Deepak Nitrite Ltd.

vs.
State of Gujarat

FACTS
Today, I'll be discussing the case, "Deepak Nitrite Ltd. vs. State of Gujarat".
In this case, a public interest petition was filed before the High Court of Gujarat, alleging
extensive pollution stemming from industries within the Gujarat Industrial Development
Corporation (GIDC) in Nandesari, Gujarat. The crux of the matter revolved around the
discharge of effluents by these industries into the effluent treatment project, surpassing
established parameters set by the Gujarat Pollution Control Board (GPCB) and thereby
causing environmental harm.
The legal proceedings unfolded as follows:
1. On May 5, 1995, the High Court appointed a committee chaired by Dr. V.V. Modi to
assess the extent of pollution within the Nandesari Industrial Estate. This Committee's
findings were supposed to play a pivotal role in gauging the severity of the pollution
problem.
2. In an effort to combat pollution, the GIDC erected a Common Effluent Treatment Plant
(CETP) within the Nandesari Industrial Estate. However, the CETP fell short of meeting the
stringent environmental standards outlined by the GPCB.
3. Recognizing the inadequacies of the CETP, the High Court, on August 7, 1996, appointed
the National Environmental Engineering Research Institute (NEERI) to evaluate the
treatment facilities, identify deficiencies, and recommend remedial measures to enhance
the CETP.
4. On May 9, 1997, in pursuance of the NEERI’s report and referring to a prior decision of
the Court, “Pravinbhai Patel & Anr. vs State of Gujarat & Ors”, the High Court issued an
order demanding that industries pay compensation amounting to 1% of their maximum
annual turnover from the preceding three years for the purpose of environmental
improvement and the upliftment of socio-economic conditions in the affected areas. This
order aimed to address these concerns in light of Article 21 of the Constitution,
acknowledging citizens' fundamental right to live in an unpolluted environment.
An appeal was filed before the Supreme Court against this order of the High Court.

ISSUES
The two main issues in this case were that:
1.Whether the mere violation of GPCB's norms in itself amounted to environmental
degradation
and
2.Whether the polluters-to-pay principle applies in this case in accordance with the High
Court's order.
JUDGEMENT
1.The appellants raised the fundamental argument that a court lacks the authority to
impose penalties for general betterment unless explicitly authorized by a statute. They also
argued that, in the absence of findings by the High Court, indicating environmental
degradation, the question of awarding damages could not arise.
2. To support their position, the appellants referred to a previous Supreme Court decision
Vellore Citizens' Welfare Forum vs. Union of India & Ors., 1996 and argued that the manner
in which pollution had occurred needs to be ascertained. Thus, they sought to distinguish
their case from Pravinbhai Jashbhai Patel's case, where direct evidence of damage had been
presented and the High Court had thus adopted a rule of thumb, imposing a 1% turnover
penalty for damages.
3. The Supreme Court took into account the opinion of senior advocate Shri T.R.
Andhyarujina, acting as amicus curiae, and acknowledged the appellant's argument that a
violation of GPCB norms did not necessarily equate to environmental degradation.
Consequently, the Court directed the High Court to conduct a more thorough examination
in each of the cases to determine whether damage had indeed been caused by the
industrial units due to their failure to adhere to GPCB norms. The Court recognized that, in
some cases, the 1% turnover formula might be appropriate, but it emphasized that the
methodology used for awarding damages based on the "polluter to pay" principle must be
practical, simple, and easy to apply.
CONCLUSION/COMMENTS
I would like to conclude by stating what I think are the key takeaways from this judgement:
The Supreme Court judgment addressed the issue of whether penalties could be imposed
on industrial units for general betterment without explicit statutory authorization. It
directed the High Court to re-examine the cases and to assess the appropriateness of the 1%
turnover formula for compensation. Both these steps were important in trying to uphold the
essence of the “polluter-to-pay” principle and in ensuring that there are no arbitrary
penalties awarded without thorough examination of the cause and effect. The Court
emphasized the importance of ensuring that compensation was proportionate to the harm
caused and acknowledged the fundamental right to a clean environment. This judgment
therefore succeeded in trying to strike a balance between environmental protection and the
practicality of awarding damages in cases of pollution.