Generation Of Revenue By Project Proponent Would Have No Nexus With Amount Of Penalty To Be Ascertained For Environmental Damages: SC
The Supreme Court observed that generation of revenue by project proponent would have no nexus with the amount of penalty to be ascertained for environmental damages.
The court quashed two orders issued by the NGT which imposed a penalty of Rs. 25 crores while expressing “deep anguish” over the methodology adopted by the NGT in imposing a penalty “totally unknown to the principles of law.”
The Court allowed the appeal by Benzo Chem Industrial Private Limited (Appellant) challenging the Orders by the National Green Tribunal (NGT) which held the Appellant liable to pay for alleged environmental damages.
The Bench of Justice B.R. Gavai and Justice K.V. Viswanathan stated, “In any case, the generation of revenue would have no nexus with the amount of penalty to be ascertained for environmental damages."
Senior Advocate Atmaram Nadkarni represented the Appellant, while Advocate Feroze Ahmad appeared for the Respondents.
The Appeals challenged the NGT orders imposing a penalty of Rs. 25 crores over alleged non-compliance with environmental requirements and the second order which rejected the Appellant’s review application. The NGT justified its decision by stating that the appellant had been in violation of environmental norms since 2010, referencing inspection reports from the Maharashtra Pollution Control Board (MPCB) and the National Environmental Engineering Research Institute (NEERI).
The Appellant argued that the NGT’s findings were contrary to the reports submitted by both the MPCB and NEERI. It was submitted that these reports confirmed full compliance with environmental requirements by the Appellant. The Appellant also challenged the NGT’s methodology in imposing the penalty, arguing that reliance on the company’s revenue range, without establishing any nexus with the alleged violations, was untenable.
The Supreme Court noted that while computing the said damages, the only methodology that the NGT adopted was that, as per the information available in the public domain, the revenue range of the Appellant was between 100 Crores to 500 Crores. “It is therefore found that the penalty of Rs.25 Crores would be commensurated with the revenue,” the Bench further noted.
“Firstly, there is a vast difference between 100 Crores and 500 Crores. Secondly, if the learned NGT had relied on the information available in the public domain, then it would not be difficult for it to come out with the exact figure. In any case, the generation of revenue would have no nexus with the amount of penalty to be ascertained for environmental damages. It is further to be noted that the learned NGT found the appellant to be guilty of violations, the least that was expected from the NGT is to give a notice to the appellant before imposing such a heavy penalty,” the Court observed.
Consequently, the Court held, “We are, therefore, inclined to quash and set aside the impugned judgments and orders and allow these appeals. Ordered accordingly.”
“Needless to state that in the event any person feels that the appellant is engaged in any of the environmental non-compliances, such a person would always be at liberty to approach the appropriate forum and if such an issue comes before it, the forum would consider and decide the same after following the principles of natural justice,” the Court clarified.
Accordingly, the Supreme Court allowed the Appeal.
Cause Title: Benzo Chem Industrial Private Limited v. Arvind Manohar Mahajan & Ors.
Appearance:
Appellant: Senior Advocate Atmaram Nadkarni; AOR Vivek Jain; Advocates Zulfiqur Menon, Waseem Pangarkar, Nadiya Sarguroh, Swapnil Srivastava, Jayesh Srivastava, Allan David, and S.S. Rebello
Respondents: Advocates Feroze Ahmad, Mukesh Verma, Pankaj Kumar Singh, Pawan Kumar Shukla, Vatsala Tripathi, Rubi Kumari, Shyamali Gadre, G. Pal, and Gaurav Singh; AOR Rajiv Ranjan Dwivedi, Shashank Singh and Soumik Ghosal