'Totally unknown to law': Supreme Court on NGT order on penalty based upon company's revenue

New Delhi: The Supreme Court has expressed its deep anguish over the methodology adopted by the National Green Tribunal, of considering overall revenue of a company, in imposing penalty upon it, without any report on non compliance of environmental norms, saying this is totally unknown to the principles of law.

A bench of Justices B R Gavai and K V Vishwanathan said the generation of revenue would have no nexus with the amount of penalty to be ascertained for environmental damages.

"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," the bench said.

In its November 27 order, the court set aside the NGT's order of August 29, 2022 imposing Rs 25 Cr penalty on appellant Benzo Chem Industrial Private Limited.

The appellant-company contended the NGT's order depicted total non application of mind as it recorded a findings of violations, though the

reports of the Maharashtra Pollution Control Board as

well as National Environmental Engineering Research Institute (NEERI) found that there are no non-compliances.

The tribunal adopted the methodology of imposing Rs 25 Cr penalty on the ground that the operative revenue of the appellant ranged from 100 Cr to 500 Cr.

"This is totally unknown to the canons of law," it said.

The bench also found the orders passed by the NGT depicted total violation of principles of natural justice and lack of due consideration.

The court also said the NEERI, which is a premier institution in environment also found that the appellant's unit was compliant with environment requirements and there was not a single non-compliance.

Thus, the findings of the NGT that the unit has been non compliant right from the year 2010 is totally untenable, the bench said.

Objecting to the methodology of imposing penalty, the bench said, "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 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."