NGT Orders Wave City to pay Rs. 113 Crore by applying Polluter's Pay Principle for Computation of Environmental Compensation

NGT Orders Wave City to pay Rs. 113 Crore by applying Polluter's Pay Principle for Computation of Environmental Compensation

The National Green Tribunal (NGT) has imposed an environmental compensation of Rs. 113.25 crore on the developer of Wave City, a township along NH-9 in Ghaziabad. The developer has been given three months to deposit the fine with the UP-Pollution Control Board (UPPCB).

A three-member NGT bench, headed by Chairperson Justice Adarsh Kumar Goel (Judicial Member), Justice Sudhir Agarwal (Judicial Member), and Prof. A. Senthil Vel (Expert Member) passed the order on Tuesday after a report from a joint team of the UPPCB, Central Ground Water Board and forest department officials.

The case dates back to August 2019 when Ghaziabad resident Mahankar Singh had approached the NGT against the developer of Wave City.

The petitioner Shri Mahakar complained that Wave city/Hi Tech city developed by M/s. Uppal Chadha Hi Tech Developers Pvt. Ltd. (hereinafter referred to as 'Project Proponent/PP') is cutting tress without any information to the villagers and other concerned authorities causing grave loss and injury to the residents. Cutting of trees, extraction of ground water without permission of concerned authorities, construction of residential and commercial towers without any Environmental Clearance (hereinafter referred to as 'EC') and No Objection Certificate (hereinafter referred to as 'NOC') from concerned authorities, using of JCB machines for mining of clay without proper environmental safeguards including water sprinkling, stocking of construction material in open exposing dust in the environment and construction activities without use of tarpaulin at construction site are some of the violations alleged to have been committed by PP.

The petitioner prayed to the NGT to direct the Central Pollution Control Board (CPCB), the Central Ground Water Board, the forest conservator of Ghaziabad and the UPPCB to separately furnish a factual and action taken report to the tribunal within one month.

Before the NGT primarily three issues came up for consideration:

1. Whether Project Proponent (PP) i.e., respondent 2- M/s. Uppal Chadha Hi Tech Developers Pvt. Ltd has violated environmental norms and laws in carrying out its Hi-Tech City Project i.e., 'Wave City' and if so, the nature and extent of such violations?

2. In case, issue I is answered in affirmative, what remedial and punitive action would be justified to be taken against Project Proponent i.e., respondent 2 in the facts and circumstances in this case?

3. What further remedial or otherwise direction or order need be passed in the present case if issues I and II are answered against respondent 2 i.e., PP?

For issue I, in terms of Environmental Clearance (EC), the Tribunal found that incorrect information was given in the Application submitted for EC in Form I and IA of Environmental Impact Assessment 2006, along with this the respondent no. 2 was found guilty of violating extraction of Ground Water as per the Central Ground Water Authority (CGWA) report dated 23.11.2019.

The Tribunal observed that, "there is no power under Water Act, 1974 or Air Act, 1981 and the Rules framed thereunder authorizing UPPCB to issue consent retrospectively. On the contrary, Section 25 of Water Act, 1974 contemplates a previous consent before operation or process etc. to commence any project which has already been established. Similar provisions in Section 21 is pari materia to Section 25 of Water Act, 1974."

The Tribunal opined that the term 'previous consent' clearly contemplates an act of consent before operation or processing on the part of proponent. In both the Statutes, legislature contemplates "previous consent" and not a subsequent consent with retrospective date or back date.

Moreover, the Tribunal found that, when application itself was not given before 17.03.2020, the question of granting any consent for period prior thereto does not arise at all.

This showed patent illegality on the part of UPPCB who have issued these consents in order to cover up the violations which were already found by Joint Committee, appointed out by Tribunal in the present Application who inspected the site of proponent on 19.09.2019 and submitted report dated 23.11.2019, pointing out that proponent had already allowed occupation of the premises by third parties before having obtained any Consent To Operate (CTO) under Water Act, 1974 and Air Act, 1981.

Coming to the issue II, the Tribunal with respect to question of assessment of environmental compensation stated that includes the principles/factors/aspects, necessary to be considered for computing/assessing/determining environmental compensation.

"Section 15 of NGT Act, 2010 talks of relief of compensation and restitution. It confers wide powers on this Tribunal to grant relief by awarding compensation for the loss suffered by individual(s) and/or for damage caused to environment," noted the Tribunal.

Further the Tribunal also noted that according to Schedule II of NGT Act, 2010 gives a list of heads under which compensation or relief for damage may be granted. It has 14 heads in total out of which item (a) to (f), (l), (m) and (n) relates to loss, damage etc. sustained to the person or individual or their property. Item (i) to (k) relates to harm, damage, destruction etc. of environment or environmental system including soil, air, water, land, and eco-system. The damage to environment covers a very wide variety of nature as is evident from definition of environment under section 2 (c) which is inclusive and says; 'environment includes water, air, and land and the interrelationship, which exists among and between water, air and land and human beings, other living creatures, plants, micro-organism and property'.

The Tribunal held, "Section 20 of NGT Act, 2010 requires Tribunal to apply principles of sustainable development, the precautionary principle and the polluter pays principle. In the present case, environmental compensation has to be computed by applying 'Polluter Pays' Principle."

The Tribunal found that the Proponent had established to operate its commercial unit contrary to law flouting norms provided by law, Statutory Regulator is bound to act and if it fails, a judicial forum can direct it to act in accordance with law.

The bench placed reference on the case M.C. Mehta vs. Union of India, (1987) wherein the Court observed in para 58 that the constitution bench held that enterprise must be held strictly liable for causing such harm as a part of social cost of carrying on the hazardous or inherently dangerous activity.

The bench opined that determination/computation/assessment of environmental compensation must, not only conform the requirement of restoration/remediation but should also take care of damage caused to the environment, to the community, if any, and should also be preventive, deterrent and to some extent, must have an element of "being punitive."

"To impose appropriate 'environmental compensation' for causing harm to environment, besides other relevant factors as pointed out, one has to understand the kind and nature of 'Harmness cost'. This includes risk assessment. The concept of risk assessment will include human health risk assessment and ecological risk assessment," the bench added in its judgment.

Applying the principle of computation of environmental compensation to the facts and circumstances of the case and also considering the gravity of the violations, the Tribunal found it appropriate to compute environmental compensation at 0.75% of the total project cost of proponent.

With respect to issue III, in view of adjudication of issues I and II, the Tribunal found that this application deserved to be allowed partly and respondent 2 was liable to pay environmental compensation but the same will have to be deposited with UPPCB for its further utilization for rejuvenation/restoration of environment.

The Tribunal while partly allowing the application ordered the following directions:

1. Environmental compensation of Rs. 113.25 Crores shall be paid by respondent 2 and be deposited with UPPCB within three months.

2. The amount shall be utilized for rejuvenation/restoration of environment in the area concerned on the recommendation of a Joint Committee comprising UPPCB, CPCB and District Magistrate, Ghaziabad who shall prepare a remediation plan within three months and execute the same within further six months from the date of deposit of environmental compensation by respondent 2/PP. UPPCB shall be the nodal authority for this purpose.

3. Additional Chief Secretary, Environment UP and/or Chairman, UPPCB would comply with the other directions as contained in the above judgment extraordinarily and in accordance with law.