Must Be A Polluter Before Being Held Absolutely Liable: Supreme Court Sets Aside NGT Order Against Art Of Living Over Yamuna Event, Orders ₹5 Cr Refund

"The alleged person must be a “polluter” before it is held as absolutely liable in law. No doubt, if this link is established, no excuse matters. However, the principle cannot be invoked unless the degradation is attributable to the alleged person." In a significant ruling setting aside the National Green Tribunal's (NGT) verdict against Sri Sri Ravi Shankar's Art of Living foundation, the Supreme Court held that the "polluter pays" principle cannot be applied in the absence of a proven causal link between the project proponent's activities and actual environmental degradation.

A bench comprising Justice Satish Chandra Sharma and Justice Nongmeikapam Kotiswar Singh quashed the NGT's 2017 judgment holding Vyakti Vikas Kendra India liable for allegedly damaging the Yamuna floodplains during the 2016 World Culture Festival (WCF) and directed the Delhi Development Authority (DDA) to refund the ₹5 crore environmental compensation deposited by the organisation within four weeks.

The appeal arose out of a common judgment dated December 7, 2017, passed by the NGT Principal Bench in applications moved by environmental activist Manoj Misra, which alleged that the three-day World Culture Festival organized in March 2016 caused severe ecological harm to the Yamuna floodplains. The Tribunal had directed the forfeiture of the ₹5 crore deposit made by the appellant for setting up a biodiversity park and ecological rehabilitation under the DDA. Aggrieved by the NGT fastening liability based on subjective expert reports and treating its own interim findings as conclusive, the appellant approached the apex court.

The primary question before the Supreme Court was whether the appellant caused actionable damage to the Yamuna floodplains during the event so as to attract liability under Section 15 and Section 17 of the National Green Tribunal Act, 2010. The court was also called upon to determine whether the Tribunal exceeded its statutory jurisdiction by equating the distinct environmental concepts of "restoration" and "rehabilitation."

Causal Link Essential To Trigger Polluter Pays Principle

Examining the invocation of strict and no-fault liability under Section 17 of the NGT Act, 2010, the bench observed that statutory no-fault liability under Section 17(3) applies specifically to accidents involving hazards and cannot be invoked arbitrarily. The bench underscored that the "polluter pays" principle requires positive proof of causation before absolute liability is fastened on any party.

The court noted that the foremost factor in environmental jurisprudence is the causation of real damage and the establishment of a causal link between the actions of the project proponent and the resultant degradation. In the present case, the court found that this causal link was never established by any standard, as ample contemporaneous evidence demonstrated that the event site was already in a dilapidated and damaged condition prior to being handed over to the appellant.

Tribunal Erred In Treating Interim Order As Final

The Supreme Court expressed strong disapproval of the NGT's approach in treating its interim order dated March 9, 2016—which had imposed the ₹5 crore deposit two days prior to the event—as conclusive and binding on the question of culpability. The bench observed that the findings in an interim order are interim precisely because they are not based on a full analysis of facts and counter-evidence.

The bench remarked that the Tribunal fell in error by holding that the interim order had attained finality simply because the appellant complied with it and did not challenge it in appeal. Since the interim order was expressly passed without prejudice to the rights and contentions of the parties, the Tribunal was duty-bound to re-test its initial prima facie findings upon appreciating all exculpatory material rather than operating on a conclusive assumption of guilt throughout the subsequent proceedings.

"The task of rehabilitation of public resources falls upon the shoulders of the State and it must be undertaken by the State by upholding the spirit of public trust doctrine... The Tribunal burdened the appellant with the task of developing something that it never destroyed."

Fine Distinction Between 'Restoration' And 'Rehabilitation' Under NGT Act

The apex court held that the NGT exceeded its statutory mandate under Section 15 of the NGT Act by directing the appellant to fund the development of a long-term biodiversity park and complete ecological rehabilitation of the riverbed. The bench clarified the distinct legal and ecological meanings of the terms "restoration" and "rehabilitation."

The court explained that "restoration" refers to a process whereby an affected area is simply brought back to its pre-existing original state, irrespective of functionality, whereas "rehabilitation" refers to complete reparation to achieve optimum ecological services. The bench emphasized that the responsibility of a private entity is strictly confined to restoring the damage it caused, while the broader mandate of rehabilitating public resources rests solely upon the State under the public trust doctrine and intergenerational equity.

Expert Committee's Contradictions And Reliance On Unscientific Metrics

The judgment critically reviewed the reports submitted by the High-Powered Expert Committee, pointing out that the committee initially claimed the site would cost ₹100–120 crores to rectify based on visual assessment, only for the committee Chairman to later distance himself from the figure as unscientific. In subsequent reports, the committee admitted that it was impossible to ascertain the pre-event ecological status of the site, thereby doing a complete somersault.

The apex court further noted that the Tribunal ignored a subsequent joint inspection report dated July 28, 2017, submitted by government engineers which confirmed that the site was fully covered with grass, had no debris or compaction of soil, and showed no marked change from pre-event conditions. The bench held that the Tribunal acted improperly in rejecting this exculpatory report merely on the ground that the committee had exceeded its jurisdiction by commenting on the absence of damage.

DDA Rapped For Granting Permission In Active Floodplain

While absolving the appellant of financial liability, the Supreme Court pulled up the Delhi Development Authority for granting permission to organize a mega-event on the active floodplain of the river Yamuna in the first place. The bench noted that DDA's conduct was inconsistent with the precautionary principle and its duties under the public trust doctrine.

The bench remarked that DDA, as the statutory custodian responsible for the ecological maintenance of the Yamuna floodplains, failed to act in accordance with its duties towards the public at large. However, since the overarching rejuvenation and management of the Yamuna floodplains had already been assigned to DDA in earlier comprehensive directions, the court held that DDA must continue carrying out the rehabilitation work on its own accord.

Allowing the appeal, the Supreme Court set aside the NGT's judgment dated December 7, 2017, along with all consequential and interim orders against Vyakti Vikas Kendra India. The court directed DDA to refund the ₹5 crore deposit to the appellant within four weeks, while clarifying that DDA's independent statutory obligations to execute the Yamuna floodplain restoration plan remain undisturbed.

Date of Decision: August 22, 2026