CASE NAME: BENZO CHEM INDUSTRIAL PRIVATE LIMITED v. ARVIND MANOHAR MAHAJAN & ORS.

The Supreme Court disapproved of a National Green Tribunal (NGT) ruling that penalized a corporation for environmental harm based on its revenue. The Court noted that there was no connection between the company’s revenue generating and the determination of the punishment for environmental law violations. An appeal against the NGT ruling that fined the corporation Rs. 25 crores was being heard by the court. The NGT issued this ruling on the grounds that the company’s income was between 100 and 500 crores.

The panel, which included Justices BR Gavai and KV Viswanathan, pointed out three major flaws in the NGT’s methodology when overturning this ruling. First of all, Rs. 100 crores and Rs. 500 crores are very different. Second, the NGT claimed that even after obtaining this information from the public domain, an accurate figure could not be determined. Thirdly, the Court ruled that the company’s revenue was not a relevant factor in determining the punishment. In addition, the corporation was not informed of the penalty’s imposition.

“In any case, the amount of the penalty to be determined for environmental damages would not be related to the generation of money…We must state with great sorrow that the learned NGT’s approach to enforcing the punishment is completely at odds with legal standards,” the Court noted. The Court further noted that it was the third NGT order it had encountered that day that had been issued outside of due contemplation and natural justice. Additionally, the Court determined that the appellant had committed no infractions.