In a significant decision aimed at empowering pollution control boards, the Supreme Court Monday held that they can seek compensation for restitution of damages already caused by polluting entities or demand bank guarantees to prevent any potential future environmental damage.
A bench of Justices P S Narasimha and Manoj Misra set aside the Delhi HC Division Bench order which said the Boards are “not empowered to levy compensatory damages in exercise of powers under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974 and Section 31A of the Air (Prevention and Control of Pollution) Act, 1981 on the ground.” The HC held that such levy can be made only by courts, after taking cognisance of offences specified under the Acts.
The SC said, “having considered the principles that govern our environmental laws and on interpretation of Sections 33A and 31A of the Water and Air Acts, we are of the opinion that that the Division Bench of the High Court was not correct in restrictively reading powers of the Boards. We are of the opinion that these regulators in exercise of these powers can impose and collect, as restitutionary or compensatory damages, fixed sum of monies or require furnishing bank guarantees as an ex-ante measure towards potential or actual environmental damage.”
The Delhi Pollution Control Board had approached the SC against the HC judgement which quashed the show cause notices issued by the Board to some residential complexes, commercial complexes and shopping malls which were allegedly constructed and were operating without obtaining the mandatory “consent to establish” and “consent to operate” under the Water Act and Air Act.
The SC judgment said, “The Board’s powers under Section 33A of the Water Act and Section 31A of the Air Act have to be read in light of the legal position on the application of the Polluter Pays principle… This means that the 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 under” the provisions.
It directed that “the powers must be exercised as per procedure laid down by subordinate legislation incorporating necessary principles of natural justice, transparency and certainty.”
The court said that “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.”
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The bench said, “Our firm view is that remedial powers or restitutionary directives are a necessary concomitant of both the fundamental rights of citizens who suffer environmental wrongs and an equal concomitant of the duties of a statutory regulator… The State’s ‘endeavour to protect and improve the environment’ will be partial, if it does not encompass a duty to restitute.”
It said that “of all the duties imposed under Article 51A (fundamental duties), the obligation to conserve and protect water and air, is perhaps the most significant, amidst our climate change crisis. The Water Act and the Air Act institutionalised all efforts and actions that need to be taken to protect air that we breathe and water that we consume by creating the Pollution Control Boards. These Boards functioning as our environment regulators are expected to act with institutional foresight by evolving necessary policy perspectives and action plans.”
