Facts: Two project proponents, M/S Rhythm County and M/S Key Stone Properties, filed civil appeals challenging orders passed by the National Green Tribunal (NGT). The NGT had found both project proponents in violation of environmental norms for carrying out construction without obtaining the necessary environmental clearances and permissions, and had imposed environmental compensation. Rhythm County was directed to pay Rs. 5,00,00,000/-, while Key Stone Properties was directed to pay Rs. 4,47,42,188/-.
Procedural Posture: The appeals were filed in the Supreme Court of India against the orders of the National Green Tribunal (NGT), Western Zone Bench, Pune.
Issue: 1. In the absence of a legislatively prescribed framework for quantifying environmental compensation, can the NGT enhance compensation based on project cost? 2. Is the NGT, under Sections 15, 17, and 20 of the National Green Tribunal Act, 2010, competent to adopt turnover or project cost as a relevant yardstick for computing environmental compensation?
Holding: The Supreme Court held that the NGT is authorized to determine environmental compensation even without a legislatively prescribed formula, and can use project cost or turnover as a relevant yardstick, provided it applies its mind to the specific facts and circumstances, ensuring the compensation is rational, proportionate, and reasoned. The Court found no reason to interfere with the NGT's computation of environmental compensation in either appeal.
Reasoning: The Court reasoned that the NGT Act is a special enactment designed for effective adjudication of environmental disputes and environmental restitution. Section 15 of the Act grants the NGT broad powers to provide relief and compensation. Section 20 mandates the application of sustainable development, the precautionary principle, and the polluter pays principle. The Court emphasized that while the CPCB guidelines are helpful, they are not binding and do not fetter the NGT's discretion. The Court cited Goel Ganga Developers India Pvt. Ltd. v. Union of India to support the use of project cost as a relevant factor and Deepak Nitrite Ltd. v. State of Gujarat & Ors. to emphasize the need for a rational correlation between compensation and the harm caused. The Court rejected the argument that turnover or project cost can never be a relevant factor, stating that it reflects the scale of operations and potential environmental impact. The Court found that the NGT had adequately considered the facts, expert reports, and objections before arriving at its decisions.