NEW DELHI: The Supreme Court stated on Friday that companies benefiting from their scale must also face greater environmental responsibilities, affirming an NGT ruling that fined a builder Rs 5 crore for breaching environmental regulations.
A bench led by Justices Dipankar Datta and Vijay Bishnoi remarked that, in cases concerning environmental protection, the scale of a company’s operations—such as revenue or production volume—can significantly influence the determination of compensation for environmental damage.
The court noted that larger operations typically result in a greater environmental footprint, leading to increased resource consumption, emissions, and waste production, ultimately intensifying environmental strain.
“If a company profits more from its scale, it is logical that it bears increased responsibility for environmental costs. Equating scale to impact emphasizes that larger entities must adhere to stricter environmental regulations.”
“A company with substantial turnover indicates the vastness of its operations. If such a company is found culpable for environmental harm, its revenue correlates directly with the level of damage inflicted. Therefore, arguing that turnover should not be factored into compensation assessment is misleading,” the bench added.
The NGT determined in 2022 that Rhythm County had breached environmental regulations in Autade Handewadi, Pune, and was liable for an environmental compensation of Rs 5 crore due to construction activities without proper clearance.
In its August 22, 2022 ruling, the NGT confirmed that Rhythm County had engaged in construction violations without the necessary approvals under the Air and Water Acts.
The NGT dismissed Rhythm County’s argument that such approvals were unnecessary, stating that statutory compliance cannot be overlooked based on convenience and that construction continued even after a stop-work order from the Maharashtra Pollution Control Board.
