Grant of ex post facto environmental clearance by the state is in derogation of the fundamental principles of environmental jurisprudence and of EIA notification of 1994; SC.
- 18:00Supreme Court of India
Justice D Y Chandrachud & Justice Ajay Rastogi
The SC on April 1, 2020 {Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors.} held that the concept of an ex post facto EC is in derogation of the fundamental principles of environmental jurisprudence and is an anathema to the EIA notification dated 27 January 1994. It was held that it is detrimental to the environment and could lead to irreparable degradation. It was also held that the reason why a retrospective EC or an ex post facto clearance is alien to environmental jurisprudence is that before the issuance of an EC, the statutory notification warrants a careful application of mind, besides a study into the likely consequences of a proposed activity on the environment. It was held that an EC can be issued only after various stages of the decision-making process have been completed. It was held that requirements such as conducting a public hearing, screening, scoping and appraisal are components of the decision-making process which ensure that the likely impacts of the industrial activity or the expansion of an existing industrial activity are considered in the decision-making calculus. It was further held that allowing for an ex post facto clearance would essentially condone the operation of industrial activities without the grant of an EC.
Further held that for an action of the Central government to be treated as a measure referable to Section 3 of the Environment (Protection) Act 1986 it must satisfy the statutory requirement of being necessary or expedient “for the purpose of protecting and improving the quality of the environment and preventing, controlling and abating environment pollution”. It was held that the circular dated 14 May 2002 in fact does quite the contrary. It purported to allow an extension of time for industrial units to comply with the requirement of an EC. It was also held that the EIA notification dated 27 January 1994 mandated that an EC has to be obtained before embarking on a new project or expanding or modernising an existing one. It was held that the EIA notification of 1994 has been issued under the provisions of the Environment Protection Act 1986 and the Environment Protection Rules 1986, with the object of imposing restrictions and prohibitions on setting up of new projects or expansion or modernisation of existing project.
It was further held that the measures are based on the precautionary principle and aim to protect the interests of the environment. It was held that the circular dated 14 May 2002 allowed defaulting industrial units who had commenced activities without an EC to cure the default by an ex post facto clearance. It was held that being an administrative decision, it is beyond the scope of Section 3 and cannot be said to be a measure for the purpose of protecting and improving the quality of the environment. It was held that the circular notes that there were defaulting units which had failed to comply with the requirement of obtaining an EC as mandated. It was also held that the circular provided for an extension of time and inexplicably introduced the notion of an ex post facto clearance. It was held that in effect, it impacted the obligation of the industrial units to be in compliance with the law.
It was further held that the concept of ex post facto clearance is fundamentally at odds with the EIA notification dated 27 January 1994. It was held that the EIA notification of 1994 contained a stipulation that any expansion or modernisation of an activity or setting up of a new project listed in Schedule – I “shall not be undertaken in any part of India unless it has been accorded environmental clearance”. It was held that the language of the notification is as clear as it can be to indicate that the requirement is of a prior EC. A mandatory provision requires complete compliance. It was held that the words “shall not be undertaken” read in conjunction with the expression “unless” can only have one meaning : before undertaking a new project or expanding or modernising an existing one, an EC must be obtained. It was held that when the EIA notification of 1994 mandates a prior EC, it proscribes a post activity approval or an ex post facto permission. It was also held that what is sought to be achieved by the administrative circular dated 14 May 2002 is contrary to the statutory notification dated 27 January 1994. It was held that the circular dated 14 May 2002 does not stipulate how the detrimental effects on the environment would be taken care of if the project proponent is granted an ex post facto EC. The EIA notification of 1994 mandates a prior environmental clearance. It was held that the circular substantially amends or alters the application of the EIA notification of 1994. It was also held that the mandate of not commencing a new project or expanding or modernising an existing one unless an environmental clearance has been obtained stands diluted and is rendered ineffective by the issuance of the administrative circular dated 14 May 2002.
It was therefore held that the aforesaid discussion leads to the conclusion that the administrative circular is not a measure protected by Section 3. Hence it was held that there was no jurisdictional bar on the NGT to enquire into its legitimacy or vires. Moreover, it was held that the administrative circular is contrary to the EIA Notification 1994 which has a statutory character. The circular is unsustainable in law - held by the SC.
It was also held that in Tamil Nadu Pollution Control Board v Sterlite Industries (I) Ltd (2019 SCC Online SC 221) the SC analysed the adjudicatory functions which have been entrusted to the NGT under the National Green Tribunal Act. Justice R F Nariman, speaking for a two judge Bench held that while exercising its jurisdiction under Section 16, the NGT cannot strike down rules or regulations made under the Environment Protection Act 1986. The said bar is not applicable as it was held by the SC in present case that the administrative circular dated 14 May 2002 does not have statutory character.
It was held in pen ultimate that though the three industries operated without an EC for several years after the EIA notification of 1994, each of them had subsequently received ECs including amended ECs for expansion of existing capacities. It was held that these ECs have been operational since 14 May 2003 (in the case of Alembic Pharmaceuticals Limited), 17 July 2003 (in the case of United Phosphorous Limited), and 23 December 2002 (in the case of Unique Chemicals Limited). It was also held that in addition, all the three units have made infrastructural investments and employed significant numbers of workers in their industrial units.
It was held that in this backdrop, the SC must take a balanced approach which holds the industries to account for having operated without environmental clearances in the past without ordering a closure of operations. It was held that the directions of the NGT for the revocation of the ECs and for closure of the units do not accord with the principle of proportionality. It was held that at the same time, the SC cannot be oblivious to the environmental degradation caused by all three industries units that operated without valid ECs. It was held that penalties must be imposed for the disobedience with a binding legal regime. It was held that it would be in the interests of justice to direct the three industries to deposit compensation quantified at ₹ 10 crores each. It was held that the order for payment of compensation as a facet of preserving the environment in accordance with the precautionary principle. These directions were issued under Article 142 of the Constitution by the SC.
Accordingly, the SC set aside the impugned judgment of the NGT dated 8 January 2016 in so far as it directed the revocation of the ECs and closure of the industries.
In the present case, the Bench of the National Green Tribunal for the Western Zone held that a circular issued by the Union Ministry of Environment and Forests on 14 May 2002 is contrary to law - which circular envisaged the grant of ex post facto environmental clearances. The NGT issued a slew of directions including the revocation of environmental clearances and for closing down industrial units operating without valid consents.The appeal was allowed by the SC by setting aside the direction of NGT for closure of industrial units and revocation of environmental clearances, rather environmental compensation of Rs. 10 Crore each was additionally imposed by the SC - while allowing the operations of industries.