Rs. 100 crore damages on Real Estate Developer, NGT order upheld by Supreme Court for violating Environmental clearance norms.
August 11, 2018
A Supreme Court Bench of Judges Justice Madan B Lokur and Justice Deepak Gupta in Goel Ganga Developers India Pvt Ltd v. Union of India & Ors, Civl Appeal No. 10854 of 2016 disposed of the appeal filed by the developer and said that "We impose damages of Rs.100 crores or 10% of the project cost, whichever is higher on the project proponent and in addition thereto, project proponent will pay Rs.5 crores as levied by the NGT in its order dated 27.09.2016". An original application was filed by Shri Tanaji Balasaheb Gambhire before the National Green Tribunal, being Application No. 184 of 2015.The court did not allow the claim of Original Applicant as it observed that the case was not in the nature of Public Interest Litigation.
Facts of the case
The original applicant filed an application before the NGT claiming that the
project proponent i.e. M/s. Goel Ganga Developers India Pvt. Ltd., had
raised construction in violation of the Environmental Clearance granted for
the project and also in violation of the various municipal laws. It was
prayed that the illegal structures be demolished; the State Level
Environment Impact Assessment Authority (SEIAA) and the Maharashtra State
Pollution Control Board be directed to initiate appropriate action against
the project proponent for violation of the Environment Impact Assessment (EIA)
Notification, 2006; the Union of India be directed to take action against
the SEIAA; and lastly it was prayed that the project proponent be directed
to pay/deposit a heavy amount of compensation in the environment relief
fund. The NGT vide its order dated 27.09.2016 allowed the application in the
following terms:
"54. For the aforesaid reasons, the Applicant succeeds in his legal
pursuit to challenge the noncompliance of EC conditions by the Respondent-9
and obtain certain directions. Hence the Application is allowed and we issue
following directions:
1. The Respondent No.9-PP shall pay environmental compensation cost of Rs.
100 crores or 5% (Five percent) of the total cost of project to be assessed
by SEAC whichever is less for restoration and restitution of environment
damages and degradation caused by the project proponent by carrying out the
construction activities without the necessary prior environmental clearance
within a period of one month. In addition to this, it shall also pay a sum
of Rs. 5 crores for contravening mandatory provision of several
Environmental Laws in carrying out the construction activities in addition
to and exceeding limit of the available environment clearance and for not
obtaining the consent from the Board.
2. In view of our finding that there has been manifest, deliberate or
otherwise suppression of facts of illegality in the project activity of
Respondent No. 9-PP by the officer of PMC, we impose fine of Rs. 5 Lakhs
upon the PMC and direct Commissioner PMC to take appropriate action against
the erring officers. The amount of Rs. 5 Lakh shall be paid within one
month.
3. We direct the Chief Secretary, State of Maharashtra and the competent
authority to take notice of the conduct of the officers concerned who have
misled the Department of Environment in the matter relating to
interpretation ofv F.S.I and BUA in terms of which order dated 31st May,
2016 has been issued in particular the Principal Secretary, Department of
Environment who has authored the order dated 31st May, 2016.
4. PMC, DoE and SEIAA are directed to pay cost of Rs. 1 lakh each to the
Applicant within 4 weeks."
Aggrieved by the aforesaid order of the NGT, the project proponent filed
Civil Appeal No. 10854 of 2016. The Pune Municipal Corporation also
challenged the said order in so far as it adversely affects the PMC by
filing Civil Appeal No. 10901 of 2016.
Review application being Application No. 35 of 2016 was filed by the
original applicant before the NGT. This application was partly allowed on
08.01.2018 and direction No. 1 in the original order dated 27.09.2016 was
modified and substituted as under:
"1. The Respondent No.9-PP shall pay environmental compensation cost of
Rs.190 crores or 5% (Five percent) of the total cost of project to be
assessed by SEAC, whichever is more, for restoration and restitution of
environment damage and degradation caused by the project proponent by
carrying out the construction activities without the necessary prior
environmental clearance within a period of one month. In addition to this,
it shall also pay a sum of Rs. 5 crores for contravening mandatory provision
of several Environment Laws in carrying out the construction activities in
addition to and exceeding limit of the available environment clearance and
for not obtaining the consent from the Board."
Thereafter, the project proponent filed I.A. No. 8000 of 2018 for permission
to amend its appeal permitting it to challenge the order passed in review
application dated 08.01.2018, which we have allowed.
Appeal being Diary No. 3911 of 2018 was filed by the original applicant
challenging the original order dated 27.09.2016 as well as the order dated
08.01.2018 passed in review application praying that demolition of the
illegal structures be ordered and the compensation be enhanced to Rs.500
crores.
That the project proponent purchased 79,100 sq. mtrs. or 7.91 hectare of
land comprised in six Survey Nos. 35, 36, 37, 38 39 and 40 in Vadgaon, Pune.
These survey numbers were amalgamated in accordance with the rules and the
plot became one plot of 79,100 sq. mtrs. From the documents placed on record
it is apparent that as per the Development Control Plan for the city of Pune,
3 roads of the width of 36 mtrs., 30 mtrs. and 18 mtrs. bisected this plot
into two which for the sake of convenience were referred to as Plot No. 1
and Plot No. 2. As per the Development Plan, there are certain statutory
reservations in addition to the roads and some land has to be left out or
reserved for schools, cultural centres, open areas etc.. The remaining area
is referred to as the 'Balance Plot Area' which in this case works out to
46,993.79 sq. mtrs.. Out of this 'Balance Plot Area' 15% is to be reserved
for amenity space and another 10% area is to be compulsorily left out as
open space leaving 'Net Plot Area' of 41,455.21 sq. mtrs.. Prima facie these
calculations do not appear to be correct. However, this will not impact the
merits of the case. Be that as it may, the undisputed fact is that FSI has
to be calculated on the 'Net Plot Area'. The court pointed out that that the
aforesaid figures are based on the written submissions submitted on behalf
of the Union of India by the learned Additional Solicitor General and these
figures have not been disputed before us.
On 12.03.2007, the project proponent applied for sanction of lay out and
building proposal plan on an area of 15,141.70 sq. mtrs., originally
depicted as Plot No. 3 and the sanctioned FSI was 15313.16 sq. mtrs..
Thereafter, on 05.09.2007, revised lay out plan was submitted for an area
measuring 28,233.23 sq. mtrs. and the sanctioned FSI was 39,526.54 sq. mtrs..
The project proponent applied for EC for the project and in the proposal
dated 27.06.2007, he had shown that he would be erecting/constructing 12
buildings having 552 flats, 50 shops and 34 offices. The 12 buildings were
to have stilts with basement and 11 floors. The total built up area was
indicated as 57,658.42 sq. mtrs.. The EC was granted to the project
proponent on 04.04.2008.
The EC was granted subject to certain conditions. It is not disputed that
the EC was granted for built up area of 57,658.42 sq. mtrs.. The main
dispute is with regard to the interpretation of the term 'built-up area'.
The case of the project proponent is that the term 'built up area' is
synonymous with 'Floor Space Index' or FSI and that the constructed area,
which is exempted from FSI area or is a non-FSI area is not a part of the
'built up area'. On the other hand, the submission made by the original
applicant as well as by the learned Additional Solicitor General appearing
for the Ministry of Environment, Forest and Climate Change is that the built
up area will cover all constructed area and the concept of FSI area or non-FSI
area is totally alien to environmental laws. Learned senior counsel for the
project proponent has drawn our attention to the Development Control Rules
for Pune Municipal Corporation, Pune, 1982.
Under the DCR, no building can be constructed without grant of building
permission/commencement certificate by the Pune Municipal Corporation. There
is a detailed procedure for obtaining the building permission/commencement
certificate wherein lay out plans, building plans etc. have to be submitted.
The court also pointed out that in this case the original applicant has
tried to project the case as if he is filing the case in the public interest
and has prayed for certain general directions. He has also claimed special
damages for himself. The main grievance of the original applicant is with
regard to the violation of the EC and according to him these violations
started in the year 2009. The original applicant had applied for a flat in
the project in question and had issued notice to the project proponent on
21.10.2011 about deficiency in service. This notice was replied to on
17.11.2011. Thereafter, the original applicant filed Consumer Complaint No.
95 of 2012 on 22.02.2012. This complaint was decided on 20.11.2014.
Thereafter, the order of the District Consumer Disputes Redressal Forum was
challenged before the State Consumer Redressal Commission both by the
project proponent and original applicant in February, 2015. It appears that
thereafter there were complaints and counter complaints filed by the parties
against each other and the project proponent filed a civil suit for
defamation against the original applicant on 02.12.2015 and it was only
thereafter on 07.12.2015 an application was filed in the NGT by the original
applicant. We are highlighting these facts only to emphasize the fact that
this litigation is obviously not a Public Interest Litigation. Therefore,
the claim of the original applicant to award him special damages cannot be
accepted.
Findings of Supreme Court and Directions passed:
"59. We summarise our findings and directions as follows:
(i) That built up area under the notification of 14.09.2006 means all
constructed area which is not open to the sky;
(ii) Built up area under the notification of 04.04.2011 means all covered area including basement and service areas;
(iii) The communication dated 07.07.2017 is totally illegal and accordingly quashed;
(iv) The original application cannot be treated as a public interest litigation;
(v) We are not taking note of the allegations levelled against the individuals who have not been arrayed as parties;
(vi) That the order dated 27.09.2016 of the NGT is upheld except in so far as Direction No. 1 is concerned;
(vii) The order in review application passed by the NGT on 08.01.2018 is held to be totally illegal and is accordingly set aside;
(viii) We uphold the original order dated 27.09.2016 holding that the construction raised by the project proponent was in violation of the environmental clearance granted to it on 04.04.2008. We uphold the fine imposed upon the PMC and the direction given to the PMC to take appropriate action against the erring officials. We also uphold the direction given to the Chief Secretary to the State of Maharashtra and in addition, direct that the Chief Secretary to the State of Maharashtra shall look into the conduct of the official holding the post of Principal Secretary (Environment) to the Government of Maharashtra on 27.09.2016 and will submit his report to the NGT within three months from today;
(ix) We impose damages of Rs.100 crores or 10% of the project cost,
whichever is higher on the project proponent and in addition thereto,
project proponent will pay Rs.5 crores as levied by the NGT in its order
dated 27.09.2016;
(x) Project proponent shall not be permitted to raise construction of two
buildings having 454 tenements;
(xi) We direct that the project proponent shall only be permitted to
complete construction of a total 807 flats, 117 shops/offices and cultural
centre including club house;
(xii) The project proponent will only be permitted to seek environmental
clearance for completion of the project subject to payment of costs in the
aforesaid terms and it may be granted ex post facto environmental clearance
in the peculiar facts of the case, on such terms and conditions as the
environmental authority deems fit and proper;
(xiii) The project proponent is granted six months' time to deposit the
amount of damages imposed in terms of direction no.
(ix) supra in the Registry of this Court. In case the project proponent does not deposit the amount within six months then all the assets of the project proponent i.e. M/s. Goel Ganga Developers India Pvt. Ltd. as well as its Directors shall be attached and the amount of damages shall be recovered by sale of those assets. It is further directed that in case this amount is not deposited within the period of six months then the licence/registration/permission granted to M/s. Goel Ganga Developers India Pvt. Ltd. to develop any "real estate project" within the meaning of the Real Estate (Regulation and Development) Act, 2016 shall be cancelled and the project proponent i.e. M/s. Goel Ganga Developers India Pvt. Ltd. and its Directors shall not be granted permission to develop any "real estate project" under the Real Estate (Regulation and Development) Act, 2016 without permission of this Court.
(xiv) The matter be listed on 22.10.2018 for issuing appropriate directions as to how the amount of damages are to be utilised;"
The court disposed of the Petitions with aforementioned conditions.
Read the Judgment of Supreme Court of India in Goel Ganga Developers India Pvt Ltd v. Union of India & Ors, Civl Appeal No. 10854 of 2016 dated 10.8.2018