The court asked the authorities to impose a fine of Rs 200 on first-time offenders, who would require to do week-long community service by cleaning the streets if they are again found guilty.
It also ordered that those guilty of dirtying their local area should be directed to clean it at least for a week.
"The time has come when harsh measures have to be taken against those members of the public who violate municipal law, and we are also of the view that penal provisions should include forcing the offender to do community service," a division bench of Justices Deepak Gupta and Sanjay Karol held.
"Some of our citizens do not hesitate to dirty the streets and the areas around their houses, but when they go abroad they comply with all the civic laws of that country," the court observed, hearing a petition on increasing pollution in Beas and Sarwari rivers in Kullu.
"Now, the time has come when the penalty for dirtying should not be less than Rs 2,500 and the government should seriously consider imposing the minimum penalty of Rs 2,500 for violation of such municipal laws," the court said.
It directed the government to take a call on the issue by March 31 next year.
Till a decision is taken in this regard, the court authorised municipal councils of Kullu and Manali and the nagar panchayat of Bhuntar to levy a fine ranging from Rs 25 to Rs 200 on the first-time offenders.
"In case of a repeat offender, he can be punished by directing asking him to personally render community service by cleaning the public area in and around his premises in question under the supervision of a senior officer of the municipal council for a period of at least one week.
Video of this shall be taken to be produced in the Court,", it said.
The bench said if a person is repeatedly found guilty of the offence, the municipal council can stop civic amenities to his house.
In case of offences committed by commercial establishments, their licenses shall be cancelled, it said.