corporate law, commercial dispute, contractual liability, Supreme Court India
0  09 Sep, 1996
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F.B. Taraporawala and Ors. Etc. Etc. Vs. Bayer India Ltd. and Ors.

  Supreme Court Of India Civil Appeal /7086/1994
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Case Background

As per case facts, industrial development raised concerns about public safety, especially near chemical factories, a concern highlighted by the Bhopal disaster. Following litigation regarding building permissions near a Bayer ...

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Document Text Version

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3

PETITIONER:

F.B. TARAPORAWALA AND OTHERS ETC.ETC.

Vs.

RESPONDENT:

BAYER INDIA LTD. AND OTHERS

DATE OF JUDGMENT: 09/09/1996

BENCH:

KULDIP SINGH, B.L HANSARIA

ACT:

HEADNOTE:

JUDGMENT:

J U D G M E N T

HANSARIA. J.

Industrial growth, yes; but by exposing a large segment

of society to the risk of losing lives, no. This

apprehension is not imaginary. Bhopal disaster brought to

the knowledge of all what a tragedy can be caused by

chemical industries. In the wake of what happened there more

than a decade ago, industrialists engaged in production of

chemicals started thinking of taking precautionary and

protective measures to see that if worst wore to befall, how

could their financial liability be taken care of.

2. The aforesaid mental make-up led some leading chemical

manufacturers in the country, like Bayer India Limited, one

of the respondents herein, to approach the Bombay High Court

in a pending writ petition filed by some builders seeking

certain orders of the High Court. In one of the writ

petitions taken by the High Court for hearing, which was

numbered as 4497/90, the Court required the Municipal

Corporation to re-examine the building plans and to pass

appropriate orders keeping in view, inter alia, the

provisions of section 46 of the Maharasthra Regional and

Town Planning Act. The matter was brought to this Court by

the respondents contending, inter alia, that in the

sanctioned plan the area had been shown reserved for

industrial user. This Court permitted the respondents to

file a review petition before the High Court. On being so

approached, the High Court dismissed the intervention

application of the respondents and directed the Municipal

Corporation to permit construction. This order led the

respondents to approach this Court again by filing

Interlocutory Application in the disposed of SLP. This

Court, by an order passed on 24.2.1993, directed the High

Court to dispose of the review application and further

directed to maintain status quo, which prevented the

appellants tn carry on construction activity within one k.m.

radius from the factory premises. The High Court disposed of

the review application on 26.9.1994 by giving the following

directions :-

"(i) No additions or modifications

shall be permitted in respect of

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3

buildings that have been completed

or those were under construction as

on the data of stay order passed by

this Hon'ble Court on 8.1.1996.

(ii) In respect of schemes where

permission may have been granted

but no actual construction has been

commenced as on the date of this

Court's order dated 8.1.1991 ,

prohibition in respect of a total

ban on further construction within

1 km. radius from the chemical

units shall apply.

(iii) Save and except in the

aforesaid cases, the stay order

passed by this Court on 8.1.1991

shall continue to the extent that

there shall be a prohibition in

respect of any further permissions

or for that further permissions or

for that matter construction within

1 k.m. radius from the chemical

factories.

(iv) The stay order shall stand

vacated only in those of the cases

as indicated where construction has

been commenced and was required to

be stopped by virtue of the stay of

this Hon'ble Court."These appeals

question the aforseaid directions

of the High Court.

3. The appeals were heard on a number of occasions and

being of the prima facie view that by giving aforesaid

immunity to the industrialists injustice has been caused to

the residents of the locality inasmuch as prohibition of

constructions within 1 k.m. radius like- Thane did adversely

affect the right to reside in the locality, leaving at the

same time the large number of inhabitants already residing

exposed to the risk mentioned above, it was thought by us

that if the industrialists wanted to safeguard their

interest in the event of some accident happening in their

factories, it was for them either to shift their factories

to such places where the residential area could be kept wide

apart from the factory premises. But then,the response of

the respondents to the first proposal being negative because

of the huge financial involvement we applied our mind as to

whether we could examine at our level the question of

relocation.

4. Respondents were heard on this aspect on many occasions

and in the written submissions filed on 2.9.1996 by Bayer

India. which can be taken as a representative stand of the

respondents, it has been stated relocation is not possible

logistically, financially or otherwise. The written

submission mentions about various aspects relating to

relocation at pages 16 to 20. It has been felt by us that we

have neither the expertise nor are in possession of various

information, which shall be required. to decide one way or

the so far as the question of relocation is concerned. In

such a situation what has appealed to us is to leave this

matter to be examined by an Authority which we would require

the Central Government to constitute, as visualized by

section 3(3) of the Environment Protection Act, 1986 (the

Act). It is not necessary to deal at length as to what is

visualized by this Act and why ? This has been explained in

detail in a judgment delivered by one of us (Kuldip Singh,

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3

J.) on August 28, 1996 in Writ Petition (C) No.914 of 1991,

on behalf of a 3-Judge Bench. The concept of "sustainable

development", whose salient points have been noted in the

aforesaid Judgment, does call upon one and all to see to the

maintenance of balance between development and its

sustenance in future.

5. In the appeals at hand, we are confronted with a problem

which has more serious consequences and which touches the

core of Article 21 of the Constitution inasmuch as the very

lives of the inhabitants living around the factories in

question are in great jeopardy so much so that any probable

accident in the factories may see annihilation of large

number of inhabitants. May be the accident does not take

place, as has been submitted by Shri Jaitley appearing for

the respondents. There is, however, no ruling out of the

same altogether as Bhopal has shown. No risk can, therefore,

be taken. But then relocation does need a deeper probe

because of the various factors which would be required to be

gone into. Such an exercise can usefully be taken by an

Authority of which mention has been made above.

6. We, therefore, direct the constitution of an Authority

under section 3(3) of the Act by the Central Government, who

shall confer all the necessary powers under the Act on the

Authority, which shall be constituted within one month from

the receipt of this order. The Authority shall submit its

report to the Central Government within three months after

examining and deciding all the relevant issues including

those mentioned by us. This would be done by affording

reasonable opportunity of hearing to the concerned parties.

Follow up actions shall be taken by all concerned as per the

recommendations of the Authority within reasonable time.

7. As the constitution and deliberation of the authority

would take times, and its ultimate result cannot be foreseen

at this stage, we have thought it fit to direct the Bombay

Municipal Corporation to proceed further with the plans

which had been submitted by the appellants, some of which

also came to be sanctioned. But then, as sanctioning in some

cases was about a decade back and as the scenario and

thinking on the subject has since then changed a lot, so

also the building bye-laws, we have thought it fit to direct

the Corporation to re-examine the question of grant of

sanction on the basis of the existing rules and bye laws.

The Corporation may proceed with this exercise, but it would

await the result of the report of the aforesaid Authority.

We have desired the Corporation to undertake this work at

this stage itself because the matter has been delayed

already and Authority's deliberation would not be available

for quite some time.

8. In the aforesaid view of the matter, the review petitions

filed before the High Court by the respondents are not

required to be kept alive and they would stand dismissed on

withdrawal, to which effect prayer was made before us. The

impugned directions of the High Court would automatically

lapse.

9. The appeals are disposed of with these directions. No

order as to costs.

Reference cases

Description

Balancing Industrial Growth and Public Safety: A Landmark Supreme Court Ruling

In a landmark 1996 ruling, the Supreme Court of India delivered a crucial judgment addressing the intricate balance between industrial development and public safety. This decision, involving F.B. Taraporawala and others versus Bayer India Ltd. and others, is a pivotal case in Environmental Law India and significantly shapes Industrial Siting Regulations. Both the original judgment and subsequent analyses are readily available on CaseOn, offering comprehensive insights into its implications.

Case Background

The dispute originated from a writ petition filed by builders in the Bombay High Court. During its proceedings, the High Court directed the Municipal Corporation to re-examine building plans, considering Section 46 of the Maharashtra Regional and Town Planning Act, particularly concerning areas reserved for industrial use. This led to a series of legal challenges, with the matter reaching the Supreme Court multiple times. The High Court had issued specific directions prohibiting or restricting construction within a 1 km radius of chemical units, a measure intended to safeguard public safety following the lessons learned from the Bhopal disaster.

Issue

The primary issue before the Supreme Court was how to reconcile the imperative of industrial growth with the fundamental right to life enshrined in Article 21 of the Constitution, especially concerning the risks posed by chemical industries operating near residential areas. Specifically, the Court had to determine the validity and appropriateness of the High Court's directions regarding construction restrictions around hazardous industrial units and propose a sustainable solution to this complex problem.

Rule

The Supreme Court's decision was guided by several key legal principles and statutory provisions:

  • Article 21 of the Indian Constitution: The fundamental right to life, which the Court interpreted to include the right to a safe and healthy environment, free from industrial hazards.
  • Environment (Protection) Act, 1986 (Section 3(3)): This provision empowers the Central Government to constitute authorities to take measures for protecting and improving the quality of the environment.
  • Concept of Sustainable Development: The Court explicitly referenced this principle, emphasizing the need to balance development with its long-term sustenance and environmental impact.
  • Maharashtra Regional and Town Planning Act (Section 46): Referenced by the High Court in its initial directions regarding town planning and land use.

Analysis

The Supreme Court recognized the serious implications of the High Court's directions, noting that while intended to protect, they also caused injustice to residents whose construction activities were halted or restricted. The Court acknowledged the chilling reality brought forth by the Bhopal disaster, stating, 'Industrial growth, yes; but by exposing a large segment of society to the risk of losing lives, no.'

The Bench, comprising Justices Kuldip Singh and B.L. Hansaria, delved into the possibility of relocating chemical factories, a suggestion put forth to the respondents, including Bayer India Ltd. However, this option was deemed unfeasible by the industries due to the immense financial and logistical challenges involved. The Court, lacking the specialized expertise to decide on such complex relocation issues, emphasized the necessity of an independent, expert body.

Consequently, the Supreme Court directed the Central Government to constitute an Authority under Section 3(3) of the Environment (Protection) Act, 1986, within one month. This Authority would be tasked with examining all relevant issues, including relocation, and submitting a comprehensive report within three months after hearing all concerned parties. The Court mandated that follow-up actions would be taken based on the Authority's recommendations.

While awaiting the Authority's report, the Court provided interim guidance to the Bombay Municipal Corporation (BMC). The BMC was directed to proceed with re-examining building plans submitted by the appellants, even those previously sanctioned, in light of current rules, bye-laws, and the updated understanding of environmental and safety regulations. The High Court's original review petitions were dismissed, and its impugned directions automatically lapsed, paving the way for a more structured and expert-driven approach to the issue.

For legal professionals seeking a concise understanding of such nuanced environmental rulings, CaseOn.in offers 2-minute audio briefs that distill complex judgments into easily digestible summaries, perfect for quick analysis and staying updated on significant legal developments.

Conclusion

The Supreme Court, in this significant judgment, prioritized the protection of human life over unbridled industrial expansion. It directed the creation of an expert Authority under the Environment (Protection) Act, 1986, to comprehensively assess and recommend solutions for industrial siting, particularly concerning hazardous chemical units near residential zones. While acknowledging the impracticality of immediate relocation, the Court ensured that the issue would be addressed by a specialized body capable of balancing industrial needs with public safety and environmental protection. The High Court's previous restrictive orders were effectively superseded, with the BMC instructed to re-evaluate building plans pending the expert Authority's findings.

Why This Judgment Matters for Legal Professionals & Students

This judgment is invaluable for legal professionals and students for several reasons:

  • Article 21 Interpretation: It offers a strong precedent on the expansive interpretation of Article 21, asserting the right to a safe environment as integral to the right to life.
  • Environmental Governance: It demonstrates the Supreme Court's proactive role in environmental governance, especially in directing the formation of specialized regulatory bodies under the Environment (Protection) Act.
  • Sustainable Development: The case underscores the judiciary's commitment to the principle of sustainable development, urging a balanced approach to economic growth and environmental protection.
  • Industrial Zoning and Public Safety: It provides critical insights into the legal framework surrounding industrial siting, hazardous industries, and the regulations designed to mitigate risks to surrounding communities.
  • Inter-Agency Coordination: The judgment highlights the necessity of coordination between judicial directives, governmental actions (forming an authority), and local bodies (BMC) in addressing complex environmental and planning challenges.

Disclaimer

The information provided in this analysis is for informational purposes only and does not constitute legal advice. While efforts have been made to ensure accuracy, readers should consult with a qualified legal professional for advice pertaining to their specific circumstances.

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