SC: Landlord not liable for tenant’s environmental violations, upholds NGT order

THe sublime margaret court on mon upheld an dictate of the subject Green Tribunal (NGT) which said that the owner of a commercial property in Gujarat cannot be made to compensate for the environmental wrongs committed by the tenant occupier.A bench of justices Satish Chandra Sharma and Sanjeev Sachdeva dismissed the appeal filed by the Gujarat Pollution Control Board (GPCB) challenging the NGT order of November 2025 directing closure of the premises and levying a penalty of ₹25 lakh.The GPCB in its appeal challenged the tribunal’s finding on the ground that the owner of the property cannot be totally absolved of the harm caused to the environment as the unit was running as an unlicensed dye-based manufacturing facility that was generating harmful effluents into the water stream in excess quantity than the permissible limits.Further, the Board said that in most cases the operator of the unit goes absconding and there is no means to recover the damage caused to the environment.The tribunal favoured the landlord Jagmohan Lachiram Jalan, who had submitted that his plot in Gujarat’s Mangrol in Surat district was leased out on rent to Suryaprakash Silaram Somani in September 2020.Also Read: What Supreme Court’s proposed regulations for AI use in courts meanThe rent agreement required that no illegal act would be permitted to be done from the said premises. Somani was the director of M/s Satyam Chemicals who renewed the agreement every year.The owner told the tribunal that he was not aware about the fact that the unit running at the premises by the name M/s Genial Chemi, had not obtained the requisite Consent to Establish and other authorisations from the Board.He was not aware of the fact that on October 16, 2021, the Board held Somani accountable and imposed an interim environmental damage compensation (EDC) of ₹25 lakh as per an earlier decision of the tribunal.Somani failed to deposit the amount and remained untraceable. In March 2022, the electricity to the premises was disconnected. It was then that the owner came to know that the tenant had incurred the wrath of the Board and was pressed with EDC under section 33A of the Water (Prevention and Control of Pollution) Act, 1974 to the tune of ₹25 lakh.Jalan filed a police complaint against Somani and three others for cheating and criminal conspiracy among other offences under the Indian Penal Code (IPC) and moved a representation to the Board against the order sealing his property. The Board rejected his representation on December 6, 2024 and ordered closure of the unit.Faced with the question whether the landlord can be held accountable for the illegal acts committed by the tenant, the NGT said, “We are of the view that for the illegal acts committed by the tenant, the landlord cannot be held accountable.”It set aside the December 2024 order and said, “We are of the considered opinion that the impugned order, which imposes the amount of interim EDC to the tune of ₹25 lakh cannot be allowed to be levied from the appellant, who is owner of the premises in question and not the actual occupier thereof.”