Supreme Court of India
ELECTROSTEEL STEELS LIMITEDversusUNION OF INDIA AND ORS. ETC
- Citation
- 2021 INSC 859
- Decided
- 9 December 2021
- Disposal
- Appeal(s) allowed
- Bench
- INDIRA BANERJEE
Holding
The Environment (Protection) Act, 1986 does not prohibit ex post facto environmental clearance, which may be granted in exceptional circumstances without being used as a penal measure, and the High Court erred in vacating the interim orders.
Summary
Electrosteel Steels Ltd. obtained environmental clearance (EC) and consent to establish a steel plant at a specified site in Bokaro, but later shifted the plant 5.3 km away, allegedly encroaching forest land. The Ministry of Environment and the Jharkhand State Pollution Control Board (JSPCB) revoked the EC, leading the company to seek interim relief and later apply for ex post facto forest clearance and revised EC. The Jharkhand High Court initially stayed the revocation but later vacated the interim orders, prompting the appeal. The Supreme Court held that the Environment (Protection) Act, 1986 does not forbid ex post facto EC and such clearance may be granted in exceptional cases, provided environmental norms are met and not as a punitive measure. Applying the doctrine of proportionality, the Court set aside the High Court's order, directed the JSPCB to decide the revised EC within three months, and allowed the plant to continue operating pending that decision.
Issues considered
- The 1986 Environment Protection Act prohibits or permits granting ex post facto environmental clearance.
- Whether the High Court erred in vacating the interim orders that allowed the steel plant to operate.
- Whether the shift of the plant site constitutes a violation requiring fresh environmental clearance under the EIA Notification.
- Application of the doctrine of proportionality and the polluter pays principle in deciding regulatory action.
Legislation cited
Subjects
environmental clearanceex post factoproportionalitypolluter payssteel plantforest landenvironmental lawjurisdictionpublic hearingregulatory compliance
Judgment
[2021] 14 S.C.R. 863 863
ELECTROSTEEL STEELS LIMITED A
v.
UNION OF INDIA AND ORS. ETC.
(Civil Appeal Nos. 7576-7577 of 2021)
DECEMBER 09, 2021 B
[INDIRA BANERJEE AND J. K MAHESHWARI, JJ.]
Environment Protection Act, 1986 – Ex post facto
environmental clearance – In the instant case, Appellant applied to
Ministry of Environment, Forest and Climate Change, Government
C
of India for grant of Environmental Clearance (EC) to establish
steel plant at Bokara District – Appellant stated in its application
that no forest land was involved in the project – 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 - The JSPCB granted CTE to the Appellant to establish D
steel plant – Even though CTE was granted to the Appellant to
establish a steel plant at Bokaro District, the Appellant established
it 5.3 Kms away from the permitted site - CTE was extended from
time to time – However, JSPCB issued an order revoking EC of the
appellant on the ground that appellant had encroached upon forest
land and shifted its location there by violating the conditions of EC E
– Appellant filed writ petition before High Court in which High
Court passed an interim order staying the operation, implementation
and execution of the order of JSPCB which was extended time to
time – In the meanwhile, Appellant applied for ex post facto Forest
Clearance (FC) which was also claimed before the High Court - F
However, after final hearing, High Court passed the order of
discontinuing the earlier interim orders – On Appeal, Held: The
1986 Act does not prohibit ex post facto Environmental Clearance
– Ex post facto environmental clearance should not however be
granted routinely, but in exceptional circumstances taking into
account all relevant environmental factors – Ex post facto approval G
should not be withheld only as a penal measure – In present facts,
steel plant was not started without EC or consent of JSPCB –
Appellant had asserted that no part of steel plant is in any forest
which MoEF had also confirmed - Appellant had duly applied for
ex post fact forest clearance approval without prejudice to its rights H
863
864 SUPREME COURT REPORTS [2021] 14 S.C.R.
A and contentions that its steel plant is not on forest land – An
establishment contributing to the economy and providing livelihood
to hundreds of people should not be closed down for technical
irregularity of shifting its site without prior EC – JSPCB was directed
to take action on the application of the appellant for revised EC in
accordance with law - High Court erred in vacating interim orders
B
which had been in force for two years.
Allowing the appeals, the Court
HELD: 1. The question is whether an establishment
contributing to the economy of the country and providing
C 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,
D can conveniently and effectively be checked. The answer has to
be in the negative. [Para 82][885-D-E]
2. 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
E 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
F and others employed in the project and others dependent on the
project, if such projects comply with environmental norms.
[Para 84][885-G-H; 886-A-B]
3. Ex post facto environmental clearance should not
however be granted routinely, but in exceptional circumstances
G 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,
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 865
ex post facto approval should be given in accordance with law, in A
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
B
from it. [Para 87][891-G-H; 892-A-B]
4. This Court held 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 C
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 observed above.
Environmental Clearance had been granted on 21st February 2008
and Consent to Operate had been granted by JSPCB on 5th May D
2008. 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 was distinguishable on facts.
Furthermore, continuance of the interim orders allowing E
operation of an industrial establishment or even the grant of
revised EC to the industrial establishment cannot stand in the
way of action against that establishment for contraventions,
including the imposition of penalty, on the principle ‘polluter pays’.
JSPCB is directed to take a decision on the application of the F
appellant for revised EC in accordance with law within three
months. [Paras 88, 94, 95][892-B-D; 893-E-F; 894-A]
Indian Council for Enviro-Legal Action and Ors. v.
Union of India and Ors. (1996) 3 SCC 212 : [1996] 2
SCR 503 Alembic Pharmaceuticals Ltd. v. Rohit G
Prajapati and Others 2020 SCC OnLine SC 347;
Lafarge Umiam Mining Private Limited v. Union of India
(2011) 7 SCC 338 : [2011] 7 SCR 954 – referred to.
H
866 SUPREME COURT REPORTS [2021] 14 S.C.R.
A Case Law Reference
[1996] 2 SCR 503 referred to Para 47
[2011] 7 SCR 954 referred to Para 85
CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 7576-
B 7577 of 2021.
From the Judgment and Order dated 16.09.2020 of the High Court
of Jharkhand at Ranchi in W.P. (C) Nos.4850 and 1873 of 2018.
Harish N. Salve, Krishnan Venugopal, Sr. Advs., Ms. Anuradha
Dutt, Ms. Suman Yadav, Ms. Nikhita Suri, Dhruv Nayar, Kunal Dutt,
C Ninad Laud, Anish Kapur, Ms. B. Vijayalakshmi Menon, Ivo D’Costa,
Aditya Pratap Singh, Advs. for the Appellant.
Vikramjit Banerjee, ASG, Gurmeet Singh Makker, Shailesh
Madiyal, Ketan Paul, Ms. Divyanshi H. Rathi, Raghavendra S. Srivatsa,
Ravi Shankar Dvivedi, Kumar Anurag Singh, Saurabh Jain, Ms. Tulika
D Mukherjee, Zain A. Khan, Shwetank Singh, Ms. Aastha Shrestha, Rajesh
R. Dubey, Santosh Mishra, Advs. for the Respondents.
The Judgment of the Court was delivered by
INDIRA BANERJEE, J.
E 1. Leave granted.
2. These Appeals are against an order dated 16th 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
F 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 Bokaro District in Jharkhand. The said steel plant in Bokaro,
G which 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.
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 867
[INDIRA BANERJEE, J.]
5. Corporate Insolvency Resolution Process (CIRP) had A
commenced against the Appellant under the Insolvency and Bankruptcy
Code 2016. As successful Resolution Applicant, Vedanta Ltd. took over
the Appellant on or about 4th June 2018 upon payment of Rs.5,320 crores
for discharge of its debts.
6. Pollution and consequential deterioration of environment has B
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 C
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
D
was felt that there was need to enact law to tackle environmental pollution.
India 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 E
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 F
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 G
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
H
868 SUPREME COURT REPORTS [2021] 14 S.C.R.
A (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;
B (iii) laying down standards for the quality of environment in
its various aspects;
(iv) laying down standards for emission or discharge of
environmental pollutants from various sources whatsoever:
C 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
D 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;
E
(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;
F (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,
G 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
H environmental laboratories and insitutes under this Act;
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 869
[INDIRA BANERJEE, J.]
(xii) collection and dissemination of information in respect of A
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 B
effective implementation of the provisions of this Act.”
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,
C
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 D
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
E
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 F
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 G
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.
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) H
870 SUPREME COURT REPORTS [2021] 14 S.C.R.
A of the Environment (Protection) Rules, 1986 the Central Government
issued the Environmental Impact Assessment Notification dated 27th
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
B
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
C 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
D of Terms and Environmental Clearance inter alia for projects which
had started work on site.
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
E 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
F 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
G 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
H and conditions laid down by IAA.
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 871
[INDIRA BANERJEE, J.]
19. A minor amendment was made to the said Environmental A
Impact Assessment Notification dated 27 th January 1994, by a
Notification dated 10th April 1997, which prescribes a detailed procedure
for public hearing.
20. By a notification being S.O. 327(E), dated 10th April 2001,
published in the Gazette of India, Extra., Pt.II, Sec.3(ii), dated 12 th April B
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 C
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. D
21. On or about 8th 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. E
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.
23. By a letter No. F.No.J-11011/137/2006-1A-II (i) dated 21st F
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 G
Act.
24. On 5th 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.
H
872 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 25. The CTE was extended from time to time till 4th 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.
B
26. A Circular No.J-11013/41/2006-1A.2(i) dated 22nd 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
C 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
D 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 change in study area and the
impact zone. As such the Environment Impact Assessment
Report and Public Hearing conducted for a particular
E 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
F 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.
G
This issues with the approval of the Competent Authority.”
27. By a communication being Reference No.1142 dated 4th 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
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 873
[INDIRA BANERJEE, J.]
District, in violation of the Forest Conservation Act 1980 and Indian A
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 B
have been quashed by the Jharkhand High Court, by an order dated 25th
January 2011.
29. On or about 23rd September 2010 the Appellant applied for
Consent to Operate (CTO) under the Air Pollution Act and the Water
Pollution Act for its 350 m3 blast furnace. Later on 9th September 2011, C
the Appellant applied for CTO in respect of its entire plant.
30. By a letter dated 2 nd 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 D
public hearing.
31. By letter dated 18 th 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,
E
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.
F
32. Pursuant to the report of JSPCB, MoEF&CC issued a Show
Cause Notice dated 6th June 2012 to the Appellant under Section 5 of
the 1986 Act. The Appellant submitted its reply to the Show Cause Notice
on 20th June 2012.
33. On 10th September 2012, the Appellant once again applied to G
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 Notice issued to the Appellant. However, JSPCB
has not been informed of the decision of MoEF&CC.
H
874 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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 said writ petition was disposed of by an order dated 5th
November 2012, the operative part whereof is set out hereinbelow:-
“Respondent 1& 2 to consider the petitioner’s application
B 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.”
35. On or about 27th November 2013, the application of the
C 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 27th November 2013 reads:-
“at this stage subject to final outcome of the decision of
D 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
E 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
High Court. Pursuant to an order dated 29th November 2013 in the
Contempt Petition, the JSPCB disposed of the applications for grant of
CTO to the Appellant.
F
37. By a letter dated 17th 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
to the MoEF&CC on 13th May, 2014.
38. Thereafter, by a letter dated 20th October 2014, the MoEF&CC,
G 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
H Air Pollution Act and Section 33(A) of Water Pollution Act.
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 875
[INDIRA BANERJEE, J.]
39. By a Memo No.521 dated 6th February 2015, the Department A
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 dated
20th October, 2014 of the MoEF&CC, Government of India and to submit
an action taken report.
B
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 Court. By an order dated 5th 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
C
that JSPCB would be at liberty to pass an order in accordance with law
after giving the Appellant an opportunity of hearing.
41. Thereafter, a show cause notice dated 25th April 2016, was
issued to the Appellant. The Appellant replied to the show cause notice
on 28th September 2016, contending that the Appellant had not set up its
D
plant on any forest land and that all pollution control measures had been
taken. However, the Principal Chief Conservator of Forests (PCCF),
Jharkhand had by a communication No.2966 dated 8th 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 E
Appellant by a letter dated 28th September 2016 reiterated that there
was no forest land in the plant premises.
42. JSPCB passed an order No.B-319 dated 13 th February 2017
disposing of the show cause notice in the light of the direction dated 5th
February 2016 of the Jharkhand High Court and the applications for F
CTO. JSPCB granted CTO to the Appellant which was valid till 31 st
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 G
of Reference and Environmental Clearance for projects which had started
the work on site, expanded the production beyond the limit of
environmental clearance or changed the product mix without obtaining
prior environmental clearance.
H
876 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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.
B
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.
C 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.
D
47. In Indian Council for Enviro-Legal Action and Ors. v.
Union of India and Ors. 1, 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
E
the 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
F 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
G S.O. 804(E) dated 14th 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.
1
(1996) 3 SCC 212
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 877
[INDIRA BANERJEE, J.]
49. Paragraphs 3, 4 and 5 of the said notification, read as follows: A
“(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 B
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 C
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 D
the law.
(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 E
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 F
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, G
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.”
H
878 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 50. On or about 24th August 2017, the Appellant applied for CTO
for five years. On 13th 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
B
CTO for five year was pending.
51. On 23rd November 2017, the Appellant submitted its online
reply to the Show Cause Notice showing compliance of the conditions
of the CTO.
C 52. By a communication No.2105 dated 18th 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 revocation of the EC for non compliance of the conditions for
grant of EC for the integrated plant at Parbatpur, Jharkhand.
D 53. Aggrieved by the failure of JSPCB to issue/renew the CTO
to the Appellant, pursuant to its application made on 24th August 2017,
the Appellant filed a writ petition being W.P.(C) No. 1873 of 2018 in the
Jharkhand High Court on or about 12th April 2018 seeking directions on
the JSPCB to issue CTO to the Appellant.
E 54. By an order dated 16th July 2018, the High Court directed the
JSPCB to take a final decision on the application of renewal/grant of
CTO filed by the Appellant on 24th August 2017 within the time stipulated
in the said order.
55. The High Court further passed an interim order directing that
F 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.
56. JSPCB passed an order dated 21st 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
G
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)
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 879
[INDIRA BANERJEE, J.]
Act, 1981 & u/s 25(40 of Water (Prevention and Control of pollution) A
Act, 1974 by “refusing” the CTO to the unit for the reason
aforesaid.”
57. The Appellant, thereafter approached the High Court with a
prayer for amendment of Writ Petition No.1873 of 2018. By an order
dated 25th August 2018, the High Court allowed the application for B
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 C
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 D
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. E
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 F
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 G
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
H
880 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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
B
by 25.09.2018.
13. I.A. No. 7610 of 2018 and I.A No. 7613 OF 2018 are
hereby disposed of.
14. It is made clear that this court has not gone into the merits
C of the claim of the petitioner and it will be open to the
respondent no 3 to take decision as per law.”
58. By the aforesaid order dated 25th 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
D of EC by encroachment upon forest land by shifting the location of the
plant.
59. On 31st August 2018, MoEF&CC issued a show cause notice
No. F.No.J-11011/137/2006-1A Pt.II (i) dated 31st August 2018 to the
Appellant for violating the provisions of the EC by shifting the location
E of its plant and encroaching upon forest land.
60. The Respondent No.1 was also accorded personal hearing on
10th September 2018. On 12th September 2018 Mr. Gyanesh Bharti who
presided over the personal hearing was transferred from MoEF&CC.
61. On 20th September 2018 the Respondent No.1 issued an order
F 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
G 2018 in the Jharkhand High Court challenging the revocation of the EC
granted to the Appellant.
63. On 27th September 2018 the High Court passed an interim
order staying the operation, implementation and execution of the impugned
order dated 20th September 2018. The Court prima facie found that the
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 881
[INDIRA BANERJEE, J.]
impugned order, passed in violation of principles of natural justice, had A
serious repercussions on the unit of the Appellant which was a running
unit, and had caused prejudice to the Appellant.
64. On 4th October 2018, the Appellant applied for ex post facto
Forest Clearance (FC) without prejudice to its rights and contentions.
On 27th November 2019 the Appellant applied for a “revised” EC without B
prejudice to its rights and contentions. In the meanwhile, the Interim
order passed by the High Court on 27th 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.
C
65. On 17th 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 D
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 E
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;...”
F
66. By an order dated 26th 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. G
67. Thereafter by a letter dated 2nd 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. H
882 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 68. The Writ Petition was called for hearing on 19th 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.
B
69. On 6th August 2020 and 7th August 2020, the case of the
Appellant was placed before the EAC at its 35th meeting. The Appellant
was invited to present its proposal online before the Committee.
70. After detailed deliberation, the EAC appraised the proposal
C 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.
71. On 4th September 2020, the Jharkhand High Court extended
D
the interim orders till 8th September 2020 while awaiting response from
the Respondents. On 8th September 2020, the High Court reserved orders
on the extension of interim orders dated 16th July 2018 and 27th September
2018 while listing the writ petitions for final hearing on 16th September
2020.
E 72. On 15th 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 hearing
on 16th September 2020 JSPCB also consented to extension of the interim
order. However, the High Court passed the impugned order dated 16th
F 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
G 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 the 1986 Act for past violations. Extension of the
H interim orders would amount to staying action.
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 883
[INDIRA BANERJEE, J.]
(iii) In Alembic Pharmaceuticals Ltd. v. Rohit Prajapati and A
Others2, this Court had deprecated ex post facto Ecs but
passed certain directions in exercise of powers under Article
142 of the Constitution.
73. By an Office Memorandum, being F.No. 22-21/2020-1A III,
dated 7th July 2021, the MoEF&CC issued Standard Operating Procedure B
(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 the 14th March, 2017 detailing the process for grant of C
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. D
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. E
&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 free to take appropriate action in accordance F
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
G
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”.
2
2020 SCC OnLine SC 347 H
884 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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
B
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
C 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
D pay have been outlined.”
75. The Standard Operating Procedure formulated by the said
Office Memorandum dated 7th July 2021 refers to and gives effect to
various judicial pronouncements including the judgment of this Court in
Alembic Pharmaceuticals (supra).
E 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.
77. By an interim order passed on 15th July 2021 in WP(MD)
F 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.
78. By an order dated 25th August 2021, MoEF&CC rejected the
application of the Appellant for the time being. The application has, in
G 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 order dated 15th July 2021, citing the judgment of
H this Court in Alembic Pharmaceuticals (supra).
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 885
[INDIRA BANERJEE, J.]
80. The Appellant has filed an application being I.A No.125221 of A
2021 in this appeal seeking directions on the Respondent No.1 to process
the Appellant’s application dated 5th August 2020 for revised EC.
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 B
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 C
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 D
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. E
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 F
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. G
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 H
886 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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.
B 85. As held by a three Judge Bench of this Court in Lafarge
Umiam Mining Private Limited v. Union of India3 (“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
C 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,
D barring 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
E 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
F 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.”
G 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,
3
H (2011) 7 SCC 338
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 887
[INDIRA BANERJEE, J.]
as the judgment in Common Cause holds, detrimental to the A
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
B
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 C
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
D
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.
87. In Alembic Pharmaceuticals (supra), this Court deprecated
ex- post facto clearances, but this Court did not pass orders for closure E
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 F
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 G
biodiversity in the area where they are located. The
Comprehensive Environmental Pollution Index4 report issued
by the Central Pollution Control Board for 2009-2010
describes the environmental quality at 88 locations across
4
“CEPI” H
888 SUPREME COURT REPORTS [2021] 14 S.C.R.
A the country. Ankleshwar in the State of Gujarat, where the
three industries are located showed critical levels of pollution5.
In the Interim Assessment of CEPI for 2011, the report
indicates similar critical figures6 of pollution in the Ankleshwar
area. The CEPI scores for 2013 7 and 2018 8 were also
significantly high. This is an indication that industrial units
B
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
C 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.
D 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 industries have also obtained ECs for an
expansion of capacity from time to time. Third, the MoEF had
E 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
F by the MoEF extending time for obtaining ECs came to the
notice of this Court in Goa Foundation (I) v. Union of India9.
Fourth, though in the context of the facts of the case, this
Court in Lafarge Umiam Mining Private Limited v. Union of
India10 (“Lafarge”) has upheld the decision to grant ex post
facto clearances with respect to limestone mining projects in
G
5
CEPI score – 88.50
6
CEPI score - 85.75
7
CEPI score - 80.93
8
CEPI score - 80.21
9
(2005) 11 SCC 559
10
H (2011) 7 SCC 338
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 889
[INDIRA BANERJEE, J.]
the State of Meghalaya. In Lafarge, the Court dealt with the A
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
B
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 C
of three learned judges of this Court in Electrotherm (India)
Limited v. Patel Vipulkumar Ramjibhai11, 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: D
“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 E
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 F
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 G
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
11
(2016) 9 SCC 300 H
890 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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
B
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
C 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.”
D (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
E 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
F have made infrastructural investments and employed
significant numbers of workers in their industrial units.
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
G 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
H without valid ECs. The three industries have evaded the legally
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 891
[INDIRA BANERJEE, J.]
binding regime of obtaining ECs. They cannot escape the A
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
B
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 C
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
D
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 E
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
F
of the ECs and closure of the industries as well as the order
in review dated 17 May 2016.”
87. The Notification being SO 804(E) dated 14th 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 with the EIA Notification dated 27th January, 1994, which G
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 H
892 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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
B
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
C
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
observed above. Environmental Clearance had been granted on 21st
February 2008 and Consent to Operate had been granted by JSPCB on
D 5th 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.
E The shift did not require fresh public hearing in terms of the Circular
dated 22nd 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
F 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
was covered by the exemption under the said Notification dated 22nd
January 2010.
91. The Appellant has all along asserted that no part of the
G 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
H
ELECTROSTEEL STEELS LIMITED v. UNION OF INDIA 893
[INDIRA BANERJEE, J.]
from the environmental impact angle requires consideration by the A
appropriate authority/forum.
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 steel plant is not on forest land and also applied for revised EC.
On 17th December 2019, MoEF&CC accorded ex post facto in principle B
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 C
Memorandum dated 7th 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 D
to projects in territories beyond the territorial jurisdiction of Madras High
Court. Moreover, final decision may have been taken in accordance
with the Orders/Rules prevailing prior to 7th July, 2021.
94. In passing the impugned order the High Court overlooked
the consequences of closure of an integrated steel plant with a work E
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 the way of action against that F
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 G
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.
H
894 SUPREME COURT REPORTS [2021] 14 S.C.R.
A 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.
B
Devika Gujral Appeals allowed.
C
D
E
F
G
H
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