The court came down heavily on federal and state governments over what it sees as a failure to curb pollution levels.
On Monday, one judge said: “Get explosives in 15 bags and kill them in one go. Why should people suffer this?”
Thick pollution has blanketed parts of northern India for weeks, with Delhi recording “hazardous” air quality levels.
On Monday, the air quality index figures in Delhi reached 339. A good level is considered anything between zero and 50.
Levels are expected to dip with rainfall predicted to hit the capital over the coming days.
The judges said it held the federal and local governments responsible for failing to control crop burning by farmers in Delhi and neighbouring states.
At this time of year, farmers tend to burn crop stubble to clear their fields, contributing to the high pollution levels.
Vehicle fumes, as well as construction and industrial emissions, have also contributed to the smog over the past month.
The court said the lifespan of millions of people had been shortened and that people in Delhi and the surrounding region are “suffocating” due to pollution.
It called on Delhi’s government to come up with a plan to install air purifying towers across the city within 10 days.
The World Health Organisation (WHO) says a third of deaths from lung cancer and heart disease are due to air pollution.
Pakistan is also suffering from high levels of pollution.
Amnesty International has called for its supporters around the world to campaign on behalf of the people of the Pakistani city of Lahore.
“The government’s inadequate response to the smog in Lahore raises significant human rights concerns. The hazardous air is putting everyone’s right to health at risk,” says Rimmel Mohydin, South Asia campaigner at Amnesty International.
The government there has shut schools down on at least three days this month.