# INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v. UNION OF INDIA & OTHERS

- **Citation:** [2011] 9 S.C.R. 146
- **Court:** Supreme Court of India
- **Decided:** 2011-07-18
- **Bench:** Dalveer Bhandari, H.L. Dattu
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/indian-council-for-enviro-legal-action-v-union-of-india-others-27907
- **Pages:** 136

## Headnote

C
ADMINISTRATION OF JUSTICE:
Abuse of process of law - Chemical industries causing
damage to the ecology by throwing untreated toxic sludge in
the open - Toxic substances percolated deep into the bowels
0 of earth polluting the acquifers and the sub-terrain supply of
water as also rendering the soil unfit for cultivation - Supreme
Court by its judgment dated 13.2.1996 directing to close down
the industrial units and attachment of their plants, machinery
and all other immovable assets as also directing remediation
E at the cost of the polluters industrial units - By order dated
4.11.1997, the cost of remediation assessed to Rs.37.385
crores - Review and curative petitions dismissed - Several
interim applications filed by the industrial units also dismissed
- Again two I As filed by the industrial units- HELD: This is a
classic example of abuse of the process of law and is indeed
F a very serious matter concerning the sanctity and credibility
of the judicial system in general and of the apex Court in
particular - All the issues raised in the instant applications
had already been argued and determined by an authoritative
judgment of the Court - The applications have been filed to
G avoid liability to pay the amount for remediation and costs
imposed by the Court on the 'polluter pays' principle -
Permitting the parties to reopen the concluded judgment of
the Court by filing repeated interlocutory applications is clearly
an abuse of the process of law and would have far reaching
H
146
}
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
147
-~
..+,..,.,
UNION OF INDIA & ORS.
'
~
adverse impact on the administration of justice -
The A
applicants had adequate opportunity and were heard by the
Court on a number of occasions - The applications being
dev.oid of any merit are dismissed with costs of Rs. 1 O lakhs
.,,
which would be utilised for carrying out remedial measures
\
in the affected area - Environmental Law - 'Polluter pays' B
principle - Costs.
Finality of judgment - Chemical industrial units causing
damage to ecology - Judgment by Supreme Court directing
closure- of industrial units and remediation at their cost - c
Review and curative petitions dismissed - Industrial units
keeping on filing interim applications - Judgment of the Court
not complied with - HELD: It should be presumed that every
proceeding has gone through infiltration several times before
-<.
the decision of the apex Court - The controversy between the
parties must come to an end at some stage and the judgment D
of the apex Court must be permitted to acquire finality -
Various cases of different jurisdictions discussed and
exceptions indicated - A final judgment of the Court cannot
be reopened by merely filing interlocutory applications where
all possible legal remedies have been fully exhausted - In a E
country governed by the rule of law, finality of the judgment
is absolutely imperative and great sanctity is attached to the
finality of the judgment. Permitting the parties to reopen the
L
concluded judgments of the Court by filing repeated
interlocutory applications is clearly an abuse of the process F
of law and would have far reaching adverse impact on the
administration of justice -
The principles laid down in
judgments of various cosurts summed up - Maxim, 'interest
4,
republicae ut sit finis litium' - Explained - Environmental law.
UNJUST ENRICHMENT:
G
Unjust enrichment -Concept of - Discussed - Held:
Unjust enrichment of a person occurs when he has and
retains money or benefits which in justice and equity belong
to another - In the instant case, by the judgment dated H
148
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A 13.2.1996 Supreme Court fixed the liability of the polluter
industries - It was on the lines of a preliminary decree - By
order dated 4. 11. 1997 the Court accepting the ascertainment,
fixed the amount at Rs. 37.385 crores - The liability to pay
arose on 4.11.1997 - This was in the lines of a final decree
B pursuant to a preliminary decree - Thus, the

## Text

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[2011) 9 S.C.R. 146
A
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION
B
v.
UNION OF INDIA & OTHERS
IA N0.36 AND IA N0.44
IN
WRIT PETITION (C) No.967 OF 1989
JULY 18, 2011
[DALVEER BHANDARI AND H.L. DATTU, JJ.]
C
ADMINISTRATION OF JUSTICE:
Abuse of process of law - Chemical industries causing
damage to the ecology by throwing untreated toxic sludge in
the open - Toxic substances percolated deep into the bowels
0 of earth polluting the acquifers and the sub-terrain supply of
water as also rendering the soil unfit for cultivation - Supreme
Court by its judgment dated 13.2.1996 directing to close down
the industrial units and attachment of their plants, machinery
and all other immovable assets as also directing remediation
E at the cost of the polluters industrial units - By order dated
4.11.1997, the cost of remediation assessed to Rs.37.385
crores - Review and curative petitions dismissed - Several
interim applications filed by the industrial units also dismissed
- Again two I As filed by the industrial units- HELD: This is a
classic example of abuse of the process of law and is indeed
F a very serious matter concerning the sanctity and credibility
of the judicial system in general and of the apex Court in
particular - All the issues raised in the instant applications
had already been argued and determined by an authoritative
judgment of the Court - The applications have been filed to
G avoid liability to pay the amount for remediation and costs
imposed by the Court on the 'polluter pays' principle -
Permitting the parties to reopen the concluded judgment of
the Court by filing repeated interlocutory applications is clearly
an abuse of the process of law and would have far reaching
H
146
}
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
147
-~
..+,..,.,
UNION OF INDIA & ORS.
'
~
adverse impact on the administration of justice -
The A
applicants had adequate opportunity and were heard by the
Court on a number of occasions - The applications being
dev.oid of any merit are dismissed with costs of Rs. 1 O lakhs
.,,
which would be utilised for carrying out remedial measures
\
in the affected area - Environmental Law - 'Polluter pays' B
principle - Costs.
Finality of judgment - Chemical industrial units causing
damage to ecology - Judgment by Supreme Court directing
closure- of industrial units and remediation at their cost - c
Review and curative petitions dismissed - Industrial units
keeping on filing interim applications - Judgment of the Court
not complied with - HELD: It should be presumed that every
proceeding has gone through infiltration several times before
-<.
the decision of the apex Court - The controversy between the
parties must come to an end at some stage and the judgment D
of the apex Court must be permitted to acquire finality -
Various cases of different jurisdictions discussed and
exceptions indicated - A final judgment of the Court cannot
be reopened by merely filing interlocutory applications where
all possible legal remedies have been fully exhausted - In a E
country governed by the rule of law, finality of the judgment
is absolutely imperative and great sanctity is attached to the
finality of the judgment. Permitting the parties to reopen the
L
concluded judgments of the Court by filing repeated
interlocutory applications is clearly an abuse of the process F
of law and would have far reaching adverse impact on the
administration of justice -
The principles laid down in
judgments of various cosurts summed up - Maxim, 'interest
4,
republicae ut sit finis litium' - Explained - Environmental law.
UNJUST ENRICHMENT:
G
Unjust enrichment -Concept of - Discussed - Held:
Unjust enrichment of a person occurs when he has and
retains money or benefits which in justice and equity belong
to another - In the instant case, by the judgment dated H
148
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A 13.2.1996 Supreme Court fixed the liability of the polluter
industries - It was on the lines of a preliminary decree - By
order dated 4. 11. 1997 the Court accepting the ascertainment,
fixed the amount at Rs. 37.385 crores - The liability to pay
arose on 4.11.1997 - This was in the lines of a final decree
B pursuant to a preliminary decree - Thus, the position of the
polluter industrial units was of a Judgment-debtor' - The
industrial units did not pay the amount but sought to postpone
the payment and in the meantime utilised the said amount
and thereby got themselves benefited - As a consequence,
C State authorities were deprived of the use of that amount for
taking remedial measures - It is settled principle that no one
can take advantage of his own wrong - Whatever benefits a
person has had or could have had by not complying with the
judgment must be disgorged and paid to the judgmentD creditor and not allowed to be retained by the judgment-debtor
- This is the bounden duty and obligation of the court -
Environmental Law.
RESTITUTION:
E
'Unjust enrichment' and 'restitution' - Explained - Held:
The courts have wide powers to grant restitution, and more so
where it relates to misuse or non-compliance with court orders
- Even if no benefit had been retained or availed even then,
to do justice, the debtor must pay the money - It is not only
F disgorging all the benefits but making the creditor whole, i.e.,
ordering restitution in full, and not dependent on what he might
have made or benefited is what justice requires - The need
for restitution in relation to court proceedings gives full
jurisdiction to the court to pass appropriate orders that
AG levelises - The court has only to levelise and not go further
•
into the realm of penalty which will be a separate area for
consideration altogether - Environmental law.
COMPOUND INTEREST:
H
Compound interest, keeping in view unjust enrichment
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
149
UNION OF INDIA & ORS.
and restitution ~ Discussed - Chemical industries causing A
damage to ecology - Supreme Court directing remediation
at the cost of polluter industries - On 4. 11. 1997 industries
directed to pay Rs.37.385 crores as remediation cost- Noncompliance of the order - Held: To do complete justice,
prevent wrongs, remove incentive for wrongdoing or delay,
and to implement in practical terms the concepts of Time
Value of Money, restitution and unjust enrichment, or to simply
leve/ise, interest has to be calculated on compound basis as
B
it also takes into account the inflationary trends - Some of
the statute law provide only for simple interest and not c
compound interest - It is a matter of law reform which the Law
Commission must take note of - Law Commission is
suggested to consider and recommend necessary
amendments in relevant laws - However, the power of the
court to order compound interest by way of restitution is not 0
fettered in any way - the applicants are directed to pay
Rs.37.385 crores along with compound interest@ 12% per
annum from 4. 11. 199 7 till the amount is paid/recovered -
Environmental law -
Restitution - Unjust enrichment -
Legislation ,... Code of Civil Procedure, 1908 - s.34.
E
COSTS:
Imposition of realistic costs and punitive costs - Held: In
consonance with the principle of equity, justice and good
conscience, courts should ensure that legal process is not
F
abused by litigants in any manner - It is the bounden duty of
courts to ensure that dishonesty and any attempt to abuse the
legal process must be effectively curbed and courts must
ensure that there is no wrongful, unauthorised or unjust gain
for anyone by the abuse of the process of court- Besides the
G
realistic costs, courts wol.Jld be fully justified even imposing
punitive costs where legal process has been abused.
Writ Petition No.967 of 1989 was filed before the
Supreme Court, stating that the chemical industries,
namely, respondents no. 4 to 8 which were controlled by
H
150
SUPREME COURT REPORTS
[2011) 9 S.C.R.
A the same group, namely, Hindustan Agro Chemicals
Limited (respondent no. 4) set up in village Bichhri, of
district Udaipur in Rajashtan, had caused damage to the
ecology of the village and the surrounding area
inasmuch as the untreated toxic sludge had been thrown
,
s in the open in and around the complex by the said
industrial units, and the toxic substances had percolated
deep into the bowels of the earth polluting the aquifers
and the sub-terrain supply of water rendering the water
in the wells and the streams unfit for human
c consumption. It had even become unfit for cattle to drink
and for irrigating the land. The soil had become polluted
and unfit for cultivation, which was the main source of
livelihood for the villagers. The Court by its judgment
dated 13.2.1996, directed closure of all the plants and
0 factories of respondents no. 4 to 8 located in the village,
and attachment of their factories, plant, machinery and all
other immovable assets; and ap_:.lying the 'polluter pays'
principle, directed that the whole of the contaminated
area be developed as a green belt at the expense of
respondents no. 4 to 8. On the basis of the report of the
E NEERI, the extent of contamination done by the plants of
respondents 4 to 8 was evaluated; and, by order dated
4.11.1997 the industrial units were asked to pay Rs.
37 .385 crores towards the costs of remediation to the
government. The review the curative petitions were
F dismissed. However, the orders of the Court could not be
implemented till date because respondent nos. 4 to 8
kept on filing interlocutory applications.
Respondent no. 4 (HACL) filed the instant I.A. 36
G stating that as on date there was no pollution existing in
the area, no remediation was required to be done in the
area and, therefore, there was no necessity for the Court
to sell its assets in order to carry out any remediation in
the area. The applicant, in support of its case sought to
H introduce before the Court ·the opinions of various
-i
'
_..
-f
...
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
151
UNION OF INDIA & ORS.
experts engaged by it for the purpose. It was prayed that
the Court may pass the consequential order directing
forclosing the proceedings and to lift the attachment
order dated 13.2.1996. By I.A. No~ 44 respondent no. 4,
" prayed to seek an investigation into the reports of April,
1994 prepared by the NEERI, which was employed by the
R.S.P.C.B. to evaluate the extent of contamination done
by the applicant's· plants in the village concerned.
Dismissing the I. As., the Court
HELD: 1.1. This is a very unusual and extraordinary
litigation where even after fifteen years of the final
judgment of this Court delivered on 13.2.1996, the
litigation has been deliberately kept alive by filing one
interlocutory application or the other in order to avoid
compliance of the judgment. The said judgment of this
Court has not been permitted to acquire finality till date.
This is a classic example how by abuse of the process
of law even the final judgment of the apex court can be
circumvented for more than a decade and a half. 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. [p~ra 1] [170-D-F]
IAs 36 and 44
1.2. The applications are a serious attempt to
discredit the NEERI report of 1996 once again. The sole
object of filing of the application is to introduce before this
Court recent reports prepared by experts at the behest
of the applicant to demonstrate to the Court that before
embarking upon remediation measures and for the said
purposes putting the properties of the applicant to sale,
the status and conditions of water, soil and environment
in the area be reviewed with a view to realistically
ascertain whether any measures for remediation are
called for at all in the area and ifyes, then the nature and.
A
8
c
D
E
F
G
H
152
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A the current cost of the same may be ascertained.
According to the applicant, the report of NEERI relied
upon by this Court was not the authentic report which
was officially prepared. There is a serious attempt to
reopen the entire case which stands fully concluded by
B the judgment of this Court delivered on 13.2.1996. It may
be pertinent to mention that even the review and curative
petitions have also been dismissed but the applicant did
not comply with the orders passed by this Court. The
report had been considered by this Court at length on its
C own merits and the observations of the Court on the
report are contained in the judgment pronounced by it on
13.2.1996. [para 29-31, 42, 49 and 64] [196-B-G; 199-G;
211-G; 220-G-H; 221-A]
1.3. All issues raised in the applications have been
D argued and determined by an authoritative judgment of
this Court in its judgment dated 13.2.1996. The
applications have been filed to avoid liability to pay the
amount for remediation and costs imposed by the Court
on the settled legal principle, i.e. "polluter pays" principle.
E The applicant is making an effort to avoid compliance of
the order/judgment of this Court delivered fifteen years
ago. The tendency must be effectively curbed. The
applicant cannot be permitted to avoid compliance of the
final order of this Court by abusing the legal process and
F keep the litigation alive. The Court must discourage such
tactics and ensure effective compliance of the Court's
order. It is also the obligation and bounden duty of the
court to pass such order where litigants are prevented
from abusing the system. [para 47-48) [211-8-F]
G
H
1.4. In its order dated 4.11.1997, this Court held that
the remedial measures taken on the basis of the NEERI
report shall be treated as final; and accepted the proposal
submitted by the Government of India for the purpose of
taking remedial measures by appointing National
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
153
.... ~
UNION OF INDIA & ORS. ·
Productivity Council as the Project Management A
Consultant and held that the Ministry of Environment and
Forests, Government of India has rightly made a demand
for Rs.37.385 crores. The applicants had adequate
·1
opportunity and were heard by the court at length on
"
number of occasions and only thereafter the writ petition
B
was disposed of. The applicants now want to reopen the
case by filing. these interlocutory applications. [para 84
and 156] [227-G-H; 228-A-B; 257-B]
1.5. The applicants certainly cannot be provided an c
entry by back door method nor can the unsuccessful
litigants to be permitted to re-agitate and reargue their
cases. The applicants have filed these applications
merely to avoid compliance of the order of the court. The
-(
applicants have been successful in their endeavour and
have not permitted the judgment delivered on 3.2.1996 to
D
acquire finality till date. It is strange that other
respondents did not implement the final order of this.
Court without there being any order or direction of this
Court. These applications being devoid of any merit
deserve to be dismissed with heavy costs. [para 157]
E
(257-D-E]
M. C. Mehta and Another v. Union of India and Others
.f
(O/eum Gas Leak Case) 1987 (1) SCR 819 = (1987) 1 SCC
395; Rupa Ashok Hurra v. Ashok Hurra & Another 2002 (2)
SCR 1006 = (2002) 4 SCC 388; Indian Council for EnviroF
Legal Action and others v. Union of India and Others 1996
(2) SCR 503 = (1996) 3 SCC 212; M.C. Mehta v. Kamal Nath
and others 2000 (1) Suppl. SCR 389 = (2000) 6 SCC 213 ·
..
- referred to .
G
Minister for the environment and Heritage v. Greentree
(No.3) [2004] FCA 1317, United States v. Hooker Chems and
Plastics Corp., 722 F. Supp 960 (W.D.N.Y. 1989) - referred
to.
H
154
SUPREME COURT REPORTS
(2011] 9 S.C.R.
A
Public Liability Insurance Act, 1991111- referred to.
FINALITY OF JUDGMENT
2.1. The maxim 'interest republicae ut sit finis litium'
says that it is for the public good that there be an end of
B litigation after a long hierarchy of appeals. At some stage,
it is necessary to put a quietus. It is not rare that in an
adversarial system, despite the judges of the highest
Court doing their best, one or more parties may remain
unsatisfied with the most correct decision. Opening door
C for a further appeal could be opening a flood gate which
will cause more wrQngs in the society at large at the cost
of rights. It should be presumed that every proceeding
has gone th"rough infiltration several times before the
D
decision of the apex Court. [para 114-115) [238-D·F]
2.2. Departure from the normal principle that the
court's judgment is final would be justified only when
compelling and substantial circumstances make it
necessary to do so. Such circumstances may be that a
E material statutory provision was not drawn to the court's
attention at the original hearing or a manifest wrong has
been done. Reviewing of various cases of different
jurisdictions lead to irresistible conclusion that though
the judgments of the apex Court can also be reviewed or
recalled but it must be done in extremely exceptional
F circumstances where there is gross violation of principles
of natural justice. It is reiterated that the finality of the
judgment of the apex.Court has great sanctity and unless
there are extremely compelling or exceptional
circumstances, the judgments of the apex Court should
G not be disturbed particularly in a case where review and
curative petitions have already been dismissed. [para 118,
153 and 219) [239-D-E; 255-D-E; 278-C]
Union of India & Another v. Raghubir Singh (Dead) by
H L.Rs. 1989 (3) SCR 316 = (1989) 2 SCC 754; Mohd. Aslam
,.
,
J
.,
'
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v. · 155
UNION OF INDIA & ORS.
v. Union of India & Others 1996 (3) SCR 782 = (1996) 2 SCC
A
749; Khoday Distilleries Ltd. and Another v. Registrar
General, Supreme Court of India 1995 (6) Suppl. SCR
190 = (1996) 3 SCC 114; Gurbachan Singh & Another v.
Union of India & Another 1996 (2) SCR 400 = (1996) 3 SCC
117; Babu Singh Bains and others v. Union of India and 8
Others 1996 (6) Suppl. SCR 120 = (1996) 6 SCC 565; P.
Ashokan v. Union of India & Another 1998 (1) SCR 717 =
(1998) 3 SCC 56; Ajit Kumar Barat v. Secretary, Indian Tea
Association & Others (2001) 5 SCC 42; Naresh Shridhar
Mirajkar v. State of Maharashtra and another 1966 SCR
744 =AIR 1967 SC 1; Mr. "X" v. Hospital "Z" (2000)9 SCC
C
439; Triveniben v. State of Gujarat 1989 (1) SCR 509 =
(1989) 1 SCC 678; Sumer v. State of U.P. 2005 (7) SCC 220
(2005) 7 SCC 220; Sita Ram Bhandar Society, New Delhi v.
Lieutenant Governor, Government of NCT, Delhi & Others 0
2009 (14) SCR 507 = (2009) 10 sec 501; M.
Nagabhushana v. State of Karnataka and others 2011 (2)
SCR 435 = (2011) 3 sec 408 - relied on.
Regina v. Gough, [1993] 1A.C.646; Dimes v. Proprietors
of Grand Junction Canal, (1852) 3 H.L. Cases 759; R v. Bow
E
Street Metropolitan Stipendiary Magistrate, ex parte Pinochet
Ugarte (No 2) (1999) 2 W.L.R. 272; Regina (Edwards) v
Environment Agency and others [2010] UKSC 57, The (U.K.)
Supreme Court Rules, 2009, 2009 No. 1603 (L. 17);
Wewaykum Indian Band v. Canada [2003) 2 SCR 259; Taylor F
Ventures Ltd. (Trustee of) v. Taylor 2005 BCCA 350; State
Rail Authority of New South Wales v. Code/fa Constructions
Propriety Limited (1982) 150 CLR. 29; Bailey v. Marinoff
(1971) 125 CLR 529; DJL v. Central Authority (2000) 170
ALR 659; Lexcray Pty. Ltd. v. Northern Territory of Australia
G
2003 NTCA 11; United States of America v. Ohio Power
Company 353 US 98 (1957), 149; Raymond G. Cahill v. The
New York, New Haven and Hartford Railroad Company 351
US
183; Re
Transferred Civil Servants (Ireland)
Compensation (1929) AC 242, 248-52; and State Rail H
156
SUPREME COURT REPORTS
[2011] 9 'S.C.R.
A Authority NSW v Code/fa Construction Pty Ltd (1982) HCA
51
. (1982) 150 CLR 29,
Smith
v NSW Bar
Association (1992) 176 CLR 252; and Autodesk Inc v
Dyason (No 2) (1993) HCA 6 : (1993) 176 CLR 300 -
referred to.
B
2.3. However, a case stands on different footing
where the aggrieved party filing a review or curative
petition was not a party to the lis but the judgment
adversely affected his interest or he was party to the lis
was not served with notice of the proceedings and the
C matter proceeded as if he had notice. [para 155) [255-G)
State of M.P. v. Sugar Singh & Others 2010 (3) SCR 159
- relied on
0
2.4. This Court has consistently taken the view that
the judgments delivered by this Court while exercising its
jurisdiction under Article 136 of the Constitution cannot
be reopened in a writ petition filed under Article 32 of the
Constitution. In view of this legal position, a final
judgment of this Court cannot be reopened by merely
E filing interlocutory applications where all possible legal
remedies have been fully exhausted. In the facts of the
instant case, it becomes abundantly clear that this Court
delivered final judgment in this case way back in 1996.
The said judgment has not been permitted to acquire
F finality because the respondent Nos. 4 to 8 had filed
multiple interlocutory applications and has ensured noncompliance of the judgment of this Court. It may be
pertinent to mention that even after dismissal of review
and the curative petition on 18.7.2002, the applicants
G (respondent Nos. 4 to 8) have been repeatedly filing one
petition or the other in order to keep the litigation alive. It
is indeed astonishing tha.t the orders of this Court have
not been implemented till date. The applicants have made
all possible efforts to avoid compliance of the judgment
H
I
}
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION· v.
157
UNION OF INDIA & ORS.
-<,,.
of this Court. This is a clear case of abuse of process of A
the court. [para 220] [278-D-F; 280-D-E]
2.5. The controversy between the parties must come
to an end at some stage and the judgment of this Court
1,
must be permitted to acquire finality. It would hardly be
B
't
proper to permit the parties to file application after
application endlessly. In a country governed by the rule
of law, finality of the judgment is absolutely imperative
and great sanctity is attached to the finality of the
judgment. Permitting the parties to reopen the concluded c
judgments of this Court by filing repeated interlocutory
applications is clearly an abuse of the process of law and
would have far reaching adverse impact on the
administration of justice. [para 115] [238-F-H; 239-A]
-'
Manganese Ore (India) Ltd. v. The Regional Assistant D
Commissioner of Sa/es Tax, Jabalpur 1976 ( 3 ) SCR 99 =
(1976) 4 SCC 124; Green View Tea & Industries v. Collector,
Golaghat and Another (2002) 1 SCC 109; Mis Northern India
Caterers (India) Ltd. v. Lt. Governor of Delhi 1980 (2) SCR
650 = (1980) 2 sec 167 - relied on
E
2.6. The principles laid down in the judgments of
various courts, can be enumerated as follows:
·~
(i) The judgment of the apex Court has great sanctity
and unless there are extremely compelling,
F
overriding and exceptional circumstances, the
judgment of the apex Court should not be disturbed,
particularly, in a case where review and curative
petitions have already been dismissed
....
G
(ii) The exception to this general rule is where in the
proceedings the judge concerned failed to disclose
the connection with the subject matter or the parties
giving scope of an apprehension of bias and the
judgment adversely affected the petitioner.
H
158
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A
(iii) The other exception to the rule is that the
circumstances incorporated in the review or curative
petition are such that they must inevitably shake
public confidence in the integrity of the
administration of justice if the judgment or order is
B
allowed to stand. [para 221] [278-G-H; 279-A-C]
These categories are illustrative and not exhaustive
but only in such extremely exceptional circumstances the
order can be recalled in order to avoid irremedial
C injustice. [para 222] [279-C-D]
UNJUST l:NRICHMENT
3.1. 'Unjust enrichment' has been defined by the
court as the unjust retention of a benefit to the loss of
0 another, or the retention of money or property of another
~
against the fundamental principles of justice, equity and
good conscience. A person is enriched if he has received
a benefit, and he is unjustly enriched if retention of the
benefit would be unjust. Unjust enrichment of a person
E occurs when he has and retains money or benefits which
in justice and equity belong to another. [para 171] [260C-D]
Black's Law Dictionary, Eighth Edition (Bryan A. Gamer)
at page 1573;_" Justice, Courts and Delays" by Dr. Arun
F Mohan - referred to.
3.2. By the judgment dated 13.02.1996 this court fixed
the liability but did not fix any specific amount, which was
ordered to be ascertained. It was on the lines of a
G preliminary decree in a suit which determines the liability,
but leaves the precise amount to be ascertained in
further proceedings and upon the process of
ascertainment being completed, a final decree for
payment of the precise amount is passed. By judgment
H dated 4.11.1997 this Court, accepting the ascertainment,
..
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
159
,...
-\,.
UNION OF INDIA & ORS .
fixed the amount i.e. Rs.37.385 crores. The exact liability A
was quantified which the applicant- HACL was under an
obligation to pay. The liability to pay arose on that
particular date i.e. 4.11.1997. This was in the lines of a final
,.
decree pursuant to a preliminary decree. On that
•
judgment being passed, the position of the applicant in
B
I.A. No.44 was that of 'judgment-debtor' and the applicant
became liable to pay forthwith. (para 159-162] [257-F-H;
258-A-F]
3.3. Admittedly, the amount has not been paid. c
Instead, the applicants sought to postpone the payment
by raising various challenges in this Court and in the
meantime 'utilised' that money, i.e., benefited. As a
~
consequence, the non-applicants (respondents-states
herein) were 'deprived' of the use of that money for
taking remedial measures. The challenge has now -
D
nearly 14 years later - been finally decided against them.
It is settled principle of law that no one can take
advantage of his own wrong. [para 163 and 165) [258-FG; 259-0]
E
3.4. Unless courts disgorge all benefits that a party
availed by obstruction or delays or non-compliance,
there will always be incentive for non compliance.
i.
Whatever benefits a person has had or could have had
by not complying with the judgment must be disgorged
F
and paid to the judgment creditor and not allowed to be
retained by the judgment-debtor. This is the bounden
duty and obligation of the court. In fact,· it has to be
•
looked from the position of the creditor. Unless the
deprivation by reason of delay is fully restituted, the G
creditor as a beneficiary remains a loser to the extent of
the un-restituted amount. [para 167-168) [259-F-G]
Schockv. Nash, 732 A.2d 217, 232-33 (Delaware. 1999).
USA); Fibrosa v. Fairbairn, [1942) 2 All ER 122; Nelson v.
Larholt [1947) 2 All ER 751 - referred to.
H
160
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A
3.5. In order to neutralize any unjust enrichment and
B
c
D
undeserved gain made by the litigants, while adjudicating,
the courts must keep the following principles in view:
(i)
It is the bounden duty and obligation of the
court to neutralize any unjust enrichment and
undeserved gain made by any party by
invoking the jurisdiction of the court.
(ii)
When a party applies and gets a stay or
injunction from the court, it is always at the
risk and responsibility of the party applying. An
order of stay cannot be presumed to be
conferment of additional right upon the
litigating party.
(iii)
Unscrupulous litigants be prevented from
taking
undue advantage by invoking
jurisdiction of the Court.
(iv) A person in wrongful possession should not
only be removed from that place as early as
E
possible but be compelled to pay for wrongful
use of that premises fine, penalty and costs.
Any leniency would seriously affect the
credibility of the judicial system.
F
(v)
No litigant can derive benefit from the mere
pendency of a case in a court of law.
(vi) A party cannot be allowed to take any benefit
of his own wrongs.
G
(vii) Litigation should not be permitted to turn Into
H
a fruitful industry so that the unscrupulous
litigants are encouraged to invoke the
jurisdiction of the court.
(viii) The institution of litigation cannot be permitted
,
•
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
161
UNION OF INDIA & ORS.
to confer any advantage on a party by delayed
A
action of courts. [para 223] [279-D-H; 280-A-D]
RESTITUTION
4.1. Unjust enrichment is basic to the subject of
restitution, and is indeed approached as a fundamental
8
principle thereof. The terms 'unjust enrichment' and
'restitution' are usually linked together, and restitution is
frequently based upon the theory of unjust enrichment.
However, although unjust enrichment is often referred to
or regarded as a ground for restitution, it is perhaps more C
accurate to regard it as a prerequisite, for, usually there
can be no restitution without unjust enrichment.
T h e
terms 'unjust enrichment' and 'restitution' are like the two
shades of green - one leaning towards yellow and the
other towards blue. With restitution, so long as the D
deprivation of the other has not been fully compensated
for, injustice to that extent remains. Which label is
appropriate under which circumstances would depend
on the facts of the particular case before the court. The
courts have wide powers to grant restitution, and more
E
so where it relates to misuse or non-compliance with
court orders. [para 179 and 182] [262-F-G; 263-D]
South-Eastern Coalfields 2003 (4) Suppl. SCR 651 =
2003 (8) SCC 648; Sahakari Khand Udyog Manda/ Ltd vs
F
Commissioner of Central Excise & Customs 2005 (2 )
SCR 606 = (2005) 3 sec 738 - relied on
American Jurisprudence 2d. Volume 66 Am Jur 2d -
referred to.
4.2. Restitution and unjust enrichment, along with an
overlap, have to be viewed with reference to the two
stages, i.e., pre-suit and post-suit. In the former case, it
becomes a substantive law (or common law) right that
G
the court will consider; but in the latter case, when the
H
162
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A parties are before the court and any act/omission, or
simply passage of time, results in deprivation of one, or
unjust enrichment of the other, the jurisdiction of the
court to levelise and do justice is independent and must
be readily wielded, otherwise it will be allowing the
B court's own process, along with time delay, to do
injustice. For this second stage (post-suit), the need for
restitution in relation to court proceedings, gives full
jurisdiction to the court, to pass appropriate orders that
levelise. Only the court has to levelise and not go further
c into the realm of penalty which will be a separate area for
consideration altogether. [para 183-184) (263-F-H; 264-A]
Bank of America Canada vs Mutual Trust Co. (2002) 2
SCR 601 = 2002 SCC 43 - referred to.
D
Sempra Metals Ltd (formerly Metal/gesel/schaft Limited)
v Her Majesty's Commissioners of Inland Revenue and
Another [2007] UKHL 34 = [2007] 3 WLR 354 = [2008] 1 AC
561 = (2007) All ER (D) 294 - referred to.
E
4.3. The liability may also be understood in the form
of recovery of a bank loan. If payment of an amount
equivalent of what the ledger account in the bank on a
clean loan would have shown as a debit balance today
is not paid and something less than that is paid, that
differential or shortfall is what there has been : (1) failure
F to restitute; (2) unfair gain by the non-complier; and (3)
provided the incentive to obstruct or delay payment.
Unless this differential is paid, justice has not been done
to the creditor. It only encourages non-compliance and
litigation. Even if no benefit had been retained or availed
G even then, to do justice, the debtor must pay the money.
H
This is not only disgorging all the benefits but making the
creditor whole i.e. ordering restitution in full and not
dependent on what he might have made or benefitted is
what justice requires. [para 188-190) 264-G-H; 265-A-C]
>
>
•
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
163
· UNION OF INDIA & ORS.
Grindlays Bank Limited vs Income Tax Officer, Calcutta
A
(1980) 2 SCC 191; Ram Krishna Verma and Others vs State
of U.P. and Others 1992 (2) SCR 378 = (1992) 2 SCC Kavita
Trehan vs Balsara Hygiene Products 1994 (1) Suppl. SCR
340 = (1994) 5 SCC 380; Marshall Sons & Co. (I) Ltd. v. Sahi
1•
Oretrans (P) Ltd. and Another 1999 (1) SCR 311 = (1999) 2
B
sec 325 - relied on
..
Padmawati vs Harijan Sewak Sangh - CM (Main) No.449
of 2002 decided by the Delhi high Court on 6.11.2008,
approved .
Compound Interest
c
4.4. 'Compound interest' is 'interest paid on both the
principal and the previously accumulated interest.' It is a
method of arriving at a figure which nears the 'Time Value o
of Money'. Compound interest is a norm for all
commercial transactions. [para 205-206) [271-E-F]
Alok Shanker Pandey vs Union of India & Others 2007
(2 ) SCR 737 = (2007) 3 sec 545 - relied on.
Black's Law Dictionary, Eighth Edition (Bryan A.
Garner) page 830;and 'The Principles of the Law of
Restitution" (at pp26-27) by Graham Virgo - referred to.
E
4.5. To do complete justice, prevent wrongs, remove
F
incentive for wrongdoing or delay, and to implement in
practical terms .the concepts of Time Value of Money,
restitution and unjust enrichment- or to simply levelise
- a convenient approach is calculating interest. But here
:..
interest has to be calculated on compound_ basis - and
G
not simple - for the latter leaves much uncalled for
benefits in the hands of the wrongdoer. [para 202) [270G-H; 271-A]
4.6. Further, a related concept of. inflation is also to
be kept in mind and the concept of compound interest
H
164
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A takes into account, by reason of prevailing rates, both
these factors, i.e., use of the money and the inflationary
trends, as the market forces and predictions work out.
[para 203) [271-B]
8
Marshall Sons & Co. (I) Ltd. v. Sahi Oretrans (P) Ltd. and
Another 1999 (1) SCR 311 = (1999) 2 SCC 325; Ouseph
Mathai and others v. M. Abdul Khadir 2001 (5) Suppl. SCR
118 = (2002) 1 SCC 319; South Eastern Coalfields Limited
v. State of M.P. and others 2003 (4) Suppl. SCR 651 =
C (2003) 8 SCC 648; Amarjeet Singh and others v. Devi Ratan
and others 2009 (15) SCR 1010 = (2010) 1 SCC 417;
Kalabharati Advertising v. Hemant Vimalnath Narichania and
others 2010 (10) SCR 971 = (2010) 9 sec 437 - relied on.
LEGAL POSITION UNDER THE CODE OF CIVIL
D PROCEDURE
4.7. One reason the law has not developed on this is
because of the wording of s. 34 of the Code of Civil
Procedure, 1908 which still proceeds on the basis of
simple interest. In fact, it is this difference which prompts
E much of our commercial litigation because the debtor
feels - calculates and assesses - that to cause litigation
and then to contest with obstructions and delays will be
beneficial because the court is empowered to allow only
simple interest. A case for law reform on this is a separate
F issue. [para 191) [256-E-F]
4.8. Some. of our statute law provide only for simple
interest and not compound interest. In those situations,
the courts are helpless and it is a matter of law reform
which the Law Commission must take note and more so,
G because the serious effect it has on administration of
justice. The Law Commission is requested to consider
and recommend necessary amendments in relevant laws.
However, the power of the court to order compound
interest by way of restitution is not fettered in any way.
H [para 204) [271-C-D]
,
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
165
UNION OF INDIA & ORS ..
4.9. In the point under consideration, which does not A
arise from a suit for recovery under the Code of Civil
Procedure, the inherent powers of the Court and the
prJnciples of justice and equity are each sufficient to
enable an order directing payment of compound interest.
The power to order compound interest as part of B
restitution cannot be disputed, otherwise there can never
be restitution. [para 192) [265-G]
4.10. The Court in its order dated 04.11.1997 while
accepting the report of the MOEF directed the applicant C
·- M/s Hindustan Agro Chemical Ltd. to pay a sum of
Rs.37.385 crores towards the costs of remediation. The
amount which ought to have been deposited way back
in 1997 has yet not been deposited by keeping the
litigation alive. This Court is clearly of the opinion that the 0
applicant-industry concerned must deposit the amount
as directed by this Court by order dated 4.11.1997 with
compound interest. The applicant-industry has
deliberately not complied with the orders of this court
since 4.11.1997. Thousands of villagers have been
adversely affected because no effective remedial steps
E
have been taken so far. The applicant-industry has
succeeded in their design in not complying with the
court's order by keeping the litigation alive.
Consequently, the applicant-industry is directed to pay
Rs.37.385 crores along with compound interest@ 12%
F
per annum from 4.11.1997 till the amount is paid or
recovered. [para 225· 227) [280-F-H; 281-A-C]
Costs:
5.1. In consonance with the principle of equity, justice G
and good con!!cience judges should ensure that the legal
process is not abused by the litigants in any manner. The
court should never permit a litigant to perpetuate illegality
by abusing the legal process. It is the bounden duty of
the court to ensure that dishonesty and any attempt to
H
166
SUPREME COURT REPORTS
[2011] 9 S.C.R.
A abuse the legal process must be effectively curbed and
the court must ensure that there is no wrongful,
unauthorized or unjust gain for anyone by the abuse of
the process of the court. One way to curb this tendency
is to impose realistic costs, which the respondent or the
B defendant has in fact incurred in order to defend himself
in the legal proceedings. The courts would be fully
justified even imposing punitive costs where legal
process has been abused. No one should be permitted
to use the judicial process for earning undeserved gains
c or unjust profits. The court must effectively discourage
fraudulent, unscrupulous and dishonest litigation.(para
216] (276-G-H; 277-A-B]
5.2. The court's constant endeavour must be to
ensure that everyone gets just and fair treatment. The
D court while rendering justice must adopt a pragmatic
approach and in appropriate cases realistic costs and
compensation be ordered in order to discourage
dishonest litigation. The object and true meaning of the
concept of restitution cannot be achieved or
E accomplished unless the courts adopt a pragmatic
approach in dealing with the cases. [para 217] [277-C-D]
F
Ramrameshwari Devi and Others v. Nirma/a Devi and
Others 2011(6) Scale 677 - relied on.
5.3. Even after final judgment of this Court, the
litigation has been kept alive for almost 15 years. The
respondents have been compelled to defend this
litigation for all these years. Enormous court's time has
been wasted for all these years. On consideration of the
G totality of the facts and circumstances of this case, the
applicant-industry is directed to pay costs of Rs.10 lakhs
in both the Interlocutory Applications. The amount of
costs would also be utilized for carrying out remedial
measure in village Bichhri and surrounding areas in
H Udaipur District of Rajasthan on the direction of the
.).
INDIAN COUNCIL FOR ENVIRO-LEGAL ACTION v.
167
UNION OF INDIA & ORS.
·•-..
authorities concerned. [para 228-229) [281-D-F]
A
Case Law Reference:
1987 (1) SCR 819
referred to
para 21
'
2002 (2) SCR 1006
referred to
para 66
8
~
1996 (2) SCR 503
referred to
para 75 .
2000 (1) Suppl. SCR 389 referred to
para 102
[2004) FCA 1317
referred to
para 104 c
722 F. Supp 960
(W.D.N.Y. 1989)
referred to
para 106
....
1976 (3) SCR 99
relied on
para 116
~
D
2002 (1) sec 109
relied on
para 117
1980 (2) SCR 650
relied on
para 118
1989 (3) SCR 316
relied on
para 119
1996 (3) SCR 782
relied on
para 120
E
1995 (6) Suppl. SCR 190 ·relied on
para 121
1996 (2) SCR 400
relied on
para 122
1996 (6) Suppl.