In a sharp rebuke, the Supreme Court nullified a National Green Tribunal (NGT) order that imposed a ₹25 crore penalty on a company for environmental violations, criticizing the tribunal’s reliance on the company’s revenue as a basis for the fine.
The Court highlighted a fundamental disconnect between the company’s earnings and the methodology used to calculate penalties for environmental damage. It deemed this approach arbitrary and legally unsound.
A bench comprising Justice BR Gavai and Justice KV Viswanathan identified critical flaws in the NGT’s reasoning. The tribunal had loosely cited public domain data, estimating the company’s revenue between ₹100 crore and ₹500 crore, without determining a precise figure. Moreover, the company was penalized without prior notice—a breach of natural justice.
“Revenue generation has no connection with the quantum of penalty for environmental damage,” the Court remarked. “The methodology adopted is alien to established legal principles.”
The ruling also noted this was one of three NGT orders encountered that day which failed to adhere to principles of natural justice. On examination, the Supreme Court found no substantive violations by the appellant company, further discrediting the penalty imposed.
This case reinforces the judiciary’s stance that penalties for environmental infractions must align with established legal frameworks and uphold fairness.
