IMPORTANT POINT
(1) There exists a distinction between obtaining relevant clearances and consents from State Pollution Control Board and obtaining environmental clearance in accordance with procedure laid down under EIA notification of 1994.
(2) Concept of an ex post facto EC is in derogation of fundamental principles of environmental jurisprudence and is an anathema to EIA notification dated 27th January 1994.

Headnote:
(A) Environment (Protection) Act 1986 – Section 3 – Environment (Protection) Rules 1986 – Rule 5(3)(d) – Grant of ex-post facto environmental clearances – NGT issued a slew of directions including revocation of environmental clearances and for closing down industrial units operating without valid consents – For an action of Central Government to be treated as a measure referable to Section 3 it must satisfy statutory requirement of being necessary or expedient for the purpose of protecting and improving quality of environment and preventing, controlling and abating environment pollution – Circular dated 14th May 2002 allowed defaulting industrial units who had commenced activities without an EC to cure default by an ex post facto clearance – Being an administrative decision, it is beyond scope of Section 3 and cannot be said to be a measure for the purpose of protecting and improving quality of the environment – Concept of ex post facto clearance is fundamentally at odds with EIA notification dated 27th January 1994 – Administrative circular is not a measure protected by Section 3 – There was no jurisdictional bar on NGT to enquire into its legitimacy or vires – Circular is unsustainable in law – Concept of an ex post facto EC is in derogation of fundamental principles of environmental jurisprudence and is an anathema to EIA notification dated 27th January 1994 – It is detrimental to environment and could lead to irreparable degradation – Allowing for an ex post facto clearance would essentially condone operation of industrial activities without grant of an EC – This would be contrary to both precautionary principle as well as the need for sustainable development – None of three industries were entitled to benefit of exemption contained in Clause 8 of explanatory note to EIA notification of 1994 – However, directions of NGT for revocation of ECs and for closure of units do not accord with principle of proportionality – At the same time, Court cannot be oblivious to environmental degradation caused by all three industries units that operated without valid ECs – Three industries have evaded legally binding regime of obtaining ECs – They cannot escape liability incurred on account of such non-compliance – Penalties must be imposed for disobedience with a binding legal regime – Breach by industries cannot be left unattended by legal consequences – Amount should be used for the purpose of restitution and restoration of environment – Instead and in place of directions issued by NGT, it would be in interests of justice to direct three industries to deposit compensation quantified at Rs. crores each – Amount shall be deposited with GPCB and it shall be duly utilised for restoration and remedial measures to improve quality of environment in industrial area in which industries operate. (Paras 21, 23, 34 and 39)
(B) Environment (Protection) Act 1986 – Section 3 – Environment (Protection) Rules 1986 – Rule 5(3)(d) – Grant of environmental clearances – There exists a distinction between obtaining relevant clearances and consents from State Pollution Control Board and obtaining environmental clearance in accordance with procedure laid down under EIA notification of 1994 – A consent order issued by State Pollution Control Board allows an industry to operate within prescribed emission norms – However, consent orders do not account for social cost and impact of undertaking an industrial activity on environment and its surroundings – A holistic analysis of environmental impact of an industrial activity is only accounted for once all steps listed out in EIA notification of 1994 are followed – Purpose of setting in place specific requirements such as public hearing, screening, scoping and appraisal is to foster deliberative decisions and protect environmental concerns – Detailed process listed out in EIA notification of 1994 for obtaining an EC allows for minimising adverse environmental impact of any industrial activity and improving quality of environment – One must adopt an ecologically rational outlook towards development – Given social and environmental impacts of an industrial activity, environment compliance must not be seen as an obstacle to development but as a measure towards achieving sustainable development and inter-generational equity. (Para 33)
Facts of the Case:
By a judgment dated 8 January 2016, 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 14th May 2002 is contrary to law. The 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. On 17 May 2016, NGT dismissed an application for review filed by one of the affected industrial units. The industrial units and MoEF are in appeal
Findings of the Court:
Directions of the NGT for revocation of the ECs and for closure of the units do not accord with the principle of proportionality. At the same time, the Court cannot be oblivious to the environmental degradation caused by all three industries units that operated without valid ECs. The three industries have evaded the legally binding regime of obtaining ECs. They cannot escape the liability incurred on account of such noncompliance. Penalties must be imposed for the disobedience with a binding legal regime.
Result : Appeals allowed.

JUDGMENT

Dr Dhananjaya Y. Chandrachud, J.

By a judgment dated 8 January 2016, the Bench of the National Green Tribunal ["NGT"] for the Western Zone held that a circular issued by the Union Ministry of Environment and Forests ["MoEF"] on 14 May 2002 is contrary to law. The 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. On 17 May 2016, the NGT dismissed an application for review filed by one of the affected industrial units. The industrial units and MoEF are in appeal [Civil Appeal no 1526 of 2016 (Alembic Pharmaceuticals Limited); Civil Appeal no 3175 of 2016 (United Phosphorus Limited); Civil Appeal nos 6604-6605 of 2016 (Unique Chemicals); and Civil Appeal no 42756 of 2016 (Union of India)].

2. The Environmental Impact Assessment ["EIA"] notification of 27 January 1994 mandated prior Environmental Clearances ["EC"] for setting up and expansion of industrial projects falling within thirty categories. The deadline for obtaining an EC under the EIA notification of 1994 was extended by various circulars to 31 March 1999 and thereafter to 30 June 2001. By the circular of 14 May 2002, which was quashed by the NGT, MoEF extended the period till 31 March 2003 for those industrial units which had gone into production without obtaining an EC under the EIA notification of 1994 to apply for and obtain an ex post facto EC. The circular indicated that it had been decided:

"... to extend the deadline upto 31 March 2003 so that defaulting units could avail of this last and final opportunity to obtain ex-post-facto environmental clearance..."

3. The circular of 14 May 2002, allowed for ex post facto ECs, subject to a graded contribution into an earmarked fund based on the investment cost of the project. The first and the second respondents challenged the circular of 14 May 2002 before the High Court of Gujarat. The proceedings were subsequently transferred to the NGT. The NGT by its decision dated 8 January 2016 held that the law did not permit the grant of an ex post facto clearances and that the circular of 14 May 2002 was an internal communication and did not override the provisions of the EIA notification dated 27 January 1994 which had been issued in exercise of statutory powers conferred by Section 3 of the Environment (Protection) Act 1986 ["Environment Protection Act 1986"].

4. Having held that the concept of an "ex post facto environmental clearance" was not sustainable with reference to any provision of law, the NGT issued the following directions:

(i) The authorities of the Union of India, including the MoEF, State of Gujarat, Gujarat Pollution Control Board ["GPCB"] and District Collectors shall not grant consent for an industrial activity covered by the EIA notification of 1994 without the steps mandated by the notification such as screening, scoping, public hearing and decision being fulfilled;

(ii) The ECs granted to the industrial units of the sixth to ninth respondents shall be revoked;

(iii) All the industrial activities which were being operated without a valid EC and consent to operate shall be closed down within one month;

(iv) Each of the units shall deposit a compensation of Rs. 10 lakhs for having caused environmental degradation; and

(v) The amount deposited shall be used for the restoration of the environment in and around the industrial area of Ankleshwar in the State of Gujarat.

5. The private respondents before the NGT who were affected by the above directions are:

(i) United Phosphorous Ltd - the sixth respondent;

(ii) Unique Chemicals - the seventh respondent;

(iii) Darshak Private Limited - the eight respondent; and

(iv) Nirayu Private Limited - the ninth respondent.

The private respondents are engaged in the manufacture of Phar

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2020 Supreme(SC) 289

Cases Referred (10)