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Judgment
This original application was earlier disposed of by the Tribunal by order dated 14.07.2021 which was subject matter of challenge before the Hon’ble Supreme Court at the instance of the Respondent No. 10 in the OA in Civil Appeal No. 6437-6438/2021 and Hon’ble Supreme Court by order dated 20.02.2023 has set aside the clause (ii) of paragraph 13 of the judgment of the Tribunal and has kept the other directions intact. Hence, the matter is being heard again to that limited extent in pursuance to the order of the Hon’ble Supreme Court.
The OA was filed making a complaint against illegal mining by Respondent No. 10 by diverting natural flow of river by digging a manmade pit of 20 feet deep and 1 km long and making a bund to stop the natural river flow.
The Tribunal by order dated 16.06.2020 had formed a Joint Committee comprising of District Collector, Sonipat and Haryana State Pollution Control Board (HSPCB) and had called for the report.
The report submitted on 08.10.2020 was duly considered by the Tribunal in the proceedings dated 12.10.2020 and the Tribunal on that date had modified the Joint Committee by including the Irrigation Department and the Mining Department of Sonipat, representative of the Central Pollution Control Board (CPCB) and a nominee of the District Magistrate, Sonipat along with State PCB by making the SPCB as nodal agency for coordination and compliance. The Tribunal had permitted the Applicant to furnish representation with the State PCB and directed the Committee to hold the meeting physically or by video conferencing within one month and conduct physical inspection in any appropriate manner through the representative of the Committee and, if any violation is found, take action in accordance with law and submit action taken report before the Tribunal. The Committee had filed the report dated 30.03.2021 inter-alia giving the following observations:
“04. Observation
The observations are summarized as under:
The unit has erected a sand bund across the river as reported by Irrigation Department and the same was demolished by the Department on 23.10.2020 in compliance with the order dated 23.10.2020, issued by Deputy Commissioner, Sonipat.
A show cause notice issued by Mining Department on 23.10.2020 as the unit was found diverting River flow and the flow of river was obstructed having constructed a sand bridge /path across the river flow. The mining activity was permitted to resume by mining department on 28.10.2020.
Irrigation Department dismantled the same bund to maintain the natural flow of the river and no mining operation was carried out.
The unit found to have violated the specific condition of sustainable mining and as mentioned at Sr. No. 17 of Environment Clearance dated 22.03.2016 that "No stream should be diverted for the purpose of sand mining. No natural course and water resource are obstructed due to mining operation."
Estimation of Environment Compensation
The unit is found to be violating Environmental Clearance and inter-alia CTO conditions and therefore, liable to pay environmental compensation as estimated below:
Reference document
Specific violation and date of violation noticed
No. of day of violation
period
Total period of violation
(in days)
The unit was found violating with the specific condition of sustainable mining practice mentioned at Sr. No. 17 of
Environment clearance dated 22.03.2016 that No stream should be diverted for the purpose
of sand mining. No natural course and water resource are obstructed due to mining operation. The unit
start its mining activity from 18.05.2018 therefor initial date of
violation has been taken from 18.05.2018.
(18.05.2018-30.06.2019),
(16.09.2019-30.06.2020),
(16.09.2020-22.10.2020),
(28.10.2020-26.01.2021).
408 days
289 days
37 days
90 days
824 days
The Estimates:
PI=Pollution Index of Industrial Sector (taken as '80' considering ‘Red Category')
N= Number of days of violation took place (Violation Period) 824 days
R= A factor in Rupees (Rs.) (taken as '250')
S= Factor for scale of operation (‘1.0’ considering scale of operation being ‘medium’)
LF= Location factor (‘1.0’ considering population of area being < 1 million)
EC=PI*N*R*S*LF
80*824*250*1.0*1.0
=1,64,80,000 /-
EC Assessed Rs: 1,64,80,000 /-
The Committee had made following recommendation:
“06. Recommendations:
Based on the above observations, the committee recommends the following:
M/s DSP Associates, village Tikola, District Sonepat shall require to pay Rs. 1,64,80,000/- (One crore sixty four lacs eighty thousands) towards Environment Compensation as estimated. The unit is also liable to pay the cost of damage caused to the water and land environmental due to obstruction and diversion of the river. The damage is required to be assessed by an institute having expertise in the field of water environment, flora and fauna study.
The mining operation activity shall not be permitted to resume unless Environment Compensation is deposited/paid in full by the Unit.
The Unit shall comply all the conditions stipulated in the Environment Clearance, Mining Lease and Consent to Operate.”
Considering the same, the Tribunal in the order dated 14.07.2021 had found as under;
“xxx …………………………….…..xxx………………………………….xxx
The mining lessee in question Respondent No. 10, M/s DSP Associates has also put in appearance through Counsel and has not raised any objection to the report. We have heard learned Counsel for the parties and perused the record.
It is pointed out on behalf of the applicant that the report clearly shows that a sand bund was erected across the river which has been demolished on 23.10.2020. It is surprising that the mining activity was permitted to be resumed on 28.10.2020 inspite of such serious violations. The report further shows that instream mining was being done in violation of EC condition no. 17. The violation continued for 824 days without any check.
We find that the above shows a very sorry state of affairs. Illegal mining continued for 824 days, sand bund was illegally erected, instream mining was done and river flow was illegally diverted. Inspite of this sorry state of affairs, in the earlier report filed on 08.10.2020 by the State PCB, it was falsely reported that though there was no violation. The fact that mining was continuing for three years without any action by the statutory regulators which shows failure of the statutory regulatory mechanism, for which remedial action needs to be taken with the intervention of the higher authorities by the Government. No criminal prosecution has been initiated. Officers of the mining department and any other concerned regulatory or supervisory officers patently appear to be hand in glove without any meaningful action against such collusion by the concerned officers.”
The Tribunal while considering the issue of determination of compensation had taken note of its earlier judgment by observing as under:
“11. In the above judgement, the Tribunal has also referred to the earlier order dated 17.8.2020 on the issue of determination of compensation for illegal mining taking into account the value of mined material, cost of restoration of damage to the environment and cost of ecological services forgone forever, apart from deterrent element where violations are continuing. In this regard, it was observed:
“10. Vide order dated 17.08.2020, the Tribunal considered the CPCB report dated 30.01.2020, in pursuance of earlier orders on scale of compensation to be recovered for violation of norms for mining on polluter pays principle and the matter was deferred for further consideration of such scale and further orders in the light of the EMGSM 2020. On the issue of scale of compensation for violations, the Tribunal held that the same has to be calculated having regard to the polluter pays principle and not mere loss of royalty. This requires taking into account value of the illegally mined material and cost of restoration of the environment. CPCB did the exercise by constituting an expert Committee. The Tribunal considered the report as follows:-
“8. The Committee considered two approaches:
(I) Approach 1: Direct Compensation based on the market value of extraction, adjusted for ecological damages.
(II) Approach 2: Computing a Simplified NPV for ecological damages.
In the first approach, the criteria adopted is:
· Exceedance Factor (EF).
· Risk Factor (RF).
· Deterrence Factor (DF).
Approach 1 is demonstrated by Table 1 as follows:
Table No. 01: Approach 1
Permitted Quantity (in MT or m3)
Total Extractio n (in MT or m3)
Excess Extraction (in MT or m3)
Exceedance in Extraction:
Compensation Charge (in Rs.)
X
Y
Z = Y-X
Z/ X
D * (1+RF + DF)
Where D = Z x Market Value-of- the-material-per-MT-or-m3
DF = 0.3 if Z/X = 0.11 to 0.40 DF
= 0.6 if Z/X = 0.41 to 0.70 DF = 1 if Z/X >= 0.71
RF = 0.25, 0.50. 0.75, 1.00 (as per table 2)
Approach 2 is demonstrated by following formula:
“Till such time as data and information for a comprehensive NPV is worked out in a site specific manner to account for all (or atleast the major) ecological damages, a simplified NPV, proxied on the market value of the illegally extracted amount may be computed. In this case the NPV approach would imply that the total benefits from the activity of sand mining (as represented by the market value of the extracted amount) be deducted from the total ecological costs imposed by the activity. In the absence of data on benefits and costs separately, we recommend a modification of the formula as shown below:
Total Benefits(B) = Market Value of illegal extraction : D (refer Table 1)
Total Ecological Costs = Market Value Adjusted for risk factor: D ✱RF (refer Table1).
For present purposes, it is assumed that the Benefits would accrue only in the first year (in which the extraction of the illegally mined material takes place), while the ecological costs would continue to be felt over a period of time. NPV is to be calculated for a period of 5 years on the net value, Σ (C-B), at a discount rate ranging from 8%-5%, varying in inverse with the risk factor. Thus, where the highest risk factor (say
1) is applicable, the discount rate applicable would be the lowest (say 5% in this case).”
Final recommendation is as follows:
“Thus, it is recommended that the annual net present value (NPV) of the amount arrived at after taking the difference between the costs and the benefits through the use of the above approach, maybe calculated for a period of 5 years at a discount rate of 5% for mining which is in a severe ecological damage risk zone. The rationale for levying this NPV is based on expert opinion that reversal and/or restoration of the ecological damages is usually not possible within a short period of time and rarely is it feasible to achieve 100% restoration, even if the sand deposition in the river basin is restored through flooding in subsequent years. The negative externalities of the mining activity are therefore to be accounted for in this manner. Ideally, the worth of all such damages, including costs of those which can be restored should be charged. However, till data on site-specific assessments becomes available, this approach may be adopted in the interim. In situations where the risk categorization charged. However, till data on site-specific assessments becomes available, this approach may be adopted in the interim. In situations where the risk categorisation is unavailable or pending calculation, the following Discount Rates may be considered:
Severity
Mild
Moderate
Significant
Severe
Risk Level
1
2
3
4
Risk Factor
0.25
0.50
0.75
1.0
Discount
8%
7%
6%
5%
Annexure-A appended to the report gives the calculation as follows:
“Compensation Charge (Scenario II - explicit accounting of NPV)
Market Value of Illegally Mined Material (D) 5000*400 = 2000000/-
Annual Value of Foregone Ecological Values D*RF = 2000000/-
PV
Present Value of Foregone Ecological Values (@ 5% discount rate and
= ( + )
over 5 years)
∑ = ( + )
= ∑(2000000) + (2000000) + (2000000) + (2000000)+ 2000000)
(1+0.05)1 (1+0.05)2 (1+0.05)3 (1+0.05)4 (1+0.05)5
= Rs. 86,58,953/-
Net Present Value (after netting out market value of illegally mined material) - i.e., Total Compensation to be levied
= NPV=PV-D
= Rs. 66,58,953/-
Compensation Charge in above case:
Approach 1
(no explicit accounting of NPV)
Approach 2
(explicit accounting of NPV)
D*(1+RF+DF)
@ 5% discount rate and over 5 years
Rs. 46,00,000/-
Rs. 66,58,953/-
The Tribunal directed undertaking of scenario analysis, as suggested on behalf of the applicant and to furnish a further report accordingly. Further report dated 12.10.2020 has been filed by the CPCB reiterating its earlier report. We propose to approve approach-2 in the report. Apart from the above, a report dated 15.01.2021 has been filed by the Oversight Committee for the State of UP1 to which reference will be made later.”
In the aforesaid background, the Tribunal by order dated 14.07.2021 had disposed of the present OA by issuing following directions:
“13. Accordingly, we dispose of this application with following directions:
i. The Chief Secretary, Haryana may review the existing monitoring mechanism in the light of facts disclosed in the present case and directions of this Tribunal on the subject.
ii. The Committee already constituted, with the addition of Regional Officer, MoEF&CC, Chandigarh may revisit the compensation as per principles referred to above and give a report to the Chief Secretary, Haryana within two months for further follow up action in coordination with the concerned statutory authorities
iii. The Chief Secretary may also look into the conduct of erring officers who failed to take action against illegal mining for more than three years and who gave a false report to this Tribunal earlier that there was no illegal mining.
iv. The Environment Department, Haryana alongwith the District Magistrate, Sonipat may prepare and execute a restoration plan and the cost thereof may be met out of the compensation already recovered and which may be recovered further.
v. The Chief Secretary may ensure further legal action including prosecution and blacklisting of the unit involved in illegal mining to enforce the rule of law.
vi. The amount to the credit of the Respondent No. 10 available with the State may not be released till the decision of the Chief Secretary, Haryana.”
The Respondent No. 10 had challenged the above order of the Tribunal dated 14.07.2021 in Civil Appeal No. 6437-6438 of 2021 which has been disposed of by the Hon’ble Supreme Court by order dated 20.02.2023 by holding as under:
“1. The appeals are taken up for hearing.
We have heard the learned counsel appearing for the appellant and the learned counsel appearing for the respondents.
The main grounds on which order dated 14th July, 2021 passed by the National Green Tribunal is impugned are that the appellant was not supplied a copy of the report which is relied upon in the impugned order and on the day on which the application was heard (14th July, 2021), due to technical glitch in video conferencing, the advocate who appeared for the appellant could not address the Tribunal.
Our attention is invited to the affidavit of Shri Amit Kumar, advocate filed in the review petition before the Tribunal. In paragraph 4 of the affidavit, he has stated on oath that firstly a copy of the report relied upon in the impugned order was not supplied to the appellant and secondly, due to technical difficulty in connecting through video conferencing, he could not address the Tribunal. In paragraph 6 of the impugned order, the Tribunal has recorded that though an advocate was representing the appellant, he has not raised any objection to the report.
We may note here that notice was specifically issued by this Court on 8th November, 2021 on the ground that the advocate for the appellant could not appear before the Tribunal due to the technical glitch in virtual hearing. Respondent No.4 who was the applicant before the Tribunal has been duly served but he is unrepresented.
We may also note here that the learned counsel appearing for the State Government has pointed out that the lease granted to the appellant has been subsequently terminated which fact is not disputed by the learned counsel appearing for the appellant.
However, considering the directions issued in paragraph 13 of the impugned judgment, the issue regarding compensation will very much survive, though the lease has been terminated.
We see no reason to dispute the correctness of the statements made on oath in the affidavit filed by advocate representing the appellant before the Tribunal. Only on the ground that proper opportunity of being heard was not made available to the appellant, we are setting aside the impugned order as stated hereinafter.
We, however, clarify that we are interfering only with the direction incorporated in clause (ii) of paragraph 13 of the impugned judgment on the ground that the appellant was not heard and a copy of the report relied upon was not made available to the appellant. Rest of the directions are not interfered with.
Accordingly, the appeals are partly allowed on above terms.
We request the Tribunal to ensure that a copy of the report referred in paragraph Nos. 5 and 6 of the impugned judgment is made available to the appellant or to the appellant's counsel. It will be open for the appellant to file objections in writing to the report. The Tribunal will reconsider the issue after hearing the parties.
We also clarify that if the order of black-listing is already passed against the appellant, it will open to the appellant to challenge it in accordance with law. Such a challenge, if any, shall be decided on its own merits.”
A perusal of the above order of Hon’ble Supreme Court reveals that only the direction contained in paragraph 13 (ii) of the earlier order of the Tribunal dated 14.07.2021 has been set aside and rest of the order of the Tribunal has been kept intact.
In pursuance to the order of the Hon’ble Supreme Court, we have heard the learned Counsel for the parties.
A copy of the report which has been referred in the earlier order of the NGT is available with the Counsel for the Respondent No. 10 and he has not raised any further grievance in this regard.
Counsel for the Respondent No. 10 has fairly submitted that he has no objection if the Committee constituted by the Tribunal along with the Regional Officer, MoEF&CC, Chandigarh revisits the compensation as per the principles referred in the order of the Tribunal dated 14.07.2021 but the Respondent No. 10 should be given an opportunity of hearing when the Committee so revisits the issue of assessment of compensation. Learned Counsel appearing for the Respondent - HSPCB does not have any objection on this submission.
In spite of issuance of notice to the Applicant on 20.09.2023 and 28.02.2024, no one has appeared for the Applicant.
In the aforesaid circumstances, we dispose of the OA reiterating all other directions which are already issued by the Tribunal in the order dated 14.07.2021, except the direction no. 13 (ii) which is substituted by the following direction:
13 (ii): The Committee constituted by the Tribunal by order dated 16.06.2020 as modified by the order dated 12.10.2020 in addition of the Regional Officer, MoEF&CC, Chandigarh will revisit the compensation as per the principles referred to in the order dated 14.07.2021, after giving an opportunity of hearing to Respondent No. 10. The compensation so assessed after revisiting the same will be forwarded by the Joint Committee to the Member Secretary, HSPCB who will pass a final order of imposition of environmental compensation in accordance with law. The parties will be at liberty to challenge the same before the appropriate forum by following the due principles of law.
Learned Counsel for Respondent No. 10 submits that a sum of Rs. 1,64,80,000 towards the environmental compensation has already been adjusted against the performance security. Hence, while passing the order of imposition/recovery of EC in pursuance to the above direction, the Member Secretary, HSPCB will give due adjustment to the amount which is already deposited, if it is found to be deposited in respect of the same violation for which the EC is imposed.
The Committee is expected to complete this exercise within a period of four months.
The OA is accordingly disposed of.