The Madhya Pradesh High Court allowed Harda factory owners to object to victim claims made during suo-moto proceedings by the National Green Tribunal (NGT). The court said that the factory owners could raise concerns about the classification and genuineness of victims, as well as the amount and categories of compensation for property loss, injuries, and displacement.
The Madhya Pradesh High Court granted the owners of the Harda Factory the right to contest a victim’s claim made during suo-motu proceedings initiated by the National Green Tribunal (NGT) following a blast that affected 160 houses.
The court was reviewing a writ petition challenging the NGT’s orders on the grounds of violating principles of natural justice.
The division bench, consisting of Justice Sanjeev Sachdeva and Justice Vinay Saraf, stated,
“It would be open to the petitioner to raise objections regarding the classification and genuineness of claimants/victims concerning injuries, as well as the categorization, classification, and quantum of compensation for property loss, destruction of houses, and displacement.”
The petitioner was represented by Senior Advocate Naman Nagrath, while Advocate General Prashant Singh represented the respondent. The explosion occurred in the petitioners’ firecracker factory, resulting in significant damage and an FIR alleging improper management of a large quantity of explosive materials, which led to the incident.
The NGT took suo motu cognizance based on news reports and issued an interim order that same day, mandating compensation for victims Rs.15 lakh for each death, Rs.3 lakh for minor injuries, Rs.5 lakh for burn injuries and grievous injuries, Rs.5 lakh for each damaged or burned house, and Rs.2 lakh for each person forced to vacate their home.
Following this order, the Collector of Harda calculated the petitioners’ liabilities at Rs.15.80 crore and ordered the deposit of this amount into the District Environment Compensation Fund, warning of coercive action for non-compliance. Additionally, liabilities of Rs.2.43 crore were assessed, leading to the confiscation of properties worth Rs.9 crore for auction.
The Advocate General raised concerns about the petition’s maintainability, arguing that the NGT’s order is appealable under Sections 14 and 22 of the NGT Act, suggesting that an alternative remedy exists. He cited the Supreme Court’s ruling in Municipal Corporation of Greater Mumbai vs. Ankita Sinha & Ors. (2022) 13 SCC 401, asserting that the petitioners have a statutory right to appeal under the National Green Tribunal Act, thus rendering the current petition unmaintainable.
Conversely, the Senior Counsel for the petitioner contended that the NGT’s order violated principles of natural justice, making the petition maintainable despite the availability of an appeal. He referenced the Supreme Court’s ruling in Veena Gupta & Ors vs. Central Pollution Control Board & Ors (2024 SCC online SC 103), which criticized the NGT for issuing ex-parte orders without adhering to natural justice principles and verifying the facts of the case. He also cited the decision in Jetpur Dyeing and Printing Association vs. Ramdevbhai Samatbhai Sanjva and Others (2024 SCC online SC 689), where an order was set aside for failing to provide an opportunity for a hearing.
The Senior Counsel further asserted that the NGT awarded interim compensation in an arbitrary and unlawful manner, lacking necessary information at the time of the order. He argued that allowing local administration to proceed with the recovery of amounts by auctioning the petitioners’ properties, without providing a hearing, constitutes a violation of natural justice. He maintained that the writ petition under Article 226 of the Constitution of India is maintainable despite the existence of an alternative remedy, citing exceptions established by the Supreme Court in Whirlpool Corporation v. Registrar of Trade Marks, Mumbai (1998) 8 SCC 1.
He stated that the NGT’s ex-parte interim compensation was issued in a highly arbitrary manner, based solely on media reports without proper assessment of the compensation quantum. He emphasized that several ineligible individuals had claimed compensation, and the Collector of Harda acted without affording the petitioners an opportunity to be heard, despite their incarceration since the incident. While acknowledging no issue regarding death cases, he pointed out that in cases of injuries and property damage, the Collector failed to verify medical records and other relevant circumstances. He also highlighted that the NGT did not establish parameters for determining which individuals qualified as grievously injured or entitled to compensation.
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The court noted that the Supreme Court, in Madhya Pradesh High Court Advocates Bar Association Vs. UOI & Others (2022 SCC online SC 639), held that the NGT’s jurisdiction under Sections 14 and 22 of the NGT Act does not exclude the High Court’s jurisdiction under Articles 226 and 227, as these are part of the Constitution’s basic structure.
The court observed,
“In this case, the main grievance of the petitioners is that an ex-parte order was passed without providing an opportunity for a hearing, resulting in a liability of over Rs.15 crores imposed on them, in violation of principles of natural justice. Consequently, this court finds it appropriate to entertain the writ petition and has issued notices.”
The court ruled that objections regarding the maintainability of the writ petition are overruled, deeming the petition maintainable, and allowed the petitioners to raise their objections to the claims, issuing appropriate directions accordingly.
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