Operating a factory, hospital, hotel or other establishment without valid Consent to Operate, or after it has expired, is one of the most common environmental violations in India, and one of the most avoidable. The consequences have changed in recent years. The Jan Vishwas (Amendment of Provisions) Act, 2023 replaced imprisonment with penalties for many Air Act contraventions, and the Water (Prevention and Control of Pollution) Amendment Act, 2024 did the same for the Water Act in the states where it applies. Penalties are now imposed by adjudicating officers. At the same time, boards can close units, disconnect power and water, and demand environmental compensation.
This guide explains what can happen if you operate without CTO, how the consequences differ between states, how penalties are decided, and what to do if you are in this position now. For applying and renewing, see Consent to Operate.
हिंदी में सारांश
बिना वैध CTO के या उसकी समाप्ति के बाद यूनिट चलाना आम उल्लंघन है। 2023 के जन विश्वास अधिनियम और 2024 के जल अधिनियम संशोधन के बाद, कई उल्लंघनों पर जेल की जगह न्यायनिर्णयन अधिकारी 10,000 रुपये से 15 लाख रुपये तक पेनल्टी लगाता है, और उल्लंघन जारी रहने पर अतिरिक्त। साथ ही बोर्ड यूनिट बंद कर सकता है, बिजली-पानी कटवा सकता है और पर्यावरणीय मुआवज़ा माँग सकता है। जल अधिनियम संशोधन हिमाचल, राजस्थान, केंद्र शासित प्रदेशों और उसे अपनाने वाले राज्यों में लागू है।
The consequences at a glance
Penalty
From Rs 10,000 up to Rs 15 lakh, with more for continuing contravention, under the amended Acts.
Closure
Boards can direct closure of the unit under Section 33A or 31A.
Disconnection
Electricity and water supply can be stopped on the board's direction.
Compensation
Where damage is caused or imminent, environmental compensation and bank guarantees.
State variation
The Water Act amendment applies only in some states; others may still use older provisions.
Renewal trouble
A lapse affects your next renewal and your record.
Penalties after the amendments
Under the Air Act as amended by the Jan Vishwas Act, and the Water Act as amended in 2024 where it applies, operating without consent is generally a contravention attracting a monetary penalty rather than imprisonment. The penalty is imposed by an adjudicating officer after an inquiry, in which the unit receives notice, can reply and can be heard. The penalty ranges from Rs 10,000 up to Rs 15 lakh, with additional amounts for each day the contravention continues, and is credited to the Environment Protection Fund. The officer considers factors such as the harm caused, any gain made, whether the contravention was repeated, and whether it was remedied.
Appeals against penalty orders lie to the National Green Tribunal; under the Water Act, the appeal requires a deposit of 10 per cent of the penalty. See environmental penalty defence.
Which states are different
The Water Act is a central law passed at the request of states, so amendments apply only in states that agree. The 2024 amendment applied from the start to Himachal Pradesh, Rajasthan and all Union territories, including Delhi. Punjab, Bihar and West Bengal adopted it by resolution, and Parliament extended it to Manipur. In other states, the older provisions of the Water Act may still apply until the state adopts the amendment, which means operating without consent under the Water Act could still lead to prosecution there. The Air Act amendment through the Jan Vishwas Act applies across India.
So the same lapse may lead to a penalty inquiry in Jaipur or Delhi but a different procedure in another state. Check the position in your state before deciding how to respond.
What to do if your CTO has lapsed
Check the dates
Confirm when consent expired and whether a renewal was filed.
Apply at once
File the renewal or fresh application with the late fee.
Show compliance
Commission fresh monitoring and fix any gaps.
Consider operations
Take advice on whether to continue or pause until consent is granted.
Reply to notices in time
With evidence of application, payment and compliance.
Prepare for the inquiry
Address the factors the adjudicating officer will weigh.
Consequences by situation
| Situation | Likely consequence |
|---|---|
| Renewal filed before expiry, board delayed | Strong position; usually no penalty if the delay is the board's |
| Renewal filed late, unit compliant | Late fee; possible penalty at the lower end |
| No application, unit compliant | Notice, penalty, possible closure until consent |
| No consent and pollution caused | Closure, disconnection, penalty and compensation |
| Repeated lapses | Higher penalty and closer scrutiny |
Closure, disconnection and compensation
Penalties are not the only risk. Under Section 33A of the Water Act and Section 31A of the Air Act, boards can direct closure of a unit and stoppage of electricity and water. Units operating without consent are common targets in enforcement drives, especially in NCR during winter. The Supreme Court held in August 2025, in DPCC v Lodhi Property, that boards can also require environmental compensation and bank guarantees where environmental damage has been caused or is imminent. A unit operating without consent but fully compliant with standards is less likely to face compensation than one that was also polluting, but closure remains possible. See closure notice reply.
Avoiding the problem
Most lapses happen because nobody tracks the expiry date, the person responsible leaves, or the renewal is filed but a query goes unanswered. Simple habits prevent them: a calendar reminder six months before expiry, a named person responsible for consent, annual filings made on time so the renewal is not held up, and a check of the portal for queries every week while an application is pending. For units with several sites or permissions, a legal register is worth setting up. See environmental compliance audit.
A delay that was the board's
Here's a made-up example. A Delhi unit filed its CTO renewal 100 days before expiry with complete documents. The DPCC did not decide it before expiry, and the unit later received a penalty inquiry notice.
We replied with proof of timely filing, the complete application, and the absence of any query from the board. The adjudicating officer closed the inquiry, accepting that the unit had done what the guidelines required.
Directors and managers
When a company operates without consent, notices and inquiries are often addressed to the company and to its directors, managers or occupier. Under the Acts, persons in charge of and responsible for the conduct of the company's business can be held liable, but those who show that the contravention happened without their knowledge or that they exercised due diligence to prevent it have a defence. Independent and non-executive directors with no role in operations should explain their position in reply. Companies can reduce personal exposure by clearly delegating environmental compliance to a named officer through a board resolution, and by putting systems in place to track consent and filings. See environmental prosecution defence.
Buying or leasing a running unit
Buyers of running factories and tenants taking over industrial premises sometimes discover after completion that the unit has been operating without valid consent. The board may treat the new owner or occupier as responsible from the date it took over, and the past lapse may still affect renewal. Before buying or leasing, check the current CTO, its holder's name, the expiry date, the conditions and any pending notices, and make renewal or transfer of consent a condition of completion where needed. An indemnity from the seller for past lapses is worth negotiating. See environmental due diligence.
Factors that affect the penalty
| Factor | What helps your case |
|---|---|
| Duration of the lapse | Proof that the lapse was short or that you applied in time |
| Harm caused | Monitoring results within standards throughout |
| Gain from non-compliance | No saving on fees or treatment costs |
| Repetition | A clean record before the lapse |
| Remedial action | Prompt application, payment of fees, fixes |
| Cooperation | Timely, accurate replies and attendance |
If you are in this position now
- When exactly did consent expire, and was renewal filed?
- Have you paid the renewal and any late fee?
- Are your monitoring results within standards?
- Have all annual returns been filed?
- Do you know whether the 2024 Water Act amendment applies in your state?
- Has anyone been named personally, and do they have a defence?
Frequently Asked Questions
What is the penalty for operating without CTO?
Under the amended Acts, from Rs 10,000 up to Rs 15 lakh, plus more for continuing contravention.
Who imposes the penalty?
An adjudicating officer after an inquiry.
Can I go to jail for operating without consent?
Under the amended Air Act and, where applicable, Water Act, it is generally a penalty matter, but older provisions may apply in some states.
Which states follow the 2024 Water Act amendment?
HP, Rajasthan, all UTs including Delhi, and states that adopted it such as Punjab, Bihar and West Bengal.
Can my unit be closed?
Yes, boards can direct closure and disconnection.
Can the board demand compensation?
Where environmental damage is caused or imminent.
What if I filed renewal on time?
That strongly helps if the board delayed.
Should I stop operating if my CTO expired?
Take advice; continuing exposes you to action.
Can I appeal a penalty?
Yes, to the NGT, with a 10 per cent deposit under the Water Act.
How do I avoid this?
Track expiry dates and renew at least 120 days early.
CTO Expired or Missing?
Send us your consent details and any notice. We will advise on the next steps.
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. Environmental rules, EPR targets, GRAP measures and board procedures change often, so check the current position for your unit or project 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.
