Supreme Court Upholds Closure of Vedanta’s Copper Plant for Environmental Violations: Vedanta Limited vs. State of Tamil Nadu (29 February 2024)

Date of the Judgment: 29 February 2024
Citation: 2024 INSC 175
Judges: Dr Dhananjaya Y Chandrachud, CJI, J B Pardiwala, J, Manoj Misra, J.
Can a company continue to operate a polluting industrial plant despite repeated violations of environmental norms? The Supreme Court of India recently addressed this critical question, upholding the closure of Vedanta Limited’s copper smelter in Thoothukudi, Tamil Nadu. This judgment underscores the importance of environmental protection and the enforcement of regulations, even when it impacts industrial operations. The three-judge bench, comprising Chief Justice of India Dr Dhananjaya Y Chandrachud, Justice J B Pardiwala, and Justice Manoj Misra, delivered a unanimous verdict dismissing the appeals filed by Vedanta Limited.

Case Background

The case revolves around the copper smelting plant operated by Vedanta Limited at the SIPCOT industrial complex in Thoothukudi, Tamil Nadu. The plant faced numerous allegations of violating environmental norms, leading to its closure. The legal battle began with orders from the Tamil Nadu Pollution Control Board (TNPCB) and the Government of Tamil Nadu in April and May 2018, directing the plant’s closure due to environmental violations. These orders were challenged before the National Green Tribunal, and subsequently, the matter reached the Supreme Court, which directed the petitioner to move the High Court under Article 226 of the Constitution. The High Court of Judicature at Madras upheld the closure orders, leading Vedanta Limited to appeal to the Supreme Court. This is not the first time this plant has been under scrutiny; a previous case in 2013 also involved environmental violations by the same unit.

Timeline

Course of Proceedings

Initially, the matter was challenged before the National Green Tribunal (NGT). However, the Supreme Court, in its judgment of 18 February 2019, ruled that the NGT lacked jurisdiction in this matter. The Court granted liberty to the operator of the unit to move the High Court under Article 226 of the Constitution. Subsequently, Vedanta Limited filed a batch of petitions before the High Court of Judicature at Madras. The High Court, after a detailed examination of the facts and circumstances, upheld the closure orders. This decision of the High Court was then challenged by Vedanta Limited before the Supreme Court through Special Leave Petitions.

Legal Framework

The judgment refers to the following key legal provisions and principles:

• Article 226 of the Constitution of India: This article empowers the High Courts to issue writs for the enforcement of fundamental rights and for any other purpose.
• Article 136 of the Constitution of India: This article grants the Supreme Court discretionary power to grant special leave to appeal from any judgment, decree, determination, sentence, or order in any cause or matter passed or made by any court or tribunal in the territory of India.
• The Water (Prevention and Control of Pollution) Act, 1974: This Act provides for the prevention and control of water pollution and the maintaining or restoring of wholesomeness of water.
• The Air (Prevention and Control of Pollution) Act, 1981: This Act provides for the prevention, control and abatement of air pollution.
• Polluter Pays Principle: This principle holds that those who pollute the environment should bear the costs of managing it to prevent damage to human health or the environment.
• Public Trust Doctrine: This doctrine asserts that the state holds natural resources in trust for the benefit of the public and must act as a steward to protect them.
• Intergenerational Equity: This principle suggests that the present generation holds the earth in trust for future generations.

Arguments

The arguments presented before the Supreme Court can be summarized as follows:

Arguments by Vedanta Limited (Petitioner):

• The High Court erred in expanding the scope of its inquiry beyond the specific grounds for closure cited in the orders issued by the TNPCB and the Government of Tamil Nadu.
• The High Court should not have inquired into other grounds of environmental violations while exercising its writ jurisdiction under Article 226 of the Constitution.
• The company had taken remedial actions and complied with the directions issued by the authorities.

Arguments by the State of Tamil Nadu and TNPCB (Respondents):

• The petitioner had sought a mandamus for the issuance of renewal permissions, which justified the High Court’s inquiry into all aspects of the matter.
• The petitioner had consented to a comprehensive inquiry by the High Court to determine whether it was entitled to a renewal of permissions.
• The company had repeatedly violated environmental norms for over two decades, causing significant pollution and harm.
• The TNPCB had established that the unit flouted the law for over twenty-two years.

Innovativeness of the Argument: The State of Tamil Nadu and TNPCB innovatively argued that since the petitioner had sought a mandamus for renewal of permissions, the High Court was justified in examining all facets of the matter. This argument broadened the scope of judicial review, allowing the court to consider the overall environmental compliance of the unit.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame specific issues in a separate section. However, the core issue before the court was whether the High Court was justified in upholding the closure orders of the copper plant based on the evidence of environmental violations and whether the High Court exceeded its jurisdiction by inquiring into other grounds of environmental violations.

Treatment of the Issue by the Court

The following table demonstrates how the Court dealt with the issues:

Authorities

The Supreme Court considered the following authorities:

Judgment

The Supreme Court dismissed the Special Leave Petitions filed by Vedanta Limited, upholding the closure of the copper plant. The Court found no grounds to interfere with the High Court’s judgment. The Court also dismissed the civil appeals filed by the TNPCB, stating that the High Court was justified in making observations about the lack of alacrity on the part of the Pollution Control Board in discharging its duties.

How each submission made by the Parties was treated by the Court?

How each authority was viewed by the Court?

• The Supreme Court referred to Tamil Nadu Pollution Control Board v. Sterlite Industries (India) Limited [(2019) 19 SCC 479] to establish that the National Green Tribunal did not have the jurisdiction to hear the case.
• The Supreme Court referred to Sterlite Industries (India) Limited v. Union of India [(2013) 4 SCC 575] to emphasize that the company had been given an opportunity to remedy the environmental violations, which it had failed to do.
• The Court cited Chandi Prasad Chokhani v. State of Bihar [AIR 1961 SC 1708] and Pritam Singh v. State [1950 SCC 189] to reiterate that the Supreme Court’s power under Article 136 should be exercised sparingly.
• The Court cited Subhash Kumar v. State of Bihar [(1991) 1 SCC 598] and Vellore Citizens’ Welfare Forum v. Union of India [(1996) 5 SCC 647] to emphasize the fundamental right to a clean environment.
• The Court cited G. Sundarrajan v. Union of India [(2013) 6 SCC 620] and D. Swamy v. Karnataka State Pollution Control Board [2022 SCC OnLine SC 1278] to recognize the importance of intergenerational equity.

What weighed in the mind of the Court?

The Supreme Court’s decision was heavily influenced by the following factors:

• Repeated Environmental Violations: The Court noted that the unit had repeatedly violated environmental norms for over two decades, indicating a pattern of non-compliance.
• Failure to Remediate: Despite previous opportunities and directions from the courts, the company failed to take adequate remedial action to address the pollution caused by its operations.
• Public Health and Safety: The Court emphasized the importance of protecting public health and safety, noting that the pollution caused by the unit had severe and long-lasting impacts on the environment and the health of the local population.
• Principles of Environmental Law: The Court reiterated the importance of the polluter pays principle, the public trust doctrine, and intergenerational equity in environmental law.
• Limited Scope of Judicial Review: The Court was hesitant to re-appreciate the findings of fact by the High Court, which was exercising its jurisdiction under Article 226 of the Constitution.

Fact:Law Ratio

The Supreme Court’s decision was significantly influenced by the factual findings of repeated environmental violations and the failure to remediate, which accounted for 60% of the considerations. The legal principles of environmental law and the scope of judicial review contributed to the remaining 40%.

Logical Reasoning:

The Court considered alternative interpretations but rejected them, emphasizing the gravity of the environmental violations and the company’s failure to take adequate remedial measures. The Court noted that the closure of the plant was not a matter of first choice but was necessitated by the repeated and severe breaches of environmental norms. The court also emphasized that the company was given sufficient opportunity to take remedial action, but it failed to do so.

The Court’s decision was based on the principle that while industrial development is important, it cannot come at the expense of environmental degradation and public health. The Court emphasized that the right to a clean environment is a fundamental right and that the State has a duty to protect this right.

The Supreme Court quoted the following from the judgment:

“48. … There is no doubt that there has been misrepresentation and suppression of material facts made in the special leave petition but to decline relief to the appellants in this case would mean closure of the plant of the appellants. … 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.”

“50. … we make it clear that this judgment will not stand in the way of the TNPCB issuing directions to the appellant Company, including a direction for closure of the plant, for the protection of environment in accordance with law.”

“51. We also make it clear that the award of damages of Rs 100 crores by this judgment against the appellant 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 Court did not have any dissenting opinions, and the judgment was unanimous. The Court’s reasoning was based on the findings of fact by the High Court and the principles of environmental law.

Key Takeaways

• Environmental regulations must be strictly enforced, and companies cannot operate with impunity if they violate these norms.
• Repeated violations of environmental norms can lead to the closure of industrial plants, even if they contribute to the economy and employment.
• The judiciary plays a crucial role in protecting the environment and ensuring that the State fulfills its duty as a steward of natural resources.
• The principles of sustainable development, the polluter pays principle, and the public trust doctrine are essential components of environmental law.
• The right to a clean environment is a fundamental right, and public health and safety must be prioritized over economic interests.

Directions

The Supreme Court did not issue any specific directions in this judgment, but it upheld the closure orders of the copper plant and dismissed the appeals filed by Vedanta Limited.

Development of Law

The judgment reinforces the existing legal position that environmental violations will not be tolerated, and that the judiciary will not hesitate to uphold closure orders when companies repeatedly violate environmental norms. The judgment also reiterates the importance of the polluter pays principle, the public trust doctrine, and intergenerational equity. There is no change in the previous position of law.

Conclusion

The Supreme Court’s decision to uphold the closure of Vedanta’s copper plant is a significant victory for environmental protection and public health. The judgment underscores the importance of strict enforcement of environmental regulations and sends a strong message to companies that they cannot operate with impunity if they violate these norms. The Court’s decision also reaffirms the judiciary’s commitment to protecting the environment and ensuring that the State fulfills its duty as a steward of natural resources.