Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – The Division Bench of the High Court held that DPCC (regulatory body/Board) is not empowered to levy compensatory damages in exercise of powers u/s.33A of the Water (Prevention and Control of Pollution) Act, 1974 and s.31A of the Air (Prevention and Control of Pollution) Act, 1981 on the ground that such an action amounts to imposition of penalty provided for in Chapters VII and VI of the respective Acts, and as such, procedure contemplated thereunder will be the only method for imposing and collecting compensatory damage – Correctness:
Held: 1. Having considered the principles that governing environmental laws and on interpretation of ss.33A and 31A of the Water and Air Acts, this Court is of the opinion that the Division Bench of the High Court was not correct in restrictively reading powers of the Boards – The environmental regulators, the Pollution Control Boards exercising powers under the Water and Air Acts, can impose and collect restitutionary or compensatory damages in the form of fixed sum of monies or require furnishing of bank guarantees as an ex-ante measure to prevent potential environmental damage – These powers are incidental and ancillary to the empowerment u/ss.33A and 31A of the Water and Air Acts – The powers must be exercised as per procedure laid down by subordinate legislation incorporating necessary principles of natural justice, transparency and certainty. [Paras 2, 28]
2. The Board’s powers u/s.33A of the Water Act and s.31A of the Air Act have to be read in light of the legal position on the application of Polluter Pays principle as formulated and explained – This means that State Board cannot impose environmental damages in case of every contravention or offence under the Water Act and Air Act – It is only when the State Board has made a determination that some form of environmental damage or harm has been caused by the erring entity, or the same is so imminent, that the State Board must initiate action u/s.33A of the Water Act and s.31A of the Air Act. [Para 30]
Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Board’s responsibility to choose appropriate course of action: Held: Given their broad statutory mandate and the significant duty towards public health and environmental protection the Boards must have the power and distinction to decide the appropriate action against a polluting entity – It is essential that the Boards function effectively and efficiently by adopting such measures as is necessary in a given situation – The Boards can decide whether a polluting entity needs to be punished by imposition of penalty or if the situation demands immediate restoration of the environmental damage by the polluter or both. [Para 32]
Water (Prevention and Control of Pollution) Act, 1974 – Air (Prevention and Control of Pollution) Act, 1981 – 2024 amendments – Decriminalisation and Adjudicatory Officer: Held: There is no conflict between the powers of the State Boards to direct payment of environmental damages u/ss.33A and 31A of the Water and Air Acts and the powers of the Adjudicating Officer to impose penalties under Chapter VII of the Water Act and Chapter VI of the Air Act – The decriminalization of offences under these Chapters has not removed the punitive nature of actions that can be taken under them – There remains a clear distinction between the nature of directions that the State Boards can issue u/ss.33A and 31A of the Water and Air Acts for payment of environmental damage and the determination by Adjudicating Officers – The former is compensatory in nature and will be resorted to when remedial measures are being undertaken to restore the degraded environment or pollution caused – The latter is a penalty for an offence under the law and is imposed with the objective of punishing the offender. [Para 31]
Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Power of Boards to direct the payment of environmental damages – Powers must be guided by transparency and non-arbitrariness:
Held: The Boards have the power to direct the payment of environmental damages, this Court makes it clear that this power must always be guided by two overarching principles – First, that the power cannot be exercised in an arbitrary manner; and second, the process of exercising this power must be infused with transparency. [Para 33]
Water (Prevention and Control of Pollution) Act, 1974 – s.17 – Air (Prevention and Control of Pollution) Act, 1981 – s.17 – Existing Legal Regime for Pollution Control in India – discussed. [Paras 9 and 10]
Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Insertion of ss.33A & 31A in Water and Air Acts – Discussed. [Paras 11 to 15 ]
Constitution of India – Part IV A and Arts. 48A, 51A – Interpretation of and for Environmental Institutions – Discussed. [Paras 16-17]
Environment – Pollution control – Duty to Restitute v. Power to Punish and Penalise – Discussed. [Paras 18 to 26] Water (Prevention and Control of Pollution) Act, 1974 – Chapters VII – Air (Prevention and Control of Pollution) Act, 1981 – Chapters VI – Environmental damage – Distinction between restitution and punitive action:
Held: There is a distinction between a direction for payment of restitutionary and compensatory damages as a remedial measure for environmental damage or as an ex-ante measure towards potential environmental damage on the one hand; and a punitive action of fine or imprisonment for violations under Chapters VII of the Water Act and VI of the Air Act on the other hand – If directions in furtherance of restitutionary and compensatory measures are issued, these are not to be considered as punitive in nature – Punitive action can only be taken through the procedure prescribed in the statute for example under chapters VII and VI of the Water and Air Acts respectively. [Paras 27(I)(II)]
Environmental Law – Indian environmental law assimilation of Principle of Polluter Pays:
Held: Indian environmental law has assimilated the principle of Polluter Pays and there is also a statutory incorporation of this principle in our laws – The invocation of this principle is triggered in the situations – i) when an established threshold or prescribed requirement is exceeded or breached, and it does result in environmental damage, ii) when an established threshold or prescribed requirement is not exceeded or breached, nevertheless the act in question results in environmental damage and also iii) when a potential risk or a likely adverse impact to the environment is anticipated, irrespective of whether or not prescribed thresholds or requirements are exceeded or breached. [Para 27(III)] Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Duty of Environmental regulators:
Held: Environmental regulators have a compelling duty to adopt and apply preventive measures irrespective of actual environmental damage – Ex-ante action shall be taken by these regulators and for this purpose a certain measure in exercise of powers u/ss.33A and 31A of the Water and Air Acts is necessary. [Para 27(IV)] Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Environment Protection Act – s.5 – Powers of Board under Environment Protection Act and Water and Air Acts: Held: The powers of the Boards u/ss.33A and 31A of the Water and Air Acts are identical to that of s.5 of the Environment Protection Act – Under Section 5, the Central Government or its delegate has the power to issue directions to the polluting industry to pay certain amounts and utilise the said fund for carrying out remedial measures – The Boards are empowered to take similar actions u/ss.33A and 31A of the Acts. [Para 27(V)]
Water (Prevention and Control of Pollution) Act, 1974 – s.33A – Air (Prevention and Control of Pollution) Act, 1981 – s.31A – Directions issued by the Supreme Court:
Held: (a) The judgement and order dated 23.01.2012, passed by the Division Bench of the High Court of Delhi is set aside to the extent of declaration of law but direct that the show cause notices that have been set aside by the High Court shall not be revived;
(b) This Court directs that the Pollution Control Boards can impose and collect as restitutionary and compensatory damages fixed sums of monies or require furnishing bank guarantees as an exante measure towards potential environmental damage in exercise of powers u/ss. 33A and 31A of the Water and Air Acts; (c) It is further directed that the power to impose or collect restitutionary or compensatory damages or the requirement to furnish bank guarantees as an ex-ante measure u/ss. 33A and 31A of the Water and Air Acts shall be enforced only after detailing the principle and procedure incorporating basic principles of natural justice in the subordinate legislation. [Para 39]
As published in the Supreme Court Reports, Supreme Court of India. Headnotes prepared by: Ankit Gyan. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
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