The Environmental Protection Fund

In one line

One fund for three Acts, three-quarters of the money back to the States, and a drafting gap that leaves the Water Act pointing at a door section 16 has not opened.

In exam wording: sections 15E, 16, 16A and 16B of the Environment (Protection) Act, as substituted and inserted by the Jan Vishwas (Amendment of Provisions) Act 2023, constitute Chapter IIIA, "Fund, Accounts and Audit"; section 15E credits every penalty to the Environmental Protection Fund; section 16 establishes it, states what is credited to it and what it may be applied for, provides for an administrator and requires seventy-five per cent of the penalties to be allocated to the States; section 16A provides for accounts and audit by the Comptroller and Auditor-General; and section 16B for an annual report laid before each House of Parliament.

Section 15E: everything goes in

Where any penalty or additional penalty is imposed under sections 14A, 14B, 15, 15A or 15B, the amount shall be credited to the Environmental Protection Fund established under section 16.

And two other Acts say the same thing. Section 45D of the Water Act and section 39C of the Air Act both credit their penalties to the fund established under section 16 of the Environment (Protection) Act 1986.

So the design is: three statutes, three sets of penalty sections, three adjudicating officers, one fund, constituted and administered under one Act. That is a sensible unification and it is new. Before 2024 a fine under any of the three Acts went into the Consolidated Fund like any other fine and was not identifiable as environmental money at all.

Section 16: the Fund

Sub-section (1). The Central Government may, by notification in the Official Gazette, establish a fund to be known as the Environmental Protection Fund.

Sub-section (2), what is credited to it:

(a) the amount of penalty imposed under the Air (Prevention and Control of Pollution) Act 1981 and under this Act; (b) the interest or other income received out of investments made from the Fund; (c) any other amount from such sources as may be prescribed.

Read clause (a) again.It names the Air Actand the Environment (Protection) Act. It does notname the Water Act.

That is a real drafting gap and it is worth an examination paragraph. Section 45D of the Water Act directs its penalties into this Fund, but section 16(2) of this Act does not list them among the sums credited to it. The reason is constitutional and is the theme of this book: the Air Act and the Environment (Protection) Act were amended by the Jan Vishwas Act 2023, which amended section 16 at the same time, and the Water Act had to be amended a year later by a separate Article 252 statute, which could and did add section 45D to the Water Act but did not touch section 16 of the Environment (Protection) Act.