Environment (Protection) Act, 1986 — Environmental Clearance (EC) — Formaldehyde manufacturing units — Whether units operating pursuant to Consent to Establish (CTE) and Consent to Operate (CTO) can be closed for want of prior EC — Held, no, in peculiar facts.
The Supreme Court held that formaldehyde manufacturing units which had been established and commenced operations pursuant to valid Consent to Establish and Consent to Operate granted by the respective State Pollution Control Boards could not be directed to shut down merely because prior Environmental Clearance under the EIA Notification, 2006 had not been obtained at the initial stage, especially when the Pollution Control Boards themselves were under the bona fide misconception that prior EC was not required for such units. (Paras 17, 18, 20, 24, 26, 27)
Environmental Law — Ex-post facto Environmental Clearance — Permissibility in exceptional factual circumstances.
The Court reiterated that ex-post facto Environmental Clearance should not ordinarily be granted and cannot be claimed as a matter of right. However, where industries were established after obtaining statutory permissions from Pollution Control Boards and subsequently applied for EC upon being directed to do so by authorities, continuation of operations pending consideration of EC applications could be permitted in exceptional circumstances. (Paras 18, 24, 25, 26)
National Green Tribunal — Orders founded solely on earlier judgment subsequently set aside — Consequence.
The Supreme Court held that since the impugned NGT orders in the present matters were entirely founded upon the earlier NGT judgment in Dastak NGO, and since the said judgment had already been set aside by the Supreme Court in Pahwa Plastics Pvt. Ltd. v. Dastak NGO, the impugned directions requiring closure of the appellant-units could not survive. (Paras 3, 10, 17, 20, 23)
Environmental Law — EIA Notification, 2006 — Synthetic Organic Chemical Units — Prior EC requirement — Subsequent regulatory clarification by Pollution Control Boards.
The Court noted that the respective Pollution Control Boards later examined the applicability of the EIA Notification, 2006 and clarified that formaldehyde manufacturing units fell within the category of “Synthetic Organic Chemicals” requiring Environmental Clearance. Thereafter, notices were issued directing operational units to apply for EC within stipulated periods. (Paras 8, 9, 24, 25)
Pollution Control Boards — Grant of CTE and CTO — Effect of authorities’ bona fide misconception regarding EC requirement.
The Supreme Court accepted that the Pollution Control Boards themselves were uncertain about the necessity of prior Environmental Clearance when they granted CTE and CTO to the units. Such bona fide misconception on the part of the regulatory authorities constituted a significant distinguishing circumstance while considering whether industries should be shut down. (Paras 7, 17, 24, 26)
Environmental Clearance Process — Screening, Scoping, Terms of Reference (TOR), Public Consultation and Appraisal — Units substantially complied with procedural requirements.
The Court recorded that the appellant-units had already applied for EC pursuant to notices issued by Pollution Control Boards; Screening and Scoping stages were completed; Terms of Reference had been granted; public consultation was either exempted because the units were situated in industrial areas or had already been completed; and only the appraisal stage remained pending. (Paras 13, 19, 25)
Environmental Jurisprudence — Vanashakti judgment and review — Scope.
The Supreme Court referred to the earlier Vanashakti judgment striking down Office Memorandums permitting ex-post facto Environmental Clearance as illegal, as well as the subsequent review judgment noting conflict with earlier decisions including Pahwa Plastics. The Court ultimately applied the ratio of Pahwa Plastics as the governing precedent in the peculiar factual matrix of the present cases. (Paras 5, 6, 12, 13, 26)
Air Act and Water Act — Alleged absence of deemed consent under Air Act — Rejected as irrelevant once CTO granted.
The Court rejected the contention that absence of deemed approval provisions under the Air (Prevention and Control of Pollution) Act, 1981 invalidated the CTO granted to the appellant-units. Since the concerned Pollution Control Boards themselves had granted CTOs and did not dispute their validity, alleged technical infractions under the Air Act were held not germane to adjudication of the appeals. (Para 21)
Environmental Law — Balance between environmental compliance and economic/public interest.
The Supreme Court clarified that while environmental laws must be strictly enforced, constitutional courts cannot ignore broader economic consequences, livelihood concerns, and operational realities of industries functioning pursuant to permissions granted by statutory authorities. (Paras 18, 22, 24, 26)
Directions Issued — Continuation of operations pending EC consideration.
The Court directed that:
(i) appellant-units be permitted to continue operations pursuant to valid CTE and CTO;
(ii) authorities decide EC applications within one month;
(iii) electricity supply, if disconnected, be restored subject to payment of dues; and
(iv) if EC applications are ultimately rejected for violations attributable to the units, authorities would be at liberty to disconnect supply and proceed according to law. (Para 27)
Result — Appeals allowed — NGT closure directions set aside.
The Supreme Court allowed the appeals, set aside the NGT orders directing closure of the formaldehyde manufacturing units, and applied the ratio of Pahwa Plastics Pvt. Ltd. v. Dastak NGO mutatis mutandis. (Paras 20, 23, 27)
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