'No Statutory Backing': Rajasthan High Court Quashes Environmental Compensation Imposed By Pollution Board On Brick Kilns

Rajasthan High Court set aside a bunch of orders by the Rajasthan State Pollution Control Board (“RSPCB”) that imposed environmental compensation on the brick-kiln operators, opining that the RSPCB had no statutory authority to impose such compensation in the absence of duly framed rules and regulations.The bench of Justice Sunil Beniwal, while heavily relying upon the Supreme Court ruling in the case of D.P.C.C. v Lodhi Property Co. Ltd. held that RSPCB could not recover environmental compensation without legislative authority or a notified method of its calculation. The Court was hearing a bunch of petitions filed by brick-kiln operators who had received notices from RSPCB for imposition of environmental compensation pursuant to the directions issued by the National Green Tribunal (“NGT”) in 2021, with the allegation of operating without Consent to Operate. It was the case of the petitioners that the RSPCB was not competent under law to impose environmental compensation, and it was only empowered to file an application before the NGT for issuance of directions to the person for demanding the same. Further, it was submitted that the environmental compensation was calculated without any formula and had no transparency. At the same time, the alleged mechanism used by RSPCB had no statutory force for not being notified in the official gazette. After hearing the contentions, the Court perused the observations made by the Supreme Court in the aforementioned case, and highlighted that the Apex Court had specifically concluded that the power to impose or collect restitutionary or compensation damages could be exercised only after detailing the principles and procedure in the subordinate legislation. “Hon'ble Apex Court has further observed that to ensure that the Boards can impose restitutionary and compensatory damages in a fair, transparent, and non-arbitrary manner, with procedural certainty, necessary subordinate legislation in the form of Rules and Regulations must be notified. This shall include methods by which environmental damages is determined, and the consequent quantum of damages are assessed.”In this background, the Court held that since there was no statutory backing regarding the mechanism to calculate environmental compensation or to have an authority to demand the same, RSPCB could not have demanded it. It was stated, the formula presently applied by the RSPCB was based on some guidelines that had no statutory backing and no authority of law. The Court also rejected the argument put forth on behalf of RSPCB that the petitioners did not challenge the NGT order based on which the actions were taken by RSPCB. It was held that, “…when the entire exercise of inspection and imposition of the environmental compensation has been carried out by the RSPCB then, it can be safely concluded that the said exercise constitutes an independent action which can be challenged under writ jurisdiction without challenging the order of NGT…more particularly, when the core issue is with regard to the competence and jurisdiction of the RSPCB to levy environmental compensation”.Accordingly, the petitions were allowed, and the notices issued to the petitioners were set aside. The Court directed refund of any compensation collected by RSPCB within 6 weeks. Title: M/s Tata Bricks Company v Rajasthan State Pollution Control Board & Ors. Citation: 2025 LiveLaw (Raj) 366Click Here To Read/Download Order

'No Statutory Backing': Rajasthan High Court Quashes Environmental Compensation Imposed By Pollution Board On Brick Kilns

Nupur Agrawal

Tags