NGT's Adjudicatory Role Cannot Be Outsourced; Must Follow Natural Justice & Procedure Under S.21, S.22 Water Act: Supreme Court - 2025-09-01

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Supreme Court Quashes ₹18 Crore NGT Penalty on Triveni Engineering, Citing Grave Procedural Lapses and Violation of Natural Justice

New Delhi: The Supreme Court, in a significant ruling on environmental jurisprudence, has set aside a ₹18 crore penalty imposed by the National Green Tribunal (NGT) on M/s. Triveni Engineering and Industries Ltd. The bench of Justices Manoj Misra and Ujjal Bhuyan held that the NGT's orders were "illegal and null and void," as they were passed in complete violation of statutory procedures under the Water Act, 1974, and the fundamental principles of natural justice.

The Court underscored that the NGT, despite being a specialized judicial body, cannot bypass mandatory legal procedures or outsource its adjudicatory functions to ad-hoc committees.

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Background of the Case

The case originated from a complaint filed before the NGT in March 2021, alleging that Triveni Engineering's sugar mill in Muzaffarnagar, Uttar Pradesh, was discharging untreated waste, leading to groundwater contamination. The NGT constituted a joint committee comprising the Central Pollution Control Board (CPCB), Uttar Pradesh Pollution Control Board (UPPCB), and the District Magistrate to inspect the unit.

Based on the committee's reports, the NGT concluded that the company had violated environmental norms, including illegal effluent disposal and diluting samples with fresh water. In its final order on September 16, 2022, the NGT imposed an "environmental compensation" of ₹18 crores, calculated at 2% of the company's annual turnover. Aggrieved by these orders, Triveni Engineering appealed to the Supreme Court.

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Arguments of the Parties

Appellant's Contentions (Triveni Engineering):

* Violation of Natural Justice: The company argued that it was never made a party to the NGT proceedings. Crucially, it was not given any notice or opportunity to be heard before adverse findings were made and the hefty penalty was imposed.

* Procedural Illegality: The joint committee failed to follow the mandatory sample collection procedure laid down in Sections 21 and 22 of the Water (Prevention and Control of Pollution) Act, 1974, which requires serving notice to the occupier and sealing samples in their presence.

* Factual and Scientific Errors: The appellant contended that the committee's reports were scientifically flawed and factually incorrect, and they were never given a chance to contest these findings before the NGT.

Respondents' Defence (State of UP & Ors.):

* The respondents supported the NGT's orders, arguing that the company was discharging untreated effluents, posing a health hazard to thousands of local residents.

* They claimed the joint committee's inspection was scientific and its reports were rightly accepted by the NGT.

* It was argued that the company was aware of the reports, as the NGT had directed the committee to share them, yet it failed to respond.

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Court's Analysis: Upholding Procedural Sanctity

The Supreme Court meticulously analyzed the procedural framework of environmental laws, emphasizing that fairness is non-negotiable. The judgment highlighted several critical lapses in the NGT's approach.

On Violation of Natural Justice: The Court noted that the entire proceeding was directed against the appellant, yet it was never formally impleaded. Justice Bhuyan, writing for the bench, observed that this was a "classic case where in the quest for doing justice, NGT has ended up doing just the reverse." The Court drew upon precedents like A.K. Kraipak Vs. Union of India to reiterate that the principles of natural justice are constantly expanding and are meant to prevent a miscarriage of justice.

"NGT did not deem it appropriate to get the appellant impleaded as a party respondent in O.A. No. 71/2021 though the entire proceedings were directed against it... there is clear violation of the provisions contained in Section 19 of the National Green Tribunal Act, 2010."

On Outsourcing Adjudicatory Functions: The bench firmly stated that the NGT cannot abdicate its judicial function to administrative expert committees. Citing Kantha Vibhag Yuva Koli Samaj Parivartan Trust Vs. State of Gujarat , the Court clarified the role of such committees.

"The role of an Expert Committee appointed by an adjudicatory forum is only to assist it in the exercise of adjudicatory functions... The decisions have to be that of NGT... Adjudication has to be by NGT."

The Court found that the NGT had simply accepted the committee's report without any independent adjudication or allowing the appellant to challenge it.

On Non-Compliance with Statutory Procedure: The judgment emphasized the mandatory nature of the procedure under Sections 21 and 22 of the Water Act for collecting and analyzing effluent samples. The committee's report was silent on whether this procedure was followed, rendering its findings inadmissible in a legal proceeding.

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Final Verdict and Its Implications

The Supreme Court allowed the appeals and set aside both impugned orders of the NGT dated February 15, 2022, and September 16, 2022. The Court decided against remanding the matter back to the NGT, stating that "the entire exercise has been vitiated" from the start due to non-compliance with statutory procedures.

However, the Court clarified that this judgment does not prevent the UPPCB from initiating fresh proceedings against the company, provided it follows the due process of law.

This landmark decision serves as a crucial check on the powers of environmental tribunals, reinforcing the principle that the pursuit of environmental justice cannot come at the cost of procedural fairness and the rule of law.