Summary
The Supreme Court held the 14 May 2002 administrative circular permitting ex post facto environmental clearance contrary to the binding 1994 EIA notification. None of the industries proved entitlement to the existing-project exemption. Nevertheless, subsequent clearances, investments and employment made closure and revocation disproportionate on these facts. The Court preserved operations subject to additional compensation of Rs 10 crore from each of the three industries for environmental restoration.
Issues
- Whether an administrative circular could permit retrospective clearances contrary to the 1994 EIA notification and whether NGT could examine it.
- Whether the industries qualified for the prior-project exemption.
- Whether closure or monetary environmental restitution was the appropriate consequence.
Provisions considered
- Section 3(1), Environment (Protection) Act, 1986The impugned administrative circular diluted mandatory environmental protection and was not a protected statutory measure under this power. (¶¶ 19, 20, 21)
- Explanatory note, clause 8, EIA notification dated 27 January 1994Exemption required acquisition of land and all relevant State clearances before 27 January 1994; an NOC alone did not suffice. (¶¶ 27, 28, 30, 31, 32, 34)
- Article 142, Constitution of IndiaSupported additional compensation for environmental restitution while substituting proportionate relief for revocation and closure. (¶ 39)
Held
- The 1994 notification’s prohibition on undertaking specified projects, expansion or modernisation unless cleared necessarily required prior environmental clearance despite absence of the word prior. An administrative circular could not dilute that statutory requirement. (¶¶ 6, 7, 21, 22)
- The circular was pleaded as a purely administrative decision and could not be sustained as an environmental-protection measure under Section 3. The restriction on NGT striking down statutory rules did not bar scrutiny of this administrative circular, which was unsustainable. (¶¶ 18, 19, 20, 21)
- Retrospective clearance undermines preventive appraisal and the precautionary principle: environmental consequences must be considered before the activity begins. Later pollution-control improvements and consents did not cure historical failure to obtain the required clearance. (¶¶ 23, 25, 26, 33)
- The project proponent bore the burden of proving the strictly construed exemption. Merely obtaining a State pollution board NOC before the notification was insufficient without all relevant clearances. On their disclosed records none of the three industries qualified. (¶¶ 27, 28, 30, 31, 32, 34)
- Subsequent operational and expansion clearances, infrastructure investment and employment justified a proportionate remedy preserving operations on these facts. Historical non-compliance still required environmental restitution; each industry was directed to pay additional compensation, rather than escape consequences. (¶¶ 35, 36, 37, 38, 39)
Result
Appeals allowed subject to Alembic Pharmaceuticals, United Phosphorous and Unique Chemicals each depositing Rs 10 crore with GPCB within four months of receipt of the certified judgment, in addition to the NGT-directed amount, for local environmental restoration. NGT judgment set aside insofar as it revoked clearances and directed closure; review order also set aside. Pending applications disposed of.