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Synopsis

The Supreme Court has directed the Goa Coastal Zone Management Authority to redetermine the damages of Rs two crore imposed on a hotel for illegal construction after finding that the damages fixed were "unilateral and in the absence of hearing."

A bench of Justices B V Nagarathna and Prasanna B Varale set aside the National Green Tribunal's order upholding the May 9, 2022, direction for damages, solely on the issue of violation of the principles of natural justice and not on merits.

The court held that the NGT was not right in sustaining the impugned order.

Zon Hotels Pvt Ltd filed a civil appeal, being aggrieved by the order of October 14, 2022, passed by the National Green Tribunal, Western Zone Bench, Pune.

The appellant raised a grievance that, pursuant to the direction issued by the high court in a PIL on April 19, 2022, the respondent authority sought to compute damages vis-a-vis the illegal construction and estimated the damages resulting from the illegal construction as a sum of Rs 2,04,19,560 towards environmental compensation.

The appellant's counsel argued that no opportunity was given, neither was a show cause notice issued nor an opportunity of hearing granted. The impugned order was a unilateral, one-sided order that was hit by the principles of natural justice.

The appellant preferred an appeal before the NGT, Western Zone. Although the NGT acknowledged that the appellant was not heard in the matter, it nevertheless did not remand the matter to the first respondent-management authority for a fresh redetermination of the environmental compensation. Instead, the NGT sustained the said order on the premise that it (NGT) was giving an opportunity of being heard to the appellant, the counsel said.

"An appellate authority hearing a lis in the form of an appeal is totally different from the original authority which would determine the environmental compensation which is in the nature of an exercise of administrative powers," the counsel said.

The counsel argued that the NGT ought to have remanded the matter to the management authority for redetermination of the environmental compensation payable by the appellant herein after granting an opportunity of being heard and filing objections to the said determination.

The counsel further submitted that the impugned order of the NGT, as well as the order of May 9, 2022, by the authorities, should be set aside, and a fresh compliance of the direction issued by the high court on April 19, 2022, should take place.

Opposing the contention, the respondents' counsel submitted that the appellant could have approached the high court if it had any grievance regarding the order of May 9, 2022. It was the appellant that chose to file an appeal before the NGT, which, after giving an opportunity of hearing to the appellant herein, passed the impugned order. The counsel argued that there was no merit in the appeal and hence, it should be dismissed.

After reviewing the orders, the bench noted that while determining the compensation, the authority had neither issued any show cause notice to the appellant herein nor granted an opportunity of being heard.

"Therefore, the said determination made by the first respondent-authority is unilateral and in the absence of hearing the appellant herein, we find that the procedure adopted by the first respondent herein was contrary to the settled principles of natural justice," the bench said.

The court also opined that when the said order was assailed by the appellant before the NGT, which had found a violation of the principles of natural justice, it ought to have remanded the matter to the first respondent-authority for redetermination of environmental compensation after granting an opportunity of being heard to the appellant herein.

"Instead, the NGT took upon itself to determine the correctness or otherwise of the calculation of environmental compensation arrived at by the first respondent-authority on the premise that it was giving an opportunity to the appellant herein," the bench said.

The court held that the opportunity given by the NGT to the appellant in an appeal was not of the same quality as the opportunity that the first respondent, as the original authority, would have granted to the appellant.

After setting aside the NGT's order, the court construed the impugned order of May 9, 2022, passed by the first respondent-authority, as a show cause notice. It granted the appellant three weeks to reply to the said order, now construed as a show cause notice.

"The appellant shall be heard and there shall be a redetermination of the environmental compensation that has to be paid by the appellant herein having regard to the direction of April 19, 2022 issued by the High Court in PIL writ petition," the bench said.

The court ordered that the said redetermination should be conducted as expeditiously as possible and in accordance with law. It allowed the appeal in part. Court also clarified that a sum of Rs 60,00,000, which had been deposited by the appellant before the NGT, Western Zone, would be subject to the orders to be made by the first respondent-authority.

Case Title: Zon Hotels Pvt Ltd Vs Goa Coastal Zone Management Authority & Ors