M/S Triveni Engineering And Industries ... vs The State Of Uttar Pradesh

REPORTABLE

IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NOS. 8119-8120 OF 2022

M/S. TRIVENI ENGINEERING AND INDUSTRIES LTD. APPELLANT(S) VERSUS

STATE OF UTTAR PRADESH & ORS. RESPONDENT(S)

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’ Signature Not Verified Digitally signed by Nirmala Negi for short) in Original Application No. 71/2021 (Chandra Date: 2025.09.01 17:03:10 IST Reason:

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

2 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.

3 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

4 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 there

was no justification for carrying out inspection when the

sugar mill was not functional due to off season. NGT,

therefore, directed the joint committee to conduct inspection

when the unit was functional and thereafter to furnish a

report to it on or before 15.12.2021. It was clarified that the

report should indicate status of compliance with the

5 standards as prior to the season, quality of treated effluence

and utilization as per protocol/agreement with the

users/farmers, further indicating that it should be mentioned

whether effluents were reaching any drain leading to

river/waterbody with direction to check the quality of ground

water as per parameters relevant to the industry in question,

particularly fluoride etc. Reference was made to an order

dated 01.09.2021 passed by the NGT in O.A. No. 539/2019

(Adil Ansari Vs. M/s. Dhampur Sugar Mills Limited) wherein it

was directed that ETPs must continue to run for maintenance

of bio-mass even during the off season.

4.7. Pursuant to the aforesaid order dated 21.09.2021,

the joint committee conducted inspection on 08.12.2021 and

submitted report dated 11.01.2022. After extensively

referring to the observations, conclusions and

recommendations of the joint committee, NGT passed the first

impugned order dated 15.02.2022 observing that the report

showed violation of the environmental norms by the project

proponent (appellant), such as, illegal disposal of untreated

6 effluents etc. while stating that such violation was required to

be remedied in terms of the recommendations made in the

report. For the past violations, the joint committee was

directed to assess the compensation in accordance with law,

having regard to the nature of violation, period of violation,

cost of remediation and turn over of the project proponent.

Joint committee was further directed to submit a

supplementary report with copy to the project proponent

(appellant) for its response.

4.8. Pursuant to the aforesaid directions, supplementary

report was filed by the joint committee on 10.08.2022

whereafter the matter was taken up for hearing on 16.09.2022.

NGT recorded that no response was filed by the project

proponent (appellant). NGT referred to the report which

mentioned that compensation amounts to Rs. 34,20,000.00 for

114 days of violation at the rate of Rs. 30,000.00 per day which

works out to Rs. 18 crores at the rate of 2 percent of the annual

turnover of Rs. 900 crores. After hearing the learned counsel

for the UPPCB, NGT was of the view that having regard to the

7 established illegal discharge of untreated effluents, dilution at

the outlet to conceal the real status, absence of monitoring,

absence of record of oil and grease stored and ETP logbook,

compensation of Rs. 18 crores at the rate of 2 percent of

annual turnover would be justified. It was ordered vide the

second impugned order dated 16.09.2022 that the

compensation recovered may be utilized for restoration of the

environment. Project proponent (appellant) was directed to

deposit the aforesaid amount with the District Magistrate,

Muzaffarnagar within one month. The compensation amount

was directed to be utilized within six months in terms of the

action plan to be prepared by the joint committee, clarifying

that UPPCB would be the nodal agency for coordination and

compliance.

5. Aggrieved by the aforesaid orders dated 15.02.2022

and 16.09.2022, appellant has preferred the related appeals.

By order dated 02.11.2022, permission to file appeal was

granted and delay was condoned. Thereafter, notice was issued.

This Court also passed an interim order staying the operation

8 of the impugned orders dated 15.02.2022 and 16.09.2022 so

far as imposing compensation on the appellant.

6. Learned senior counsel for the appellant submits

that the impugned orders dated 15.02.2022 and 16.09.2022

are non est in the eye of law in as much as those orders were

passed by the NGT in complete violation of the principles of

natural justice. Though the entire allegations in O.A. No.

71/2021 were directed against the appellant and though the

impugned orders have adversely affected the appellant yet

appellant was not made a party to the proceedings in O.A. No.

71/2021. NGT failed to appreciate that the appellant was a

necessary party and without issuing notice and giving

opportunity of hearing to the appellant, no adverse order

against the appellant such as the ones dated 15.02.2022 and

16.09.2022 could have been passed. That being the position,

not only the impugned orders but also the entire proceedings

in O.A. No. 71/2021 being in absolute violation of the

principle of audi alteram partem are liable to be set aside and

quashed on this ground alone.

9 6.1. Learned senior counsel asserts that no opportunity

of hearing, not to speak of any fair opportunity of hearing,

was afforded to the appellant before rendering the findings

vide the impugned orders dated 15.02.2022 and 16.09.2022.

6.2. Adverting to the reports of the joint committee

dated 11.01.2022 and 10.08.2022, learned senior counsel

submits that findings recorded in the reports are scientifically

not possible. Those are materially different from the readings

shown by the data retrieved and recorded by the inspection

team during the inspection on 08.12.2021. The joint

committee relied upon the reports prepared by third party

laboratories which were based on erroneous data. As a result,

there are glaring contradictions in the above reports.

6.3. Learned senior counsel also questioned the

methodologies adopted by the joint committee in carrying out

the inspection and thereafter in submitting the reports.

According to him, NGT and the joint committee gave a

complete go-bye to the procedure laid down under Sections

21 and 22 of the Water (Prevention and Control of Pollution)

10 Act, 1974. That apart, the reports of the joint committee

suffered from factual mistakes in as much as appellant has

been maintaining ETP logbook at all times which were

provided to the joint committee officials when they had visited

the sugar mill for inspection. Likewise, boiler ash records

were also maintained. Had an opportunity of hearing being

given to the appellant, it could have explained its position qua

the joint committee reports. NGT accepted the erroneous

reports of the joint committee without subjecting the same to

further scrutiny by permitting the appellant to have its say in

the matter.

6.4. Learned senior counsel also referred to the

provisions of Section 19(1) of the National Green Tribunal Act,

2010 which states that though the NGT shall not be bound

by the procedure laid down by the Code of Civil Procedure,

1908, it shall be guided by the principles of natural justice.

There is clear infraction of Section 19(1) of the National Green

Tribunal Act, 2010 in the present case which has vitiated the

impugned orders.

11 6.5. Summing up his arguments, learned senior

counsel submitted that the impugned orders are wholly

untenable in law as well as on facts and those are as such

liable to be set aside.

7. Learned senior counsel for the respondents on the

other hand has supported the impugned orders passed by the

NGT. It is submitted that without treatment of the effluent,

water was being discharged from the sugar mill of the

appellant; the same was being released into the drain which

has contaminated the ground water of the area in and around

the sugar mill where about 10 to 15 thousand people reside.

The entire population is thus exposed to the polluted water

and resultant health hazards.

7.1. Learned senior counsel submits that NGT took

cognizance of this alarming situation and constituted the

joint committee to carry out necessary inspection. Joint

committee carried out inspection in a scientific manner and

thereafter submitted reports to the NGT. The reports being

prepared by a committee of experts was rightly accepted by

12 the NGT. Based on the observations and conclusions reached

by the joint committee, NGT passed the impugned orders

which calls for no interference.

7.2. Learned senior counsel submits that principles of

natural justice cannot be applied as a straight jacket formula.

NGT was careful enough to direct the joint committee to

furnish copies of its reports to the project proponent

(appellant). Appellant was, therefore, very much aware of the

contents of the two reports, yet it did not contest the same

before the NGT. That being the position, the contentions

advanced on behalf of the appellant are without any

substance.

7.3. He finally submits that the civil appeals being

devoid of merit are, therefore, liable to be dismissed.

8. Submissions made by learned counsel for the

parties have received the due consideration of the Court.

9. At the outset, it would be apposite to refer to some

of the relevant statutory provisions.

13

10. The Water (Prevention and Control of Pollution)

Act, 1974 (briefly ‘the Water Act’ hereinafter) is an act to

provide for the prevention and control of water pollution and

the maintaining or restoring of wholesomeness of water, for

the establishment with a view to carrying out the purposes

aforesaid, of pollution control boards for the prevention and

control of water pollution, for conferring on and assigning to

such boards, powers and functions relating thereto and for

matters connected therewith. Section 2 is the definition

clause. Section 2(dd) defines ‘outlet’ to include any conduit,

pipe or channel, open or closed, carrying sewage or trade

effluent or any other holding arrangement which causes, or is

likely to cause, pollution.

10.1. The expression ‘pollution’ is also defined. As per

Section 2(e), ‘pollution’ means contamination of water. Section

2(e) reads thus:

“pollution” means such contamination of water or such alteration of the physical, chemical or biological properties of water or such discharge of any sewage or trade effluent or of any other liquid, gaseous or solid substance into water (whether directly or indirectly) as

14 may, or is likely to, create a nuisance or render such water harmful or injurious to public health or safety, or to domestic, commercial, industrial, agricultural or other legitimate uses, or to the life and health of animals or plants or of aquatic organisms.

10.2. ‘Sewage effluent’ has been defined in Section 2(g)

and means effluent from any sewerage system or sewage

disposal works and includes sullage from open drains.

Section 2(gg) defines ‘sewer’ to mean any conduit pipe or

channel, open or closed, carrying sewage or trade effluent.

10.3. ‘Stream’ has been defined in Section 2(j) and as per

the said definition, stream includes:

(i) river; (ii) water course (whether flowing or for the time being dry);

(iii) inland water (whether natural or artificial);

(iv) sub-terranean waters; (v) sea or tidal waters to such extent or, as the case may be, to such point as the State

Government may, by notification in the Official Gazette, specify in this behalf.

15 10.4. ‘Trade effluent’ has been defined in Section 2(k) in

the following manner:

“trade effluent” includes any liquid, gaseous or solid substance which is discharged from any premises used for carrying on any industry, operation or process or treatment and disposal system, other than domestic sewage.

10.5. Section 21 of the Water Act is included in Chapter

V which deals with prevention and control of water pollution.

Sub-section (1) of Section 21 empowers the State Pollution

Control Board or any officer authorized by it to take samples

of water from any stream or well or samples of any sewage or

trade effluent which is passing from any plant or vessel or

from or over any place into such stream or well for the

purposes of analysis. Sub-section (2) however clarifies that

the result of any analysis of a sample of any sewage or trade

effluent taken under sub-section (1) shall not be admissible

as an evidence in any legal proceedings unless the provisions

of sub-sections (3), (4) and (5) are complied with. Sub-sections

(1) and (2) of Section 21 are as follows:

16

21. Power to take samples of effluents and procedure to be followed in connection therewith. — (1) A State Board or any officer empowered by it in this behalf shall have power to take for the purpose of analysis samples of water from any stream or well or samples of any sewage or trade effluent which is passing from any plant or vessel or from or over any place into any such stream or well.

(2) The result of any analysis of a sample of any sewage or trade effluent taken under sub-section (1) shall not be admissible in evidence in any legal proceeding unless the provisions of sub-sections (3), (4) and (5) are complied with.

10.6. As noticed above, analysis of any sample of any

sewage or trade effluent taken under sub-section (1) would

not be admissible as a piece of evidence in any legal

proceedings unless the procedure contemplated under sub-

sections (3), (4) and (5) are complied with. Let us therefore

take note of the provisions contained in sub- sections (3), (4)

and (5) of Section 21 which are extracted as under:

* * * * * (3) Subject to the provisions of sub-sections (4) and (5), when a sample (composite or otherwise as may be warranted by the process used) of any sewage or

17 trade effluent is taken for analysis under sub-section (1), the person taking the sample shall—

(a) serve on the person in charge of, or having control over, the plant or vessel or in occupation of the place (which person is hereinafter referred to as the occupier) or any agent of such occupier, a notice, then and there in such form as may be prescribed of his intention to have it so analysed;

(b) in the presence of the occupier or his agent, divide the sample into two parts;

(c) cause each part to be placed in a container which shall be marked and sealed and shall also be signed both by the persons taking the sample and the occupier or his agent;

(d) send one container forthwith,—

(i) in a case where such sample is taken from any area situated in a Union Territory, to the laboratory established or recognised by the Central Board under Section 16; and

(ii) in any other case, to the laboratory established or recognised by the State Board under Section 17;

(e) on the request of the occupier or his agent, send the second container,—

(i) in a case where such sample is taken from any area situated in a Union Territory, to the laboratory established or specified under sub-section (1) of Section 51; and

18

(ii) in any other case, to the laboratory established or specified under sub-section (1) of Section 52.

(4) When a sample of any sewage or trade effluent is taken for analysis under sub-section (1) and the person taking the sample serves on the occupier or his agent, a notice under clause (a) of sub-section (3) and the occupier or his agent wilfully absents himself, then,—

(a) the sample so taken shall be placed in a container which shall be marked and sealed and shall also be signed by the person taking the sample and the same shall be sent forthwith by such person for analysis to the laboratory referred to in sub-clause (i) or sub-clause

(ii), as the case may be, of clause (e) of sub-section (3) and such person shall inform the Government analyst appointed under sub-section (1) or sub-section (2), as the case may be, of Section 53, in writing about the wilful absence of the occupier or his agent; and

(b) the cost incurred in getting such sample analysed shall be payable by the occupier or his agent and in case of default of such payment, the same shall be recoverable from the occupier or his agent, as the case may be, as an arrear of land revenue or of public demand:

Provided that no such recovery shall be made unless the occupier or, as the case may be, his agent has been given a reasonable opportunity of being heard in the matter.

19 (5) When a sample of any sewage or trade effluent is taken for analysis under sub-section (1) and the person taking the sample serves on the occupier or his agent a notice under clause (a) of sub-section (3) and the occupier or his agent who is present at the time of taking the sample does not make a request for dividing the sample into two parts as provided in clause (b) of sub-section (3), then, the sample so taken shall be placed in a container which shall be marked and sealed and shall also be signed by the person taking the sample and the same shall be sent forthwith by such person for analysis to the laboratory referred to in sub- clause (i) or sub-clause (ii), as the case may be, of clause

(d) of sub-section (3).

10.7. As can be seen from the above, the person who is

taking the sample is required to serve on the person in charge

of or having control over the plant or vessel etc. a notice of his

intention to have the sample analyzed; take and divide the

sample into two parts in the presence of the occupier or his

agent. One container after being sealed and signed by both

the persons taking the sample and the occupier or his agent

is taken to the laboratory established or recognized by the

pollution control board (whether central or state) and send

the other container in the same manner to the laboratory

20 established under Section 51(1) in case of a union territory

and Section 52(1) in any other case. In case the occupier or

his agent willfully absents himself from the aforesaid process,

then the person taking the sample shall inform the

government analyst in writing about the willful absence of the

occupier or his agent.

10.8. Section 22 of the Water Act is concerned with

reports of the result of analysis on samples taken under

Section 21. Section 22 reads thus:

22. Reports of the result of analysis on samples taken under section 21.—(1) Where a sample of any sewage or trade effluent has been sent for analysis to the laboratory established or recognised by the Central Board or, as the case may be, the State Board, the concerned Board analyst appointed under sub-section (3) of Section 53 shall analyse the sample and submit a report in the prescribed form of the result of such analysis in triplicate to the Central Board or the State Board, as the case may be.

(2) On receipt of the report under sub-section (1), one copy of the report shall be sent by the Central Board or the State Board, as the case may be, to the occupier or his agent referred to in Section 21, another copy shall

21 be preserved for production before the court in case any legal proceedings are taken against him and the other copy shall be kept by the concerned Board.

(3) Where a sample has been sent for analysis under clause (e) of sub-section (3) or sub-section (4) of Section 21, to any laboratory mentioned therein, the Government analyst referred to in that sub-section shall analyse the sample and submit a report in the prescribed form of the result of the analysis in triplicate to the Central Board or, as the case may be, the State Board which shall comply with the provisions of sub- section (2).

(4) If there is any inconsistency or discrepancy between, or variation in the results of, the analysis carried out by the laboratory established or recognised by the Central Board or the State Board, as the case may be, and that of the laboratory established or specified under Section 51 or Section 52, as the case may be, the report of the latter shall prevail.

(5) Any cost incurred in getting any sample analysed at the request of the occupier or his agent shall be payable by such occupier or his agent and in case of default the same shall be recoverable from him as arrears of land revenue or of public demand.

10.9. As is evident from the above, after a sample of any

sewage or trade effluent is sent to the concerned laboratory,

22 the competent analyst shall analyse the samples and submit

a report in the prescribed form of the result of such analysis

to the pollution control board. A copy of such report shall also

be forwarded to the occupier or his agent.

10.10. Section 24 prohibits release or disposal of polluting

matter into any stream or well or sewer or on land. Sub-

section (1) of Section 24 is relevant and reads as under:

24. Prohibition on use of stream or well for disposal of polluting matter, etc.—(1) Subject to the provisions of this section,—

(a) no person shall knowingly cause or permit any poisonous, noxious or polluting matter determined in accordance with such standards as may be laid down by the State Board to enter (whether directly or indirectly) into any stream or well or sewer or on land;

or

(b) no person shall knowingly cause or permit to enter into any stream any other matter which may tend, either directly or in combination with similar matters, to impede the proper flow of the water of the stream in a manner leading or likely to lead to a substantial aggravation of pollution due to other causes or of its consequences.

23 10.11. As per Section 43 of the Water Act, whoever

contravenes the provisions of Section 24 shall be punishale

with imprisonment for a term which shall not be less than one

year and six months but which may extend to six years and

with fine.

11. We now come to the Environment (Protection) Act,

1986 (briefly ‘the Environment Act’ hereinafter). It is an act to

provide for the protection and improvement of environment

and for matters connected therewith. Section 2(a) defines

‘environment’ in the following manner:

“environment” includes water, air and land and the inter-relationship which exists among and between water, air and land, and human beings, other living creatures, plants, micro-organism and property.

11.1. ‘Environmental pollutant’ has been defined in

Section 2(b) to mean any solid, liquid or gaseous substance

present in such concentration as may be, or tend to be,

injurious to environment. ‘Environmental pollution’ is defined

under Section 2(c) and means the presence in the

environment of any environmental pollutant. Section 2(f) 24 defines ‘occupier’ in relation to any factory or premises, to

mean a person who has control over the affairs of the factory

or the premises and includes, in relation to any substance,

the person in possession of the substance.

11.2. Sections 7, 8, 14A, 15 and 15A are included in

Chapter III which deals with prevention, control and

abatement of environmental pollution. Section 7 says that no

person carrying on any industry, operation or process shall

discharge or emit or permit to be discharged or emitted any

environmental pollutant in excess of such standards as may

be prescribed. Similarly, Section 8 says that no person shall

handle or cause to be handled any hazardous substance

except in accordance with such procedure and after

complying with such safeguards as may be prescribed.

11.3. Section 14A has been introduced by way of an

amendment in the year 2023 with effect from 01.04.2024. It

provides for penalty in the event of contravention of Sections

7 and 8. Section 14A is extracted hereunder:

25 14A. Penalty for contravention of section 7 or section 8.—(1) If any person, contravenes provisions of Section 7 or Section 8 or the rules made thereunder, he shall be liable to penalty in respect of each such contravention, which shall not be less than one lakh rupees but which may extend to fifteen lakh rupees.

(2) Where any person continues contravention under sub-section (1), he shall be liable to additional penalty of fifty thousand rupees for every day during which such contravention continues.

11.4. Be it stated that Section 15 was also introduced in

the Environment Act by way of the 2023 amendment with

effect from 01.04.2024. Section 15 deals with penalty for

contravention of the provisions of the Environment Act, rules,

orders and directions. Section 15 reads thus:

15. Penalty for contravention of provisions of Act, rules, orders and directions.—(1) Where any person contravenes or does not comply with any of the provisions of this Act or the rules made or orders or directions issued thereunder for which no penalty is provided, he shall be liable to penalty in respect of each such contravention which shall not be less than ten thousand rupees but which may extend to fifteen lakh rupees.

26 (2) Where any person continues contravention under sub-section (1), he shall be liable to additional penalty of ten thousand rupees for every day during which such contravention continues.

11.5. Similarly, Section 15A provides for penalty for

contravention by companies. Section 15A is as follows:

15A. Penalty for contravention by companies.—(1) Where any company contravenes any of the provisions of this Act, the company shall be liable to penalty for each such contravention which shall not be less than one lakh rupees but which may extend to fifteen lakh rupees.

(2) Where any company continues contravention under sub-section (1), the company shall be liable to additional penalty of one lakh rupees for every day during which such contravention continues.

12. To provide for the establishment of a National

Green Tribunal for the effective and expeditious disposal of

cases relating to environmental protection and conservation

of forests and other natural resources including enforcement

of any legal right relating to environment and giving relief and

compensation for damages to person and property and for

matters connected therewith or incidental thereto, the

27 National Green Tribunal Act, 2010 has been enacted. Section

2(1)(c) defines the word ‘environment’. It says ‘environment’

includes water, air and land and the inter-relationship which

exists among and between water, air and land and human

beings, other living creatures, plants, micro-organism and

property.

12.1. Section 2(1)(m) defines ‘substantial question

relating to environment’ and is as follows:

2(m) “substantial question relating to environment” shall include an instance where,—

(i) there is a direct violation of a specific statutory environmental obligation by a person by which,— (A) the community at large other than an individual or group of individuals is affected or likely to be affected by the environmental consequences; or (B) the gravity of damage to the environment or property is substantial; or (C) the damage to public health is broadly measurable;

(ii) the environmental consequences relate to a specific activity or a point source of pollution.

28 12.2. As per Section 14, National Green Tribunal (NGT)

has the jurisdiction over all civil cases where a substantial

question relating to environment (including enforcement of

any legal right relating to environment) is involved.

12.3. Section 15 deals with the relief, compensation and

restitution that NGT may provide. Sub-section (1) of Section

15 reads as under:

15. Relief, compensation and restitution.—(1) The Tribunal may, by an order, provide,—

(a) relief and compensation to the victims of pollution and other environmental damage arising under the enactments specified in the Schedule I (including accident occurring while handling any hazardous substance);

(b) for restitution of property damaged;

(c) for restitution of the environment for such area or areas, as the Tribunal may think fit.

12.4. Section 17 deals with liability to pay relief or

compensation in certain cases. As per sub-section (1), where

death of, or injury to, any person (other than a workman) or

damage to any property or environment has resulted from an

accident or the adverse impact of an activity or operation or

29 process under any enactment specified in Schedule I, the

person responsible shall be liable to pay such relief or

compensation for such death, injury or damage. Sub-section

(2) says that if the death, injury or damage cannot be

attributed to any single activity or operation or process but is

the combined or resultant effect of several such activities,

operations and processes, NGT may apportion the liability for

relief compensation amongst those responsible for such

activities, operations and processes on an equitable basis. In

case of an accident, NGT shall apply the principle of no fault.

12.5. We now come to Section 19 which deals with the

procedure and powers of NGT. Sub-section (1) says that NGT

shall not be bound by the procedure laid down by the Code of

Civil Procedure, 1908 but shall be guided by the principles of

natural justice. For the purposes of discharging its functions,

NGT shall have the same powers as are vested in a civil court

under the Code of Civil Procedure, 1908 while trying a suit in

respect of the matters mentioned in sub-section (4) and as per

Clause (i), it has the mandate to pass an interim order

30 (including granting an injunction or stay) after providing the

parties concerned an opportunity to be heard on any

application made or appeal filed under the said Act. Sub-

section (5) makes it abundantly clear that all proceedings

before NGT shall be deemed to be judicial proceedings within

the meaning of Sections 193, 219 and 228 for the purposes

of Section 196 of the Indian Penal Code, 1860 and the NGT

shall be deemed to be a civil court for the purposes of Section

195 and Chapter XXVI of the Code of Criminal Procedure,

1973.

13. Having adverted to the relevant statutory provisions,

let us examine as to how the NGT proceeded in this matter. We

have already noticed that a joint committee was constituted by

NGT comprising of CPCB, UPPCB and District Magistrate,

Muzaffarnagar to conduct inspection of the sugar mill of the

appellant when it was functional and thereafter to file status

report with regard to handling of the effluents. Pursuant

thereto, inspection was carried out on 08.12.2021 whereafter

report was submitted on 11.01.2022. General observations of

31 the joint committee as extracted in the impugned order dated

15.02.2022 are as follows:

3.0 OBSERVATIONS

1. The unit M/s Triveni Engineering and Industries Limited, Sugar Unit, Village Sheikhpura, Khatauli, Dist.- Muzaffarnagar is engaged in production of refined sugar by Defco melt Phosphatation followed by Ion Exchange Process (IER) with consented capacity of 16000 TCD.

2. The unit has started its crushing season 2021-22 on 07th November, 2021 and the unit was operational on the date of visit i.e. 08th December 2021.

3. As informed by the unit ETP was started on 27/09/2021 for stabilization purpose in compliance to notified standards in MoEF&CC Notification G.S.R. 35(E) dated 14th January, 2016

4. The unit has valid Consent to Operate under section 21/22 of the Air (Prevention & Control of Pollution) Act, 1981 (as amended) for 65 TPH boiler, which is valid up to 31.12.2023 and for two boilers of 120 TPH, which is valid up to 31.12.2024.

5. The unit has valid Consent to Operate under section 25/26 of Water (Prevention & Control of Pollution) Act, 1974 (as amended) for discharge of effluent, which is valid up to 31.12.2023.

6. The unit has valid Authorization issued under the provisions of Hazardous and Other Wastes (Management and Trans-Boundary Movement) Rules, 2016 for storage and

32 disposal of hazardous wastes valid up to 13.01.2023.

7. As per Daily Manufacturing Reports (DMRs) provided by the unit, the average actual crush rate (TCD) is 11975.56 TCD (for duration of 20th November 07th December, 2021), against the consented capacity of 16000 TCD.

8. The unit is an integrated backend refinery sugar unit with 45 MW cogeneration power plant for in-house activity in sugar manufacturing process and the unit has valid Consent to Operate under section 25/26 of Water (Prevention & Control of Pollution) Act, 1974 (as amended) for discharge of effluent, which is valid up to 31.12.2024.

9. Being a Sugar Refinery SO2 gas is not used in sugar manufacturing process, hence provision of separate Sulphur Recovery System (SRS) is not required.

10. The unit has installed Ion Exchange Resin Technology for decoloring of sugar syrups. The Ion Exchange resin gets saturated/ exhausted after repeated usage and has to be regenerated. The unit re-

generates exhausted resin using caustic brine solutions.

11. The unit has submitted the details about the Brine recovery system, which is as follows:

Overall Operating Parameters

Feed capacity 7500 LPH Operating hr 20 hr Overall permeate 6775 LPH Final Reject 725 LPH Overall Recovery 90 % ± 2%

33

12. The unit has 03 boilers with capacity of 120 TPH (02 nos.) for co-gen and one boiler with capacity of 65 TPH for sugar manufacturing process with valid consent. 65 TPH boiler has stack height of 40m from ground level and two boilers of 120 TPH has stack height of 74 meter from ground level.

13. The unit has 02 DG sets having capacity of 1010 KVA each with acoustic enclosure.

14. As informed, the unit transfers used oil to third party (Ramky Enviro Engineers Ltd.) for its disposal on quarterly basis. The unit has provided membership certificate (UPWMP – KNP – HzW – CHW – TSDF - 2174) with Ramky Group, valid up to 23.02.2022.

15. The unit has Permitted Quantity (kg/day) of 10.0 kg/day of Used Oil under Schedule I (Category 5.1) and Wastes or residues containing oil under Schedule I (Category 5.2) of Hazardous and Other Wastes (Management and Trans-

Boundary Movement) Rules, 2016 as per consent issued by UPPCB. The unit has not provided the details of quantity provided to Ramky Enviro Engineers Ltd.

16. The unit has not installed flow meter at mill house and boiling house to quantify the effluent generation separately. The effluent generated from the mill house and boiling house is being collected in a collection tank and further it goes to ETP inlet by gravity for further treatment.

17. The unit has setup environmental

34 laboratory; however, the unit has not maintained the ETP log book for daily analysis of sugar effluent parameter.

18. As informed by the unit representative, the boiler ash is used to fill low laying area, however, the unit has not provided record of generated boiler ash.

19. It was observed that the unit has not maintained the record of Press mud generation, however, it was informed that press mud was provided to local farmers as organic manure.

20. The unit has two underground reservoirs (UGR) for hot water and cold- water recirculation system having capacities of 300 m3 and 400 m3 each.

14. The joint committee also observed that there were

two ponds filled with waste water at the backside of the sugar

mill. It is stated that the inspecting team collected the samples

from the ponds for physio-chemical analysis. Thereafter, the

observations of the joint committee alongwith the analysis

results were extracted by the NGT in the impugned order dated

15.02.2022 which reads as follows:

21. The Joint Team has observed two ponding (Pond 1- large in size and Pond 2- small in size) filled with waste water at the back side of the press mud storage area. The team has collected the sample from pond for

35 physico-chemical analysis. The analysis results of the collected samples are mentioned as below:

Table-1: Analysis results of Ponding behind press mud storage area

Sample pH COD BOD TSS TDS Cl- Col SO NO3 NO2 PO4 Analysis or 42- - - -

N N P Pond-1 5.8 750 420 43 592 190 65 39 6.89 0. 2.11 (Large) 04 Pond-2 5.1 1267 587 94 472 260 57 419 7.69 BDL 2.70 (Small)

22. Analysis result of sample collected from pond-1 shows acidic pH-5.8, Color-65, high BOD-420 mg/l and COD- 750 mg/l, which indicate the characteristics of untreated effluent.

23. Analysis result of sample collected from pond-2 shows acidic pH-5.1, Color-57, high BOD-587 mg/l and COD-1267 mg/l, which reflect the characteristics of Refined Sugar effluent (pH-5.5- 6.5, Color- Light brown, BOD- 600-1000 mg/l, COD- 1500-2500 mg/l).

15. The joint committee also collected water samples

from the sugar mill drain. The findings of the joint committee

qua the samples collected from the sugar mill drain reads as

under:

24. The team has also collected water samples from Sugar mill drain (name of the drain is Sugar mill drain), river Kali East i.e.

36 upstream and downstream of the Sugar mill drain & Canal near sugar mill (Lat-

29.269901, Long-77.743243). The analysis results are mentioned as below:

Table-2: Analysis results of Sugar mill Drain, River Kali East i.e. upstream and downstream of the Sugar mill drain & Canal near sugar mill

River Kali Sugar River Kali Canal near Sample East u/s Mill East d/s Sugar mill Analysis drain Sugar Mill Sugar Mill (29.269901 drain drain 77.743243) pH 6.5 6.8 6.6 7.9 COD 198 402 529 7.0 (mg/l) BOD 68 98 166 -

(mg/l) TSS (mg/l) 79 567 901 33 TDS (mg/l) 196 120 328 122 Cl- (mg/l) 47 64 66 46 Color 30 46 43 BDL SO42- 451 57 52 44 (mg/l) NO3-N 1.95 2.62 1.87 1.3 (mg/l) NO2-N BDL BDL BDL -

(mg/l) PO4-P 0.64 0.75 0.73 0.07 (mg/l) Conductivi - - - 216 ty (µmho/cm) Total hardness - - - 303 as CaCO3 (mg/l) Total Alkalinity - - - 322 as CaCO3 (mg/l) Fluoride - - - 0.3 (mg/l)

37

25. Analysis result of sample collected from River Kali East u/s Sugar Mill drain shows pH- 6.5, COD- 198 mg/l, BOD-68 mg/l, TSS-79 mg/l, TDS- 196 mg/l, Chloride-47 mg/l, SO42--451 mg/l, NO3-N-1.96 mg/l, NO2-N-BDL, PO4-P-0.64 mg/l.

26. Analysis result of sample collected from River Kali East d/s Sugar Mill drain shows pH- 6.6, COD- 529 mg/l, BOD-166 mg/l, TSS-901 mg/l, TDS- 328 mg/l, Chloride-66 mg/l, SO42--52 mg/l, NO3-N-1.87 mg/l, NO2-N-BDL, PO4-P-0.73 mg/l indicate the effect of effluent carried by sugar mill drain i.e. pH- 6.8, COD- 402 mg/l, BOD-98 mg/l, TSS-567 mg/l, TDS-120 mg/l, Chloride-64 mg/l, SO42--46 mg/l, NO3-N-2.67 mg/l, NO2-N-BDL, PO4-P-0.75 mg/l.

27. The increase in BOD, COD and TSS in River Kali East at downstream of Sugar mill drain is due to turbulent flow conditions contributing in higher TSS, thereby BOD & COD increased. The entire flow in drain was sewage. Direct discharge or outlet into the Sugar mill drain was not evident during inspection.

28. Analysis result of samples collected from Canal near Sugar mill shows pH- 7.9, COD- 7.0 mg/l, TSS-33 mg/l, TDS- 122 mg/l, Chloride-46 mg/l, SO42--44 mg/l, NO3-N- 1.3 mg/l, PO4-P-0.07 mg/l.

16. Similar analysis of water samples collected from

borewells and handpumps of the sugar mill and nearby areas

were made and results have been recorded. Likewise, analysis

results of samples collected from the Sewage Treatment Plant

38 and Effluent Treatment Plant have been recorded. Thereafter,

the joint committee concluded in the following manner:

5.0 CONCLUSION A. Compliance with the Standards:

1. The analysis results of sample collected from ETP outlet after filtration show pH - 7.5, COD- 15 mg/l, BOD - 05 mg/l, TSS - BDL, TDS - 272 mg/l, Oil & Grease - BDL & from lagoon show pH-7.6, COD- 04 mg/l, BOD - 01 mg/l, TSS - BDL, TDS - 532 mg/l, which are complying w.r.t. the Notified standards in MoEF&CC Notification G.S.R. 35 (E) dated 14th January, 2016.

2. However, it seems from the percentage reduction by two Aeration Tank (in series) in BOD-99.27%, COD- 97.73% & TSS- 100% as compared from Primary Clarifier outlet to Secondary Clarifier-1, indicate dilution with fresh water by the unit.

3. MLSS value of 1674 mg/l in Aeration Tank-

I of ETP indicates presence of less biomass against desired level (2500-3000 mg/l).

4. Also, Secondary Clarifier-2 outlet charac-

teristics TSS - BDL and TDS - 136 mg/l (compared to Secondary Clarifier -1 outlet TDS 680 mg/l with same influent) indicate provisions of dilutions using fresh water in the outlet.

5. The effluent stored (Pond 1 & Pond 2) behind press mud is an illegal disposal of untreated effluent and the characteristics i.e. BOD (420 mg/l and 587 mg/l) and COD (750 mg/l and 1267 mg/l) confirm stored/disposed effluent was untreated

39 which is a violation of consent conditions issued by UPPCB.

B. Quality of treated effluents and utilisation as per protocol/agreement with the users /farmers:

1. The unit has stored treated effluent in lagoon after ETP filtration units, which was in semi filled condition. The analysis results of sample collected from lagoon are complying w.r.t. the Notified standards in MoEF&CC Notification G.S.R. 35(E) dated 14th January, 2016.

2. The unit has not provided any agreement for providing treated effluent for irrigation to users/farmers, however as informed by the unit representative, treated effluent used in the plant.

C. Effluents are reaching any drain leading to river/water body:

1. Provision of direct discharge or outlet point from unit into the sugar mill drain was not evident during inspection. The entire flow in Sugar mill drain was carrying sewage. The increase in BOD, COD and TSS in River Kali East at downstream of Sugar mill drain is due to turbulent flow conditions contributing in higher TSS, thereby BOD & COD increased.

D. Ground water quality be checked as per parameters relevant to the industry in question, particularly, fluoride etc.:

1. The analysis result of sample collected from 01 borewell located inside and 04 handpumps located outside the unit premises shows fluoride within permissible limit i.e.1.5 mg/l as per BIS IS 10522:2012 Standards.

40 2. However, analysis results of samples collected from borewells within unit premises and all 04 Handpumps outside the unit premises are within permissible limit as per drinking water standard BIS IS 10500:2012 except Fe- 0.62mg/l, 4.78 mg/l, 0.46 mg/l from Handpump Sugar Mill near canal, Handpump Sugar Mill near drain and Handpump near Main gate of sugar mill respectively. Selenium (Se)- 0.02 mg/l is also detected which is beyond the permissible limit i.e. 0.01 mg/l as per drinking water standard BIS IS 10500:2012 in the sample collected from Handpump near Main gate of sugar mill.

E. Others:

1. The unit M/s Triveni Engineering and Industries Limited, Sugar Unit, Village Sheikhpura, Khatauli, Distt Muzaffarnagar is an integrated refinery sugar unit with 45 MW cogen and having consented capacity of 16000 TCD. As per Daily Manufacturing Reports (DMRs) provided by the unit, the average actual crush rate (TCD) is 11975.56 TCD (for duration of 20th November 07th December, 2021).

2. The unit has valid Consent to Operate under section 21/22 of the Air (Prevention & Control of Pollution) Act, 1981 (as amended) for 65 TPH boiler, which is valid up to 31.12.2023 and for two boilers of 120 TPH, which is valid up to 31.12.2024.

3. The unit has valid Consent to Operate under section 25/26 of Water (Prevention & Control of Pollution) Act, 1974 (as amended) for discharge of effluent, which is valid up to 31.12.2023. The unit has valid Authorization issued under the provisions of Hazardous and Other Wastes (Management and Trans-

41 Boundary Movement) Rules, 2016 for storage and disposal of hazardous wastes valid up to 13.01.2023.

4. The unit has a membership of TSDF with Ramky Enviro Engineers Ltd. as informed for disposal of used oil and wastes or residues containing oil on quarterly basis. Membership is valid up to 23.02.2022.

5. The unit has not installed flow meter at mill house and boiling house to quantify the effluent generation separately.

6. The unit has environmental laboratory for daily analysis of sugar effluent parameter, however, the unit has not maintained the ETP log book.

7. The unit has not provided record of generated Boiler ash.

8. The unit has not maintained the record of Press mud generation.

9. The unit has permission to abstract total 430 m3/hr of groundwater from four existing bore-wells as per No Objection Certificate (NOC) from Uttar Pradesh Ground Water Department (UPGWD), which is valid up to 13.01.2023.

10. The unit has Sewage Treatment Plant (STP) with capacity of 500 KLD for the treatment of domestic waste water generated from its residential colony/mill staff having population around 1000-1200 people. The analysis results (BOD-10 mg/l and COD-39 mg/l) of samples collected from STP inlet indicate dilution with fresh water by the unit.

11. The unit has installed flowmeters at the inlet & outlet of STP, however, flowmeters

42 were found non-operational at the time of inspection.

17. On the aforesaid basis, the joint committee made

the following recommendations:

6.0 RECOMMENDATIONS

1. The unit shall not discharge partially treated effluent into the drain and on land within or outside the unit premises.

2. The unit shall install flow meters at mill house and boiling house to quantify the effluent generation separately.

3. The unit shall maintain the proper records for quantity of used oil & grease as per valid Authorization issued under the provisions of Hazardous and Other Wastes (Management and Trans-Boundary Movement) Rules, 2016 for storage and disposal of hazardous wastes.

4. The unit shall maintain proper record of Press Mud which is provided to the local farmers.

5. The unit shall maintain the ETP log book for daily analysis of raw and treated effluent parameters.

6. The unit shall maintain the proper record of boiler ash generation, sludge and their disposal.

7. The unit shall maintain adequate MLSS & MLVSS concentration in Aeration Tank-I & II while operating the ETP to ensure proper stabilization of ETP.

8. The unit shall make proper color coding of pipelines for water distribution

43 network w.r.t. the defined coding of color for particular pipe carrying sugar effluent, treated effluent and fresh water.

9. The unit shall dismantle the Pond-1 and Pond-2 which contains waste water having characteristics of partially treated industrial effluent.

10. The unit shall restrict the use of Handpump near Main gate of sugar mill as the sample analysis shows Selenium (Se)- 0.02 mg/l which is beyond the permissible limit i.e. 0.01 mg/l as per drinking water standard BIS IS 10500.

11. The unit shall make flow meters operational installed at STP inlet and outlet.

18. The impugned order dated 15.02.2022 indicates

that the said report was accepted by the NGT and held that

appellant had violated the environmental norms. On that

basis and following further report of the joint committee dated

10.08.2022, compensation amount of Rs. 18 crores at the rate

of 2 percent of annual turnover was worked out and imposed

on the appellant by the NGT vide the second impugned order

dated 16.09.2022, further directing that the same may be

deposited by the appellant with the District Magistrate,

Muzaffarnagar within one month.

44

19. From a conjoint reading of the report of the joint

committee and the impugned orders of the NGT, the following

features are clearly discernable:

(i) NGT constituted a joint committee to carry out

inspection of the sugar mill of the appellant vis a vis

maintenance of pollution control measures and

discharge of effluents.

(ii) This is an adhoc committee when the Water Act,

more particularly Sections 21 and 22 thereof, clearly

prescribe a statutory procedure to be followed while

carrying out such inspection to examine pollution, if

any, or the extent of pollution caused by the project

proponent and to suggest remedial measures.

(iii) The joint committee report dated 11.01.2022 as

noticed above, is silent as to whether it has followed

the procedure laid down in the aforesaid Act more

particularly notice to the occupier or his agent and

collection and sealing of samples in the presence of

45 the occupier or his agent having his signature on the

sealed containers.

(iv) 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.

(v) No opportunity was granted to the appellant to

contest the report of the joint committee and to have

its say. Thus, there is clear violation of the provisions

contained in Section 19 of the National Green

Tribunal Act, 2010.

(vi) It is the categorical stand of the appellant that the

joint committee did not issue any notice to it before

carrying out the inspection and it was not served

with a copy of the report of the joint committee either.

(vii) NGT accepted the report of the joint committee

without any adjudication on it.

46 (viii) Environmental compensation was quantified without

any adjudication and without granting any

opportunity of hearing to the appellant.

(ix) Environmental compensation was imposed on the

appellant without giving any opportunity to the

appellant to contest the reports of the joint

committee and without giving any opportunity of

hearing to the appellant.

20. Let us now refer to and examine some of the

relevant case laws on the subject.

21. In A.K. Kraipak Vs. Union of India1, a Constitution

Bench of this Court considered the question as to whether

principles of natural justice applied to administrative

proceedings, after observing that the dividing line between an

administrative power and a quasi-judicial power is quite thin

and is being gradually obliterated. This Court observed that

horizon of natural justice is constantly expanding. Aim of the

1 (1969) 2 SCC 262

47 rules of natural justice is to secure justice or to put it

negatively to prevent miscarriage of justice. Rules of natural

justice operate in areas not covered by any law validly made.

Natural justice do not supplant the law of the land but

supplement it. This Court answered the above question in the

following manner:

20. The aim of the rules of natural justice is to secure justice or to put it negatively to prevent miscarriage of justice. These rules can operate only in areas not covered by any law validly made. In other words they do not supplant the law of the land but supplement it. The concept of natural justice has undergone a great deal of change in recent years. In the past it was thought that it included just two rules namely: (1) no one shall be a judge in his own case (Nemo debet esse judex propria causa) and (2) no decision shall be given against a party without affording him a reasonable hearing (audi alteram partem). Very soon thereafter a third rule was envisaged and that is that quasi-judicial enquiries must be held in good faith, without bias and not arbitrarily or unreasonably. But in the course of years many more subsidiary rules came to be added to the rules of natural justice. Till very recently it was the opinion of the courts that unless the authority concerned was required by the law under which it functioned to act

48 judicially there was no room for the application of the rules of natural justice. The validity of that limitation is now questioned. If the purpose of the rules of natural justice is to prevent miscarriage of justice one fails to see why those rules should be made inapplicable to administrative enquiries. Often times it is not easy to draw the line that demarcates administrative enquiries from quasi-judicial enquiries. Enquiries which were considered administrative at one time are now being considered as quasi-judicial in character. Arriving at a just decision is the aim of both quasi-judicial enquiries as well as administrative enquiries. An unjust decision in an administrative enquiry may have more far reaching effect than a decision in a quasi-judicial enquiry. As observed by this Court in Suresh Koshy George v. University of Kerala [1968 SCC OnLine SC 9] the rules of natural justice are not embodied rules.

What particular rule of natural justice should apply to a given case must depend to a great extent on the facts and circumstances of that case, the framework of the law under which the enquiry is held and the constitution of the Tribunal or body of persons appointed for that purpose. Whenever a complaint is made before a court that some principle of natural justice had been contravened the court has to decide whether the observance of that rule was necessary for a just decision on the facts of that case.

49

22. As observed in A.K. Kraipak (supra), the rules of

natural justice are constantly expanding. A Constitution

Bench of this Court in S.N. Mukherjee Vs. Union of India2 held

that an administrative authority exercising quasi-judicial

functions must record the reasons for its decision. An

important consideration for holding so is that the reasons so

recorded would enable the higher forum to effectively exercise

appellate or supervisory powers. Further the requirement of

recording reasons would guarantee consideration by the

authority; introduce clarity in the decisions; and minimise

chances of arbitrariness in decision making. Recording of

reasons by an administrative authority serves a salutary

purpose by excluding chances of arbitrariness and ensuring

a degree of fairness in the decision making process. The

Bench clarified that the requirement that reasons be recorded

should govern the decisions of an administrative authority

exercising quasi-judicial functions irrespective of the fact

whether the decision is subject to appeal, revision or judicial

2 (1990) 4 SCC 594

50 review. The Bench conclusively held that except in cases

where the requirement has been dispensed with, expressly or

by necessary implication, an administrative authority

exercising judicial or quasi-judicial functions is required to

record the reasons for its decision.

23. If this is true for an administrative authority

exercising quasi-judicial functions, it is all the more true for

a judicial tribunal vested with adjudicatory powers.

24. In Municipal Corporation of Greater Mumbai Vs.

Ankita Sinha3, this Court referred to its earlier decision

involving the same parties whereby and whereunder the

question as to whether National Green Tribunal (NGT) can

exercise suo motu jurisdiction or initiate suo motu action was

answered in the affirmative. Thereafter, this Court held that

even if NGT intends to initiate suo motu action, it must provide

an opportunity of hearing to persons likely to be affected

before passing any adverse order against them. In that

context, this Court held that the impugned ex-parte

3 2021 SCC Online SC 1298

51 preemptory order passed by the NGT without giving

opportunity to the person likely to be affected by such order

be treated as effaced from the record. This Court made it

amply clear that NGT is obliged to hear the party before

issuing any adverse directions which is likely to be directly

affected by it, including an action initiated suo motu.

25. This Court in T. Takano Vs. Securities and

Exchange Board of India4 examined the issue of disclosure of

all relevant materials to the parties in the context of

disclosure of investigative report submitted to the Securities

and Exchange Board of India under Regulation 9 of the

Securities and Exchange Board of India (Prohibition of

Fraudulent and Unfair Trade Practices Relating to Securities

Market) Regulations, 2003 to the noticee to whom the show

cause was issued and held that possession of information by

both the parties can aid the courts in determining the truth

of the contentions. The role of the court is not restricted to

interpreting the provisions of law but also in determining the

4 (2022) 8 SCC 162

52 veracity and truth of the allegations made before it. The court

would be able to perform this function accurately only if both

parties have access to information and possess the

opportunity to address arguments and counter arguments

related to the information.

25.1. Elaborating further, this Court held that principles

of fairness and transparency of adjudicatory proceedings are

the cornerstones of the principle of open justice. This is the

reason why an adjudicatory authority is required to record its

reasons for every judgment or order it passes. The purpose of

disclosure of information is not merely individualistic that is

to prevent errors in the verdict but is also towards fulfilling

the larger institutional purpose of fair trial and transparency.

Therefore, all relevant materials must be disclosed; otherwise

it would be fundamentally contrary to the principles of

natural justice. In the circumstances, this Court concluded

as under:

50.1. A quasi-judicial authority has a duty to disclose the material that has been relied upon at the stage of adjudication.

53 50.2. An ipse dixit of the authority that it has not relied on certain material would not exempt it of its liability to disclose such material if it is relevant to and has a nexus to the action that is taken by the authority. In all reasonable probability, such material would have influenced the decision reached by the authority.

50.3. Thus, the actual test is whether the material that is required to be disclosed is relevant for purpose of adjudication. If it is, then the principles of natural justice require its due disclosure.

26. State Bank of India Vs. Rajesh Agarwal 5 is a case

where this Court once again reiterated that principles of

natural justice are not mere legal formalities. They constitute

substantive obligations that need to be followed by decision-

making and adjudicating authorities. This Court held as

under:

36. We need to bear in mind that the principles of natural justice are not mere legal formalities. They constitute substantive obligations that need to be followed by decision-making and adjudicating authorities. The principles of natural justice act as a guarantee against arbitrary action, both in terms of procedure and substance, by judicial, quasi-judicial,

5 (2023) 6 SCC 1

54 and administrative authorities. Two fundamental principles of natural justice are entrenched in Indian jurisprudence : (i) nemo judex in causa sua, which means that no person should be a Judge in their own cause; and (ii) audi alteram partem, which means that a person affected by administrative, judicial or quasi-

judicial action must be heard before a decision is taken. The courts generally favour interpretation of a statutory provision consistent with the principles of natural justice because it is presumed that the statutory authorities do not intend to contravene fundamental rights. Application of the said principles depends on the facts and circumstances of the case, express language and basic scheme of the statute under which the administrative power is exercised, the nature and purpose for which the power is conferred, and the final effect of the exercise of that power.

26.1. Further, this Court held in clear terms that every

order or proceeding which involves civil consequences or

adversely affects a citizen should be in accordance with the

principles of natural justice.

55

27. In Kantha Vibhag Yuva Koli Samaj Parivartan Trust

Vs. State of Gujarat 6, this Court dealt with an appeal arising

out of an order passed by the NGT dismissing an original

application alleging environmental degradation and seeking

restitution of the environment. This Court observed that it is

important to differentiate expert committees which are set up

by the courts/tribunals from those set up by the government

in exercise of executive powers or under a particular statute

and held as follows:

17. It is first important to differentiate Expert Committees which are set up by the courts/tribunals from those set up by the Government in exercise of executive powers or under a particular statute. The latter are set up due to their technical expertise in a given area, and their reports are, subject to judicially observed restraints, open to judicial review before the courts when decisions are taken solely based upon them. The precedents of this Court unanimously note that courts should be circumspect in rejecting the opinion of these committees, unless they find their decision to be manifestly arbitrary or mala fide. On the other hand, the courts/tribunals themselves set up Expert Committees on occasion. These committees are

6 (2023) 13 SCC 525

56 set up because the fact-finding exercise in many matters can be complex, technical and time-consuming, and may often require the committees to conduct field visits. These committees are set up with specific terms of reference outlining their mandate, and their reports have to conform to the mandate. Once these committees submit their final reports to the court/tribunal, it is open to the parties to object to them, which is then adjudicated upon. The role of these Expert Committees does not substitute the adjudicatory role of the court or tribunal. The role of an Expert Committee appointed by an adjudicatory forum is only to assist it in the exercise of adjudicatory functions by providing them better data and factual clarity, which is also open to challenge by all the parties concerned. Allowing for objections to be raised and considered makes the process fair and participatory for all the stakeholders.

27.1. This Court also referred to an earlier decision in the

case of Sanghar Zuber Ismail Vs. Union of India7 wherein it

was held that constitution of an expert committee does not

absolve NGT of its duty to adjudicate. The adjudicatory

functions of NGT cannot be assigned to committees, even

expert committees. The decisions have to be that of NGT. NGT

7 (2021) 17 SCC 827

57 has been constituted as an expert adjudicatory authority

under the statute. The discharge of its functions cannot be

obviated by tasking committees to carry out a function which

vests in the NGT. Adverting to the facts of that case, this Court

held that NGT had abdicated its jurisdiction by entrusting

judicial function to an administrative expert committee. An

expert committee may be able to assist NGT, for instance, by

carrying out a fact finding exercise but the adjudication has

to be by NGT.

28. This Court in Grasim Industries Limited Vs. State of

Madhya Pradesh8 noticed that NGT had followed a similar

procedure as in the present case. The procedure followed by

NGT has been summed up in the following manner:

4. After the NGT entertained the O.A. on the basis of the letter addressed by Respondent No. 1, it initially directed the plant of the appellant to be examined by the State Pollution Control Board. After the receipt of the report of the State Pollution Control Board, the Court appointed a Joint Committee to give its report.

The said Joint Committee made certain

8 (2024) SCC Online SC 3538

58 recommendations and the NGT passed the impugned order on the basis of the said recommendations.

5. The material placed on record would also reveal that the appellant herein was not made a party to the proceedings before the learned NGT or before the Joint Committee. Though an application for impleadment was filed by the appellant, the same was rejected by the learned NGT.

6. It further appears that even the Joint Committee appointed by the NGT neither gave any notice to the appellant nor an opportunity was given of being heard. Though, this objection was specifically taken by the appellant, the NGT observed “We asked the learned Counsel whether the stand of the unit is that the violations found never existed or whether they existed but have been remedied. His answer is later. It is patent that there were violations.

28.1. It was in the above context that this Court held that

the procedure followed by NGT was totally unknown to the

settled principles of natural justice. Neither was any notice

given by the joint committee to the appellant before giving an

adverse report against the appellant nor the NGT permitted

impleadment of the appellant as a party respondent. NGT

could not have proceeded further with the matter even at the

59 initial stage without impleading the appellant as a party

respondent. Approach adopted by the NGT clearly smacks of

condemning a person unheard. NGT cannot outsource an

opinion and base its decision on such opinion.

29. In Delhi Pollution Control Committee Vs. Lodhi

Property Company Limited9, this Court examined the

challenge of Delhi Pollution Control Board to a judgment of

the Delhi High Court whereby it was held that Delhi Pollution

Control Board is not empowered to levy compensatory

damages in exercise of powers under Section 33A of the Water

(Prevention and Control of Pollution) Act, 1974 and Section

31A of the Air (Prevention and Control of Pollution) Act, 1981

on the ground that such an action amounts to imposition of

penalty provided for in Chapters VI and VII of the aforesaid

Acts and, as such, the procedure contemplated thereunder

will be the only method for imposing and collecting

compensatory damage. The core question in that case was

whether the regulatory boards in exercise of powers under

9 2025 SCC OnLine SC 1601

60 Section 33A of the Water Act and Section 31A of the Air Act

can impose and collect as restitutionary and compensatory

damages fixed sums of monies or require furnishing bank

guarantees as an ex-ante measure towards potential

environmental damage? The above question was answered in

the affirmative by holding that pollution control boards can

impose and collect as restitutionary and compensatory

damages, fixed sums of monies or require furnishing bank

guarantees as an ex-ante measure towards potential

environmental damage in exercise of the aforesaid powers.

However, what is relevant for our present consideration is the

following declaration:

39. * * * * *

(c) it is further directed that the power to impose or collect restitutionary or compensatory damages or the requirement to furnish bank guarantees as an ex-ante measure under Sections 33A and 31A of the Water and Air Acts shall be enforced only after detailing the principle and procedure incorporating basic principles of natural justice in the subordinate legislation.

30. Having surveyed the relevant case law on the

subject, let us revert back to the present case. From the

61 conspectus of facts and law, it is clearly evident that the

impugned orders are in complete violation of the procedures

laid down in the Water (Prevention and Control of Pollution)

Act, 1974, the Environment (Protection) Act, 1986, more

particularly Sections 21 and 22 of the Water Act and the

National Green Tribunal Act, 2010, including Section 19

thereof. It is crystal clear that the impugned decisions which

entail adverse civil consequences upon the appellant were

passed without following the due procedure laid down under

the statute as well as the elementary principles of natural

justice. We, therefore, have no hesitation in declaring such

orders to be illegal and null and void.

31. NGT exercises judicial functions. Therefore, it is all

the more necessary for the NGT to adhere to a fair procedure

which is statutorily laid down of which principles of natural

justice are an inalienable part. Rigor of Section 19(1) of the

National Green Tribunal Act, 2010 is qua the procedure to be

adopted by the NGT in conducting its proceedings. It cannot

be stretched to abandon the statutory procedure laid down

62 under Sections 21 and 22 of the Water Act and by outsourcing

investigation to administrative committees by overlooking the

statutory provisions and basing its decisions on the

recommendation of such administrative committee. This is

not within the remit of NGT.

32. As we have noticed above, this is a classic case

where in the quest for doing justice, NGT has ended up doing

just the reverse.

33. Ordinarily, in a case where there is violation of the

principles of natural justice, parties are relegated to the

adjudicatory forum to re-do the exercise after following the

due process. But in this case, the entire exercise has been

vitiated because of non-conforming to the laid down

procedure contemplated under Sections 21 and 22 of the

Water (Prevention and Control of Pollution) Act, 1974. In such

circumstances, relegating the parties back to the NGT in our

considered opinion would serve no useful purpose. However,

we clarify that it will always be open to the UPPCB to carry

out inspection and take remedial measures qua the sugar mill

63 of the appellant by following the procedure laid down under

the Water Act and after complying with the due process

statutorily laid down thereunder, including by adhering to the

principles of natural justice.

34. Accordingly and in the light of the above, the

impugned orders dated 15.02.2022 and 16.09.2022 passed

by the NGT in O.A. No. 71/2021 are hereby set aside.

Consequently, the civil appeals are allowed. However, there

shall be no order as to cost.

……………………………J. [MANOJ MISRA]

……………………………J. [UJJAL BHUYAN] NEW DELHI;

SEPTEMBER 01, 2025.

64