Supreme Court Quashes NGT’s ₹18 Crore Environmental Compensation Against Triveni Engineering for Breach of Natural Justice
Case Name: M/s. Triveni Engineering and Industries Ltd. vs. State of Uttar Pradesh & Ors.
Date of Judgment: 01.09.2025
Citation: Civil Appeal Nos. 8119-8120 of 2022; 2025 INSC 1060
Bench: Justice Manoj Misra; Justice Ujjal Bhuyan (DB).
Held: The Supreme Court set aside the National Green Tribunal’s orders imposing ₹18 crores environmental compensation on Triveni Engineering’s sugar mill in Muzaffarnagar. The Court found that the proceedings before the NGT violated the principles of natural justice, since the appellant was neither impleaded as a party nor given an effective hearing before adverse findings were recorded. It held that environmental compensation cannot be imposed without strict adherence to the statutory procedures under the Water (Prevention and Control of Pollution) Act, 1974, and without affording the affected party an opportunity to rebut committee reports.
Summary: The case arose from Original Application No. 71/2021 before the NGT, where it was alleged that Triveni’s sugar mill was discharging untreated effluents, contaminating ground water and causing health hazards in the surrounding area. NGT constituted a joint committee of CPCB, UPPCB, and the District Magistrate, Muzaffarnagar, which carried out inspections and submitted reports indicating multiple violations, including untreated effluent disposal, dilution with fresh water, absence of flow meters, and lack of record-keeping. On the basis of these reports, NGT passed orders on 15.02.2022 and 16.09.2022 holding the appellant guilty of environmental violations and imposing compensation of ₹18 crores (2% of annual turnover), directing deposit with the District Magistrate for environmental restoration.
On appeal, the appellant argued that it was never made a party to the proceedings, nor given notice or opportunity to contest the committee reports, in violation of the principle of audi alteram partem. It further contended that the statutory procedure for sampling and testing under Sections 21 and 22 of the Water Act was not followed, and that the findings relied upon third-party laboratory data containing errors and contradictions. The State defended the NGT’s orders as necessary to curb pollution and protect public health, but the Supreme Court emphasized that even environmental adjudication must conform to principles of fairness and natural justice.
The Court referred to precedents including A.K. Kraipak v. Union of India (1969), S.N. Mukherjee v. Union of India (1990), Municipal Corporation of Greater Mumbai v. Ankita Sinha (2021), T. Takano v. SEBI (2022), and State Bank of India v. Rajesh Agarwal (2023), reiterating that natural justice obligations apply with full force to tribunals like the NGT. It held that while expert committees may assist, their reports cannot substitute judicial adjudication without giving the affected party a chance to respond.
Decision: In view of these findings, the Supreme Court allowed the appeals and quashed the impugned NGT orders dated 15.02.2022 and 16.09.2022. It held that the imposition of ₹18 crores compensation without notice or hearing was unsustainable and contrary to law. The Court clarified that the role of expert committees is only to aid the tribunal and not to replace its adjudicatory function, and that statutory procedures under the Water Act must be strictly followed. The Court emphasized that environmental protection, though of paramount importance, cannot be pursued at the cost of overriding the rule of law and principles of natural justice. Consequently, the demand for environmental compensation against the appellant stood annulled.