The Practical Lawyer

Indian Council For Enviro-Legal Action v. Union of India, (2011) 8 SCC 161

Constitution of India

Arts. 21, 32, 47 and 48-A - Compensation for loss suffered by citizenry due to pollution - Polluter pays principle -
Disgorgement of gains of polluter - Polluter who unjustly enriches itself by abusing process of court and adopting
delaying tactics to avoid paying remedial environmental costs - Restitutionary relief of compound interest and penalty -
Imposition of - When warranted - Polluter not paying environmental remediation costs imposed even after 15 years from
date of final judgment of Supreme Court and even after dismissal of review and curative petitions thereagainst - Instead
polluter adopting delaying tactics by filing repeated IAs including present two IAs and thereby abusing process of court -
Therefore, polluter directed to pay Rs 37.385 crores (i.e. remediation costs assessed by final decree) along with
compound interest @ 12% per annum from 4-11-1997 (date of final decree) till amount is paid or recovered - Polluter
also directed to pay costs of Rs 10 lakhs in both the IAs - In case amount of Rs 37.385 crores with compound interest @
12% computed from 4-11-1997 and costs imposed not paid within two months, same directed to be recovered as arrears
of land revenue, (2011) 8 SCC 161-A

Restitution

Disgorgement of gains of wrongdoer

Compound interest - Permissibility to award, and such award when warranted - Compound interest rather than simple
interest, to be preferred in such cases - Rationale for, explained - Held, power to order compound interest as part of
restitution cannot be disputed, otherwise there can never be restitution - Some of the statute law provides only for simple
interest and not compound interest - However, power of court to order compound interest by way of restitution is not
thereby fettered in any way - Inherent powers in court and principles of justice and equity are each sufficient to enable an
order directing payment of compound interest - Lastly, once doctrine of restitution is attracted award of interest is not
controlled by provisions of Interest Act of 1839 or of 1978, (2011) 8 SCC 161-B

Courts, Tribunals and Judiciary

Judicial Process

Restitution in case of unjust enrichment arising out of abuse of process - Bounden duty of court, to neutralise unjust
enrichment - Imposition of compound interest and punitive costs so as to achieve complete restitution of wronged party,
and to discourage frivolous and dishonest litigation - Pre-suit and post-suit restitutionary powers of court, distinguished -
In consonance with equity, justice and good conscience, Judges, held, should ensure that legal process is not abused in
any manner - Any leniency would seriously affect credibility of judicial system - To do complete justice, prevent wrongs,
remove incentive for wrongdoing or delay, and to implement in practical terms the concepts of time value of money,
restitution and unjust enrichment, or to simply levelise, interest has to be calculated on compound basis, and not simple,
for simple interest leaves much uncalled for benefits in hands of wrongdoer - Realistic costs, which may also include
punitive costs should also be imposed when process is abused so that full restitution is achieved, (2011) 8 SCC 161-C

Restitution

Disgorgement of gains of wrongdoer

Restitution in case of unjust enrichment based on interim orders obtained by unscrupulous litigant - Principles
applicable - Award of compound interest and punitive costs - When warranted - Need for neutralisation of all
consequential orders - Held, a party cannot be allowed to take benefit of his own wrong - A stay obtained by
unscrupulous litigant cannot confer a right on him and he cannot take undue advantage by invoking jurisdiction of court -
Unless deprivation by reason of delay is fully restituted by awarding compound interest, party at receiving end remains a
loser to the extent of unrestituted amount - Furthermore, courts should be careful and pass an order neutralising the
effect of all consequential orders passed in pursuance of interim orders passed by the court - Such express directions
may be necessary to check the rising trend among litigants to secure relief as an interim measure and then avoid
adjudication on merits, (2011) 8 SCC 161-D

Civil Procedure Code, 1908

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Ss. 35, 35-A and 35-B - Realistic costs - Determination of - Abuse of process of court - Frivolous and dishonest litigation
causing harassment to opposite party and wastage of court's time - Disgorgement of gains of wrongdoer - Factors to be
considered for determining actual and realistic costs - Prevalent fee structure of lawyers - Other miscellaneous expenses
which have to be incurred towards drafting and filing of counter-affidavit, miscellaneous charges towards typing,
photocopying, court fee, etc. - How long defendants or respondents were compelled to contest and defend litigation in
various courts - Relevance of - Costs of Rs 10 lakhs imposed in both IAs, recoverable as arrears of land revenue, (2011)
8 SCC 161-E

Restitution

Generally

Unjust enrichment - Meaning and definition, stated, (2011) 8 SCC 161-F

Restitution

Generally

Relationship between unjust enrichment and restitution, explained - Appropriate label, held, depends on facts - Pre-suit
and post-suit situations, examined, (2011) 8 SCC 161-G

Constitution of India

Arts. 32, 136, 142, 141, 137, 129, 21, 47 and 48-A - Interim applications (IAs) - Applicant polluter, not paying remedial
costs imposed upon it and seeking to reopen issues settled by final judgment of Supreme Court - Maintainability -
Supreme Court in a common judgment under Art. 32 holding polluter responsible for causing pollution of soil, aquifers
and subterranean water supply of area concerned by discharge of hazardous material/wastes - Supreme Court
assessing and imposing remedial costs of Rs 37.385 crores on polluter - Review and curative petitions in this regard
being dismissed - Present IAs again disputing assessment of environmental damage and even asserting that no damage
to environment was caused by applicant - Polluter reopening issue of fabrication/falsification of environmental
assessment reports (such allegations having been dismissed in an earlier contempt petition with costs of Rs 10,000) -
Held, present IAs are not maintainable - Said IAs are abuse of process of court - Such tendency of polluters to avoid
liability to pay remediation costs imposed must be effectively curbed - Court must discourage such business tactics and
ensure effective compliance with court's order - Endless applications and controversies must end at some stage -
Litigation after a long hierarchy of appeals must end for public good i.e. interest reipublicae ut sit finis litium - Both IAs
dismissed with costs of Rs 10 lakhs with imposition of compound interest @ 12% p.a. on remedial amount due of Rs
37.385 crores on polluter for 15 years' delay in making payment, (2011) 8 SCC 161-H

Constitution of India

Arts. 32, 136, 141 and 137 - Writ against final judgments/orders - Maintainability - Reiterated, writ petition under Art. 32
assailing correctness of a decision of Supreme Court on merits or claiming reconsideration is not maintainable -
Furthermore, reconsideration by way of writ petition under Art. 32 of final decision of Supreme Court after review petition
is dismissed cannot be sustained, (2011) 8 SCC 161-I

Constitution of India

Arts. 32, 137 and 136 - Interim applications in writ petition under Art. 32 seeking to reopen final judgments of Supreme
Court under Art. 136 - Maintainability - Such IAs, reiterated, not maintainable as it is settled law that final judgments
under Art. 136 cannot be reopened by filing writ under Art. 32, (2011) 8 SCC 161-J

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 The Practical Lawyer

Constitution of India

Arts. 141, 142, 136, 137 and 32 - Finality of judgments - Sanctity attached to finality of judgments of Supreme Court,
(2011) 8 SCC 161-K

Practice and Procedure

Res judicata

Finality of judgments - Foundations - In a country governed by rule of law, finality of judgments, held, is absolutely
imperative, (2011) 8 SCC 161-L

Constitution of India

Art. 137 - Review of final judgments of Supreme Court - Permissible scope and illustrative situations when review/recall
power may be exercised - Final judgments of Supreme Court, held, cannot be reviewed merely for rehearing and fresh
decision - Review permissible only under extremely compelling and exceptional circumstances - Although there can be
no exhaustive list of such circumstances, illustrations of such exceptions pointed out - Supreme Court can interfere in
review: (a) where in a proceedings, Judge concerned failed to disclose connection with subject-matter or parties giving
scope of an apprehension of bias and judgment adversely affected petitioner, or (b) if circumstances incorporated in
review or curative petitions are such that they would inevitably shake public confidence in integrity of administration of
justice, or (c) if a material statutory provision was not drawn to Court's attention at original hearing, or (d) if a manifest
wrong was done, or (e) to avoid irremediable injustice, or (f) if there is a gross violation of principles of natural justice,
(2011) 8 SCC 161-M

Constitution of India

Arts. 141, 137 and 32 - Doctrine of stare decisis - Limited scope for departure from doctrine of stare decisis, examined,
(2011) 8 SCC 161-N

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