The Supreme Court criticized the National Green Tribunal (NGT) for imposing penalties based on a company’s revenue, calling it “totally unknown to law.” A bench comprising Justices B.R. Gavai and K.V. Vishwanathan stated that revenue generation has no connection to determining the penalty for environmental violations. The court emphasized the need for penalties to align with legal principles and the nature of the infraction.
New Delhi: The Supreme Court expressed profound concern regarding the National Green Tribunal’s (NGT) approach of imposing penalties based on a company’s overall revenue, without any evidence of non-compliance with environmental regulations.
Justices B.R. Gavai and K.V. Vishwanathan stated,
“With deep anguish we have to say that the methodology adopted by the NGT for imposing penalty is totally unknown to the principles of law.”
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In a ruling on November 27, the court overturned the NGT’s August 29, 2022 order, which had imposed a Rs.25 crore penalty on Benzo Chem Industrial Private Limited.
The appellant argued that the NGT’s order demonstrated a complete lack of consideration, as both the Maharashtra Pollution Control Board and the National Environmental Engineering Research Institute (NEERI) reported no instances of non-compliance.
The NGT’s decision to impose the Rs. 25 crore penalty based on the company’s revenue, which ranged from Rs.100 crore to Rs.500 crore, was criticized as being “totally unknown to the canons of law.”
The bench also highlighted that the NGT’s findings violated principles of natural justice and lacked due consideration. NEERI, a leading environmental institution, confirmed that the appellant’s unit met environmental requirements with no violations since 2010.
The court declared that the NGT’s conclusion of ongoing non-compliance was “totally untenable” and emphasized that the revenue generation should not influence the determination of penalties for environmental damage, stating,
“The generation of revenue would have no nexus with the amount of penalty to be ascertained for environmental damages.”
The bench further noted that the NGT should have provided notice to the appellant before imposing such a significant penalty.
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The National Green Tribunal (NGT) is a specialized judicial body in India established in 2010 under the National Green Tribunal Act. It focuses on the expeditious resolution of environmental disputes, including matters related to pollution, deforestation, and wildlife conservation.
The NGT has the authority to enforce legal rights relating to the environment, provide relief and compensation to victims of environmental damage, and impose penalties for non-compliance with environmental laws. It plays a crucial role in promoting sustainable development and ensuring accountability for environmental violations.