Supreme Court Stays NGT's Direction To Initiate Action Under PMLA, Prima Facie Says NGT Lacks Jurisdiction

The Supreme Court on Friday (May 10) stayed the direction of the National Green Tribunal (NGT) to initiate action under the Prevention of Money Laundering Act 2002 (PMLA) against the appellant company for actions related to dumping of hazardous waste in violation of environmental norms. The Court noted that the NGT lacked jurisdiction to pass any such direction and further stayed the order to pay environmental compensation of Rs. 25,39,68,750/-. 

The bench of Justices AS Oka and Ujjal Bhuyan in their order issued notice to the challenge against the impugned NGT directions and observed the following : 

"Prima facie, we are of the view that the National Green Tribunal had no jurisdiction to issue a direction to initiate action under the Prevention of Money Laundering Act, 2002 against the appellant. Therefore, we stay the said direction recorded in paragraph 230 of the impugned order. We also stay clause (I) of paragraph 232 of the impugned order." 

The appellant company was sent an order imposing and demanding environmental compensation of Rs.46,67,80,837 by the Uttar Pradesh Pollution Control Board, Kanpur Dehat (UPPCB) for allegedly dumping hazardous waste containing chromium at a village in the area. The said order was then challenged before the NGT in an appeal. The main issue before the NGT was to consider whether the appellant was liable under the Water Act 1974, Air Act 1981 and Hazardous Waste (Management & Handling) Rules, 1989 for the dumping of hazardous chromium and the nature of action to be taken against it.  

In deciding so, the Tribunal noted that the PMLA consists within its ambit offences under environmental norms by way of S. 30 of the PML (Amendment) Act, 2012.  These offences include Offences under The Biological Diversity Act, 2002; Offences under The Environment Protection Act, 1986; Offences Under The Water (Prevention And Control Of Pollution) Act, 1974 and Offences under The Air Act 1981. 

The Tribunal observed that the process of production of materials consequently led to the hazardous discharge and violation of scheduled offences under S.3 of the PMLA (offence of money-laundering). The court reasoned that the revenue proceeds of the appellant constituted as the proceeds of crimes of environmental character as included under Schedule A of the PMLA and the appellants were thus liable for action under the PMLA. 

227. In the present case, when environmental norms were not followed, by not operating ETP or by discharging partially or totally untreated pollutant or by causing other violations, this resulted in commissioning of Scheduled offence and revenue earned by committing such crime is proceeds of crime as defined in PMLA 2002 and by showing it part of business proceeds in accounts amounts to projecting or claiming it as untainted property. The entire activity is covered by Section 3 of PMLA 2002.

The NGT thus proceeded to initiate legal action against the appellants under the provisions of the PMLA 

"230. We accordingly, answer issue VII holding that appellant having violated the provisions of Water Act 1974, Air Act 1981 and EP Act 1986, therefore is also liable for action under PMLA 2002." 

The appellants were further directed to comply and pay an environmental compensation of Rs.25,39,68,750/- failing which they would face recovery proceedings. 

"232. In view of the above discussion, we allow Appeal partly in the manner as under:

I. Appellant shall pay and deposit environmental compensation of Rs. 25,39,68,750/- (Rs. twenty five crores, thirty nine lacs, sixty eight thousands, seven hundred and fifty only) with UPPCB within three months, failing which, recovery proceedings in accordance with law, shall be initiated by the Competent Authority without any further delay...."

The matter will now be heard by the Apex Court on August 5. 

Counsels appearing for appellants : Mr. Ninad Laud, Adv.; Mr. Ashok Kumar Tripathi, Adv.; Ms. Rashika Narain, Adv.; Mr. Zubin Dash,Adv.; Mr. Gajendra Singh Negi, Adv.; Mr. Pradyumna Tyagi, Adv.; Mr. Umesh Kumar Shukla, Adv.; Mr. Avinash Shukla, Adv.; Mr. Subhro Prokas Mukherjee, AOR

Case Details : WARIS CHEMICALS PVT. LTD. v. UTTAR PRADESH POLLUTION CONTROL BOARD CIVIL APPEAL Diary No(s). 15982/2023

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