1. Determination of environmental compensation for illegal construction following court directions — Challenge to the unilateral nature of the compensation order. (Para 4 , 10 )
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2025 Supreme(SC) 429
SUPREME COURT OF INDIA
B.V. NAGARATHNA, PRASANNA B. VARALE, JJ.
Zon Hotels Pvt. Ltd. – Appellant
Versus
Goa Coastal Zone Management Authority & Ors. – Respondents
Civil Appeal No(S). 9328 of 2022
Decided on : 19-02-2025
Advocates Appeared:
For the Appellant : Mr. Shiven Desai, Adv., Mr. Avishkar Singhvi, Adv., Mr. Vivek Jain, AOR, Ms. Suchitra Kumbhat, Adv., Mr. Rajat Jain, Adv., Mr. Sadiq Noor, Adv.
For the Respondent: Mr. Surjendu Sankar Das, AOR Ms. Annie Mittal, Adv. Mr. Sanjay Parikh, Sr. Adv. Ms. Srishti Agnihotri, AOR Ms. Kritika, Adv. Mr. D.P.Singh, Adv. Ms. Tara Elizabeth Kurien, Adv.
For the Appellant : Mr. Shiven Desai, Adv., Mr. Avishkar Singhvi, Adv., Mr. Vivek Jain, AOR, Ms. Suchitra Kumbhat, Adv., Mr. Rajat Jain, Adv., Mr. Sadiq Noor, Adv.
For the Respondent: Mr. Surjendu Sankar Das, AOR Ms. Annie Mittal, Adv. Mr. Sanjay Parikh, Sr. Adv. Ms. Srishti Agnihotri, AOR Ms. Kritika, Adv. Mr. D.P.Singh, Adv. Ms. Tara Elizabeth Kurien, Adv.
The court emphasized the necessity of adhering to principles of natural justice, ruling that failure to provide a hearing before determining environmental compensation invalidated the original order.
Headnote:(A) Environmental Protection Act - Principles of Natural Justice - The appellant challenged the NGT's order for environmental compensation of Rs.2,04,19,560/- without being given a Show Cause Notice or hearing, claiming violation of natural justice principles. (Paras 5, 11, 12)
(B) Appeal - The NGT's failure to remand the matter for re-determination after acknowledging the lack of a hearing was erroneous. The court emphasized that the opportunity provided in an appeal differs from that in original proceedings. (Paras 11, 12)
Facts of the case:
The appellant contested the NGT's order regarding damages for illegal construction, asserting that no prior notice or hearing was provided before the compensation was determined.
Findings of Court:
The court found that the NGT should have remanded the matter for a proper hearing and re-determination of compensation.
Issues: The main issues were whether the appellant was afforded due process and the appropriateness of the NGT's decision to sustain the original order.
Ratio Decidendi: The court ruled that the lack of a hearing constituted a violation of natural justice, necessitating a remand for proper procedure.
Result: The appeal is allowed in-part and disposed of in the aforesaid terms.
Legal Category Hierarchy
Table of Contents
2. Whether failure to issue a show cause notice violates natural justice and whether an appellate hearing cures the lack of an original administrative hearing. (Para 5 , 6 , 7 , 8 )
3. Determining compensation without a show cause notice or hearing is unilateral and violates natural justice; appellate hearings cannot substitute original administrative determinations. (Para 11 , 12 )
4. An opportunity of being heard in an appeal is not equivalent to the quality of opportunity required during the original administrative determination of liabilities. (Para 12 )
5. Appeal allowed in-part — NGT order set aside — Original compensation order construed as show cause notice for re-determination after hearing the appellant. (Para 12 , 13 , 14 , 15 )
6. Does the failure to provide a show cause notice before determining environmental compensation violate the principles of natural justice?
Yes. Determining compensation unilaterally without issuing a show cause notice or granting an opportunity for a hearing is contrary to settled principles of natural justice. (Para 11 )
7. Can an appellate authority's hearing cure the lack of a hearing before the original administrative authority?
No. The opportunity provided by an appellate authority during an appeal is not of the same quality as the opportunity that an original administrative authority must grant when determining liabilities. (Para 12 )
8. What is the appropriate remedy when an administrative order is passed in violation of natural justice but the appellate body sustains it after a hearing?
The appellate authority should remand the matter to the original authority for re-determination of the liability after providing the aggrieved party an opportunity to be heard. (Para 11 , 12 )
JUDGMENT :
NAGARATHNA, J.
Admit.
2. Being aggrieved by the order dated 14.10.2022 passed by the National Green Tribunal, Western Zone Bench, Pune (“NGT” for the sake of convenience), in Appeal No.19/2022 (WZ), the appellant is before this Court.
3. We have heard learned counsel for the appellant and learned counsel for first respondent and learned counsel for respondent Nos.2 and 3 and we have perused the material on record.
4. The controversy in this appeal is in a very narrow compass. The grievance of the appellant is that pursuant to the direction issued by the High Court in PIL Writ Petition No.2530/2021 dated 19.04.2022, the first respondent herein sought to compute damages vis-a-vis the illegal construction put up by the appellant herein and estimated the damages resulting from the illegal construction put up by the appellant herein in monetary terms. The first respondent herein by order dated 09.05.2022 directed the appellant herein to pay a sum of Rs.2,04,19,560/- (Ruees Two Crores, four lakhs nineteen thousand and five hundred and sixty only) towards environmental compensation.
5. Learned counsel for the appellant submitted that prior to the determination of the environmental compensation directed to be paid by the appellant herein, there was no opportunity given to the appellant herein inasmuch neither a Show Cause Notice was issued to the appellant nor was an opportunity of hearing granted. The impugned order dated 09.05.2022 is a unilateral, one-sided order which is hit by the principles of natural justice.
6. Being aggrieved by the said order, the appellant herein preferred an appeal before the NGT, Western Zone. Although the NGT acknowledged the fact that the appellant was not heard in the matter, nevertheless it did not remand the matter to the first respondent-management authority for a re-determination of the environmental compensation afresh. Instead, the NGT simply sustained the said order on the premise that it (NGT) was giving an opportunity of being heard to the appellant herein. Learned counsel for the appellant submitted that an Appellate Authority hearing a lis in the form of an appeal is totally different from the original authority which would determine the environmental compensation which is in the nature of an exercise of administrative powers. Learned counsel submitted that the order dated 09.05.2022 which was passed by the first respondent-management authority was in total violation of the principles of natural justice. The NGT, therefore, ought to have remanded the matter to the Management Authority for re- determination of the environmental compensation that was liable to be paid by the appellant herein after giving an opportunity of being heard and filing objections to the said determination.
7. In the circumstances, learned counsel for the appellant submitted that the impugned order of the NGT as well as the order dated 09.05.2022 may be set aside and there may be a fresh compliance of the direction issued by the High Court dated 19.04.2022.
8. Per contra, learned counsel for the first respondent and learned counsel for third respondent supported the impugned order(s) and contended that there is no merit in the appeal; that the appellant herein could have approached the High Court in Writ Petition No.2530/2021 if it had any grievance with regard to order dated 09.05.2022; that it was the appellant which chose to file an appeal before the NGT and the NGT, after giving an opportunity of hearing to the appellant herein, has passed the impugned order; that there is no merit in this appeal and hence, the same may be dismissed.
9. We have considered the arguments advanced at the bar in light of the material on record and particularly in light of order dated 09.05.2022 passed by first respondent-Authority as well as the impugned order passed by the NGT.
10. We find that the High Court by order dated 19.04.2022 observed as under:
“3. In so far as prayer clause (c) is concerned, we direct the GCZMA as well as oth
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