Ex Post Facto Environmental Clearance Can Be Granted In Exceptional Circumstances; Environment Protection Act Doesn't Prohibit It : Supreme Court

The Supreme Court has observed that the Environmental Protection Act does not not prohibit grant of ex post facto Environmental Clearance absolutely.

The bench comprising Justices Indira Banerjee and JK Maheshwari observed that it should not be granted routinely, but in exceptional circumstances taking into account all relevant environmental factors.

"Where the adverse consequences of denial of ex post facto approval outweigh the consequences of regularization 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 given in accordance with law, in strict conformity with the applicable Rules, Regulations and/or Notifications.", the court observed.

The Court was considering an appeal filed by Pahwa Plastics Pvt. Ltd against an order passed by National Green Tribunal (NGT) holding that its manufacturing units, which did not have prior Environmental Clearance (EC) could not be allowed to operate. The question of law considered by the bench was framed thus: Whether an establishment employing about 8000 workers, which has been set up pursuant to Consent to Establish (CTE) and Consent to Operate (CTO) from the concerned statutory authority and has applied for ex post facto EC can be closed down pending issuance of EC, even though it  may not cause pollution and/or may be found to comply with the required pollution norms?

The court noted that, in Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, it had deprecated ex post facto clearances, but did not direct closure of the units concerned but explored measures to control the damage caused by the industrial units. In this regard, the bench made the following observations:

"The 1986 Act does not prohibit ex post facto Environmental Clearance. Grant of ex post facto EC in accordance with law, in strict compliance with Rules, Regulations, Notifications and/or applicable orders, in appropriate cases, where the projects are in compliance with, or can be made to comply with environment norms, is in our view not impermissible. The Court cannot be oblivious to the economy or the need to protect the livelihood of hundreds of employees and others employed in the project and others dependent on the project, if such projects comply with environmental norms."

There can be no doubt that the need to comply with the requirement to obtain EC is non-negotiable. A unit can be set up or allowed to expand subject to compliance of the requisite environmental norms. EC is granted on condition of the suitability of the site to set up the unit, from the environmental angle, and also existence of necessary infrastructural facilities and equipment for compliance of environmental norms. To protect future generations and to ensure sustainable development, it is imperative that pollution laws be strictly enforced. Under no circumstances can industries, which pollute, be allowed to operate unchecked and degrade the environment.

Ex post facto environmental clearance should not be granted routinely, but in exceptional circumstances taking into account all relevant environmental factors. Where the adverse consequences of denial of ex post facto approval outweigh the consequences of regularization 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 given in accordance with law, in strict conformity with the applicable Rules, Regulations and/or Notifications. The deviant industry may be penalised by an imposition of heavy penalty on the principle of 'polluter pays' and the cost of restoration of environment may be recovered from it.

Allowing the appeal, the bench observed that the NGT erred in law in directing that the units cannot be allowed to function till compliance of the statutory mandate. It observed thus:

"The question in this case is, whether a unit contributing to the economy of the country and providing livelihood to hundreds of people, which has been set up pursuant to requisite approvals from the concerned statutory authorities, and has applied for ex post facto EC, should be closed down for the technical irregularity of want of prior 28 environmental clearance, pending the issuance of EC, even though it may not cause pollution and/or may be found to comply with the required norms. The answer to the aforesaid question has to be in the negative, more so when the HSPCB was itself under the misconception that no environment clearance was required for the units in question. HSPCB has in its counter affidavit before the NGT clearly stated that a decision was taken to regularize units such as the Apcolite Yamuna Nagar and Pahwa Yamuna Nagar Units, since requisite approvals had been granted to those units, by the concerned authorities on the misconception that no EC was required."

Case details

Pahwa Plastics Pvt. Ltd vs Dastak NGO | 2022 LiveLaw (SC) 318 | CA 4795 OF 2021 | 25 March 2022

Coram: Justices Indira Banerjee and JK Maheshwari

Counsel: Sr. Adv Nidhesh Gupta, AOR Tarun Gupta for the appellant, AOR Surender Singh Hooda for respondents, Sr.AAG Anil Grover for State, ASG Aishwarya Bhati for UoI

Headnotes

Environment Protection Act, 1986 - Ex post facto Environmental Clearance - The 1986 Act does not prohibit ex post facto Environmental Clearance - It should not be granted routinely, but in exceptional circumstances taking into account all relevant environmental factors. Where the adverse consequences of denial of ex post facto approval outweigh the consequences of regularization 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 given in accordance with law, in strict conformity with the applicable Rules, Regulations and/or Notifications. The deviant industry may be penalised by an imposition of heavy penalty on the principle of 'polluter pays' and the cost of restoration of environment may be recovered from it - An establishment contributing to the economy of the country and providing livelihood ought not to be closed down only on the ground of the technical irregularity of not obtaining prior Environmental Clearance irrespective of whether or not the unit actually causes pollution (Para 63, 65,)

Environment Protection Act, 1986 - Environmental Clearance - Need to comply with the requirement to obtain EC is non-negotiable. A unit can be set up or allowed to expand subject to compliance of the requisite  environmental norms. EC is granted on condition of the suitability of the site to set up the unit, from the environmental angle, and also existence of necessary infrastructural facilities and equipment for compliance of environmental norms. To protect future generations and to ensure sustainable development, it is imperative that pollution laws be strictly enforced. Under no circumstances can industries, which pollute, be allowed to operate unchecked and degrade the environment. (Para 62)

Judgments - Words and phrases and/or sentences in a judgment cannot be read in the manner of a statute, and that too out of context. (Para 47)

Amendment - If power to amend or modify or relax a notification and/or order exists, the notification and/or order may be amended and/or modified as many times, as may be necessary. A statement made by counsel in Court would not prevent the authority concerned from making amendments and/or modifications provided such amendments and/or modifications were as per the procedure prescribed by law. (Para 47)

Summary: Appeal by Pahwa Plastics Pvt. Ltd against an NGT order holding that its manufacturing units, which did not have prior Environmental Clearance (EC) could not be allowed to operate - Allowed - The question in this case is, whether a unit contributing to the economy of the country and providing livelihood to hundreds of people, which has been set up pursuant to requisite approvals from the concerned statutory authorities, and has applied for ex post facto EC, should be closed down for the technical irregularity of want of prior environmental clearance, pending the issuance of EC, even though it may not cause pollution and/or may be found to comply with the required norms. The answer to the aforesaid question has to be in the negative, more so when the HSPCB was itself under the misconception that no environment clearance was required for the units in question.