Pay compound interest for 14 years: Apex court to polluting firm


New Delhi: Pulling up a chemical company for trying to wriggle out of paying up for the pollution caused by it, the Supreme Court directed the firm, M/s Hindustan Agro Chemical Ltd, to pay Rs.37.38 crore along with compound interest at 12 percent for the last 14 years during which it resorted to every legal avenue to escape payment.

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The firm was directed to pay the amount for restoring the ecology in 642 hectare area damaged by toxic waste from its plant in Bicchari village in Udaipur district of Rajasthsan.

“This is a very unusual and extraordinary litigation where even after 15 years of the final judgment of this court, litigation has been deliberately kept alive by filing one interlocutory application or the other in order to avoid compliance,” said an apex court bench of Justice Dalveer Bhandari and Justice H.L. Dattu in their judgment delivered on Monday but made available only Friday.

The court also directed the firm to pay Rs.10 lakhs as costs for taking the litigation route to escape paying the money for a decade and a half.

Expressing its anguish over the company’s attempts to circumvent its verdict, the judgment said “This is indeed a very serious matter concerning the sanctity and credibility of the judicial system in general and of the apex court in particular.”

The court order came on a petition filed by the Indian Council for Enviro-Legal Action drawing the attention of the court on the suffering of the people of village Bichhari.

Speaking for the bench, Justice Bhandari said, “The pursuit of profit of entrepreneurs has absolutely drained them of any feeling for fellow human beings living in that village.”

The judgment noted how the “conditions of a peaceful, nice and small village of Rajasthan were dramatically changed after Hindustan Agro Chemical Limited started producing certain chemicals like Oleum (concentrated form of Sulphuric Acid) and single super Phosphate.”

The amount which ought to have been deposited way back in 1997 has yet not been deposited by keeping the litigation alive, the judgment noted.

The court had asked the M/s Hindustan Agro Chemical Ltd to clean the iron and gypsum sludge produced by the plant on Feb 13, 1996. The gravity of the situation could be gauged from the fact that sludge survived even though, under public outcry, the plant was closed in January 1989.

This case is a classic illustration where even after decade and a half of pronouncement of the judgment based on the principle of “polluter pays”, till date the polluters have taken no steps to ecologically restore the village and its surrounding areas or complied with the directions of this court at all, the judgment read.

The sum of Rs.37.38 crore that the court had asked the M/s Hindustan Agro Chemical Ltd was based on the calculation by the Ministry of Environment and Forest which in turn was based on the reports of NEERI and Rajasthan Pollution Control Board.

Slamming the dilatory tactics adopted by the company, the judgment said, “The applicant is in business where sole motto of most businessmen is to earn money and increase profits. If by filing repeated applications he can delay in making payment of huge remediation costs then it makes business sense but the court must discourage such business tactics and ensure effective compliance of the court order. It is also the obligation and bounden duty of the court to pass such order where litigants are prevented from abusing the system,” it said.