in February 2011 did show reduction in various parameters including in Hexavalent Chromium. The HSPCB vide its letter dated 9th December, 2009 had informed the Member Secretary of the Board at Panchkula about the analysis of the soil samples collected from the premises of the appellant industry. It showed total Chromium 1308.5 mg/kg. present in sample no. 1 and 78.24 mg/kg in sample no. 2. Hexavalent Chromium in first sample was 1166.7. In response to the action taken by the Board, the appellant industry vide its letter dated 8th January, 2010 filed the affidavit showing its commitment for treating contaminated groundwater from the MSL, Village Sehraul and surrounding areas and recharging it accordingly. It claimed that it was making its best efforts on war footing to remediate the contamination of groundwater. This letter was unequivocal and without any reservation. The affidavit, bank guarantee and undertaking submitted by the company were not strictly adhered to leading to partial encashment of bank guarantee as well. The order of closure dated 31st December, 2009 was a detailed order and the order dated 9th August, 2010 completely brings out the continuous pollution, violations committed by the industry and deficiencies in performance and the undertaking given. In this order, it was specifically stated that the unit has failed to achieve 50% reduction in respect of Hexavalent Chromium values of borewell nos. 2 and 4 were higher than the base values. The RO Plant and ETP were not in operation at the time of inspection. The ETP sludge has not been sent for treatment. Storage capacity was inadequate. The unit had failed to obtain permission from the Central Ground Water Authority. It also failed to install online measuring instrument for Hexavalent Chromium. The results of the tubewell of private parties in relation to Hexavalent Chromium were also found to be excessive.

It was obligatory upon the industry to take all preventive and precautionary measures even before starting of its business. It had been indiscriminately polluting the groundwater, tubewell water and had even rendered land and water of other properties unfit for human consumption. The Principle of Strict Liability would undoubtedly place an unequivocal obligation upon the appellant industry to ensure that it causes no pollution and none suffers including the environment as a result of carrying on of its activity. Right from 2009 the extensive contamination of groundwater and other waters committed by the appellant industry came to light but it has still taken its own sweet time to improve its manufacturing activity to be brought within the required parameters. Even as of now, it has failed to achieve its performance in terms of its undertaking, affidavit and restoration of contaminated groundwater in and around the factory premises. It was directed to correct and recharge the groundwater in 10 km radius of the factory but it was hardly of any consequence. Keeping in view the fact that the industry for its material gain had polluted the environment and ecology particularly the groundwater. The Principle of Polluter Pays is subsequently attracted in the facts and circumstances of the case. It cannot be permitted to avoid its liability on any pretext whatsoever. The Tribunal must issue appropriate directions both within the ambit and scope of Sections 15 and 17 of the Act of 2010. The industry must not only prevent and control pollution but should also take all requisite steps in restorating and rejuvenating the contaminated groundwater for which the appellant industry is primarily responsible. The Board had passed the order of 31st December, 2011 against which the Writ Petition has been filed in the Punjab and Haryana High Court in the year 2009 and thereafter it was transferred to this Tribunal. The provision of Section 17 provides for limitation of 5 years, which would be the period for which the industry must be held liable to pay environmental compensation and compensation for restorative measures that are required to be taken, as well as damage caused to the property and groundwater of the complainants. If we compute 5 years from 31st December, 2009 when the Board had passed the order, the liability of the appellant which could be fastened upon it will be in the year 2004 and in any case the industry cannot escape its liability of 5 years from the date it challenged the order of the Board.

In view of the reasoning afore-recorded, we dispose of this appeal with the following order and directions:

We see no reason to interfere with the order dated 9th August, 2010 passed by the HSPCB, partially encashing the bank guarantee furnished by the appellant industry to the extent of Rs. 1.25 crores. The application in relation to that relief is dismissed.

We also see no reason and justification, in setting aside the order dated 4th November, 2011 passed by the Appellate Authority of State of Haryana in dismissing the appeal preferred by the appellant industry against the order dated 9th November, 2010 as well as prayer for restraining the respondents from initiating any action under Sections 33, 43 and 44 of the Act of 1974.

We hereby direct that in the event the appellant industry fails to fulfill all its obligations in terms of the orders of the HSPCB dated 11th August, 2010 and all other orders, inspection reports including Remediation Plan submitted by it to the Board within 3 months from the date of pronouncement of this judgment, the industry would be liable to shut down its electroplating unit without any further opportunity.

We would direct the Chairman of the HSPCB to personally conduct an enquiry into the matter, fix responsibility and take action in accordance with law.

We hereby further issue notice to show cause to the appellant industry as to why it should not be directed to pay environmental compensation in terms of Sections 15 and 17 of the Act of 2010 for causing pollution of ground water and surrounding areas for last so many years as afore-stated. The industry should also show cause as to why should it not be directed to discharge its corporate social responsibility to completely recharge and remove contamination of groundwater within a 10 km radius from its factory premises or carry out the same work at its own cost.

The Appeal is disposed of with no order as to costs.