New Delhi: In a blow to Sterlite Industries, a subsidiary of UK-based Vedanta Group, the Supreme Court Tuesday directed it to pay within three months Rs 100 crore as compensation for polluting environment through its copper smelting plant in Tamil Nadu but refused to direct its closure saying it will not be good in "public interest".
The apex court, however, clarified that Tamil Nadu Pollution Control Board (TNPCB) can pass orders against the company including a direction for closure of the plant, for the protection of environment.
A bench of justices A K Patnaik and H L Gokhale said that the environment has been polluted for a long time due to the discharge from the plant of the multinational company and it has to pay compensation but it set aside the Madras High Court 2010 order for closing down the plant.
"By this judgement, we have only set aside the directions of the High Court in the impugned common judgement and we make it clear that this judgement will not stand in the way of the TNPCB issuing directions to the company, including a direction for closure of the plant, for the protection of environment in accordance with law," the bench said.
"The companies, however, are directed to deposit within three months from today a compensation of Rs.100 crores with the Collector of Thoothukudi District, which will be kept in a fixed deposit in a Nationalized Bank for a minimum of five years, renewable as and when it expires, and the interest therefrom will be spent on suitable measures for improvement of the environment, including water and soil, of the vicinity of the plant," it said.
The company, run by billionaire Anil Agarwal, has been accused of running the plant without getting certain mandatory clearances from the concerned authorities.
The apex court also said that its judgement will not come in the way of any other court proceedings filed against the company for compensation.
"We also make it clear that the award of damages of Rs 100 crores by this judgment against the Company for the period from 1997 to 2012 will not stand in the way of any claim for damages for the aforesaid period or any other period in a civil court or any other forum in accordance with law," the bench said.
Although the bench held that the company had suppressed and misrepresented facts that it has always been running their plant with statutory consents, it however refused to direct its closure saying that the plant contributes substantially to the copper production and generates huge revenue for the government.
"The plant contributes substantially to the copper production in India and copper is used in defence, electricity, automobile, construction and infrastructure etc. The plant has about 1300 employees and it also provides employment to large number of people through contractors. A number of ancillary industries are also dependent on the plant. Through its various transactions, the plant generates a huge revenue to Governments in terms of excise, custom duties, income tax and VAT. It also contributes to 10 percent of the total cargo volume of Tuticorin port.
"For these considerations of public interest, we do not think it will be a proper exercise of our discretion under Article 136 of the Constitution to refuse relief on the grounds of misrepresentation and suppression of material facts in the special leave petition," the bench said.
The court's judgement would, however, have no bearing on Tamil Nadu Pollution Control Board's (TNPCB) direction of March 30, this year to shut down the copper plant in the wake of alleged noxious gas leak from it, as the apex court's verdict is confined to the high court's 2010 order, according to lawyers.
Sterlite had moved the apex court against the order of the high court which had on September 28, 2010, ordered shutting down of the smelting plant for allegedly failing to comply with environmental norms.
Setting aside the High Court's order, the bench said, "the High Court could not have interfered with the decision of the Central Government granting environmental clearance on the ground of procedural impropriety."
It said since the Consent Order was granted to the company by TNPCB to establish its plant, the High Court could not have come to the conclusion that the appellant-company had violated the Consent Order and directed closure of the plant on this ground.
The apex court noted "The NEERI reports of 1998, 1999, 2003 and 2005 show that the plant of the appellant did pollute the environment through emissions which did not conform to the standards laid down by the TNPCB under the Air Act and through discharge of effluent which did not conform to the standards laid down by the TNPCB under the Water Act."