# Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc

- **Citation:** 2025 INSC 923
- **Court:** Supreme Court of India
- **Decided:** 2025-08-04
- **Bench:** Pamidighantam Sri Narasimha, Manoj Misra
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/delhi-pollution-control-committee-v-lodhi-property-co-ltd-etc-38989
- **Pages:** 33

## Headnote

Whether the regulatory boards can, in exercise of powers u/s.33A
of the Water Act and s.31A of the Air Act, impose and collect as
restitutionary and compensatory damages fixed sums of monies
or require furnishing bank guarantees as an ex-ante measure
towards potential environmental damage.
Headnotes†
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
[2025] 8 S.C.R.
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Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
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 31

## Text

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[2025] 8 S.C.R. 362 : 2025 INSC 923
Delhi Pollution Control Committee
v.
Lodhi Property Co. Ltd. Etc.
(Civil Appeal No(s). 757-760 of 2013)
04 August 2025
[Pamidighantam Sri Narasimha and Manoj Misra, JJ.]
Issue for Consideration
Whether the regulatory boards can, in exercise of powers u/s.33A
of the Water Act and s.31A of the Air Act, impose and collect as
restitutionary and compensatory damages fixed sums of monies
or require furnishing bank guarantees as an ex-ante measure
towards potential environmental damage.
Headnotes†
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
[2025] 8 S.C.R.
363
Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
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
364
[2025] 8 S.C.R.
Supreme Court Reports
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
[2025] 8 S.C.R.
365
Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
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)]
366
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Supreme Court Reports
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]
Case Law Cited
MC Mehta v. Kamal Nath [2000] Supp. 1 SCR 389 : (2000) 6
SCC 213; Vellore Citizens' Welfare Forum v. Union of India [1996]
Supp. 5 SCR 241 : (1996) 5 SCC 647; Research Foundation for
Science (18) v. Union of India [2005] 1 SCR 115 : (2005) 13 SCC
186; Deepak Nitrite Ltd. v. State of Gujarat [2004] Supp. 2 SCR
49 : (2004) 6 SCC 402; T.N. Godavarman Thirumulpad, In Re v.
Union of India [2024] 3 SCR 187 : (2025) 2 SCC 641; Bengaluru
Development Authority v. Sudhakar Hegde [2020] 5 SCR 755 :
(2020) 15 SCC 63 - relied on.
State of MP v. Centre for Environment Protection Research &
Development [2020] 12 SCR 1139 : (2020) 9 SCC 781; Chandra
Kishore Jha v. Mahavir Prasad & Ors. [1999] Supp. 2 SCR 754 :
(1999) 8 SCC 266; Indian Council for Enviro-Legal Action v.
Union of India [1996] 2 SCR 503 : (1996) 3 SCC 212; Bengaluru
Development Authority v. Sudhakar Hegde [2020] 5 SCR 755 :
(2020) 15 SCC 63 - referred to.
Splendor Landbase Ltd. v. DPCC, 2012 (195) DLT 177; State
Pollution Control Board, Odisha v. M/s Swastik Ispat Pvt Ltd and
Others, 2014 SCC OnLine NGT 13 - referred to.
[2025] 8 S.C.R.
367
Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
List of Acts
Water (Prevention and Control of Pollution) Act, 1974; Air
(Prevention and Control of Pollution) Act, 1981; Constitution of
India; Environment (Protection) Act 1986.
List of Keywords
Restitutionary and compensatory damages; Bank guarantees as
an ex-ante measure; Potential environmental damage; Violation
of the environmental norms; Power of Boards; Principle of Natural
Justice in the subordinate legislation; Polluter Pays principle;
Broad statutory mandate; Appropriate action against a polluting
entity; Payment of environmental damages; Pollution control;
Section 33A of Water (Prevention and Control of Pollution) Act,
1974; Section 31A of Air (Prevention and Control of Pollution)
Act, 1981; Environmental regulators; Punitive action; Remedial
measure; Power to issue directions to the polluting industry;
Decriminalization of offences; Powers of the Adjudicating
Officer to impose penalties; Remedial jurisprudence; Injunctory,
mandatory and compensatory remedies; Restitutionary directives;
Fundamental rights of citizens; Environmental wrongs; Institutional
foresight; Institutional memory; Institutional integrity; Institutional
transparency and accountability; Independent and objective
decisions.
Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No(s). 757-760
of 2013
From the Judgment and Order dated 23.01.2012 of the HIGH
COURT OF DELHI AT NEW DELHI in LPA No(s). 709, 710, 866
and 867 of 2011
With
Civil Appeal No(s). 1977-2011 of 2013
Appearances for Parties
Advs. for the Appellant:
Ninad Laud, Saurabh Kulkarni, Ms. Rashika Narain, Ms. Ishani
Shekhar, Dcosta Ivo Manuel Simon, Pradeep Misra, Daleep
Dhyani, Suraj Singh.
368
[2025] 8 S.C.R.
Supreme Court Reports
Advs. for the Respondents:
S. D. Sanjay, Satya Darshi Sanjay, A.S.Gs., Pinaki Mishra,
B.b.gupta, Ms. Swarupma Chaturvedi, Kailash Vashudev, Pravin
Bahadur, Kishan Rawat, Ms. Rubi Singh Ahuja, Ms. Kanika Gomber,
Rajan Narain, Umesh Kumar Khaitan, Ajit Warrier, Angad Kochhar,
S. S. Shroff, Gurmeet Singh Makker, Ms. Ruchi Kohli, Chinmayee
Chandra, Chitvan Singhal, Mohit D. Ram, Ms. Nayan Gupta, Mrs.
Priya Puri, Navin Prakash, Ms. Srishti Prakash, Ms. Swarupama
Chaturvedi, Ms. Ruchi Kohli, Ms. Chinmayee Chandra, Chitvan
Singhal, Amit Sharma V, Dr. N. Visakamurthy, Avijit Roy.
Judgment / Order of the Supreme Court
Judgment
Contents*
1.
Introduction ..................................................................................
2
2.
Facts ............................................................................................
3
3.
Single Judge's Judgement and Orders .......................................
4
4.
Impugned Order of the Division Bench .......................................
6
5.
Submissions .................................................................................
8
6.
Issue .............................................................................................
11
7.
Existing Legal Regime for Pollution Control in India ...................
12
8.
Insertion of Sections 33A & 31A in Water and Air Acts ...............
14
9.
Interpretation of and for Environmental Institutions .....................
18
10.
Duty to Restitute v. Power to Punish and Penalise .....................
20
11.
Principles ......................................................................................
26
A. Board's Responsibility to Choose Appropriate Course of
Action ....................................................................................
32
B. Powers Must Be Guided by Transparency and
Non-Arbitrariness ..................................................................
33
* Ed. Note: Pagination as per the original Judgment.
[2025] 8 S.C.R.
369
Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
1.
Introduction.
1.
The Delhi Pollution Control Committee (DPCC)1 is in appeal against
the judgment of the Division Bench of the High Court holding that
it is 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, 19812 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.
2.
Having considered the principles that govern Indian environmental
laws, we have held that 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 under
Sections 33A and 31A of the Water and Air Acts. At the same time,
we have directed that the powers must be exercised as per procedure
laid down by subordinate legislation incorporating necessary principles
of natural justice, transparency and certainty.
2.
Facts.
3.
It is the case of the Delhi Pollution Control Committee that pursuant
to the directions of the Ministry of Environment, Forest and Climate
Change (MoEFCC) to take appropriate action against certain entities
operating in violation of the environmental norms, show cause notices
were issued for violation of Section 25 of the Water Act and Sections 21
and 22 of the Air Act. These entities were either residential complexes,
commercial complexes or shopping malls. The show cause notices
were issued on the ground that they proceeded with construction and
in fact, were operating without obtaining the mandatory "consent to
1
DPCC is a regulatory body in the National Capital Territory of Delhi, established as a 'State Board'. These
Boards are constituted under section 4 of the Water Act and under section 4 or section 5 of the Air Act,
and exercise powers granted under section 33A of the Water Act and section 31A of the Air Act. Our
interpretation of section 33A and 31A herein will apply to any such body established under said Acts.
2
Hereinafter referred to as the Water Act and Air Act respectively.
370
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Supreme Court Reports
establish" and "consent to operate" under Section 25 of the Water
Act and Section 21 of the Air Act. The show cause notices were
challenged by way of 38 writ petitions before the Delhi High Court.
The challenge culminated in the judgement of a single judge dated
30.09.2010 in the case of Splendor Landbase Ltd. v. DPCC3. The
learned single judge considered the question as to whether a State
Board can levy environmental damages in the form of fixed sums of
money or require an entity to furnish a bank guarantee as a condition
for grant of consent under Section 33A of Water Act and/or Section
31A of Air Act. Similar writ petitions were considered and decided by
another single judge bench in Bharti Realty Ltd. v. DPCC and Anush
Finlease and Construction v. DPCC on 20.07.2011 and 15.09.2011
and were disposed of in terms of the decision in Splendor Landbase
Ltd. v. DPCC. The reasoning adopted in the judgement and orders
passed by the Single Judges are as follows.
3.
Single Judge's Judgement and Orders.
4.
In Splendor Landbase Ltd. v. DPCC4, the ld. single judge by his
judgement dated 30.09.2010 dealt with two major issues - firstly,
whether proprietors of properties over 20,000 square meters are
required to obtain consent to establish and consent to operate under
Water Act and Air Act independently, despite obtaining EIA Clearance
from the Ministry; and secondly, whether Boards can levy penalties,
fines, environmental damages in form of fixed sums of monies or call
for bank guaranties as a condition to grant consent under Water and
Air Acts? While the first question was answered in the affirmative,
the second was answered in the negative.
4.1 It was held that the power to levy penalty is in the nature of a
penal power and as such a penalty cannot be imposed without
there being an enabling statutory power. For this reason, the
single judge held that Board has no power to levy penalty
or damage, even on the basis of the general powers under
Sections 31A or 33A of the Acts. The learned Judge criticized
the monetary demand as a pre-condition for grant of consent
under the Acts on the ground that it has no statutory backing.
3
2012 (195) DLT 177.
4
Hereinafter referred to as Splendor.
[2025] 8 S.C.R.
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Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
4.2 In the other batch of cases i.e. in Bharti Realty Ltd. v. DPCC
and Anush Finlease and Construction Ltd. v. DPCC, decided
on 12.07.2011 and 15.09.2011, the learned Single Judge was
constrained to enquire into the matter in detail as writ appeals
against the judgement in Splendor were already pending before
a Division Bench. Therefore, the Single Judge allowed the writ
petitions following the decision in Splendor and holding that
the Board has no power to impose and collect compensatory
damages. In these cases, the learned Judge also directed refund
of the amounts collected. However, no interest was granted
to the respondents as they chose to comply with the demand
instead of challenging the same at the relevant point in time.
4.
Impugned Order of the Division Bench.
5.
The decisions of the single judges were challenged by the appellant
before the Division Bench of the High Court. By the judgement
impugned before us, the Division Bench upheld the findings of the
Single Judge in Splendor that the power to issue directions under
Sections 33A and 31A under the two Acts does not confer the power to
levy 'penalty'. The High Court further observed that under Chapter VII
and Chapter VI of the Water and Air Acts penalties can be levied only
by courts and that too after taking cognizance of offences specified
under the two Acts. Provided that the procedure so prescribed under
the statute has to be followed mandatorily, the Division Bench held
that the appellant would not be entitled to impose compensation or
direct deposit of bank guarantees. The relevant portion of the Division
Bench of the High Court is as follows -
"37. We concur with the reasoning of the learned Single
Judge in paras 58 to 64 of the impugned decision and thus
do not elaborate any further, but would additionally highlight
that, the power to issue directions under Section 33A of
the Water Act and the power to issue directions under
Section 31A of the Air Act, on their plain language, does
not confer the power to levy any penalty. We would further
highlight that under Chapter VII of the Water Act and under
Chapter VI of the Air Act penalties and procedure to levy the
same have been set out. A perusal of the provisions under
the Water Act would reveal that penalties can be levied
as per procedure prescribed and only Courts can take
372
[2025] 8 S.C.R.
Supreme Court Reports
cognizance of offences under the Act and levy penalties,
whether by way of imprisonment or fine. Similar is the
position under the Air Act. The legislature having enacted
specific provisions for levy of penalties and procedures to
be followed has specifically made the offences cognizable
by Courts and the power to levy penalties under both Acts
has been vested in the Courts. The role of the Pollution
Control Boards is to initiate proceedings before the Court
of Competent jurisdiction and no more.
40. The language of Sub-Section 5 of Section 25 of the
Water Act makes it plain clear that the only solution to
a situation of a building being constructed to establish
an industry, operation or process without obtaining prior
consent of the State Pollution Control Board is the power
of the Board to serve upon the person concerned a notice
imposing such conditions as might have been imposed
on an application, seeking prior consent and we find that
the learned Single Judge has correctly so opined and has
rightly issued the direction that the only way out, pertaining
to the Water Act is to permit DPCC to inspect the shopping
malls and the shopping commercial complexes and if it is
found that pertaining to discharge of sewage from these
buildings any steps are required to prevent water pollution
DPCC would be authorized to issue notices requiring the
owner of the building to take steps in terms of the notice
issued. Pertaining to the Air Act notwithstanding there being
no similar provision, but the concept of a post decisional
hearing may be made applicable with the modification that
no hearing would be required inasmuch as there is no
decision, but DPCC should be empowered to inspect the
shopping malls and the shopping, commercial complexes
and pertaining to air pollution, if the owners of the buildings
do not take corrective action, DPCC would always have
the power to file criminal complaints before the Courts of
Competent Jurisdiction, which Courts would alone have
the power to impose fine and additionally impose sentence
of imprisonment upon the offending persons.
42. In a few cases, we find that since DPCC was not
permitting the buildings to be occupied, under protest, the
[2025] 8 S.C.R.
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Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
owners paid the penalty to DPCC and have immediately
approached the Court seeking refund and the same has
been ordered for the reason neither under the Water Act
nor under the Air Act there exists any power in DPCC
to levy penalty or impose conditions of furnishing bank
guarantee. The decision of the learned Single Judge is
correct in directing the bank guarantees to be discharged
and penalties levied to be refunded for the reason the
said act of DPCC is ultra-vires its power under the two
statutes and the levy of penalty is without any authority
of law. In the decision reported as 1997 [5] SCC 535
Mafatlal Industries Ltd. & Ors. Vs UOI & Ors., under writ
jurisdiction refund can be directed where the levy is without
jurisdiction and the same would include a penalty levied
without any jurisdiction. In the instant case the penalty
levied is unconstitutional being not sanctioned by any
power vested in DPCC either under the Water Act or the
Air Act. The impugned decisions where penalty levied has
been directed to be refunded are upheld."
5.
Submissions.
6.
Mr. Pradeep Mishra appearing on behalf of the appellant DPCC
submitted that the High Court erred in holding that the State Boards
are not empowered to impose environmental damages under Sections
33A and 31A of Water and Air Acts. He has argued that the application
of the principle of Polluter Pays is distinct from the requirement of
authority of law to impose tax or penalty.
7.
We have requested Mr. Ninad Laud, learned counsel to assist us in
the matter. He has gracefully accepted and has eminently assisted
the Court. He has submitted# that as per broad scheme of the Acts
and also the statement of objects and reasons, State Boards are
empowered to act on their own while enforcing Sections 25 and
26 and also while issuing directions under Sections 33A and 31A.
However, when faced with non-compliances, recourse to judicial
process is contemplated under Sections 49 and 43 of Water and
Air Acts respectively. Further, neither Rule 34 of Water (Prevention
# Ed. Note: "We have requested Mr. Ninad Laud, learned counsel to assist us in the matter. He has gracefully
accepted and has eminently assisted the Court. He has submitted" instead of "On behalf of the respondents,
Mr. Ninad Laud has submitted" in terms of subsequent corrigendum.
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& Control of Pollution) Rules 1975 nor Rule 20A of Air (Prevention
& Control of Pollution) Rules 1983, while providing a mechanism
to administer Section 33A and Section 31A, contemplate monetary
penalties. Countering the submission of Mr. Pradeep Misra on the
principle of Polluter Pays to encourage reading the power to impose
and collect environmental damages under Sections 33A and 31A of the
respective Acts, he would submit such an approach is impermissible
as the said power is specifically and separately provided under
Chapters VII and VI therein. Relying on the decision of this Court in
MC Mehta v. Kamal Nath5, he would submit, after considering the
scheme of penal provisions under Water Act, Air Act and Environment
(Protection) Act 1986, the Supreme Court held that penalties under
the Acts befall a person only after finding of guilt upon trial by a court
of law. Referring to the legitimacy of State Board's action demanding
bank guarantees to secure compliance with conditions, he would
submit that no penalty, other than that contemplated in the statute or
statutory scheme can be imposed.6 We have also heard Mr. Pinaki
Misra, Senior Advocate and other learned counsel and they have
strongly supported the decision of the Division Bench.
7.1 Counsel for M/s Laxmi Buildtech Pvt Ltd7 has submitted that
they have neither violated nor acted in breach of any provision
of environmental laws and therefore they cannot be subjected
to any penalty or criminal prosecution. Counsel for other
respondents further submitted that they have deemed consent
as well as EIA clearance from the Ministry. They have also
submitted that imposition and collection of damages by the
State Boards is outside the powers vested in them under the
Water and Air Acts.
7.2 Counsel for M/s Bharti Realty Ltd has submitted that it is a
settled principle of law that if a statute provides for a thing to
be done in a particular manner, then it has to be done in that
manner and no other.8 This principle, according to the learned
counsel, squarely applies to the present case as Chapter VII
and Chapter VI of the Water and Air Acts have a prescribed
5
(2000) 6 SCC 213, para 13-17.
6
State of MP v. Centre for Environment Protection Research & Development, (2020) 9 SCC 781.
7
Civil Appeal No. 2001 of 2013.
8
Chandra Kishore Jha v. Mahavir Prasad & Ors, (1999) 8 SCC 266.
[2025] 8 S.C.R.
375
Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
procedure to be followed before imposing penalties. It is further
argued that the role of any State Board is in the nature of a
complainant and not that of an adjudicatory authority. In this
vein, it is submitted that any other interpretation would render
the chapter on 'Penalties and Procedures' nugatory and otiose.
It is also submitted that the power to give directions under
Sections 33A and 31A of the Water and Air Acts is "subject to
provisions of this Act". Written submissions also refer to the
recent amendments to the Water and Air Acts, empowering
an Adjudicating Officer, not below the rank of Joint Secretary
of Government of India or Secretary to State Government, for
imposing penalties for contravention of provisions of the Acts.
6.
Issue.
8.
The core question in these appeals is - whether the regulatory boards
can, in exercise of powers under Section 33A of the Water Act and
Section 31A of the Air Act, impose and collect as restitutionary
and compensatory damages fixed sums of monies or require
furnishing bank guarantees as an ex-ante measure towards potential
environmental damage?
7.
Existing Legal Regime for Pollution Control in India.
9.
Under the Water Act and the Air Act, the State Boards have a broad
statutory mandate to prevent, control and abate water pollution and
air pollution. Under Section 17 of the Water Act, the State Boards
are to shoulder enormous responsibilities and their functions are
reproduced herein for ready reference -
"Section 17. Functions of State Board - (1) Subject to
the provisions of this Act, the functions of a State Board
shall be- (a) to plan a comprehensive programme for the
prevention, control or abatement of pollution of streams
and wells in the State and to secure the execution thereof;
(b) to advise the State Government on any matter
concerning the prevention, control or abatement of water
pollution;
(c) to collect and disseminate information relating to water
pollution and the prevention, control or abatement thereof;
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(d) to encourage, conduct and participate in investigations
and research relating to problems of water pollution and
prevention, control or abatement of water pollution;
(e) to collaborate with the Central Board in organising
the training of persons engaged or to be engaged in
programmes relating to prevention, control or abatement
of water pollution and to organise mass education
programmes relating thereto;
(f) to inspect sewage or trade effluents, works and plants
for the treatment of sewage and trade effluents and to
review plans, specifications or other data relating to plants
set up for the treatment of water, works for the purification
thereof and the system for the disposal of sewage or trade
effluents or in connection with the grant of any consent
as required by this Act;
(g) to lay down, modify or annul effluent standards for the
sewage and trade effluents and for the quality of receiving
waters (not being water in an inter-State stream) resulting
from the discharge of effluents and to classify waters of
the State;
(h) to evolve economical and reliable methods of treatment
of sewage and trade effluents, having regard to the
peculiar conditions of soils, climate and water resources
of different regions and more especially the prevailing
flow characteristics of water in streams and wells which
render it impossible to attain even the minimum degree
of dilution;
(i) to evolve methods of utilisation of sewage and suitable
trade effluents in agriculture;
(j) to evolve efficient methods of disposal of sewage and
trade effluents on land, as are necessary on account of
the predominant conditions of scant stream flows that do
not provide for major part of the year the minimum degree
of dilution;
(k) to lay down standards of treatment of sewage and
trade effluents to be discharged into any particular stream
taking into account the minimum fair weather dilution
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Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
available in that stream and the tolerance limits of pollution
permissible in the water of the stream, after the discharge
of such effluents;
(l) to make, vary or revoke any order-
(i) for the prevention, control or abatement of discharges
of waste into streams or wells;
(ii) requiring any person concerned to construct new
systems for the disposal of sewage and trade effluents
or to modify, alter or extend any such existing system
or adopt such remedial measures as are necessary to
prevent, control or abate water pollution;
(m) to lay down effluent standards to be complied with by
persons while causing discharge of sewage or sullage or
both and to lay down, modify or annul effluent standards
for the sewage and trade effluents;
(n) to advise the State Government with respect to the
location of any industry the carrying on of which is likely
to pollute a stream or well;
(o) to perform such other functions as may be prescribed
or as may, from time to time, be entrusted to it by the
Central Board or the State Government.
(2) The Board may establish or recognize a laboratory or
laboratories to enable the Board to perform its functions
under this section efficiently, including the analysis of
samples of water from any stream or well or of samples
of any sewage or trade effluents."
10. Section 17 of the Air Act9, substantially similar to its equivalent
9
Section 17 of Air Act states -
17. Functions of State Boards.- (1) Subject to the provisions of this Act, and without prejudice to the
performance of its functions, if any, under the Water (Prevention and Control of Pollution) Act, 1974, the
functions of a State Board shall be-
(a) to plan a comprehensive programme for the prevention, control or abatement of air pollution
and to secure the execution thereof;
(b) to advise the State Government on any matter concerning the prevention, control or abatement
relating to air pollution;
(c) to collect and disseminate information relating to air pollution;
(d) to collaborate with the Central Board in organising the training of persons engaged or to be
engaged in programmes relating to prevention, control or abatement of air pollution and to organise
a mass-education programme relating thereto;
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under the Water Act, also indicates the crucial responsibilities of the
State Boards in discharge of their mandate. Chapter V of the Water
Act and Chapter IV of the Air Act include provisions that prescribe
the regulatory powers of the State Boards. These powers include
the power to issue, modify or withdraw consent10, power to obtain
information11, power of entry and inspection12 and power to take
samples13.
8.
Insertion of Sections 33A & 31A in Water and Air Acts.
11. In 1988, both Acts were amended. Notably, through amendments
the State Boards were further empowered to give directions under
Section 33A of the Water Act and Section 31A14 of the Air Act. These
(e) to inspect, at all reasonable times, any control equipment, industrial plant or manufacturing
process and to give, by order, such directions to such persons as it may consider necessary to take
steps for the prevention, control or abatement of air pollution;
(f) to inspect air pollution control areas at such intervals as it may think necessary, assess the
quality of air therein and take steps for the prevention, control or abatement of air pollution in such
areas;
(g) to lay down, in consultation with the Central Board and having regard to the standards for
the quality of air laid down by the Central Board, standards for emission of air pollutants into the
atmosphere from industrial plants and automobiles or for the discharge of any air pollutant into
the atmosphere from any other source whatsoever not being a ship or an aircraft: Provided that
different standards for emission may be laid down under this clause for different industrial plants
having regard to the quantity and composition of emission of air pollutants into the atmosphere
from such industrial plants;
(h) to advise the State Government with respect to the suitability of any premises or location for
carrying on any industry which is likely to cause air pollution;
(i) to perform such other functions as may be prescribed or as may, from time to time, be entrusted
to it by the Central Board or the State Government;
(j) to do such other things and to perform such other acts as it may think necessary for the proper
discharge of its functions and generally for the purpose of carrying into effect the purposes of this
Act.
(2) A State Board may establish or recognise a laboratory or laboratories to enable the State Board to
perform its functions under this section efficiently.
10
Sections 25, 27 of Water Act and Section 21 of Air Act
11
Section 20 of Water Act and Section 25 of Air Act
12
Section 23 of Water Act and Section 24 of Air Act
13
Section 21 of Water Act and Section 26 of Air Act
14
Section 31A of the Air Act states -
31A. Power to give directions.-Notwithstanding anything contained in any other law, but subject to
the provisions of this Act, and to any directions that the Central Government may give in this behalf,
a Board may, in the exercise of its powers and performance of its functions under this Act, issue any
directions in writing to any person, officer or authority, and such person, officer or authority shall be
bound to comply with such directions.
Explanation.-For the avoidance of doubts, it is hereby declared that the power to issue directions under
this section includes the power to direct-
(a) the closure, prohibition or regulation of any industry, operation or process; or
(b) the stoppage or regulation of supply of electricity, water or any other service.
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Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. Etc.
two provisions are identically worded. Section 33A of the Water Act
is as under;
"Section 33A.