Fine for environment law violation can't be based on company's revenue: Supreme Court slams NGT

The Supreme Court recently took exception to the National Green Tribunal (NGT) levying penalty on a company based on its revenue without even hearing them on alleged environmental norm violations [Benzo Chem Industrial Private Limited v Arvind Manohar Mahajan and ors]..A Bench of Justices BR Gavai and KV Viswanathan made it clear that such an approach, which in the instant case led to a ₹25 crore fine, was totally unknown in law."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. With deep anguish we have to say that the methodology adopted by the learned NGT for imposing penalty is totally unknown to the principles of law," the Court observed on November 27..This is the third matter today in which we are considering the orders passed by the learned NGT, which depicts total violation of principles of natural justice and lack of due considerationSupreme Court.The observations came in a verdict setting aside orders of the NGT from 2022 passed against chemical intermediates manufacturer, Benzo Chem Industrial Private Limited..The counsel for Benzo Chem argued that reports of the Maharashtra Pollution Control Board and the National Environmental Engineering Research Institute (NEERI) had found no non-compliance from their end; yet the NGT recorded to the contrary. Further, the penalty amount was fixed on the ground that the company's operational revenue ranged from ₹100 crore to ₹500 crore..The Supreme Court noted that NEERI was a premier institute for environmental sciences and therefore, the NGT's findings of violations for over a decade were not tenable.It said the NGT's reasoning made for 'interesting reading', while pointing out that there is a vast difference between ₹100 crore and ₹500 crore."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 ... We are, therefore, inclined to quash and set aside the impugned judgments," the Court said while allowing the appeals filed by Benzo Chem..Senior Advocate Atmaram Nadkarni with advocates Vivek Jain, Zulfiqur Menon, Waseem Pangarkar, Nadiya Sarguroh, Swapnil Srivastava, Jayesh Srivastava, Allan David, and SS Rebello, briefed by a team from MZM Legal, appeared for Benzo Chem.Advocates Mukesh Verma, Pankaj Kumar Singh, Pawan Kumar Shukla, Vatsala Tripathi, Rubi Kumari, and Shashank Singh appeared for the Maharashtra Pollution Control Board..The NGT has invited the apex court's ire in recent times.In 2023, the Court had taken strong exception to the manner in which the tribunal was passing orders based on reports of committees and experts, without actually hearing the parties to the case.It reiterated the same in June that year and February this year.In January this year, the Supreme Court criticised the NGT for suggesting that trucks heading to an Inland Container Depot (ICD) at Delhi's Tughlakabad be diverted to ICDs outside the National Capital Region (NCR).In another case that month, it had criticised the tribunal for stalling the implementation of the draft Development Plan 2041 for Shimla..[Read Judgment]