Supreme Court Clarifies Prosecution of Municipal Commissioners under the Water Act: Karnataka State Pollution Control Board vs. B. Heera Naik & Ors. (26 November 2019)

Introduction

Date of the Judgment: 26 November 2019

Citation: (2019) INSC 1234

Judges: Ashok Bhushan, J., M.R. Shah, J.

Can the head of a municipal body be held liable for pollution caused by the municipality? The Supreme Court of India addressed this critical question in a case concerning the prosecution of municipal officials under the Water (Prevention and Control of Pollution) Act, 1974. This judgment clarifies the extent to which municipal commissioners and chief officers can be held responsible for environmental violations committed by their respective municipal bodies. The Court’s decision has significant implications for environmental law and the accountability of local government officials. The judgment was delivered by a two-judge bench comprising Justice Ashok Bhushan and Justice M.R. Shah.

Case Background

The Karnataka State Pollution Control Board (the Board) initiated legal action against several municipal officials for failing to prevent water pollution. The Board alleged that these officials, including Commissioners and Chief Officers of various City Municipal Councils, had violated the Water (Prevention and Control of Pollution) Act, 1974 (the Act). Specifically, the Board contended that these officials had failed to establish sewage treatment plants and were discharging untreated sewage into water bodies. The complaints were filed in the Court of Metropolitan Magistrate at Bangalore.

The complaints stated that the City Municipal Council of Krishnarajapuram, Bangalore, and its Commissioners had been granted consent to discharge sewage effluent after treatment, which expired on 30.06.2006. The council had not renewed the consent, nor had it established a sewage treatment plant within six months as required. Instead, the council continued to discharge untreated sewage into nearby water bodies, violating Section 25 of the Act, which is punishable under Section 44 of the Act. Similar complaints were filed against other municipal councils and their respective officials.

The municipal officials, in response, filed criminal petitions under Section 482 of the Code of Criminal Procedure (Cr.P.C.) in the High Court of Karnataka, seeking to quash the proceedings initiated against them. The High Court, relying on previous judgments, allowed these petitions, stating that municipal commissioners and chief officers could not be considered “Heads of Department” under Section 48 of the Act, and therefore, could not be prosecuted under the Act. The Karnataka State Pollution Control Board then appealed to the Supreme Court.

Timeline

Course of Proceedings

The Karnataka State Pollution Control Board filed complaints against the Municipal Commissioners and Chief Officers in the Court of Metropolitan Magistrate at Bangalore. The accused persons then filed criminal petitions under Section 482 Cr.P.C. in the High Court of Karnataka, seeking to quash the proceedings. The High Court, relying on a previous Division Bench judgment in Writ Petition No. 30610 of 2008 and a single-judge decision in Criminal Petition No. 831 of 2007, held that Commissioners and Chief Officers could not be prosecuted under Section 48 of the Act, 1974, as they were not “Heads of Department.” The High Court thus quashed the proceedings initiated by the Board.

Legal Framework

The core of this case revolves around the interpretation of the Water (Prevention and Control of Pollution) Act, 1974. Key sections include:

• Section 25: This section restricts new outlets and new discharges of sewage or trade effluent into water bodies without prior consent from the State Board.
• Section 41: This section specifies the circumstances under which a person can be prosecuted for non-compliance with the Act.
• Section 44: This section prescribes penalties for violations of the Act, including imprisonment and fines.
• Section 47: This section addresses “Offences by companies.” It states that if a company commits an offense under the Act, every person in charge of and responsible for the company’s business, as well as the company itself, shall be deemed guilty. The explanation to this section defines “company” to include “any body corporate.”
• Section 48: This section deals with “Offences by Government Departments.” It states that if a Government Department commits an offense, the Head of the Department shall be deemed guilty.
• Section 49: This section deals with cognizance of offences. It states that no court shall take cognizance of any offence under this Act except on a complaint made by a Board or any officer authorized in this behalf by it.

The Supreme Court also considered the Karnataka Municipalities Act, 1964, specifically Section 10, which states:

“10. Incorporation of city and town municipal councils.— (1) In every municipal area, there shall be a municipal council, and every such municipal council shall be a body corporate by the name of “the City Municipal Council of ……..” or “the Town Municipal Council of ……..”, as the case may be, and shall have perpetual succession and a common seal with power, subject to the provisions of this Act, to acquire, hold and dispose of property and to contract and may by the said name sue and be sued through its Chief Officer or Municipal Commissioner. (2) Save as otherwise provided in this Act, the municipal Government of a municipal area shall vest in the municipal council.”

Arguments

The counsel for the Karnataka State Pollution Control Board argued that:

• Municipal Corporations and Municipalities are entrusted with significant municipal functions and statutory duties.
• The Water Act, 1974, provides for penalties for contravention of its provisions.
• Municipal Corporations and Municipalities are liable to be prosecuted for violating the Act.
• The Commissioner of the Municipal Corporation and the Chief Officers of the Municipal Council are the Chief Executive Officers of their respective bodies and, as such, are the “Head of the Department” and liable to be prosecuted under Section 48 of the Act.
• The High Court erred in quashing the prosecution by incorrectly interpreting that the officials were not “Head of Department.”
• The counsel relied on the judgment of the Supreme Court in V.C. Chinnappa Goudar Vs. Karnataka State Pollution Control Board & Anr. [Criminal Appeal No. 755 of 2010], which upheld the prosecution of Commissioners and Chief Commissioners under the Act.

The core argument of the appellant was that the municipal bodies and their heads are liable under the Water Act, 1974. The Board contended that the High Court had erred in its interpretation of “Head of Department” and that the municipal officials should be held accountable for the pollution caused by their municipalities.

The innovativeness of the argument lies in the Board’s interpretation of the term “company” under Section 47 of the Act to include municipal bodies, thereby making the officials in charge liable for the offenses committed by the municipal bodies.

Issues Framed by the Supreme Court

The Supreme Court framed the following issue:

1. Whether the Commissioner of a City Municipal Council or the Chief Officer of a City Municipal Council, constituted under the Karnataka Municipalities Act, 1964, can be treated as the Head of the Department of any Department of Government, for the purpose of Section 48 of the Water (Prevention and Control of Pollution) Act, 1974.
2. Whether the Municipal Council can be prosecuted under the Water (Prevention and Control of Pollution) Act, 1974.

Treatment of the Issue by the Court

Authorities

The Supreme Court considered the following authorities:

Judgment

How each authority was viewed by the Court?

• Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, (1979) 3 SCC 489:* The Court used this case to support the concept of the government acting through various instrumentalities, including juridical persons.
• Hakam Singh Vs. M/s. Gammon (India) Ltd., (1971) 1 SCC 286:* The Court used this case to support the interpretation of “corporation” to include “company” and to emphasize that the meaning of an expression has to be determined from the specific statute.
• Subhash Chandra Vs. Gulab Bai and Others, (2016) 4 SCC 750:* The Court used this case to support the view that the term “company” can include statutory corporations, depending on the context of the statute.
• Aneeta Hada Vs. Godfather Travels and Tours Private Limited, (2012) 5 SCC 661:* The Court used this case to highlight the concept of corporate criminal liability, which applies to both corporations and companies.
• Arun Kumar Singh vs. The State of Bihar and Ors. (Criminal Misc. No. 7268 of 2005):* The Court agreed with the Patna High Court’s interpretation that the definition of “company” in Section 141 of the Negotiable Instruments Act is wider than the definition in the Companies Act and includes any body corporate.
• V.C. Chinnappa Goudar Vs. Karnataka State Pollution Control Board & Anr. (Criminal Appeal No. 755 of 2010):* The Court noted that this case affirmed that sanction under Section 197 Cr.P.C. is not required for proceedings under Section 49 of the Act.

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily driven by the interpretation of the term “company” under Section 47 of the Water Act, 1974. The Court emphasized that the definition of “company” in this section is broad and includes “any body corporate.” This interpretation was crucial in holding municipal bodies accountable for environmental offenses. The Court also highlighted the purpose of the Act, which is to prevent and control water pollution, and the need to ensure that all entities, including municipal bodies, comply with its provisions.

The Court’s reasoning was heavily based on legal interpretation, with a focus on the definition of “company” and the scope of Sections 47 and 48 of the Act. The factual aspects of the case, such as the specific violations by the municipal bodies, were secondary to the legal analysis.

The Supreme Court rejected the High Court’s interpretation that municipal commissioners and chief officers are “Heads of Department” under Section 48 of the Act. The Court clarified that Section 48 applies to offenses committed by Government Departments, and municipal bodies, being “body corporates,” do not fall under this category.

The Court instead held that municipal bodies fall under the definition of “company” as provided in Section 47 of the Act. This section states that if a company commits an offense under the Act, every person in charge of and responsible for the company’s business, as well as the company itself, shall be deemed guilty. The explanation to this section defines “company” to include “any body corporate.” The Court reasoned that since municipal bodies are “body corporates,” they are covered under the definition of “company” and can be prosecuted under this section.

The Court also emphasized the importance of interpreting the law in a manner that furthers its purpose. The Water Act, 1974, was enacted to prevent and control water pollution, and the Court held that all entities, including municipal bodies, must be held accountable for violations.

The Court’s decision was unanimous, with both Justice Ashok Bhushan and Justice M.R. Shah agreeing on the interpretation of the law and the outcome of the case.

The Supreme Court quoted the following from the judgment:

“The Municipal City Council and Municipal Corporation, which have been created by State enactments are controlled by the Government, which bodies also receive financial assistance from the Government. It is well settled that Municipal Corporations are instrumentality or agency of the Government.”

“In a Statute, the definition of an expression has to be found out in accordance with the context and Scheme of the enactment.”

“We, thus, looking to the purpose and object of Act, 1974, are of the opinion that Section 47 can be resorted to for offences by body corporate and Karnataka State Pollution Control Board by filing a complaint before the Magistrate for taking cognizance of offence under Section 49 did not commit an error.”

Key Takeaways

• Municipal bodies, being “body corporates,” are now clearly liable for prosecution under the Water (Prevention and Control of Pollution) Act, 1974, for environmental violations.
• The definition of “company” under Section 47 of the Act is broad and includes any body corporate, thus encompassing municipal councils and corporations.
• Municipal Commissioners and Chief Officers, while not directly liable under Section 48 as “Heads of Department,” can be held accountable under Section 47 as persons in charge of the municipal body’s business.
• This judgment reinforces the need for municipal bodies to comply with environmental regulations and take necessary measures to prevent pollution.
• The judgment clarifies the legal framework for prosecuting municipal bodies and their officials for environmental offenses, ensuring greater accountability.

Directions

The Supreme Court directed the Magistrate/Metropolitan Magistrate to proceed with the complaints filed by the Karnataka State Pollution Control Board in accordance with the law. The High Court’s order quashing the complaints was set aside.

Specific Amendments Analysis

There is no discussion about any specific amendment in the judgment.

Development of Law

The ratio decidendi of this case is that municipal bodies, being body corporates, fall under the definition of “company” as per Section 47 of the Water (Prevention and Control of Pollution) Act, 1974, and are therefore liable to be prosecuted for offenses under the Act. This judgment clarifies the scope of Section 47 and establishes that municipal bodies are not immune from prosecution under the Act.

The Supreme Court clarified that municipal bodies are not “Government Departments” as per Section 48 of the Act. This overrules the previous interpretation of the High Court that the municipal officials are “Heads of Department” under Section 48.

Conclusion

The Supreme Court’s judgment in Karnataka State Pollution Control Board vs. B. Heera Naik & Ors. clarifies that municipal bodies are liable for prosecution under the Water (Prevention and Control of Pollution) Act, 1974, for environmental offenses. The Court held that municipal bodies, being body corporates, fall under the definition of “company” in Section 47 of the Act. This decision ensures greater accountability for municipal bodies and their officials in preventing and controlling water pollution. The judgment sets aside the High Court’s order and directs the Magistrate to proceed with the complaints.