Supreme Court’s Diktat on Powers of the NGT: Can Developers Finally Rest Easy?

 

Introduction

The Hon’ble National Green Tribunal, Principal Bench, New Delhi (NGT), vide the judgment dated May 4, 2016 in the Original Application No. 222 of 2014 (Original Application), passed certain orders, which had wide scale impact on the real estate developers in the city of Bengaluru. The NGT directed that the buffer zones maintained around lakes and rajakaluves (drains) were to be increased substantially more than provided under the zoning regulations in the Revised Master Plan 2015 (RMP 2015). The RMP 2015 provided for buffer zones of 30 meters from the centre of the lake, for primary rajakaluves it was 50 meters from the centre of the rajakaluve, for secondary rajakaluves, it was fixed at 25 meters and for tertiary rajakaluve it was 15 meters. The Hon’ble Supreme Court of India (Supreme Court) has recently passed a judgment in Civil Appeal No. 5016 of 2016 and other connected appeals on March 5, 2019 (Judgment). These appeals were filed challenging the NGT’s judgment dated May 4, 2016.

In this first part of a two-part blog, we discuss the facts that led to filing of the present appeals before the Supreme Court and a couple of key issues discussed in the Judgment.

Brief Background of the Dispute

The Original Application was filed by Forward Foundation, Praja RAAG and Bangalore Environment Trust (Applicants) before the NGT alleging that the commercial projects being developed by Mantri Techzone Private Limited (Respondent No. 9) and Core Mind Software and Services Private Limited (Respondent No. 10) in the valley land immediately abutting Agara Lake and the land lying between Agara and Bellandur Lakes (Project Lands), were exposing the entire ecosystem of the area to severe threat of environmental degradation and damage. On May 7, 2015, in exercise of its jurisdiction under Section 20 of the National Green Tribunal Act, 2010 (NGT Act), the NGT passed an order inter alia directing that a committee be constituted to inspect the Project Lands and other areas of Bangalore (Committee), to examine the allegations made against Respondent No. 9 and Respondent No. 10 and recommend appropriate restoration steps and buffer zones around lakes. In the interim, Respondent No. 9 and Respondent No. 10 were restrained from creating any third party interests in respect of the Project Lands and were also directed to pay a sum of Rs. 117.35 Crores and Rs. 22.5 Crores respectively to the Karnataka State Pollution Control Board (KSPCB).

The order dated May 7, 2015 was challenged by Respondent No. 9 and Respondent No. 10 in an appeal before the Supreme Court and on May 20, 2015, the Supreme Court disposed of this appeal by granting liberty to Respondent No. 9 and Respondent No. 10 to file an application before the NGT to re-hear the matter on merits and decide it afresh. Accordingly, the matter was re-heard by the NGT, which then passed the judgment dated May 4, 2016 holding that the buffer/green zones to be maintained from the periphery of the lakes/rajakaluves be increased to 75 meters in respect of lakes, 50 meters in respect of primary rajakaluves, 35 meters in respect of secondary rajakaluves and 25 meters in case of tertiary rajakaluves. Further, the environmental compensation amount was upheld in respect of Respondent No. 9, the environmental compensation for Respondent No. 10 was reduced from Rs. 22.5 crores to Rs. 13.5 Crores and Respondent No. 9 and Respondent No. 10 were directed to demolish offending structures from the Project Lands.  Appeals were filed against the order/judgment dated May 4, 2016 by Respondent No. 9, Respondent No. 10, the State of Karnataka and other developers who were aggrieved by the general directions issued by the NGT and such appeals have been disposed of vide the Judgment of the Supreme Court..

Verdict of the Supreme Court

The Supreme Court in its Judgment has considered various issues, which are briefly discussed below:

Scope of enquiry in an appeal from an order/judgment of the NGT:

  • The Supreme Court has analysed the question on the right of appeal under Section 22 of the NGT Act and the scope of enquiry in such an appeal. The Court has noted that Section 22 of the NGT Act affords the right of appeal to a party aggrieved by an order of the NGT on the grounds specified in Section 100 of the Code of Civil Procedure, 1908 (CPC). Section 100 of the CPC entails that an appeal can be filed only where a substantial question of law is involved. The determination of whether a question of law is ‘substantial’ or not would, in turn, necessitate an examination of its public importance, effect on rights of the parties, and the settled legal position in relation to such a question.[1]
  • The Supreme Court has also discussed its scope of enquiry in an appeal under Section 22 of the NGT Act. It has observed that the right to appeal granted under this provision does not ipso facto permit a party to seek re-appreciation of the factual matrix of the entire matter or the evidence therein, nor does it allow a party to re-argue its case in such an appeal.
  • Thus, the Supreme Court has clarified that an appeal under Section 22 of the NGT Act cannot be treated as a matter of right unless it involves a substantial question of law.

Jurisdiction of the NGT:

  • The Supreme Court has also provided clarity on the powers/jurisdiction of the NGT, which was one of the main grounds raised by Respondent No. 9 and Respondent No. 10. The Supreme Court has noted that Section 14 of the NGT Act provides jurisdiction to the NGT over all civil cases that arise out of enactments specified in Schedule I of the NGT Act, where a substantial question relating to the environment or any legal right relating to it is involved. Section 15 of the NGT Act relates to power of the NGT to provide relief, compensation and restitution to victims of pollution and environmental damage. While discussing these provisions, the Court has pointed out that Section 15(1)(b) & (c) of the NGT Act have not been made relatable to Schedule I of the NGT Act. This conspicuous difference between Section 15(1)(a) and the remaining sub-sections of Section 15 of the NGT Act affords a wider range of powers to the NGT.
  • Another notable observation in respect of the jurisdiction of the NGT was that the power and jurisdiction of the NGT under Section 14 of the NGT Act is independent of the power provided under Section 15 of the NGT Act. In this regard, the Court pointed out that Section 18 of the NGT Act also recognises the right to file separate applications under the two provisions and observed that such applications have different periods of limitation.
  • It has further observed that Section 20 of the NGT Act, which mandates application of the principles of sustainable development, precautionary principle and ‘polluter pays’ principle by the NGT, offers a wide range of powers to the NGT to take restorative measures in the interest of the environment when coupled with its powers under Section 15(1)(c) of the NGT Act. Notably, the Supreme Court has taken a supportive stance on wide powers being granted to the NGT in view of this being a ‘beneficial legislation’ and has observed that a restrictive view of the powers of the NGT would ‘betray the legislative intent’ in setting it up.

In the second part of this blog, we will discuss other issues that have been addressed by the Supreme Court and analyse the reasoning behind its key findings.


[1] Sir Chunilal V. Mehta and Sons, Ltd. v. Century Spinning and Manufacturing, 1962 Supp. (3) SCR 549
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Photo of Namrata Kolar Namrata Kolar

Partner in the Real Estate and Disputes Resolution practice at the Bangalore office of Cyril Amarchand Mangaldas. Namrata has advised several Indian and overseas clients in both real estate transactions and has represented them in dispute resolution matters. She has expertise in practice of debt recovery, mergers and amalgamations and property/corporate / commercial litigations and real estate development and establishment of corporate campuses. She also advises on general corporate law including on joint venture, shareholders issues, mergers and acquisitions and arbitrations. She can be reached at namrata.kolar@cyrilshroff.com.

Photo of Sharan Kukreja Sharan Kukreja

Senior Associate in the Dispute Resolution practice at the Bangalore office of Cyril Amarchand Mangaldas. Sharan has extensively advised and represented clients before courts/tribunals on litigations and arbitrations involving commercial and transactional issues. He can be reached at sharan.kukreja@cyrilshroff.com.

Photo of Tanvi Kishore Tanvi Kishore

Associate in the Dispute Resolution practice at the Bangalore office of Cyril Amarchand Mangaldas. Tanvi has extensively advised and represented clients before various courts and tribunals in litigation and arbitration matters concerning commercial and property disputes. She can be reached at tanvi.kishore@cyrilshroff.com.

Photo of Sindhu Rao Sindhu Rao

Associate in the Dispute Resolution practice at the Bangalore office of Cyril Amarchand Mangaldas. Sindhu has extensively advised and represented clients before courts/tribunals on litigations and arbitrations involving civil and commercial issues. She can be reached at sindhu.rao@cyrilshroff.com.