Karnataka HC Halts Recovery of Rs. 12.69-Crore Environmental Compensation from Ramky One North Developer

The Karnataka High Court has restrained the Karnataka State Pollution Control Board (KSPCB) from taking any coercive steps to recover a demand of Rs. 12.69 crore imposed as environmental compensation on the developer of Ramky One North.

The High Court's Green Bench, consisting of Chief Justice Vibhu Bakhru and Justice C. M. Poonacha, passed the interim order on 14 November 2025.

The writ petition, argued by Advocate Angad Kamath for the petitioner M/s Ramky Estates and Farms Pvt. Ltd., challenges a demand notice issued on 16 October 2025 by which the Board sought to recover environmental compensation for an alleged six-year violation period between 2017 and 2023.

The petitioner has not disputed any factual allegation of pollution or operational violations. Instead, it questions whether the KSPCB possesses any statutory power to impose or recover monetary compensation when no such power is granted under the Water Act, the Air Act or the Environment (Protection) Act.

According to the petition, the demand is “wholly without jurisdiction” and relies on an internal CPCB formula that has never been notified as law. The petitioner pointed out that the State Environment Impact Assessment Authority (SEIAA) which is the authority empowered to monitor environmental clearance compliance, had earlier closed proceedings after noting the absence of measurable environmental damage, and that multiple accredited laboratory reports from 2009 to 2025 showed treated effluent well within permissible standards. The Board’s unilateral computation of environmental harm, it was argued, is mechanical, retrospective, and unsupported by any statutory procedure.

During the hearing, Advocate Kamath placed strong reliance on the Supreme Court’s recent decision in Delhi Pollution Control Committee v. Lodhi Property Co. Ltd. (2025 SCC OnLine SC 1601), which clarified that Pollution Control Boards do not possess inherent power to impose restitutionary or compensatory damages. The Supreme Court held that such powers may be exercised only when backed by detailed subordinate legislation, such as rules or regulations that lay down transparent principles, quantifiable methods and natural-justice safeguards. Court made clear that internal CPCB guidelines cannot substitute for law.

The High Court noted that Karnataka has not framed any such subordinate legislation. Recording this, the bench observed that the petitioner’s contention that the Board cannot impose environmental compensation until a statutory framework is notified “warrants consideration”.

Advocate A. Mahesh Chowdhary accepted notice for the KSPCB, while the State sought time to file objections. The High Court issued notice and granted the State two weeks to file its response. Until then, it directed that no coercive steps be taken to recover the Rs. 12.69-crore demand.

The matter will be heard next on 5 February 2026.

Case Title: M/s Ramky Estates and Farms Pvt Ltd vs State of Karnataka and Another

Order Date: November 14, 2025

Bench: Green Bench consisting of Chief Justice Vibhu Bakhru and Justice C M Poonacha