Questioning the Defence of Unawareness in Environmental Clearance Violation Cases

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).

 

 

 

*I thank a mentor who sent across and discussed the judgment in Neetu Solvents v. Vineet Nagar.

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[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

“This is the ratio”[1]! and the spectre of ex post facto EC lingers

The May 2025 Judgment in Vanashakti v. Union of India & Ors was too good to be true; the illegalisation of an inherently perverse circumvention came as a shot in the arm considering the legal regression in environmental protection spearheaded by the executive in connivance with a complacent legislature.  The subject at hand- ex post facto environmental clearance (hereafter, ‘ex post facto EC’) as conceptualised by primarily two instruments- a Gazette notification and an Office Memorandum[2]- issued under the 2006 EIA notification- had been hotly contested in high courts and under the appellate jurisdiction of the supreme court previously, on varying facts, issues, and notification itself (one judgment- Alembic Pharmaceuticals- was on the 1994 EIA notification). Vanashakti was filed as a writ petition directly challenging the legality of ex post facto EC, given that the Central Government had been normalising a pattern of impunity by extending the deadlines within which a non-compliant project proponent could apply for the EC.  In a nutshell, the 2006 EIA notification, issued by the Central Government under section 3 of the Environment Protection Act, 1984, inter alia, requires that all project proponents undertaking identified activities as per the notification, apply for and acquire a prior environmental clearance (the existence of ‘prior’ is significant, when compared to its absence in the 1994 notification). The 2017 Notification was the first executive order to allow ex post facto EC if filed within 6 months from date of notification. This was extended for 30 days in Puducherry Environment Protection Association v. Union of India (Madras HC), on the recorded submission of the Central Government that it would be a one-time measure.[3] Then the 2021 OM was introduced, that was supposed to lay down SoP for 2017 notification, in compliance with Tanaji B. Gambhire v. Chief Secretary, Government of Maharashtra and Others (NGT, Principal bench).[4] Vanashakti identified the SoP as an implicit continuation of the ex post facto EC regime, even after the expiration of the 2017 OM,[5] thereby contrary to the submission made in the Madras HC; it was not an innocuous SoP but a surreptitious license to violate environmental norms initially, get an ex post facto EC, pay penalties and continue. Only certain cases of enormous improbability of compliance with environmental norms were to be directed for demolition.[6]

However, it would be incorrect to pin the perversity in the allowance of ex post facto EC even after the 2017 notification; more fundamentally, and rightly so, the malaise existed in its allowance in the first place. Vanashakti sought to contend with this derogation of the EIA notification’s requirement of ‘prior’ EC on the basis of the scope of executive action allowed by EPA and 2006 EIA Notification (section 3 of the Act grants Central Government to take positive action to protect the environment[7]; how could the same be construed to allow endangerment, through executive orders, that was the essential purport of ex post facto EC?) and a principles-based discourse that sought to visiblise the discomfort of situating ex post facto EC in the regime of environmental protection in the first place, that borrowed strength from two prior judgments of the SC, namely Alembic Pharmaceuticals and Common Cause.[8] In the latter prong of contention, glaringly, it was evident that the concept was at direct odds with the objective of the EPA,

Para 19. “The object of the 2017 notification appears to be to protect the industries and entities which violated the EIA notification.”

Vanashakti emphasised the impunity and artificial portrayal of ignorance with which project proponents, despite knowing that a ‘prior’ EC is required as per 2006 EIA notification, carried on without obtaining one, and sought legalisation of their projects through the two notification and OM later. This exercise, on the face of it, displayed trivialisation of obtaining an EC in the catena of various approvals a project proponent is required to obtain BEFORE legally beginning with the project itself. Moreover, the multiple extensions played the role of making an exception the norm, despite a specific undertaking by the Central Government of the ex post facto EC under 2017 notification being a “one-time measure”. Does the ignorance of this recorded undertaking by Pahwa Plastics[9] and now in CREDAI (the judgment dated November 18, 2025 that has allowed review of Vanashakti)[10], mean that submissions recorded before the court can be derogated from inconsequentially, merely because judicial pronouncements are to be interpreted differently than statutes?[11] Another line of questioning inevitably also arises in cases of environmental law: whether the court would have treated this undertaking with more seriousness had it been a more “serious” matter, perhaps in the realm of taxation? Especially when the State is supposed to act as a steward of the environment under the Public Trust Doctrine, can its undertakings be ignored or accepted summarily, without any critical appraisal? Ideally, no.

Vanashakti, while prohibiting the Central Government to issue any further notifications in the semblance of the two struck down notification and OM, allowed the ex post facto ECs granted till the date of the judgment i.e., May 16, 2025, to operate. This accommodation, rooted in equity, was not enough for the petitioners in CREDAI, who have sought for challenging the entire judgment instead of an expansion of accommodation in Vanashakti itself, a course of action potentially explorable as per the dissenting judge (and original co-adjudicator in Vanashakti) in CREDAI. This review petition, therefore, has undertones of retaining the impunity and illegality prevalent before Vanashakti, spearheaded by Big Corporate (and suspiciously, not by the Central Government directly), relying on principles of judicial discipline, stare decisis and judicial predictability. But, very arguably, the principles have been moulded to the extent of blatant misapplication, that necessitated the dissenting judge to take a crash course on all these principles in his 93-page dissent.

Two sets of judgments have existed on ex post facto EC. Alembic and Common Cause had unequivocal ratios stating that ex post facto EC is an anathema to EPA and 2006 EIA, and the larger scheme of environmental jurisprudence. Just with respect to fact application, they relied on equity and proportionality principles, to allow the prevalence of granted ex post facto ECs after paying penalties, a direction originating in the court’s power under Article 142 of the Constitution. The other set, comprising Pahwa Plastics, Electrosteel[12], and D. Swamy[13], accepted the argument of exceptional cases that could allow perfectly legal ex post facto ECs. In CREDAI, the fact applications of Alembic and Common Cause have been identified as a part of the ratio of those respective judgments. Buttressing the observation of the majority was the portrayal of petitioners as helpless project proponents (who proceeded relying on the 2021 OM to not obtain a ‘prior’ EC, as required by the EIA notification, that has a superior statutory character), the fact of near completion of obtaining ex post facto ECs, nature of projects (sewage treatment plant, AIIMS hospital and an airport), and the lingering fear of demolition as a penalty. The CREDAI judgment, that was supposed to only find grounds of review, did not stop at finding those grounds, but has made an emotive case for the petitioners to the detriment of the respondents.

Finding that the demolition will cause immense loss to the public exchequer, the majority judgment made the following observations with respect to a sewage treatment plant that could be demolished for lack of a legal EC:

“para 111. (…) The question is whether demolition of such effluent treatment plants, constructed using huge public exchequer, would be conducive to the protection of environment or against it?

para 112. I, therefore, ask a question to myself as to whether it would be in the public interest to demolish all such projects and permit the money spent from the pocket of public exchequer to go in the dustbin?”

Cherrypicking the sewage treatment plant is reflective of the peculiar conundrum seen in M.K. Ranjitsinh[14]; however, the list of projects that could be demolished also includes a greenfield airport in Karnataka- would it not be doubly endangering for the environment given the lack of an EC to begin with, and then the pursuant emissions that will ratchet up? Moreover, the question of public interest again brings to fore the fundamental development v. environment dichotomy which has always provided room for judicial manoeuvring based on convenience in environmental cases. Can the cases of all project proponents be situated in the realm of public interest? Is there really no private interest at play here, with the public interest actually lying in the long-term goal of recognition and enforcement of procedural fairness and propriety in environmental protection? Can the primacy of money, albeit important for a developing country like India, always trump environmental protection that has often struggled in making a space for itself monetarily? The pronouncement in Vanashakti that denied regularisation of the projects defiant of 2006 EIA notification, even after payment of penalties under section 15 of the EPA, sought to prevent overutilisation of an ex post facto polluter pays principle that did little for ecological restoration by just levying monetary damages which could most of the times be a better option than compliance (as explored widely in ecological economics).

The other set of cases, for instance, Pahwa Plastics for our purposes, was not mentioned in Vanashakti, the reasoning of which, as per the dissenting judge in CREDAI, laid in the per incuriam nature of those judgments vis-à-vis Alembic and Common Cause.[15] But the majority construed this as an ignorance necessitating a review of the judgment. It can be argued that this was not an error apparent on the face of the record; the arguments of the respondent in Vanashakti, namely Union of India, did argue, even if implicitly, on the basis of huge costs of construction and its wastage if ex post facto ECs were not approved.[16] The issue of proportionality was an act of equity and exception (which can be contested from the vantage point of environmental compromises) that even Vanashakti upheld by allowing the granted ex post facto ECs the same stature as ‘prior’ ECs. It was not as rigorously ignorant of exception as CREDAI made it out to be; the form was emphasised to the detriment of substance which was present in Vanashakti. The CREDAI judgment appeared to be an exercise of appellate jurisdiction, a contention raised by the respondents in the beginning. Merely because two views are possible in ex post facto EC, one allowing on the basis of exception that runs contrary to the very substance of EPA and EIA, and one disallowing on the basis of statutory guidance and authoritative environmental protection principles, the review seeks to sabotage the exceptional nature of review jurisdiction itself. Even if the review on merits remains to begin, the CREDAI judgment has set a tone too hostile and ungenerous to Vanashakti, by trumping the cause of development and potential monetary loss, with environmental protection having no comparable monetary leverage.

[P.S.: A factual correction has been made since this blogpost was posted, namely, it was the 2017 "notification" and not an "office memorandum"; despite that it was rightly ruled as illegal by Vanashakti, in the face of the parent 2006 EIA notification.]

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[1] Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr, Review Petition in WP (C) 1394//2023, para 20 (Bhuyan J.).

[2] The 2017 notification and 2021 OM; 2017 notification issued by MoEFCC on 14.03.2017, S.O. 804(E), and published in the Gazette.

[3] Vanashakti v. Union of India, WP(C) No. 1394/2023, para 8.

[4] Appeal No.34/2020 (WZ)

[5] Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr, Review Petition in WP (C) 1394//2023, para 36 (Bhuyan J.). (hereafter, “CREDAI”)

[6] Vanashakti, supra note 3, para 29. “The Court must come down very heavily on the attempt of the Central Government to do something which is completely prohibited under the law. Cleverly, the words ex post facto have not been used, but without using those words, there is a provision to effectively grant ex post facto EC.”

[7]  Vanashakti, supra note 3, para 13.

[8] Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors., Civil Appeal No. 1526 of 2016; Common Cause v. Union of India & Ors, 2017 (9) SCC 499.

[9] M/s Pahwa Plastics Pvt. Ltd. & Anr. v. Dastak NGO, Civil Appeal No. 4795 of 2021.

[10] Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr, Review Petition in WP (C) 1394//2023.

[11] ibid, para 47.

[12] Electrosteel Steels Limited Vs. Union of India, 2023 (6) SCC 615.

[13] D. Swamy Vs. Karnataka State Pollution Control Board, 2023 (20) SCC 469.

[14] M.K. Ranjitsinh & Ors. v. Union of India & Ors., WP(C) No. 838/2019.

[15] Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr, Review Petition in WP (C) 1394//2023, para 44 (Bhuyan J.).

[16] Vanashakti, supra note 3, para 25.