Yes, a demand for environmental compensation can be challenged, and yes, a person harmed by pollution can claim compensation. A business should first check how the board counted the days, which category and scale it applied, and whether a proper hearing was given, then reply in writing and, if needed, appeal to the National Green Tribunal within 30 days. A farmer or family whose crops, well, house or health suffered can apply to the NGT under section 15 within five years. In both cases the outcome turns on documents and proof, not on how loudly the case is argued.
This guide is for two readers: the factory owner, builder or hospital holding a compensation demand from DPCC, UPPCB, HSPCB or the CPCB, and the person on the other side of the wall whose land or family has been hurt. For the basic idea, read our short explainer on what environmental compensation means. This page goes straight to action.
For help on a live demand, see our page on environmental compensation demands; for victims, see compensation for pollution damage.
हिंदी में सारांश
अगर प्रदूषण बोर्ड ने आपसे पर्यावरण क्षतिपूर्ति (environmental compensation) मांगी है, तो आप राशि और उल्लंघन की अवधि दोनों को चुनौती दे सकते हैं। पहले देखें कि दिन कैसे गिने गए, उद्योग की श्रेणी और आकार सही लगाया गया या नहीं, और सुनवाई का मौका मिला या नहीं। बोर्ड को लिखित जवाब दें और जरूरत हो तो 30 दिन में राष्ट्रीय हरित अधिकरण (NGT) में अपील करें। अगर प्रदूषण से आपकी फसल, कुआं, मकान या सेहत को नुकसान हुआ है, तो आप NGT की धारा 15 के तहत पांच साल के भीतर मुआवजे का दावा कर सकते हैं। पटवारी या कृषि विभाग की नुकसान रिपोर्ट, पानी की जांच रिपोर्ट और मेडिकल रिकॉर्ड सबसे जरूरी सबूत हैं। कोई भी वकील पहले से राशि की गारंटी नहीं दे सकता।
The essentials
Check the arithmetic
Most demands that fail do so on the period counted, the category used or double counting.
30 days to appeal
An NGT appeal against a board direction runs from the date the order reaches you.
Pay under protest if you must
Paying to save the unit does not end your challenge if the letter says it is under protest.
Victims go to the NGT
Section 15 lets an injured person or property owner claim relief and compensation within five years.
Proof decides the figure
Loss assessments, water test reports and medical records turn a grievance into a number.
No promised amounts
Compensation depends on what you can prove and link to the polluter; nobody can honestly promise a figure.
The board is demanding environmental compensation. Can I challenge the amount, or the period it covers?
Yes, both. A compensation demand is an order of a statutory authority, and it must rest on correct facts, the right method and a fair hearing. The amount comes out of a formula, so if one input is wrong (the number of days, the category of your industry, the size of your unit) the final figure is wrong too. Challenging it is not defiance; it is asking the board to apply its own method properly.
The period of violation is where most demands go astray. Boards often count from the inspection that found a problem to a later inspection that found compliance, even when the unit fixed the fault weeks earlier and told the board so. Some count days when the unit was sealed or not working at all. Others start from the date consent expired, though the renewal application was pending with the board itself. Each of these can add lakhs.
Next come scale and category: a small unit charged as a large one, or an orange category activity charged at the red rate because of an old classification. Then process: a demand raised without a show-cause notice, without considering your reply, or without supplying the reports it relies on is open to challenge on natural justice alone.
Reply to the board first, in writing and with documents. If the board confirms the demand, it is usually a direction under section 33A of the Water Act, section 31A of the Air Act or section 5 of the Environment (Protection) Act, and an appeal lies to the NGT under section 16 within 30 days of communication. Check which provision your order cites, because that decides the forum. See our page on appealing against a pollution board's order.
Mistakes in the demand and what to check
Put the demand letter, your consent orders and every inspection report side by side and go down this list. Most of what you need is in your own files; the rest comes through an RTI application.
| Possible mistake | What to check | What to send back |
|---|---|---|
| Too many days counted | Start and end dates used; whether days of closure, sealing or no production were included | Electricity bills, production registers, closure and revocation orders |
| Compliance date ignored | Date you fixed the fault, and date you told the board | Invoices, commissioning report, dated photos, your letter with receipt |
| Wrong category | Category in your consent order and in the CPCB list for your actual process | Consent order, process flow chart, raw materials and products |
| Wrong scale | Whether the unit was treated as large, medium or small, and on what basis | Udyam certificate, investment figures, installed capacity |
| Double counting | The same period charged twice, under two notices, or separately for air and water for one fault | Earlier demands and payments, a short table showing the overlap |
| No hearing | Whether a show-cause notice came and your reply was considered | The notice (or proof none came), your reply, any hearing request |
| Partial compliance ignored | Whether a unit that fixed some faults was treated like one that fixed none | Item-wise compliance chart with dates |
One honest caution. If the violation is real and serious (untreated effluent in a drain, years without consent), arguing only about arithmetic may reduce the figure but will not make it disappear. Then the stronger course is to show full compliance quickly and argue for a fair recalculation, not to deny everything.
A response plan for a business that has received a demand
The first week matters most: the appeal clock is running, and boards often follow a demand with a closure or disconnection notice if nothing comes back.
Note the dates
Record the date on the order and the date it reached you. The 30 days run from communication, so keep the envelope or email header.
Collect the basis
Ask the board in writing for the inspection report, sample results and calculation sheet. File an RTI application too, but do not wait for the reply before acting.
Rebuild the period
Chart when the unit ran, when it was shut, when each fault was fixed and when the board was told. Back every date with a bill, register entry or letter.
Check category, scale and location
Compare what the board applied with your consent order and records.
Fix what is still pending
Stop any continuing violation now and document it. Tribunals are far readier to recalculate for a unit that is compliant today.
Reply to the board
Send a reasoned reply with the chart and documents, ask for a personal hearing, and ask for withdrawal or recalculation.
Decide on payment
If closure or disconnection is threatened, consider paying all or part with a letter stating it is under protest and without prejudice to your appeal.
Appeal to the NGT
If the board confirms the demand or sits on your reply, file before the right bench within 30 days and ask for interim protection if recovery is threatened.
Do not let the reply eat up the appeal period. The NGT can condone up to 60 days' delay for sufficient cause, but do not plan on it; our guide on the NGT time limit explains why.
Paying under protest, deposits and stopping recovery
Many owners pay because the alternative is a sealed gate and idle workers. That is a fair commercial choice and need not mean giving up. The covering letter should say the amount is paid under protest, that you dispute the period and calculation, and that you reserve your right to appeal. Without it, the board may later argue you accepted the demand.
Once an appeal is filed, the NGT may protect a unit from coercive recovery, but it often attaches a condition, such as depositing part of the amount. The share depends on how strong the challenge looks and how serious the pollution was, so plan for it. If a closure direction came with the demand, seek revocation in parallel; see our guide to closure notice options.
How do the board and the NGT work out the compensation amount?
Boards and the CPCB use a formula-based method published by the CPCB. In words, it multiplies a pollution index reflecting how polluting your industry category is, the number of days of violation, a fixed rupee factor, a scale factor for a small, medium or large unit, and a location factor that is higher in populous or sensitive areas. We do not quote the figures, because they are revised and vary by type of violation; work from the version your board actually applied.
Seen this way, the formula tells you where to look. The rupee factor is fixed. The pollution index follows the category, so the category must be right. The scale follows unit size, so check what size the board assumed. The location factor is rarely disputed, though a unit in an industrial area is sometimes charged as if it were in a residential zone. And the days follow the dates, which is where the real fights happen.
The CPCB has separate approaches for some situations, such as waste rule violations, construction dust or missed EPR targets. If your demand comes from one of those, ask the board to state in writing which method and version it used. When Advocate B.K. Singh reviews a compensation demand, he rebuilds the period of violation from the unit's own bills and registers before looking at anything else, because that is where most demands go wrong.
How the NGT fixes compensation
The NGT is not tied to the CPCB formula. Section 20 of the NGT Act requires it to apply the polluter pays principle, which the Supreme Court backed in Indian Council for Enviro-Legal Action v Union of India and Vellore Citizens' Welfare Forum v Union of India (both 1996). The polluter bears the cost of the harm, including the cost of putting the environment right.
The tribunal often asks a joint committee (typically the CPCB, the State Board and the District Magistrate) to inspect, assess the damage and suggest a figure, using the formula, the cost of restoration, or both. Restoration cost means what it would actually take to clean the soil, treat the groundwater or desilt the drain. Parties can object to the committee report: a business can point out factual errors there, and a victim can point out losses the committee missed.
So an appeal is not only about whether the board got its sums right. The tribunal looks at the whole picture and can uphold the demand, reduce it, or occasionally order a fresh assessment that comes out higher. Be candid with your lawyer about what happened at the unit before filing.
A dyeing unit charged for 410 days
Here's a made-up example. A small dyeing unit near Ghaziabad receives a demand covering 410 days, counted from a March inspection that found the effluent plant bypassed to an April inspection the next year that found everything in order. The order applies a large-scale factor.
The owner's records tell a different story. The unit was sealed for 95 days after the first inspection, and the electricity bills show almost nothing consumed. The bypass was removed in August, and the owner wrote to the board that month with photographs; the board simply did not inspect again until April. The unit's investment puts it in the small category. Rebuilt properly, the period is closer to 60 days, and the scale factor is wrong.
The owner replies with a dated chart, pays part of the demand under protest to keep running, and appeals to the NGT within 30 days. How the tribunal rules is its call, but the case now rests on records, not assertions.
Pollution damaged my crops, well or health. Can I claim compensation, and how much?
Yes, you can claim. The main route is an application to the NGT under section 15 of the NGT Act, which allows relief and compensation to victims of pollution, restitution of damaged property and restitution of the environment. The time limit is five years from when the cause of action first arose, plus up to 60 days for sufficient cause. Under section 18, the injured person, the property owner, legal representatives of someone who died, or a representative body such as an association can apply.
How much depends on proof. The tribunal asks what exactly was lost, what it is worth in money, and whether this polluter caused it. A farmer with a patwari or agriculture department assessment of crop loss, a test report showing contamination in the tube well, and a board sample report showing the same contaminant in the factory's discharge has a real claim. A farmer with only a sense that the crop was poor this year does not, however genuine the grievance.
So nobody should promise a figure at the start. What can be done is to list every head of loss (crop, soil, livestock, well water, damage to the house, treatment, lost wages, restoring the land or water source) and gather evidence for each. Round, large claims with no breakdown get cut sharply. Unsure the NGT is the right forum? See whether the NGT can hear your case.
Routes open to a person harmed by pollution
| Route | When it fits | Time limit and points to note |
|---|---|---|
| NGT, section 15 | Pollution that damaged crops, land, water, a house or health, raising a substantial environmental question under the Schedule I Acts | 5 years from the cause of action, plus up to 60 days. Court fee 1% of the claim, minimum ₹1,000. |
| NGT, section 17 (no-fault) | An accident such as a gas leak, tank burst or chemical spill | Liability without proof of negligence. Claimed under section 15 within the same time limit. |
| Public Liability Insurance Act 1991 | An accident involving a hazardous substance; such units must carry insurance | Fixed, modest interim relief on a no-fault basis, usually through the district Collector. Does not bar a larger claim. |
| Civil suit for damages | A private nuisance or negligence dispute, often between neighbours | State court fee and limitation rules apply. Where the NGT can decide the claim, civil court jurisdiction may be questioned. |
| Complaint to the board or DM | You want the pollution stopped first | Gives no money by itself, but the board's sample reports become your best evidence later. |
For most rural and residential victims the NGT is the practical forum: it is not bound by the Code of Civil Procedure, can send committees to inspect, and can order compensation and clean-up together. See how to file a case in the NGT.
Evidence a victim should collect
Start from the day you notice the damage. Crop condition, water colour or a sick animal cannot be recreated a year later.
Crops and land
- Loss assessment by the patwari, lekhpal or agriculture department, with the khasra number
- Soil test report from a government or accredited lab
- Khatauni or land record showing ownership or tenancy
- Dated photos of the affected crop beside an unaffected field
- Yield or mandi records from earlier seasons
Wells and water
- Water test report from an accredited or government lab, with date and sampling point
- Earlier reports showing the water was clean before
- Photos and video of discoloured water or froth
- Bills for tanker water or a new borewell
Health
- Prescriptions, test reports and hospital records
- A doctor's note linking the illness to the exposure, if the doctor will give one
- Treatment and medicine bills
- Proof of work days lost
Linking it to the polluter
- Earlier complaints to the board, DM or panchayat, with receipts
- Board inspection and sample reports through RTI
- Expert report on how pollution travelled to your land or well
- Statements from neighbours with the same problem
Why some genuine claims fail
The usual failure is causation. There are three factories upstream and a sewage drain beside the field, and the claim names one without showing why. A board sample report from that outlet, or a committee report tracing the source, closes the gap, which is why an early complaint to the board matters even if money is the eventual aim.
Then the water sample. A bottle filled at home and taken to a private lab days later is easy to attack; record who collected it, when and from which point. And delay: complaints do not stop the clock, and the five years run from the first damage.
Be careful with the amount too. The NGT fee is 1% of the claim, so inflating it costs more, and the tribunal can order compensatory costs against a false or vexatious claim. A plea calling the NGT's fees excessive is pending in the Delhi High Court; see our guide on NGT costs and appeals.
A farmer whose tube well turned red
Here's a made-up example. A farmer in western Uttar Pradesh finds his tube well water reddish and his wheat on two bighas stunted. A paper unit a kilometre away discharges into a nala past his field. He complains to the board and the SDM; the board samples the unit's outlet and two village wells, and the reports he gets through RTI show the same pollutants in both.
He has the lekhpal record the crop damage against his khasra number, gets the soil tested at a government lab, and keeps bills for tanker water. With two neighbours he applies to the NGT under section 15, and the tribunal asks a joint committee to assess the damage, including the cost of restoring the groundwater. Any amount will depend on what the committee finds, but his claim rests on dated official documents linking his loss to one source, which most failed claims lack.
The provisions that matter here
Relief and compensation to victims of pollution, restitution of damaged property and of the environment. File within five years of the cause of action, plus up to 60 days for sufficient cause.
No-fault liability for accidents: the person responsible pays relief and compensation even if no negligence is proved. It builds on the absolute liability rule in M.C. Mehta v Union of India (Oleum gas, 1987).
The NGT applies sustainable development, the precautionary principle and the polluter pays principle, the basis for making a polluter bear the cost of damage and restoration.
The formula boards use to calculate environmental compensation, combining pollution category, days of violation, a rupee factor, unit scale and location. The NGT may adopt it, adjust it or assess restoration cost instead.
Before you reply, pay or file
- Business: do you know the date the demand reached you, and when 30 days runs out?
- Business: have you checked the violation dates against your own records?
- Business: do the category, scale and location match your consent order?
- Business: is the violation fixed today, with proof, and does any payment letter say under protest?
- Victim: do you have an official record of the loss (patwari, agriculture department, doctor)?
- Victim: does a test report link your well or soil to the polluter's discharge?
- Victim: is the first damage less than five years old, and is each head of loss backed by a document?
Where to go next
If the pollution is still going on, stopping it may be more urgent than the money; see our guide on pollution near your home. Units in Uttar Pradesh can see our page on dealing with UPPCB, and anyone heading to the tribunal can read about our NGT case filing work. Fees are agreed in writing, stage by stage.
Frequently Asked Questions
Can I appeal against environmental compensation imposed by the pollution board?
Yes. Where the demand is a direction under Water Act s.33A, Air Act s.31A or EP Act s.5, an appeal lies to the NGT under section 16 within 30 days of the order reaching you.
Should I reply to the board before appealing?
Usually yes, since a documented reply sometimes gets the demand recalculated. Just do not let it use up the 30 days.
If I pay the environmental compensation, can I still challenge it?
Yes, if you state in writing at the time of payment that it is under protest.
Will the NGT stop recovery while my appeal is pending?
It may, but it often asks for part of the amount to be deposited first.
Can the board charge compensation for days my unit was closed?
It should not, if the unit genuinely was not operating. Electricity bills and closure orders are the usual proof.
Is the CPCB formula binding on the NGT?
No. The NGT may use it, change it, or assess compensation on the actual cost of restoration.
How long do I have to claim compensation for pollution damage?
Five years under section 15 of the NGT Act from when the cause of action first arose, plus up to 60 days for sufficient cause.
How much compensation will I get for crop damage due to pollution?
There is no fixed rate. It depends on the loss you prove, its value and the link to the polluter.
What is the court fee for a compensation claim in the NGT?
One percent of the compensation claimed, minimum ₹1,000.
Can a whole village claim together?
Yes. Affected people can apply jointly, and a representative body can apply under section 18.
Do I need to prove negligence after a gas leak or chemical spill?
No. Section 17 imposes no-fault liability for accidents.
About the author
Advocate B.K. Singh, Founder & Principal Advocate, MCA, LL.B., LL.M.
Advocate B.K. Singh has practised for more than twenty years before the Supreme Court, the High Courts and the National Green Tribunal, and leads the environmental practice from offices in Dwarka (New Delhi) and Vaishali (Ghaziabad) with Advocate Sadhna Singh. Read his profile.
Holding a demand, or counting a loss?
Send us the board's order, or a short note of what was damaged and when, on WhatsApp or by phone. We will tell you what can be checked, the time limit and what evidence to gather first.
This page gives general information about environmental law as it stood when it was last reviewed. It is not legal advice on your case and does not promise any result. Laws, rules, fees and time limits change, so check the current position for your matter before acting.
Have a question about your own case?
A guide can only go so far. Send us the notice, the order or a few photos, and we'll tell you where you stand, which authority or NGT bench deals with it and when the next step is due, in plain words.
