## Facts

- The dispute concerned proposed industrial activity within 10 kilometers of **Himayat Sagar** and **Osman Sagar**, reservoirs that supply drinking water to Hyderabad and Secunderabad.
- The State of Andhra Pradesh had issued **G.O. No. 111 (8 March 1996)** imposing a **10-kilometer prohibition on polluting industries** around these drinking-water sources under delegated powers traceable to the Environment (Protection) Act, 1986 framework.
- **M/s Surana Oils & Derivatives (India) Ltd.** (the industrial unit at the center of the case) proposed to set up a **“red category”** industrial unit involving **castor/vegetable oil derivatives**, a class treated as hazardous/polluting under applicable regulatory classifications.
- The Andhra Pradesh Pollution Control Board (**APPCB**) objected to the siting and **refused consent** under **Section 25 of the Water (Prevention and Control of Pollution) Act, 1974**, citing the risk that pollutants could escape due to leaks, accidents, or failures and reach the reservoirs.
- The **Commissioner of Industries** took the contrary position that the unit would generate **no liquid discharge** and that **solid waste could be disposed of**, suggesting the risks could be managed through conditions.
- Relying on those assurances, the company sought a relaxation from the 10-kilometer prohibition. The State Government issued **G.O. No. 153 (3 July 1997)** granting a **site-specific exemption** and directing APPCB to stipulate safeguards; APPCB issued conditional proceedings thereafter while maintaining its concerns.
- The industry pursued statutory remedies, and the **Appellate Authority under the Water Act (Section 28)** set aside APPCB’s refusal and directed grant of consent. The **High Court** upheld the outcome favorable to the industry.
- In an earlier phase of the same litigation (**A.P. Pollution Control Board (I) v. Prof. M.V. Nayudu, (1999) 2 SCC 718**), the Supreme Court set aside the consent-related orders and called for scientific evaluation, stressing the need for scientific material in complex environmental disputes.
- Pursuant to the Supreme Court’s directions, the matter was referred for opinions including from the **National Environmental Appellate Authority (NEAA)** and other scientific/technical bodies; the resulting reports were **adverse to permitting the unit** at the proposed location.
- The industrial company filed objections to the reports and continued to argue that “no discharge” operation and safeguards justified allowing the project despite the 10-kilometer prohibition.

## Issues

1. Whether the State Government could lawfully grant a **project-specific exemption** from an area-wide prohibition (the 10-kilometer ban) intended to protect major drinking-water reservoirs.
2. Whether APPCB’s **statutory refusal of consent** under the Water Act could be displaced by State action directing conditional clearance for a hazardous unit within the prohibited zone.
3. Whether the **precautionary principle** and the related allocation of the **burden of proof** required denial of permission where the risk to drinking-water sources could be serious or irreversible.
4. Whether the industrial unit could rely on **equitable claims** (including reliance on governmental actions and expenditure already incurred) to compel permission despite non-compliance with the consent regime.
5. How courts should decide technically contested environmental disputes involving competing scientific claims and risk to public drinking-water supplies.

## Decision

- The Supreme Court **allowed APPCB’s appeals** and held that this was a fit case for **injunctive relief** to prevent the risk of **irreversible pollution** to the Osman Sagar and Himayat Sagar reservoirs serving a very large urban population.
- The Court **affirmed APPCB’s position not to grant consent** to the industrial unit for establishing/operating at the proposed site within the prohibited zone.
- In light of the scientific material obtained after the earlier remand (including NEAA and other reports), the Court accepted that the unit had not demonstrated that its siting posed no significant risk to the drinking-water sources.
- The Court rejected arguments based on **prior permissions, expenditure, or reliance**, noting that the industry had proceeded without securing the required **prior consent** under the Water Act and that equities cannot override statutory duties aimed at protecting public health and drinking water.
- The Court treated the 10-kilometer protection regime as a serious environmental safeguard and declined to sustain the State’s attempt to carve out a one-off exemption where the scientific assessment did not support siting the unit near the reservoirs.
- The judgment also discussed institutional needs in environmental adjudication and urged consideration of **specialized environmental courts/tribunals** with judicial and technical members to handle scientific questions more effectively.

## Legal Principles

- The **precautionary principle** applies where an activity poses a plausible threat of serious or irreversible environmental harm; protective measures may be required even when complete scientific certainty is not available.
- A “**burden of proof**” approach applies in such cases: the project proponent seeking to alter the status quo bears the burden to show that the proposed activity and location will not cause environmental harm.
- The **right to access clean drinking water** is part of the right to life under **Article 21** of the Constitution of India, and the State has a duty to prevent contamination of major drinking-water sources.
- **No estoppel or equity** can be used to defeat environmental statutes and consent requirements; proceeding with construction or investment without prior statutory consent does not create a right to operate.
- Courts deciding environmental disputes should actively seek **reliable scientific assistance** where needed and should consider institutional arrangements (specialized forums with technical participation) suited to science-heavy environmental litigation.

## Conclusion

AP Pollution Control Board-II v. Prof. MV Nayudu held that a hazardous “red category” unit could not be permitted within the protected 10-kilometer zone around Hyderabad’s key drinking-water reservoirs; the Supreme Court upheld APPCB’s refusal of consent, rejected the State’s site-specific exemption and reliance-based claims, applied precaution-based reasoning with the burden on the proponent, and highlighted the need for science-capable environmental adjudicatory bodies.


AP Pollution Control Board-II v. Prof. MV Nayudu, (2001) 4 LRI 657 (1 December 2000)