SC slams NGT for linking fines to revenue of company

The Supreme Court has ruled that the quantum of penalty for environmental damage cannot be linked to a company’s revenue, criticising the National Green Tribunal for its lack of due consideration and violation of natural justice principles. A bench, comprising justices Bhushan R Gavai and KV Viswanathan, underscored that such a methodology is alien to established legal principles, while quashing an order by the NGT that imposed a ₹25 crore penalty on Benzo Chem Industrial Private Limited. Expressing “deep anguish” at the NGT’s rationale in tying the penalty amount to the company’s publicly reported revenue range of ₹100 crore to ₹500 crore, the bench clarified that revenue generation and environmental damages are unrelated factors. “This is the third matter today where we are considering orders passed by the NGT that depict total violation of principles of natural justice and lack of due consideration.” Not only the bench took issue with the NGT’s approach of deriving the penalty from the company’s revenue range that it said reflected a lack of precision and fairness, but it also pointed out that the tribunal failed to provide notice to the appellant before imposing such a significant penalty, a fundamental lapse in procedural fairness.