New Delhi, Aug. 4 -- In a significant judgment strengthening the regulatory authority of environmental bodies, the Supreme Court today upheld the powers of State Pollution Control Boards to impose environmental compensation and demand bank guarantees from polluters as part of their preventive and remedial functions.

A Bench comprising Justice P.S. Narasimha and Justice Manoj Misra ruled that such actions taken under Section 33A of the Water (Prevention and Control of Pollution) Act, 1974 and Section 31A of the Air (Prevention and Control of Pollution) Act, 1981 are lawful and fall squarely within the statutory powers of the Boards.

The Court, however, underscored that such powers must be exercised with fairness, transparency, and adheren...