1. Dispute regarding the requirement of prior Environmental Clearance for cold rolling stainless steel units under EIA Notification 2006 and the validity of a grace period granted by NGT. (Para 2 , 3 , 6 )
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2022 Supreme(SC) 717
SUPREME COURT OF INDIA
Hemant Gupta, Vikram Nath, JJ.
Gajubha Jadeja Jesar – Appellant
Versus
Union of India & Ors. – Respondents
Civil Appeal No. 3116, 3576 of 2020
Decided On : 10-08-2022
Important Points
The Court held that where regulatory ambiguity exists in the EIA Notification, the NGT can grant a grace period for obtaining Environmental Clearance to avoid severe economic hardship, emphasizing that ex-post facto clearances may be permissible in exceptional circumstances to balance development and environmental protection.
Subject
Environmental Law - Environmental Clearance
Act Referred
Headnote
Environmental Clearance - Cold Rolled Coils of Stainless Steel - EIA Notification 2006 - [ENVIRONMENTAL CLEARANCE] - [COLD ROLLED COILS OF STAINLESS STEEL] - [EIA Notification 2006, Section 3(a)] - The court discussed the applicability of the EIA notification 2006 and the ambiguity surrounding the requirement of prior environmental clearance for secondary metallurgical processing industry. The court considered the recommendations of the Expert Appraisal Committee and the subsequent amendment to the EIA notification, which clarified the requirement for environmental clearance for such units. The court also emphasized the jurisdiction of the Tribunal under Section 21 of the NGT Act to pass orders for sustainable development, taking into account the ambiguity in the notification and the economic impact of closure of units.
Fact of the Case:
The Project Proponent set up a Cold Rolled Coils unit without prior Environmental Clearance, leading to a challenge before the National Green Tribunal. The Tribunal granted a one-year grace period for the unit to obtain Environmental Clearance, based on the ambiguity in the EIA notification 2006. The closure of the unit was also challenged during the appeal.
Finding of the Court:
The court found that the Tribunal's order was based on the ambiguity in the EIA notification and the economic impact of closure. It held that the Tribunal had the jurisdiction to pass orders for sustainable development under Section 21 of the NGT Act. The closure notice issued by the Gujarat State Pollution Control Board was quashed, and the Project Proponent was allowed time to seek Environmental Clearance in line with the amended notification.
Issues: The issues revolved around the jurisdiction of the Tribunal to grant a grace period for obtaining Environmental Clearance, the ambiguity in the EIA notification 2006, and the economic impact of closure of the unit.
Ratio Decidendi: The court's decision was influenced by the ambiguity in the EIA notification 2006, the economic impact of closure of the unit, and the jurisdiction of the Tribunal under Section 21 of the NGT Act to pass orders for sustainable development.
Final Decision: Civil Appeal No. 3116 of 2020 was dismissed, and the closure notice issued by the Gujarat State Pollution Control Board was quashed. The Project Proponent was allowed time to seek Environmental Clearance in line with the amended notification.
Legal Category Hierarchy
- environmental law
- administrative law
Advocates Appeared:
For the parties : Mr. Shyam Divan, Sr. Adv. Mr. Kavin Gulati, Sr. Adv. Mr. Kishore Kunal, AOR Mr. Manish Rastogi, Adv. Ms. Ankita Prakash, Adv. Ms. Kanak Grover, Adv. Mr. Uday Aditya Banerjee, Adv. Ms. Anitha Shenoy, Sr. Adv. Mr. Ritwick Dutta, Adv. Ms. Srishti Agnihotri, AOR Ms. Sanjana Grace Thomas, Adv. Ms. Aarti Krupa Kumar, Adv. Ms. Ayushma Awasthi, Adv. Ms. Madhavi Divan, ASG Ms. Seema Bangani, Adv. Ms. Akanskha Kaul, Adv. Mr. Ayush Puri, Adv. Mr. Aman Sahani, Adv. Mr. M. Singh, Adv. Mr. Gurmeet Singh Makker, AOR Ms. Aastha Mehta, Adv. Ms. Deepanwita Priyanka, AOR Ms. Prerana Mohapatra, Adv. Ms. Srishti Agnihotri, AOR Ms. Vishakha, Adv. Ms. Sujatha Bagadhi, Adv. Mr. Gurmeet Singh Makker, AOR Ms. Deepanwita Priyanka, AOR Ms. Nidhi Jaswal, AOR Mr. Arvind Kumar Sharma, AOR Mr. Kishore Kunal, AOR
For the parties : Mr. Shyam Divan, Sr. Adv. Mr. Kavin Gulati, Sr. Adv. Mr. Kishore Kunal, AOR Mr. Manish Rastogi, Adv. Ms. Ankita Prakash, Adv. Ms. Kanak Grover, Adv. Mr. Uday Aditya Banerjee, Adv. Ms. Anitha Shenoy, Sr. Adv. Mr. Ritwick Dutta, Adv. Ms. Srishti Agnihotri, AOR Ms. Sanjana Grace Thomas, Adv. Ms. Aarti Krupa Kumar, Adv. Ms. Ayushma Awasthi, Adv. Ms. Madhavi Divan, ASG Ms. Seema Bangani, Adv. Ms. Akanskha Kaul, Adv. Mr. Ayush Puri, Adv. Mr. Aman Sahani, Adv. Mr. M. Singh, Adv. Mr. Gurmeet Singh Makker, AOR Ms. Aastha Mehta, Adv. Ms. Deepanwita Priyanka, AOR Ms. Prerana Mohapatra, Adv. Ms. Srishti Agnihotri, AOR Ms. Vishakha, Adv. Ms. Sujatha Bagadhi, Adv. Mr. Gurmeet Singh Makker, AOR Ms. Deepanwita Priyanka, AOR Ms. Nidhi Jaswal, AOR Mr. Arvind Kumar Sharma, AOR Mr. Kishore Kunal, AOR
Table of Contents
2. Whether NGT can grant time for obtaining prior Environmental Clearance and whether units operating with statutory consents should be closed for lack of such clearance. (Para 7 , 8 , 12 , 13 )
3. Ambiguity in EIA Notification 2006 led widespread operation under CTE/CTO; NGT's powers under Section 21 NGT Act enable it to ensure environmental justice and equity. (Para 11 , 18 , 19 )
4. Units contributing to the economy and operating under statutory approvals should not be closed for technical irregularities like lack of prior EC if they comply with norms. (Para 20 )
5. Appeal against NGT order dismissed and closure notice issued by State Pollution Control Board quashed. (Para 25 )
6. Does the National Green Tribunal have jurisdiction to grant a grace period for obtaining Environmental Clearance?
Yes, under Section 21 of the NGT Act, the Tribunal is a multifunctional body capable of providing redressal for environmental exigencies, applying principles of environmental justice and equity to go beyond a mere adjudicatory role. (Para 19 )
7. Can industrial units be closed solely for the technical irregularity of not obtaining prior Environmental Clearance?
No, units contributing to the economy and providing livelihoods, established with statutory approvals and complying with pollution norms, should not be closed with pedantic rigidity for lack of prior EC. (Para 20 )
8. What is the legal effect of ambiguity in the EIA Notification 2006 regarding the requirement for Environmental Clearance?
Where ambiguity exists and units have operated based on statutory CTE/CTO, the court may allow a window for regularization to avoid social and economic unrest, especially when the government subsequently clarifies the requirement. (Para 18 , 20 )
JUDGMENT :
HEMANT GUPTA, J.
1. This order shall dispose of Civil Appeal No. 3116 of 2020 arising out of an application filed by the appellant1[For short, the ‘Applicant’] before the National Green Tribunal2[For short, the ‘Tribunal’] and Civil Appeal No. 3576 of 2020 filed by the Project Proponent, both arising out of the same order passed by the Tribunal on 12.2.2020.
2. The Project Proponent applied for Consent to Establish (CTE) Cold Rolled Coils of stainless steel on 20.1.2018, the permission of which was granted by Gujarat State Pollution Control Board. After the unit was erected, Project Proponent was granted permission to operate the unit on 6.2.2020. It is noted that the Project Proponent has invested Rs.1100 crores for the development of infrastructure and had a turnover of approximately Rs.743 crores and paid Rs.286.17 crores as Goods and Services Tax till the Financial Year 2020-21. The applicant also earned US Dollars 15.52 million foreign exchange for the country.
3. An application was filed before the Tribunal on 20.7.2019 on the ground that the Project Proponent has set up the unit in violation of Environment Impact Assessment (EIA) notification dated 14.9.2006, as such plant would fall within category 3(a) i.e., secondary metallurgical industry for which a prior environmental clearance is required. The relevant extract from the EIA notification reads thus :
| 3(a) | Metallurgica l industries (ferrous & non ferrous) | a) Primary metallurgical industry All projects b) Sponge iron manufacturing ≥200 TPD c) Secondary metallurgical processing industry All toxic and heavy metal producing units ≥ 20,000 tonnes/annum - | Sponge iron manufacturing <200 TPD Secondary metallurgical processing industry i) All toxic and heavy metal producing units <20,000 tonnes/annum ii) All other non-toxic secondary metallurgical processing industries >5000 tonnes/annum | General Condition shall apply for Sponge iron manufacturing Note: (i) The recycling industrial units covered under HSM Rules are exempted. (ii) In case of secondary metallurgical processing industrial units only those projects involving operation of furnaces such as induction and electric are furnace, submerged are furnace, cupola and crucible furnace with capacity more than 30,000 tonnes per annum (TPA) would require environmental clearance (iii) Plant/units other than power plants (given against entry no. 1 (d) of the schedule), based on municipal solid waste (non hazardous) are exempted). |
4. The Tribunal set up a Joint Committee on 28.7.2019. The Committee concluded that the applicability of the notification would be determined by the Ministry of Environment, Forest and Climate Change3[For short, the ‘Ministry’]. The Ministry filed an affidavit on 21.11.2019, on the basis of which the Tribunal took a prima facie view that the industry requires an environmental clearance and thus stayed all activities of the project as the Ministry sought time to file an additional response. Later, an affidavit was filed by the Ministry that a Group of Experts had been appointed on the issue. After the said report, the Project Proponent filed an application for modification of the order passed by the Tribunal on 21.11.2019 and the stay was thereafter vacated on 16.1.2020.
5. The Expert Appraisal Committee4[For short, the ‘EAC’ 3] in its meeting held on 23-24.12.2019 concluded that grace period of one year could be granted where the industry has been established after CTE/CTO. The Ministry filed an affidavit accepting the recommendation No. 3(iii) of the EAC recommending one year grace period for the industry. The relevant part of the recommendation is reproduced as under:
“i. Project activity of CSPL falls under Category B of Schedule 3(a) Metallurgical Industries (ferrous and non-ferrous) of EIA Notification, 2006.
ii. The committee also noted that there are a few issues which may have diverse interpretations. The reports submitte
