Full Judgment Text
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REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NOS. 7576-7577 OF 2021
[Arising out of SLP (C.) Nos. 11226-11227 of 2020]
Electrosteel Steels Limited ……Petitioner (s)
Versus
Union of India and Ors. Etc. ….Respondent (s)
J U D G M E N T
Indira Banerjee, J.
Leave granted.
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2. These Appeals are against an order dated 16 September 2020
passed by a Single Bench of the High Court of Jharkhand in W.P. (C)
No.1873 of 2018 and W.P. (C) No. 4850 of 2018, discontinuing the interim
orders earlier passed by the High Court, allowing the Appellant to operate
its unit under the supervisory regulatory control of the Respondent –
Jharkhand State Pollution Control Board, hereinafter referred to as
“JSPCB”, which had been in force for over two years.
3. The Appellant owns and runs a 1.5 MTPA integrated steel plant in
Signature Not Verified
Digitally signed by
Rajni Mukhi
Date: 2021.12.14
17:13:44 IST
Reason:
Bokaro District in Jharkhand. The said steel plant in Bokaro, which
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employs 3,000 regular employees and 7000 contractual employees,
produced steel worth Rs.4,200 crores in the financial year 2019-20.
4. The Appellant claims that about 30,000 persons other than those
actually employed by the steel plant as regular or contractual employees
depend on the steel plant for their livelihood.
5. Corporate Insolvency Resolution Process (CIRP) had commenced
against the Appellant under the Insolvency and Bankruptcy Code 2016.
As successful Resolution Applicant, Vedanta Ltd. took over the Appellant
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on or about 4 June 2018 upon payment of Rs.5,320 crores for discharge
of its debts.
6. Pollution and consequential deterioration of environment has been
assuming alarming proportions, and has become a cause of universal
concern. Fumes, smoke, emission of green house gases by use of
motors and machines and operation of mills, factories and plants cause
environmental degradation.
7. Under the aegis of the United Nations discussions and deliberations
have been held to protect and improve environment and prevent
pollution.
8. In 1972, the United Nations Conference on the Human Environment
was convened in Stockholm to work out ways and means to protect and
improve the environment. In course of deliberations, it was felt that
there was need to enact law to tackle environmental pollution. India
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participated in the conference and strongly voiced environmental
concerns.
9. The Environment (Protection) Act, 1986, hereinafter referred to as
“the 1986 Act”, has been enacted as a consequence of decisions taken
at the United Nations Conference on the Human Environment held in
Stockholm in June, 1972.
10. The statement of objects and reasons for enactment of the 1986
Act declares that the Act has been prompted by concern over
environment, that has grown the world over, since the sixties.
11. Sub-Section (1) of Section 3 of the 1986 Act empowers the Central
Government to take all such measures as it might deem necessary or
expedient for the purpose of protecting and improving the quality of the
environment and preventing, controlling and abating environmental
pollution.
12. Sub-section (2) of Section 3 of the 1986 Act enables the Central
Government to take, inter alia, the following measures:
“(i) co-ordination of actions by the State
Governments, officers and other authorities—
(a) under this Act, or the rules made thereunder; or
(b) under any other law for the time being in force which is
relatable to the objects of this Act;
(ii) planning and execution of a nation-wide programme for the
prevention, control and abatement of environmental pollution;
(iii) laying down standards for the quality of environment in its
various aspects;
(iv) laying down standards for emission or discharge of
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environmental pollutants from various sources whatsoever:
Provided that different standards for emission or discharge may
be laid down under this clause from different sources having
regard to the quality or composition of the emission or discharge
of environmental pollutants from such sources;
(v) restriction of areas in which any industries, operations or
processes or class of industries, operations or processes shall
not be carried out or shall be carried out subject to certain
safeguards;
(vi) laying down procedures and safeguards for the prevention of
accidents which may cause environmental pollution and
remedial measures for such accidents;
(vii) laying down procedures and safeguards for the handling of
hazardous substances;
(viii) examination of such manufacturing processes, materials
and substances as are likely to cause environmental pollution;
(ix) carrying out and sponsoring investigations and research
relating to problems of environmental pollution;
(x) inspection of any premises, plant, equipment, machinery,
manufacturing or other processes, materials or substances and
giving, by order, of such directions to such authorities, officers or
persons as it may consider necessary to take steps for the
prevention, control and abatement of environmental pollution;
(xi) establishment or recognition of environmental laboratories
and institutes to carry out the functions entrusted to such
environmental laboratories and insitutes under this Act;
(xii) collection and dissemination of information in respect of
matters relating to environmental pollution;
(xiii) preparation of manuals, codes or guides relating to the
prevention, control and abatement of environmental pollution;
(xiv) such other matters as the Central Government deems
necessary or expedient for the purpose of securing the effective
implementation of the provisions of this Act.”
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13. Sub-section (3) of Section 3 of the 1986 Act provides as follows:
“The Central Government may, if it considers it necessary or
expedient so to do for the purposes of this Act, by order,
published in the Official Gazette, constitute an authority or
authorities by such name or names as may be specified in the
order for the purpose of exercising and performing such of the
powers and functions (including the power to issue directions
under Section 5) of the Central Government under this Act and
for taking measures with respect to such of the matters referred
to in sub-section (2) as may be mentioned in the order and
subject to the supervision and control of the Central Government
and the provisions of such order, such authority or authorities
may exercise the powers or perform the functions or take the
measures so mentioned in the order as if such authority or
authorities had been empowered by this Act to exercise those
powers or perform those functions or take such measures.”
14. Subject to the provisions of the 1986 Act, the Central Government
has power under sub-section (1) of section 3 to take all such measures as
it deems necessary or expedient for the purpose of protecting and
improving the quality of the environment and preventing, controlling and
abating environmental pollution.
15. Section 5 of the 1986 Act provides that notwithstanding anything
contained in any other law, but subject to the provisions of the 1986 Act,
the Central Government may, in exercise of its powers and performance
of its functions under the 1986 Act, issue directions in writing to any
person, officer or any authority and such person, officer or authority shall
be bound to comply with such directions.
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16. In exercise of powers conferred by Sub-Section (1) and clause (v) of
sub-section (2) of Section 3 of the 1986 Act read with Rule 5(3)(d) of the
Environment (Protection) Rules, 1986 the Central Government issued the
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Environmental Impact Assessment Notification dated 27 January 1994
directing that on and from the date of publication of the said notification
in the Official Gazette, expansion or modernisation of any activity or a
new project listed in Schedule I of the Notification shall not be undertaken
in any part of India, unless it has been accorded Environmental Clearance
(EC) by the Central Government in accordance with the procedure
specified in the Notification.
17. Under Clause (2)(I) of the said Notification, any person who desires
to undertake any new project listed in Schedule I is required to submit an
application to the Secretary, Ministry of Environment and Forests (MoEF),
New Delhi in the pro forma specified in Schedule II, accompanied by a
project report which is to include the EIA (Environmental Impact
Assessment) Report /Environment Management Plan (EMP) prepared in
accordance with the guidelines issued by MoEF. Another Environmental
Impact Notification was issued in 2006, for grant of Terms and
Environmental Clearance inter alia for projects which had started work on
site.
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18. The EIA Report submitted with the application of the project
proponent is to be evaluated and assessed by the Impact Assessment
Agency (IAA), that is MoEF, and if deemed necessary, it may consult a
Committee of Experts constituted in the manner prescribed in Schedule
III. The Committee of Experts shall have full right of entry and inspection
of the site. The Impact Assessment Agency is to prepare a set of
recommendations based on technical assessment of documents and
data, furnished by the project proponent, supplemented by data collected
during visits to sites, interaction with the affected population and
environmental groups, if necessary. The summary of the reports, the
recommendations and the conditions, subject to which EC is given shall,
subject to public interest, be made available to the parties concerned or
environmental groups on request. The IAA may solicit comments of the
public within the specified period by arranging public hearings for that
purpose. The public shall, subject to public interest, be provided access,
to the summary of the EIA Report/Environment Management Plan (EMP).
The clearance granted for commencement of the construction or
operation of the plant, is to be valid for five years. Clause IV of the
Environmental Impact Assessment Notification provides for the
monitoring of the implementation of the conditions of EC and/or the
recommendations and conditions laid down by IAA.
19. A minor amendment was made to the said Environmental Impact
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Assessment Notification dated 27 January 1994, by a Notification dated
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10 April 1997, which prescribes a detailed procedure for public hearing.
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20. By a notification being S.O. 327(E), dated 10 April 2001, published
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in the Gazette of India, Extra., Pt.II, Sec.3(ii), dated 12 April 2001, the
Central Government has delegated the powers vested in it under Section
5 of the 1986 Act, to the Chairpersons of the respective State Pollution
Control Boards/Committees to issue directions to any industry or any
local or other authority for the violations of the standards and rules
relating to biomedical waste, hazardous chemicals, industrial solid waste
and municipal solid waste including plastic waste notified under the
Environment (Protection) Act, 1986 subject to the condition that the
Central Government may revoke such delegation of powers or may itself
invoke the provisions of Section 5 of the said Act, if in the opinion of the
Central Government such a course of action is necessary in the public
interest.
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21. On or about 8 January 2007, the Appellant applied to the Ministry
of Environment, Forest and Climate Change, Government of India,
hereinafter referred to as “MoEF&CC” for grant of EC to establish 3 MTPA
integrated steel plant at Mauza South Parbatpur of Chandankiyari Block
of Bokaro District.
22. In its application, the Appellant stated that 1350 acres of land were
required for establishing the said plant at the Mauza South Parbatpur of
Chandankiyari Block of Bokaro District and that no forest land was
involved in the project.
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23. By a letter No. F.No.J-11011/137/2006-1A-II (i) dated 21 February
2008, the Appellant was granted EC. After obtaining EC, the Appellant
applied to the JSPCB, for grant of ‘Consent to Establish’ (CTE) under the
Air (Prevention and Control of Pollution) Act, 1981, hereinafter referred to
as the Air Pollution Act, and Water (Prevention and Control of Pollution)
Act 1974, hereinafter referred to as the Water Pollution Act.
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24. On 5 May 2008, the JSPCB granted CTE to the Appellant to
establish the 3 MTPA integrated steel plant at Mauza South Parbatpur of
Chandankiyari Block of Bokaro District. The CTE was granted on the
basis of the EC granted by the MoEF&CC.
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25. The CTE was extended from time to time till 4 May 2011. Even
though CTE was granted to the Appellant to establish a steel plant at
Mauza South Parbatpur of Chandankiyari Block of Bokaro District, the
Appellant established steel plant in Mauza Bhagabandh in the Chas Block
in Bokaro District, 5.3 Kms away from the site for which EC and CTE had
been granted.
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26. A Circular No.J-11013/41/2006-1A.2(i) dated 22 January, 2010 was
issued by the Ministry of Environment and Forest (MoEF) of the
Government of India which provided as follows:
“Instances have come to the notice of this Ministry wherein the
project proponents have changed the project site after the said
project has been granted environmental clearance or after the
public hearing has been held. The project proponents have
approached this Ministry to revalidate the environmental
clearance so granted without undergoing afresh the procedure
prescribed for obtaining environmental clearance. The matter
has been considered in the ministry. The change in project site
would lead to change in project affected people as well as the
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change in study area and the impact zone. As such the
Environment Impact Assessment Report and Public Hearing
conducted for a particular location cannot be taken valid for the
changed location.
Accordingly, it has been decided that any shift in project site
location after holding of public hearing will be deemed to be a
new proposal and will be appraised afresh as per the procedure
prescribed under EIA Notification 2006 provided the respective
Expert Appraisal Committee is satisfied that the shift is so minor
as to have no change in EIA/EMP, duly recorded in the minutes
and prior approval of advisor (In-charge)/SEIAA for Category
‘A’/Category ‘B’ projects respectively is obtained for not holding
the public hearing for the changed location afresh.
This issues with the approval of the Competent Authority.”
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27. By a communication being Reference No.1142 dated 4 May 2010,
the District DFO (District Forest Officer) Bokaro requested JSPCB to take
action against the Appellant for setting up its integrated steel plant on
forest land in Mauza Bhagabandh of Chas Block of Bokaro District, in
violation of the Forest Conservation Act 1980 and Indian Forest Act 1927.
The DFO, Bokaro reported encroachment of 220.88 acres of notified
forest land by the Appellant to JSPCB.
28. It appears that cases had been initiated against the officials of the
Appellant under the Indian Forest Act, 1927, Forest Conservation Act,
1980 and the Bihar Public Land Encroachment Act, 1955 which have been
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quashed by the Jharkhand High Court, by an order dated 25 January
2011.
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29. On or about 23 September 2010 the Appellant applied for Consent
to Operate (CTO) under the Air Pollution Act and the Water Pollution Act
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for its 350 m blast furnace. Later on 9 September 2011, the Appellant
applied for CTO in respect of its entire plant.
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30. By a letter dated 2 December 2011, addressed to the Appellant,
the MoEF confirmed that the lay out of the Appellant’s 3 MTPA Integrated
Steel Plant was well within the Environment Impact Area and that the
affected people had the opportunity to participate in a public hearing.
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31. By letter dated 18 May 2012, the JSPCB reported encroachment
by the Appellant upon forest land and alleged violation by the Appellant
of the Forest Conservation Act, 1980 to the MoEF&CC, New Delhi. The
MoEF&CC was also informed of the unauthorized shifting of the
integrated steel plant from Mauza South Parbatpur of Chandankiyari
Block of Bokaro District to Mauza Bhagabandh of Chas Block of Bokaro
District in violation of the conditions of Environment Clearance granted
by the MoEC&CC.
32. Pursuant to the report of JSPCB, MoEF&CC issued a Show Cause
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Notice dated 6 June 2012 to the Appellant under Section 5 of the 1986
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Act. The Appellant submitted its reply to the Show Cause Notice on 20
June 2012.
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33. On 10 September 2012, the Appellant once again applied to JSPCB
for CTO for one year under the Water Pollution Act and Air Pollution Act.
According to the Appellant, several reminders were sent to MoEF&CC
requesting MoEF&CC to intimate JSPCB of the outcome of the Show Cause
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Notice issued to the Appellant. However, JSPCB has not been informed of
the decision of MoEF&CC.
34. The Appellant filed a Writ Petition being W.P. No.2247/2012 in the
Jharkhand High Court for orders on JSPCB to grant the Appellant CTO. The
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said writ petition was disposed of by an order dated 5 November 2012,
the operative part whereof is set out hereinbelow:-
“Respondent 1& 2 to consider the petitioner’s application and as
assured by them, if so required, give an opportunity of hearing to
the petitioners and after taking into consideration the facts and
provisions of law and the related decisions, shall dispose of the
petitioner’s application within five weeks from the date of
receipt/production of a copy of this order.”
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35. On or about 27 November 2013, the application of the Appellant
for CTO was rejected on the ground that the Appellant had shifted the
site of its steel Plant and had encroached upon forest land in violation of
the Forest Conservation Act, 1980. The operative part of the order dated
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27 November 2013 reads:-
“at this stage subject to final outcome of the decision of MoEF&CC,
New Delhi with respect to show cause notice dated 6.6.2012, we
dispose the application for CTO in exercise of power conferred u/s
21(4) of Air (Prevention and Control of Pollution) Act, 1981 & u/s
25(4) of Water (Prevention and Control of Pollution) Act, 1974 by
“refusing” the CTO to the unit for the reason aforesaid.”
36. The Appellant filed an application for contempt being Contempt
Case (C) No.939 of 2013 in W.P.(C) No.2247 of 2012 in the Jharkhand
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High Court. Pursuant to an order dated 29 November 2013 in the
Contempt Petition, the JSPCB disposed of the applications for grant of
CTO to the Appellant.
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37. By a letter dated 17 April 2013, the MoEF&CC had called for a
status report from the State of Jharkhand in respect of forest land
encroached by the Appellant. The Forest Department submitted a report
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to the MoEF&CC on 13 May, 2014.
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38. Thereafter, by a letter dated 20 October 2014, the MoEF&CC,
New Delhi directed the Department of Forest, Environment and Climate
Change, Government of Jharkhand to take action against the Appellant
for violating the provisions of Indian Forest Act, 1927 and Forest
Conservation Act, 1980. In compliance with the aforesaid order, JSPCB
directed the Appellant to close down its plant under Section 31(A) of the
Air Pollution Act and Section 33(A) of Water Pollution Act.
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39. By a Memo No.521 dated 6 February 2015, the Department of
Forest, Environment and Climate Change, Government of Jharkhand
directed the DGP, Jharkhand, Ranchi and the Deputy Commissioner,
Bokaro to take action against the Appellant in the light of the letter
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dated 20 October, 2014 of the MoEF&CC, Government of India and to
submit an action taken report.
40. The aforesaid order of JSPCB was challenged by the Appellant by
filing a Writ Petition being WP(C) No.2033 of 2015 in the Jharkhand High
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Court. By an order dated 5 February 2016 the High Court set aside the
order of the JSPCB holding that the same had been passed in violation of
principles of natural justice. The High Court however, held that JSPCB
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would be at liberty to pass an order in accordance with law after giving
the Appellant an opportunity of hearing.
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41. Thereafter, a show cause notice dated 25 April 2016, was issued
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to the Appellant. The Appellant replied to the show cause notice on 28
September 2016, contending that the Appellant had not set up its plant
on any forest land and that all pollution control measures had been
taken. However, the Principal Chief Conservator of Forests (PCCF),
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Jharkhand had by a communication No.2966 dated 8 August 2016
informed JSPCB that the Appellant had encroached forest land.
Thereafter JSPCB once again called upon the Appellant to show cause in
the light of information provided by the PCCF, Jharkhand. The Appellant
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by a letter dated 28 September 2016 reiterated that there was no
forest land in the plant premises.
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42. JSPCB passed an order No.B-319 dated 13 February 2017
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disposing of the show cause notice in the light of the direction dated 5
February 2016 of the Jharkhand High Court and the applications for CTO.
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JSPCB granted CTO to the Appellant which was valid till 31 December,
2017.
43. The MoEF&CC and the State Environment Impact Assessment
Authorities had, in the meanwhile been receiving proposals under the
Environment Impact Assessment Notification, 2006 for grant of Terms of
Reference and Environmental Clearance for projects which had started
the work on site, expanded the production beyond the limit of
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environmental clearance or changed the product mix without obtaining
prior environmental clearance.
44. The MoEF&CC deemed it necessary that all entities not complying
with the environmental regulation under Environment Impact Assessment
Notification, 2006, be brought to comply with the environmental laws in
expedient manner, for the purpose of protecting and improving the
quality of the environment and reducing environmental pollution.
45. The MoEF&CC deemed 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
would be more damaging to the environment.
46. In furtherance of this objective, the Government of India deemed it
essential to establish a process for appraisal of cases of violation of
norms, and prescribing such adequate environmental safeguards that
would deter violation of the provisions of Environment Impact
Assessment Notification, 2006 and ensure that damage to environment
was adequately compensated for.
47. In Indian Council for Enviro-Legal Action and Ors. v. Union of
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India and Ors. , the Supreme Court analyzed relevant provisions of
environmental laws and concluded that damages might be recovered
under the provisions of the 1986 Act, inter alia, to implement measures
that were necessary or expedient for protecting and promoting the
1. (1996) 3 SCC 212
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environment. This Court affirmed that the power of the Central
Government under Section 3 of the 1986 Act was wide and included the
power to prohibit an activity, close an industry, direct to carry out
remedial measures, and wherever necessary impose the cost of remedial
measures upon the offending industry. The question of liability of the
respondents to defray the costs of remedial measures could also be
looked into from the principle “polluter pays.”
48. In exercise of power under Section 3(1) and Section 3(2)(v) of the
1986 Act read with Rule 5(3)(d) of the Environment (Protection) Rules,
1986, the Central Government has issued a Notification being S.O. 804(E)
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dated 14 March 2017 which provides for grant of ex post facto EC for
project proponents who have commenced, continued or completed a
project without obtaining EC under the 1986 Act or the EIA notification
issued under it.
49. Paragraphs 3, 4 and 5 of the said notification, read as follows :
“(3) In cases of violation, action will be taken against the
project proponent by the respective State or State Pollution
Control Board under the provisions of section 19 of the
Environment (Protection) Act, 1986 and further, no consent to
operate or occupancy certificate will be issued till the project is
granted the environmental clearance.
(4) The cases of violation will be appraised by respective
sector Expert Appraisal Committees constituted under sub-
section (3) of Section 3 of the Environment (Protection) Act,
1986 with a view to assess that the project has been
constructed at a site which under prevailing laws is permissible
and expansion has been done which can be run sustainably
under compliance of environmental norms with adequate
environmental safeguards; and in case, where the finding of the
Expert Appraisal Committee is negative, closure of the project
will be recommended along with other actions under the law.
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(5) In case, where the findings of the Expert Appraisal
Committee on point at sub-para(4) above are affirmative, the
projects under this category will be prescribed the appropriate
Terms of Reference for undertaking Environment Impact
Assessment and preparation of Environment Management Plan.
Further, the Expert Appraisal Committee will prescribe a specific
Terms of Reference for the project on assessment of ecological
damage, remediation plan and natural and community resource
augmentation plan and it shall be prepared as an independent
chapter in the environment impact assessment report by the
accredited consultants. The collection and analysis of data for
assessment of ecological damage, preparation of remediation
plan and natural and community resource augmentation plan
shall be done by an environmental laboratory duly notified under
Environment (Protection) Act, 1986, or a environmental
laboratory accredited by National Accreditation Board for Testing
and Calibration Laboratories or a laboratory of a Council of
Scientific and Industrial Research institution working in the field
of environment.”
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50. On or about 24 August 2017, the Appellant applied for CTO for five
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years. On 13 November 2017, JSPCB issued a Show Cause Notice to the
Appellant pointing out alleged contraventions of the conditions of
Consent to Operate (CTO) earlier granted to the Appellant. The
Appellant was called upon to show cause whether conditions of the CTO
had been contravened while the application of the Appellant for CTO for
five year was pending.
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51. On 23 November 2017, the Appellant submitted its online reply to
the Show Cause Notice showing compliance of the conditions of the CTO.
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52. By a communication No.2105 dated 18 December 2017 JSPCB
requested MoEF&CC to inform JSPCB of the decision on the show cause
notice issued to the Appellant under Section 5 of the 1986 Act for
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revocation of the EC for non compliance of the conditions for grant of EC
for the integrated plant at Parbatpur, Jharkhand.
53. Aggrieved by the failure of JSPCB to issue/renew the CTO to the
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Appellant, pursuant to its application made on 24 August 2017, the
Appellant filed a writ petition being W.P.(C) No. 1873 of 2018 in the
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Jharkhand High Court on or about 12 April 2018 seeking directions on
the JSPCB to issue CTO to the Appellant.
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54. By an order dated 16 July 2018, the High Court directed the JSPCB
to take a final decision on the application of renewal/grant of CTO filed
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by the Appellant on 24 August 2017 within the time stipulated in the
said order.
55. The High Court further passed an interim order directing that the
Appellant be allowed to operate its unit under the supervisory and
regulatory control of the JSPCB, who might carry out periodical check as
to adherence by the Appellant of pollution control laws.
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56. JSPCB passed an order dated 21 August, 2018, rejecting at that
stage the request of the Appellant for CTO, subject to the decision of
MoEF&CC on the show cause notice issued to the appellant. The
operative part of the said order is set out hereinbelow:
“at this stage subject to final outcome of the decision of
MoEF&CC, New Delhi with respect to show cause notice
dated 6.6.2012, we dispose the application for CTO in
exercise of power conferred u/s 21(4) of Air (Prevention and
Control of Pollution) Act, 1981 & u/s 25(40 of Water
(Prevention and Control of pollution) Act, 1974 by “refusing”
the CTO to the unit for the reason aforesaid.”
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57. The Appellant, thereafter approached the High Court with a prayer
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for amendment of Writ Petition No.1873 of 2018. By an order dated 25
August 2018, the High Court allowed the application for amendment of
the Writ Petition and directed the respondent to file their response to the
amended writ petition. The High Court further directed:-
“10. So far as interim relief is concerned, this court finds that the
order passed by the respondent-Jharkhand State Pollution
Control Board dated 23.08.2018 appears to be directly
dependent on the final decision which is yet to be taken by the
Ministry of Environment, Forest & Climate Change on the show
cause issued to the petitioner as back as in the year 2012. As
per the submission made by the counsel appearing on behalf of
Union of India, they are shortly going to take a final decision in
the matter after hearing the petitioner. Accordingly the
operation, implementation and execution of the order dated
23.08.2018 passed by Jharkhand State Pollution Control Board is
hereby stayed till 27.09.2018 and the interim order dated
16.07.2018 is hereby extended till 27.09.2018.
11.So far as decision of the Ministry of Environment, Forest &
Climate Change are concerned, considering the fact that the unit
of the petitioner is running unit and large number of employees
are working in this unit of the petitioner, this court consider it
appropriate that the issue regarding the environmental
clearance of the petitioner should be decided at the earliest.
12.It is further observed that it is open to the petitioner to
approach the Union of India with their proposal/ application for
regularization of the alleged violation, without prejudice to their
rights (including right, title, interest, possession and nature of
property of the petitioner) and advance submissions before the
respondent authority of Union of India pursuant to the show
cause notice issued to them dated 6.6.2012 and the appropriate
authority may, if possible, simultaneously consider the aforesaid
application of the petitioner for regularization along with the
show cause reply of the petitioner such that entire dispute is
decided and the petitioner may also have a clarity about the fate
of its unit . The decision which is to be taken by the Union of
India be brought on record by either of the parties by filing
supplementary affidavit latest by 25.09.2018.
13.I.A. No. 7610 of 2018 and I.A No. 7613 OF 2018 are hereby
disposed of.
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14.It is made clear that this court has not gone into the merits of
the claim of the petitioner and it will be open to the respondent
no 3 to take decision as per law.”
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58. By the aforesaid order dated 25 August 2018, the High Court
directed MoEF to take a decision on the application of the Appellant for
EC as also a decision regarding violation by the Appellant of the
provisions of EC by encroachment upon forest land by shifting the
location of the plant.
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59. On 31 August 2018, MoEF&CC issued a show cause notice No. F.No.
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J-11011/137/2006-1A Pt.II (i) dated 31 August 2018 to the Appellant for
violating the provisions of the EC by shifting the location of its plant and
encroaching upon forest land.
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60. The Respondent No.1 was also accorded personal hearing on 10
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September 2018. On 12 September 2018 Mr. Gyanesh Bharti who
presided over the personal hearing was transferred from MoEF&CC.
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61. On 20 September 2018 the Respondent No.1 issued an order
bearing No.F.No.J-11011/137/2006-IA.II(I) revoking the EC of the
Appellant on the ground that the Appellant had encroached upon 220
acres of forest land and had shifted the location of its plant from
Parbatpur to Bhagabandh, violating the conditions stipulated in the EC.
62. The Appellant filed Writ petition being W.P. (C) No.4850 of 2018 in
the Jharkhand High Court challenging the revocation of the EC granted
to the Appellant.
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63. On 27 September 2018 the High Court passed an interim order
staying the operation, implementation and execution of the impugned
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order dated 20 September 2018. The Court prima facie found that the
impugned order, passed in violation of principles of natural justice, had
serious repercussions on the unit of the Appellant which was a running
unit, and had caused prejudice to the Appellant.
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64. On 4 October 2018, the Appellant applied for ex post facto Forest
th
Clearance (FC) without prejudice to its rights and contentions. On 27
November 2019 the Appellant applied for a “revised” EC without
prejudice to its rights and contentions. In the meanwhile, the Interim
th
order passed by the High Court on 27 September 2018 was extended
from time to time. Such extensions were granted on 10.10.2018,
5.11.2018, 11.12.2018, 8.1.2019, 23.1.2019, 16.5.2019, 25.7.2019 and
17.10.2019.
th
65. On 17 December 2019, MoEF&CC passed an order according ex
post facto in principle approval for the forest diversion/clearance
proposal of the Appellant. The operative part of the said order reads:-
“After careful examination of the proposal of the State
Government and on the basis of the recommendations of the
Forest Advisory Committee and approval of the same by the
competent authority of the MoEF&CC, New Delhi, the Central
Government hereby accords ex-post facto ‘in-principle’ approval
under Section -2 of the Forest (Conservation) Act, 1980 for
diversion of 184.23 ha of forest land (174.39 ha encroached (ex-
post facto) and 9.84 ha virgin land) in favour of M/s Electrosteel
Steels Limited in the State of Jharkhand subject to fulfilment of
following conditions:-
(i) Legal status of the diverted forest land shall remain
unchanged;...”
22
th
66. By an order dated 26 February 2020, the Jharkhand High Court
directed that the pendency of W.P. (C) No. 4850 of 2018 and W.P. (C)
No.1873 of 2018 would not come in the way of consideration by the
MoEF&CC of grant or refusal of restoration of EC and it would be open to
the Ministry to take appropriate decision in accordance with law. The
interim orders in force were extended.
nd
67. Thereafter by a letter dated 2 March 2020, the Appellant requested
MoEF&CC to consider the application of the Appellant for revised EC. In
the meanwhile, the interim orders passed by the High Court were further
extended. The interim orders were extended by orders passed on
26.2.2020, 7.4.2020 and 29.5.2020.
th
68. The Writ Petition was called for hearing on 19 June 2020
whereupon it was submitted on behalf of the Respondent No.1 that the
revised EC application of the Appellant would be placed before the Expert
Appraisal Committee (EAC) for consideration on merit and Violation
Committee would decide on the action to be taken against the Appellant
for violation of Environment (Protection) Act, 1986.
th th
69. On 6 August 2020 and 7 August 2020, the case of the Appellant
th
was placed before the EAC at its 35 meeting. The Appellant was invited
to present its proposal online before the Committee.
23
70. After detailed deliberation, the EAC appraised the proposal on
merits and recommended issuance of Standard Terms of Reference along
with Specific Terms of Reference for undertaking Environmental Impact
Assessment (EIA) and preparation of Environment Management Plan
(EMP). The EAC noted that the plant was a running unit and the EC was
subject to the conditions imposed in the Terms of Reference.
th
71. On 4 September 2020, the Jharkhand High Court extended the
th
interim orders till 8 September 2020 while awaiting response from the
th
Respondents. On 8 September 2020, the High Court reserved orders on
th th
the extension of interim orders dated 16 July 2018 and 27 September
th
2018 while listing the writ petitions for final hearing on 16 September
2020.
th
72. On 15 September 2020, the Respondent No.1 filed an affidavit
stating that it had no objection to extension of the interim orders
considering that the steel plant employed a large workforce. At the
th
hearing on 16 September 2020 JSPCB also consented to extension of the
interim order. However, the High Court passed the impugned order
th
dated 16 September 2021 dis-continuing the earlier interim orders on,
inter alia, the following grounds:
(i) The Expert Appraisal Committee of the MoEF&CC had, after
detailed deliberations, found that the Appellant had been in
violation of the EIA Notification 2006 and general condition no.
(ii) of the EC dated 21.02.2008.
(ii)
The MoEF&CC had while issuing ToR for grant of EC
recommended action against the Appellant under Section 19 of
24
the 1986 Act for past violations. Extension of the interim orders
would amount to staying action.
(iii) In Alembic Pharmaceuticals Ltd. v. Rohit Prajapati and
2
Others , this Court had deprecated ex post facto Ecs but passed
certain directions in exercise of powers under Article 142 of the
Constitution.
th
73. By an Office Memorandum, being F.No. 22-21/2020-1A III, dated 7
July 2021, the MoEF&CC issued Standard Operating Procedure (SOP) for
Identification and Handing of violation cases under EIA Notification 2006.
74. The said Office Memorandum, inter alia, reads:
“The Ministry had issued a notification number S.O.804(E), dated
th
the 14 March, 2017 detailing the process for grant of Terms of
Reference and Environmental Clearance in respect of projects or
activities which have started the work on site and/ or expanded
the production beyond the limit of Prior EC or changed the
product mix without obtaining Prior EC under the EIA Notification,
2006.
2. This Notification was applicable for six months from the date of
publication i.e. 14.03.2017 to 13.09.2017 and further based on
court direction from 14.03.2018 to 13.04.2018.
3. Hon’ble NGT in Original Application No. 287 of 2020 in the
matter of Dastak N.G.O. Vs Synochem Organics Pvt. Ltd. &Ors.
and in applications pertaining to same subject matter in Original
Application No. 298 of 2020 in Vineet Nagar Vs. Central Ground
Water Authority &Ors., vide order dated 03.06.2021 held that
"( ... ) for past violations, the concerned authorities are
2 2020 SCC OnLine SC 347
25
free to take appropriate action in accordance with
polluter pays principle, following due process”.
4. Further, the Hon'ble National Green Tribunal in O.A No.
34/2020 WZ in the matter of Tanaji B. Gambhire vs. Chief
Secretary, Government of Maharashtra and ors., vide order dated
24.05.2021 has directed that " ... a proper SoP be laid down
for grant of EC in such cases so as to address the gaps in
binding law and practice being currently followed. The
MoEF may also consider circulating such SoP to all SEIAAs
in the country".
5. Therefore, in compliance to the directions of the Hon'ble NGT a
Standard Operating Procedure (SoP) for dealing with violation
cases is required to be drawn. The Ministry is also seized of
different categories of 'violation' cases which have been pending
for want of an approved structural/procedural framework based
on ‘Polluter Pays Principle’ and ‘Principle of Proportionality’. It is
undoubtedly important that action under statutory provisions is
taken against the defaulters/violators and a decision on the
closure of the project or activity or otherwise is taken
expeditiously.
6. In the list of the above directions of the Hon’ble Tribunal
and the issues involved, the matter has accordingly been
examined in detail in the Ministry. A detailed SoP has accordingly
been framed and is outlined herein. The SoP is also guided by
the observations/decisions of the Hon’ble Courts wherein
principles of proportionality and polluters pay have been
outlined.”
26
75. The Standard Operating Procedure formulated by the said Office
th
Memorandum dated 7 July 2021 refers to and gives effect to various
judicial pronouncements including the judgment of this Court in Alembic
Pharmaceuticals (supra).
76. In terms of the Standard Operating Procedure, the proposal for
grant of EC in cases of violation are to be considered on merits, with
prospective effect, applying principles of proportionality and the principle
that the polluter pays and is liable for costs of remedial measures.
th
77. By an interim order passed on 15 July 2021 in WP(MD) 11757 of
2021 in Fatima vs. Union of India , the Madurai Bench of Madras High
Court has stayed the operation of the Standard Operating Procedure.
th
78. By an order dated 25 August 2021, MoEF&CC rejected the
application of the Appellant for the time being. The application has, in
effect, been kept in abeyance.
79. The MoEF apparently did not take any decision on the application of
the Appellant for EC, since the Standard Operating Procedure issued by it
has been stayed by the Madurai Bench of Madras High Court, by the said
th
order dated 15 July 2021, citing the judgment of this Court in Alembic
Pharmaceuticals (supra).
80. The Appellant has filed an application being I.A No.125221 of 2021
in this appeal seeking directions on the Respondent No.1 to process the
th
Appellant’s application dated 5 August 2020 for revised EC.
27
81. There can be no doubt that the need to comply with the
requirement to obtain Environment Clearance is non-negotiable. A
project can be set up or allowed to expand subject to compliance of the
requisite norms. Environmental clearance is granted on condition of the
suitability of the site to set up the project from the environmental angle,
and existence of necessary infrastructural facilities and equipment for
compliance of environmental norms. To protect future generations, it is
imperative that pollution laws be strictly enforced. Under no
circumstances, can industries which pollute be allowed to operate
unchecked and degrade the environment.
82. The question is whether an establishment contributing to the
economy of the country and providing livelihood to hundreds of people
should be closed down for the technical irregularity of shifting its site
without prior environmental clearance, without opportunity to the
establishment to regularize its operation by obtaining the requisite
clearances and permissions, even though the establishment may not
otherwise be violating pollution laws, or the pollution, if any, can
conveniently and effectively be checked. The answer has to be in the
negative.
83. The Central Government is well within the scope of its powers
under Section 3 of the 1986 Act to issue directions to control and/or
prevent pollution including directions for prior Environmental Clearance
before a project is commenced. Such prior Environmental Clearance is
necessarily granted upon examining the impact of the project on the
28
environment. Ex-Post facto Environmental Clearance should not ordinarily
be granted, and certainly not for the asking. At the same time ex post
facto clearances and/or approvals and/or removal of technical
irregularities in terms of Notifications under the 1986 Act cannot be
declined with pedantic rigidity, oblivious of the consequences of stopping
the operation of a running steel plant.
84. The 1986 Act does not prohibit ex post facto Environmental
Clearance. Some relaxations and even grant of ex post facto EC in
accordance with law, in strict compliance with Rules, Regulations
Notifications and/or applicable orders, in appropriate cases, where the
projects are in compliance with, or can be made to comply with
environment norms, is in over view not impermissible. The Court cannot
be oblivious to the economy or the need to protect the livelihood of
hundreds of employees and others employed in the project and others
dependent on the project, if such projects comply with environmental
norms.
85. As held by a three Judge Bench of this Court in Lafarge Umiam
3
Mining Private Limited v. Union of India (“Lafarge”) reported in (2011) 7
SCC 338:
“119. The time has come for us to apply the constitutional
“doctrine of proportionality” to the matters concerning
environment as a part of the process of judicial review in
contradistinction to merit review. It cannot be gainsaid
that utilization of the environment and its natural
resources has to be in a way that is consistent with
principles of sustainable development and
intergenerational equity, but balancing of these equities
may entail policy choices . In the circumstances, barring
3. (2011) 7 SCC 338
29
exceptions, decisions relating to utilization of natural resources
have to be tested on the anvil of the well- recognized principles
of judicial review. Have all the relevant factors been taken into
account? Have any extraneous factors influenced the decision? Is
the decision strictly in accordance with the legislative policy
underlying the law (if any) that governs the field? Is the decision
consistent with the principles of sustainable development in the
sense that has the decision-maker taken into account the said
principle and, on the basis of relevant considerations, arrived at a
balanced decision? Thus, the Court should review the decision-
making process to ensure that the decision of MoEF is fair and
fully informed, based on the correct principles, and free from any
bias or restraint. Once this is ensured, then the doctrine of
“margin of appreciation” in favour of the decision-maker would
come into play.”
86. In Alembic Pharmaceuticals (supra) this Court observed:-
“27. The concept of an ex post facto EC is in derogation of the
fundamental principles of environmental jurisprudence and is an
anathema to the EIA notification dated 27 January 1994. It is, as
the judgment in Common Cause holds, detrimental to the
environment and could lead to irreparable degradation. The
reason why a retrospective EC or an ex post facto clearance is
alien to environmental jurisprudence is that before the issuance
of an EC, the statutory notification warrants a careful application
of mind, besides a study into the likely consequences of a
proposed activity on the environment. An EC can be issued only
after various stages of the decision-making process have been
completed. Requirements such as conducting a public hearing,
screening, scoping and appraisal are components of the decision-
making process which ensure that the likely impacts of the
industrial activity or the expansion of an existing industrial
activity are considered in the decision-making calculus. Allowing
for an ex post facto clearance would essentially condone the
operation of industrial activities without the grant of an EC. In the
absence of an EC, there would be no conditions that would
safeguard the environment. Moreover, if the EC was to be
ultimately refused, irreparable harm would have been caused to
the environment. In either view of the matter, environment law
cannot countenance the notion of an ex post facto clearance. This
would be contrary to both the precautionary principle as well as
the need for sustainable development.
30
87. In Alembic Pharmaceuticals (supra), this Court deprecated ex-
post facto clearances, but this Court did not pass orders for closure of
the three industries concerned, on consideration of the consequences
of their closure. This court proceeded to observe and held:-
44. The issue which must now concern the Court is the
consequence which will emanate from the failure of the three
industries to obtain their ECs until 14 May 2003 in the case of
Alembic Pharmaceuticals Limited, 17 July 2003 in the case of
United Phosphorous Limited, and 23 December 2002 in the case
of Unique Chemicals Limited. The functioning of the factories of
all three industries without a valid EC would have had an
adverse impact on the environment, ecology and biodiversity in
the area where they are located. The Comprehensive
4
Environmental Pollution Index report issued by the Central
Pollution Control Board for 2009-2010 describes the
environmental quality at 88 locations across the country.
Ankleshwar in the State of Gujarat, where the three industries
5
are located showed critical levels of pollution . In the Interim
Assessment of CEPI for 2011, the report indicates similar critical
6
figures of pollution in the Ankleshwar area. The CEPI scores for
7 8
2013 and 2018 were also significantly high. This is an
indication that industrial units have been operating in an
unregulated manner and in defiance of the law. Some of the
environmental damage caused by the operation of the industrial
units would be irreversible. However, to the extent possible
some of the damage can be corrected by undertaking measures
to protect and conserve the environment.
45. Even though it is not possible to individually determine the
exact extent of the damage caused to the environment by the
three industries, several circumstances must weigh with the
Court in determining the appropriate measure of restitution. First,
it is not in dispute that all the three industries did obtain ECs,
though this was several years after the EIA notification of 1994
and the commencement of production. Second, subsequent to
the grant of the ECs, the manufacturing units of all the three
4. “CEPI”
5. CEPI score – 88.50
6. C
EPI score 85.75
7.
CEPI score 80.93
8. CEPI score 80.21
31
industries have also obtained ECs for an expansion of capacity
from time to time. Third, the MoEF had issued a circular on 5
November 1998 permitting applications for ECs to be filed by 31
March 1999, which was extended subsequently to 30 June 2001.
On 14 May 2002, the deadline was extended until 31 March 2003
subject to a deposit commensurate to the investment made. The
circulars issued by the MoEF extending time for obtaining ECs
came to the notice of this Court in Goa Foundation (I) v. Union of
9
India . Fourth, though in the context of the facts of the case, this
Court in Lafarge Umiam Mining Private Limited v. Union of
10
India (“Lafarge”) has upheld the decision to grant ex post
facto clearances with respect to limestone mining projects in the
State of Meghalaya. In Lafarge , the Court dealt with the
question of whether ex post facto clearances stood vitiated by
alleged suppression of the nature of the land by the project
proponent and whether there was non-application of mind by the
MoEF while granting the clearances. While upholding the ex post
facto clearances, the Court held that the native tribals were
involved in the decision-making process and that the MoEF had
adopted a due diligence approach in reassuring itself through
reports regarding the environmental impact of the project. “
(Emphasis supplied)
46. After adverting to the decision in Lafarge , another Bench of
three learned judges of this Court in Electrotherm (India)
11
Limited v. Patel Vipulkumar Ramjibhai , dealt with the issue of
whether an EC granted for expansion to the appellant without
holding a public hearing was valid in law. Justice Uday Umesh
Lalit speaking for the Bench held thus:
“19…the decision-making process in doing away with or
in granting exemption from public consultation/public
hearing, was not based on correct principles and as such
the decision was invalid and improper.”
47. The Court while deciding the consequence of granting an EC
without public hearing did not direct closure of the appellant's
unit and instead held thus:
“20. At the same time, we cannot lose sight of the fact
that in pursuance of environmental clearance dated 27-1-
2010, the expansion of the project has been undertaken
9. (2005) 11 SCC 559
10. (2011) 7 SCC 338
11. (2016) 9 SCC 300
32
and as reported by CPCB in its affidavit filed on 7-7-2014,
most of the recommendations made by CPCB are
complied with. In our considered view, the interest of
justice would be subserved if that part of the decision
exempting public consultation/public hearing is set aside
and the matter is relegated back to the authorities
concerned to effectuate public consultation/public
hearing. However, since the expansion has been
undertaken and the industry has been functioning,
we do not deem it appropriate to order closure of
the entire plant as directed by the High Court . If the
public consultation/public hearing results in a negative
mandate against the expansion of the project, the
authorities would do well to direct and ensure scaling
down of the activities to the level that was permitted by
environmental clearance dated 20-2-2008. If public
consultation/public hearing reflects in favour of the
expansion of the project, environmental clearance dated
27-1-2010 would hold good and be fully operative. In
other words, at this length of time when the
expansion has already been undertaken, in the
peculiar facts of this case and in order to meet
ends of justice, we deem it appropriate to change
the nature of requirement of public
consultation/public hearing from pre-decisional to
post-decisional. The public consultation/public
hearing shall be organised by the authorities
concerned in three months from today .”
(Emphasis supplied)
48. Guided by the precepts that emerge from the above
decisions, this Court has taken note of the fact that though the
three industries operated without an EC for several years after
the EIA notification of 1994, each of them had subsequently
received ECs including amended ECs for expansion of existing
capacities. These ECs have been operational since 14 May 2003
(in the case of Alembic Pharmaceuticals Limited), 17 July 2003 (in
the case of United Phosphorous Limited), and 23 December 2002
(in the case of Unique Chemicals Limited). In addition, all the
three units have made infrastructural investments and employed
significant numbers of workers in their industrial units.
33
49. In this backdrop, this Court must take a balanced approach
which holds the industries to account for having operated
without environmental clearances in the past without ordering a
closure of operations. The directions of the NGT for the
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. The breach by the
industries cannot be left unattended by legal consequences. The
amount should be used for the purpose of restitution and
restoration of the environment. Instead and in place of the
directions issued by the NGT, we are of the view that it would be
in the interests of justice to direct the three industries to deposit
compensation quantified at Rs. 10 crores each. The amount shall
be deposited with GPCB and it shall be duly utilised for
restoration and remedial measures to improve the quality of the
environment in the industrial area in which the industries
operate. Though we have come to the conclusion, for the
reasons indicated, that the direction for the revocation of the ECs
and the closure of the industries was not warranted, we have
issued the order for payment of compensation as a facet of
preserving the environment in accordance with the
precautionary principle. These directions are issued under Article
142 of the Constitution. Alembic Pharmaceuticals Limited, United
Phosphorous Limited and Unique Chemicals Limited shall deposit
the amount of compensation with GPCB within a period of four
months from the date of receipt of the certified copy of this
judgment. This deposit shall be in addition to the amount
directed by the NGT. Subject to the deposit of the aforesaid
amount and for the reasons indicated, we allow the appeals and
set aside the impugned judgment of the NGT dated 8 January
2016 in so far as it directed the revocation of the ECs and
closure of the industries as well as the order in review dated 17
May 2016.”
34
th
87. The Notification being SO 804(E) dated 14 March, 2017 was not
an issue in Alembic Pharmaceuticals (supra). This Court was examining
the propriety and/or legality of a 2002 circular which was inconsistent
th
with the EIA Notification dated 27 January, 1994, which was statutory.
Ex post facto environmental clearance should not however be granted
routinely, but in exceptional circumstances taking into account all
relevant environmental factors. Where the adverse consequences of ex
post facto approval outweigh the consequences of regularization of
operation of an industry by grant of ex post facto approval and the
industry or establishment concerned otherwise conforms to the requisite
pollution norms, ex post facto approval should be given in accordance
with law, in strict conformity with the applicable Rules, Regulations
and/or Notifications. Ex post facto approval should not be withheld
only as a penal measure. The deviant industry may be penalised by an
imposition of heavy penalty on the principle of ‘polluter pays’ and the
cost of restoration of environment may be recovered from it.
88. We are of the view that the High Court erred in passing the
impugned order, vacating interim orders which had been in force for two
years. The impugned order is not in conformity with the principle of
proportionality. This is not a case where the steel plant was started
without environmental clearance or consent of JSPCB. The Appellant had
applied for and obtained environmental clearance to set up an integrated
steel plant (3MTPA) on 1350 acres of land at Mauza South Parbatpur, as
st
observed above. Environmental Clearance had been granted on 21
35
th
February 2008 and Consent to Operate had been granted by JSPCB on 5
May 2008.
89. The Appellant established its steel plant in Mauza Bhagaband, 5.3
kms away from the site for which EC and CTE had been granted. It is the
contention of the Appellant that the shift is minor and makes no change
in the EIA/EMP on the basis of which EC has been granted. The shift did
nd
not require fresh public hearing in terms of the Circular dated 22
January 2010 of the MoEF.
90. As aforesaid, by a letter dated 2.12.2011 addressed to the
Appellant, the MoEF confirmed that the steel plant of the Appellant was
within the Environment Impact Area and the affected people had the
opportunity to air their views in a public hearing. The question is whether
the Petitioner was required to obtain fresh prior clearance for shifting or
nd
was covered by the exemption under the said Notification dated 22
January 2010.
91. The Appellant has all along asserted that no part of the premises of
the integrated steel plant is in any forest. As such there was no violation
of the Indian Forest Act, 1927 or the Forest Conservation Act, 1980. The
MoEF had also confirmed that the steel plant in question was well within
the Environment Impact Area and the affected people had the
opportunity in a public hearing. Be that as it may, whether the shifting of
the site has really made any difference from the environmental impact
angle requires consideration by the appropriate authority/forum.
36
92. In any case, the Appellant has duly applied for ex post facto forest
clearance approval without prejudice to its rights and contentions that its
th
steel plant is not on forest land and also applied for revised EC. On 17
December 2019, MoEF&CC accorded ex post facto in principle approval to
the forest clearance proposal on the recommendations of the Forest
Advisory Committee. The application for revised clearance is pending
consideration. No final decision has however been taken, ostensibly in
view of the interim order passed by the Madras High Court staying the
operation of the Standard Operation Procedures issued vide
th
Memorandum dated 7 July 2021.
93. The interim order passed by the Madras High Court appears to be
misconceived. However, this Court is not hearing an appeal from that
interim order. The interim stay passed by the Madras High Court can
have no application to operation of the Standard Operating Procedure to
projects in territories beyond the territorial jurisdiction of Madras High
Court. Moreover, final decision may have been taken in accordance with
th
the Orders/Rules prevailing prior to 7 July, 2021.
94. In passing the impugned order the High Court overlooked the
consequences of closure of an integrated steel plant with a work force of
300 regular and 700 contractual workers. The High Court also failed to
appreciate that the judgment of this Court in Alembic Pharmaceuticals
(supra) was distinguishable on facts. Furthermore, continuance of the
interim orders allowing operation of an industrial establishment or even
the grant of revised EC to the industrial establishment cannot stand in
37
the way of action against that establishment for contraventions, including
the imposition of penalty, on the principle ‘polluter pays’. The scope
and effect of Section 32A of the IBC is a different issue. This Court need
not examine into the question of whether penal action can be initiated
against the Appellant or, whether compensation can be recovered from
the Appellant, at this stage. The issue may be decided by the
appropriate authority at the appropriate stage when it adjudicates an
action for penalization of the Appellant or recovery of compensation from
the Appellant. The application of the Appellant for revised EC, CTO etc.
shall be considered strictly in accordance with environmental norms.
95. The appeals are allowed. The impugned order is set aside. The
Respondent No.1 shall take a decision on the application of the Appellant
for revised EC in accordance with law, within three months from date.
Pending such decision, the operation of the steel plant shall not be
interfered with on the ground of want of EC, FC, CTE or CTO.
…………………………………J.
[Indira Banerjee]
……………………………….J.
[J.K. Maheshwari]
New Delhi;
December 9, 2021