Supreme Court: In an appeal preferred by the Gujarat Pollution Control Board (GPCB), assailing the National Green Tribunal (NGT) order holding the landlord not accountable for the tenant’s environmental violations, the Division Bench of Satish Chandra Sharma and Sanjeev Sachdeva, JJ., found no reason to entertain the appeal challenging the NGT order.
Background
The present dispute arose from an order of the GPCB holding that the closure direction issued under Section 33-A, Water (Prevention and Control of Pollution) Act, 1974 and the interim environmental damage compensation (EDC) imposed by the Board were just and proper.
The respondent claimed to be the owner of the subject premises, which had been let out under a rent agreement for carrying on business activities. According to the respondent, the premises were to be used only for lawful purposes, and the tenant was in possession of a GST registration for conducting the business.
The respondent stated that he came to know of the closure direction and the imposition of environmental compensation only when officials of the electricity distribution company, Dakshin Gujarat Vij Company Ltd., visited the premises for disconnection of electricity supply. Upon obtaining copies of the relevant documents, the respondent found that the closure direction had been issued against a chemical company, describing it as the owner of the premises. The respondent contended that he had no connection with the said chemical company and was neither its owner, director nor partner. The respondent further stated that he subsequently came to know that his tenant was the owner and director of the said chemical company and that the premises had remained in the tenant’s possession during the relevant period.
The respondent asserted that he did not know about the inspection conducted by the GPCB or of the closure direction issued thereafter. Upon becoming aware of the proceedings, he lodged a police complaint against the tenant and others and submitted representations disputing the observations recorded during the inspection.
The respondent thereafter approached the Gujarat High Court, which directed the GPCB to afford an opportunity of hearing and consider the respondent’s representation. The respondent alleged that the GPCB neither considered the submissions made in the representation nor conducted any enquiry before passing the impugned order.
Aggrieved thereby, the respondent preferred an appeal before the NGT seeking to set aside the said order.
NGT Proceeding
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Issue
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NGT Analysis and Decision
Whether the landlord can be held accountable for the illegal acts committed by the tenant?
The NGT noted that the appellant was the owner of the premises where a unit of the said chemical company was being run by the tenant, which was found to be operating without obtaining the requisite consent to establish or consent and authorisation from the GPCB. Consequently, interim EDC of ₹25 lakhs was assessed against the unit. The NGT further noted that, after the tenant vacated the premises and became untraceable, the GPCB sought to recover the amount from the appellant based on its Circular dated 26 June 2020, which contemplated joint and several liability of the tenant and the lessor-owner for environmental violations.
The NGT considered the appellant’s contention that the rent agreement expressly stipulated that the tenant would not engage in any illegal activities and would be solely responsible for any damage caused to the property. The NGT also noted that the agreement prohibited subletting or transfer of possession by the tenant.
The NGT observed that the GPCB Circular itself contemplated that the stipulation regarding joint and several liability of the owner should be incorporated in the rent agreement, but was silent as to how a landlord would be aware of such a Circular while entering into a tenancy agreement. The NGT observed that the Circular appeared to be an internal mechanism requiring the GPCB to ensure incorporation of such a condition at the stage of grant of consent to establish and consent and authorisation.
The NGT rejected the GPCB’s contention that the appellant was required to challenge the validity of the Circular before seeking relief in the appeal. Referring to the decision of the Delhi High Court in Sunita Aggarwal v. Delhi Pollution Control Committee, 2022 SCC OnLine Del 4314, The NGT found that the facts of the present case were similar and noted that the High Court had held that a landlord could not be held accountable for violations committed by the tenant. The NGT held that the GPCB Circular was contrary to the law laid down in Sunita Aggarwal.
The NGT also relied upon the decision of the Supreme Court in CCE v. Ratan Melting & Wire Industries, (2008) 13 SCC 1, and observed that a Circular contrary to the statutory provisions has no existence in law. The NGT did not accept the GPCB’s submission that the said decision was distinguishable on facts. Consequently, the NGT held that the Circular dated 26 June 2020 could not be made applicable to the present case.
The NGT further took note of the definitions of “occupier” under the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act, 1974, and accepted the appellant’s contention that, being merely the owner of the premises, he could not be regarded as the actual occupier thereof.
Accordingly, the NGT held that the interim EDC of ₹25 lakhs could not be recovered from the appellant, who was the owner of the premises and not the actual occupier. The NGT held that the landlord could not be held accountable for the illegal acts committed by the tenant. The appeal was allowed, the impugned order was set aside, and the GPCB was left at liberty to proceed against the tenant in accordance with law.
Aggrieved by the NGT’s order, the GPCB preferred the present civil appeal before the Supreme Court.
Supreme Court Decision
Upon consideration, the Court held that it found no reason to entertain the appeal against the NGT’s order and accordingly dismissed the present appeal.
[Gujarat Pollution Control Board v. Jagmohan Lachiram Jalan, Civil Appeal Diary No. 25268 of 2026, decided on 8-5-2026]
Advocates who appeared in this case:
For the petitioner: AOR Deepanwita Priyanka, Aastha Mehta, Prerana Mohapatra, Prina Sharma, Advocates
For the respondent: N/A
