M.C. Mehta v. Kamal Nath, 2002 (2) SCALE 654DORAISWAMY RAJU, J.

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The above matter has been set down for hearing before us
pursuant to the orders passed by this Court (Justice S. Saghir Ahmad and Justice Doraiswamy
Raju) on May 12, 2000 and the consequent Notice issued to the Executive Director, M/s.
Span Motels Pvt. Ltd. at Manali, and the Executive Director, Span Motels Pvt. Ltd.,
Operations Headquarters at New Delhi, calling upon them to show cause as to why in
addition to damages, exemplary damages be not awarded for having committed the various
acts set out and enumerated in detail in the main Judgment reported in M.C. Mehta v. Kamal
Nath [(1997) 1 SCC 388] (see above).

2. On being served with a notice dated 14.12.1996, the matter was heard on 19.12.1996
   when this Court (Justice Kuldip Singh and Justice S. Saghir Ahmad) passed the following
   order:
   Pursuant to the above quoted direction NEERI has filed its report. A copy of the
   report was given to the learned counsel for the Motel yesterday. Show cause notice
   to the Motel has been given on 2 counts – (i) why the Motel be not asked to pay
   compensation to reverse the degraded environment, and (ii) why pollution fine, in
   addition, be not imposed. Mr. H.N. Salve, learned counsel appearing for the Motel
   states that he intends to file counter to the report filed by the NEERI. He has asked
   for short adjournment. We are of the view that prayer for adjournment is justified.
   We, however, make it clear that this Court in the judgment dated December 13,
   1996 has found as a fact that the Motel by constructing walls and bunds on the river
   Banks and in the river Bed, as detailed in the judgment, has interfered with the flow
   of the river. The said finding is final and no argument can be permitted to be
   addressed in that respect. The only question before this Court is the determination of
   quantum of compensation and further whether the fine in addition be imposed, if so,
   the quantum of fine. [Emphasis supplied)
   When the matter came up for hearing on 4.8.98, the State of Himachal Pradesh was
   directed to examine the Report submitted by NEERI and also submit its own Plan of Action,
   too. Since, it was felt that the various owners of properties along the river banks would be
   benefited by the plan that is prepared, they should also be heard before any action is taken on
   the basis of such plan. The suggested plan and list of owners of properties were directed to be
   filed and thereupon Notices were also issued to them, in due course. On 16.3.99. Notice was
   issued to the Ministry of Environment, Government of India, to indicate their response to the
   Action Plan submitted by the Government of Himachal Pradesh on 21.12.98, wherein it was
   also stated that they are not possessed of sufficient financial means to implement their own
   action plan unless the Government of India provides them necessary finances. On 3.8.99, it
   was ordered that the larger issue regarding Action Plan will be considered later and the matter
   will be taken to decide the question relating to pollution fine, if any, to be imposed on the 1st
   respondent. On 28.9.99, the statement of Mr. Salve, learned counsel on behalf of the
   respondent, that M/s. Span Motels (P) Ltd. was prepared to bear their fair share of the project
   cost of ecological restoration was recorded, and directed the same to be submitted in writing.
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   On 19.01.2999, it was also ordered that the question of apportionment of cost of restoration of
   ecology as also the question of pollution fine will be considered by the Court on the next date
   of hearing. At the hearing on 29.2.2000, Shri G.L. Sanghi, Senior Advocate, appearing for
   M/s. Span Motels (P) Ltd., challenged the legality of the proposed levy of fine, otherwise than
   through the manner envisaged under the relevant pollution laws by resorting to prosecution
   before criminal court and after a fair trial therefore. Mr. M.C. Mehta, apart from making
   submissions, was permitted to submit a note in response to the submissions of Shri G.L.
   Sanghi.
3. On a consideration of the respective stand on behalf of the parties on either side, by a
   judgment dated 12.5.2000, reported in 2000 (6) SCC 213, after adverting to the various laws
   relating to the prevention and control of pollution and for protection of environment, it was
   held as follows:
   Thus, in addition to the damages which have to be paid by M/s. Span Motels, as
   directed in the main judgment, it cannot be punished with fine unless the entire procedure
   prescribed under the Act is followed and M/s. Span Motel are tried for any of the
   offences contemplated by the Act and is found guilty.
   The notice issued to M/s. Span Motel why pollution fine be not imposed upon them
   is, therefore, withdrawn. But the matter does not end here. Pollution is a civil wrong.
   By its very nature, it is a Tort committed against the community as a whole. A person,
   therefore, who is guilty of causing pollution has to pay damages (compensation) for
   restoration of the environment and ecology. He has also to pay damages to those who
   have suffered loss on account of the act of the offender. The powers of this Court under
   Article 32 are not restricted and it can award damages in a PIL or a Writ Petition as has
   been held in a series of decisions. In addition to damages aforesaid, the person guilty of
   causing pollution can also be held liable to pay exemplary damages so that it may act as a
   deterrent for others not to cause pollution in any manner. Unfortunately, notice for
   exemplary damages was not issued to M/s. Span Motel although it ought to have been
   issued. The considerations for which “fine” can be imposed upon a person guilty of
   committing an offence are different from those on the basis of which exemplary damages
   can be awarded. While withdrawing the notice for payment of pollution fine, we direct a
   fresh notice be issued to M/s. Span Motel to show cause why in addition to damages,
   exemplary damages be not awarded for having committed the acts set out and detailed in
   the main judgment. This notice shall be returnable within six weeks. This question shall
   be heard at the time of quantification of damages under the main judgment.
4. We have carefully considered the submissions made by them in the light of the
   materials on record. The sum and substance of the stand taken for M/s. Span Motels (P) Ltd.,
   is that the action taken and construction works executed by them at heavy cost was meant to
   protect not only their property but the property of the State and the same was also in the
   interests of those on the basin and banks of both sides of the river Beas and a perusal of the
   remedial measures suggested in the technical reports noticed above would go to show that
   they have only executed such nature and type of works which now are suggested for
   execution in those reports as protective measures, and, therefore, they cannot be held guilty of
   having committed any illegalities and interfered with or endangering the environment or
   ecology in the place to warrant the levy of exemplary damages against them. In pursuing
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   such a stand the repeated endeavour was to reiterate that M/s. Span Motels (P) Ltd. could not
   be said to have committed any illegal acts, when they really approached all the authorities
   concerned for effective action and even obtained necessary permissions for executing those
   necessary protective measures and works, at a stage when the authorities who are obliged
   themselves to undertake such works were feeling helpless for want of funds to undertake
   them. Finally, it was contended that they have already spent considerable sum of their own
   money for the protective and relief measures undertaken by them and it will be unjust and
   harsh to impose upon them any further liability in the shape of exemplary damages, when
   they have already undertaken responsibility to bear a fair share of the project cost of
   ecological restoration. Shri G.L. Sanghi also reiterated and reinforced the said undertaking by
   stating that his clients still stand by the same and there is no justification whatsoever to levy
   any exemplary damages against them.
5. This Court, on the earlier occasions, after adverting to the pleadings, relevant
   documents and the technical report of the Central Pollution Control Board, enumerated the
   various activities of the Span Motels considered to be illegal and constituted “callous
   interference with the natural flow of rive Beas” resulting in the degradation of the
   environment and for that purpose indicated them with having “interfered with the natural flow
   of the river by trying to block the natural relief/spill channel of the river”. We do not want to
   burden this judgment once again by repeating them in extenso. Equally, the Himachal
   Pradesh Government also was held to have committed patent breach of public trust by leasing
   the ecologically fragile land to the Motel. It is only on such findings, the “polluter pays”
   principle as interpreted by this Court with liability for harm to compensate not only the
   victims but also the cost of restoring the environmental degradation and reversing the
   damaged ecology was held applicable to this case. Those findings rendered earlier were held
   to be “final and no argument can be permitted to be addressed in that respect” and the only
   question that remained left is the “determination of quantum of compensation and further
   whether the fine in addition be imposed, if so, the quantum of fine.” Therefore, not only it is
   impermissible for the counsel for the Motel or anyone else to claim for a reversal of those
   findings or any reconsideration of the nature, character and legality or propriety of those
   activities of SMPL but we feel bound by them and not persuaded to proceed on a clean slate,
   by-passing the exercise earlier undertaken and the conclusions firmly recorded in this regard.
   After the submission of the technical report by NEERI also, it was held that the “question of
   apportionment of cost of restoration of ecology as also the question of pollution fine will be
   considered by the Court” on the next and further hearings. The NEERI report also does not
   appear to either give a clean chit or completely exonerate the Span Motel Pvt. Ltd. for their
   activities, which were earlier considered to constitute an onslaught on the fragile environment
   and ecology of the area.
6. Even in the judgment of this Court, since reported in (2000) 6 SCC 213 while
   accepting the claim of the Motels that the sine qua non for punishment of imprisonment and
   fine is a fair trial in a competent court and that such punishment of imprisonment or fine can
   be imposed only after the person is found guilty by the competent Court, a general and
   passing reference has also been made to the earlier findings and as a consequence of which
   only it has been again held that though no fine as such can be imposed and the notice issued
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   by this Court earlier be withdrawn, a fresh notice was directed to be issued to Span Motels
   Pvt. Ltd. as to why in addition to damages, as directed in the main judgment, exemplary
   damages cannot be awarded against them “for having committed the acts set out and detailed
   in the main judgment.” Equally, the object and purpose of such levy of exemplary damages
   was also indicated as to serve “a deterrent for others not to cause pollution in any manner.”
   Having regard to what has been stated supra, the question as to the imposition of exemplary
   damages and the liability of Span Motels Pvt. Ltd. in this regard has to necessarily depend
   upon the earlier findings of this Court that the Motel by constructing walls and bunds on the
   river banks and in the river bed as detailed in the judgment has interfered with the flow of the
   river and their liability to pay the damages on the principle of “Polluter pays” and also as an
   inevitable consequence thereof. The specification in the NEERI report regarding details of
   the activities of Span Motels Pvt. Ltd. and the nature of constructions made in 1993 in figure
   No. 2 that (a) “in 1993, to protect the newly acquired land as also the main resort land, the
   SMPL constructed concrete studs stepped wall and concrete bars as depicted in Fig. 2;” (b)
   “blocked the mouth of the natural relief/spill channel by dumping of boulders” resulting in the
   leveling of the leased area, and (c) “at the downstream of M/s. SMPL, a private property
   owner has blocked the relief/spill channel by constructing a stonewall across the channel (E &
   F)” also confirms and only reinforce the need for justification for the indictment already
   made. The basis for their liability to be saddled with the exemplary costs has been firmly and
   irreversibly already laid down in the main judgment itself and there is no escape for the Span
   Motels Pvt. Ltd. in this regard. We have to necessarily proceed further only on those basis of
   facts and position of law, found and declared.
   The question remaining for further consideration relating to the award of exemplary
   damages is only as to the quantum. The various laws in force to prevent, control pollution
   and protect environment and ecology provide for different categories of punishment in the
   nature of imposition of fine as well as or imprisonment or either of them, depending upon the
   nature and extent of violation. The fine that may be imposed alone may extend even to one
   lakh of rupees. Keeping in view all these and the very object underlying the imposition of
   imprisonment and fine under the relevant laws to be not only to punish the individual
   concerned but also to serve as a deterrent to others to desist from indulging in such wrongs
   which we consider to be almost similar to the purpose and aim of awarding exemplary
   damages, it would be both in public interest as well as in the interests of justice to fix the
   quantum of exemplary damages payable by Span Motels Pvt. Ltd. at Rupees Ten lakhs only.
   This amount we are fixing keeping in view the undertaking given by them to bear a fair share
   of the project cost of ecological restoration which would be quite separate and apart from
   their liability for the exemplary damages. The question relating to the said quantum of
   liability for damages on the principle of “polluter pays”, as held by this Court against the
   Span Motels Pvt. Ltd. and undertaken by them, will be determined separately and left open
   for the time being. The amount, of special damages of Ten lakhs of rupees, shall be remitted
   to the State Government in the Department of Irrigation and Public Health to the
   Commissioner/Secretary for being utilized only for the flood protection works in the area of
   Beas river affected by the action of Span Motels Pvt. Ltd.