Supreme Court recalls own order barring retrospective green nod for projects

The matter will now be placed before the CJI for further action.

Tuesday’s decision came on a petition filed by the Confederation of Real Estate Developers of India (CREDAI) and applications by the Steel Authority of India (SAIL) and State of Karnataka, seeking review of the May 16 verdict in Vanashakti vs Union of India, delivered by a bench of Justices A S Oka and Justices Bhuyan — Justice Oka has since retired. The May 16 ruling also struck down a 2021 Office Memorandum issued in pursuance of the 2017 notification.

During the hearing, it was pointed out to the court that 24 projects already initiated, involving expenditure to the tune of Rs 8,293 crore, were awaiting EC at the Central level, while at the state level, 29 projects worth Rs 11,168 crore remained pending. These included construction of hospitals/medical colleges/airports including the 962-bed AIIMS Medical College and Hospital in Odisha, and the greenfield airport in Vijayanagar in Karnataka. There were also common effluent treatment plants, awaiting post facto clearance.

Writing for the majority, CJI Gavai said if the May 16 judgment “is not recalled, it will result in demolition of various buildings/projects constructed out of public exchequer to the tune of nearly Rs 20,000 crore”. He asked “whether it would be in the public interest to demolish all such projects and permit the money spent from the pocket of the public exchequer to go in the dustbin” and whether demolishing and constructing them again “would be in the larger public interest or would in fact be counter-productive to the public interest”.

The CJI said such a step, “rather than being in public interest would result in throwing the valuable public resources in the dustbin”.

The majority ruling also cited procedural flaws in the May 16 ruling saying it had failed to adequately consider three other verdicts by two-judge benches of the Supreme Court which held that post facto EC was not impermissible –  the 2021 ruling in Electrosteel Steels Ltd vs Union of India and Others; the March 2022 decision in Pahwa Plastics Pvt Ltd vs Dastak NGO; and the September 2022 ruling in D Swamy vs Karnataka State Pollution Control Board and Others.

“It is thus clear that though this Court held that ex post facto EC should not ordinarily be granted, but in exceptional circumstances they can be granted. It was held that where the adverse consequences of denial of ex post facto approval outweigh the consequences of regularisation of operations by grant of ex post facto approval, and the establishment concerned otherwise conforms to the requisite pollution norms, ex post facto approval should be granted. It has been categorically held that the Environment Protection Act does not prohibit ex post facto EC,” the majority verdict said.

It said the two-judge bench which delivered the May 16 ruling should, therefore, have referred it to a larger bench as the earlier decisions were also by benches of co-equal strength.

“It is trite law that a Bench of two-Judges is bound by an earlier view taken by the other two-Judge Benches. If, however, a subsequent Bench of two Judges considers the law laid down earlier by another two-Judges Bench requires reconsideration, the only option available to it is to refer the matter to a larger Bench. A Bench of two-Judges cannot take a view contrary to the view taken by a Bench of co-equal strength,” it said, adding “equally settled is the position of law that the judgment delivered by a subsequent Bench of two Judges in ignorance of the earlier judgment of a Bench of co-equal strength is per incuriam in law” – per incuriam refers to a judicial decision made in ignorance of binding statutory provisions or precedents.

“In  any case, both the 2017 Notification and 2021 OM provide for imposition of huge penalties. As such, the penalties have a deterrent effect and the same takes care of heavily penalising the errant builder/developer while allowing operation of several projects which are otherwise permissible in law,” the majority ruling said.

It said if the Vanasakthi decision continues to operate, “rather than protecting the environment, it would result in creating even more pollution… because if such large number of buildings/projects which have been completed or are near completion are demolished and they could be reconstructed shortly thereafter after obtaining EC as they were otherwise permissible; it would result in nothing but creating more pollution which could not have been the intention of the judgment”.

Disagreeing with the majority, Justice Bhuyan said what emerges from the 2017 ruling in Common Cause v. Union of India and 2020 decision in Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors, which were also by two-judge benches, is that the concept of ex post facto EC is in derogation of the fundamental principles of environmental jurisprudence and completely alien to environmental jurisprudence.

“It is thus clear that the subsequent coordinate Bench in Electrosteel, Pahwa and D. Swamy has not followed the binding precedent of the previous two-Judge Bench declared in Common Cause and Alembic… Therefore, the latter judgments in Electrosteel, Pahwa and D. Swamy are clearly hit by the principle of per incuriam,” Justice Bhuyan said.

He said “a per incuriam judgment is not binding on a subsequent coordinate Bench” and “therefore, the two-Judge Bench in Vanashakti rightly followed the correct ratio laid down in Common Cause and Alembic which is in complete alignment with the environmental jurisprudence developed in our country and has built upon it, rather than following the per incuriam decisions in Electrosteel, Pahwa and D. Swamy”.

Justice Bhuyan said “it is unfortunate that a false narrative is being created, pitting environment against development. It is a completely untenable binary in as much as ecology and development are not adversaries. Both are part of the constitutional construct of sustainable development… the review judgment only seeks to reinforce the above stereotype.”

The minority ruling said the petition is by members of the confederation who are builders and developers who started their projects without EC but had applied under the 2021 OM for EC and that “beyond this, no other particulars are available: as to when the members had started their respective projects; whether each project required prior EC; or whether expansion of the projects required EC. The dates of application for EC under the 2021 OM have also not been mentioned… I am afraid, on the aforestated ground itself, the review petition is liable to be dismissed”.

Justice Bhuyan said the “question is when the Central Government or the MOEF&CC have themselves not come forward to seek relaxation of this assurance and have not sought for review of Vanashakti, then why the coordinate Bench in Electrosteel, Pahwa and D. Swamy and now the review judgment should be seen so keen, virtually prodding the Central Government or the MOEF&CC to grant ex post facto EC to all the law violators”.

He also referred to the Delhi air pollution saying “the deadly Delhi smog reminds us everyday about the hazards of environmental pollution.

Supreme Court, as the highest constitutional court of the country, has the duty and obligation under the Constitution of India and the laws framed thereunder to safeguard the environment. It cannot be seen backtracking on the sound environmental jurisprudence that has evolved in this country, that too, on a review petition filed by persons who have shown scant regard for the rule of law”.

Justice Bhuyan said “the review judgment is an innocent expression of opinion. It overlooks the very fundamentals of environmental jurisprudence. Precautionary principle is the cornerstone of environmental jurisprudence. Polluter pays is only a principle of reparation. Precautionary principle cannot be given a short shrift by relying on polluter pays principle. The review judgment is a step in retrogression.”