New Delhi: The Supreme Court tore into the National Green Tribunal’s 443-page order asking the Enforcement Directorate (ED) to launch a money laundering probe against a firm, saying the application of mind was “not proportionate to the number of pages”.
A bench led by Chief Justice of India (CJI) B.R. Gavai, and also comprising Justice K. Vinod Chandaran, was hearing an appeal by C. L. Gupta Export Ltd that challenged the NGT order asking the ED to register a case against it under the Prevention of Money Laundering Act, 2002.
“Before we leave the matter, with some anguish, we cannot but indicate that application of mind is not proportionate to the number of pages,” the court said last week, taking exception to the voluminous order, which also included several reports, that were “not necessarily required to be made part of the order”.
Notably, a PMLA offence is made out when scheduled offences under the PMLA Act are committed, including scheduled environmental offences. In this case, the SC, however, noted no offence under the money laundering law was made out.
Allowing the appeal, the Supreme Court quashed the 2022 NGT order—passed by then NGT chairperson Justice A.K. Goel, and judicial members Justice Sudhir Agarwal and Justice Brijesh Sethi.
The NGT had ordered the PMLA probe observing that the ED had not taken action for environmental offences even though the scope of the PMLA had been widened to include such offences. It said this inaction has emboldened polluters and defeated the intent of treating environmental violations as serious crimes. It had then directed the ED to initiate proceedings under the PMLA.
The SC said the green tribunal has no jurisdiction to make such a direction. The court said this was a power of constitutional courts. “The NGT should act within the contours of the powers conferred on it which is Section 15 of the NGT Act of 2010,” the court observed.
“Though such power would be available to a Court constituted under the PMLA or to constitutional courts, it would not be available for exercise by the NGT, constituted to ensure effective and expeditious consideration of cases relating to environmental protection and conservation of forests and other natural resources including enforcement of any legal right and giving relief and compensation for damages to persons and properties,” it added.
The SC emphasised courts and tribunals should refrain from engaging in “mere rhetoric”, without a particular reference to the facts of the case.
Advocate Praveen Mahajan, who practices at the Delhi High Court and appears before tribunals, opined the such rhetorical decisions by the NGT are becoming commonplace.
“The Supreme Court was right to call out the NGT’s order, especially at a time when judgments heavy on rhetoric and light on facts are becoming common. Setting the order aside is a necessary course correction,” he said.
Advocate Gaurav Bansal, a Supreme Court lawyer who also appears before tribunals, said such oversight is necessary for the healthy functioning of tribunals, and must also extend to the operational matters of such tribunals.
“Such intervention in instances where the NGT exceeds its jurisdictional limits is not only well-established but also a necessary check within our judicial framework,” Bansal said.
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NGT and its mandate
The National Green Tribunal is a specialised statutory body set up by Parliament in 2010 for hearing matters relating to environmental protection and forest conservation. Since it was set up, the NGT has decided many critical cases including the ban on diesel vehicles and construction activities in the Sundarbans.
The recent strongly worded SC order came after a series of instances over the last year where the top court hauled up the NGT.
From holding that the NGT must stay within the boundaries of the NGT Act to criticising its outsourcing of decision making to expert bodies, the Supreme Court has consistently underlined the principle of jurisdiction in the functioning of the green tribunal.
In November last year, the top court criticised the NGT for imposing Rs 75 lakh penalty on the Grasim Industries based on a tribunal-ordered joint committee’s recommendation. There was no application of mind by the NGT, the top court had opined.
The matter pertained to non-installation of online flow meters in acid production, which the NGT held violated the Environment (Protection) Act, 1986. Acting on the basis of a complaint letter and the report of the joint committee, the tribunal ordered the fine, without hearing Grasim Industries that was not heard by the committee either.
“A tribunal is required to arrive at its decision by fully considering the facts and circumstances of the case before it. It cannot outsource an opinion and base its decision on such an opinion,” the court had observed, setting aside the decision of the NGT, while remitting it for fresh hearing.
Then, in March this year, the Supreme Court overturned a ban on the construction of roads in the Auroville township, holding the NGT had exceeded its jurisdiction.
This case had its origin in a 2021 petition by two Auroville residents who alleged that the roads through the Dakali forest were damaging the environment and that this area should be treated as a ‘deemed forest’ under environment law.
Rejecting the NGT’s interpretation, the top court said the tribunal had “misdirected itself” by entering into the restricted domain of judicial review. The Dakali forest was a man-made plantation and not a forest in any official documentation, therefore, the NGT exceeded its jurisdiction by interfering in the matter, the SC had observed.
“There is no whisper in the impugned order as to which of the provisions and which of the enactment specified in Schedule I was violated,” it had observed, noting that the Tribunal had brushed aside the concerned raised by the Union Environment Ministry without any material on record.
Bansal said, “There have been periods when the NGT was led by a retired Supreme Court judge who invariably denied advocates the opportunity to argue and opted to decide cases primarily by delegating them to committees of the Pollution Control Boards (PCBs)—the very entities most frequently named as respondents.”
In another case, the top court took strong exception to an NGT order where the tribunal calculated a fine following a methodology “totally unknown to the principles of law.”
The case involved Benzo Chemical Industries that was slapped with a fine of Rs 25 crore by the NGT.
Interestingly, the penalty sum of Rs 25 crore was calculated by the NGT on the ground that the operative revenue of the appellant ranges from Rs 100 crore to Rs 500 crore, which the SC had criticised as having no basis in law. Besides, the fine was ordered even though reports of the state pollution control board and the National Environmental Engineering Research Institute (NEERI) had not found even a single non-compliance.
“With deep anguish we have to say that the methodology adopted by the learned NGT for imposing penalty is totally unknown to the principles of law…This is the third matter today in which we are considering the orders passed by the learned NGT, which depicts total violation of principles of natural justice and lack of due consideration,” the bench led by CJI Gavai had said.
The SC has also previously taken note of the tribunal passing an ex-parte order and called it a counterproductive force for preservation of the environment. Ex-parte orders are passed after only considering one side, where a party is absent or has not been notified.
“In its zealous quest for justice, the Tribunal must tread carefully to avoid the oversight of propriety. The practice of ex parte orders and the imposition of damages amounting to crores of rupees, have proven to be a counterproductive force in the broader mission of environmental safeguarding,” the court had said last year.
Akshat Jain is a final-year student at the National Law University, Delhi and is a contributor with ThePrint
(Edited by Ajeet Tiwari)
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