Holding

Environmental compensation under the Solid Waste Management Rules, 2026 is a restitutionary, polluter‑pays liability distinct from penalties and must be determined on principles of proportionality, temporal extent, comprehensive damage valuation, and polluter’s capacity, with the Central Implementation Committee mandated to frame detailed guidelines.

Summary

The Supreme Court examined the need to institutionalise solid waste management under the Solid Waste Management Rules, 2026 and to formulate principles for environmental compensation. It directed the Ministry of Environment, Forest and Climate Change to constitute a Central Implementation Committee, which was already appointed by an Office Memorandum, and tasked it with preparing detailed guidelines for levying and collecting environmental compensation. The Court articulated that such compensation is restitutionary, distinct from penalties, and must be based on the polluter‑pays principle, proportionality, the temporal extent of damage, valuation of both tangible and intangible harms, and the polluter’s financial capacity. It also prescribed that State Pollution Control Boards must assess damages, maintain escrow accounts, and use the funds for remediation. The Court incorporated guidance from existing rules on plastic and hazardous waste and mandated that all courts record reasons when determining compensation. Consequently, the Court issued directions for the MoEF&CC to finalize the guidelines and listed the appeals for hearing.

Issues considered

The Solid Waste Management Rules, 2026 require institutionalisation of a central implementation mechanism for effective enforcement.
What principles should govern the determination, imposition and collection of environmental compensation under Rule 17 of the SWM Rules.
Whether environmental compensation is a restitutionary liability distinct from penalties and fines.
What factors (financial capacity, tangible/intangible damage, proportionality, etc.) must be considered in quantifying environmental compensation.
The scope of authority and duties of the Central Implementation Committee in formulating guidelines, including reference to existing waste management rules.

Legislation cited

Environment (Protection) Act, 1986s. 15

Headnote

Issue for Consideration Issue arose as regards the need for institutionalization of the process of solid waste management; formulation of principles for determination of environmental compensation. Headnotes† Solid Waste Management Rules, 2026 – rr.18(1)-(3), 17(2) – Determination and imposition of – Principles formulated – Central Implementation Committee constituted vide Office Memorandum dtd.09.03.2026 – Under sub-rule 17(2), the Central Implementation Committee is mandated to prepare guidelines for imposition and collection of

Subjects

Solid waste managementInstitutionalization of process of solid waste managementSolid Waste Management Rules, 2026Environmental CompensationCentral Implementation CommitteeCentral Pollution Control BoardPlastic waste management

Judgment

[2026] 8 S.C.R. 307 : 2026 INSC 796

Amravati Municipal Corporation
v.
Ganesh Dadarao Anasane & Ors.
(Civil Appeal No. 4020 of 2020)
04 August 2026
[Pamidighantam Sri Narasimha and Alok Aradhe, JJ.]

Issue for Consideration
Issue arose as regards the need for institutionalization of the
process of solid waste management; formulation of principles
for determination of environmental compensation.

Headnotes†
Solid Waste Management Rules, 2026 – rr.18(1)-(3), 17(2) –
Environmental Compensation – Determination and imposition
of – Principles formulated – Central Implementation Committee
constituted vide Office Memorandum dtd.09.03.2026 – Under
sub-rule 17(2), the Central Implementation Committee is
mandated to prepare guidelines for imposition and collection
of environmental compensation – Principles laid down:
Held: Environmental compensation cannot be seen as a
replacement for penalties levied against the erring polluter – It is
restitutionary in nature and is paid in addition to the penalty or fine
that the polluter is liable to pay – The temporal extent of paying
compensation by the polluter ends only when the damage caused
is reversed – The appropriate authorities of the State have a duty
to undertake an exercise of valuing the damage caused by the
polluter and collect such compensation required for restoration of
the environment – While determining the amount of environmental
compensation, both tangible and intangible damage caused by the
polluter must be considered – Even if actual harm is not caused
but is imminent or the actions/activities of the polluter have the
potential to cause harm, the liability to pay compensation will
come into place – Factors such as the financial capacity of the
polluter, the cost involved in assessing the damage and loss
suffered by individuals and the environment as well as the cost of
remediation or restoration are also to be taken into account while
valuing such compensation – Any environmental compensation
308 [2026] 8 S.C.R.

Supreme Court Reports

levied must be proportional to the damage caused by the polluter
and must have some rational nexus to the pollution caused –
All courts and tribunals must record reasons while determining
environmental compensation, listing the factors considered, the
valuation standard used to assess such damages and the formula
or guidelines applied to quantify the compensation payable –
Central Implementation Committee can also take guidance from
certain Rules already in force viz. Plastic Waste Management
Rules enables the Central Pollution Control Board to formulate
and notify guidelines for environmental compensation for plastic
waste management violations; Revised Guidelines for Assessment
of Environment Compensation to be levied for violation of Plastic
Waste Management Rules, 2016 laying down a detailed formula to
calculate environmental compensation based on various factors;
Guidelines for Determination of Environmental Compensation
to be recovered for violation of Hazardous and Other Wastes
(Management and Transboundary Movement) Rules, 2016;
Environment Protection (Manner of Holding Inquiry and Imposition
of Penalty) Rules, 2024 – MoEF&CC to take into account the
principles for determination and imposition of environmental
compensation, as also the Rules that operate in the field, to
formulate the necessary guidelines to be issued u/r.17(2) of the
Solid Waste Management Rules, 2026 – MoEF&CC shall file an
affidavit and shall place on record the progress in the making
and the issuance of the regulations. [Paras 8, 17-25]

Case Law Cited
T.N. Godavarman Thirumulpad v. Union of India and Ors. [2024] 1
SCR 1194 : (2024) 15 SCC 302; Lifecare Innovations v. Union of
India, 2025 INSC 269 : [2025] 2 SCR 727; M.C. Mehta v. Union
of India [1987] 1 SCR 819 : (1987) 1 SCC 395; Vellore Citizens’
Welfare Forum v. Union of India [1996] Supp. 5 SCR 241 : (1996)
5 SCC 647; M.C. Mehta v. Kamal Nath [2000] Supp. 1 SCR
389 : (2000) 6 SCC 213; Research Foundation for Science (18) v.
Union of India [2005] 1 SCR 115 : (2005) 13 SCC 186; Vellore
District Environment Monitoring v. District Collector, Vellore and
Ors. [2025] 1 SCR 1265 : 2025 SCC OnLine SC 207; Delhi
Pollution Control Committee v. Lodhi Property Co. Ltd. [2025] 8
SCR 362 : (2026) 2 SCC 670; Sterlite Industries (India) Ltd. v.
Union of India [2013] 6 SCR 573 : (2013) 4 SCC 575; Rhythm
County v. Satish Sanjay Hegde, 2026 INSC 102 – referred to.
[2026] 8 S.C.R. 309

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

List of Acts
Solid Waste Management Rules, 2026; Plastic Waste Management
Rules, 2016; Guidelines for Determination of Environmental
Compensation to be recovered for violation of Hazardous and
Other Wastes (Management and Transboundary Movement)
Rules, 2016; Environment Protection (Manner of Holding Inquiry
and Imposition of Penalty) Rules, 2024.

List of Keywords
Solid waste management; Institutionalization of process of solid
waste management; Solid Waste Management Rules, 2026;
Environmental Compensation; Central Implementation Committee;
Central Pollution Control Board; Plastic waste management.

Case Arising From
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 4020 of 2020
From the Judgment and Order dated 22.09.2020 of the National
Green Tribunal in OA No. 60 of 2019
With
Civil Appeal No. 8630 of 2022

Appearances for Parties
Ms. Shibani Ghosh, Amicus Curiae.
Advs. for the Appellant(s):
Nikhil Nayyar, Sudhanshu S. Choudhary, Sr. Adv., Sangram Singh
R. Bhonsle, Nrupal A. Dingankar, Ms. Pushkara A. Bhonsle,
Ms. Sneha S. Bhonsle, Ms. Sugandha Batra, Sanmitra Y. Pol,
Ms. Shruti Sharma, Ms. Anshula Vijay Kumar Grover, Prashant
S. Kenjale, Ms. Damini Vishwakarma, B. Dhananjay, Ms. Srishty
Pandey, Karunakar Mahalik,
Advs. for the Respondent(s):
Ms. Archana Pathak Dave, Sr. Adv., Vaibhav Dwivedi, G. S.
Makkar, Mukesh Kumar Singh, Narendra Kumar Goyal, C.M
Driwedi, Chirayu Sharma, Ms. Komal Singh, Ms. Kajal Rani,
Kadam Hans, Jitendra Kumar, Subodh, Harsh Chaturvedi,
M/s Mukesh Kumar Singh And Co., Omkar Deshpande, Siddharth
Dharmadhikari, Aaditya Aniruddha Pande, Shrirang B. Varma,
Mukesh Verma, Ms. Vatsala Tripathi, Kamal Kumar Pandey,
310 [2026] 8 S.C.R.

Supreme Court Reports

Mrs. Vatsala Tripathi, Shashank Singh, Pankaj Kumar Singh,
Ms. Sohini Sanyal, Ms. Ahona Chatterjee.
Respondent-in-person.

Judgment / Order of the Supreme Court

Judgment

1. Our endeavour is to institutionalise the process of solid waste
management for our country. An integral part of which relates
to making of enforceable laws governing the subject, and this is
already achieved with the issuance of the Solid Waste Management
Rules, 2026. However, the mission to institutionalise solid waste
management does not end here.
2. In fact, it only begins from here1. Constitutional Courts, as also the
National Green Tribunal, have the duty to follow it up to ensure that
the mandate of a statute, coupled with the Rules and Regulations
made thereinunder are translated into an effective and a robust
system of enforcement. If the Rules contemplate establishing a
regulatory body, we must ensure that they are not only constituted
but also notified to commence work. If they are notified, then we
must ensure that the members are appointed and take charge. We
must enquire if they have the infrastructure and human resources to
function effectively. Their powers and duties must be recognized and
fine-tuned with accountability. It is also necessary for the constitutional
court to provide that much of hand-holding, as is necessary for these
regulatory bodies to evolve with discipline, creativity, expertise,
efficiency and fairness in action. With this kind of judicial review,
while moving away from micromanaging environmental governance,
constitutional courts will enable entrenching regulatory institutions
that will earn public trust and confidence.
3. So, we picked up the thread from where the executive left it. The
Solid Waste Management Rules, 2026 contemplate the constitution

1 T.N.Godavarman Thirumulpad vs. Union of India and Ors. (2024) 15 SCC 302, where it was held,
“22. As new bodies, authorities and regulators for environmental governance emerged from time to time,
their institutionalisation assumes extraordinary importance. Institutionalisation means that these bodies
must work in compliance with institutional norms of efficiency, integrity and certainty...”
[2026] 8 S.C.R. 311

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

of the Committee for Effective Implementation at the Central Level.
Rule 18 is as follows:-
“18. Committee for Effective Implementation at
Central level.—
(1) A committee shall be constituted by the Central
Pollution Control Board under chairpersonship of
the Chairman, Central Pollution Control Board to
recommend measures to Ministry of Environment,
Forest and Climate Change for effective implementation
of these rules.
(2) The committee shall monitor the implementation of
these rules and also take such measures as required
for removal of difficulties.
(3) The committee shall also be tasked with the guiding
and supervision of the development and operation of the
online centralised portal.
(4) The committee shall comprise of representatives
from concerned Central Ministries or Departments, all
State Pollution Control Board, expert institutions such as
National Environmental Engineering Research Institute
and stakeholders such as associations representing
obligated entities, treatment facility providers and
any other stakeholders as invited by the chair of the
committee.”
4. By our order dated 12.05.2026, we had directed the Ld. ASG, to
take instructions about appointment of the committee as provided
in Rule 18(1). Following our directions, the ASG has placed before
us an Office Memorandum dated 09.03.2026 appointing the Central
Implementation Committee. This is a good development and we must
appreciate the efforts of the Ld. ASG and also the prompt action of
MoEF&CC in issuing the OM. The OM, which is comprehensive in
all respects is as follows:-
“Office Memorandum
Subject: Constitution of Central Implementation
Committee for effective implementation of Solid
Waste Management Rules, 2026-reg
312 [2026] 8 S.C.R.

Supreme Court Reports

Ministry of Environment, Forest and Climate Change
(MoEFCC) has notified the Solid Waste Management
(SWM) Rules, 2026 on 27 January 2026 under the
Environment (Protection) Act, 1986, which shall come
into effect from 1 April 2026, in supersession of the
Solid Waste Management Rules, 2016, to ensure
environmentally sound management of solid waste in
the country.
Clause 18 and Clause 38(3) of the SWM Rules,
2026 directs that the CPCB shall constitute a Central
Implementation Committee under the Chairmanship
Chairman, CPCB for the effective implementation of
these rules and recommend measures to MoEF&CC
and for making it robust.
In view of the above, a Committee comprising of
following members is hereby constituted for the effective
implementation of SWM Rules, 2026 w.e.f. 01.04.2026
1 Chairman, Central Pollution Control Board Chairperson
2 Representative from MoEF&CC Member
3. Representative from Ministry of Housing and
Urban Affairs, MoHUA Member
4 Representative from Ministry of Panchayati
Raj Member
5 Representative from Ministry of Chemicals
and Fertilizers Member
6 Representative from Department of Drinking
Water and Sanitation Member
7 Representative from National Environmental
Engineering Research Institute Member
8 Representative from Bureau of Indian
Standards Member
9 Chairman of the 36 SPCBs /PCCs Member
10 Representative from Federation of Hotel
and Restaurant Associations of India Member
11. Representative from Cement Manufactures
Association Member
12. Member Secretary, Central Pollution Control Member
Board Convener”
[2026] 8 S.C.R. 313

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

5. Interestingly, this OM also specifies the scope of the work entrusted
to the Committee. We will reproduce it here for ready reference;
“Scope of Work of the Committee:
i. The Committee shall monitor the implementation
of these rules and also take such measures as
required for removal of difficulties as per Clause
18(2) of SWM Rules, 2026.
ii. The Committee shall recommend measures to
MoEF&CC for effective implementation of these
Rules.
iii. The Committee shall also be tasked with the guiding
and supervision of the development and operation
of the online centralised portal as per Clause 18(3)
of SWM Rules, 2026.
iv. The Committee shall prepare guidelines for imposition
and collection of environment compensation from
entities involved in collection, sorting, transportation
and treatment or processing of solid waste and
disposal, in case of violation or noncompliance
under these rules, as per Clause 17(2) of SWM
Rules, 2026.
v. The Committee shall recommend the modalities for
utilization of the funds for solid waste management
(as levied & collected under environmental
compensation by State Pollution Control Board or
Pollution Control Committee) and approved by the
MoEF&CC, as Clause 17(4) of SWM Rules, 2026.
vi. The Committee shall meet at least once in six
months to submit its report and recommendations
to MoEF&CC for effective implementation of these
rules, as per Clause 38(3) of SWM Rules, 2026.
vii. The tenure of the committee shall initially be one
year, which may be extended or re-constituted
thereafter.
viii. To address any other matter as referred to the
Committee.”
314 [2026] 8 S.C.R.

Supreme Court Reports

6. The above-referred Committee is constituted in exercise of powers
under Rule 18 read with Rule 38(3) of the SWM Rules, 2026. The
committee is the duty bearer for monitoring and implementing
the SWM Rules as it exercises its power to take such measures
as may be required for “effective implementation of Rules”. The
committee’s functioning and its decisions will have the force of law.2
Rule 18(3) specifically tasks the committee to guide and supervise
the development and operation of the Online Centralised Portal
contemplated under Rule 16.
7. Continuing the process of institutionalisation of solid waste
management, we enquired from the Ld. ASG about the next important
step of formulating a method and manner of determination and
collection of environmental compensation for transgression of the
Solid Waste Management Rules. It is high time that the determination
and imposition of environmental compensation is not left to the
discretion of regulatory bodies, tribunals, or Courts. There must
be a structured regime through which people will know with clarity
and certainty, as to, for which type of environmental violation, what
consequential punitive action will follow. This clarity and certainty
will sub-serve the twin purposes of deterrence as also the imminent
consequence of a violation. Rule 17 is the statutory incorporation of
the need to evolve the principles for determination, imposition and
collection of compensation. Rule 17 is as follows;
“17. Imposition of Environmental Compensation-
(1) The Environmental Compensation shall be levied
based upon polluter pays principles on persons, who
are not complying with the provisions of these rules,
including the following activities:
(a) entities carrying out activities without
registration as mandated under these rules;
(b) entities providing false information or willful
concealment of material facts by the entities
registered under these rules;

2 Lifecare Innovations vs. Union of India (2025) INSC 269, wherein it was observed that committees set up
under statutory regimes have the force of law for enforcing the legal mandate that is entrusted to them.
[2026] 8 S.C.R. 315

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

(c) entities submitting forged or manipulated
documents by the entities registered under
these laws;
(d) entities engaged in collection, segregation,
sorting, transportation, processing, and
disposal of solid waste.
(2) Central Implementation Committee constituted
by Central Pollution Control Board under these rules
shall prepare guidelines for imposition and collection
of environment compensation from entities involved
in collection, sorting, transportation and treatment or
processing of solid waste and disposal, in case of
violation or non-compliance under these rules.
(3) The environment compensation shall be levied by
the concerned State Pollution Control Board or Pollution
Control Committee for non-compliance of responsibilities
and obligations set out under these rules, as per guidelines
prepared by Central Pollution Control Board based upon
the provisions in these rules. In case, the State Pollution
Control Board or Pollution Control Committee does not
take action in reasonable time, the Central Pollution
Control Board shall issue directions to the State Pollution
Control Board or Pollution Control Committee.
(4) The funds collected under environmental compensation
shall be kept in a separate escrow account by State
Pollution Control Board or Pollution Control Committee,
for the purpose and the funds collected shall be utilised
related to collection, segregation, transportation and
treatment or processing of solid waste and disposal.
Modalities for utilization of the funds for solid waste
management would be recommended by the Central
Implementation Committee and approved by the Ministry
of Environment, Forest and Climate Change.
5. In addition to the provisions of Environmental
Compensation in sub-rule (1) of rule 17, action under
section 15 of the Environment (Protection) Act 1986,
may also be taken.”
(emphasis supplied)
316 [2026] 8 S.C.R.

Supreme Court Reports

8. Under sub-rule 17(2), the Central Implementation Committee
is mandated to prepare guidelines for imposition and collection
of environmental compensation. Our task is now to help the
Central Implementation Committee to prepare and issue the
necessary guidelines for imposition and collection of environmental
compensation. For this purpose, we will first refer to the principles
that have been evolved through legal precedents commencing
from the decision of this Court in M.C. Mehta v. Union of India3
and culminating in some of the recent decisions on the subject and
formulate the essential principles evolved therefrom. We will also
refer to certain rules that have been issued by the executive from
which guiding principles can be gathered.

(I) Judicial precedents for determination of environmental
compensation evolved by the Supreme Court.
9. The method and manner of determining environmental compensation,
up till now, has only been the judge-made law. In M.C. Mehta (supra),
this Court held;
“31. ….. We would therefore hold that where an enterprise
is engaged in a hazardous or inherently dangerous
activity and harm results to anyone on account of an
accident in the operation of such hazardous or inherently
dangerous activity resulting, for example, in escape of
toxic gas the enterprise is strictly and absolutely liable to
compensate all those who are affected by the accident
and such liability is not subject to any of the exceptions
which operate vis-a-vis the tortious principle of strict
liability under the rule in Rylands v. Fletcher.4
32. We would also like to point out that the measure
of compensation in the kind of cases referred to in
the preceding paragraph must be corelated to the
magnitude and capacity of the enterprise because such
compensation must have a deterrent effect. The larger
and more prosperous the enterprise, the greater must
be the amount of compensation payable by it for the

3 (1987) 1 SCC 395. (para 31 and 32)
4 (1868) LR 3 HL 330: 19 LT 220: (1861-73) All ER Rep 1.
[2026] 8 S.C.R. 317

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

harm caused on account of an accident in the carrying
on of the hazardous or inherently dangerous activity by
the enterprise.”
(emphasis supplied)

10. Similarly, in Vellore Citizens’ Welfare Forum v. Union of India,5 this
Court has held:
“12. “The Polluter Pays Principle” has been held to be
a sound principle by this Court in Indian Council for
Enviro-Legal Action v. Union of India (1996) 3 SCC 212.
The Court observed:
“… we are of the opinion that any principle
evolved in this behalf should be simple,
practical and suited to the conditions obtaining
in this country.”
The Court ruled that:
“… once the activity carried on is hazardous or inherently
dangerous, the person carrying on such activity is liable
to make good the loss caused to any other person
by his activity irrespective of the fact whether he took
reasonable care while carrying on his activity. The rule is
premised upon the very nature of the activity carried on”.
Consequently, the polluting industries are “absolutely
liable to compensate for the harm caused by them to
villagers in the affected area, to the soil and to the
underground water and hence, they are bound to take
all necessary measures to remove sludge and other
pollutants lying in the affected areas”. The “Polluter Pays
Principle” as interpreted by this Court means that the
absolute liability for harm to the environment extends
not only to compensate the victims of pollution but also
the cost of restoring the environmental degradation.
Remediation of the damaged environment is part of
the process of “Sustainable Development” and as such

5 (1996) 5 SCC 647.
318 [2026] 8 S.C.R.

Supreme Court Reports

the polluter is liable to pay the cost to the individual
sufferers as well as the cost of reversing the damaged
ecology.”
11. In M.C. Mehta v. Kamal Nath,6 this Court held that:
“24. 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. He has also to pay damages
to those who have suffered loss on account of the act
of the offender. The powers of this Court under Article
32 are not restricted and it can award damages in a
PIL or a writ petition as has been held in a series of
decisions. In addition to damages aforesaid, the person
guilty of causing pollution can also be held liable to pay
exemplary damages so that it may act as a deterrent for
others not to cause pollution in any manner.”
12. In Research Foundation for Science (18) v. Union of India7, which
dealt with illegal disposal of domestic and imported hazardous waste,
this Court held that environmental compensation should cover both
tangible and intangible damage caused by an environmental harm,
by observing the following:
“29. The polluter-pays principle basically means that the
producer of goods or other items should be responsible
for the cost of preventing or dealing with any pollution
that the process causes. This includes environmental cost
as well as direct cost to the people or property, it also
covers cost incurred in avoiding pollution and not just
those related to remedying any damage. It will include
full environmental cost and not just those which are
immediately tangible. The principle also does not mean
that the polluter can pollute and pay for it. The nature
and extent of cost and the circumstances in which the
principle will apply may differ from case to case.”

6 (2000) 6 SCC 213.
7 (2005) 13 SCC 186.
[2026] 8 S.C.R. 319

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

13. With regard to assessing the temporal extent to which compensation
should be paid, in a recent decision of Vellore District Environment
Monitoring v. District Collector, Vellore and Ors8., this court held that
until the damage caused by the Polluter is reversed, the polluter
continues to pay compensation in the following words:
“91.1. In the light of the principles outlined above, this
Court has the duty to foster a more comprehensive,
balanced, and sustainable approach to curb the water
pollution in the river. The principles mentioned not
only ensure compliance but also encourage long-term
strategies for environmental protection, public health, and
sustainable development. Moreover, the legal position
is clear: until the damage caused by the tanneries to
the ecology is reversed, the polluters have a continuing
duty to pay compensation and further, it is the bounden
duty of both the Central and State Governments and
local authorities to prevent, protect and preserve
natural resources and maintain a healthy and clean
environment.”
14. In the case of Delhi Pollution Control Committee v. Lodhi Property Co.
Ltd9, it was reiterated that the aspect of compensation is restitutionary
in nature as opposed to a punitive action. Mere payment of a fine
would not absolve the polluter or the authority to pay compensation.
The State, apart from preventing such acts in the future, should
take immediate steps for restoration of the damage already done;
undertake an exercise for determining the valuation of the damage
done and recover it from the persons found responsible for causing
such a damage.
“32. More recently, in T.N. Godavarman Thirumulpad, In re
[T.N. Godavarman Thirumulpad, In re, (2025) 2 SCC 641] ,
this Court while considering the issue of illegal construction
in the Corbett Tiger Reserve drew the distinction between
action against persons violating the law and measures
for restoration of the environmental damage. The Court
held: (SCC pp. 728-29, paras 173 & 175)

8 2025 SCC OnLine SC 207, [91.1]
9 (2026) 2 SCC 670, [23]
320 [2026] 8 S.C.R.

Supreme Court Reports

“173. … However, the principle of restoration
of damaged ecosystem would require the
States to promote the recovery of threatened
species. We are of the considered view that
the States would be required to take steps for
the identification and effective implementation
of active restoration measures that are
localised to the particular ecosystem that
was damaged. The focus has to be on
restoration of the ecosystem as close and
similar as possible to the specific one that
was damaged.
***
175. We find that, bringing the culprits to
face the proceedings is a different matter and
restoration of the damage already done is a
different matter. We are of the considered
view that the State cannot run away from its
responsibilities to restore the damage done
to the forest. The State, apart from preventing
such acts in the future, should take immediate
steps for restoration of the damage already
done; undertake an exercise for determining
the valuation of the damage done and recover
it from the persons found responsible for
causing such a damage.”
11. Principles
33. Based on a review of precedents on this issue, the
following legal position emerges:
33.1. 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.”
(emphasis supplied)
[2026] 8 S.C.R. 321

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

15. Financial capacity of the polluter could also be a guiding principle
while determining environmental compensation. In Sterlite Industries
(India) Ltd. v Union of India, 10 the size and financial capacity of
the polluter was taken into account, wherein a lumpsum Rs. 100
crore was charged as environmental compensation after the Court
examined the financial statements of the company. The following
passage is instructive;
“47. In the Annual Report 2011 of the appellant Company,
at pp. 20 and 21, the performance of its copper project
is given. We extract hereinbelow the paragraph titled
“Financial Performance”:
“PBDIT for the financial year 2010-2011 was
Rs 1043 crores, 40% higher than PBDIT of Rs
744 crores for the financial year 2009-2010.
This was primarily due to higher LME prices
and lower unit costs at Copper India and with
the improved by-product realisation.”
Considering the magnitude, capacity and prosperity of the
appellant Company, we are of the view that the appellant
Company should be held liable for a compensation
of Rs 100 crores for having polluted the environment
in the vicinity of its plant and for having operated the
plant without a renewal of the consents by the TNPCB
for a fairly long period and according to us, any less
amount, would not have the desired deterrent effect on
the appellant Company. The aforesaid amount will be
deposited with the Collector of Thoothukudi District, who
will invest it in a fixed deposit with a nationalised bank
for a period of five years. The interest therefrom will be
spent for improving the environment, including water and
soil, of the vicinity of the plant after consultation with
TNPCB and approval of the Secretary, Environment,
Government of Tamil Nadu.”
16. In the recent judgement of Rhythm County v. Satish Sanjay Hegde11,
this Court has placed an important pre-condition for imposing

10 (2013) 4 SCC 575.
11 2026 INSC 102, [37] at para 46.2
322 [2026] 8 S.C.R.

Supreme Court Reports

environmental compensation by holding that any compensation
that is awarded must be proportionate, bearing some rational nexus
to the pollution caused by the polluter in question12 by holding
that, “this Court has consistently underscored that environmental
compensation must rest on a foundation of rationality, proportionality
and reasoned assessment.”
17. On the basis of the principles laid down in the above-mentioned
cases, we can formulate the principles as under:
I) Environmental compensation cannot be seen as a replacement
for penalties levied against the erring polluter. It is restitutionary
in nature and is paid in addition to the penalty or fine that the
polluter is liable to pay.
II) The temporal extent of paying compensation by the polluter
ends only when the damage caused is reversed.
III) The appropriate authorities of the State have a duty to
undertake an exercise of valuing the damage caused by the
polluter and collect such compensation required for restoration
of the environment.
IV) While determining the amount of environmental compensation,
both tangible and intangible damage caused by the polluter
must be considered.
V) Even if actual harm is not caused but is imminent or the
actions/activities of the polluter have the potential to cause
harm, the liability to pay compensation will come into place.
VI) Factors such as the financial capacity of the polluter, the
cost involved in assessing the damage and loss suffered
by individuals and the environment as well as the cost of
remediation or restoration are also to be taken into account
while valuing such compensation.
VII) Any environmental compensation levied must be proportional
to the damage caused by the polluter and must have some
rational nexus to the pollution caused.

12 Id, [46.5]
[2026] 8 S.C.R. 323

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

VIII) All courts and tribunals must record reasons while determining
environmental compensation, listing the factors considered,
the valuation standard used to assess such damages and the
formula or guidelines applied to quantify the compensation
payable.

(II) The Central Implementation Committee can also examine
the following rules that have been issued by the Pollution
Control Board or such other authorities.
18. Apart from the judicially evolved principles as formulated hereinabove,
the Central Implementation Committee can also take guidance from
certain Rules already in force.
19. Rule 18 of the Plastic Waste Management Rules enables the
Central Pollution Control Board to formulate and notify guidelines
for environmental compensation for plastic waste management
violations. Rule 18 is as follows;
“18. Imposition of Environmental Compensation- The
Environmental Compensation shall be levied based upon
polluter pays principle, on persons who are not complying
with the provisions of these rules, as per guidelines
notified by the Central Pollution Control Board.”
20. In August 2024, CPCB issued Revised Guidelines for Assessment
of Environment Compensation to be levied for violation of Plastic
Waste Management Rules, 2016. The guidelines lay down a detailed
formula to calculate environmental compensation based on factors
such as; a) per ton environmental compensation to be charged, b)
increased environmental compensation in case of repeat offenders,
c) category of plastic waste generated and d) type of polluter. This
is a graded approach wherein the quantum and the type of waste
generated as well as the frequency of the polluter are taken into
account for determining compensation.
21. A similar approach has been adopted by the CPCB in the case of
hazardous waste. Rule 23 of the 2016 Rules reads as follows;
“23. Liability of occupier, importer or exporter and
operator of a disposal facility-
(1) The occupier, importer or exporter and operator of the
disposal facility shall be liable for all damages caused to
324 [2026] 8 S.C.R.

Supreme Court Reports

the environment or third party due to improper handling
and management of the hazardous and other waste.
(2) The occupier and the operator of the disposal facility
shall be liable to pay financial penalties as levied for
any violation of the provisions under these rules by the
State Pollution Control Board with the prior approval of
the Central Pollution Control Board.”
22. Supplementing the power to levy environmental compensation,
the CPCB issued Guidelines for Determination of Environmental
Compensation to be recovered for violation of Hazardous and
Other Wastes (Management and Transboundary Movement) Rules,
2016. The Rules categorise the type of violation into Category A
and Category B.
22.1 Category A includes only procedural violations of Hazardous
and Other Wastes (Management and Transboundary
Movement) Rules, 2016 which has not caused damage to
environment or third party for which the polluter only attracts
a penalty.
22.2 Category B includes environmental damage caused by the
Polluter making him liable for both environmental compensation
and penalty. This category is further sub-divided into two parts:
i) Damage Caused When Assessable: The Environmental
Compensation is to be determined by the Procedure
given in Annexure I. The methodology given for
calculation includes a) Immediate Response Liability:
Rs. 10,00,000; b) Assessment Liability: Rs. 20,00,000 –
Rs. 45,00,000; c) Remediation Liability depending on
nature of breach; d) Compensation Liability depending
on nature of damage caused which is to be valued by
the District Magistrate.
ii) Damage Caused When Not Assessable: A formula is
prescribed to take into account where the valuation of
damage is imputed based on samples taken of damage
caused by similar waste by similar polluters.
22.3 It is evident that the guidelines prescribe that the compensation
levied by the appropriate authority is subject to the type of
violation caused by the polluter and the extent to which such
[2026] 8 S.C.R. 325

Amravati Municipal Corporation v. Ganesh Dadarao Anasane & Ors.

damage harms third persons and the environment as a whole.
It also provides for compensation in a stage wise manner for
restoration.
23. Yet another instructive source that the Central Implementation
Committee can look into could be Rule 6 of The Environment
Protection (Manner of Holding Inquiry and Imposition of Penalty)
Rules, 2024. The said Rule is as follows;
“6. Factors to be considered while determining
quantum of penalty- The adjudicating officer, while
adjudicating the quantum of penalty shall have due
regard to all or any the following factors in addition to
factor stated in sub-section (4) of section 15C of the
Act, namely:
(a) place of operation of project;
(b) size of the project whether large, medium or Small;
(c) category of industry;
(d) type of contravention or violation such as,-
(i) working without prior environment clearance
as required under the notification number S.O
1533(E) dated the 14th September, 2006 issued
under the Act;
(ii) non-compliance of environmental safeguards
and standards prescribed under the Act;
(iii) violation of conditions of environment clearances
granted under the notification referred to in sub-
section
(iv) non-compliances of orders or directions;
(e) quantum of deviation or contravention from the
standard prescribed under the Act;
(f) health impacts or loss likely to be caused;
(g) undue gain or benefit derived out of contravention
or non-compliance;
(h) the amount of disproportionate gain or unfair
326 [2026] 8 S.C.R.

Supreme Court Reports

advantage, wherever quantifiable, made as a result of
the contravention or non-compliance;
(i) the repetitive nature of the contravention or
non-compliance;
(j) any other factor as may be considered by the
adjudicating officer to be relevant for the protection of
environment.”
23.1 Analysis of these parameters shows that factors such as the
geographical location of the polluter, the type of entity involved
in the act of pollution or non-compliance, any undue advantage
gained by the polluter and the health impact such pollution or
non-compliance has on the general public can be considered
as principles for determining compensation.
24. In conclusion, we direct the MoEF&CC to take into account the
above-referred principles for determination and imposition of
environmental compensation, as also the Rules that operate in the
field, to formulate the necessary guidelines to be issued under Rule
17(2) of the Solid Waste Management Rules, 2026.
25. The MoEF&CC shall file an affidavit and shall place on record the
progress in the making and the issuance of the regulations.
26. List these appeals on 29.09.2026.

Result of the case: D irections issued; Appeals to be listed on
29.09.2026.

†
Headnotes prepared by: Divya Pandey