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2014 (1) TMI 1913 - Tri - Indian LawsJurisdiction - power of Board requiring industrial units to furnish bank guarantee - invocation of the bank guarantee by the State Board on the alleged breach is penal and thus impermissible under the provisions of the Air Act and the Water Act or not - whether the order of the appellate authority suffers from the infirmity of taking into consideration irrelevant matters and grounds - invocation of the bank guarantee is or not in terms of the bank guarantee - HELD THAT:- It is clear that the Board has preventive, punitive and curative powers. While reading the object and reasons in conjunction with Sections 16 to 18 and Section 31A of the Air Act, it is clear that the powers of the Board to issue directions are to be exercised with the primary object of prevention, control and abatement of air pollution. The most fundamental aspect of environmental law is prevention and control of pollution and to provide clean and healthy environment and wholesome water to the society at large. As already noticed, the provisions of Section 17(1)(a) casts upon the Board an obligation to do things and perform such acts as may be necessary for the proper discharge of its functions and generally for the purpose of carrying out the purposes of the Air Act. Upon analysis of the language of these provisions, it is evident that besides performing the specific acts and functions, the Board is entitled to do things or perform acts which may be in aid thereto and for carrying out effectively the purposes of the Air Act. Once it prepares a comprehensive programme for prevention, control and abatement of air pollution, and emission standards are prescribed, the Board then is required to issue the order of consent to various applicant-units to establish and operate their activities. Keeping in view the legislative scheme and the object of the Air Act, it is evident that the Board is not incapacitated to issue a direction which may not be prohibitory or of closure in substance and application, but may be regulatory with an object to ensure that anti-pollution devices and anti-pollution measures are adopted to prevent and control pollution. For this purpose, the Board may require an industry to furnish a bank guarantee which would serve dual purposes - the intention of the Legislature to ensure implementation of these facets is further elucidated by the language of Section 31A of the Air Act where the Board can issue directions as afore-mentioned in exercise of its powers and performance of its functions under the Act. Thus, there has to be a direct nexus between the directions contemplated under Section 31A of the Air Act and the powers and functions of the Board as contemplated under Sections 16, 17 and other relevant provisions of the Air Act. Once these Sections are read co-jointly, then it becomes clear that a direction which would ensure compliance of the conditions of the consent order and further the cause of prevention and control of pollution would be a direction permissible under law. Asking for the bank guarantee, as an interim measure, during which the industrial unit is called upon to comply with the conditions of the consent order, does not fall outside the ambit of statutory powers vested in the Board. Condition requiring a unit to furnish a Bank Guarantee - is it penal? - HELD THAT:- It is clear that a fine but unambiguous distinction between penalty and compensation has been accepted by courts and tribunals. Distinct and definite consequences flow from these actions. Their distinctions are procedural as well as consequential. A penal action cannot be permitted to take in its orbit, by process of overlapping, an action which is patently compensatory in nature. Striking a balance between environmental interest and sustainable development would require the expert bodies like the Boards to follow a path which would permit industrial growth and still protect the environment without allowing any irretrievable injury to the environment - In the case in hand, the regulatory regime under the Air Act permits taking of harsher steps in the nature of closure and prohibitory directions. Therefore, permitting a unit to operate for a limited period upon furnishing a Bank Guarantee for compliance of the conditions/directions imposed in the consent order, being an order of lesser gravity and consequences, would be permissible. It is in the interest of sustainable development and is even beneficial to the industry itself. The Bank Guarantee asked for is for compliance, compensation for environmental restoration, if required, and is not punitive in nature. There are no hesitation in holding that the invocation of the bank guarantee by the Board, in its satisfaction, is justifiable and is in accordance with law - appeal allowed in part.
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