The Supreme Court of India has recently criticized the National Green Tribunal (NGT) for imposing substantial fines on companies for alleged environmental violations without adhering to the principles of natural justice. In a notable case involving Benzo Chem Industrial Private Limited, the apex court underscored the necessity of due process and appropriate assessment methods when determining penalties.
Case Background
Benzo Chem Industrial Private Limited, a manufacturer of chemical intermediates, was fined ₹25 crore by the NGT for purported environmental violations. The penalty was calculated based on the company’s operational revenue, which the NGT estimated to be between ₹100 crore and ₹500 crore. This estimation was made without providing the company an opportunity to present its case, leading to allegations of a breach of natural justice.
Supreme Court’s Observations
A bench comprising Justices B.R. Gavai and K.V. Viswanathan expressed strong disapproval of the NGT’s approach. The court emphasized that determining penalties based solely on a company’s revenue, without establishing a direct link to the environmental damage caused, is legally unsound. The bench stated, “In any case, the generation of revenue would have no nexus with the amount of penalty to be ascertained for environmental damages.”
Furthermore, the Supreme Court highlighted the NGT’s failure to notify Benzo Chem before imposing the hefty fine. The court remarked, “The least that was expected from the NGT is to give a notice to the appellant before imposing such a heavy penalty.” This omission was deemed a significant violation of the principles of natural justice.
Reliance on Expert Reports
Benzo Chem’s defense referenced reports from the Maharashtra Pollution Control Board and the National Environmental Engineering Research Institute (NEERI), both of which found no non-compliance by the company. Despite these findings, the NGT concluded that the company had been violating environmental norms for over a decade. The Supreme Court found this contradiction troubling, especially given NEERI’s status as a premier environmental science institute.
Critique of NGT’s Methodology
The Supreme Court criticized the NGT’s method of estimating the company’s revenue, noting the significant disparity between ₹100 crore and ₹500 crore. The court pointed out that if the NGT had utilized publicly available information, it could have determined a more precise figure. The bench concluded that the NGT’s approach to imposing the penalty was “totally unknown to the principles of law.”
Pattern of Procedural Lapses
This case is not an isolated incident. The Supreme Court has previously reprimanded the NGT for similar procedural lapses. In February 2023, the apex court criticized the tribunal for imposing fines without seeking responses from the involved parties, labeling such actions as violations of natural justice.
Additionally, in January 2023, the Supreme Court criticized the NGT for suggesting the diversion of trucks to Inland Container Depots outside the National Capital Region without proper consultation, further highlighting the tribunal’s tendency to make unilateral decisions.
Implications for Environmental Governance
The Supreme Court’s recent judgment serves as a critical reminder of the importance of adhering to due process and the principles of natural justice in environmental governance. While the NGT plays a vital role in addressing environmental issues, its actions must align with legal standards to ensure fair and just outcomes.
This ruling underscores the necessity for regulatory bodies to base their decisions on concrete evidence and established legal principles, rather than arbitrary assessments. It also highlights the judiciary’s role in upholding these standards, ensuring that environmental protection efforts do not come at the expense of legal fairness.
As environmental concerns continue to rise, this judgment emphasizes the need for balanced and just approaches in enforcing environmental laws, ensuring that the rights of all stakeholders are respected.
