National Green Tribunal – The Supreme Court on Friday (January 30, 2026) said that if a company earns profits beyond its scale, it will have to bear greater responsibility for environmental costs, while upholding the National Green Tribunal (NGT) order which imposed environmental compensation of ₹5 crore on a builder for violating green norms. A bench of Justices Dipankar Datta and Vijay Bishnoi said that in cases related to protection of the environment, linking the scale of operations of a company (such as turnover, production volume or revenue generation) to environmental damage can be a powerful factor in determining compensation. Noting that larger operations imply a larger footprint, the Court noted that larger scale often means greater resource use, greater emissions and more waste, leading to greater environmental stress.

“If a company makes profits greater than its scale, it is logical that it takes greater responsibility for environmental costs. Linking scale to impact sends the message that big players need to play by the green rules,” the bench said. “If the turnover of a company is high, it reflects the sheer scale of its operations.

Such a company, if found to contribute generously to environmental damage, may have a direct relationship with its turnover with the extent of the damage caused. Thus, in our considered opinion, the argument that turnover can never become a relevant factor in determining the quantum of compensation commensurate with the extent of damage caused is wrong.

” The NGT had in 2022 held that Rhythm County had violated environmental norms at Pune’s Autade Handewadi and constructed without obtaining environmental clearance, for which it had to pay compensation of ₹5 crore. In its order dated August 22, 2022, the NGT held that Rhythm County had carried out construction activity in violation of environmental norms and without obtaining mandatory consent under the Air and Water Act. The NGT rejected Rhythm County’s contention that such consent was not required, holding that statutory compliance cannot be diluted on the basis of interpretive convenience and that the company had continued construction activities even after the Maharashtra Pollution Control Board issued a stop-work order.