State Pollution Control Boards Cannot Demand Environmental Compensation Without Statutory Backing: Rajasthan High Court
The High Court held that CPCB’s “Mechanism of Calculation, Imposition and Recovery of Environmental Compensation” has no statutory force, and therefore, the Rajasthan State Pollution Control Board lacked legal authority to demand environmental compensation from the petitioners based on that.
The Rajasthan High Court has held that the State Pollution Control Boards cannot demand environmental compensation from brick kiln operators in the absence of statutory rules or a regulatory framework giving such authority legal force.
The Court was hearing a batch of writ petitions filed by brick kiln owners challenging the show cause notices and orders issued by the Rajasthan SPCB imposing environmental compensation for alleged operation of their units without a valid Consent to Operate, pursuant to directions of the National Green Tribunal.
A Single Bench comprising Justice Sunil Beniwal, while deciding the matter, observed that “..there is no dispute to the fact that presently the formula, as applied by the RSPCB, is based on the guidelines ‘Mechanism of Calculation, Imposition and Recovery of Environmental Compensation’. These guidelines have no statutory backing and, therefore, considering the judgment of the Hon’ble Apex Court, the RSPCB has no authority of law in demanding such Environmental Compensation.”
Senior Advocate Manish Shishodia appeared for the petitioners. The State and RSPCB were represented by AAG Sajjan Singh Rathore and other counsel.
Background
The petitioners, operating brick kilns across Rajasthan, were issued show cause notices and consequential orders by the RSPCB imposing environmental compensation, alleging that their units operated without a valid Consent to Operate. The demands were calculated on the basis of the Pollution Control Board's internal guidelines.
The petitioners argued that the Pollution Control Board had no legislative authority to impose such compensation, since no statutory rules or subordinate legislation existed to prescribe methodology, calculation, or process.
They relied heavily on the Supreme Court judgment in D.P.C.C. v. Lodhi Property Company Ltd. [2025], where the apex court held that Pollution Control Boards may levy environmental damages only after statutory rules and procedures are framed incorporating principles of natural justice.
Respondents contended that the demands were lawful under directions issued by the National Green Tribunal and pursuant to Section 18(1)(b) of the Air Act, asserting that the Board is empowered to impose damages to restore environmental harm.
Court’s Observation
The Rajasthan High Court noted that the Supreme Court in Lodhi Property Co. (supra) had clarified that State Pollution Control Boards may impose environmental compensation, but only after statutory rules and regulations are framed detailing the principles, procedures, transparency, methodology for assessment, and safeguards of natural justice.
The High Court emphasised that the formula presently used by the RSPCB has no statutory foundation. The Court stated that the Board imposed environmental compensation only based on guidelines issued by the Central Pollution Control Board, which were not backed by law, nor notified as subordinate legislation.
It held further that judicial pronouncements operate retrospectively unless specifically stated otherwise. Therefore, even if the Supreme Court judgment was delivered after some of the demands, the legal principle still applies and invalidates the impugned notices.
The Court rejected the State’s argument that the petitions were not maintainable due to the availability of an alternative remedy, noting that when an action is without jurisdiction, writ courts may intervene directly.
“State Pollution Control Boards can impose restitutionary or compensatory environmental damages but only after having competence of subordinate legislation in the form of Rules & Regulations”, the Bench concluded.
Conclusion
The Court allowed the writ petitions and set aside all impugned notices and orders imposing environmental compensation on brick kiln operators. It further directed that any amount already recovered must be refunded within six weeks.
Cause Title: M/s Tata Bricks Company v. Rajasthan State Pollution Control Board & Ors (Neutral Citation: 2025:RJ-JD:44705)
Appearances
Petitioner: Senior Advocate Manish Shishodia with Advocates D.S. Thind, Harshvardhan Rathore, Vijay Kumar Aggarwal, Hemant Kumar Jain, Bhuvneshwar Singh Sodha and others
Respondents: AAG Sajjan Singh Rathore with Advocates Pravin Kumar Choudhary, Mahendra Bishnoi, Sanjay Raj Paliwal, Neelam Sharma (AGC)