Supreme Court: While considering the appeals filed against 2 orders by the National Green Tribunal (NGT) holding the appellant guilty for violating environmental norms, directing a Joint Committe to investigate past violations and subsequently directing the appellant to pay compensation of Rs 18 crores at rate of 2%; the Division Bench of Manoj Misra and Ujjal Bhuyan*, JJ., pointed out that NGT exercises judicial functions; therefore, it is all the more necessary for it to adhere to a fair procedure which has been statutorily laid down, and of which principles of natural justice, is an inalienable part.
The Court thus held that rigor of Section 19(1) of the National Green Tribunal Act, 2010 (NGT Act) is qua the procedure to be adopted by the NGT in conducting its proceedings. It cannot be stretched to abandon the statutory procedure laid down under Sections 21 and 22 of the Water Act and by outsourcing investigation to administrative committees by overlooking the statutory provisions and basing its decisions on the recommendation of such administrative committee.
Background:
The appellant has been engaged in diverse business activities including manufacture of sugar. In 1952, the appellant under its earlier name, Ganga Sugar Corporation Limited, had acquired the sugar manufacturing unit at village Sheikhpura, Khatauli, Muzaffarnagar District in the State of Uttar Pradesh (sugar mill). It was stated that the sugar mill was a functional unit, having all the necessary permissions as required under the applicable statutes.
In 2021, Respondent 2 filed a complaint before the NGT alleging that the sugar mill of the appellant was discharging untreated waste in a particular drain resulting in contamination of ground water in an area of about 1 ½ km around the sugar mill having depth upto 50 metres. A Joint Committee of the Central Pollution Control Board (CPCB), Uttar Pradesh Pollution Control Board (UPPCB) and District Magistrate (DM), Muzaffarnagar was constituted. NGT on perusal of the report declared that it was not satisfied with the stand of the State PCB. NGT was of the view that there was no justification for carrying out inspection when the sugar mill was not functional due to off season. NGT, therefore, directed the joint committee to conduct inspection when the unit was functional.
Subsequently, a detailed investigation was carried by the Joint Committee and after perusing this report, the NGT passed the 1st impugned order dated 15-02-2022 observing that the report showed violation of the environmental norms by the appellant. For the past violations, the joint committee was directed to assess the compensation in accordance with law, having regard to the nature of violation, period of violation, cost of remediation and turnover of the appellant.
Pursuant to the aforesaid directions, supplementary report was filed by the Joint Committee which mentioned that compensation amounts to Rs. 34,20,000 for 114 days of violation at the rate of Rs. 30,000 per day which works out to Rs. 18 crores at the rate of 2 percent of the annual turnover of Rs. 900 crores. Thereafter, by its 2nd impugned order dated 16-09-2022, the NGT directed that the Rs 18 crore compensation recovered may be utilized for restoration of the environment. The appellant was directed to deposit the aforesaid amount with the District Magistrate, Muzaffarnagar within one month.
Aggrieved with the afore stated orders, the appellant knocked the doors of the Supreme Court.
Counsels for the appellant argued that the impugned orders are non est in the eye of law in as much as those orders were passed by the NGT in complete violation of the principles of natural justice. The appellant also questioned methodologies adopted by the Joint Committee in carrying out the inspection and thereafter in submitting the reports. It was further submitted that there was clear infraction of Section 19(1) of the NGT Act, 2010 in the present case which had vitiated the impugned orders.
Per contra, the respondents argued that principles of natural justice cannot be applied as a straitjacket formula. NGT was careful enough to direct the joint committee to furnish copies of its reports to the appellant, who was, therefore, very much aware of the contents of the two reports, yet it did not contest the same before the NGT.
Court’s Assessment:
Persuing the case, the Court deemed it fit to refer the relevant statutory provisions of the the Water (Prevention and Control of Pollution) Act, 1974 (‘the Water Act’); the Environment (Protection) Act, 1986 (‘the Environment Act’) and the NGT Act in order to examine the way NGT proceeded in this matter.
The Court perused the report of the Joint Committee and impugned NGT orders, the Court pointed out the following:
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NGT constituted a joint committee to carry out inspection of the sugar mill of the appellant vis a vis maintenance of pollution control measures and discharge of effluents. This was an ad hoc committee when the Water Act, more particularly Sections 21 and 22 thereof, clearly prescribed a statutory procedure to be followed while carrying out such inspection to examine pollution, if any, or the extent of pollution caused by the project proponent and to suggest remedial measures.
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The joint committee report dated 11-01-2022 was silent as to whether it has followed the procedure laid down in the Water Act more particularly notice to the occupier or his agent and collection and sealing of samples in the presence of the occupier or his agent having his signature on the sealed containers.
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NGT did not deem it appropriate to get the appellant impleaded as a party respondent.
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No opportunity was granted to the appellant to contest the report of the joint committee and to have its say. Thus, there was a clear violation of the provisions contained in Section 19 of the NGT Act.
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Appellant had contended that joint committee did not issue any notice to it before carrying out the inspection and it was not served with a copy of the report of the Joint Committee either.
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NGT accepted the report of the joint committee without any adjudication on it.
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Environmental compensation was quantified without any adjudication and without granting any opportunity of hearing to the appellant. Environmental compensation was imposed on the appellant without giving any opportunity to the appellant to contest the reports of the joint committee and without giving any opportunity of hearing to the appellant.
The Court then perused relevant precedents on necessity for following the principles of natural justice. The Court thus opined that it was clearly evident that the impugned orders were in complete violation of the procedures laid down in the Water Act, 1974, specifically Sections 21 and 22, the Environment Act, 1986, and the NGT Act, 2010, including Section 19 thereof. Furthermore, the impugned decisions which entail adverse civil consequences upon the appellant were passed without following the due procedure laid down under the statute as well as the elementary principles of natural justice. Therefore, the Court declared impugned orders as illegal and null and void and same was set aside.
“This is a classic case where in the quest for doing justice, NGT has ended up doing just the reverse”.
The Court stated that in a case where there is violation of the principles of natural justice, parties are relegated to the adjudicatory forum to re-do the exercise after following the due process. However, in this case, the entire exercise has been vitiated because of non-conforming to the laid down procedure contemplated under Sections 21 and 22 of the Water Act, 1974.
In such circumstances, relegating the parties back to the NGT would serve no useful purpose. However, the Court clarified that it will always be open to the UPPCB to carry out inspection and take remedial measures qua the appellant’s sugar mill by following the procedure laid down under the Water Act and after complying with the due process statutorily laid down thereunder, including by adhering to the principles of natural justice.
[Triveni Engineering and Industries Ltd v. State of Uttar Pradesh, 2025 SCC OnLine SC 1877, decided on 1-9-2025]
*Judgment by Justice Ujjal Bhuyan
Advocates who appeared in this case:
For Appellant(s): Mr. Kavin Gulati, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ruchir Ranjan Rai, Adv. Mr. Ankur Saigal, Adv. Mr. Prateek Kumar, Adv. Mr. Arshit Anand, Adv. Ms. Vidisha Swarup, Adv. Mr. Naman Gupta, Adv. Mr. E. C. Agrawala, AOR
For Respondent(s): Mr. Sudeep Kumar, AOR Mr. Pradeep Misra, AOR