Supreme Court: “Polluter Pays Principle is Absolute” – Tanneries in Vellore Liable for Continuing Environmental Damage Until Full Ecological Restoration, Supreme Court Orders Reassessment of Compensation and Strict Enforcement of Pollution Control Measures

Court’s Decision

The Supreme Court set aside the High Court’s dismissal of the petition and ruled that the liability of polluting industries extends beyond 1998 until the damage to the environment is fully reversed. The Polluter Pays Principle is absolute, meaning industries must compensate affected individuals and fund environmental restoration. The Court also ordered a reassessment of compensation and directed the authorities to strictly enforce pollution control measures, recover unpaid compensation, and prosecute defaulting industries.

Facts of the Case

1. Pollution Caused by Tanneries in Vellore

• Vellore district in Tamil Nadu is home to over 600 tanneries that process leather.
• These industries discharged untreated toxic effluents into the Palar River, which serves as a drinking water source for 30 towns and 50 villages.
• Pollutants included chromium, sulphates, chlorides, and heavy metals, making the water unfit for drinking and agriculture.

2. Supreme Court’s 1996 Judgment (Vellore Citizens Welfare Forum Case)

• In Vellore Citizens Welfare Forum v. Union of India (1996), the Supreme Court:
  • Recognized “Polluter Pays Principle” and “Precautionary Principle” under Article 21 (Right to Life).
  • Ordered the closure of non-compliant industries.
  • Directed the Loss of Ecology Authority (LoEA) to:
    • Assess damage to ecology and award compensation to affected individuals.
    • Recover compensation from polluting industries.
    • Recommend schemes for environmental restoration.

3. Dispute Over Compensation and Compliance

• The LoEA’s first compensation award (07.03.2001) ordered polluters to pay ₹26.82 crores for pollution from 1991 to 1998.
• However, affected farmers argued the compensation was too low (ranging from ₹1,000 – ₹14,000 per hectare per year).
• They also claimed:
  • Many industries failed to pay compensation.
  • Pollution continued even after 1998.
  • No fresh compensation assessment was conducted after 1998.
• The Madras High Court (2010) dismissed their petition, holding that industries had already paid their dues, and quashed the LoEA’s attempt to reassess pollution damage beyond 1998.
• The Vellore District Environment Monitoring Committee (petitioners) appealed to the Supreme Court.

Issues Before the Supreme Court

1. Does the liability of polluting industries extend beyond 1998 until pollution damage is reversed?
2. Did the High Court err in quashing the LoEA’s 2009 compensation reassessment?
3. Were industries still polluting the Palar River despite earlier Supreme Court orders?
4. Did authorities fail to enforce pollution control measures and compensation collection?
5. Were industries operating illegally near the river, violating environmental laws?

Petitioner’s (Vellore District Environment Monitoring Committee) Arguments

1. Compensation Was Inadequate and Not Fully Paid

• The compensation awarded in 2001 was too low, failing to cover the actual damage.
• Many industries defaulted on payments, and authorities failed to enforce recovery.
• Even after Supreme Court’s 2013 order, ₹4.48 crores remained unpaid.

2. Pollution Continued Beyond 1998

• Groundwater and soil in Vellore were still contaminated, affecting farmers and drinking water.
• The Polluter Pays Principle states that liability continues until full restoration of the environment.
• The High Court’s 2010 ruling ignored this principle by dismissing fresh compensation claims.

3. Industrial Violation of Environmental Laws

• Tanneries and Common Effluent Treatment Plants (CETPs) were operating within 1 km of the river, violating Tamil Nadu Government Order (G.O.) 213/1989.
• Zero Liquid Discharge (ZLD) was not achieved, and untreated wastewater was still being released.
• TNPCB failed to take enforcement action.

4. Failure of Authorities to Implement Restoration Measures

• The Tamil Nadu government did not implement the LoEA’s environmental restoration schemes despite receiving funds from industries.
• The Pollution Control Board failed to monitor illegal discharges into the Palar River.
• Municipal authorities failed to prevent sewage and solid waste dumping in the river.

Respondent’s (AISHTMA – Tanneries’ Association) Arguments

1. Full Compensation Already Paid

• Tanneries had paid ₹33.39 crores (₹26.82 crores for pollution damages + ₹3.66 crores for environmental restoration).
• The Tamil Nadu government confirmed that all dues were cleared and that ₹1.15 crores remained unutilized.

2. Industries Implemented Pollution Control Measures

• All 459 tanneries installed ZLD systems and effluent treatment plants (ETPs).
• Online monitoring systems were set up, linked to CPCB and TNPCB.
• No fresh compensation was justified since pollution levels had reduced.

3. Other Sources Were Polluting the Palar River

• Municipal bodies dumped untreated sewage and solid waste into the river.
• Encroachments and illegal sand mining caused further damage.
• Agricultural runoff from fertilizers also contributed to contamination.

4. Reassessment of Compensation After 10 Years Was Illegal

• The LoEA lacked authority to reassess damages beyond its initial 2001 order.
• The LoEA’s 2009 reassessment was not based on fresh scientific evidence.
• Reopening compensation claims after a decade was legally unsound.

Analysis of the Law

1. Polluter Pays Principle

• Recognized in Vellore Citizens Welfare Forum v. Union of India (1996) and subsequent cases.
• Industries must pay for past and present environmental damage.

2. Precautionary Principle

• Imposes strict liability on polluting industries, requiring them to prevent damage before it occurs.

3. Water (Prevention and Control of Pollution) Act, 1974

• Section 24 & 25 prohibit industrial discharge into water bodies without consent.
• Violations warrant prosecution and closure of non-compliant units.

Precedent Analysis

1. Vellore Citizens Welfare Forum v. Union of India (1996) – Established “Polluter Pays Principle”.
2. MC Mehta v. Kamal Nath (1997) – Polluters have absolute liability for environmental harm.
3. Goa Foundation v. Union of India (2014) – Liability continues until full environmental restoration.

Court’s Reasoning

• The High Court erred in quashing the LoEA’s 2009 reassessment, as continuing pollution warranted fresh compensation evaluation.
• Industries remain liable until full environmental restoration is achieved.
• Zero Liquid Discharge (ZLD) had not been fully implemented, and pollution persisted.
• Authorities failed to enforce compensation collection and pollution control measures.
• Municipalities and state authorities also contributed to pollution and must be held accountable.

Conclusion

1. Industries must continue paying compensation until pollution is fully reversed.
2. Tanneries that fail to comply with ZLD norms must be shut down.
3. Government must enforce G.O.213/1989 and relocate industries operating illegally.
4. Authorities must prosecute polluters under the Water (Prevention and Control of Pollution) Act, 1974.
5. Compensation for affected individuals must be reassessed and disbursed.

Implications of the Judgment

• Strengthens environmental accountability by ensuring liability does not end at arbitrary dates.
• Mandates stricter enforcement of pollution control laws and regular reassessment of damages.
• Sets a precedent for continued industry liability even after initial compensation is paid.
• Requires state agencies to actively monitor and prosecute polluters.

This judgment reinforces India’s commitment to environmental justice and sustainable development.

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