National Green Tribunal
M/S Dugar Housing Ltd vs Ministry Of Environment, Forest And ... on 1 November, 2022
Author: Adarsh Kumar Goel
Bench: Adarsh Kumar Goel
Item No. 02 Court No. 1
BEFORE THE NATIONAL GREEN TRIBUNAL
PRINCIPAL BENCH, NEW DELHI
(By Video Conferencing)
M. A. No. 77/2022
In
Appeal No. 41/2016
M/s Dugar Housing Ltd. Applicant
Versus
Ministry of Environment, Forests
& Climate Change & Anr. Respondent(s)
Date of hearing: 01.11.2022
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL, CHAIRPERSON
HON'BLE MR. JUSTICE SUDHIR AGARWAL, JUDICIAL MEMBER
HON'BLE PROF. A. SENTHIL VEL, EXPERT MEMBER
Applicant: Ms. Rohini Musa, Advocate in M.A 77/2022
ORDER
1. This application has been filed in pursuance of order of the Hon'ble Supreme Court dated 16.08.2022 in Civil Appeal No. 8046 of 2019, M/s Jones Foundations Pvt. Ltd. vs. Union of India & Ors. which was against earlier order of this Tribunal dated 12.04.2019, rejecting the prayer of the applicant for refund of the amount deposited with the State PCB in terms of order of the Tribunal dated 07.07.2015 in O.A. No. 37 of 2015, S.P. Muthuraman & Anr. vs. Union of India & Ors.
2. We may briefly mention the background. Vide order dated 07.07.2015 in O.A. No. 37 of 2015, the Tribunal dealt with a batch of matters against Office Memoranda dated 12.12.2012 and 27.06.2013 relaxing the regime of EC for housing projects, in violation of EIA 1 Notification dated 14.09.2006. The Tribunal also constituted a joint Committee to ascertain the extent of violation of norms by the housing projects in question and also directed the Project Proponents (PPs) to pay environmental compensation at the rate of 5% of the project value for restoration of environment. The amount was to be deposited with the State PCB for restoration purposes. The operative part of the order is reproduced below:-
"163.........xxx.............................xxx.......................................xxx
1) We hold and declare the Office Memoranda dated 12th December, 2012 and 27th June, 2013 as ultra vires the provisions of the Act of 1986 and the Notification of 2006. They suffer from the infirmity of lack of inherent jurisdiction and authority.
Resultantly, we quash both these Office Memoranda.
2) Consequently, the above Office Memoranda are held to be ineffective and we prohibit the MoEF and the SEIAA in the entire country from giving effect to these Office Memoranda in any manner, whatsoever.
3) We hold and declare that the resolution/orders passed by the SEIAA, de-listing the applications of the Project Proponents, do not suffer from any legal infirmity. These orders are in conformity with the provisions of the Act of 1986 and the Notification of 2006 and do not call for interference.
4) We hereby constitute a Committee of the following Members:
a) Member Secretary of SEIAA, Tamil Nadu.
b) Member Secretary, Tamil Nadu Pollution Control Board.
c) Professor from Department of Civil Engineering, Environmental Branch, IIT Bombay.
d) Representative not below the rank of Director from the Ministry of Environment and Forest (to be nominated in three days from the date of pronouncement of this judgment).
e) Representative of the Chennai Metropolitan Development Authority.
5) Member Secretary of the Tamil Nadu Pollution Control Board shall be the Nodal Officer of the Committee for compliance of the directions contained in this judgment.
6) The above Committee shall inspect all the projects in question and submit a comprehensive report to the Tribunal.
This comprehensive report shall relate to the illegal and unauthorized acts and activities carried out by the Respondents. It shall deal with the ecological and environmental damage done by these projects. It would further deal with the installation of STP's and other 2 antipollution devices by the Project Proponents, including the proposed point of discharge of sewage and any other untreated waste. The Expert Committee would also state in regard to the source of water during operation phase and otherwise, use of energy efficient devices, ecologically and environmentally sensitive areas and details of alteration of and its effect on the natural topography, the natural drainage system etc. The Committee shall also examine the adequacy of rainwater harvesting system and parking area and if at all they have been provided. The report shall also deal with the mechanism provided for collection and disposal of municipal solid waste at the project site.
7) The Committee shall further report if the conditions stated in the planning permission and other permissions granted by various authorities have been strictly complied with or not.
8) The Committee shall also report to the Tribunal if the suggestions made by the SEIAA in its meetings adequately takes care of environment and ecology in relation to these projects.
9) What measures and steps, including demolition, if any, or raising of additional structures are required to be taken in the interest of environment and ecology?
10) All the Project Proponents shall pay environmental compensation of 5 per cent of their project value for restoration and restitution of the environment and ecology as well as towards their liability arising from impacts of the illegal and unauthorized constructions carried out by them. They shall deposit this amount at the first instance, which shall be subject to further adjustment. Liability of each of the Respondents is as follows:
Mr. Y. Pondurai.: Rs. 7.4125 crores M/s Ruby Manoharan Property Developers Pvt. Ltd.: Rs. 1.8495 crores.
M/s Jones Foundations Pvt. Ltd.: Rs. 7 crores. M/s SSM Builders and Promoters: Rs. 36 crores M/s SPR and RG Construction Pvt. Ltd.: Rs. 12.5505 crores. M/s Dugar Housing Ltd.: Rs. 6.8795 crores.
M/s SAS Realtors Pvt. Ltd.: Rs. 4.5 crores.
11) The compensation shall be payable to the Tamil Nadu Pollution Control Board within three weeks from the date of the pronouncement of this judgment. The amounts shall be kept in a separate account and shall be utilised by the Boards for the above stated purpose and subject to further orders of the Tribunal.
12) The above environmental compensation is being imposed on account of the intentional defaults and the conduct attributable only to the Project Proponents. We direct that the Project Proponents shall not pass on this compensation to the purchasers/prospective purchasers, as an element of sale.3
13) After submission of the report by the Expert Committee, the Tribunal would pass further directions for consideration of the matter by SEIAA in accordance with law.
14) All the project proponents are hereby prohibited from raising any further constructions, creating third party interest and/or giving possession to the purchasers/prospective purchasers without specific orders of the Tribunal, after submission of the report by the Expert Committee."
3. Against the above order, the PPs preferred Appeals in the Hon'ble Supreme Court which were disposed of vide order dated 04.07.2016 in Civil Appeal No (s). 1119-1120/2016, Satilila Sehkari Awas Samiti Ltd. vs. Union of India & Ors. Etc. Etc. as follows:-
"We are informed by learned counsel for the parties that the Committee appointed by the National Green Tribunal in terms of its order dated 7th July, 2015 has submitted its Report to the Tribunal. A copy of the said Report has been filed in this Court also in terms of our direction. A reading of the Tribunal's Order dated 7th July, 2015 would show that the Tribunal proposes to pass further directions after the Report by the Expert Committee is received by it. Now, that the Committee has submitted its report, we see no reason why the Tribunal should be prevented from examining the same and passing appropriate orders considered just and proper.
In the circumstances, we allow the Tribunal to proceed with the passing of the directions, referred to in para 163(13) of its Order dated 7th July, 2015. We make it clear that learned counsel for the parties shall be free to urge all such submissions as may be open to them on facts and in law before the Tribunal. We also make it clear that we have expressed no opinion on the contentions that may be available to the parties."
4. Thereafter the PP was granted EC dated 10.08.2018 subject to certain conditions including deposit of 2% of the project cost towards corporate environment responsibility.
5. The Project Proponent thereafter moved this Tribunal by way of M.A. 100/2019 seeking refund of deposit as per order dated 7.7.2015 beyond 2% as per EC condition. The same was dismissed on 12.04.2019 with the observation that compensation in terms of order dated 07.07.2015 was 4 also towards liability of PP for violations, apart from the component of the cost of restoration. As earlier noted, the said order has been quashed by the Hon'ble Supreme Court with the following observations:-
"4. Vide sub-paragraph 10 of paragraph 163 of the impugned order, all the Project Proponents were required to pay environmental compensation of 5% of their project value. In the said sub-paragraph, the NGT had also specified the amount to be paid by each of the Project Proponents. It was also provided that the said amount was to be deposited at the first instance, which would be subject to further adjustment. Insofar as the present appellant is concerned in Civil Appeal No.4663/2019, the liability was earmarked at Rs.7 crores and for the appellant in Civil Appeal No. 8046/2019 the liability was earmarked at Rs.6.8795 crores.
5. The said order was challenged before this Court. Though notice was issued, subsequently the petitions were withdrawn with liberty to the parties to adjudicate their grievances before the appropriate forums.
6. In pursuance to the orders passed by the learned NGT, the State Environmental Assessment Committee (SEAC) considered the inspection reports, ecological damage, project plan, compliance etc. and found that the appellants were liable to pay Corporate Environment Responsibility @ 2% of the project cost towards the aforesaid factors.
7. It is the contention of the appellant that the amount deposited by him was much higher i.e. @ 5% whereas the assessment by the SEAC was only @ 2%. As such the appellant was entitled to refund of the excess amount deposited with the authorities.
8. Mr. Sundaram, learned senior counsel further submitted that insofar as the other Project Proponents are concerned, though they too were directed to deposit 5% of the amount by the NGT, they had deposited lesser amount which was thereafter adjusted by the SEAC in the calculation of Corporate Environment Responsibility. He therefore submits that discrimination was meted out by the SEAC to the appellants herein.
9. Learned senior counsel further submits that now that the environmental clearance as required under the Environment Protection Act has already been issued and the possession of the tenements is handed over to the allottees, the appellants are entitled to refund.
10. Mr. Amit Anand Tiwari, learned Additional Advocate General appearing on behalf of the respondent-State submits that the assessment of 5% by the learned NGT was independent of the 5 assessment by the SEAC and therefore the appellants are not entitled to refund. He submits that 25% of the amount collected has already been deposited by the Tamil Nadu Pollution Control Board to the Central Pollution Control Board on 24th February, 2017 and as such, any order of refund at this stage would be unjust to the Tamil Nadu Pollution Control Board.
11. Prima facie, we do not find any merit in the contention of Mr. Tiwari, learned counsel. Sub-paragraph 10 of paragraph 163 of the impugned order specifies the amount on adhoc basis @ 5% and further clarifies that the said deposit would be at the first instance and the same shall be subject to further adjustment.
12. In any case, when a specific contention to that effect was made, the learned NGT was expected to consider this aspect. However, by a non-reasoned order, the learned NGT has rejected the claim of the appellants.
13. In that view of the matter, we are inclined to allow these appeals. The impugned orders are quashed and set aside. The matters are remitted back to the NGT to consider the applications of the appellants afresh in accordance with law.
14. Needless to state that both the parties would be at liberty to raise the grounds available to them in law."
6. We have heard learned Counsel for the applicant who submitted that in terms of sub-para 10 of Para 163 of order dated 07.07.2015, the deposit was subject to further adjustment. In light of EC conditions fixing liability at 2% of the project cost, excess amount is liable to be refunded.
7. Though the argument appears to be prima facie attractive, we are unable to accept the same for the reasons that follow. No doubt the amount to be deposited under sub-para 10 of para 163 of order of this Tribunal dated 07.07.2015 was subject to further adjustment, such adjustment was to depend upon report of the Expert Committee about the extent of violations, as shown by sub-para 12 and 13. Sub-para 11 further shows that the amount to be paid also covered liability for intentional default and conduct of the PP and was to be utilized by the State PCB subject to further 6 orders. Learned Counsel for the Applicant is unable to show any report of the Committee which may call for such refund. Only material referred to is lesser amount as condition for grant of EC which is not shown in any manner to be compensation for the violation of going ahead with the project without requisite EC. Further, in view of law laid down inter-alia in Goel Ganga Developers India Pvt. Ltd. v UOI1, Keystone Realtors Pvt. Ltd. v. Anil v. Tharthare and Ors.2 and Alembic Chemicals v Rohit Prajapati3, the compensation amount covers deemed damage to the environment by going ahead with the project with prior appraisal of environment impact as required for grant of EC. Some of the observations from the said judgements are as follows:
"Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC 157 ......The three industries have evaded the legally binding regime of obtaining ECs. They cannot escape the liability incurred on account of such non-compliance. Penalties must be imposed for the disobedience with a binding legal regime. The breach by the industries cannot be left unattended by legal consequences. The amount should be used for the purpose of restitution and restoration of the environment. Instead and in place of the directions issued by NGT, we are of the view that it would be in the interests of justice to direct the three industries to deposit compensation quantified at Rs 10 crores each. The amount shall be deposited with GPCB and it shall be duly utilised for restoration and remedial measures to improve the quality of the environment in the industrial area in which the industries operate.
Keystone Realtors (P) Ltd. v. Anil V. Tharthare, (2020) 2 SCC 66 A core tenet underlying the entire scheme of the EIA Notification is that construction should not be executed until ample scientific evidence has been compiled so as to understand the true environmental impact of a project. By completing the construction of the project, the appellant denied the third and fourth respondents the ability to evaluate the environmental impact and suggest methods to mitigate any environmental damage Goel Ganga Developers India (P) Ltd. v. Union of India, (2018) 18 SCC 257 1 (2018) 18 SCC 257 2 (2020) 2 SCC 66 3 2020 SCC OnLine SC 347 7 Having held so we are definitely of the view that the project proponent who has violated law with impunity cannot be allowed to go scot-free.
This Court has in a number of cases awarded 5% of the project cost as damages. This is the general law.
8. In the present case, the EC order dated 10.08.2018 is as follows:-
"27. The CER amount of Rs. 23.59 lakhs shall not be claimed ant any point of time from the environmental compensation of Rs. 1.50 Crores remitted to the TNCPB as per the Hon'ble NGT, PB, New Delhi order dated 07.07.2015 as committed in the affidavit submitted by the proponent. The TNCPB shall utilize the amount of Rs. 23.59 Lakhs earmarked as CER for government activities/projects for the following purposes:
Water conservation, Storm water management, urban greening, Biodiversity conservation, Climate change studies and mitigation projects implementation."
9. EC condition cannot override determination by the Tribunal nor be ground for the Tribunal to revisit its order.
10. Only other argument of learned Counsel for the applicant is that in another case, SEIAA has directed adjustment of the compensation amount deposited in terms of order of this Tribunal towards restoration measures. It is also mentioned by the applicant itself that the said order TN SEAC was later withdrawn. The fact remains that as per law of the land and in terms of order of this Tribunal dated 07.07.2015, the claim of the applicant for refund of the amount is not maintainable.
11. Accordingly, we do not find any ground for directing refund of the amount of compensation deposited.
12. However, we make it clear that if any amount deposited by the PP with the State PCB remains unutilized, the same may be now utilized in accordance with the concerned District Environment Plan in the area in light of order of this Tribunal dated 21.10.2022 in M.A. No. 74/2022 in 8 O.A. No. 976/2019, Gurinder Singh & Ors. vs. Union of India & Ors. Relevant extract from the said order is as follows:-
"5. It is a matter of common knowledge that environmental compensation funds for restoration of environment have been collected by statutory regulators, particularly State PCBs and SEIAAs but the same are not being utilised for such purpose though directions have been earlier issued on the subject. In Haryana, such funds may also be available with Haryana Water Resource Authority, under State law on the subject. It thus appears to be necessary to direct due utilisation for restoration of environment expeditiously.
6. This aspect has been dealt with inter alia order dated 22.1.2019 in OA 101/2019, filed by CPCB approving the course of action suggested by the CPCB. In pursuance of further order of the Tribunal dated 28.8.2019 in OA 593/2017, Paryavaran Suraksha case, CPCB issued guidelines for use of compensation which are in public domain. Further orders were passed by the Tribunal on 24.7.2020 in OA102/2019, Ashish Kumar Dixit case in response to which CPCB filed status report in the matter on 8.2.2021 which was dealt with vide order dated 9.2.2021 directing further action for utilisation of the funds. Extracts from order dated 27.4.2020 and 9.2.2021 are reproduced below for ready reference:
Order dated 24.7.2020 in OA102/2019 "4. ........What is required in terms of orders of this Tribunal is to spend the environmental restoration fund for the purpose it is meant for, viz., for restoration of the environment such as strengthening vigilance mechanism, setting up of laboratories, for monitoring of environment, coordination with the District Magistrates to prepare District Environment Plans, hiring of experts and consultants, undertaking remediation and study of contaminated sites etc. We may recall observations of the Hon'ble Supreme Court in dealing with Compensatory Afforestation (Campa) Fund in T.N.Godavarman v. UOI, (2014) 6 SCC 150 that such funds be spent as per plan to be approved by the National Campa Advisory Council (NCAC) for purposes such funds are raised and not for governmental functions.
5. Accordingly, we direct the State PCB to revisit its plan.
The CPCB may oversee preparation of such action plan in the light of earlier orders4 of this Tribunal. The Chairman and Member Secretary may have a meeting (physical or online) with Chairman and Member Secretary of the State PCB within one month. Plan may be finalized, with the approval of CPCB, 417(iii), Order dated 28.08.2019, OA 95/2018, Aryavart Foundation v. M/s Vapi Green Enviro Ltd. & Ors.
12, Order dated 06.08.2019, OA 681/2018, News item published in "The Times of India"
Authored by Shri Vishwa Mohan Titled "NCAP with multiple timelines to clean air in 102 cities to be released around August 15"
12, Order dated 05.11.2019, OA 639/2018, Shailesh Singh v. State of Haryana & Ors. 33, Order dated 10.07.2019, OA 1038/2018, News Item published in "The Asian Age" Authored by Sanjay Kaw titled "CPCB to rank industrial units on pollution levels"
20(viii), Order dated 26.08.2019, OA 804/2017, Rajiv Narayan v. Union of India & Ors. 8 & 9, Order dated 15.07.2019, OA 710/2017, Shailesh Singh v. Sheela Hospital & Trauma Center 9 within two months. All other State PCBs and PCCs may also prepare similar action plans for restoration of environment and implementation of District Environment Plans, in coordination with CPCB. CPCB may also prepare such plan for utilization of funds available with it. CPCB may file compliance report to this effect within four months by e-mail at judicial- [email protected] preferably in the form of searchable PDF/ OCR Support PDF and not in the form of Image PDF."
Order dated 9.2.2021 in OA 102/2019 "We now refer to the report of the CPCB on the subject of utilizing EC funds for restoration of environment:-
"Action taken/status: CPCB's New Proposals for utilization of EC Fund:
In compliance to the aforesaid directions of Hon'ble NGT, CPCB has prepared Action Plans on various activities for utilization of EC funds. The following Action Plans are under consideration of EC Project Appraisal Committee:
Action Plan Estimated Cost
(INR in Crore)
Framing of 36 Nos. of District 3.60
Environmental Plan Covering all states of
India
Making of Air Pollution Awareness 0.63
Videos/Animation for Mass Awareness
Preliminary Study on Impact of Ecological 2.30
Flows in Downstream of Reservoir (s) on
Riparian Ecosystem (Aquatic Life) in the
River Ganga from Origin till Unnao along-
with Biomonitoring along the entire stretch of River Ganga till confluence at Bay of Bengal.
Development of Water Quality Criteria & 0.40
National Water Quality Index
Development of state of art 0.46
laboratory infrastructure/furniture
including plinth mounted island benches
for CPCB Regional Directorate Laboratory,
Bhopal
3. Status on Utilization of Environmental Compensation Fund (NGT-25%) available with CPCB:
It is submitted that the Hon'ble NGT vide order dated 22.01.2019 in O.A. No 101/2019 in the matter of Central Pollution Control Board Vs. Assam State Pollution Control Board & Ors, has 10 granted approval for utilization of 25% Environmental Compensation Fund (hereinafter referred to as EC Fund) for specified activities in line with "Guidelines for Utilization of EC Fund" prepared by CPCB.
In compliance of said order of Hon'ble NGT dated 22.01.2019, a separate dedicated account is being maintained by CPCB for receiving of EC (25%) fund. In this regard, CPCB also constituted an EC Project Appraisal Committee for utilization of EC fund. Recently, CPCB has re-constituted the said committee vide office order dated June 16, 2020 comprising of officials from CPCB, MoEF&CC, Department of Science and Technology and NEERI for evaluation and recommendation of projects proposals from CPCB/SPCBs/PCCs for financial assistance under EC fund.
CPCB so far organized ten (10) EC Project Appraisal Committee meetings for evaluations and recommendations of project proposals submitted by CPCB/SPCBs/PCC in line with "Guidelines for Utilization of EC Fund" prepared by CPCB. Status on proposals evaluated and recommended by the Committee for utilization of EC fund as below:
a) Project Proposals received by the EC Project Appraisal Committee Items No. of Proposals (i) Total Proposals Received 80 (ii) Total Proposals Appraised 80 (iii) Proposals not considered / rejected / 47 revised (iv) Proposals Recommended & Approved 33
b) Number & type of project proposals recommended as per Guidelines for utilization of EC Fund Type of Activities No. of Proposals
(i) Strengthening of laboratory upgradation 9 (ii) Research & Development Projects 6 (iii) Follow-up for Hon'ble NGT Court cases 9 (iv) Inventorization sources of pollution 2 (v) IEC activities 2 (vi) Capacity building of CPCB/SPCBs/PCCs 2
(vii) Development Air & Water quality Monitoring 3 & surveillance
b) EC fund utilization status 11 Components Amount status (INR in Crore)
(i) EC Fund received (as NGT-25%) till date 123.20 December, 2020
(ii) EC Fund (25%) released for 23 Project 22.38 proposals
(iii) Committed expenditure for 11 Project proposals 65.32 (Details is given at Annexure-IV)
(iv) Fund available under NGT-25% Account 35.49
(v) Retain emergency fund 16.01
(vi) Fund available for funding of Project 19.48 proposals
4. Revised mechanism for Utilization of EC Fund available with CPCB Based on the experience, it was felt necessary to revise the 100% funding to SPCBs/PCCs under EC fund from Central fund. Part contribution by SPCBs/PCCs may ensure their ownership and identification of meaning full proposals. Following fund sharing pattern has been recommended by the EC Project Appraisal Committee is submitted for kind information of Hon'ble NGT as below:
a) 100% funding for CPCB all project proposals
b) 100% funding to R & D projects, received from SPCBs/PCCs, with replicability in other areas
c) Projects (other than R & D) received from SPCBs/PCCs (except NE-States/Weaker States); fund sharing will be on 60:40 ratio (i.e. CPCB 60%, SPCB/PCC 40%)
d) Projects (other than R & D) from NE-SPCBs and Weaker SPCBs, fund sharing will be on 90:10 (i.e. CPCB- 90%, SPCB/PCC -10%)"
With regard to the issue of utilization of environmental funds, we find that the application for approval was filed by the State PCB on 13.10.2020 and the approval was granted on 14.10.2020. It is not clear whether the proposal received full attention, considering details of different heads such as Environmental Surveillance Cell. It may thus be necessary that the CPCB revisits the subject and grant its approval after due appraisal by the Chairman and the Member Secretary, considering the details and the observations in para 4 in the order of this Tribunal dated 24.07.2020 quoted above in para 6, namely hiring of Experts, undertaking remediation and study of the contaminated sites and allied issues. These observations are based on the judgment of the Hon'ble Supreme Court in T.N. Godavarman v. UOI, (2014) 6 SCC 150. The CPCB may also consider the details of expenditure to be incurred for the District Environment Plans and priority to be accorded to different items of expenditure, with funds being limited. Focus of utilization of EC funds should primarily be for remediation/restitution of environment."12
7. Consistent with the above directions, we direct that updated action plans be got prepared and executed by the Chief Secretaries of all States/UTs. The recovered compensation may be credited to a separate account under the Chief Secretary and used as per said plans only. This will apply to compensation deposited with the State PCBs/PCCs and also other regulators such as SEIAAs, Water Resource Authorities etc. The utilisation plans may be in sync with State/District Environment Plans, in pursuance of order of this Tribunal dated 26.09.2019 in OA No. 360/2018, Shree Nath Sharma vs. Union of India & Ors. The process of planning and execution for utilistion of such funds may be preferably entrusted to a high powered Committee of three Additional Chief Secretaries, identified by the Chief Secretary within one month. Such plans and progress in execution may be placed on websites of the States/UTs after every six months. A part of funds be provided for environment awareness through eco clubs in all Schools and Colleges upto grassroot levels in the State through the education Departments. States/UTs may also coordinate with Legal Services Authorities, if viable."
The application will stand disposed of accordingly.
Adarsh Kumar Goel, CP Sudhir Agarwal, JM Prof. A. Senthil Vel, EM November 01, 2022 M. A. No. 77/2022 In Appeal No. 41/2016 SN 13