Judicial discussion on the legality of ex post facto environmental clearance (‘EEC’) has been mired in conflicting pronouncements that have complicated an inarguably straightforward fact- that EEC flouts the most basic of environmental law principles under the guise of ease of doing business. The argument that EEC is necessary to bring non-complying project proponents (‘PP’) within the coverage of EIA Notification, 2006 fails to satisfy one question- why were these project proponents even violating the Notification in the first place? This was one of the reasons of the 2017 Notification[1] that introduced EEC, which despite its craftiness, sneeringly bypasses the precautionary principle and creates a perpetual cycle of coming to the rescue of violating units from time to time. To elaborate on the question posed above, consider this- the EIA Notification, 2006 was preceded by EIA Notification, 1994, indicating that the EC regime was not introduced out of the blue in 2006. In the 2006 Notification, Paragraph 12 provided for a transition regime that, for pending cases, either relaxed the provisions of this notification or continued with the 1994 Notifications provisions for a maximum of one year. Therefore, it was a clear watershed that provided a fair relaxation to pending cases that could have fallen in a legal void. There should have been no confusion for post-2006 initiated projects.
This conundrum is best studied in the contentious EEC
cases of Pahwa Plastics v. Dastak NGO [2]
and the recent judgment in Neetu Solvents v. Vineet Nagar[3],
that squarely applies Pahwa Plastics for want of parity with common respondents
in the NGT order[4]
that was set aside in the SC judgment. In Pahwa Plastics, the appellant operated
at least two Formaldehyde manufacturing units in Haryana, that the judgment
acknowledged to be covered as a ‘synthetic organic chemicals industry’ under
item 5(f), Schedule of the 2006 Notification. The appellant had obtained consent
to establish (‘CTE’) and consent to operate (‘CTO’) from Haryana State
Pollution Control Board (‘HSPCB’) in 2016 and 2018 respectively. CTE and CTO
are given by the State Pollution Control Board (‘SPCB’) under sections 21 and 25
of the Air and Water Acts, respectively. These consents are given by the SPCB
after an assessment of a project’s operations and imposing obligations on the
PP to prevent air and water contamination due to such operations.
The appellant in Pahwa Plastics (and in Neetu
Solvents) argued that since the HSPCB granted CTE and CTO, it was “assumed”
that an EC was not required. The argument continued forth to state that even
the HSPCB did not know that an EC was required for these units. It was only
in 2020 that HSPCB came with an order stating that formaldehyde manufacturing
units were covered by the 2006 Notification, and since the appellant here (and
in Neetu Solvents) did not obtain an EC, their CTEs and CTOs were
revoked. However, that did not mean that these units could not operate -- the
2017 Notification, introducing EEC with a de facto extension through the
2021 Office Memorandum, existed for non-complying PPs. The Terms of Reference
(under EIA Notification, 2006) for the appellant were issued on July 9, 2021,
two days after the 2021 OM was issued by MoEFCC, thereby evidencing the extension
of 2017 notification’s applicability beyond its April 2018 deadline. Similarly,
in Neetu Solvents, the appellants were PPs from Haryana and Rajasthan, and
the SPCBs of both the states had given CTE and CTO without the PPs producing an
EC given by the respective SEIAA.
The sequence of EC, CTE and CTO is crucial to
understand. In G. Sundarrajan v. Union of India (2013), J. Radhakrishnan
had distinguished between an EC, on the one hand, and a CTE and CTO, on the
other hand.[5]
While he stated that an EC cannot substitute a CTE/CTO, the reverse principle
also holds true: a CTE/CTO cannot substitute an EC. Moreover, the judgment
further recognised,
Para 172: “…Only after clearance or NOC, the question
of “establishing” or “operating” a plant arises…”
The appellants’ contention in Pahwa Plastics and
Neetu Solvents was identical- since the SPCB itself did not ask for an
EC while granting CTE and CTO, they could not be blamed for not obtaining an
EC. This was more so, the appellants claimed, when “the units are totally
‘non-polluting’ having ‘zero trade discharge’, which is also incorporated in
the CTE and CTO granted to them.”[6] The Division Bench in Pahwa
Plastics, sympathising with the appellant’s victimisation, refused to shut
down the unit on the “technical irregularity of not obtaining prior
Environmental Clearance irrespective of whether or not the unit actually causes
pollution.” The later part of this sentence is probably relying on the appellants’
claim of “non-polluting unit”, and the substantial compliance with the four
stages of their Environment Impact Assessment (‘EIA’) for the subsequent EEC. It
is respectfully argued here that whether a unit causes pollution or not is
precisely the enquiry undertaken in an Environment Impact Assessment (EIA) that
precedes the issuance of an EC. This assessment is crucial in determining how
the said project will impact the baseline conditions of the site’s environment.
Therefore, a prior EC can never be a technical irregularity, as an ex-ante
EIA gives the option of not permitting a potentially destructive activity
in the first place, keeping in view the ecological sensitivity of the unhindered
baseline condition at the project site. On the contrary, an EEC is based on a
tampered baseline which impacts the assessment of environmental change.
With regards to the appellants’ and SPCBs’ lack of
awareness of the requirement of an EC, in both Pahwa Plastics and Neetu
Solvents, the bench accepted such ignorance without question. A particularly
notable paragraph on this acceptance is in Neetu Solvents:
Para 26: “Therefore, the case in hand is not a (sic)
one where the appellants established the units of formaldehyde and started
operation due to lack of bona fide ignoring any requirement of law. On
the contrary it is a case where the PCBs were not aware that prior EC to
establish and operate such units is required in terms of EIA 2006 notification…”
The benches in both the cases did not delve into some very
relevant questions to check the veracity of such ignorance. These are as
follows: Why did the SPCBs, at the time of considering the CTE and CTO
applications, not suspect that a chemical manufacturing plant would require a
prior EC, especially when the 2006 Notification had been out for nearly a
decade for most of the appellants? Why did the project proponents think that a
prior EC would not be required, especially when they were planning to undertake
a particularly hazardous chemical manufacturing activity, and when the 2006 EIA
notification was not the first time that the EC regime was established?
It is crucial to note that both Haryana Air (Prevention
and Control of Pollution) Rules, 1983, and Haryana Water (Prevention and
Control of Pollution) Rules, 1978 require
the applicant in CTE and CTO applications to submit “copies of latest
consent/authorization/environment impact assessment clearance”; this
requirement is particularly important as it is required both at the stage of initial
grant and renewal of consent.[7] Similarly, the Rajasthan’s
Air (Prevention and Control of Pollution) Rules, 1983, and Water (Prevention
and Control of Pollution) Rules, 1975 implicitly acknowledge the requirement of
an EC for considering an application of CTE and CTO through the requirement of
an additional application fees.[8] Thus, the question arises,
why did the project proponents not submit an EC at the time of the application?
If there was a confusion about their coverage by the EIA Notification, 2006,
why did they not ascertain its (non- or) applicability before submitting incomplete
applications to the SPCBs? While the SPCBs were certainly derelict in their
duty by approving incomplete CTE and CTO applications, the PPs cannot be
assumed to have approached the court with clean hands as, in the given set of
facts and existing law, they should have been expected to take caution and get
a prior EC. The SPCBs’ dereliction of duty must also be investigated keeping in
view their institutional weakening through understaffing, lack of equipment,[9] and tightening
of timeframes, by the State Governments, to approve CTE and CTOs that makes
a detailed scrutiny of applications, including presence/absence of an EC, extremely
tough.
These pertinent questions remain unasked with the EEC
regime initiated through the 2017 notification, extended through the 2021 OM, further
operational till now with the recall of Vanashakti (the judgment in which
was passed a year ago) in CREDAI v. Vanashakti .[10]
It is only hoped that subsequent cases of violation are dealt with a more
detailed scrutiny of the intentions of the project proponents, conditions of SPCBs,
and compatibility of ease of doing business (in the form of EEC) with
environmental rule of law (in the form of a prior EC).
[1]
Reason 11 states, “And whereas, the Ministry of Environment, Forest and Climate
Change deems it necessary to bring such projects and activities in compliance
with the environmental laws at the earliest point of time, rather than leaving
them unregulated and unchecked, which will be more damaging to the environment
and in furtherance of this objective, the Government of India deems it
essential to establish a process for appraisal of such cases of violation for
prescribing adequate environmental safeguards to entities and the process
should be such that it deters violation of provisions of Environment Impact
Assessment Notification, 2006 and the pecuniary benefit of violation and damage
to environment is adequately compensated for...”
[2] Civil
Appeal No. 4795/2021
[3] Civil
Appeal No. 2881/2021, along with six other Civil Appeals.
[4] Dastak
N.G.O. v. Synochem Organics Pvt. Ltd. & Ors., Original Application No.
287/2020
[5] (2013)
6 SCC 620
[6] Neetu
solvents, Para 7; Pahwa plastics, Para 50.
[7] Rule
15(I) read with Form I in Air Rules; Rule 22(I) read with Form B of water
rules.
[8] Schedule,
part IV, Note (5) of air rules; schedule (iv), part IV, note (5) of water rules.
[9] In
News Item Titled “Pollution Control Boards Are the Weak Link” Appearing in
Deccan Herald Dated 24.10.2023. v. Meghalaya Pollution Control Board & Ors.,
[OA No. 693/2023] Principal Bench of the NGT is enquiring into these issues. In
its latest order of April 10, 2026, the bench observed that the SPCBs and PCCs
(Pollution Control Committees) “do not have the requisite facilities”.
[10] Vanashakti
v. Union of India, W.P. (C) No. 1394/2023
