The Supreme Court ruled that Pollution Control Boards (PCBs) are legally empowered to impose environmental compensation on polluting entities under the Water (Prevention and Control of Pollution) Act, 1974and the Air (Prevention and Control of Pollution) Act, 1981.

Key Highlights of the Judgment

• Restoration: The Court emphasised that the goal is to completely restore polluted air and waterbodies to their original pristine states within the ecosystem.
• Statutory Authority:  Boards can levy restitutionary or compensatory damages (monetary penalties or bank guarantees) either: 
  • Post-facto, when environmental harm has occurred, or
  • Ex-ante, to prevent anticipated damage.
• Sections Invoked: 
  • Section 33A – Water Act, 1974
  • Section 31A – Air Act, 1981
  • These allow PCBs to issue directions to polluting entities, including monetary directions, similar to powers under Section 5 of the Environment Protection Act, 1986.
• Direction to the Legislature:
  • This power must be exercised only after issuance of subordinate legislation (rules and regulations) under both Acts.
  • These rules must follow the principles of natural justice.

Legal Principles Laid Down by the SC

• Restitutionary vs Punitive Damages
  • Restitutionary Damages: Focused on restoring the environment to its original or near-original state.
  • Punitive Damages: Intended to penalize the violator.
  • Court’s Clarification: These are distinct remedies and must be treated separately.
• Polluter Pays Principle: Recognised as a constitutional and statutory obligation in Indian environmental law.
  • The judgment reinforced that offending industries are responsible for environmental damage and must bear the cost of restoration.

Supporting Judgments Cited

• The judgment drew on landmark cases like Vellore Citizens Welfare Forum (1996) and Indian Council for Enviro-Legal Action (1996).
• The judgements in these cases emphasized environmental restitution as a constitutional and statutory obligation, distinct from punitive sanctions.
• These cases upheld environmental restitution and the Polluter Pays Principle.

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