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(A) Report of National Environmental Appellate Authority, New Delhi (NEAA):

The said authority was presided over by a retired Judge of the Supreme Court of India, Sri Justice N. Venkatachala.
The NEAA framed two points (a) and (b):
(a) (i) Is the respondent-industry a hazardous industry or?
(ii) What is the pollution potentiality of the respondent industry, taking into account, the nature of the products, its effluents and its location?
(iii) Whether the operation of the industry is likely to affect the sensitive catchment area resulting in pollution of the Himayat Sagar and Osman Sagar lakes supplying drinking water to the twin cities of Hyderabad and Secunderabad?

On point (a)(i), it noticed that the industry is to use, among 12 major items, - 70 Kgs. of nickel based catalyst ( Pellets) per day and that the raw material is to be stored atleast for 30 days. It observed that according to Chapter 8.0 of NFPA, Hazard classification, the raw materials used by the industry are serious health hazards, highly inflammable and re-active at elevated temperatures and pressures. Four items, Nickel, Ammonia, Methanol and Hydrochloric Acid are used in the process. After referring to the various plants and processes, the NEAA referred to the provisions of the Factories Act ( as amended in 1987) and Section 2 (cb) defining 'hazardous processes and Schedule I thereof in which item 25 refers to 'extraction of oils and fats from vegetable and animal sources" as hazardous processes. It referred to Rule 2(h) of the 'Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989' issued under the Environment (Protection) Act, 1986. It referred to the provisions in the Environment (Protection) Act, Section 2(e), 2(f) and 2(d). It agreed that merely because an industry is hazardous does not by itself debar it but then Section 8 of that act would come into play. It answered question (i) in the affirmative that the industry is hazardous. On point a(ii), it referred to the definition of 'pollution' in section 2(c) of the Water Act, section 2(f) which defines 'sewage effluent' and section 2(k) which defines 'trade effluent' and observed that the 'pollution potential' of the industry was to be assessed. After referring to the effluents - Commercial Castor oil, Bleaching earth, Activated carbon, Nickel catalyst, Hyflo supercel, Sulphuric Acid, Caustic Soda, Methanol, Calcium Oxide, Alum - in all 1463 MTs per month and noticed that the monthly requirement of 3 Hydrogen was 76 500 NM. As the industry is coal based, large quantity coal is required. It would produce huge quantities of BSS, HCO, HSA, Methyl, Fatty acids, Epoxidise, Glyceren etc. Hydroxy Stearic Acid, methyl Hydroxy Stearic Acid and methanol are serious health hazardous. Items in part II list of Schedule I to the 'Manufacture, Storage and Import of Hazardous Chemicals Rules, 1989' are the raw materials and RW2 ( Dr. G.S. Siddhu) in his evidence agreed that these are hazardous ( toxic) chemicals. The solid effluents generated every day are (i) spent bleaching earth 1250 Kgs, (ii) spent bleaching carbon 250 kgs, (iii) spent nickel catalyst kgs. and (iv) sodium sulphate 3820 Kgs. (12-HSA) and kgs. ( from CME). Monthly turn out of effluents will be 400 MT. Every day 55 kgs. of nickel is consumed. Every day, 27,830 litres of water are to be used and normally the effluent will carry all these hazardous substances, including nickel. 'As it is said that the water used could be re-used for cultivation of lands in the premises of the industry, the toxic chemicals which get lodged in the surface layers of the soil will flow down in storm run offs or percolate into the ground water, to ultimately reach the water body of the two reservoirs. The NEAA further stated that Dr.Santappa in his evidence as RW-1 made admissions regarding gaseous effluents - - fly ash, SO CO Oxides of Nitrogen, Oxides of Sulphur and suspended particulate matter. The solid and liquid effluents could reach the lakes through seepage. The factory cannot be located in the catchment area because run-offs due to rain will carry hazardous material along surface and through seepage. The NEAA adverted to the 'Drainage Basic Analysis' by the Central Ground Water Board, to the effect that the Basin "has moderate run-off and moderately high permeability of the terrain. As such the amount of infiltration is considerably high". The said Report shows that rainfall in 796 mm ( heaviest being 1326 mm) and there is every likelihood of the solids being "transported down along the gradient". The said Report of Central Ground Water Board, referred to "dolerite dykes" in the vicinity and the possibility of flow even more. Having regard to the location of the dyke and the speed and angle, the polluted water could reach Himayat Sagar which is hardly 2 m bgl. since the dam height is 1763.50 feet. Satellite maps of NSRA were also examined and relied for this purpose. Among the substances stored are nickel, sulphuric acid, HCA, which are well-known 'hazardous' substances.

The NEAA also referred to the Report of the three man Technical Committee of the Andhra Pradesh Pollution Control Board consisting of Dr. J.M. Dave ( PW 3) and that "accidents and human failure are the most probable causes for spillage and it is unrealistic to give a 'zero spillage', and specially to their report on 'nickel' and held that the respondent industry has high pollution potentiality under issue a(ii). The NEAA, then took up issue (b) as to the likelihood of the industry affecting the sensitive catchment area. It referred to the Expert Committee Report of the HMWSSB and its recommendations which led to the issuance of the GO 192 dated 31.3.94 and GO 111 date d8/.3.96. The NEAA concluded that the "establishment of any chemical industry, carries with it, the imminent dangers of the chemicals or chemical effluents polluting the water of Himayat Sagar and Osman Sagar.

Point 6:

Learned counsel for the seventh respondent referred to the existence of several other industries within the 10 k.m. radius of the two reservoirs, which have been granted permission earlier. According to him, these industries are also polluting industries. In our view, the Environmental (Protection) Act, 1986 and the Water Act, 1974 and the Air Act, 1981 have enough provision applicable not only to new industries proposed to be established but also to existing industries. The State of Andhra Pradesh is therefore directed hereby to identify these industries located within 10 K.M. radius of these two lakes and to take action in consultation with the A.P.Pollution Control Board to prevent pollution to the drinking water in these two reservoirs. The State and the Board shall not permit any polluting industries within the 10 k.m radius. A report shall be submitted to this Court by the State of Andhra Pradesh in this behalf within four months from today, in regard to the pollution or pollution potential of industries, if any, existing within 10 K.M. of the lakes. After the Report is received, the matter may be listed. Point 6 is decided accordingly. In the result, the appeal is allowed, the judgment of the High Court and the order of the appellate authority under section 28 of the Water Act, 1974 are set aside and the order of the appellant Board refusing permission to the seventh respondent under section 25 of the Water Act is restored. Before parting with the case, we acknowledge the excellent Reports submitted to this Court by the three expert bodies on the basis of scientific/technological research of a very high order. The amount of hard work done by these three bodies is commendable. But for these expert reports it would have been very difficult for this Court to resolve the complicated scientific issues involved in this case, with confidence. It will be open to the three expert bodies (1) National Environmental Appellate Authority, New Delhi (2) The University Department of Chemical Technology (Autonomous), Matunga, Bombay headed by Dr. Bhowmick and (3) The National Geophysical Research Institute, Tarnaka, Hyderabad, to submit their list of expenses or fee, if any, to the State of Andhra Pradesh, through the appellant Board. If any claims for monies are made, the same shall be paid by the State of Andhra Pradesh.