Supreme Court Seeks Explanation from Centre, CPCB Over Utilisation of ₹1,000-Crore Environment Relief Fund
The Supreme Court has sought detailed responses from the Union Government and the Central Pollution Control Board (CPCB) on a public interest litigation alleging that more than ₹1,000 crore lying in the Environment Relief Fund (ERF) has remained largely unutilised despite being created to provide relief to victims affected by hazardous substances. The Court’s intervention has brought renewed attention to the administration and accountability of one of India’s key environmental compensation mechanisms.
A Bench headed by Chief Justice Surya Kant, along with Justices Joymalya Bagchi and Vipul M. Pancholi, issued notices after hearing submissions that the fund, established under the Public Liability Insurance Act, 1991 and linked with compulsory insurance provisions under the Motor Vehicles Act, has accumulated substantial resources over the years without meaningful disbursement. According to the submissions before the Court, collections had reached approximately ₹881 crore by 2020 and have since crossed ₹1,000 crore.
The PIL was filed by Jabalpur-based activist Gyan Prakash, who contended that although the Environment Relief Scheme was formulated in 2008, the intended beneficiaries have not received compensation from the fund. The petitioner argued that the prolonged non-utilisation defeats the very objective of creating a dedicated mechanism for providing immediate relief to victims of accidents involving hazardous substances and other environmental emergencies.
Taking note of these concerns, the Supreme Court directed the Centre and the Member Secretary of the CPCB to file comprehensive affidavits explaining the utilisation or non-utilisation of the fund. The Bench specifically sought clarification on whether an effective statutory mechanism currently exists for disbursing the accumulated money, the reasons for the apparent delay in releasing compensation, and the manner in which the fund is being administered.
The proceedings also highlighted the CPCB’s role in managing the Environment Relief Fund. The Court indicated that transparency in the management of public funds intended for environmental justice is essential and that authorities must demonstrate whether the statutory framework is functioning in accordance with its intended purpose.
The case carries wider implications for environmental governance in India. Environmental relief funds are designed to ensure prompt financial assistance to individuals affected by industrial accidents and hazardous substances, reflecting the “polluter pays” principle and the State’s responsibility to provide effective remedies. If significant public funds remain idle despite statutory objectives, it could undermine confidence in environmental compensation mechanisms and delay relief for affected communities.
The matter will now proceed after the Union Government and the CPCB submit their responses. The Supreme Court’s eventual decision is expected to clarify the legal framework governing the Environment Relief Fund, determine whether institutional reforms are necessary, and ensure that environmental compensation reaches eligible victims in a timely and transparent manner.
