Pollution Control Boards can impose restitutionary damages and require bank guarantees under Sections 33A/31A, says Supreme Court
A bench of Justice Pamidighantam Sri Narasimha and Justice Manoj Misra heard appeals by the Delhi Pollution Control Committee (DPCC) challenging a Division Bench of the Delhi High Court that had held state pollution control boards were not empowered 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 to levy compensatory damages or require bank guarantees. The appeals arose from show-cause notices and demands issued to owners of large residential, commercial and shopping complexes for operating without statutory “consent to establish” and “consent to operate”.
The Court allowed the appeals on the question of law and clarified the permissible scope of regulatory directions. It held that pollution control boards could, in exercise of powers under Sections 33A and 31A, impose and collect restitutionary or compensatory damages as fixed sums or require bank guarantees as an ex-ante preventive measure, subject to safeguards of natural justice, transparency and subordinate legislation specifying procedure. The Court emphasised the distinction between restorative measures and punitive sanctions, noting that punitive penalties remain subject to the prescribed penal procedure and adjudication under the substantive chapters of the Acts. The Court, in its reasoning, observed: The judgment also reiterated established principles: "Pollution is a civil wrong. By its very nature, it is a tort committed against the community as a whole. A person, therefore, who is guilty of causing pollution has to pay damages (compensation) for restoration of the environment and ecology."
Background The DPCC had issued show-cause notices from 2006 onwards to multiple developers and owners for alleged operation without mandatory consents under the Water and Air Acts. Single-judge decisions in Splendor Landbase Ltd. and related matters held that boards lacked power to levy environmental damages or demand bank guarantees under Sections 33A/31A, and ordered refunds where amounts were collected. A Division Bench upheld those findings, reasoning that the power to levy penalties was penal in nature and confined to the process provided in Chapters VII (Water Act) and VI (Air Act), with enforcement being through courts. DPCC appealed, arguing that the Polluter Pays principle and the boards’ remedial mandate permitted restitutionary measures and ex-ante safeguards.
The Supreme Court surveyed the statutory scheme, the 1988 insertions of Sections 33A/31A, precedent including Indian Council for Enviro-Legal Action, Vellore Citizens’ Welfare Forum and later authorities, and National Green Tribunal practice. The Court drew a clear legal distinction between compensatory/restitutory directions (which may be issued by boards as part of regulatory functions to restore or prevent environmental harm) and punitive penalties (which required adjudication under the penal chapters or by adjudicating officers under recent amendments). The Court directed that Boards could exercise these restorative powers only pursuant to subordinate legislation detailing principles, procedure and basic natural justice, and stressed transparency and non-arbitrariness. The Court noted contemporary statutory changes (including creation of Adjudicating Officers and decriminalisation measures) and held there was no conflict between boards’ power to direct restitution and the separate penal/adjudicatory regime. Because the impugned show-cause notices dated from 2006 had been set aside by the High Court, the Court declined to revive them and ordered any amounts already collected to be refunded by DPCC within six weeks.
Case Details: Case No.: CIVIL APPEAL NO(S). 757-760 OF 2013; CIVIL APPEAL NO(S). 1977-2011 OF 2013 (reported as 2025 INSC 923) Case Title: Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. & Ors. Appearances: For the Petitioner(s): Mr. Pradeep Mishra, Advocate (for DPCC) For the Respondent(s): Mr. Pinaki Misra, Senior Advocate; other counsel for various respondents (as recorded in the judgment)