Supreme Court Clarifies NGT’s Appellate Jurisdiction in Environmental Cases: Tamil Nadu Pollution Control Board vs. Sterlite Industries (2019)

Date of the Judgment: 18 February 2019
Citation: (2019) INSC 123
Judges: R.F. Nariman, J. and Navin Sinha, J.
Can the National Green Tribunal (NGT) directly hear appeals against original orders of pollution control boards, or must these appeals go through the designated appellate authorities first? The Supreme Court of India addressed this critical question concerning the NGT’s appellate jurisdiction in a case involving a copper smelting plant in Tamil Nadu. The court clarified the statutory framework for environmental appeals, emphasizing the importance of adhering to the prescribed hierarchical structure. This judgment has significant implications for environmental litigation and the functioning of the NGT.

Case Background

Sterlite Industries (India) Ltd. (now Vedanta Ltd.) operated a copper smelter plant in Thoothukudi, Tamil Nadu. The company received initial clearances and consent to operate from the Tamil Nadu Pollution Control Board (TNPCB) and the Ministry of Environment, Forest, and Climate Change (MoEF) in the mid-1990s. Production commenced on January 1, 1997. However, these clearances faced legal challenges, leading to a Madras High Court order in 2010 to shut down the plant.

In March 2013, nearby residents reported health issues due to emissions from the plant. The TNPCB issued a closure notice on March 29, 2013, which was stayed by the NGT on May 31, 2013, allowing the plant to resume production under certain conditions. The NGT later set aside the TNPCB closure order on August 8, 2013. Subsequently, in 2018, the TNPCB refused to renew the consent to operate, citing non-compliance with environmental regulations. This led to further orders for closure and disconnection of power supply, culminating in a Tamil Nadu government order for permanent closure on May 28, 2018.

These orders became the subject of a composite appeal before the NGT. The NGT eventually set aside these orders, leading to the present appeals before the Supreme Court.

Timeline:

Course of Proceedings

The TNPCB’s initial closure order was stayed by the NGT, which allowed the plant to resume operations with conditions. However, the NGT’s order was challenged by the TNPCB before the Supreme Court. The NGT also set aside the TNPCB’s closure order in August 2013, which was again challenged before the Supreme Court.

In 2018, after the TNPCB refused to renew consent to operate, Sterlite filed appeals before the appellate authority under Section 28 of the Water (Prevention and Control of Pollution) Act, 1974. While these appeals were pending, the Tamil Nadu government ordered permanent closure of the plant. The NGT then took up a composite appeal against all the orders, including the government’s closure order. The NGT constituted a committee headed by a former Chief Justice to investigate the matter. The committee concluded that the closure orders were against natural justice and not justified. The NGT substantially accepted the committee’s recommendations and set aside the closure orders.

The TNPCB and the State of Tamil Nadu then appealed to the Supreme Court, primarily arguing that the NGT lacked the jurisdiction to entertain the appeals.

Legal Framework

The Supreme Court examined the following key legal provisions:

• Section 18 of the Water (Prevention and Control of Pollution) Act, 1974: This section empowers the government to issue directions to the State Pollution Control Boards.
• Section 25 of the Water (Prevention and Control of Pollution) Act, 1974: This section restricts new outlets and new discharges without the consent of the State Board.
• Section 27 of the Water (Prevention and Control of Pollution) Act, 1974: This section deals with the refusal or withdrawal of consent by the State Board.
• Section 28 of the Water (Prevention and Control of Pollution) Act, 1974: This section provides for appeals against orders made by the State Board under Sections 25, 26, or 27 to an appellate authority constituted by the State Government.
• Section 29 of the Water (Prevention and Control of Pollution) Act, 1974: This section allows the State Government to revise orders made by the State Board.
• Section 33A of the Water (Prevention and Control of Pollution) Act, 1974: This section empowers the Board to issue directions, including closure, prohibition, or regulation of any industry.
• Section 33B of the Water (Prevention and Control of Pollution) Act, 1974: This section allows appeals to the NGT against orders of the appellate authority under Section 28, orders of the State Government under Section 29, and directions issued by the Board under Section 33A.
• Section 21 of the Air (Prevention and Control of Pollution) Act, 1981: This section restricts the operation of industrial plants without the consent of the State Board.
• Section 31 of the Air (Prevention and Control of Pollution) Act, 1981: This section provides for appeals against orders made by the State Board to an appellate authority constituted by the State Government.
• Section 31A of the Air (Prevention and Control of Pollution) Act, 1981: This section empowers the Board to issue directions, including closure, prohibition, or regulation of any industry.
• Section 31B of the Air (Prevention and Control of Pollution) Act, 1981: This section allows appeals to the NGT against orders of the appellate authority under Section 31.
• Section 14 of the National Green Tribunal Act, 2010: This section defines the NGT’s jurisdiction over environmental disputes.
• Section 16 of the National Green Tribunal Act, 2010: This section defines the NGT’s appellate jurisdiction, including appeals against orders under the Water Act and the Air Act.

Arguments

Arguments by the Tamil Nadu Pollution Control Board (TNPCB) and the State of Tamil Nadu:

• The NGT acted without jurisdiction by directly entertaining appeals against original orders of the TNPCB and the State Government.
• The order dated 09.04.2018 refusing consent to operate was appealable to the appellate authority under the Water Act and Air Act, and not directly to the NGT.
• The orders dated 12.04.2018, 23.05.2018, and 28.05.2018, made under Section 33A of the Water Act and Section 31A of the Air Act, were composite orders. Orders under Section 31A of the Air Act are not appealable to the NGT, and therefore, the NGT could not have interfered with these orders.
• The order dated 28.05.2018, issued by the Government of Tamil Nadu under Section 18 of the Water Act, was not an appealable order under either the Water Act or the NGT Act.
• The NGT cannot exercise powers of judicial review over orders that are not specifically appealable under the statutes.
• A party cannot bypass the appellate authority and directly approach the NGT.

Arguments by Sterlite Industries (Respondent):

• The appeal before the appellate authority against the order dated 09.04.2018 had become infructuous due to the government’s order for permanent closure, making a direct appeal to the NGT maintainable.
• The combined orders under Sections 33A and 31A of the Water Act and Air Act, respectively, were substantially orders under the Water Act and hence appealable.
• The NGT has the power to correct orders under Section 14 of the NGT Act to avoid piecemeal litigation.
• A direction under Section 31A of the Air Act is equivalent to an order under Section 31 of the Air Act and hence appealable.
• The order dated 28.05.2018 of the Government of Tamil Nadu under Section 18 of the Water Act was not a valid order, as it dealt with a specific industry and not general matters.
• The NGT, being an expert body, is better equipped to handle environmental matters than the High Court.
• The NGT can exercise powers of judicial review and interfere with the State Government’s orders.

Issues Framed by the Supreme Court:

1. Whether the NGT could directly entertain appeals against the original orders of the TNPCB and the State Government, or whether such appeals should have been filed before the designated appellate authorities first?
2. Whether the orders passed under Section 33A of the Water Act and Section 31A of the Air Act were appealable to the NGT?
3. Whether the order passed under Section 18 of the Water Act was appealable to the NGT?

Treatment of the Issue by the Court

Authorities

Judgment

How each authority was viewed by the Court?

• The Court relied on Kundur Rudrappa v. Mysore Revenue Appellate Tribunal and Ors. [CITATION] to emphasize that an appeal must be specifically provided for by statute.
• The Court cited Cellular Operators Association of India and Ors. v. Union of India and Ors. [CITATION] to highlight that the jurisdiction of a tribunal is defined by the statute that created it.
• The Court used B. Himmatlal Agrawal v. Competition Commission of India [CITATION] to reinforce that an appellate tribunal cannot exceed its statutory powers.
• The Court referred to Raja Soap Factory v. S.P. Shantharaj [CITATION] to show that a High Court’s original jurisdiction is limited to matters specifically invested by statute.
• The Court cited Northern Plastics Ltd. v. Hindustan Photo Films Mfg. Co. Ltd. and Ors. [CITATION] to emphasize that statutory procedures for appeals must be strictly adhered to.
• The Court relied on Manohar Lal v. Ugrasen [CITATION] to clarify that an appellate authority cannot exercise the powers of a lower statutory authority.
• The Court cited Arcot Textile Mills Ltd. v. Regional Provident Fund Commissioner [CITATION] to reiterate that a right of appeal must be expressly provided by statute.
• The Court referred to Smith v. East Elloe Rural District Council [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court followed State of Punjab v. Gurdev Singh [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court followed Tayabbhai M. Bagasarwalla v. Hind Rubber Industries (P) Ltd. [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court followed Pune Municipal Corpn. v. State of Maharashtra [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court followed Krishnadevi Malchand Kamathia v. Bombay Environmental Action Group [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court followed Kandla Port v. Hargovind Jasraj [CITATION] to highlight that an administrative order is valid until set aside by a competent authority.
• The Court cited Garikapati Veeraya v. N. Subbiah Choudhury [CITATION] to emphasize that the right to appeal is not a procedural matter but a substantive one.
• The Court referred to Re: Special Reference [CITATION] to emphasize the difference between a superior court and a court of limited jurisdiction.
• The Court relied on Bharat Sanchar Nigam Limited v. Telecom Regulatory Authority of India and Ors. [CITATION] to clarify that the NGT, as an appellate body, cannot strike down rules or regulations.
• The court distinguished Kanhiya Lal Omar v. R.K. Trivedi [CITATION] as the context of Article 324 was different.
• The court distinguished Maharashtra State Board of Secondary and Higher Secondary Education v. Paritosh Bhupeshkumar Sheth [CITATION] and stated that it cannot provide an appeal where there is none.
• The court distinguished Galada Power & Telecommunication Ltd. v. United India Insurance Co. Ltd. [CITATION] as the question was not whether an appellant may waive a statutory right of appeal but whether the NGT has the jurisdiction to hear a direct appeal.
• The court distinguished Allokam Peddabbayya v. Allahabad Bank [CITATION] as the question was not whether an appellant may waive a statutory right of appeal but whether the NGT has the jurisdiction to hear a direct appeal.
• The court distinguished L. Chandra Kumar v. Union of India and Ors. [CITATION] as it pertained to tribunals under Article 323A of the Constitution and not statutory tribunals.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the need to adhere strictly to the statutory framework governing environmental appeals. The Court emphasized that the NGT’s jurisdiction is defined by the statutes that created it—the Air Act, the Water Act, and the NGT Act—and that it cannot exercise powers beyond those specifically conferred. The Court was particularly concerned about the NGT bypassing the designated appellate authorities, which would undermine the hierarchical structure established by the statutes. The Court also highlighted that the right to appeal is a substantive right and must be expressly provided by law, and cannot be assumed. The Court also emphasized the distinction between the powers of a superior court and a court of limited jurisdiction, clarifying that the NGT does not have general powers of judicial review like a High Court under Article 226 of the Constitution.

Logical Reasoning:

Ratio Decidendi

The Supreme Court held that the NGT’s appellate jurisdiction is limited to orders passed by the designated appellate authorities under the Air Act and Water Act and not against original orders of the Pollution Control Boards or the State Government. The Court emphasized that the NGT cannot bypass the prescribed appellate hierarchy and that a right to appeal must be expressly conferred by statute. The Court also clarified that directions issued under Section 31A of the Air Act are not appealable to the NGT, and that the NGT does not have the power of judicial review over orders that are not specifically made appealable under the statutes. The Court also held that orders made under Section 18 of the Water Act are not appealable to the NGT but can only be challenged in a civil suit or under Article 226 of the Constitution of India.

Obiter Dicta

The Court made several observations in passing, which are not binding as precedents but provide guidance. These include:

• The importance of adhering to the hierarchical structure for appeals as prescribed by statute.
• The need for tribunals to act within the jurisdictional limits defined by the statute.
• The principle that an administrative order is valid until set aside by a competent authority.
• The distinction between the powers of a superior court and a court of limited jurisdiction.
• The right of appeal is a substantive right, not a procedural one, and must be expressly provided by law.

Dissent

There was no dissenting opinion in this case, as both judges on the bench agreed on the judgment.

Final Order

The Supreme Court allowed the appeals filed by the TNPCB and the State of Tamil Nadu. The Court set aside the order of the NGT, stating that the NGT had acted without jurisdiction by directly entertaining appeals against the original orders of the TNPCB and the State Government. The Court remanded the matter back to the appellate authority under the Air Act and Water Act for adjudication of the appeals filed by Sterlite Industries.

Impact of the Judgment

This judgment has significant implications for environmental litigation and the functioning of the NGT. Key impacts include:

• Clarification of NGT’s Appellate Jurisdiction: The judgment clarifies that the NGT’s appellate jurisdiction is not as broad as some may have assumed. It cannot directly hear appeals against original orders of Pollution Control Boards or the State Government.
• Importance of Appellate Hierarchy: The judgment reinforces the importance of adhering to the prescribed appellate hierarchy. Parties must first exhaust their remedies before the designated appellate authorities before approaching the NGT.
• Limitations on NGT’s Powers: The judgment limits the NGT’s power of judicial review, clarifying that it cannot interfere with orders that are not specifically made appealable under the statutes.
• Impact on Environmental Litigation: The judgment may lead to a more structured approach to environmental litigation, with parties being required to follow the prescribed appellate procedures.
• Precedent for Future Cases: This judgment serves as an important precedent for future cases involving the NGT’s appellate jurisdiction.

Conclusion

In Tamil Nadu Pollution Control Board vs. Sterlite Industries (2019), the Supreme Court of India provided a significant clarification on the appellate jurisdiction of the National Green Tribunal (NGT). The Court emphasized that the NGT’s jurisdiction is limited to orders of the appellate authorities under the Air Act and Water Act, and not against original orders of Pollution Control Boards or the State Government. The Court held that the NGT cannot bypass the prescribed appellate hierarchy and that a right of appeal must be expressly conferred by statute. This judgment underscores the importance of adhering to statutory procedures and the limitations on the powers of tribunals. It serves as a crucial guide for environmental litigation and the functioning of the NGT in India.