Supreme Court Seeks Detailed Response From Centre on Utilisation of ₹1,000-Crore Environment Relief Fund
The Supreme Court has sought a comprehensive response from the Union Government and the Central Pollution Control Board (CPCB) over allegations that the Environment Relief Fund (ERF), which has accumulated more than ₹1,000 crore, has remained largely unutilised despite being created to provide compensation to victims affected by accidents involving hazardous substances. The Bench headed by Chief Justice of India Surya Kant, along with Justices Joymalya Bagchi and Vipul M. Pancholi, sought explanations on the utilisation—or non-utilisation—of the fund.
The matter came up during the hearing of a Public Interest Litigation filed by Jabalpur-based environmental activist Gyan Prakash. The petitioner contended that the Environment Relief Fund Scheme, framed in 2008 under the Public Liability Insurance Act, 1991, has failed to achieve its intended objective, with no meaningful disbursal reported despite substantial collections over the years. The petition argues that the prolonged non-utilisation defeats the very purpose for which the fund was established.
During the hearing, the Court noted the Centre’s submission that approximately ₹881 crore had been collected in the fund up to 2020 and that the corpus has since grown to over ₹1,000 crore. On being informed that the CPCB is presently administering the fund, the Bench directed both the Union Government and the Member Secretary of the CPCB to file detailed affidavits explaining how the money has been utilised, whether any operational mechanism exists for disbursing compensation, and the reasons behind the alleged non-disbursal of funds.
The Supreme Court observed that if such a significant public fund has remained idle for years, the authorities must clearly justify the circumstances. It indicated that transparency and accountability are essential where statutory funds meant for environmental victims are concerned. The Bench also appreciated the petitioner’s efforts in bringing the issue before the Court, recognising the larger public interest involved in ensuring that statutory compensation mechanisms function effectively.
The Environment Relief Fund was constituted to provide immediate financial relief to persons suffering death, injury or property damage due to accidents involving hazardous substances. It is financed through contributions collected under the statutory framework governing public liability insurance and is intended to ensure prompt compensation without requiring victims to undergo prolonged litigation. The PIL alleges that despite this legislative objective, the fund has remained virtually dormant for nearly two decades.
The matter will now proceed after the Centre and the CPCB submit their comprehensive responses. The Supreme Court’s scrutiny is expected to examine not only whether the Environment Relief Fund has been effectively administered but also whether institutional reforms are required to ensure that compensation reaches victims of environmental and industrial accidents in a timely and transparent manner.
