1. Environmental compensation imposed by NGT on a sugar mill for effluent violations based on a joint committee report without impleading the mill as a party. (Para 1 , 2 )
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2025 Supreme(SC) 1287
SUPREME COURT OF INDIA
MANOJ MISRA, UJJAL BHUYAN, JJ.
M/s. Triveni Engineering And Industries Ltd. – Appellant
VERSUS
State Of Uttar Pradesh & Ors. – Respondent
Civil Appeal Nos. 8119-8120 of 2022
Decided On : 01-09-2025
Advocates appeared:
For the Appellant(s) : Mr. Kavin Gulati, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ruchir Ranjan Rai, Adv. Mr. Ankur Saigal, Adv. Mr. Prateek Kumar, Adv. Mr. Arshit Anand, Adv. Ms. Vidisha Swarup, Adv. Mr. Naman Gupta, Adv. Mr. E. C. Agrawala, AOR
For the Respondent(s): Mr. Sudeep Kumar, AOR Mr. Pradeep Misra, AOR
For the Appellant(s) : Mr. Kavin Gulati, Sr. Adv. Mr. Mahesh Agarwal, Adv. Mr. Ruchir Ranjan Rai, Adv. Mr. Ankur Saigal, Adv. Mr. Prateek Kumar, Adv. Mr. Arshit Anand, Adv. Ms. Vidisha Swarup, Adv. Mr. Naman Gupta, Adv. Mr. E. C. Agrawala, AOR
For the Respondent(s): Mr. Sudeep Kumar, AOR Mr. Pradeep Misra, AOR
Principles of natural justice must be followed in administrative decisions, granting parties the right to contest allegations, particularly when sanctions affect them materially.
Headnote:(A) National Green Tribunal Act, 2010 - Section 22 - Water (Prevention and Control of Pollution) Act, 1974 - Sections 21 and 22 - Appeal against orders of NGT for compensation due to environmental violations involving untreated effluent discharge - NGT found the appellant engaged in illegal disposal of untreated effluent, requiring assessment of past violations and compensation; compensation of Rs. 18 crores imposed based on annual turnover without due process leading to challenges on grounds of natural justice. (Paras 2-34)
(B) Principles of Natural Justice - Violation of principles of natural justice due to non-inclusion of appellant as a party; failure to provide opportunity for hearing or contesting findings of joint committee; procedures outlined in Sections 21 and 22 must be adhered to prior to imposing penalties. (Paras 6, 19, 30)
(C) The NGT must conduct its adjudications while ensuring adherence to statutory procedures - bypassing established methods results in unlawful outcomes; judicial review necessitates transparency and fairness in adjudicatory processes. (Paras 30-34)
Legal Category Hierarchy
- administrative law
- environmental law
- practice and procedure
Table of Contents
2. Appellant alleges violation of natural justice and statutory sampling procedures under the Water Act; Respondent contends environmental urgency justifies the expert committee's findings. (Para 6 , 7 )
3. NGT failed to implead the affected party, ignored statutory sampling procedures under the Water Act, and abdicated its adjudicatory role to an administrative committee. (Para 19 , 24 , 27 , 28 , 30 , 31 )
4. Adjudicatory bodies must follow statutory procedures and principles of natural justice before passing orders entailing adverse civil consequences. (Para 21 , 22 , 24 , 25 , 26 , 30 , 31 )
5. Impugned NGT orders imposing environmental compensation are set aside and civil appeals are allowed. (Para 34 )
6. Is the National Green Tribunal bound by the principles of natural justice when passing adverse orders?
Yes. Under Section 19(1) of the NGT Act, while not bound by the Code of Civil Procedure, the Tribunal must be guided by natural justice, ensuring affected parties are heard before adverse orders are passed. (Para 19 , 24 , 30 )
7. What is the legal effect of failing to follow the sampling procedure prescribed under Sections 21 and 22 of the Water Act?
Analysis of sewage or trade effluent is inadmissible as evidence in legal proceedings unless the specific statutory procedures for notice, division, and sealing of samples are strictly complied with. (Para 19 , 30 , 33 )
8. Can a tribunal delegate its adjudicatory functions to an expert committee?
No. Expert committees assist tribunals by providing data and factual clarity, but they cannot substitute the tribunal's adjudicatory role. The tribunal must independently adjudicate and cannot outsource its judicial function. (Para 27 , 31 )
9. Can an adverse order be passed against a party not impleaded in the proceedings?
No. Passing an order with adverse civil consequences against a person without impleading them as a party or providing an opportunity to be heard violates the principle of audi alteram partem. (Para 6 , 19 , 24 , 28 , 30 )
JUDGMENT
UJJAL BHUYAN, J.
These two civil appeals filed under Section 22 of the National Green Tribunal Act, 2010 are directed against orders dated 15.02.2022 and 16.09.2022 passed by the National Green Tribunal, Principal Bench, New Delhi (‘NGT’ for short) in Original Application No. 71/2021 (Chandra Shekhar Vs. State of Uttar Pradesh).
2. By the order dated 15.02.2022, NGT held that the project proponent (appellant herein) had violated the environmental norms which included illegal disposal of untreated effluent, dilution at outlet with fresh water to conceal real status, absence of flow meter at boiler/mill house to avoid monitoring, absence of record of oil and grease stored and absence of Effluent Treatment Plant (ETP) logbook. Thereafter, NGT observed that the joint committee needed to assess the past violations and recover compensation in accordance with law having regard to the nature of the violation, period of violation, cost of remediation and turnover of the project proponent (appellant). The joint committee was directed to submit a supplementary report in this regard.
2.1. By the second order dated 16.09.2022, NGT considered the supplementary report filed by the joint committee on 10.08.2022 and held that compensation of Rs. 18 crores at the rate of 2 percent of annual turnover would be justified. It was directed that the amount may be deposited by the project proponent (appellant) with the District Magistrate, Muzaffarnagar, within one month to be utilized for restoration of the environment.
3. At the outset, a brief recital of facts is considered necessary.
4. Appellant i.e. M/s. Triveni Engineering and Industries Limited is a public limited company incorporated under the Companies Act, 1956. It is engaged in diverse business activities including manufacture of sugar. It is stated that appellant has seven sugar manufacturing units across the State of Uttar Pradesh.
4.1. In the year 1952, appellant under its earlier name, Ganga Sugar Corporation Limited, which was incorporated under the Companies Act, 1913, had acquired the sugar manufacturing unit at village Sheikhpura, Khatauli, Muzaffarnagar District in the State of Uttar Pradesh (sugar mill). It is stated that the sugar mill is a functional unit, having all the necessary permissions as required under the applicable statutes.
4.2. It appears from the record that in the month of March, 2021, respondent No. 2 filed a complaint before the NGT which was registered as Original Application No. 71/2021 (O.A. No. 71/2021) alleging that the sugar mill of the appellant was discharging untreated waste in a particular drain resulting in contamination of ground water in an area of about one and a half kilometer around the sugar mill having depth upto 50 metres.
4.3. By order dated 22.03.2021, NGT constituted a joint committee of Central Pollution Control Board (CPCB), Uttar Pradesh Pollution Control Board (UPPCB) and District Magistrate (DM), Muzaffarnagar. The joint committee was directed to conduct inspection and thereafter to file status report within two months.
4.4. It appears that the sugarcane crushing season for the year 2020-21 came to an end on 22.05.2021. Joint committee in its report dated 02.07.2021 stated that because of various reasons including conclusion of the sugarcane crushing season and the sugar mill remaining closed on account of the covid pandemic, inspection could not be carried out and prayed for further time to carry out fresh inspection.
4.5. Thereafter, regional office of UPPCB, Muzaffarnagar carried out inspection of the sugar mill and the area around it on 13.09.2021 and observed that no contamination was found in the ground water samples. However, it was observed that further investigation could be carried out when the industry become operational during the next crushing season.
4.6. O.A. No. 71/2021 was heard on 21.09.2021. NGT on perusal of the report declared that it was not satisfied with the stand of the State PCB. NGT was of the view that
