In Brief
A manufacturing company challenged the National Green Tribunal's environmental order imposing Rs. 50 crores compensation, closure directions for non-compliant divisions, and a reference to the Enforcement Directorate under the Prevention of Money Laundering Act. The company had achieved full compliance by its final report. The Supreme Court held that environmental penalties must have rational nexus to actual damage, not arbitrary calculations based on turnover. The Court found the NGT lacked jurisdiction to direct PMLA prosecution and should not issue sweeping closure orders after compliance was documented. The Court allowed the appeal, setting aside the arbitrary compensation and closure directions while retaining continuing monitoring powers, emphasizing that judicial reasoning must proportionately address facts rather than elaborate on general law.
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