NGT Orders Imposing Rs.18 Crore Environmental Compensation Are Set Aside for Breach of Statutory Procedure and Natural Justice

A bench of Justices Manoj Misra and Ujjal Bhuyan heard appeals under Section 22 of the National Green Tribunal Act, 2010 challenging two National Green Tribunal (NGT) orders of 15.02.2022 and 16.09.2022 in Original Application No. 71/2021, which had found a sugar unit in Muzaffarnagar to have illegally discharged untreated effluent and had directed recovery of environmental compensation of Rs. 18 crores (2% of annual turnover).

The Court allowed the civil appeals and set aside both impugned NGT orders. It held that the NGT had erred in accepting and acting upon the report of an ad hoc joint committee without impleading the company as party, without ensuring compliance with the statutory sampling and reporting regime under Sections 21 and 22 of the Water (Prevention and Control of Pollution) Act, 1974, and without giving the appellant an opportunity of hearing in breach of the principles of natural justice under Section 19 of the NGT Act. The Court emphasised that an expert or fact‑finding committee cannot substitute the adjudicatory functions of the NGT and that where statutory procedures for sampling and analysis exist they must be followed. The Court, in its reasoning, observed: The Court further noted: “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.” Background The dispute arose from a complaint before the NGT in March 2021 alleging that the Sheikhpura (Khatauli), Muzaffarnagar sugar mill of M/s Triveni Engineering and Industries Ltd. discharged untreated effluent, contaminating groundwater and surface drains. The NGT constituted a joint committee of CPCB, UPPCB and the District Magistrate to inspect the unit when operational. Following inspection on 08.12.2021, the joint committee furnished reports (11.01.2022 and a supplementary report of 10.08.2022) recording ponded wastewater behind press‑mud storage, elevated BOD/COD/TSS in pond samples and higher BOD/COD/TSS downstream of the mill drain, along with deficiencies such as absence of flow‑meters at mill/boiler house, non‑maintained ETP logbook and records of oil/grease and boiler ash. The NGT accepted the joint committee’s findings, recorded violations of environmental norms, directed the joint committee to assess past violations and, by order dated 16.09.2022, imposed compensation of Rs. 18 crores to be deposited with the District Magistrate for restoration work.

The appellant challenged the NGT orders on grounds that it had not been impleaded or given notice, that the joint committee had not followed the statutory sampling, sealing and reporting procedure under Sections 21–22 of the Water Act, and that the NGT therefore committed a plain breach of natural justice and of the statutory regime. The State and UPPCB defended the inspections and reports as scientific and appropriate. The Supreme Court examined the Water Act provisions governing sampling, the Environment (Protection) Act and the NGT Act (including Sections 15, 17 and 19), and surveyed precedents on natural justice and the limits of reliance on expert or administrative committees (including A.K. Kraipak, S.N. Mukherjee, Municipal Corporation of Greater Mumbai v. Ankita Sinha, Sanghar Zuber Ismail and subsequent rulings). The Court held that the procedural infractions and denial of an opportunity to be heard vitiated the NGT orders; it set aside the impugned orders, allowed the appeals and made no order as to costs. The Court clarified that the UPPCB remained free to carry out inspection and remedial action in accordance with the statutory procedures (including notice, sampling and analysis, and giving the occupier an opportunity to be heard) and subject to applicable law.

Case Details: Case No.: 2025 INSC 1060 (Civil Appeal Nos. 8119-8120 of 2022) Case Title: M/s. Triveni Engineering and Industries Ltd. v. State of Uttar Pradesh & Ors. Appearances: For the Petitioner(s): Senior Counsel for M/s Triveni Engineering and Industries Ltd. For the Respondent(s): Senior Counsel for State of Uttar Pradesh / UPPCB / CPCB