Supreme Court Upholds Enhanced Environmental Compensation for Major Builders Landmark Judgment Establishes Project Cost as a Valid Yardstick for Environmental Compensation
In a significant ruling, the Supreme Court of India has upheld the National Green Tribunal's (NGT) decision to impose enhanced environmental compensations on two construction companies, M/s. Rhythm County and M/s. Key Stone Properties, for violations of environmental laws. The judgment, delivered by a bench comprising Justices Dipankar Datta and Vijay Bishnoi, reinforces the use of project cost as a metric for determining environmental compensation, aligning with the 'polluter pays' principle.
The appeals originated from orders passed by the NGT, which found that both companies had engaged in construction activities without obtaining necessary environmental clearances. M/s. Rhythm County was ordered to pay Rs. 5 crore, while M/s. Key Stone Properties faced a compensation of Rs. 4.47 crore.
The Supreme Court examined the statutory framework of the National Green Tribunal Act, 2010, particularly Sections 15 and 20, which empower the NGT to grant relief and compensation for environmental damage. The Court affirmed that the NGT's discretion to enhance compensation based on project cost is legally sustainable. This approach ensures a rational nexus between the scale of operations and the environmental impact, aiming to deter violations and restore environmental balance.
The judgment also clarifies that while the Central Pollution Control Board (CPCB) guidelines can inform the computation of compensation, they are not universally binding. The NGT's methodology, incorporating expert assessments and project cost considerations, was deemed appropriate in both cases.
This ruling is expected to have broad implications for future environmental litigation, reinforcing accountability among developers and underscoring the judiciary's role in environmental protection.
Bottom Line:
National Green Tribunal (NGT) has discretion to quantify environmental compensation based on project cost or turnover, ensuring rationality, proportionality, and adherence to the polluter pays principle.
Statutory provision(s): National Green Tribunal Act, 2010 Sections 15, 20
M/s. Rhythm County v. Satish Sanjay Hegde, (SC) : Law Finder Doc Id # 2845746
