The Supreme Court stated that the revenue generated by the project proponent is not related to the penalties determined for environmental damages.
The Supreme Court noted that the revenue generated by the project proponent is unrelated to the penalty amount for environmental damages. The court annulled two orders from the NGT that imposed a penalty of Rs. 25 crores, expressing strong disapproval of the NGT’s method for determining the penalty, which it deemed inconsistent with legal principles. The Court upheld the appeal from Benzo Chem Industrial Private Limited, which contested the NGT’s decisions that held it responsible for supposed environmental harm. Justices B.R. Gavai and K.V. Viswanathan remarked that revenue generation has no connection to the penalty for environmental damages.
Senior Advocate Atmaram Nadkarni represented the Appellant, while Advocate Feroze Ahmad represented the Respondents. The appeals challenged the NGT’s Rs. 25 crores penalty for alleged environmental non-compliance and a second order that denied the Appellant’s review request. The NGT defended its ruling by claiming the Appellant had violated environmental standards since 2010, citing reports from the Maharashtra Pollution Control Board (MPCB) and the National Environmental Engineering Research Institute (NEERI). The Appellant contended that the NGT’s conclusions contradicted the findings of both the MPCB and NEERI, which indicated full compliance with environmental regulations. Additionally, the Appellant criticized the NGT’s approach to imposing the penalty, arguing that using the company’s revenue without proving a link to the alleged violations was unjustifiable.
The Supreme Court pointed out that the NGT used a specific method to calculate damages, relying on public information that indicated the Appellant’s revenue was between 100 Crores and 500 Crores. The Court stated, “Thus, a penalty of Rs.25 Crores seems appropriate given the revenue.” The Bench highlighted two key issues: the significant gap between 100 Crores and 500 Crores, and that if the NGT had used public data, it could have determined a precise figure. Additionally, the Court noted that revenue generation should not directly relate to the penalty for environmental harm. The Court also mentioned that since the NGT found the appellant guilty of violations, it should have issued a notice before imposing such a substantial penalty.
As a result, the Court decided, “We are inclined to annul the contested judgments and orders and approve these appeals. This is ordered.” The Court added that if anyone believes the appellant is violating environmental laws, they can approach the proper authority, which will address the matter while ensuring fairness. Thus, the Supreme Court granted the Appeal.
Cause Title: Benzo Chem Industrial Private Limited v. Arvind Manohar Mahajan & Ors.
Appearance:
Appellant: Senior Advocate Atmaram Nadkarni; AOR Vivek Jain; Advocates Zulfiqur Menon, Waseem Pangarkar, Nadiya Sarguroh, Swapnil Srivastava, Jayesh Srivastava, Allan David, and S.S. Rebello
Respondents: Advocates Feroze Ahmad, Mukesh Verma, Pankaj Kumar Singh, Pawan Kumar Shukla, Vatsala Tripathi, Rubi Kumari, Shyamali Gadre, G. Pal, and Gaurav Singh; AOR Rajiv Ranjan Dwivedi, Shashank Singh and Soumik Ghosal
