(MENAFN- IANS) New Delhi, Aug 26 (IANS) The Supreme Court has held that the National Green Tribunal (NGT) lacks the power to direct the Enforcement Directorate (ED) to initiate prosecution under the anti-money laundering law for alleged environmental violations.

A bench of Chief Justice of India (CJI) B.R. Gavai and Justice K. Vinod Chandran observed that the green tribunal has no power under the National Green Tribunal Act, 2010, to direct the prosecution of individuals under the Prevention of Money Laundering Act (PMLA).

“Though such power would be available to a PMLA court or to constitutional courts, it would not be available for exercise by the NGT, constituted to ensure effective and expeditious consideration of cases relating to environmental protection and conservation of forests," the CJI Gavai-led Bench said as it set aside the green tribunal's direction to the ED to examine the petitioner, C.L. Gupta Export Ltd, a handicraft manufacturing and exporting company.

"We hence set aside the direction issued to the Enforcement Directorate; but say nothing on whether there is an offence made out or not, which at this stage is not within our ken," it said.

The apex court further noted that no FIR had been registered for any scheduled offence, nor was any complaint filed alleging such offences under the various environmental protection statutes scheduled under the PMLA.

In its judgment, the Supreme Court also set aside the Rs 50 crore environmental compensation imposed by the NGT on the petitioner company for alleged violations, including illegal groundwater extraction and discharge of effluents into a Ganga tributary.

The bench observed that the NGT's method of calculating the penalty based on the company's revenue lacked a rational nexus with the alleged environmental damages and was inconsistent with legal principles laid down in earlier judgements of the apex court.

"The methodology adopted by the NGT for imposition of penalty was held to be totally unknown to any principle of law. (R)ule of law does not permit the state or its agencies to extract a 'pound of flesh', even in environmental matters,” it added.

However, the apex court upheld the NGT's directions allowing continuous monitoring and audit of pollution control measures to ensure a“pollution-free compliance regime."

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