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Judgment
This appeal has been preferred under Section 16 of NGT Act against order dated 10.08.2022 of the Appellate Authority constituted under the Water (Prevention and Control of Pollution) Act, 1974 (Water Act) in Punjab. The said order was passed in appeal against order of the State PCB levying compensation of Rs. 1,14,62,500/- on ‘Polluter Pays’ principle for violation of provisions of the Water Act. Order of the State PCB dated 17.07.2021 shows that violation alleged is as follows:-
“…the industry had provided 06 number syntax tanks of capacity 10,000 ltr each for the storage of raw material i.e, acid and 04 tanks were found half filled with the acid. The industry has failed to install ETP to treat its trade effluent generated from the process. Samples were collected from 02 no, different acid storage tanks and the same were sent to the Board's lab for analysis. As per the analysis report, HCL and H₂SO were detected in the sample. The processing area was stabilized with bricks and interlocking tiles instead of the impervious material. The storage of acid in the tanks and the electricity bills indicate that the industry was commissioned and operated at site, without obtaining prior- consent to operate of the Board under Water (Prevention & Control of Pollution) Act, 1974 and under the Air (Prevention & Control of Pollution) Act, 1981 as well as without obtaining authorization under Hazardous Waste and Other Wastes (Management & Transboundary Movement) Rules, 2016. Adequate Pollution Control arrangements have also not been made by the Industry. The sample report reveals that the unit is lifting hydrochloric acid (HCL) based spent liquid illegally from unknown locations and is not maintaining any record relating to the operation of the plant.”
The stand of the PP in response to above was dealt with as follows:-
“9. It is relevant to mention here that the AGM of the industry has given a misleading statement during the course of hearing held on 13.07.2021 that the plant is not operational after the trials. Whereas the scrutiny of electricity bills of the Industry has revealed that the industry was in operational mode. The detail of the electricity bills with units consumed and electricity charges in rupees with effect from 20.01.2020 upto 17.05.2021 was given in the notices issued to the industry vide letter no. 5024-25 dated 28.06.2021 under the provisions of Water (Prevention & Control of Pollution) Act, 1974 and vide letter no. 5026-27 dated 28.06.2021 under the provisions of Air (Prevention & Control of Pollution) Act, 1981. The Industry proceeded to operate its plant without obtaining the mandatory permission in the form of Consent to operate under the provisions of the Water (Prevention & Control of Pollution) Act, 1974, the Air (Prevention & Control of Pollution) Act, 1981, Authorization and actual user Certificate under the provisions of the Hazardous & Other Wastes (Management & Transboundary Movement) Rules, 2016. Hence the industry has degraded the environment by Indulging in illegal operation of its unit with effect from 09.01.2019 upto 13.07.2021 and has thus made itself liable for environmental Compensation on the basis of Polluter Pay's Principle.
From the facts of the case and the perusal of the record available with the Board it is clear that the industry kept on violating the provisions of Water (Prevention & Control of Pollution) Act, 1974, Air (Prevention & Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2015 for the period from 09 January 2019 upto 13 July 2021 and has caused environmental degradation, the explanation of which is recorded above. Thus the industry has made itself liable under the "Polluter Pay's Principle" to pay Environmental Compensation, which according to the formula evolved by the Central Pollution Control Board and adopted by the PPCB is calculated to be Rs. 1,14,62,500/- (One crore fourteen lakh sixty two thousand five hundred only) for period from 09 January 2019 upto 13 July 2021 for not handling and managing the effluent as well as Hazardous Waste.
Therefore, the industry is hereby directed through its AGM to deposit Environmental Compensation amounting to Rs. 1,14,62,500/- (One crore fourteen lakh sixty two thousand five hundred only) in the office of Punjab Pollution Control Board [A/c No. 50100313112162, IFSC code- HDFC0001311, HDFC Bank limited] for violating the provisions of Water (Prevention & Control of Pollution) Act, 1974, Air (Prevention & Control of Pollution) Act, 1981 and Hazardous and Other Wastes (Management & Transboundary Movement) Rules, 2016 for the period of violation as recorded above, within 15 days from the date of receipt of this order failing which necessary action will be Initiated for recovery of the Environmental Compensation by adopting coercive measures.”
The Appellate Authority upheld the above as follows:-
“6) After hearing the parties and examination of the relevant documents, it is observed that the facts relating to the setting up of the industrial unit for manufacturing of Ferric Chloride by the appellant after obtaining the Consent to Establish (NOC) of the Punjab Pollution Control Board under section 25 of the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981 valid from 9.1.2019 to 8.1.2020 are not disputed in any manner. I hereby record my observations and findings on the remaining facts of the case as under:
a) The appellant has proceeded to commission the industrial unit without obtaining the mandatory consent to operate of the State Pollution Control Board under the Water (Prevention and Control of Pollution) Act, 1974 and Air (Prevention and Control of Pollution) Act, 1981 and without the installation of ETP.
b) There is an admission on the part of the appellant that Civil construction work and errection of mechanical equipment was completed but there is no mention of ETP.
c) Though the appellant has claimed that only trial / testing process was undertaken but according to the Board officer and legal provisions, the consent to operate is also required for trial run of the industry.
d) During visit of the officers to the site of the industry on 4.6.2021, 4 tanks of capacity 10,000 litter each were found half filled with the acid. As per analysis report HCL and H2SO4 were detected in the sample.
e) The storage of acid in the tanks and the electricity bills put on notice by the Board indicate that the appellant Industry was commissioned and operated at the site without the valid consent to operate of the State Pollution Control Board under the Water (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and Control of Pollution) Act, 1981 as well as without obtaining authorization under the Hazardous and other Waste (Management, Handling and Transboundary Movement) Rules, 2016.
f) The sample report reveals that the appellant is lifting hydro chloric acid (HCL) based spent liquid illegally from unknown locations and has not maintained any record relating to the operation of the plant.
g) The appellant has admitted that the plant was operated for testing purpose and the illustration shown for the usage of electricity by the appellant himself reveals that the plant atleast was put to operation for 1.2 hours a day put forward by the appellant.
h) Adequate pollution control arrangements were not available in the premises of the appellant firm.
i) The examination of the Judgment of the Hon'ble Supreme Court of India in the case of Deepak Nitrite Ltd. v/s State of Gujarat has revealed that the Hon'ble Supreme Court of India has directed the High Court to re-examine the matter as to whether there is degradation of environment and as a result there of any damage is caused to any victim and what norms should be adopted in the matter of awarding compensation in that regard. In this process it is open to the High Court to consider whether 1% of the turnover itself would be an appropriate formula or not as applicable to the present case. The Hon'ble Supreme Court has directed the High Court to further investigate in each of these cases and find out broadly whether there has been any damage caused by any of the Industrial units by their activities in not observing the norms prescribed by Gujarat Pollution Control Board as reported by the Modi Committee appointed by the High Court or by an expert body like NEERI and that exercise need not be under taken by the High Court as if the present proceedings is an action in tort but an action in public law.
j) in the present case, the appellant has started production on its own without obtaining the consent to operate of the Board and without the installation of ETP and pollution control arrangements. Even if the argument of the appellant is considered that they had undertaken trial runs of the unit, even in that case, the permission of the Board was required and the Board should have imposed an appropriate condition as to how the trail run would be conducted in the absence of ETP.
k) The right to clean and hazardous-less environment has been recognized as a fundamental right under Article 21 of the Constitution of India but in the present case, the appellant has started the production of Ferric Chloride, which is hazardous in nature without obtaining the consents of the State Pollution Control Board and without obtaining authorization and actual user certificate under the Hazardous and other Waste (Management, Handling and Transboundary Movement) Rules, 2016.
l) The appellant has indulged itself in illegal collection of hydro chloric acid (HCL) based spent liquid illegally from unknown locations and not maintaining any record relating to operation of the plant.
m) The operation of plant might have generated effluent and no explanation is forthcoming as to where such effluent was discharged.
n) Had the unit to make construction activity or other allied work, it should have obtained a reasonable electricity load and that of 99 kilowatts, which is required for Industrial purpose only.
o) It is clearly written in the order dated 17.7.2021 of the Punjab Pollution Control Board that the Environmental Compensation is being imposed according to the formula evolved by the Central Pollution Control Board and adopted by Punjab Pollution Control Board and the Environmental Compensation is calculated to be 1,14,62,500/-
p) Punjab Pollution Control Board on request has provided the formula for imposition of Environmental Compensation to the appellant twice vide letter dated 17.8.2021 and 28.8.2021.
7) To apply the Polluter Pay's Principle, it is to be ascertained as to in what manner the pollution has been caused. In view of the above recorded facts, observations and findings I have reached at the conclusion that the appellant in fact has indulged in the activities/processes which were hazardous in nature without requisite permission and these unauthorized activities in the collection of hazardous substance from unknown locations without any record and discharge of untreated effluent have caused pollution and contributed towards the degradation of environment. The appellant has proceeded to operate the plant without permission and without the installation of ETP to treat the effluent generated for the process for the sole purpose to earn money and profits without caring for the protection and preservation of environment and thus cannot escape liability on the basis of Polluter Pay's Principle. The appellant Industry though aware of the requirement of the Pollution Control and Environmental Laws, but had intentionally and deliberately not complied with the same. The appellant was irresponsible is not wanting or caring to set up effluent treatment plant and continue to operate the plant and pollute and damage the environment. As the State Pollution Control Board has applied the formula evolved by the Central Pollution Control Board while imposing Environmental Compensation upon the appellant, I do not find any illegality in this regard also. No interference, in the order passed by the Board for imposition of Environmental Compensation upon the appellant is required. Hence the order dated 17.7.2021 passed by the Board is upheld and the appellant is hereby directed to deposit the amount of Environmental Compensation of Rs. 1,14,82,500/with the office of the State Pollution Control Board immediately.
8) Appeal is dismissed. The order which was reserved on 10.8.2022 is signed and issued on 18.8.2022.”
When the appeal came up for hearing earlier on 12.01.2023, the Tribunal passed an interim order requiring deposit of Rs. 42 lakhs for following reasons:-
“
Secondly the authorities found that the consumption of electricity commenced in January, 2020 but in June 2022 and onwards consumption suddenly has risen. The chart of electricity consumption reads as under:
“
S.No.
Bill date
Units consumed in (KWH)
Amount in Rs.
1.
20 January17 2020
628
15,770/-
2.
17 February 2020
592
15,630/-
3.
18 March 2020
798
15,721/-
4.
20 April 2020
542
9,840/-
5.
18 June 2020
3202
47,690/-
6.
15 July 2020
1744
72,010/-
7.
18 August 2020
1476
95,900/-
8.
18 September 2020
2396
30,060/-
9.
19 October 2020
2792
61,420/-
10.
17 November 2020
2404
91,570/-
11.
17 December 2020
2756
1,27,540/-
12.
18 January 2021
3064
1,61,340/-
13.
18 February 2021
2054
1,88,660/-
14.
15 March 2021
1088
45,080/-
15.
15 April 2021
832
59,230/-
16.
17 May 2021
2090
84,640/-
Total
28458
11,22,101/-
”
The aforesaid facts shows that there was substantial quantity of acid present on the site. This acid is one of the raw materials required for production of FeCl, found stored by the appellant and that quantity was after consumption of material during alleged testing period which appellant admits that it ran the unit for testing production. Further, sudden rise of consumption of electricity from June 2020 and onwards could not be explained. In that view of matter, we find no merit in the submission that the unit has never run into production. Even test run of production would have required Consent To Operate (hereinafter referred to as ‘CTO’). Admittedly no CTO was obtained by appellant. Hence, the view taken by the authorities on this aspect cannot be said to be erroneous either on facts or law.
Now coming to computation of environmental compensation, we find some substance in the submission that number of days for which amount of compensation has been computed is not correct in as much as compensation could not have been computed from the date CTE was issued but when there is material on record to show or atleast come to a reasonable conclusion based on record that production started from a particular day, computation of compensation must have correlation with such period and not earlier thereto.
Now taking from the chart of electricity consumption, we find prima facie that during June 2020 to May 2021, there was high quantity of consumption of electricity and therefore even test production of the unit as claimed by the appellant must have gone during this period but without obtaining any consent to operate under the Water Act 1974, and Air Act 1981 and authorisation under HWM Rules, 2016.
Taking the period of June 2020 to May 2021, it is about 365 days for which amount of environmental compensation comes to Rs. 42 lakhs and odd. We are of the view that if we appellant presently deposit Rs. 42 lakhs within two months, the respondent authority shall not proceed with recovery of further environmental compensation until further orders of this Tribunal. We order accordingly.”
We have heard learned counsel for the appellant. No response has been filed by the respondents. We have duly considered the matter.
It is clear that the unit did function without requisite consent. Substantial quantity of toxic material was found at the site to be used as raw material. Functioning of the unit is established by use of electricity. There are no requisite consents. The State PCB and the Appellate Authority have found that four tanks of capacity 10,000 ltr each were found half filled with acid. In absence of material to show that such acid was scientifically handled, it is permisible to infer that acid was disposed of in the drains resulting in damage to the environment. The collection of hydro chloric acid (HCL) based spent liquid illegally from unknown locations and not maintaining any record relating to operation of the plant is proved. No explanation is forthcoming as to where such effluent was discharged.
It cannot thus be held that no damage to the environment has been caused, apart from undertaking operations without requisite consent/authorization and handling hazardous chemical in violation of the Hazardous and other Waste (Management, Handling and Transboundary Movement) Rules, 2016. Thus, only relief which appellant can be granted is in the matter of quantum of compensation which will stand reduced to Rs. 42 lakhs for the reasons given in the interim order referred to above.
The Appeal is disposed of accordingly.