A.P. POLLUTION CONTROL BOARD-IIversusPROF. M.V. NAYUDU (RETD.) AND ORS.

                 A.P. POLLUTION CONTROL BOARD-II                                  A
                                 v.
                PROF. M.V. NAYUDU (RETD.) AND ORS.

                            DECEMBER I, 2000

            [M. JAGANNADHA RAO AND M.B. SHAH, JJ.]                                B


      Pollution laws :

      Environment (Protection) Act, 1986- -Sections 2(b), 3(2), 5-- Water
(Prevention and Control of Pollution) Act, 1974- -Sections 2(e), 2(k), 17, 18,    C
19, 25-.00 by State prohibiting setting up any industry within JO KM~ from
the banks of the two lakes, Osman Sagar and Himayat Sagar; which supplies
drinking water to twin cities, Hyderabad and Secunderabad--By a GO, State
Government subsequently granting an exemption to a single industry, which
is declared to be hazardous, tu be set up within the prohibited area- -Held,      D
the GO granting exemption is without statutory backing and also wholly
arbitrary and violative of- Article 21- -Constitution of India.

      Precautionary Principle- When to be applied-Held, permission to set
up hazardous industry should not be allowed on mere assurances as the
chance of an accident, within such close proximity of the reservoirs cannot       E
be ruted out.

       Principle of Promissory Estoppel-Applicability of- Permission from
Gram Panchayat and Collector for the use of the land and grant of letter of
intent from the Government-Action of the industry contrary to the statute-·-      F
Estoppe/ cannot be against a statute-Hence question of estoppel does not
arise.

      Constitution of India- Article 21--Right to healthy environment as
part of right to life-Held, access to drinking water is fundamental to life and
there is a duty on the State under the Constitution to provide clean drinking     G
water to its citizens.

     Union of India issued a Notification in 1988 listing various hazardous
industries in different categories in exercise of its powers vested under the
Water (Prevention and Control of Pollution) Act, 1974, the Air (Prevention
                                     249                                          H
    250                      SUPREME COURT REPORTS [2000] SCPP. 5 S.C.R.

A   and Control of Pollution) Act, 1981, the Water (Prevention and Control of
    Pollution) Cess Act, 1977 and the Environment Protection Act, 1986 a11d
    directing the Pollution Control Boards of the States to keep in view the
    pollution-causing potential of the industry before granting consent from the
    appellant-Board for setting up. Consequent to the directive, the State of Andhra
B   Pradesh issued GO 192 dated 31.3.94 prohibiting location of industries within
    10 KMs of the two reservoirs, Osman Sagar and Himayat Sagar, which caters
    to the needs of drinking water to twin cities - Hyderabad and Secunderabad.
    Respondent industry applied for consent from the appellant-Board for setting
    up factory within 10 KMs in November 1995 through the Industries
    Department of the State Government. The State recommended to the
C   Government oflndia for grant of letter of intent in relaxation of 10 K.."1s, rule
    subject to the respondent industry obtaining NOC from the appellant Board.
    The Government of India granted the relaxation. Pursuant to GO 111 dated
    8.3.96 issued by the Government reaffirming the 10 KMs, prohibition, the
    Pollution Control Board rejected the application of the respondent industry.

D          The respondent industry obtained permission from the Gram Panchayat
    for establishing a factory and from the District Collector for change of land
    use from agricultural to non-agricultural and executed various civil works
    in spite of the prohibition. The appellant Board rejected another application
    of the respondent industry for setting up factory. The respondent industry
E   then applied to the State Government seeking exemption from the 10 KMs,
    rule contained in GO 111 dated 8.3.96 on the ground that it had invested huge
    amounts to establish the industry and had almost completed the civil works
    and had purchased and installed the machinery. The State by GO No. 153 dated
    3.7.97 granted exemption from GO 111 to the respondent industry and
    directed the appellant Board to prescribe conditions for treatment/disposal of
F   aqueous/solid waste. Compelled by the direction of the State, the Appellant
    Board passed an order dated 16. 7.97 directing the respondent industry to take
    various precautions/safeguards as stated in the order.

          The Society for Preservation of Environment and Quality Life filed a
G   Writ Petition for quashing the exemption order in GO 153 and obtained stay.
    The appellant-Board refused to grant NOC as it was not desirable to locate
    such an industry in the catchment area in view of GO 111. The respondent
    industry filed an appeal under Section 28 of the Water Act, 1974 before the
    appellant authority against the order of the appellant Board. The appellate
    authority allowed the appeal and set aside the orders of the Board. A Public
H   Interest Litigation petition was filed before the High Court for quashing the




                                                                                        1
            AP POLLUTION CONJ ROL BOARD-II v. PROF MY. ~A YUDU               25 J
order of the appellate authority. The High Court upheld the orders of the            A
appellate authority and directed the appellant Board to grant of NOC. Hence
these appeals by the Board.

      This Court by order dated 27.1.99 sought an opinion from National
Environmental Appellate Authority on the likelihood of causing serious
pollution to the drinking water in the lakes by the respondent industry. This        B
Court referred the question of adequacy of the precautions/safeguards
prescribed by the appellant Board by its order dated 16.7.97 to the University
Department of Chemical Technology, (Autonomous), Matunga, Bombay, headed
by Prof. D.N. Bhowmick with the assistance of the National Geophysical
Research Institute, Hyderabad (NGRI). All the three reports opined that the          C
proposed industry is a hazardous industry likely to affect the catchment area
of the two lakes.

      Allowing the appeals, the Court

      HELD : 1.1. Section 3(2)(v) of the Environment (Protection) Act, 1986          D
permits restriction specifying "areas" in which industrial operations or
processes shall not be carried out or shall be carried out subject to certain
safeguards. The notification issued by the State Government in GO 11 l dated
8.3.96 falls within the first part i.e. where industries shall not be carried out.
This is a total prohibition within I 0 KMs, of the two reservoirs. When such         E
a prohibition was in force, the State Government could not obviously grant
any exemption to a specified industry like the respondent industry, located
within the 'area'. Nor was it permissible for the State to direct the appellant-
Board to prescribe conditions for grant of NOC. [266-C, D[

      1.2. From the provisions of the Water (Prevention) and Control of F
Pollution) Act, 1974, it is clear that in view of sub-sections 2(e), 2(k) read
with Sections 17 and 18 of the Water Act, the fundamental objective of the
statute is to provide clean drinking water to the citizens. Having laid down
the policy prohibiting location of any industry within I 0 KMs, under GO 111
dated 8.3.1996, the State could not have granted exemption to the respondent G
industry, nor to any other industry, from any part of the main GO 11 l dated
8.3.96. Section 19 permitted the State to restrict the application of the Water
Act, 1974 to particular area, if need be, but it did not enable the State to grant
exemption to a particular industry within the area prohibited for location of
polluting industries. Exercise of such a power in favour of a particular
industry must be treated as arbitrary and contrary to public interest and in H
    252                      SUPRI ME COURT REPORTS [2000] SUPP. 5 S.C.R.

A violation of the Constitution of India. (266-E, F, GI
           2.1. Exemption granted even to single major hazardous industry may
    itself be sufficient to make the water in the reservoirs totally unsafe for
    drinking water purposes. Government could not pass such orders of exemption
    having dangerous potential, unmindful of the fate of lakhs of citizens of the
B   twin cities to whom drinking water is supplied from these lakes. Such an
    order of exemption carelessly passed, ignoring the 'precautionary principle'
    could be catastrophic. Therefore, the GO 153 dated 3. 7.97 granting exemption
    must be held to be without statutory backing and also wholly arbitrary and
    violative of Article 21. (266-H; 267-A, B]
c          2.2. In the light of the exhaustive scientific reports of the National
     Environmental Appellate Authority, the Department of Chemical Technology,
    Bombay University and the National Geophysical Research Institute, it cannot
    be said that the two lakes will not be endangered. In respect of the drinking
    water reservoirs, which cater to the needs of about 70 or 80 Iakhs population,
D   the Court cannot rely upon a bare assurance that care will be taken in the
    storage of serious hazardous materials. Nor can the Court rely on an
    assurance that the hazardous substance would be effectively removed without
    spillage. It is not humanly possible for any department to keep track whether
    the pollutants are not spilled over. This is exactly where the 'precautionary
E   principle' comes into play. The chance of an accident, within such close
    proximity of the reservoirs cannot be ruled out, as pointed out in the Reports.
    Thus, it is inferred that there is a very great risk that these highly hazardous
    material could seep into the earth and reach the tanks, after passing through
    the dolerite dykes. (271-C, D, F, G, HI

F         2.3. On the basis of the Scientific material obtained by this Court from
    three highly reputed sources, this is certainly not a fit case for directing
    grant of NOC by the Pollution Control Board. It is not also possible to hold
    that the safeguards suggested by the appellant Board - pursuant to the
    direction of the Government dated 3.7.97, will be adequate, in the light of the
    Reports. In the facts of this case, the Board could not be directed to suggest
G   safeguards and there is every likelihood that safeguards could fail either due
    to accident, as stated in the report, or due to human error. 1272-A-CI

         3. The respondent industry ought not to have taken steps to obtain
    approval of plans by the Gram Panchayat, nor for conversion of land use by
H   the Collector, nor should it have proceeded with civil work and installation of
            A.I'. POLL! "rION CC >NTROL BOARD-II 1·. PROF \1 V. NAYUDU       253
machinery. The action of the industry being contrary to the provisions of the       A
Act, no equities can be claimed. The Appellate Authority erred in thinking
that because of the approval of plan by the Panchayat or conversion of land
use by the Collector or grant of letter of intent by the Central Government, a
case for applying principle of "promissory estoppel" applied to the facts of
this case. There could be no estoppel against the statute. The industry could       B
not therefore seek an NOC after violating the policy decision of the
Government. [273-8, C, DI

       4. Drinking water is of primary importance in any country. India is a
party to the Resolution of the UNO passed during the United Nations Water
Conference in 1977. Thus, the right to access to drinking water is                  C
fundamental to life and there is a duty on the State under Article 21 to provide
clean drinking water to its citizens. There is building up, in various countries,
a concept that right to healthy environment and to sustainable development
are fundamental human rights implicit in the right to 'life'. This Court was
the first to develop the concept of right to 'healthy environment' as part of the
right to "life" under Article 21 of our Constitution. This principle has now        D
been adopted in various countries today. (255-C, D, G, H; 256-AI

    Narmada Bachav Ando/an v. Union of India, [2000] 7 Scale 34 and
Bandhua Mukti Morcha v. Union of India, (1984] 3 SCC 161, referred to.

      Portugal v. £.C. Council, 3 C.M.L.R. 331 (1997); Lopez Ostra v. Spain,        E
303-C, Eur. Ct. H.R. (Ser.-A) (1994); Powell & Ravner v. U.K., 172 Eur. Ct.
H.R. (Ser.-A) Page 5 (1990); Yanomani Indians v. Brazil Inter-Amer, C.H.R.
7615 OEA/Ser.L.V./11/66 Doc. 10 rev. 1, (1985); Minors Opasa v. Department
of Environment and Natural Resources, 33 I.L.M. 173 (1994); Fundepub/ico
v. Mayer of Bugalagrande and Ors., [Constitutional Court of Columbia                F
(17.6.92) and Wildlife Society of Southern Africa & Ors., v. Minister of
Environmental Affairs and Tourism of the Republic of South Africa and Ors., dt.
27.6.1996 (1996] 9 BCLR 1221 (Tk), (1996) SACLR LEXIS 30, referred to.

      "Right to Healthy Environment" - Vol. 25 - (2000) Columbia Journal
of Environmental law by John Lee (P. 283), referred to.                             G
      5. Inasmuch as most of the statutes dealing with Environment are by
Parliament, the Law Commission could kindly consider the question of review
of the environmental laws and the need for constitution of Environmental
Courts with experts in environmental law, in addition to judicial members, in
the light of experience in other countries. (274-E, Fl                              H
     254                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A          6. The State of Andhra Pradesh is directed to identify the industries
     located within 10 K.M. radius of the two lakes and to take action in
     consultation with the A.P. Pollution Control Board to prevent pollution to the
     drinking water in the two reservoirs. The States and the Board shall not permit
     any polluting industries within the IO KMs. radius. A report shall be
B    submitted to this Court by the State of Andhra Pradesh in this behalf within
     four months, in regard to the pollution or pollution potential of industries, if
     any, existing within I 0 KMs. of the lakes. (275-A, BJ

           A.P. Pollution Control Board (I) v. Prof M. V. Nayudu, (1999] 2 SCC
     718, referred to.
c            CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 368-3 71 of
     1999.

          From the Judgment and Order dated 1.5.98 of the Andhra Pradesh High
    Court in W.P. Nos. 17832, 16969, 18681/97 and 2215of1998.
D                                           WITH

             Civil Appeal Nos. 372 and 373 of 1999.

          R.N. Trivedi, Additional Solicitor Genera!, Nikhil Nayyar, Urmila Sirur,
E   P.S. Narasimha, P. Sridhar, V.G. Pragasam, A. Subba Rao, Anil Kumar Tandale,
    K. Ram Kumar, Ms. Sandhya Goswami, N . Ganpathy, H.K. Puri, Mahabir
    Singh, Ms. Hemantika Wahi and Ms. Anu Sawhney for the appearing parties.

             The Judgment of the Court was delivered by

          M. JAGANNADHA RAO, J. On an earlier occasion, in this very case,
F   this Court in A.P. Pollution Control Board (!) v. Prof M. V. Nayudu, [1999]
    2 sec 718 (dated 27.1.I 999) referred to the 'precautionary principle' and the
    new rule of 'burden of proof' in the matter of environmental pollution. This
    Court in that judgment emphasised the need for scientific inputs before
    adjudicating complicated issues of pollution to environment. The said approach
G   of this Court was based upon contemporary trend in the adjudication of
    environmental matters in various countries and was not intended to restrict
    the powers of this Court under Article 21 of the Constitution of India to
    safeguard environment from pollution.

          Our efforts to get at the best scientific evidence on the issues involved
H   in the case, have yielded satisfactory results in the sense that we have today
           A.P. POLLUTION CONTROL BOARD-II v. PROF M V. NAYUDU [M.J RAO, JI      25)

     greater confidence about the correctness of our conclusions and further that       A
     this is a fit case for affirming the orders of the appellant ( Andhra Pradesh
     Pollution Control Board) not to grant 'consent' to the seventh respondent
     (Mis. Surana Oils & Derivatives (India) Ltd.) under the statute for establishing
     its industry. We are now more sure that, on facts, this is a pre-eminently fit
     case which requires grant of an injunction to prevent irreversible pollution to    B
     the drinking water reservoirs of Osman Sagar and Himayaat Sagar catering to
     the needs of over 50 lakhs people, in Hyderabad and Secunderabad.

           Drinking water is of primary importance in any country. In fact, India is
     a party to the Resolution of the UNO passed during the United Nations Water
     Conference in 1977 as under:
                                                                                        c
                "All people, whatever their stage of development and their social
             and economic conditions, have the right to have access to drinking
             water in quantum and of a quality equal to their basic needs."

     Thus, the right to access to drinking water is fundamental to life and there       D
     is a duty on the State under Article 21 to provide clean drinking water to its
     citizens.

           Adverting to the above right declared in the aforesaid Resolution, in

\j   Narmada Bachao Ando/an v. Union of India, (2000) 7 Scale 34 (at p.124),
     Kirpal J observed:                                                                 E
                 "Water is the basic need for the survival of human beings and is
             part of right of life and human rights as enshrined in Article 21 of the
             Constitution of India ..... "

             There is therefore need to take into account the right to a healthy        p
             environment along with the right to sustainable development and
             balance them.

           Competing human rights to healthy environment and sustainable
     development:
                                                                                        G
           There is building up, in various countries, a concept that right to
     healthy environment and to sustainable development are fundamental human
     rights implicit in the right to 'life'.

           Our Supreme Court was one of the first Courts to develop the concept
     of right to 'healthy environment' as part of the right to "life" und~r Article     H
     256                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A    21 of our Constitution. See Bandhua Mukti Morcha v. Union of India, [ 1984]
     3 SCC 161. This principle has now been adopted in various countries today.

            In today's emerging jurisprudence, environmental rights which
     encompass a group of collective rights are described as "third generation"
B    rights. The "first generation" rights are generally political rights such as those
     found in the International Convention on Civil & Political Rights while "second
     generation" rights are social and economic rights as found in the International
     Covenant on Economic, Social and Cultural Rights. ''Right to Healthy
     Environment". (See Vol.25) 2000 Columbia Journal of Environmental Law by
     John Lee P.283, at pp.293-294 fn.29)
c          The right to sustainable development has been declared by the UN
    General Assembly to be an inalienable human right ( Declaration on the Right
    to Development) (1986). The 1992 Rio Conference declared that Human beings
    are at the centre of concerns for sustainable development. Human beings are
    entitled to a healthy and productive life in harmony with nature. (Principle I).
D   In order to achieve "sustainable development, environmental protection shall
    constitute an integral part of development process and cannot be considered
    in isolation of it". The 1997 Earth Summit meeting of I 00 nations in New York
    reflected the above principles. The European Court of Justice, emphasised in
    Portugal v. E. C. Council, the need to promote sustainable development while
E   taking inio account the environment. (3 C.M.L.R.331) (I 997) (ibid Columbia
    Journal of Environmental Law, p. 283.

           In Lopez Ostra v. Spain, (303-C, Eur. Ct. H.R. (Ser.A) 1994), the European
     Court at Strasbourg has held that the result of environmental degradation
     might affect an individual's well being so as to deprive him of enjoyment of
F    private and family life. Under Article 8 of the European Convention, everyone
     1s guaranteed the right to respect for his private and family life. ( See also,
    Powell & Rayner v. U.K., (172 Eur. Ct H.R. (Ser. A, p.5) (1990). The lnter-
    American Commission on Human Rights has found a similar linkage (Yanomani
    Indians v. Brazil) ( Inter-Amer.C.H.R. 7615 OEA/Ser.L.V/11/66 Doc. JO rev. I
G   (1985). The Commission found that Brazil had violated the Yanomani Indians'
    right to life by not taking measures to prevent the environmental damage. The
    Philippine Supreme Court dealt with the action against Government not to
    continue licensing agreements permitting deforestation so that the right to a
    'balanced and healthful ecology in accordance with the rhythm and harmony
    of nature' is not affected. ( Minors Opasa v. Department of Environment and
H   Natural Resources (33, l.L.M. 173) (1994 ). The judgment was based on 'inter-




                                                                                          1
      A. P POLLUTION CON1 ROL BOARD-II v. PROF M. V. NA YUDU [M.l RAO, J .]   257
generational responsibility'. In Fundepublico v. Mayor of Bugalagrande &            A
Ors., the Constitutional Court of Columbia ( 17 .6.1992) held in favour of the
right to healthy environment as a fundamental human right and treated the
right as part of customary international law. The Court permitted popular
action mechanism. The Supreme Court of South Africa, in a recent case in
Wildlife Society of Southern Africa & Ors. v. Minister of Environmental
affairs and Tourism of the Republic of South Africa and Ors., (Dt.27.6.1996)        B
(1996) 9 BCLR 1221 (Tk); 1996 SACLR LEXIS 30) dealt with the right to
healthy environment. About 60 nations since 1990 have recognised in their
constitutions a right to a healthy environment as a corollary duty to defend
the environment. ( Columbia Journal of Environmental Law, ibid PP.318-319).
                                                                                    c
       Thus, the concept of a healthy environment as a part of the fundamental
right to life, developed by our Supreme Court, is finding acceptance in various
countries side by side with the right to development.

      Events afier 27.1.99 judgment:
                                                                                    D
     We shall now refer to the events subsequent to our order dated 27.1.99.
They are as follows:

       The question is whether in the event of the seventh respondent being
permitted to establish its industry within 10 Kms. of the lakes -notwithstanding    E
the Government's policy to the contrary and the refusal of the appellant Board
to grant NOC - there is likelihood of serious pollution to the drinking water
 in these lakes. This Court in its judgment dated 27 .1.99 referred the said
question to the National Environmental Appellate Authority ( constituted
under the National Environmental Appellate Authority Act, 1997) for its
opinion. The said authority visited the site of the industry at Peddashpur          F
village near Hyderabad and submitted a detailed and exhaustive report to this
Court, after receiving oral and documentary evidence. The Report went against
the seventh respondent industry. The industry filed objections to the said
Report.
                                                                                    G
       When the matter was thereafter heard, the seventh respondent industry
relied upon an order passed by the appellant-Board on 16.7.97, suggesting
that if certain safeguards were provided by the industry to prevent pollution,
NOC could be granted. The said order had to be passed at one stage by the
Board because of the direction of the Government of Andhra Andhra contained
in an order granting exemption from the I 0 KM rule.                                H
    258                     SUPREME COURT REPORTS (2000) SUPP. 5 S.C.R.

A          Before this Court heard arguments on the merits on the question of
    validity of the exemption granted by the Government, this Court wanted to
    first ascertain - without prejudice to the contentions of the parties - whether
    the precautions which were suggested by the appellant Board on 16.7.97
    pursuant to the directive of the State Government would be adequate and
    whether any further precautions were to be taken. The limited question
B   relating to adequacy or otherwise of the "safeguards" as stated above was
    then referred to another expert body, namely, the University Department of
    Chemical Technology, (Autonomous), Matunga, Bombay, headed by Prof.
    D.N. Bhowmick. It was stated in the said order of this Court that Prof.
    Bhowmick could take the assistance of the National Geophysical Research
C   Institute, Hyderabad (hereinafter called the 'NGRI').

          Thereafter, Dr. Bhowmick submitted his Report dated 16.8.2000 together
    with a report of June 2000 furnished by the NGRI, Hyderabad. In as much as
    the Reports - particularly, that ofNGRI- had gone against the 7th respondent
    - industry, it again filed objections thereto.
D
           We then finally heard learned Additional Solicitor General of India, Sri
    R.N. Trivedi for the appellant Board and of Sri P.S. Narasimha for the writ
    petitioner (respondent I) who supported the appellant and Sri A. Subba Rao,
    learned counsel for the 7th respondent- industry. Thus, we have now the
E   Report of the National Environmental Appellate Authority, the Report of Dr.
    Bhowmick, (Bombay) and the Report of the National Geophysical Research
    Institute, (NGRI) Hy4erabad.

          Basic facts leading to the grant of exemption:

F          We may now refer to certain basic facts. The Ministry of Forests and
    Environment, Union oflndia issued a Notification dated 27.9.88 listing various
    industries as hazardous and included them in a 'Red' list. Item 37 of the said
    list of hazardous industries is the industry which produces 'Vegetable oils
    including solvent extracted oils'. The above notification was expressly stated
G   to be issued by the Government of India in exercise of its powers vested
    under the Water (Prevention and Control of Pollution) Act, 1974, the Air
    (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention
    and Control of Pollution) Cess Act 1977 and the Environment (Protection)
    Act, 1986, directing that whenever any industry sought consent from the
    Pollution Control Boards, the said Boards, "while processing the consent
H   application, should decide, keeping in view the pollution - causing potential
      AP POLLCTION CONTROL BOARD-II v. PROF MV NA YUDU [Ml RAO, J.)        259
of the industry, as to which category the industry belongs."                       A
      Consequent to the directive of the Union Government the State of
Andhra Pradesh initially issued notification in GO 192 dated 31.3.94 (Municipal
Administration). Therein, the State Government relied upon the interim report
of an Expert Committee of the Hyderabad Metropolitan Water Supply and
Sewerage Board, called HMWSSB), and prohibited industries being located            B
within 10 K.M. of the two reservoirs.

       ln spite of the prohibition contained in GO 192 dated 31.3.94 prohibiting
industries within I 0 KM. of the reservoirs, the seventh respondent industry
purchased land of 12 acres on 26.9.95 in Peddashpur village situated on the
outskirts of Hyderabad, within I 0 KM of the reservoirs. Initially, the industry   C
applied for consent from the appellant Board in November 1995, through the
Industries Department of the State Government. The State of Andhra Pradesh,
by letter dated 28.11.95, wrote to the Government of India on 28.11.95,
recommending grant of letter of intent in relaxation of I 0 K.M. rule, subject
to the industry obtaining NOC from the appellant Board. On 9.1.96, Government      D
of India gave letter of intent but required the industry to obtain No Objection
Certificate from the environmental authority of the State.

      At that stage, the Government re-affirmed the 10 K.M. prohibition in GO
111 dated 8.3.96, after obtaining the second interim report of the HMWSSB.
Consequent thereto, in the pre-scrutiny by the Single Window Clearance             E
Committee Meeting of the Pollution Control Board held on 24.5. 96, the
application of the industry stood rejected because of the 10 K.M. prohibition.

      Undeterred, the industry proceeded to obtain permission from the Gram
Panchayat on 31.5.96 for establishing a 'factory'. Even though, on 31.5.96 the
Commissioner of Industries, specifically informed the industry that it should      F
better select an alternative site, instead of heeding to the said advice, the
industry obtained permission of the District Collector on 7.9.96 for change of
land use from agricultural to non-agricultural use. It then proceeded to execute
various civil works in spite of the I 0 k.m. prohibition rule.

     Thereafter, the Industry proceeded further with construction of civil         G
works and then applied to the appellant Board on 7.4.97 under Section 25 of
the Water Act for permission to establish the factory. One of the bye-products
mentioned in the said application was:

            "Glycerine, spent bleaching earth and carbon and spent nickel
        catalysts".                                                                H
    260                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A         On 1.6.97, the appellant Board wrote to the Commissioner oflndustries
    that the industry would be generating 'nickel' catalyst and other pollutants
    which could find their way to the lakes either directly or indirectly. Even the
    solid waste such as activated carbon bleaching earth and sodium sulphate
    might find entry during rainy season from the storage yard resulting in
B   polluting to lakes.

          In spite of the said opinion of the appellant Board, the Commissioner
    of industries, in his letter dated 6.6.97 stated that there would be no liquid
    effluent or acidic fumes and that the limited aqueous effluent was totally bio-
    degradable and the solid wastes were disposable,

c         On 25.6.97, the appellant Board once again rejected the application,of
    the industry inasmuch as the said industry was in the 'Red' list annexed to
    the Notification dated 1.2.89 of the Ministry of Forests & Environment,
    Government of India.

D         Confronted with the above problems, the industry approached the State
    Government on 24.6.96 seeking exemption from the 10 k.m. rule contained in
    G0.111 dated 8.3.96 on the ground that it had invested huge amounts to
    establish the industry and that it had almost completed the civil works, and
    had purchased machinery and installed the same. The State Government, in
    spite of the prohibitory directions issued by it earlier, issued GO. 153 dated
E   3.7.97 granting exemption from GO 111 dated 8.3.96 on the ground that the
    Government of India had issued letter of intent on 9.1.96, that the Commissioner
    of Industries, in his letter dated 6.6.97 opined that there would be no liquid
    effluents and that the solid wastes would be disposable. Government then
    granted exemption stating as follows:
F           "The Government had considered the matter in its entirety and feel
            that if proper control over treatment of aqueous and solid wastes is
            exercised, then there can be no objection to setting up of the industry
            under reference at the proposed site".

G The Government then directed the Board to prescribe conditions for treatment/
    disposal of aqueous/solid waste.

          Compelled by the above direction, the appellant Board passed an order
    on 16.7.97 requiring various precautions to be taken by the industry. (In fact,
    after 8.3.96, Government of Andhra Pradesh issued GO 181 dated 7.8.1997
H   modifying GO 153 dated 3.7.97 and clarifying that the exemption granted did
      AP. POLLUTION CONTROL BOARD-111•. PROF M.V. NA YU DU [M.J. RAO, J.I   26 J

not relate to para (I) of GO 111 but related only to para 3(f)), that para being    A
the one which related to the I 0 K.m. prohibition.

       Meanwhile, the Society for Preservation of Environment and Quality
Life ( SPEQL) filed W.P. 16969/97 for quashing the exemption order in GO 153
dated 3. 7. 97 and obtained stay on 25. 7. 97.
                                                                                    B
       The appellant-Board stuck to its decision to refuse NOC. On 30.7.97, it
finally rejected the application for NOC relying upon GO 111 dated 8.3.96 and
also upon the Government of India's notification dated 1.2.89 which showed
this type of industry in its 'Red' list. The Board stated that it was not
desirable to locate such an industry in the catchment area in view of GO. 111       C
dated 8.3.96. It also referred to the fact that earlier the Board had already
rejected the NOC on 24.5.96 at the pre-scrutiny level.

     Aggrieved by the order of rejection dated 30.7.97 of the appellant
Board, the seventh-respondent industry filed appeal under Section 28 of the
Water Act, 1974 before the appellate authority. For the first time, in the said     D
appeal, it filed an affidavit of Prof. M. Santappa, ( a former Vice Chancellor)
who was the then Scientific Officer of the Tamil Nadu Pollution Control Board.
The said opinion was in favour of the industry.

       By order dated 5.1.98, the appellate authority (presided over by a retired
Judge of the A.P. High Court) allowed the appeal and set aside the orders of        E
the Board. It held that the categorisation into 'Red' as made by the Government
of India on l .2.89 was applicable only to the industries set up in the Doon
valley. It relied on the affidavit of Prof. M. Santappa to the affect that the
industry had adopted the latest technology which was eco-friendly and that
the Chairman of the Board of Directors of the industry was Dr. Siddhu,
formerly Director General of CSIR, that the technology was obtained by the          F
industry from the Indian Institute of Chemical Technology, Hyderabad (IICT)
which issued a certificate that the industry will not discharge any acidic
effluents and solid wastes, and that they could be collected in M.S. Drums
mechanically. The appellate authority referred to Dr. Santappa's report which
stated that none of the bye products would fall on ground and that the              G
conditions laid down by the Technical Committee of the appellant Board on
 16.7.97 would be fulfilled. There would be no liquid effluents or acidic fumes
as certified by !ICT. The nearest spread would be 8.5 Kms. There was no
possibility of seepage into the reservoirs. The appellate authority also held
that principle of 'promissory estoppel' applied inasmuch as permission for
change of land-use was given and permission to erect factory was also given.        H
    262                      SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A   It was brought to the notice of the said appellate authority that under the
    Water Act, long before the State Government issued the prohibiting notification,
    there was an earlier categorisation dated 27.9.88 made by the Government of
    India showing 'Vanaspati Hydegenerated vegetable oils for industrial purposes'
    in the red category. Even so, the appellate authority allowed the appeal of the
B   7th respondent filed under Section 28 of the Water (Prevention and Control
    of pollution) Act, 1974 and directed NOC to be issued by the appellant.

          Writ petition 2215/98 was a PIL case filed for quashing the order dated
    5.1.98 of the appellate authority. The said writ petition and the writ petition
    ofSPEQL (WP. 16969/97 already referred to) and the W.P. 11803/98 filed by
C   the respondent-industry seeking mandamus <1gainst the appellant Board for
    grant of NOC, were all disposed of by the High Court on 1.5.98, upholding
    the orders of the ~ppelfate authority and directing grant of NOC by the
    appellant.

           The 'present appeals have arisen out of the said judgment. We first
D   rendered the judgment dated 27.1.99 as stated earlier. We have already set out
    the subsequent facts relating to the reference made by this Court to the
    National Environmental Appellate Authority on the main point relating to
    pollution and also to its report dated 25.6.99. Further, we have said that this
    Court then made a further reference by order dated 5.5.2000 to the University-
    Department of Chemical Technology, Bombay and the latter submitted its
E   Report dated 16.8.2000 together with Report of National Geophysical Research
    Institute, Hyderabad of June, 2000.

          The following points arise for consideration:-

          (I) Whether, in view of Sub-section 2(b), 3(2) and 5 of the Environment
F   (Protection) Act, 1986 and the notification issued by the Central Government
    on 27 .9 .88 and the further notification issued by the State Government on
    31.3.94 and 8.3.96 as delegate of the Central Government, totally prohibiting
    location of following industries in an 'area', it was permissible for the State
    Government to issue an exemption on 3.7.97 for an individual hazardous
G   industry within the area, even if it be by way of asking the industry to provide
    safeguards?

           (2) Whether, in view of Sub-sections 2(e), 2(k), 17, 18 and 19 of the
    Water (Prevention and Control of Pollution) Act, 1974, ifthe State Government
    had issued notification totally prohibiting polluting industries in the area, and
H   if the State Pollution Board had rejected the request for location of a polluting
       A.P. POLLUTION CONTROL BOARD-II 1•. PROF MV. NAYUDU [M.J. RAO. J.]     263
 industry within the area, it was permissible for the Government to grant             A
 exemption for a single industry within the prohibited area?

       (3) Whether in the light of the Reports of (a) the National Environment
  Appellate Authority, New Delhi, (b) the University Department of Chemical
  Technology, Bombay and (c) the National Geophysical Research Institute,
. Hyderabad, the 7th respondent industry could claim exemption from the 10            B
  KM. prohibition and whether such an exemption could have been granted?

       (4) Whether in spite of the prohibition contained in Section 25 of the
 Water (Prevention & Control of Pollution ) Act, 1974 that industries should
 riot be established without consent of the appellant-Board, the seventh
 respondent could have proceeded with establishing the industry and could             C
 plead equities or rely on the principle of promissory estoppel?

       (5) On the question of establishment of 'Environmental Courts', to what
 extent, the States and Union Territories have taken steps to have environmental
 scientists/experts in the various environmental tribunal or appellate bodies, as     D
 directed in the earlier judgment?

       (6) To what relief?

       Points I and 2:

       It is necessary first to refer to the following provision of the Environment   E
 (Protection) Act, 1986. Under Section 2(b), 'environmental pollution' means
 any solid, liquid or gaseous substance present in such concentration may be,
 or tend to be, injurious to environment. Section 2(e) defines 'hazardous
 substance' as any substance or preparation which, by reason of its chemical
 or physio-chemical properties or handling, is liable to cause harm to human          F
 being, other living creatures, plants, micro-organism, property or the
 environment. Section 3 refers to the extensive process of the Central
 Government to take measures to protect and improve environment. Sub-
 clause (2) permits measures to be taken ( see clause (v)) by imposing

         "restriction of areas in which industries, operations or processes or        G
         class of industries, operations or processes shall not be carried out
         or shall be carried out subject to certain safeguards."

       Section 5 deals with the power of the Central Government, to issue
 directions to any person, officer or any authority and such person, officer or
 authority shall be bound to comply with such conditions. Explanation to              H
    264                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A   Section 5 clarifies that the said power to issue directions includes the power
    to direct:

                "(a) the closure, prohibition or regulation of any industry, operation
            or process; or

B              (b) stoppage or regulation of the supply of electricity or water or
            any other service."

           The notification of the Central Government dated 27.9.1988 (~inistry of
     Forests and Environment) was issued expressly in exercise of powers of the
     Central Government under the Environment (Protection) Act, 1986 the Water
C   (Prevention and Control of Pollution) Act, 1974 and the Air (Prevention and
    Control of Pollution) Act, 1981. It stated that industries were being classified
    in lists 'Red, Orange and Green' and that "when an industry seeks consent
    from the Pollution Control Board, as required by the above Acts, the Board
    which processing the consent application should decide, keeping in view the
D   pollution causing potential of the industry, as to which category, the
    'environmental safeguards' should be determined". This is a general
    notification. Item 37 in the red list refers to an industry producing 'vegetable
    oils including solvent extracted oil'. No doubt, the subsequent notification
    dated 1.2.1989 as pointed out by the appellate authority under Section 28
    related to red category industries for the Doon Valley and was issued under
E   Section 3(2)(v) of the Environment (Protection) Act, 1986 and Rule 5(3 )( d) of
    the Environment (Protection) Rules, 1986 for the purpose of restricting industrial
    units in Doon Valley. Even assuming that notification dated 1.2.99 did not
    apply to Andhra Pradesh, the notification dated 27.9.88 and the State
    Government's notification in GO 111 dated 8.3.96 are sufficient for the present
F   purposes.

          As pointed out in para 2( c) of the Rejoinder affidavit of the appellant-
    Board, the power to issue directions under Section 5 of the Environment
    (Protection) Act, 1986 and its Environment (Protection) Rules, 1986 were
    amended in 1988 (S.O. 152-E) were delegated to the State of Andhra Pradesh
G   in 1988 in S.O. 152-E. The said notification reads as follows:

               "S.O.No.152(£) dated 10.2.1988: In exercise of the powers
            conferred by Section 23 of the Environment (Protection) Act, 1986 the
            Central Government hereby delegates the powers vested in it under
            Section 5 of the act to the State Governments of Andhra Pradesh,
H           Assam, Bihar, Gujarat, Haryana, Himachal Pradesh, Karnataka, Kerala,
      AP POL:.,UTION CONTROL BOARD-II v. PROF MY NAYUDU [M .I RAO, J J        265
        Madhya Pradesh, Mizoram, Orissa, Rajasthan, Sikkim and Tamil Nadu             A
        subject to the condition that the Central Government may revoke such
        delegation of powers in respect of all or any one or more of the State
        Government or may itself invoke the provisions of Section 5 of the
        Act, if in the opinion of the Central Government such a course of
        action is necessary in public interest."
                                                                                      B
      The State of Andhra Pradesh could therefore issue orders in GO I 11
dated 8.3.96 prohibiting the location of industries in specified areas.

      In our view, GO l 92 dated 31.3 .1994 and GO l 11 dated 8.3. l 996 are
therefore referable to the said delegated authority permitting the State
Government to impose "total prohibition" of polluting industries to be located        c
within 10 Kms. of the two reservoirs. The notification dated 31.3. l 994 prohibited
any polluting industries, Major Hotels, residential colonies or other
establishments that generate pollution in the catchment areas of these two
lakes within 10 Kms radius from the full tank level. The appellant Board and
the MD of the Hyderabad Water Supply and Sewage Boa~d, the HUDA and                   D
the Collector of three Districts, Mehboobnagar, Ranga Reddy and Hyderabad
were directed to scrupulously protect the water in the two Jakes from imminent
danger of pollution. GO 111 dated 8.3.1996 (Municipal Administration and
Urban Development Department) issued in modification of GO 192 dated
31.3.1994 re-iterated the same prohibition as follows in clause 3(f). It stated:
                                                                                      E
        "3(i): To prohibit polluting industries, major hotels, residential colonies
        or other establishments that generate pollution in the catchment of
        the lakes up to I 0 Kms:, from full tank level of the lakes as per list
        in Annexure l.

        3(e): To prohibit pollution industries within IO Kms., radius (in both        F
        on upstream and down stream side of the lakes to prevent acidification
        of lakes due to air pollution.

        3(f): There shall be total prohibition of location of industries in the
        prohibited zone."
                                                                                      G
       The above notification was issued after approval by the Chief Secretary
or the Chief Minister. Item 38 thereof refers to Peddashpur Village, which is
with in I0 KM of these two reservoirs.

    As stated earlier, o. 3.7.1997, the State Government (Industries and
Commerce) Department issued notification granting "exemption" from the 10             H
     266                       SUPREME COURT REIWRTS (2000] SUPP. 5 S.C.R.

 A KM rule mentioned in GO 111 dated 8.3.96 later amended by GO 181 dated
     7.8.1997 as exempting para 3(t) of GO 111 and directed A.P. Pollution Control
     Board:

             "to prescribe conditions for treatment/disposal of aqueous/solid
             wastes."
B
     The result of exemption from the purview of para 3(t) of GO.I I I dated 8.3.96
     was that the seventh respondent industry could be located within 10 KM of
     the lakes. The question is whether this exemption can be valid ?

            Under Section 3(2)(v) above extracted, the Central Government or the
C    State Government as its delegate, could issue directions as permitted by
     Section 5. Now Section 3(2)(v) permits restriction specifying "areas" in which
     industrial operations or processes shall not be carried out or shall be carried
     out subject to certain safeguards. The notification issued by the State
     Government in GO 111 dated 8.3.96 falls within the first part i.e. where industries
D    shall not be carried out. This is a total prohibition within I0 KM of the two
     reservoirs. When such a prohibition was in force, the State Government could
     not obviously grant any exemption to a specified industry like the seventh
     respondent, located within the 'area'. Nor was it permissible for the State to
     direct the appellant-Board to prescribe conditions for grant of NOC.

E          Coming to the provisions of the Water Act, 1974, it is clear that in view
    of Sub-sections 2(e), 2(k) read with Sections 17 and 18 of the Water Act, the
    fundamental objective of the statute is to provide clean drinking water to the
    citizens. Having laid down the policy prohibiting location of any industries
    within 10 Kms, under GO 111 dated 8.3.1996, the State could not have granted
    exemption to the 7th respondent industry, nor to any other industry, from any
F   part of the main GO 111 dated S.3.96. Section 19 permitted the State to restrict
    the application of the Water Act, 1974 to particular area, ifneed be, but it did
    not enable the State to grant exemption to a particular industry within the area
    prohibited for location of polluting industries. Exercise of such a power in
    favour of a particular industry must be treated as arbitrary and contrary to
G   public interest and in violation of the right to clean water under Article 21 of
    the Constitution of India.

        The above reasoning given by us does not mean that exemption can
  be given to all industries within a particular radius of the reservoirs unmindful
  of the possible danger of pollution to the lakes. In fact, exemption granted
H even to a single major hazardous industry may itself be sufficient to make the
     AP POLLUTION CONTROL BOARD-11 v PROF M V. NAYUDC [M J RAO, J J        267

water in the reservoirs totally unsafe for drinking water purposes. Government    A
could not pass such orders of exemption having dangerous potential,
unmindful of the fate of lakhs of citizens of the twin cities to whom drinking
water is supplied from these lakes. Such an order of exemption carelessly
passed, ignoring the 'precautionary principle', could be catastrophic.

      Therefore, the GO 153 dated 3.7.97 granting exemption must be held to       B
be without statutory backing and also wholly arbitrary and violative of Article
21. Points I and 2 are decided against the 7th respondent

      Point 3:

       Jn our earlier judgment in A.P. Pollution Control Board(!) v. Prof M. V.   C
Nayudu and Ors,, [ 1999] 2 SCC 718, this Court had occasion to refer to the
basis of the precautionary principle and to explain the basis and content of
the very principle. This Court also explained the new principle of burden of
proof.

     Therefore, it was for the 7th respondent industry to establish that there
                                                                                  D
would be no danger of pollution to the two reservoirs even if the industry
was established within I 0 Km radius of the said reservoirs. In the present
proceedings, the 7th respondent has failed to discharge the said onus.

      Before the State Government, the industry produced no expert opinion        E
except to say that it had got the new technology from the Indian Institute of
Chemical Technology, Hyderabad (IICT) and it relied on a statement of Dr.
Siddhu, Chairman of the 7th respondent and formerly Director General of
CSIR. The affidavit of Dr. Santappa was produced only before the appellate
authority under Section 28 of the Water Act, 1974.
                                                                                  F
     But, in the light of the subsequent reports now obtained by this Court,
the position is quite clear. We shall now refer in some detail to the three
exhaustive reports furnished by the National Environmental Appellate
Authority, New Delhi (NEAA), Dr. Bhowmick of Bombay and the NGRL

      (A) Report of National t,"nvironmental Appellate Authority, New Delhi       G
(NEAA).

     The said authority was presided over by a retired Judge of the Supreme
Court of India, Sri Justice N. Venkatachala.

       The NEAA framed two points (a) and (b):                                    H
     268                        SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A            (a) (i) Is the respondent-industry a hazardous industry or?
             (ii)   What is the pollution potentiality of the respondent industry,
                    taking into account, the nature of the products, its effluents and
                    its location?
             (iii) Whether the operation of the industry is likely to affect the
B                  sensitive catchment area resulting in pollution of the Himayat
                   Sagar and Osman Saga.· lakes supplying drinking water to the
                   twin cities of Hyderabad and Secunderabad?

           On point (a)(i), it noticed that the industry is to use, among 12 major
C items, - 70 Kgs. of nickel based catalyst (Pellets) per day and that the raw
    material is to be stored atleast for 30 days. It observed that according to
    Chapter 8.0 of NFPA, Hazard classification, the raw materials used by the
    industry are serious health hazards, highly inflammable and re-active at
    elevated temperatures and pressures. Four items, Nickel, Ammonia, Methanol
    and Hydrochloric Acid are used in the process. After referring to the various
D   plants and processes, the NEAA referred to the provisions of the Factories
    Act (as amended in 1987) and Section 2 (cb) defining 'hazardous processes
    and Schedule I thereof in which item 25 refers to 'extraction of oils and fats
    from vegetable and animal sources" as hazardous processes. It referred to
    Rule 2(h) of the 'Manufacture, Storage and Import of Hazardous Chemicals
E   Rules, 1989' issued under the Environment (Protection) Act, 1986. It referred
    to the provisions in the Environment (Protection) Act, Section 2(e), 2(f) and
    2( d). It agreed that merely because an industry is hazardous does not by itself
    debar it but then Section 8 of that act would come into play. It answered
    question (i) in the affirmative that the industry is hazardous.

F         On point a(ii), it referred to the definition of 'pollution' in section 2(c)
    of the Water Act, section 2(f) which defines 'sewage effluent' and section 2(k)
    which defines 'trade effluent' and observed that the 'pollution potential' of
    the industry was to be assessed. After referring to the effluents -Commercial
    Castor oil, Bleaching earth, Activated carbon, Nickel catalyst, Hyflo supercel,
C . Sulphuric l\cid, Caustic Soda, Methanol, Calcium Oxide, Alum - in all 1463
 1
    MTs per month and noticed that the monthly requirement of Hydrogen was
    76 500 NM. As the industry is coal based, large quantity coal is required. It
    would produce huge quantities of BSS, HCO, HSA, Methyl, Fatty acids,
    Epoxidise, Glyceren etc. Hydroxy Stearic Acid, methyl Hydroxy Stearic Acid
    and methanol are serious health hazardous. Items in part II list of Schedule
H I to the 'Manufacture, Storage and Import of Hazardous Chemicals Rules,
      A.P. POLLUTION CONTROL BOARD-II v. PROF M.V NAYUDU ;M.J. RAO .   .I.: 269
 1989' are the raw materials and RW2 (Dr. G.S. Siddhu) in his evidence agreed     A
that these are hazardous ( toxic) chemicals. The solid effluents generated
every day are (i) spent bleaching earth 1250 Kgs, (ii) spent bleaching carbon
250 kgs, (iii) spent nickel catalyst 45 kgs. and (iv) sodium sulphate 3820 Kgs.
(12-HSA) and 170 kgs. ( from CME). Monthly tum out of effluents will be 400
MT. Every day 55 kgs. of nickel is consumed. Every day, 27,830 litres of water    B
are to be used and normally the effluent will carry all these hazardous
substances, including nickel. 'As it is said that the water used could be re-
used for cultivation of lands in the premises of the industry, the toxic
chemicals which get lodged in the surface layers of the soil will flow down
in storm run offs or percolate into the ground water, to ultimately reach the
water body of the two reservoirs. The NEAA further stated that Dr. Santappa       C
in his evidence as RW-1 made admissions regarding gaseous effluents-fly
ash, S02 C02 Oxides of Nitrogen, Oxides of Sulphur and suspended particulate
matter. The solid and liquid effluents could reach the lakes through seepage.
The factory cannot be located in the catchment area because run-offs due to
rain will carry hazardous material along surface and through seepage. The
NEAA adverted to the 'Drainage Basic Analysis' by the Central Ground              D
Water Board, to the effect that the Basin "has moderate run-off and moderately
high permeability of the terrain. As such the amount of infiltration is
considerably high". The said Report shows that rainfall in 796 mm ( heaviest
being 1326 mm) and there is every likelihood of the solids being "transported
down along the gradient". The said Report of Central Ground Water Board,          E
referred to "dolerite dykes" in the vicinity and the possibility of flow even
more. Having regard to the location of the dyke and the speed and angle, the
polluted water could reach Himayat Sagar which is hardly 2 m bgl. since the
dam height is 1763.50 feet. Satellite maps of NSRA were also examined and
relied for this purpose. Among the substances stored are nickel, sulphuric
acid, HCA, which are well-known 'hazardous' substances.                           F

      The NEAA pointed out that the 'Engineering Package' provided by
the IICT to the industry ( Ex. p. 29) as found in the agreement with the IICT,
"does not refer at all to the nature of pollutants to be generated in this
industry or to the methods adopted to control them, as asserted by RW2".          G
The NEAA pointed out that in. fact clause 17(5) of Annexure IV to the
agreement stated that 'the scope of supply (engineering package) does not
include design of effluent treatment system'. On this ground the article in
llCT Bulletin (Ex.RI) was rejected by the NEAA.

     The NEAA also referred to the Report of the three man Technical              H
     270                      SCPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A    Committee of the Andhra Pradesh Pollution Control Board consisting of Dr.
     J.M. Dave (PW 3) and that "accidents and human failure are the most probable
     causes for spillage and it is unrealistic to give a 'zero spillage', and specially
     to their report on 'nickel' and held that the respondent industry has high
     pollution potentiality under issue a(ii).

B          The NEAA, then took up issue (b) as to the likelihood of the industry
    affecting the sensitive catchment area. It referred to the Expert Committee
    Report of the HMWSSB and its recommendations which led to the issuance
    of the GO 192 dated 31.3.94 and GO 111dated8.3.96. The NEAA concluded
    that the "establishment of any chemical industry, carries with it, the imminent
C   dangers of the chemicals or chemical effluents polluting the water of Himayat
    Sagar and Osman Sagar.

         Thus, the exhaustive Report of the NEAA has gone against the 7th
    respondent industry.

D        (B) Report of Bombay University Department of Chemical Technology
    headed by Dr. Bhowmick:

            The Department of Chemical Technology, Bombay University, in its
     Report dated I 6.8.2000 have gone into the other aspects as to what should
     be the safeguards to be taken by the industry if the appellant-Board's letter
E    dated 16.7.97 is to be applied. Dr. Bhowmick suggested that 'No nickel catalyst
     whether present in any solid waste or in any solution be allowed to spill on
     floor/ground. The process should not emit gaseous harmful vapours. Adequate
    and ready safety measures must be made available for accidental leakage/
    spillage situations. They then gave six suggestions - storage tanks to be
F   surrounded by bunds; that it is not advisable to use hydrochloric acid but
    sulphuric acid may be used. Again, accidental leakage of ammonia will be
    catastrophic. Alternately, hydrogen gas may be brought in cylinders. He
    expressed doubts about plate and frame filter press or of leaf filters. Quantity
    of methanol stored should not exceed more than a week's requirement. The
    floor washing water should pass through oil traps and then properly treated
G   in an effluent treatment plant. If salt and ionic impurities are not removed, it
    may produce ground water contamination.

           (C) Report of National Geophysical Research Institute, Hyderabad

          Finally, the NGRI, Hyderabad has given a very detailed and exhaustive
H   report about "IMPACT OF DYKE". They conducted (i) field investigations,
      A.P. POLLUTION CONTROL BOARD-II v. PROF M.V. NAYUDU [M.J. RAO, J.~     27]

(ii) Hydrogeological studies, (iii) Geophysical investigation, (iv) Electric         A
Resistivity investigation (v) Magnetic survey and (vi) Tracer studies. The
Report is a voluminous one.

       The final conclusion after an exhaustive analysis of various types of
data "from results of multi- parameter investigations carried out in the area,
is that hydraulic connectivity exists across the dolerite dyke located between       B
Chouderguda and Sirsilmuktha facilitating the ground water movement .... .ln
the post monsoon scenario, the groundwater table will go up and thereby may
result in more groundwater flow across the dyke.

       Our conclusion on the basis of these Reports:
                                                                                     c
        In the light of the above exhaustive scientific Reports of the National
 Environmental Appellate Authority, New Delhi the Department of Chemical
 Technology, Bombay University and the National Geophysical Research
 Institute, Hyderabad - it cannot be said that the two lakes will not be
 endangered. The package of the IICT- which did not deal with the elimination        D
 of effluent effects, the opinion of Dr. Santappa, the view of Director of
 Industries, and the view of the Government of Andhra Pradesh must be held
 to be base on insufficient data and not scientifically accurate.

        It is no doubt stated by the 7th respondent that it is prepared to adopt
  the safety measures suggested by the appellant Board on I. 7. 97 and also          E
  those suggested by Dr. Bhowmick, by trying to see that during storage of raw
. materials and after release of the hazardous liquids, they are put in containers
  and removed.

       In respect of these drinking water -reservoirs which cater to the needs
 of about 70 or 80 lakhs population, we cannot rely upon a bare assurance that F
 care will be taken in the storage of serious hazardous materials. Nor can we
 rely on an assurance that these hazardous substances would be effectively
 removed without spillage. It is, in our view, not humanly possible for any
 department to keep track whether the pollutants are not spilled over. This is
 exactly where the 'precautionary principle' comes into play. The chance of an. G
 accident, within such close proximity of the reservoirs cannot be ruled out,
 as pointed out in the Reports. Thus, we are led to the inference that there
 is a very great risk that these highly hazardous material could seep into the
 earth and reach the tanks, after passing through the dolerite dykes, as pointed
 by the National Geophysical Research Institute. Our inference from facts and
 the reports is that of a reasonable person, as pointed out in the main judgment H
    272                       SUPREME COURT REPORTS [2000] SUPP. 5 S.C.R.

A    in A.P. Pollution Board v. Prof M. V. Nayudu.

          On the basis of the scientific material now obtained by this Court from
    three highly reputed sources, this is certainly not a fit case for directing grant
    of NOC by the Pollution Control Board. It is not also possible to hold that
    the safeguards suggested by the appellant Board - pursuant to the direction
B   of the Government dated 3.7.97, will be adequate, in the light of the Reports.
    We therefore hold that in the facts of this case, the Board could not be
    directed to suggest safeguards and there is every likelihood that safeguards
    could fail either due to accident, as stated in the report, or due to human error.
    We, therefore, hold on point 3 against the 7th respondent-industry.
c         Point 4:

           This point deals with the principle of promissory estoppel applied by
    the appellate authority, on the ground that once building permission and
    permission for change of land use were granted, the appellant Board could
D   not refuse NOC. The learned Additional Solicitor General, Sri R.N. Trivedi
    referred to the amendment to Section 25(1) in this connection.

          Under Section 25 (I) of the Water (Prevention and Control of Pollution)
    Act, 1974 as it original stood, sub-section (I) thereof read as follows:

E              "Section 25(/): Subject to the provisions of this section, no
           person shall, without the previous consent of the State Board, bring
           into use any new or altered outlet for the discharge of sewage or trade
           effluent into a stream or well or begin to make any new discharge of
           sewage or trade effluent into a stream or well".
F         By Central Act 53/1988, the sub-section was amended and reads as
    follows:

               "Section 25(/): Subject to the provisions of this section, no
           person shall, without the previous consent of the State Board - (a)
           establish or take any steps to establish any industry, operation or
G
           process, or any treatment and disposal system or any extension or
           addition thereto, which is likely to discharge sewage or trade effluent
           into a stream or well or sewer or on land ( such discharge being
           hereafter in this section referred to as discharge of sewage) or (b)
           bring into use any new or altered outlet for the discharge of sewage,
H          or (c) bring to make any new discharge or sewage ..... "
      AP POLLUTION CONTROL BOARD-II v PROF M.V. NAYt;DU [M J. RAO, J]        273
      After the amendment, the prohibition now extends even to                      A
'establishment' of the industry of taking of steps for that process and therefore
before consent of the Pollution Board is obtained, neither can the industry
be established nor any steps can be taken to establish it.

       The learned Additional Solicitor General of India, Sri Trivedi is right in
contending that the 7th respondent industry ought not to have taken steps           B
to obtain approval of plans by the Gram Panchayat, nor for conversion of land
use by the Collector, nor should it have proceeded with civil work in a
installation of machinery. The action of the industry being contrary to the
provisions of the Act, no equities can be claimed.

       The learned Appellate Authority erred in thinking that because of the        C
approval of plan by the Panchayat, or conversion of land use by the Collector
or grant of letter of intent by the Central Government, a case for applying
pr'.nciple of "promissory estoppel" applied to the facts of this case. There
could be no estoppel against the statute. The industry could not therefore
seek an NOC after violating the policy decision of the Government. Point 4          O
is decided against the 7th respondent accordingly.

      Point 5:

      In this Court's earlier judgment dated 27.1.99, this Court referred to the
need for constituting environmental Courts, tribunals, or appellate bodies          E
comprising of environmental scientists/experts as members. We had then
referred to the need to constitute Environmental Courts as done in New South
Wales in Australia. In this Court's earlier judgment, responses of various
States and Universities were called for in this behalf. Some States & Union
Territories have responded but several have not responded.
                                                                                    F
      We may in this connection refer to the recent report entitled
'Environmental Court Project' published on 18.2.2000 by a Research team at
the Department of Land Economy, University of Cambridge, UK, headed by
Prof. Malcoum Grant. (See Journal of Planning and Environment, May, 2000
p.453 titled 'The use for Environmental Courts'). The aim of the team was to
explore the concept of an Environmental Court in the light of the experience        G
in other jurisdictions and in Australia and New Zealand in particular. The
concepts referred to in the Report are

       (a) a specialist and exclusive jurisdiction;

       (b) a power to determine merits appeals;                                     H
    274                      SCPREME COCRT REPORTS (2000] SCPP. 5 S.C.R.

A           (c) vertical and horizontal integration, by this is meant a wide
            environmental jurisdiction which integrates both subject matter and
            different types of legal proceedings;

            ( d) hall marks of a Court or tribunal;

B           (e) dispute resolution powers, it is pointed out that this Court extend
            to disputes over the formu- lation of policy as well as more traditional
            adjudication;

            (f) expertise, the members would be specialist in environmental
            matters;
c           (g) access, there would be broad rights of access to the Court;

            (h) informality of procedures - such as the use of alternative dispute
            resolution procedures;

            (i) costs - this is linked to the need for access and involves means
D           of overcoming the problem of high costs crihibifing access; or

            (j) capacity for innovation.

           The Report puts forward a proposal for a two-tier Environmental Court.
    The Court would have jurisdiction and powers including judicial review and
E   civil procedure powers while dealing with environmental matters.

          Inasmuch as most of the statutes dealing with Environment are by
    Parliament, we would think that the Law Commission could kmdly consider
    the question ofreview of the environmental laws and the need for constitution
    of Environmental Courts with experts in environmental law, in addition to
F   judicial members, in the light of experience in other countries. Point 5 is
    decided accordingly.

          Point 6:

G          Learned counsel for the seventh respondent referred to the existence of
    several other industries within the IO k.m. radius of the two reservoirs, whi~h
    have been granted permission earlier. According to him, these industries are
    also polluting industries. In our view, the Environmental (Protection) Act,
    1986 and the Water Act, I 974 and the Air Act, 1981 have enough provision
    applicable not only to new industries proposed to be established but also to
H   existing industries.
       A P POLU!TION CIJNTROL BOARD-II v. PROF MY NA YUDU I Ml RAO, J]     275
      The State of Andhra Pradesh is therefore directed hereby to identify         A
these industries located within I 0 K.M. radius of these two lakes and to take
action in consultation with the A.P.Pollution Control Board to prevent pollution
to the drinking water in these two reservoirs. The State and the Board shall
not permit any polluting industries within the JO k.m radius. A report shall
be submitted to this Court by the State of Andhra Pradesh in this behalf           B
within four months from today, in regard to the pollution or pollution potential
ot industries. if any, existing within 10 K.M. of the lakes. After the Report is
received. the matter may be listed. Point 6 is decided accordingly.

      In the result, the appeals are allowed, the judgment of the High Court
and the order of the appetlate authority under section 28 of the Water Act,        C
1974 are set aside and the order of the appellant Board refusing permission
to the seventh respondent under section 25 of the Water Act is restored.

       Before parting with the case, we acknowledge the excellent Reports
submitted to this Court by the three expert bodies on the basis of scientific/
technological research of a very high order. The amount of hard work done          D
by these three bodies is commendable. But for these expert reports it would
have been very difficult for this Court to resolve the complicated scientific
issues invotved in this case, with confidence. It will be open to the three
expert bodies (I) National Environmental Appellate Authority, New Delhi (2)
The University Department of Chemical Technology (Autonomous), Matunga,
Bombay headed by Dr. Bhowmick and (3) The National Geophysical Research            E
Institute, Tarnaka, Hyderabad, to submit their list of expenses or fee, if any,
to the State of Andhra Pradesh, through the appellant Board. If any claims
for monies are made, the same shall be paid by the State of Andhra Pradesh.

       Appeals are allowed as stated above. No costs.
                                                                                   F
     List the matter after 4 months, after the Report of the State of Andhra
Pradesh as directed above, is received.

B.S.                                                         Appeals allowed.