1. Challenge to NGT directions regarding environment compensation under Section 5 of the Environment (Protection) Act, 1986, following closure orders and subsequent appeals. (Para 2 )
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2025 Supreme(SC) 1448
SUPREME COURT OF INDIA
ABHAY S.OKA AND UJJAL BHUYAN, JJ.
M/S Unicast alloy Pvt. Ltd. - Appellant
Versus
Disha - A Life School and P.K.D. College of Education and others — Respondent
Civil Appeal No. 7024 of 2021 with Civil Appeal No. 7066 of 2021
Decided on : 07-01-2025
The Court held that the Pollution Control Board must follow the principles of natural justice, including issuing a show-cause notice and providing a hearing, while considering subsequent legal developments before determining the liability for environmental compensation under Section 5 of the Environment (Protection) Act, 1986.
Headnote:(A) Environment (Protection) Act, 1986 - Section 5 - Appeals against closure order of Pollution Control Board - National Green Tribunal directed to consider subsequent events before passing an order on environmental compensation - Parties can seek remedies before appropriate authorities. (Paras 2, 3, 4, 6, 7)
(B) Legal principles of administrative procedure - Notices and hearings must precede the imposition of penalties, ensuring compliance with principles of natural justice, reaffirmed in the context of environmental regulation.
(C) Appeals against operational violations of pollution control measures - Findings indicate necessity for procedural compliance by regulatory bodies before imposing environmental liabilities.
(D) The court framed the issue as whether the Pollution Control Board's actions were lawful and complied with statutory requirements. (E) The court held that due process, including notice and a hearing, must be afforded by the Pollution Control Board before determining environmental compensation, emphasizing procedural fairness. (F) Appeals disposed of with directions for compliance with procedural norms and that liability for compensation remains open for determination by the Pollution Control Board. (G) Parties involved: Appellant - Unicast Alloy Pvt. Ltd.; Respondents - Disha - A Life School and P.K.D. College of Education and others; National Green Tribunal.
Legal Category Hierarchy
Table of Contents
2. Dispute over the imposition of environmental compensation and the necessity of considering subsequent orders from the Appellate Authority and NGT. (Para 2 , 3 , 4 )
3. Quantification of environmental compensation can only be passed after providing the party with a notice and an opportunity to be heard. (Para 5 )
4. Environmental compensation orders must be based on a fair hearing and a comprehensive review of all subsequent material events and legal orders. (Para 5 , 6 )
5. Appeals disposed of directing the Pollution Control Board to issue show cause notices and consider subsequent events before deciding on environmental compensation. (Para 7 )
6. What is the procedural requirement for the Pollution Control Board to impose environmental compensation?
The Pollution Control Board must issue a show cause notice and provide the affected party an opportunity to be heard before passing an order for the quantification or imposition of environmental compensation. (Para 5 , 7 )
7. How should the Pollution Control Board handle subsequent legal developments when deciding on environmental compensation?
The Board must consider all subsequent events, including orders passed by the Appellate Authority and the National Green Tribunal, while determining the liability and quantification of environmental compensation. (Para 6 , 7 )
ORDER :
1. Heard learned counsel appearing for the parties.
2. The challenge in these appeals is to order dated 30th September, 2021 passed by the National Green Tribunal (NGT). The operative part of the order reads thus:
"we feel that the application can be disposed of with the following directions:
(i) Since, the Pollution Control Board had already issued closure order and disconnection of electricity supply of respondents 4 and 5 units and they filed appeals before the Appellate Authority and since they are pending, there is nothing survives before this Tribunal and parties can sort out their remedies before the Appellate Authority, where appeals are pending.
(ii) As regard the imposition of environment compensation for violations, the Pollution Control Board is directed to initiate proceedings against respondents 4 and 5 for violations of conditions imposed on the basis of the guidelines given by the Central Pollution Control Board after giving necessary notice to the respondents 4 and 5 and after hearing them pass appropriate order in accordance with law under Section 5 of the Environment (Protection) Act, 1986.
(iii) The applicants are at liberty to challenge the order passed by the Appellate Authority, if it goes against them before the appropriate forum in accordance with law and that liberty is left open.
(iv) The liberty of the applicant to come before this Tribunal for future violations or pollution, if any, caused on account of the operation of the units of the respondents 4 and 5 is also left open.
(v) Pollution Control Board is directed to monitor the functioning of the units, if ultimately later the closure order is revoked, periodically and if there is any violation found, they are directed to take appropriate action against respondents 4 and 5 in accordance with law.
(vi) Respondents 4 and 5 are also directed to comply with the conditions, if any, imposed by the Appellate Authority or by the Tamil Nadu Pollution Control Board on revocation of the closure order ultimately later and avoid causing pollution to the neighbours and avoid complaints being raised by them on account of their activities of causing pollution in future.
(vii) Considering the circumstances, the parties are directed to bear their respective costs in the application.
(viii) The registry is directed to communicate this order to the Tamil Nadu Pollution Control Board for their information and compliance."
3. The operative part notes that the appeals preferred by the present appellants against the closure order and the order of disconnection of electricity were pending. Therefore, while issuing notice, by order dated 13th December, 2021, this Court stayed clause (ii) of the operative part of the impugned judgment with a direction to the Appellate Authority to decide the pending appeals against order of Pollution Control Board dated 27th July, 2021. It appears that the Appellate Authority by order dated 14th February, 2022 allowed the appeal preferred by the appellants.
4. Aggrieved by the order of the Appellate Authority dated 14th February, 2022, the first and the second respondents preferred a statutory appeal before the NGT. A copy of judgment dated 17th May, 2023 passed by the National Green Tribunal is placed on record. NGT confirmed the order of the Appellate Authority subject to certain conditions which were incorporated in paragraph 26 of the said judgment.
5. Admittedly, an order in terms of clause (ii) of the operative part of the impugned judgment has not been passed by the Pollution Control Board. The order of quantification/imposition of environment compensation could have been passed only after giving a notice to the appellants and after giving an opportunity of being heard.
6. Therefore, we need not keep the appeals pending. We can dispose of the appeals by directing the Pollution Control Board to consider all the subsequent events such as orders of the Appellate Authority and the NGT which are referred above while passing order in terms of
