SC: Pollution boards can impose damages
The Supreme Court ruled that pollution control boards can impose compensatory damages for environmental harm, emphasizing prevention over punishment in regulation.
Pollution control boards are constitutionally empowered to impose and collect restitutionary or compensatory damages under the Water and Air Acts for actual or potential harm to the environment — not merely punitive penalties — the Supreme Court said in a landmark ruling that redefines the powers of environmental regulators.
Delivering a judgment with far-reaching implications for environmental governance, a bench led by Justice PS Narasimha declared that such powers are not only legally valid under Sections 33A of the Water Act and 31A of the Air Act, but are also a “necessary concomitant of the fundamental rights of citizens who suffer environmental wrongs and the duties of a statutory regulator.”
While setting aside a 2012 ruling of the Delhi high court that stripped pollution control boards of their authority to seek environmental damages, the court underscored that remediation and prevention, not just punishment, must lie at the heart of environmental regulation in India.
“This order is a very good development. In fact, this was a concern with Air and Water acts because earlier they were excessively focused on punitive action which led to criminalisation. That was not a good tool to drive change. Civil penalties are very important tools to drive action but they were either imposed by NGT or by Supreme Court,” said Anumita Roychowdhury, executive director, Centre for Science and Environment.
The bench, also comprising Justice Manoj Misra, drew a critical distinction between punitive penalties imposed after finding legal violations, and restitutionary damages, which may be imposed even ex-ante -- before actual environmental harm occurs. In doing so, the court reinforced the preventive role of regulatory authorities, aligning Indian law with global environmental principles such as “polluter pays” and precautionary action.
{{/usCountry}}The bench, also comprising Justice Manoj Misra, drew a critical distinction between punitive penalties imposed after finding legal violations, and restitutionary damages, which may be imposed even ex-ante -- before actual environmental harm occurs. In doing so, the court reinforced the preventive role of regulatory authorities, aligning Indian law with global environmental principles such as “polluter pays” and precautionary action.
{{/usCountry}}“Environmental regulators can impose and collect restitutionary or compensatory damages in the form of fixed sums or require furnishing of bank guarantees as an ex-ante measure…These powers are incidental and ancillary to their statutory empowerment and are critical to preventing environmental degradation,” it held.
{{/usCountry}}“Environmental regulators can impose and collect restitutionary or compensatory damages in the form of fixed sums or require furnishing of bank guarantees as an ex-ante measure…These powers are incidental and ancillary to their statutory empowerment and are critical to preventing environmental degradation,” it held.
{{/usCountry}}Importantly, the court clarified that such damages are not punitive fines and therefore do not require the procedural rigour mandated for criminal prosecution. Instead, they serve as compensatory tools aimed at restoring degraded ecosystems or mitigating potential environmental harm.
{{/usCountry}}Importantly, the court clarified that such damages are not punitive fines and therefore do not require the procedural rigour mandated for criminal prosecution. Instead, they serve as compensatory tools aimed at restoring degraded ecosystems or mitigating potential environmental harm.
{{/usCountry}}The judgment draws from the Indian constitutional framework, particularly Article 48A (State’s duty to protect the environment) and Article 51A(g) (citizens’ fundamental duty to safeguard natural resources). The bench reasoned that in the face of climate change and rising pollution, restoration of the environment is a core constitutional obligation and not just a statutory function.
“Our constitutionalism bears the hallmark of an expansive interpretation of fundamental rights…But such creative expansion is only a job half done if the depth of the remedies, consequent upon infringement, remain shallow,” it noted.
The court called environmental protection “perhaps the most significant duty” imposed under Article 51A, and asserted that regulators must be allowed to act with foresight and autonomy. It emphasised the importance of institutional integrity, independence from government and industrial control and domain expertise within the pollution control boards.
The judgment further consolidated the “polluter pays” principle into Indian jurisprudence, observing that it applies in three scenarios -- when regulatory thresholds are breached causing environmental damage; when no thresholds are breached, yet damage occurs; and when there is a likelihood or risk of environmental damage, even if no harm has occurred yet.
In all three instances, the court held, pollution control boards are duty-bound to act, not merely after the fact, but proactively. “Environmental regulators have a compelling duty to adopt and apply preventive measures irrespective of actual environmental damage. A restrictive interpretation of Sections 33A and 31A would encumber the boards’ ability to discharge their duty.”
“This is very good because precautionary action gives you space to drive implementing agencies to enable implementation. More importantly, the polluter pays principle helps in mobilizing additional resources to meet the cost of implementation. For example in Delhi, trucks pay environmental compensation charge, big diesel cars also pay env compensation and there is a cess on diesel. These helped create dedicated funds meant for meeting pollution control measures,” Roychowdhury said.
Stressing the importance of democratic participation in environmental governance, the court said future rules must include provisions enabling citizen complaints and community involvement in regulatory oversight. It added that pollution control boards, being the first line of defence, must be accessible, transparent, and accountable.
While expanding the powers of regulators, the court emphasised that restitutionary powers be exercised with transparency, fairness, and procedural certainty, and be guided by subordinate legislation in the form of formal rules and regulations.
These rules, the court said, must spell out methods for assessing environmental damage, criteria for calculating compensation, natural justice safeguards for affected parties, and mechanisms to ensure public participation in the complaint and enforcement process.
The court took note of existing guidelines issued by the Central Pollution Control Board in December 2022, pursuant to National Green Tribunal directions, but insisted they must now be codified as binding rules to lend them legal legitimacy and enforceability.
“Boards can decide whether a polluting entity needs to be punished or whether the situation demands immediate restoration-- or both. What matters is that their decision is guided by principle, not arbitrariness,” it said.
