Holding

The Court held that the Hotel‑cum‑Restaurant structure was constructed in breach of Section 2 of the Forest (Conservation) Act and therefore illegal, and it upheld the NGT’s demolition order.

Summary

The Himachal Pradesh Bus Stand Management and Development Authority (HPBSM&DA) obtained a 99‑year lease on forest land that had been diverted for a parking space and a bus stand under Forest (Conservation) Act orders of 1997 and 2001. It then authorised a private contractor to construct a Bus Stand‑cum‑Parking Complex that included a Hotel‑cum‑Restaurant, without obtaining the requisite approvals from the Town and Country Planning Department or additional clearance from the Ministry of Environment, Forests and Climate Change. The Central Empowered Committee and the National Green Tribunal found the hotel structure to be illegal, citing violations of Section 2 of the Forest Act and the environmental rule of law, and ordered its demolition. The appellants contended that the original forest‑land diversion permitted any non‑forest use and that the NGT lacked jurisdiction over the Town and Country Planning Act. The Supreme Court held that the hotel construction exceeded the scope of the forest‑land diversion, that the NGT acted within its jurisdiction by basing its decision on the Forest Act, and that the demolition order must be enforced. Consequently, the Court upheld the NGT’s directions and dismissed the appeals.

Issues considered

Whether the construction of the Hotel‑cum‑Restaurant structure violated Section 2 of the Forest (Conservation) Act, 1980.
Whether the National Green Tribunal had jurisdiction to adjudicate alleged violations of the Himachal Pradesh Town and Country Planning Act, which is not listed in Schedule I of the NGT Act.
Whether the permission granted for diversion of forest land for parking and a bus stand could be lawfully extended to a commercial hotel‑restaurant facility.
Whether the appellant’s actions amounted to a breach of the environmental rule of law.
Whether the demolition order for the illegal structure should be upheld.

Legislation cited

Subjects

forest land diversionenvironmental lawrule of lawNational Green Tribunalillegal constructiondemolition orderpublic‑private partnershipenvironmental rule of lawsection 2 Forest Act

Judgment

344 [2021]
SUPREME COURT 1 S.C.R. 344
REPORTS [2021] 1 S.C.R.

A HIMACHAL PRADESH BUS STAND MANAGEMENT AND
DEVELOPMENT AUTHORITY (HPBSM & DA)
v.
THE CENTRAL EMPOWERED COMMITTEE ETC. & ORS.
B (Civil Appeal Nos. 5231-32 of 2016)
JANUARY 12, 2021
[DR. DHANANJAYA Y CHANDRACHUD,
INDU MALHOTRA AND INDIRA BANERJEE, JJ.]
Environmental laws: Forest land – Diversion of forest land
C for construction of bus stand and parking space at McLeod Ganj –
Construction of the Hotel-cum-Restaurant structure in the Bus Stand
Complex – Legality of – By order dated 12 November 1997, MOEF
permitted diversion of 0.093 hectares of forest land for construction
of a parking space at McLeod Ganj in accordance with s.2 of the
D Forest Act – Another order dated 1 March 2001 was passed by
MOEF diverting another 0.48 hectares of forest land for
construction of a bus stand at McLeod Ganj – In April 2000,
appellant-authority was constituted for construction of bus stands
in the State of Himachal Pradesh – In 2006, the land diverted for
non-forest use under orders dated 12 November 1997 and 1 March
E 2001 was transferred on a 99 year lease to the appellant for
construction of parking facility in McLeod Ganj – Appellant
decided to construct a Bus Stand-cum-Parking Complex and
approved the lowest bid of second respondent – Second respondent
started construction of the Bus stand Complex without awaiting
F approval of plans and drawings by the Town and Country Planning
(TCP) Department – Subsequently TCP Department received
application seeking approval of drawings of Bus Stand Complex –
TCP Department pointed out certain shortcomings – As second
respondent continued with the construction without rectifying the
shortcomings, TCP Department called upon the appellant to halt
G the construction of Bus Stand Complex – Relying upon the report of
CEC, NGT gave findings that the project proponent not only started
the construction without obtaining appropriate approval and
sanction from the concerned State and Central Government but had
also worked in collusion with some of the authorities who consented
to the commencement of construction which was entirely uncalled
H
344
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 345
ETC. & ORS.

for and was illegal – Hence instant appeal – Held: The construction A
of the Hotel-cum-Restaurant structure in the Bus Stand Complex
was illegal and constituted a brazen violation of law – The permission
which was granted by MOEF on 12 November 1997 was only for
construction of a ‘parking place’ at McLeod Ganj – Similarly, the
permission granted on 1 March 2001 was granted for constructing
B
a ‘bus stand’ in the same area – At no point was any permission
granted for the construction of a hotel or commercial structure –
Appellant, on being granted permission to engage in construction
for a specified purpose, unlawfully utilised that permission as the
basis to construct a different structure which was not authorized –
It did so in disregard of the provisions of the Forest Act – The C
provisions of s.2 of the Forest Act mandated strict and punctilious
compliance – Mere substantial compliance is not enough – The
officials of statutory bodies of the State Government connived at
the violation of law which is a reflection on the nature of governance
by those who are expected to act within the bounds of law – NGT
D
acted within its mandate in a case of this nature, where the appellant
actively allowed the perpetration of a structure in breach of
environmental norms – Not looking askance at the construction of
the Hotel-cum-Restaurant structure, in an area which the NGT rightly
describes as the “lap of nature”, would lead on the path of judicially
sanctioned environmental destruction – Directions passed to E
demolish the Hotel-cum-Restaurant structure in the Bus Stand
Complex – Further, as directed by the NGT, the State of Himachal
Pradesh and the second respondent can utilise the parking space
and the bus stand in the Bus Stand Complex, after the demolition of
the Hotel-cum-Restaurant structure – However, this should be in
F
accordance with orders dated 12 November 1997 and 1 March 2001
issued by the MOEF, i.e., it shall not be used for any purpose other
than parking of cars and buses, as the case may be – Forest Act –
s.2 – Himachal Pradesh Town and Country Planning Act, 1977.
Environmental laws: Environmental rule of law – Essential
features of – Held: It seeks to facilitate a multi-disciplinary analysis G
of the nature and consequences of carbon footprints and in doing
so it brings a shared understanding between science, regulatory
decisions and policy perspectives in the field of environmental
protection – It recognises that the ‘law’ element in the environmental
H
346 SUPREME COURT REPORTS [2021] 1 S.C.R.

A rule of law does not make the concept peculiarly the preserve of
lawyers and judges – On the contrary, it seeks to draw within the
fold all stakeholders in formulating strategies to deal with current
challenges posed by environmental degradation, climate change
and the destruction of habitats – Environmental rule of law seeks a
unified understanding of these concepts – There are significant
B
linkages between concepts such as sustainable development, the
polluter pays principle and the trust doctrine.
Environmental rule of law – Violation of – In the case in hand,
the exact effect of the construction of the Hotel-cum-Restaurant
structure by the appellant and the second respondent on the ecology
C of the area cannot be determined in quantifiable terms – The parties
engaged in the construction without complying with the plans drawn
by the appellant’s third-party consultants, which were agreed to by
them in the RFP – The construction proceeded even when the TCP
Department tried to halt it, refusing to approve its plans – Even the
D post facto refusal by the MOEF for changing the nature of the
diverted forest land was not enough to stop the parties – Ultimately,
when they were forced to halt the construction by the CEC, they
proceeded with it under the guise of an order of this Court which
permitted only legal construction – A combination of these
circumstances highlighted not only conduct oblivious of the
E environmental consequences of their actions, but an active disdain
for them in favour of commercial benefits – While the second
respondent was a private entity, they were actively supported in
these efforts by the appellant – Hence, their actions stood in violation
of the environmental rule of law – The environmental rule of law
F surely means that construction of this sort cannot receive acceptance,
no matter what its economic benefits may be.
Jurisprudence: Rule of law and Rule by the law – Distinction
between – In a constitutional framework which is intended to create,
foster and protect a democracy committed to liberal values, the rule
G of law provides the cornerstone – The rule of law is to be
distinguished from rule by the law – The former comprehends the
setting up of a legal regime with clearly defined rules and principles
of even application, a regime of law which maintains the
fundamental postulates of liberty, equality and due process – The
rule of law postulates a law which is answerable to constitutional
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 347
ETC. & ORS.

norms – The law in that sense is accountable as much as it is capable A
of exacting compliance – Rule by the law on the other hand can
mean rule by a despotic law – It is to maintain the just quality of the
law and its observance of reason that rule of law precepts in
constitutional democracies rest on constitutional foundations – A
rule of law framework dwells on the institutions which provide the
B
arc of governance – By focussing on the structural norms which
guide institutional decision making, rule of law frameworks
recognise the vital role played by institutions and the serious
consequences of leaving undefined the norms and processes by
which they are constituted, composed and governed – A modern
rule of law framework is hence comprehensive in its sweep and C
ambit – It recognises that liberty and equality are the focal point of
a just system of governance and without which human dignity can
be subverted by administrative discretion and absolute power – Rule
of law then dwells beyond a compendium which sanctifies rules of
law – Its elements comprise of substantive principles, processual
D
guarantees and institutional safeguards that are designed to ensure
responsive, accountable and sensitive governance.
National Green Tribunal Act, 2010: Whether the NGT could
have adjudicated upon a violation of the TCP Act, which is not an
Act present in Schedule I of the NGT Act – Held: The provisions of
the TCP Act required the appellant and second respondent to take E
prior permission from the TCP Department before changing the
nature of the land through their construction – Non-conformity with
this stipulation led to a violation of their environmental obligations
– In any case, this question is academic in the instant case because
the NGT’s impugned judgment grounds its decision in the appellant F
and second respondent’s violation of s.2 of the Forest Act, which is
an Act present within Schedule I of the NGT Act – Forest Act – s.2 –
Himachal Pradesh Town and Country Planning Act, 1977.
Disposing of the appeals, the Court
HELD: 1. The report of the CEC is a serious indictment of G
the actions of the appellant. The CEC report indicates that: (i)
the construction of the Hotel-cum-Restaurant structure in Bus
Stand Complex was illegal; (ii) the land was a reserved forest;

H
348 SUPREME COURT REPORTS [2021] 1 S.C.R.

A (iii) there was no valid permission for diversion for the land for
the construction of the Hotel-cum-Restaurant structure; (iv)
Forest Act consent was taken only for the parking facility and the
bus stand; (v) there was no valid approval from the TCP
Department of the plans of the entire Bus Stand Complex; and
(vi) the finally constructed Bus Stand Complex is not in conformity
B
with the appellant’s own proposed plans in the RFP. The report
submitted by the District and Sessions Judge presents a striking
analysis of the manner in which the Hotel-cum-Restaurant
structure was constructed in breach of statutory requirements
and how this was made possible by the connivance of multiple
C state actors. The findings which were arrived at in NGT’s
judgment are supported by the report submitted by the District
and Sessions Judge. NGT acted within its mandate in a case of
this nature, where the appellant actively allowed the perpetration
of a structure in breach of environmental norms. Not looking
askance at the construction of the Hotel-cum-Restaurant
D
structure, in an area which the NGT rightly describes as the
“lap of nature”, will would lead on the path of judicially sanctioned
environmental destruction.[Paras 43, 44, 45][375-F-H;
376-A-B, H; 377-A]
2.1 In a constitutional framework which is intended to create,
E foster and protect a democracy committed to liberal values, the
rule of law provides the cornerstone. The rule of law is to be
distinguished from rule by the law. The former comprehends the
setting up of a legal regime with clearly defined rules and principles
of even application, a regime of law which maintains the
F fundamental postulates of liberty, equality and due process. The
rule of law postulates a law which is answerable to constitutional
norms. The law in that sense is accountable as much as it is
capable of exacting compliance. Rule by the law on the other
hand can mean rule by a despotic law. It is to maintain the just
quality of the law and its observance of reason that rule of law
G precepts in constitutional democracies rest on constitutional
foundations. A rule of law framework encompasses rules of law
but it does much more than that. It embodies matters of substance
and process. It dwells on the institutions which provide the arc
of governance. By focussing on the structural norms which guide
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 349
ETC. & ORS.

institutional decision making, rule of law frameworks recognise A
the vital role played by institutions and the serious consequences
of leaving undefined the norms and processes by which they are
constituted, composed and governed. A modern rule of law
framework is hence comprehensive in its sweep and ambit. It
recognises that liberty and equality are the focal point of a just
B
system of governance and without which human dignity can be
subverted by administrative discretion and absolute power. Rule
of law then dwells beyond a compendium which sanctifies rules
of law. Its elements comprise of substantive principles,
processual guarantees and institutional safeguards that are
designed to ensure responsive, accountable and sensitive C
governance. [Para 46][377-B-G]
2.2 The environmental rule of law, at a certain level, is a
facet of the concept of the rule of law. But it includes specific
features that are unique to environmental governance, features
which are sui generis. The environmental rule of law seeks to D
create essential tools – conceptual, procedural and institutional
to bring structure to the discourse on environmental protection.
It does so to enhance our understanding of environmental
challenges – of how they have been shaped by humanity’s interface
with nature in the past, how they continue to be affected by its
engagement with nature in the present and the prospects for the E
future, if we were not to radically alter the course of destruction
which humanity’s actions have charted. The environmental rule
of law seeks to facilitate a multi-disciplinary analysis of the nature
and consequences of carbon footprints and in doing so it brings a
shared understanding between science, regulatory decisions and F
policy perspectives in the field of environmental protection. It
recognises that the ‘law’ element in the environmental rule of
law does not make the concept peculiarly the preserve of lawyers
and judges. On the contrary, it seeks to draw within the fold all
stakeholders in formulating strategies to deal with current
challenges posed by environmental degradation, climate change G
and the destruction of habitats. The environmental rule of law
seeks a unified understanding of these concepts. There are
significant linkages between concepts such as sustainable

H
350 SUPREME COURT REPORTS [2021] 1 S.C.R.

A development, the polluter pays principle and the trust doctrine.
The universe of nature is indivisible and integrated. The state of
the environment in one part of the earth affects and is
fundamentally affected by what occurs in another part. Every
element of the environment shares a symbiotic relationship with
the others. It is this inseparable bond and connect which the
B
environmental rule of law seeks to explore and understand in
order to find solutions to the pressing problems which threaten
the existence of humanity. The environmental rule of law is
founded on the need to understand the consequences of our
actions going beyond local, state and national boundaries. The
C rise in the oceans threatens not just maritime communities. The
rise in temperatures, dilution of glaciers and growing
desertification have consequences which go beyond the
communities and creatures whose habitats are threatened. They
affect the future survival of the entire eco-system. The
environmental rule of law attempts to weave an understanding of
D
the connections in the natural environment which make the issue
of survival a unified challenge which confronts human societies
everywhere. It seeks to build on experiential learnings of the
past to formulate principles which must become the building
pillars of environmental regulation in the present and future. The
E environmental rule of law recognises the overlap between and
seeks to amalgamate scientific learning, legal principle and policy
intervention. Significantly, it brings attention to the rules,
processes and norms followed by institutions which provide
regulatory governance on the environment. In doing so, it fosters
a regime of open, accountable and transparent decision making
F
on concerns of the environment. It fosters the importance of
participatory governance – of the value in giving a voice to those
who are most affected by environmental policies and public
projects. The structural design of the environmental rule of law
composes of substantive, procedural and institutional elements.
G The tools of analysis go beyond legal concepts. The result of the
framework is more than just the sum total of its parts. Together,
the elements which it embodies aspire to safeguard the bounties
of nature against existential threats. For it is founded on the

H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 351
ETC. & ORS.

universal recognition that the future of human existence depends A
on how we conserve, protect and regenerate the environment
today. [Para 47][377-G-H; 378-A-H; 379-A-C]
Centre for Environmental Law, WWF- I v. Union of India
[2013] 6 SCR 757; Hanuman Laxman Aroskar v. Union
of India (2019) 15 SCC 401 : [2019] 5 SCR 916 – B
referred to.
2.3 The need to adjudicate disputes over environmental
harm within a rule of law framework is rooted in a principled
commitment to ensure fidelity to the legal framework regulating
environmental protection in a manner that transcends a case-by- C
case adjudication. Before this mode of analysis gained acceptance,
we faced a situation in which, despite the existence of
environmental legislation on the statute books, there was an
absence of a set of overarching judicially recognized principles
that could inform environmental adjudication in a manner that
was stable, certain and predictable.However, even while using D
the framework of an environmental rule of law, the difficulty we
face is this – when adjudicating bodies are called on to adjudicate
on environmental infractions, the precise harm that has taken
place is often not susceptible to concrete quantification. While
the framework provides valuable guidance in relation to the E
principles to be kept in mind while adjudicating upon
environmental disputes, it does not provide clear pathways to
determine the harm caused in multifarious factual situations that
fall for judicial consideration. The determination of such harm
requires access to scientific data which is often times difficult
to come by an individual situations. [Paras 50, 51][380-F-G; F
381-D-E]
2.4 In the case in hand, it is not possible to determine in
quantifiable terms the exact effect of the construction of the Hotel-
cum-Restaurant structure by the appellant and the second
respondent on the ecology of the area. Both of them have tried G
to argue that the number of trees felled by them, in the case of
the present construction, is what it would have been, had they
only built a bus stand and a parking space. However, the parties
have engaged in the construction without complying with the plans
H
352 SUPREME COURT REPORTS [2021] 1 S.C.R.

A drawn by the appellant’s third-party consultants, which were
agreed to by them in the RFP. The construction proceeded even
when the TCP Department tried to halt it, refusing to approve its
plans. Even the post facto refusal by the MOEF for changing the
nature of the diverted forest land was not enough to stop the
parties. Ultimately, when they were forced to halt the construction
B
by the CEC, they proceeded with it under the guise of an order
of this Court which permitted only legal construction. A
combination of these circumstances highlights not only conduct
oblivious of the environmental consequences of their actions,
but an active disdain for them in favour of commercial benefits.
C While the second respondent was a private entity, they were
actively supported in these efforts by the appellant. Hence, their
actions stood in violation of the environmental rule of law. The
environmental rule of law surely means that construction of this
sort cannot receive acceptance, no matter what its economic
benefits may be. A lack of scientific certainty is no ground to
D
imperil the environment. [Para 53][382-B-G]
Bengaluru Development Authority vs. Sudhakar Hegde
2020 SCC OnLine SC 328; Lal Bahadur vs. State of
Uttar Pradesh (2018) 15 SCC 407; State of Meghalaya
& others vs. All Dimasa Students Union (2019) 8 SCC
E 177 : [2019] 8 SCR 297; Hospitality Association of
Mudumalai vs. In Defence of Environment and Animals
2020 SCC OnLine SC 838; Goel Ganga Developers
India Pvt. Ltd. vs. Union of India (2018) 18 SCC 257;
M.C. Mehta vs. Union of India (2018) 18 SCC 397 :
F [2018] 11 SCR 384 – referred to.
3. In the present set of appeals, the forest land was allowed
to be used by the MOEF for the specific purposes of constructing
a ‘parking space’ and ‘bus stand’ in McLeod Ganj. MOEF made
a conscious decision not to modify the terms of this permission,
G even when granted an opportunity to do so. Hence, any
construction undertaken by the second respondent, even with
the tacit approval of the appellant being a statutory authority under
the HP Bus Stands Act, will be illegal. [Para 62][386-E-F]
4. The provisions of the TCP Act required the appellant
H and second respondent to take prior permission from the TCP
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 353
ETC. & ORS.

Department before changing the nature of the land through their A
construction. Non-conformity with this stipulation led to a violation
of their environmental obligations. In any case, this question is
academic because the NGT’s impugned judgment grounds its
decision in the appellant and second respondent’s violation of
Section 2 of the Forest Act, which is an Act present within
B
Schedule I of the NGT Act. [Para 63][387-E-F]
State of M.P. v. Centre for Environment Protection
Research & Development (2020) 9 SCC 781 – referred
to.
5. The directions issued by the NGT in its judgment are C
upheld. By the earlier orders dated 16 May 2016 and 9 September
2016, this court only stayed NGT’s direction in relation to the
demolition of the Hotel-cum-Restaurant structure. The argument
of the appellant against the demolition of the Hotel-cum-
Restaurant structure in the Bus Stand Complex, submitting that
it may be allowed to stand for their use is not accepted otherwise D
it would legalise what is an otherwise entirely illegal construction.
The process of demolishing the Hotel-cum-Restaurant structure
in the Bus Stand Complex is directed to commence within two
weeks from the date of the judgment and the structure shall be
demolished by the second respondent within one month E
thereafter. In the event of default, the Chief Conservator of Forest
along with the administration of district Dharamshala shall
demolish the structure and recover the cost and expenses as
arrears of land revenue from the second respondent. Further, as
directed by the NGT, the State of Himachal Pradesh and the second
respondent can utilise the parking space and the bus stand in the F
Bus Stand Complex, after the demolition of the Hotel-cum-
Restaurant structure. However, this has to be in accordance with
orders dated 12 November 1997 and 1 March 2001 issued by
the MOEF, i.e., it shall not be used for any purpose other than
parking of cars and buses, as the case may be. [Paras 64, 65, G
66][387-G-H; 388-A-D]
Case Law Reference
[2013] 6 SCR 757 referred to Para 38 (i)

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354 SUPREME COURT REPORTS [2021] 1 S.C.R.

A [2019] 5 SCR 916 referred to Para 38 (ii)
(2018) 15 SCC 407 referred to Para 55
[2019] 8 SCR 297 referred to Para 55
(2018) 18 SCC 257 referred to Para 60
B [2018] 11 SCR 384 referred to Para 61
(2020) 9 SCC 781 referred to Para 63
CIVIL APPELLATE JURISDICTION : Civil Appeal Nos. 5231-
5232 of 2016.
C From the Judgment and Order dated 04.05.2016 of the National
Green Tribunal Principal Bench, New Delhi in Miscellaneous Application
No. 1180 of 2015 and 1181 of 2015.
With
Civil Appeal Nos. 5229-5230 of 2016.
D
Abhinav Mukerji, AAG, Suryaprakash V Raju, ASG, Parag P
Tripathi, Suryanarayana Singh, Ajit Kr Sinha, Sr. Advs., Ashim Shridhar,
Ms. Mishika Bajpai, Gopal Jha, Ms. Niyati, Shreyash Bhardwaj, Ms.
Pragati Neekhra, Gurmeet Singh Makker, R Bala, M P Gupta, Anmol
Chandan, R K Verma, Annam D. N. Rao, Rahul Mishra, Mrs. Bihu
E Sharma, Ms. Pratishtha Vij, Ritwick Dutta, Ms. Srishti Agnihotri, Ms.
Kanika Sood, Ms. Sanjana Grace Thomas, Ms. Anmol Gupta, Advs. for
the appearing parties.
The Judgment of the Court was delivered by

F DR. DHANANJAYA Y CHANDRACHUD, J.
This judgment has been divided into sections to facilitate analysis.
They are:
A The appeal
B Previous orders of this Court
G
C The history of the forest land
D The construction of the Bus Stand Complex
E Proceedings before the first respondent
F Proceedings before the NGT
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE 355
ETC. & ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

G Report of the District and Sessions Judge, Kangra A
H Submissions of counsel
I Analysis
I.1 Environmental rule of law
I.2 Role of courts in ensuring environmental protection B
I.3 Illegal activities on forest land
I.4 Jurisdiction of NGT
J Conclusion
C
A. The appeal
1. The civil appeals in the present case arise under Section 22 of
the National Green Tribunal Act, 2010 (“NGT Act”). The correctness
of a judgment and order dated 4 May 2016 of the National Green Tribunal
(“NGT”) is in issue.
D
2. The NGT dealt with an original application filed by the second
respondent, who is also the appellant in companion Civil Appeal Nos.
5229-5230 of 2016, to challenge a report dated 18 September 2008 of
the Central Empowered Committee (“CEC”), the first respondent. In
its report, the CEC concluded, inter alia, that a part of the Bus Stand
Complex constructed by the second respondent and the appellant at E
McLeod Ganj in Himachal Pradesh violates the provisions of the Forest
(Conservation) Act, 1980 (“Forest Act”). The CEC recommended the
demolition of the illegal portions.
3. The NGT accepted the findings of the CEC, observing that the
Bus Stand Complex seriously disturbs the ecology of the area in which it F
has been constructed. The NGT directed, inter alia, that:
(i) The structure of the Hotel-cum-Restaurant in the Bus Stand
Complex be demolished by the second respondent;
(ii) The second respondent shall pay a compensation of Rs. 15
G
lacs in terms of Sections 15 and 17 of the NGT Act;
(iii) The appellant shall pay a compensation of Rs. 10 lacs, while
the State of Himachal Pradesh and its Department of
Tourism shall pay a compensation of Rs. 5 lacs each; and
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356 SUPREME COURT REPORTS [2021] 1 S.C.R.

A (iv) The Chief Secretary of the State of Himachal Pradesh shall
conduct an enquiry against the erring officers of the
appellant, in order to fasten the responsibility for the illegal
project.
B. Previous orders of this Court
B 4. By an order dated 16 May 2016, this Court admitted the present
appeals and framed the following substantial questions of law, as provided
in Section 22 of the NGT Act:
“1. Whether the Tribunal has failed to appreciate that the land
which is subject matter of the appeal had already been diverted
C for non - forest use under Section 2 of the Forest (Conservation)
Act, 1980?
2. Whether the Tribunal failed to consider properly the effect of
Section 14 of the Himachal Pradesh Bus Stand Management and
Development Authority Act, 1999 which empowers the authority
D to establish and maintain hotels and restaurants at or near bus
stands?
3. Whether the Tribunal exceeded its jurisdiction in holding that
alleged violations of the Himachal Pradesh Town and Country
Planning Act, 1977 are made out even though the said enactment
E is absent in the Schedule I of enactments attached to the National
Green Tribunal Act?”
This Court also granted a stay against the operative portion of the
NGT’s judgment directing: (i) the demolition of the Hotel-cum-Restaurant
structure in the Bus Stand Complex; and (ii) an enquiry to be conducted
F against the appellant’s officers.
5. The above order was modified on 9 September 2016, by lifting
the stay against the enquiry to be conducted against the appellant’s
officers. However, this Court directed that an enquiry shall be conducted
by the District and Sessions Judge, Kangra within whose jurisdiction the
G Bus Stand Complex is located. The District and Sessions Judge was
directed to place a report before this Court. Parties to the present appeals
were permitted to associate themselves with the enquiry being conducted
by the District and Sessions Judge.
C. The history of the forest land
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 357
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

6. The genesis of the present case originates in an order dated 12 A
November 1997 of the Union Ministry of Environment and Forests (the
fourth respondent, “MOEF”), on a proposal made by the State of
Himachal Pradesh, permitting the diversion of 0.093 hectares of forest
land for the construction of a parking space at McLeod Ganj, in
accordance with Section 2 of the Forest Act. The order is extracted
B
below:
“After careful consideration of the proposal of the State
Government, the competent authority hereby conveys approval
under Section -2 of Forest (Conservation) Act, 1980, for diversion
of 0.093 hectares of forest land for the construction of parking
place at McLeod Ganj, forest division Dharamsala, District Kangra, C
HP, subject to following conditions:
1. Legal status of the forest land will remain unchanged. The
forest land will be restored to forest Department as and when it is
no more required.
D
2. Compensatory afforestation will be carried out, by planting at
least 250 plants of deodar and ornamental species around McLeod
Ganj town as proposed, at a cost of Rs.11500/ - which is reported
to have been deposited by user agency vide TC No.3 dt. 02.09.97.
3. The Forest land will be used only for the purpose as mentioned E
in the proposal.
4. The user agency will abide by any condition that may be imposed
by the State Forest Department in the interest of afforestation
and protection of the forest.
5. This approval is subject to the clearance of the proposal under F
other relevant Acts/ Rules / Court’s Ruling /Instructions etc. as
applicable to this proposal.
State Government will ensure fulfilment of these conditions.”
7. MOEF issued a further order dated 1 March 2001, diverting
another 0.48 hectares of forest land for the construction of a bus stand G
at McLeod Ganj. The contents of the order read thus:
“After careful consideration of the proposal of the State
Government, the competent authority hereby conveys approval
for diversion of 0.48 hectares of forest land for construction’ of
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358 SUPREME COURT REPORTS [2021] 1 S.C.R.

A above mentioned project at Dharmsala, forest division Dharamsala
and district Kangra, H.P., subject to following conditions.
1. Legal status of the forest land will remain unchanged.
2. Minimum no. of trees as are unavailable may be felled which
should not exceed 17 (seventeen) as proposed.
B
3. Compensatory afforestation will be carried out, on 0.098 forest
land at P46K Dharamsala C.B. Govt. Forest of Dharamsala forest
division at a cost of Rs.14,900/- (Rs. Fourteen thousand nine
hundred) which is reported to have been deposited by user agency
vide cheque No.055710 dated 19.10.2000.
C
4. Forest Guard hut as proposed in the proposal, will also be
constructed at a cost of Rs.2.25 lacs which is reported to have
been deposited by user agency.
5. The user agency will abide by any condition that may be imposed
D by the State Forest Department In the interest of afforestation
and protection of the forest.
6. This forest land will not be used for any other purpose than that
mentioned in the proposal.
7. This approval is subject to the clearance of the proposal under
E other relevant Acts/Rules /Court’s Ruling /Instructions etc. as
applicable to this proposal.
8. The Ministry may revoke suspend the clearance if
implementation of any of the above conditions is not satisfactory.
State Government through state forest department will ensure
F fulfillment of these conditions.”
8. Of the above land, an area admeasuring 0.093 hectares is above
the main Dharamshala-McLeod Ganj road while an area admeasuring
0.48 hectares is below the main road. Both these pieces of land face
each other and are a part of Banoi Reserve Forest. The user agencies
G responsible for the construction of the parking space and the bus stand
were the S.D.O. Dharamshala and Himachal Pradesh Tourism
Department. The cost of these projects was estimated at Rs. 10 lacs
and Rs. 90-95 lacs.
9. In April 2000, the appellant was constituted for the construction
H of bus stands in the State of Himachal Pradesh following the enactment
of the Himachal Pradesh Bus Stands Management and Development
Authority Act, 1999 (“HP Bust Stands Act”). In January/February of
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 359
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

2006, the land diverted for non – forest use under the above orders A
dated 12 November 1997 and 1 March 2001 was transferred on a 99
year lease to the appellant.
D. The construction of the Bus Stand Complex
10. The land transferred to the appellant was to be utilised for the
construction of a parking facility in McLeod Ganj. Given the nature of B
the costs that would be incurred for the creation of a ‘modern complex’,
the Board of Directors of the appellant in their meeting held on 7
November 2003 decided to construct a Bus Stand-cum-Parking Complex
on a Build-Operate-Transfer basis1. In furtherance of this, the appellant
invited offers on 19 November 2003. The appellant received only one C
offer, which was considered financially unviable since it envisaged a
concession period of 75 years.
11. The appellant decided to alter the nature of the Bus Stand
Complex in order to make it financially viable for private entities by
issuing a new Request for Proposal on 13 July 2004 for the construction D
of the modified Bus Stand Complex. Apart from the construction of the
bus stand itself on the lower level, the appellant envisaged further
construction in the complex of:
(i) a multi-level commercial complex with shops at the road
level; E
(ii) a dormitory and a budget hotel at the first, second and third
levels;
(iii) a dining facility/restaurant/food plaza at the top level; and
(iv) a parking provision for fifty cars at the road level.
F
The area of the multi-level commercial complex was to be 2779
M2; of the road level parking, 1100 M2; and of the bus stand at the lower
level, 2580 M2 (which included 359 M2 of area for shops/kiosks).

G
1
In a BOT project, the public sector grantor grants to a private company the right to
develop and operate a facility or system for a certain period (the “Concession Period”),
in what would otherwise be a public sector project. (See, ‘Concessions, Build-Operate-
Transfer (BOT) and Design-Build-Operate (DBO) Projects’ available at <https://
ppp.worldbank.org/public-private-partnership/agreements/concessions-bots-dbos>
accessed on 23 December 2020).
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360 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 12. On 13 October 2004, the Board of the appellant approved the
lowest bid submitted by the second respondent for the construction of
the Bus Stand Complex. The second respondent was awarded
construction rights through a ‘notice of award’ dated 18 November 2004.
The appellant and the second respondent entered into a ‘Concession
Agreement’ on 23 December 2004 under which the concession period
B
commenced from 15 December 2005, and was to be for 16 years, 7
months and 15 days.
13. The second respondent started the construction of the Bus
Stand Complex in December 2005 without awaiting the permission of
the Town and Country Planning Department (“TCP Department”),
C approving the plans and drawings.
14. On 4 March 2006, the TCP Department received an application
seeking approval of the drawings of the Bus Stand Complex. It pointed
out shortcomings in the proposed drawings on 10 March 2006. Through
further letters between 28 July 2006 to 19 February 2007, it directed the
D appellant to provide further information and to rectify the shortcomings
in the proposed construction. During the midst of this process, the second
respondent continued with the construction of the Bus Stand Complex.
15. Finally, through notices dated 5 October 2006, 8 March 2007
and 5 June 2008, the TCP Department called upon the appellant to halt
E the construction of the Bus Stand Complex. The second respondent
nonetheless continued with the construction.
16. On 8 May 2007, the State of Himachal Pradesh sent a proposal
to MOEF requesting, inter alia, that:
(i) The use of the entire land (measuring 0.573 hectares) which
F was permitted to be diverted for non – forest use under
orders dated 12 November 1997 and 1 March 2001 be
changed to the construction of the Bus Stand Complex;
and
(ii) The user agency be changed to the appellant.
G 17. Through its order dated 12 June 2007, MOEF rejected the
proposal of the State of Himachal Pradesh. The order was in the following
terms:
“Please refer to your letter No. FFE-B-F(2)-87/97 dated 8th May,
2007 on the above mentioned subject seeking approval of
H Government of India for changing of land use from construction
of parking on 0.093 hectare of forest land and Bus Stand Complex
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 361
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

and Hotel on entire 0.573 hectare of forest land for non-forestry A
propose under Forest (Conservation) Act, 1980 and change in the
name of user agency from SDO(Civil) and HP Tourism
Department to HP Bus Stand Management and Development
Authority.
The request of the State Government has been examined and the B
competent authority conveys its inability to consider the same and
it is therefore, rejected.”
18. As explained in greater detail below, when proceedings were
initiated before it, CEC directed a halt in construction. The second
respondent approached this Court by filing an interim application. By an C
order dated 7 September 2007, this Court directed that the second
respondent can proceed with the construction of the bus stand, observing
thus:
“In this application, the applicant is seeking a direction for
construction of a bus stand. It is alleged that the C.E.C. has D
prevented the applicant from constructing some parking area near
the bus stand. We are told that the C.E.C. is proposing to inspect
the site and shall give a report. We think that before giving any
direction to the applicant, the C.E.C. may hear the applicant and
file a report and meanwhile the work relating to the construction
of bus stand may continue but no other construction shall be carried E
out.”
The construction of the Bus Stand Complex was then completed
by the second respondent on 7 July 2008.
E. Proceedings before the first respondent F
19. During the construction by the second respondent, the sixth
and the seventh respondents approached the CEC by filing an application
on 20 April 2007, alleging that the construction of the Bus Stand Complex
was in violation of the Forest Act. As stated above, the CEC directed
that the construction of the Bus Stand Complex be halted.
G
20. The second respondent filed an interim application, in which
this Court passed an order dated 7 September 2007, which has been
extracted above. The second respondent was impleaded in the
proceedings before the CEC.
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362 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 21. The members of the CEC visited the site of the Bus Stand
Complex on 27 September 2007. The CEC heard the parties before it on
multiple dates. It also had before it a report dated 18 August 2008 of the
Chief Secretary of Himachal Pradesh.
22. The CEC submitted its report dated 18 September 2008 to
B this Court. The salient findings were that:
(i) The construction of the Hotel-cum-Restaurant structure
within the Bus Stand Complex was not permitted, by
MOEF’s orders dated 12 November 1997 and 1 March
2001. Hence, the construction is in violation of the Forest
C Act;
(ii) The post facto permission sought by the State of Himachal
Pradesh from MOEF for changing the use of the diverted
forest land was rejected on 12 June 2007;
(iii) The RFP issued by the appellant on 13 July 2004 indicated
D that a multi-level commercial complex was to be of an area
admeasuring 2779 M2, while the combined area of the road
level parking and the bus stand at the lower level was to be
3680 M2. However, the actual area of the multi-level
commercial complex constructed by the second respondent
E is 3324.89 M2, which is 545.89 M2 in excess. Similarly, the
actual area of the road level parking and the bus stand
constructed is 9945.65 M2, which is 6265.65 M2 in excess.
This additional construction had been tacitly approved by
the Board of the appellant;

F (iv) While the RFP issued by the appellant indicated that only
two lower levels would be constructed for the bus stand,
the second respondent had constructed four additional levels.
This had also been tacitly approved by the Board of the
appellant;
(v) The above factors establish connivance between the officers
G
of the appellant and the second respondent, in order to
benefit the second respondent;
(vi) The construction of the Bus Stand Complex by the second
respondent has been done without the prior approval of the
TCP Department. The notices issued by the Department to
H halt construction were ignored;
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 363
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(vii) Due to the nature of the construction of the bus stand at A
the lower levels, additional forest area will be required since
there was no area for the buses to turn in; and
(viii) No car parking is available for the residents of the hotel in
the commercial complex, who would either have to park on
the roads or use the road level parking in the complex. This B
would create traffic congestion and will not increase the
net parking available in the area.
23. Based on its conclusions, the CEC issued the following
recommendations:
“22. The above clearly highlights that there has been absolute C
anarchy in the matter of construction of the parking place and
Bus Stand. At the same time there is a very real need at McLeod
Ganj for both the Parking place and the Bus Stand Complex on
the two pieces of forest land. With a view to finding a way out of
this terrible muddle created by the deep vested interests and at D
the same time ensuring that those who have connived in the serious
lapse are not allowed to go scot free the following is recommended:
a) the hotel complex structure should be pulled down immediately
and the 0.093 ha. of forest land should be cleared of debris. This
should be done within three months. Thereafter a Parking place E
may be constructed as was originally visualized when the project
was approved under the Forest (Conservation) Act, 1980. Prior
to that approval of the Town and Country Planning Department
may be taken as required under the law. This will send a clear
signal to the building mafia and their supporters that such brazen
acts of illegal and unauthorized construction will not be tolerated; F
b) the serious shortcomings noted in the construction of Bus Stand
Complex would need to be with the approval of the Town and
Country Planning Department. Towards this end it is proposed
that the State Government may constitute a Committee with the
Chief Secretary as Chairman with the Principal Chief Conservator G
of Forests, senior most Engineer in the State PWD and a
representative of MoEF as Members. The Director, Town and
Country Planning Department, Himachal Pradesh, could be the
Member Secretary. The Committee may immediately go into the
entire matter and may in a time bound manner within two months
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364 SUPREME COURT REPORTS [2021] 1 S.C.R.

A propose to this Hon’ble Court how best the Bus Stand Complex
can be salvaged from the present mess so that the State
Government is able to:
i) ensure best and most efficient use of the Bus Stand so that the
maximum number of buses are able to ply from there. While
B providing for commercial, shops, public toilets, restaurants,
telephone booths and the like at the Bus Stand the only
consideration should be the actual requirements of the travelling
public; and
ii) ensure maximum parking place for vehicles;
C c) there has been a collective failure and serious lapses on the
part of the officials and others of the State Government connected
with the unauthorized and illegal construction of the twin project
on the two pieces of forest land and reflects on the pathetic state
of affairs in the matter of governance. In this background the
D State Government of Himachal Pradesh has to take the blame
and may be directed to deposit an amount of Rupees one crore, in
a special fund for the conservation and protection of the forest
and wildlife;
d) the State Government may also be directed to simultaneously
E identify and initiate stringent and deterrent action in a time bound
manner against all the concerned persons and officials for complete
abdication of their responsibility and accountability in the matter
of governance and who are responsible for blatantly allowing the
unauthorized and illegal building structures to come up on the two
pieces of forest land in flagrant violation of the Forest
F (Conservation) Act, 1980, the HP Town and Country Planning
Act, 1977 and other relevant local laws; and
e) the services of M/S Prashanti Surya Construction Company
should be dispensed with and M/s Prashanti Surya should be
blacklisted and should also be penalized suitably for the grave
G illegalities and irregularities knowingly committed to promote his
private interests.”
24. The second respondent then filed another application before
this Court for setting aside the report issued by the CEC. The second

H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 365
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

respondent argued that they had not been provided a fair hearing, and A
had the right to file a detailed reply.
25. By an order dated 5 October 2015, this Court transferred the
proceedings to the NGT.
F. Proceedings before the NGT
B
26. In its impugned judgment, the NGT noted that the following
facts were indisputable:
“A. At no point of time there was any permission, sanction or
approval granted by the Competent Authority in the State
Government and/or Central Government under the Act of 1980 C
and even (under) other relevant laws for the hotel and shopping
complex.
B. Right from the initial stages, the hotel and shopping complex
were never a part of the project for which the Government
departments and/or the project proponent even submitted D
applications for grant of approval/sanction from the Competent
Authority. MoEF&CC vide its letter dated 12th June, 2007 had
specifically declined the permission for conversion of the forest
land for any other non forest activity. Once such permission for
hotel and shopping complex was declined, the project proponent
could not have been taken up and commenced any activity. E
C. The project proponent not only started the construction without
obtaining appropriate approval and sanction from the concerned
State and the Central Government, but had also worked in collusion
with some of the authorities who consented [to] the
commencement of construction temporarily which was entirely F
uncalled for and in fact was illegal.”
27. The NGT further noted that the approval accorded by the
MOEF on 12 November 1997 was only for construction of a ‘parking
place’ at McLeod Ganj. Further, on 1 March 2001, approval was accorded
only for construction of a ‘bus stand’ at McLeod Ganj. The State of G
Himachal Pradesh had no power to authorize the construction of the
Hotel-cum-Restaurant structure and, therefore, the construction was
entirely illegal. It further endorsed the findings by the CEC and observed:

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366 SUPREME COURT REPORTS [2021] 1 S.C.R.

A “3. It is clear from the above report of the CEC that there are
serious violations of law. It is a project coming up in the forest
area without Forest Clearance, and even the consent to establish
and/or operate has not been granted by the concerned Board.
Moreover, this project is bound to have an adverse impact on
environment and ecology. The recommendations of the CEC
B
clearly state that the whole complex should be pulled down and
only a parking place must be constructed as was originally
visualized, for which the Forest Clearance under the Act of 1980
has been granted. The CEC also blames the concerned authorities
by suggesting that there has been collective failure and serious
C lapses on part of the State Government and its officials connected
with the unauthorized and illegal construction of the project, which
was constructed on the two pieces of land. The Report also
observed that the State Government should be directed to deposit
Rs. 1 Crore in a special fund and the project proponent should be
blacklisted and penalized suitably for the grave illegalities and
D
irregularities committed by him.”
28. The NGT characterized the construction of the Hotel-cum-
Restaurant structure as an intentional violation that exhibited “violation
of law coupled with serious adverse impacts on environment and
ecology of the eco sensitive area”2. It held that just as seeking an
E Environmental Clearance under MOEF’s Notification dated 14 September
2006 is a precondition to the commencement of the project, which cannot
be derogated from, seeking a Forest Clearance under Section 2 of the
Forest Act was a necessary precondition in the present case before
construction could have begun. It drew on this Court’s jurisprudence on
F the precautionary principle, polluter pays principle and the principle of
sustainable development.
G. Report of the District and Sessions Judge, Kangra
29. In furtherance of this Court’s order dated 16 May 2016, the
District and Sessions Judge submitted his enquiry report on 9 October
G 2018. The report is based on documentary evidence and statements
from sixteen witnesses.
30. In his report, the District and Sessions Judge has found that
the Bus Stand Complex:
2
H Para 27 of the impugned judgment.
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 367
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(i) Has been constructed on forest land, in violation of the A
provisions of the Forest Act;
(ii) Has been constructed without requisite permissions being
obtained from the TCP Department;
(iii) Does not conform to the plans prepared by third-party
consultants hired by the appellant, which were submitted B
during the RFP;
(iv) Has not been properly maintained, and is plagued by issues
of seepage; and
(v) Suffers from architectural defects due to which it is C
extremely difficult for buses to turn into the bus stand from
the main road.
31. The District and Sessions Judge concludes that the second
respondent could not have engaged in this illegal construction without
the connivance of the officials of the following departments: (i) the D
appellant; (ii) Himachal Pradesh Tourism Department; (iii) TCP
Department; (iv) Forest Department; (v) Municipal Committee and
Municipal Corporation; (vi) Revenue Department; and (vii) Electricity
Department. The report states this in the following terms:
“28. I have no hesitation to conclude that the officials/officers of
E
all the departments were hand in gloves with the M/s Prashanti
Surya Construction Company, in order to give undue advantage
to M/s Prashanti Surya Construction Company including the
financial benefits. For the same these officers/officials are liable.
It is a case of serious lapse and failure on the part of officers/
officials of State Government, who were duty bound to take prompt F
and immediate action to stop the un-authorised and illegal
construction of the structure in dispute. So, it is my humble
submission that concerned Disciplinary Authority/Authorities of
the State Government be directed to take deterrent action against
the defaulting officers/officials. It appears that the CEO and Board
G
of Directors suo moto assumed the powers to change the
conceptual plan and allowed the construction work of illegal
structure on the spot by throwing into the air the statutory provisions
of law. Moreover, the structure of bus stand on the spot has not
been properly erected. As submitted here in above, due to pillars,
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368 SUPREME COURT REPORTS [2021] 1 S.C.R.

A there was lack of sufficient space for turning the buses and at the
same time there is no separate entry and exit point of the buses.
The structure has not been properly maintained and seepage was
found on the spot. There is no separate place for idle bus parking.
So, it appears that the Bus Stand Authority’ has got no control
over the maintenance of the bus stand structure and it is not paying
B
any heed in this regard. In view of my submissions, it is a case of
open favoritism of M/s Prashanti Surya Construction Company.
All the concerned Authorities were well aware of the legal
requirements, but they preferred to continue with the illegal
construction without following the legal requirements. It cannot
C be believed that the construction work on the spot continued from
mid 2005 to beginning 2009 without connivance [sic of] the
aforesaid Government Agencies and these officials/officers.”
H. Submissions of counsel
32. Challenging the impugned judgment of the NGT, the appellant
D has made the following submissions:
(i) The appellant had been legitimately provided the land for
the construction of the Bus Stand Complex, when the forest
land was diverted for “non-forest purposes” through orders
dated 12 November 1997 and 1 March 2001 issued by the
E MOEF;
(ii) The appellant included the Hotel-cum-Restaurant structure
in the Bus Stand Complex to make it more commercially
viable, for which it then assigned the rights to the second
respondent without assigning it any interest in the land;
F
(iii) While this was in public knowledge from the beginning, the
sixth and seventh respondents did not raise any objections
then but only did so belatedly when the construction of the
Bus Stand Complex was already underway;
(iv) In relation to the violations of the Himachal Pradesh Town
G
and Country Planning Act, 1977 (“TCP Act”):
(a) once the project was handed over to the second
respondent, it was their responsibility to get appropriate
permissions;
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 369
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(b) arguments in relation to violation of the TCP Act were A
not raised by the sixth and seventh respondents before
the CEC or the NGT;
(c) the NGT cannot, in any case, consider violations of the
TCP Act; and
(d) the Deputy Commissioner Kangra had recommended, B
by a letter dated 13 April 2007 addressed to the Director
of the TCP Department for relaxation in respect of the
parameters since this was a first of its kind parking
complex at a hill station which regularly suffers from
traffic congestion. C
(v) Section 14(3)(e) of the HP Bus Stands Act empowers the
appellant to establish and maintain hotels and restaurants
at or near bus stands. There was no secrecy or wrongdoing
in awarding the project to the second respondent, it having
made the lowest bid. The project was to be constructed on D
a BOT basis and would be handed back to the State of
Himachal Pradesh at the end of the concession period;
(vi) Since by the orders dated 12 November 1997 and 1 March
2001 permission had already been obtained to divert the
land for a “non-forest purpose”, no further consents from E
the MOEF were needed for the construction of the Hotel-
cum-Restaurant. Even so, the State of Himachal Pradesh,
by way of abundant caution, moved an application to seek
its consent for change of land use for the construction of a
Hotel-cum-Restaurant structure within the Bus Stand
Complex. On 12 June 2007, the application was not F
dismissed on merits through a speaking order, but only owing
to an “inability to consider the same” since proceedings
were ongoing before the CEC; and
(vii) The Explanation attached to Section 2 of the Forest Act
expressly provides that “non forest purpose” means the G
breaking up or clearing of any forest land or portion thereof
for any purpose other than re-afforestation. As a result, the
incidental and ancillary facilities of the Hotel-cum-
Restaurant structure in the Bus Stand Complex were
sanctioned by the clearances already granted.
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370 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 33. Supporting the submission of the appellant, the second
respondent submits that:
(i) It decided to participate in the project because it was not
limited to the bus stand, but also included the management
of the Hotel-cum-Restaurant which made it commercially
B viable. Under the Concession Agreement, the second
respondent was to build the bus stand, parking and Hotel-
cum-Restaurant which it would retain until the year 2022,
following which it would stand transferred to the State of
Himachal Pradesh. According to the second respondent,
this was done through a transparent process;
C
(ii) The CEC incorrectly decided the application filed by the
sixth and seventh respondents without properly
understanding the second respondent’s reasons for
constructing the additional floors in the structure, which was
due to the strength and condition of the soil. The same error
D was made by the NGT in its impugned judgment;
(iii) The allegation that the appellant acted in a biased manner
are unfounded. The appellant is a nodal independent statutory
authority for maintenance of modern commercial bus stand
infrastructure. The appellant is empowered under Section
E 14(3)(e) of the HP Bus Stands Act to establish and maintain
hotels and restaurants at or near bus stands. At the relevant
time, the appellant did not have adequate financial resources
to construct bus stands on its own and so it took a policy
decision for their construction by seeking private
F participation on a BOT basis;
(iv) ‘Not an inch of forest land’ was encroached upon other
than what was permitted by the MOEF. Further, on the
lower parcel of land, minimum trees were felled by the
forest department and on the upper portion of land there
G were no trees. The felling and removing of the trees was
done strictly in accordance with the permission granted;
(v) The District and Sessions Judge ignored the public nature
of the project and that the land will revert to the State of
Himachal Pradesh after the concession period. There is
nothing to suggest that the second respondent constructed
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 371
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

the project with the objective of obtaining wrongful gain or A
undue advantage. The second respondent has invested more
than Rs. 19 crores in the public project in question, with a
major chunk of it being sourced through bank borrowings.
Under the financial scheme of the project, 70% of the
revenue was to be recovered by the second respondent
B
from the Hotel-cum-Restaurant and 30% from the operation
of the bus stand. Hence, since the Hotel-cum-Restaurant
has not been operationalized, the second respondent, after
making the investment in the project, has not been able to
receive proportionate returns and has been forced to face
a financial crisis, for no fault of its own; C
(vi) The second respondent is no longer managing or operating
the parking space and the bus stand after the District
Magistrate, Kangra by an order dated 7 June 2019 under
Section 144 of Code of Criminal Procedure, 1973,
constituted and authorized an Executive Committee to take D
control of the parking space and run it free of cost in public
interest. Further, the District Magistrate, through an order
dated 31 July 2019, notified the space available at McLeod
Ganj Bus Stand as public parking place under Section 117
of the Motor Vehicles Act, 1988, in the interest of the
efficient organization of the transport system; E

(vii) The NGT erred in not directing the Central Government to
consider the possibility of granting ex-post facto clearance
to the Hotel-cum-Restaurant structure of the Bus Stand
Complex under Section 2 of the Forest Act, given that the
construction of the Hotel-cum-Restaurant structure took F
place pursuant to a tender floated by a statutory authority;
(viii) The NGT overlooked the fact that the CEC’s report dated
18 September 2008 was prepared without following the
principles of natural justice. This was because it was
prepared on the basis of the second affidavit dated 18 August G
2008 filed by the Chief Secretary of the State of Himachal
Pradesh, which was not served upon the second respondent;
and

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372 SUPREME COURT REPORTS [2021] 1 S.C.R.

A (ix) The NGT should have considered that the appellant had
made a representation to the second respondent in the
Concession Agreement that all the necessary permissions
have been obtained by it for the execution of the Bus Stand
Complex.
B 34. The State of Himachal Pradesh has made the following
submissions:
(i) The Bus Stand Complex had all requisite permissions, and
had been constructed lawfully without the conferment of
undue benefits to the second respondent;
C (ii) The report of the District and Sessions Judge dated 9
October 2018 is flawed because:
(a) the appellant did not ask for permission from the
MOEF, since such permission was already available;

D (b) the project was constructed in accordance with
approved plans, and keeping in mind the topography
of the area; and
(c) the maintenance of the project could not be questioned
because its upkeep had to be abandoned in 2009 after
the litigation began.
E
(iii) As regards the findings in the report of the District and
Sessions Judge dated 9 October 2018, the reason why no
consent for the construction of the Hotel-cum-Restaurant
structure was separately sought was because the appellant
was under the impression that the consent for diverting forest
F
land for a “non-forest purpose”, granted by the MOEF by
its orders dated 12 November 1997 and 1 March 2001, was
sufficient.
35. The State of Himachal Pradesh argues that this is a case
involving procedural lapses, as opposed to illegality. The setting up of
G such projects in the State is a gigantic task given the peculiar topography
and other conditions existing there. The project, if allowed to be continued/
completed, will not only provide facilities of a modular bus stand to the
people of the town but also, the provision of a commercial complex will
cater to economical services to commuters, besides providing opportunities
H of employment to the local population. However, if the structure is ordered
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 373
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

to be demolished at this stage, it is likely to cause environmental damage A
since it will be difficult to dispose of the huge debris emanating from the
demolition as the area is congested and covered with extensive
vegetation. Some part of the proceeds received as income from the
commercial complex may be utilized to compensate the loss that might
have been caused to the environment and ecology of the area due to the
B
construction of the Bus Stand Complex.
36. The State of Himachal Pradesh later submitted before this
Court on 3 November 2020 that it had taken steps for initiating
prosecutions for violations of the provisions of the Forest Act. It placed
on record, through an affidavit, the steps taken by it.
C
37. Opposing these submissions and arguing in support of NGT’s
impugned judgment, the CEC submits the following:
(i) The forest land was permitted to be diverted for “non-forest
purposes” only for the construction of a bus stand and
parking space. However, the appellant expanded the scope D
to include a Hotel-cum-Restaurant without prior permission;
(ii) The second respondent started construction of the Bus Stand
Complex without approval of the drawings and plans by
the TCP Department, which later pointed out issues with
the plans; and
E
(iii) On 12 June 2007, MOEF rejected the request of the State
of Himachal Pradesh for the extension of the use of the
forest land for anything other than a bus stand and a parking
space.
38. Supporting the submissions of the CEC, the sixth and seventh
respondents submit: F
(i) The de-reservation of forest land for the construction of
the Hotel-cum-Restaurant structure in the Bus Stand
Complex was in violation of: (i) Section 2(i) of the Forest
Act; and (ii) the order dated 13 November 2000 issued by
this Court in Centre for Environmental Law, WWF - I G
vs Union of India3, which held that further land shall not
be de-reserved pending further orders from this Court;
(ii) As such, the actions of the appellant and the second
respondent in deliberately violating the provisions of the
3
Writ Petition (Civil) No. 337 of 1995 H
374 SUPREME COURT REPORTS [2021] 1 S.C.R.

A Forest Act constitute a violation of the “environmental rule
of law” enunciated by this Court in Hanuman Laxman
Aroskar vs Union of India4; and
(iii) The entire Bus Stand Complex was constructed without
requisite permissions under the TCP Act.
B 39. The MOEF has accepted the report submitted by the District
and Sessions Judge in its entirety and stands by its findings.
40. The rival submissions now fall for our consideration.
I. Analysis
C 41. The construction of the Hotel-cum-Restaurant structure in
the Bus Stand Complex is illegal and constitutes a brazen violation of
law. The permission which was granted by MOEF on 12 November
1997 was only for construction of a ‘parking place’ at McLeod Ganj.
Similarly, the permission granted on 1 March 2001 was granted for
D constructing a ‘bus stand’ in the same area. At no point was any
permission granted for the construction of a hotel or commercial structure.
NGT’s finding on this count commends acceptance. The appellant, on
being granted permission to engage in construction for a specified purpose,
unlawfully utilised that permission as the basis to construct a different
structure which was not authorized. It has done so in disregard of the
E provisions of the Forest Act.
42. Section 2 of the Forest Act reads as follows:
“2. Restriction on the de-reservation of forests or use of forest
land for non-forest purpose.— Notwithstanding anything contained
in any other law for the time being in force in a State, no State
F
Government or other authority shall make, except with the prior
approval of the Central Government, any order directing—
(i) that any reserved forest (within the meaning of the expression
“reserved forest” in any law for the time being in force in that
State) or any portion thereof, shall cease to be reserved;
G
(ii) that any forest land or any portion thereof may be used for
any non-forest purpose;

4
(2019) 15 SCC 401
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 375
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

(iii) that any forest land or any portion thereof may be assigned by A
way of lease or otherwise to any private person or to any authority,
corporation, agency or any other organisation not owned, managed
or controlled by Government;
(iv) that any forest land or any portion thereof may be cleared of
trees which have grown naturally in that land or portion, for the B
purpose of using it for reafforestation.
Explanation.— For the purposes of this section “non-forest
purpose” means the breaking up or clearing of any forest land or
portion thereof for—
(a) the cultivation of tea, coffee, spices, rubber, palms, oil-bearing C
plants, horticulture crops or medicinal plants;
(b) any purpose other than reafforestation,
but does not include any work relating or ancillary to conservation,
development and management of forests and wild-life, namely, D
the establishment of check-posts, fire lines, wireless
communications and construction of fencing, bridges and culverts,
dams, waterholes, trench marks, boundary marks, pipelines or
other like purposes.”
The provisions of Section 2 mandate strict and punctilious
E
compliance. Mere substantial compliance is not enough. The construction
of the Hotel-cum-Restaurant structure is entirely illegal, having been
carried out in clear breach of this mandatory statutory stipulation. That
officials of statutory bodies of the State Government have connived at
the violation of law is a reflection on the nature of governance by those
who are expected to act within the bounds of law. F
43. The report of the CEC is a serious indictment of the actions of
the appellant. The CEC report indicates that: (i) the construction of the
Hotel-cum-Restaurant structure in Bus Stand Complex was illegal; (ii)
the land was a reserved forest; (iii) there was no valid permission for
diversion for the land for the construction of the Hotel-cum-Restaurant G
structure; (iv) Forest Act consent was taken only for the parking facility
and the bus stand; (v) there was no valid approval from the TCP
Department of the plans of the entire Bus Stand Complex; and (vi) the
finally constructed Bus Stand Complex is not in conformity with the
appellant’s own proposed plans in the RFP.
H
376 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 44. The findings which were arrived at in NGT’s judgment are
supported by the report submitted by the District and Sessions Judge.
The report presents a striking analysis of the manner in which the Hotel-
cum-Restaurant structure was constructed in breach of statutory
requirements and how this was made possible by the connivance of
multiple state actors. The relevant findings from the report are excerpted
B
below:
“4. The EPC has prepared the conceptual plan Ex. Cl I4A, but
the bus stand authority went on to flout the aforesaid conceptual
plan and on its own and decided to construct bus stand-cum-parking
and hotel complex on two pieces of forest land under BOT basis.
C No sanction or approval was obtained by the Bus Stand Authority
under the provision of Forest (Conservation) Act, 1980 for diversion
of forest land to use the same for non - forest purpose. The
Government of India Ministry of Environment and Forest, turned
down the request to use the forest land for non-forest purpose
D and change the name of user agency from SDO(C) and H.P.
Tourism Department to Bus Stand Authority vide copy of letter
Ex. Cl03.
...
7. The illegal construction of disputed structure was raised with
E sole motive to give undue advantage to M/s Prashanti Surya
Construction Company and for the same Bus Stand Authority is
primarily responsible and in addition to that the officers/officials
of other concerned departments are also responsible.
...
F
12. In this case the Bus Stand Authority did not inform in writing
the Director of Town and Country Planning Department, regarding
the construction work in question as discussed here in above in
the aforesaid statutory provisions. Said information should have
been given by the CEO of the Bus Stand Authority in the year of
G 2005 when the construction work started on the spot. So, the
CEO of Bus Stand Authority in the year 2005, is responsible for
ignoring the statutory provisions of Section 28 of the H.P. Town
and Country Planning Act.”
45. NGT acted within its mandate in a case of this nature, where
H the appellant actively allowed the perpetration of a structure in breach
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 377
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

of environmental norms. Not looking askance at the construction of the A
Hotel-cum-Restaurant structure, in an area which the NGT rightly
describes as the “lap of nature”, will put us on the path of judicially
sanctioned environmental destruction.
I.1 Environmental rule of law
46. In a constitutional framework which is intended to create, B
foster and protect a democracy committed to liberal values, the rule of
law provides the cornerstone. The rule of law is to be distinguished from
rule by the law. The former comprehends the setting up of a legal regime
with clearly defined rules and principles of even application, a regime of
law which maintains the fundamental postulates of liberty, equality and C
due process. The rule of law postulates a law which is answerable to
constitutional norms. The law in that sense is accountable as much as it
is capable of exacting compliance. Rule by the law on the other hand
can mean rule by a despotic law. It is to maintain the just quality of the
law and its observance of reason that rule of law precepts in constitutional
democracies rest on constitutional foundations. A rule of law framework D
encompasses rules of law but it does much more than that. It embodies
matters of substance and process. It dwells on the institutions which
provide the arc of governance. By focussing on the structural norms
which guide institutional decision making, rule of law frameworks
recognise the vital role played by institutions and the serious consequences E
of leaving undefined the norms and processes by which they are
constituted, composed and governed. A modern rule of law framework
is hence comprehensive in its sweep and ambit. It recognises that liberty
and equality are the focal point of a just system of governance and
without which human dignity can be subverted by administrative
discretion and absolute power. Rule of law then dwells beyond a F
compendium which sanctifies rules of law. Its elements comprise of
substantive principles, processual guarantees and institutional safeguards
that are designed to ensure responsive, accountable and sensitive
governance.
47. The environmental rule of law, at a certain level, is a facet of G
the concept of the rule of law. But it includes specific features that are
unique to environmental governance, features which are sui generis.
The environmental rule of law seeks to create essential tools – conceptual,
procedural and institutional to bring structure to the discourse on
environmental protection. It does so to enhance our understanding of H
378 SUPREME COURT REPORTS [2021] 1 S.C.R.

A environmental challenges – of how they have been shaped by humanity’s
interface with nature in the past, how they continue to be affected by its
engagement with nature in the present and the prospects for the future,
if we were not to radically alter the course of destruction which
humanity’s actions have charted. The environmental rule of law seeks
to facilitate a multi–disciplinary analysis of the nature and consequences
B
of carbon footprints and in doing so it brings a shared understanding
between science, regulatory decisions and policy perspectives in the
field of environmental protection. It recognises that the ‘law’ element in
the environmental rule of law does not make the concept peculiarly the
preserve of lawyers and judges. On the contrary, it seeks to draw within
C the fold all stakeholders in formulating strategies to deal with current
challenges posed by environmental degradation, climate change and the
destruction of habitats. The environmental rule of law seeks a unified
understanding of these concepts. There are significant linkages between
concepts such as sustainable development, the polluter pays principle
and the trust doctrine. The universe of nature is indivisible and integrated.
D
The state of the environment in one part of the earth affects and is
fundamentally affected by what occurs in another part. Every element
of the environment shares a symbiotic relationship with the others. It is
this inseparable bond and connect which the environmental rule of law
seeks to explore and understand in order to find solutions to the pressing
E problems which threaten the existence of humanity. The environmental
rule of law is founded on the need to understand the consequences of
our actions going beyond local, state and national boundaries. The rise in
the oceans threatens not just maritime communities. The rise in
temperatures, dilution of glaciers and growing desertification have
consequences which go beyond the communities and creatures whose
F
habitats are threatened. They affect the future survival of the entire
eco-system. The environmental rule of law attempts to weave an
understanding of the connections in the natural environment which make
the issue of survival a unified challenge which confronts human societies
everywhere. It seeks to build on experiential learnings of the past to
G formulate principles which must become the building pillars of
environmental regulation in the present and future. The environmental
rule of law recognises the overlap between and seeks to amalgamate
scientific learning, legal principle and policy intervention. Significantly, it
brings attention to the rules, processes and norms followed by institutions
which provide regulatory governance on the environment. In doing so, it
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 379
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

fosters a regime of open, accountable and transparent decision making A
on concerns of the environment. It fosters the importance of participatory
governance – of the value in giving a voice to those who are most affected
by environmental policies and public projects. The structural design of
the environmental rule of law composes of substantive, procedural and
institutional elements. The tools of analysis go beyond legal concepts.
B
The result of the framework is more than just the sum total of its parts.
Together, the elements which it embodies aspire to safeguard the bounties
of nature against existential threats. For it is founded on the universal
recognition that the future of human existence depends on how we
conserve, protect and regenerate the environment today.
48. In its decision in Hanuman Laxman Aroskar vs Union of C
India (supra), this Court, speaking through one of us (DY Chandrachud,
J.) recognized the importance of protecting the environmental rule of
law. The court observed:
“142. Fundamental to the outcome of this case is a quest for
environmental governance within a rule of law paradigm. D
Environmental governance is founded on the need to promote
environmental sustainability as a crucial enabling factor which
ensures the health of our ecosystem.
143. Since the Stockholm Conference, there has been a dramatic
expansion in environmental laws and institutions across the globe. E
In many instances, these laws and institutions have helped to slow
down or reverse environmental degradation. However, this
progress is also accompanied, by a growing understanding that
there is a considerable implementation gap between the
requirements of environmental laws and their implementation and F
enforcement — both in developed and developing countries alike
…
156. The rule of law requires a regime which has effective,
accountable and transparent institutions. Responsive, inclusive,
participatory and representative decision making are key G
ingredients to the rule of law. Public access to information is, in
similar terms, fundamental to the preservation of the rule of law.
In a domestic context, environmental governance that is founded
on the rule of law emerges from the values of our Constitution.
The health of the environment is key to preserving the right to life
H
380 SUPREME COURT REPORTS [2021] 1 S.C.R.

A as a constitutionally recognised value under Article 21 of the
Constitution. Proper structures for environmental decision making
find expression in the guarantee against arbitrary action and the
affirmative duty of fair treatment under Article 14 of the
Constitution.”
B 49. In its first global report on environmental rule of law in January
2019, the United Nations Environment Programme (“UNEP”) has
presciently stated5:
“If human society is to stay within the bounds of critical ecological
thresholds, it is imperative that environmental laws are widely
C understood, respected, and enforced and the benefits of
environmental protection are enjoyed by people and the planet.
Environmental rule of law offers a framework for addressing the
gap between environmental laws on the books and in practice
and is key to achieving the Sustainable Development Goals.

D ...
Successful implementation of environmental law depends on the
ability to quickly and efficiently resolve environmental disputes
and punish environmental violations. Providing environmental
adjudicators and enforcers with the tools that allow them to
E respond to environmental matters flexibly, transparently, and
meaningfully is a critical building block of environmental rule of
law.”
50. The need to adjudicate disputes over environmental harm within
a rule of law framework is rooted in a principled commitment to ensure
F fidelity to the legal framework regulating environmental protection in a
manner that transcends a case-by-case adjudication. Before this mode
of analysis gained acceptance, we faced a situation in which, despite the
existence of environmental legislation on the statute books, there was an
absence of a set of overarching judicially recognized principles that could
inform environmental adjudication in a manner that was stable, certain
G and predictable. In an article in the Asia-Pacific Journal of Environmental
Law (2014), Bruce Pardy describes this conundrum in the following
terms6:
5
UNEP, ‘Environmental Rule of Law First Global Report’ (January 2019), pgs viii and
223.
6
Bruce Pardy, ‘Towards an Environmental Rule of Law’, 17 Asia Pacific Journal of
H Environmental Law 163 (2014).
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 381
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

“Environmental regulations and standards typically identify specific A
limits or prohibitions on detrimental activities or substances. They
are created to reflect the principles and prohibitions contained in
the statute under which they are promulgated. However, where
the contents of the statute are themselves indeterminate, there is
no concrete rule or set of criteria to apply to formulate the
B
standards. Their development can therefore be highly political and
potentially arbitrary.
...
Instead of serving to protect citizens’ environmental welfare, an
indeterminate environmental law facilitates a utilitarian calculus C
that allows diffuse interests to be placed aside when they are
judged to be less valuable than competing considerations.”
51. However, even while using the framework of an environmental
rule of law, the difficulty we face is this – when adjudicating bodies are
called on to adjudicate on environmental infractions, the precise harm D
that has taken place is often not susceptible to concrete quantification.
While the framework provides valuable guidance in relation to the
principles to be kept in mind while adjudicating upon environmental
disputes, it does not provide clear pathways to determine the harm caused
in multifarious factual situations that fall for judicial consideration. The
determination of such harm requires access to scientific data which is E
often times difficult to come by in individual situations.
52. In an article in the Georgetown Environmental Law Review
(2020), Arnold Kreilhuber and Angela Kariuki explain the manner in
which the environmental rule of law seeks to resolve this imbroglio7:
F
“One of the main distinctions between environmental rule of law
and other areas of law is the need to make decisions to protect
human health and the environment in the face of uncertainty and
data gaps. Instead of being paralyzed into inaction, careful
documentation of the state of knowledge and uncertainties allows
the regulated community, stakeholders, and other institutions to G
more fully understand why certain decisions were made.”
The point, therefore, is simply this – the environmental rule of law
calls on us, as judges, to marshal the knowledge emerging from the
7
Arnold Kreilhuber and Angela Kariuki, ‘Environmental Rule of Law in the Context of
Sustainable Development’, 32 Georgetown Environmental Law Review 591 (2020). H
382 SUPREME COURT REPORTS [2021] 1 S.C.R.

A record, limited though it may sometimes be, to respond in a stern and
decisive fashion to violations of environmental law. We cannot be
stupefied into inaction by not having access to complete details about
the manner in which an environmental law violation has occurred or its
full implications. Instead, the framework, acknowledging the imperfect
world that we inhabit, provides a roadmap to deal with environmental
B
law violations, an absence of clear evidence of consequences
notwithstanding.
53. In the case before us, it is not possible for us to determine in
quantifiable terms the exact effect of the construction of the Hotel-cum-
Restaurant structure by the appellant and the second respondent on the
C ecology of the area. Both of them have tried to argue that the number of
trees felled by them, in the case of the present construction, is what it
would have been, had they only built a bus stand and a parking space.
However, what we can record a determination on is the way in which the
appellant and second respondent have gone about achieving this object.
Specifically, the parties have engaged in the construction without complying
D
with the plans drawn by the appellant’s third-party consultants, which
were agreed to by them in the RFP. The construction proceeded even
when the TCP Department tried to halt it, refusing to approve its plans.
Even the post facto refusal by the MOEF for changing the nature of the
diverted forest land was not enough to stop the parties. Ultimately, when
E they were forced to halt the construction by the CEC, they proceeded
with it under the guise of an order of this Court which permitted only legal
construction. A combination of these circumstances highlights not only
conduct oblivious of the environmental consequences of their actions, but
an active disdain for them in favour of commercial benefits. While the
second respondent was a private entity, they were actively supported in
F these efforts by the appellant. Hence, it is painfully clear that their actions
stand in violation of the environmental rule of law. Whatever else the
environmental rule of law may mean, it surely means that construction of
this sort cannot receive our endorsement, no matter what its economic
benefits may be. A lack of scientific certainty is no ground to imperil the
environment.
G
I.2 Role of courts in ensuring environmental protection
54. In a recent decision of this Court in Bengaluru Development
Authority vs Sudhakar Hegde8, this Court, speaking through one of us
(DY Chandrachud, J.) held:
8
H 2020 SCC OnLine SC 328
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 383
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

“107. The adversarial system is, by its nature, rights based. In the A
quest for justice, it is not uncommon to postulate a winning side
and a losing side. In matters of the environment and development
however, there is no trade-off between the two. The protection
of the environment is an inherent component of development and
growth…
B
108. Professor Corker draws attention to the idea that the
environmental protection goes beyond lawsuits. Where the state
and statutory bodies fail in their duty to comply with the regulatory
framework for the protection of the environment, the courts, acting
on actions brought by public spirited individuals are called to
invalidate such actions… C

109. The protection of the environment is premised not only on
the active role of courts, but also on robust institutional frameworks
within which every stakeholder complies with its duty to ensure
sustainable development. A framework of environmental
governance committed to the rule of law requires a regime which D
has effective, accountable and transparent institutions. Equally
important is responsive, inclusive, participatory and representative
decision making. Environmental governance is founded on the
rule of law and emerges from the values of our Constitution. Where
the health of the environment is key to preserving the right to life E
as a constitutionally recognized value under Article 21 of the
Constitution, proper structures for environmental decision making
find expression in the guarantee against arbitrary action and the
affirmative duty of fair treatment under Article 14 of the
Constitution. Sustainable development is premised not merely on
the redressal of the failure of democratic institutions in the F
protection of the environment, but ensuring that such failures do
not take place.”
55. In Lal Bahadur vs State of Uttar Pradesh9, this Court
underscored the principles that are the cornerstone of our environmental
jurisprudence, as emerging from a settled line of precedent: the G
precautionary principle, the polluter pays principle and sustainable
development. This Court further noted the importance of judicial
intervention for ensuring environmental protection. In a recent decision

9
(2018) 15 SCC 407. H
384 SUPREME COURT REPORTS [2021] 1 S.C.R.

A in State of Meghalaya & others vs All Dimasa Students Union10,
this Court reiterated the key principles of environmental jurisprudence in
India, while awarding costs of Rs. 100 crores on the State of Meghalaya
for engaging in illegal coal mining.
56. The UNEP report (supra) also goes on to note11:
B “Courts and tribunals must be able to grant meaningful legal
remedies in order to resolve disputes and enforce environmental
laws. As shown in Figure 5.12, legal remedies are the actions,
such as fines, jail time, and injunctions, that courts and tribunals
are empowered to order. For environmental laws to have their
C desired effect and for there to be adequate incentives for
compliance with environmental laws, the remedies must both
redress the past environmental harm and deter future harm.”
57. In its Global Judicial Handbook on Environmental
Constitutionalism, the UNEP has further noted12:
D “Courts matter. They are essential to the rule of law. Without courts,
laws can be disregarded, executive officials left unchecked, and
people left without recourse. And the environment and the human
connection to it can suffer. Judges stand in the breach.”
58. The above discussion puts into perspective our decision in the
E present appeals, through which we shall confirm the directions given by
the NGT in its impugned judgment. The role of courts and tribunals cannot
be overstated in ensuring that the ‘shield’ of the “rule of law” can be used
as a facilitative instrument in ensuring compliance with environmental
regulations.

F I.3 Illegal activities on forest land
59. We are not traversing unexplored territory. In the past, this Court
has clamped down on illegal activities on reserved forest land specifically,
and in violation of environmental laws more generally, and taken to task
those responsible for it. In a recent three-judge bench decision of this
G Court in the case of Hospitality Association of Mudumalai vs In
Defence of Environment and Animals13, this Court was confronted
10
(2019) 8 SCC 177.
11
Supra at note 5, pg 213.
12
UNEP, Global Judicial Handbook on Environmental Constitutionalism (3 rd edition,
2019), pg 7.
13
2020 SCC OnLine SC 838.
H
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 385
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

with a situation involving illegal commercial activities taking place in an A
elephant corridor. Justice S. Abdul Nazeer, speaking for the Court, held
as follows:
“42…the “Precautionary Principle” has been accepted as a part
of the law of our land. Articles 21, 47, 48A and 51A(g) of the
Constitution of India give a clear mandate to the State to protect B
and improve the environment and to safeguard the forests and
wild life of the country. It is the duty of every citizen of India to
protect and improve the natural environment including forests and
wild life and to have compassion for living creatures. The
Precautionary Principle makes it mandatory for the State
Government to anticipate, prevent and attack the causes of C
environmental degradation.”
60. In Goel Ganga Developers India Pvt. Ltd. vs Union of
14
India , this Court dealt with a situation in which the project proponent
had engaged in construction that was contrary to the environmental
clearance granted to it. Coming down on the project proponent, a two- D
judge bench, speaking through Justice Deepak Gupta, held as follows:
“64. Having held so we are definitely of the view that the project
proponent who has violated law with impunity cannot be allowed
to go scot-free. This Court has in a number of cases awarded 5%
of the project cost as damages. This is the general law. However, E
in the present case we feel that damages should be higher keeping
in view the totally intransigent and unapologetic behaviour of the
project proponent. He has manoeuvred and manipulated officials
and authorities. Instead of 12 buildings, he has constructed 18;
from 552 flats the number of flats has gone up to 807 and now F
two more buildings having 454 flats are proposed. The project
proponent contends that he has made smaller flats and, therefore,
the number of flats has increased. He could not have done this
without getting fresh EC. With the increase in the number of flats
the number of persons residing therein is bound to increase. This
will impact the amount of water requirement, the amount of parking G
space, the amount of open area, etc. Therefore, in the present
case, we are clearly of the view that the project proponent should
be and is directed to pay damages of Rs 100 crores or 10% of the
project cost, whichever is more.”
14
(2018) 18 SCC 257. H
386 SUPREME COURT REPORTS [2021] 1 S.C.R.

A 61. In M.C. Mehta vs Union of India15, a two judge Bench of
this Court held that the land notified under Punjab Land Preservation
Act, 1900 in the Kant Enclave was to be treated as “forest land”. As a
result, any construction made on the land or its utilization for “non-forest
purposes” without Central Government approval was violative of the
Forest Act and therefore illegal. The relevant excerpt of this Court’s
B
decision, speaking through Justice Madan B. Lokur, is as follows:
“132... R. Kant & Co. and the Town and Country Department of
the State of Haryana being fully aware of the statutory Notification
dated 18-8-1992 and the restrictions placed by the notification. R.
Kant & Co. and the Town and Country Department of the State
C of Haryana were also fully aware that Kant Enclave is a forest or
forest land or treated as a forest or forest land, and therefore any
construction made on the land or utilisation of the land for non-
forest purposes, without the prior approval of the Central
Government, would be illegal and violative of the provisions of the
D Forest (Conservation) Act, 1980. Notwithstanding this,
constructions were made (or allowed to be made) in Kant Enclave
with the support, tacit or otherwise, of R. Kant & Co. and the
Town and Country Department of the State of Haryana. They
must pay for this.”
E 62. In the present set of appeals, the forest land was allowed to
be used by the MOEF for the specific purposes of constructing a ‘parking
space’ and ‘bus stand’ in McLeod Ganj. MOEF made a conscious decision
not to modify the terms of this permission, even when granted an
opportunity to do so. Hence, any construction undertaken by the second
respondent, even with the tacit approval of the appellant being a statutory
F authority under the HP Bus Stands Act, will be illegal.
I.4 Jurisdiction of NGT
63. An ancillary issue now remains for our consideration, which is
whether the NGT could have adjudicated upon a violation of the TCP
G Act, which is not an Act present in Schedule I of the NGT Act. In a
recent two-judge Bench decision of this Court in State of M.P. vs Centre
for Environment Protection Research & Development 16,one of
us speaking for the Court (Justice Indira Banerjee), held as follows:
15
(2018) 18 SCC 397.
16
H (2020) 9 SCC 781.
(HPBSM & DA) v. THE CENTRAL EMPOWERED COMMITTEE ETC. 387
& ORS. [DR. DHANANJAYA Y CHANDRACHUD, J.]

“41. The Tribunal constituted under the NGT Act has jurisdiction A
under Section 14 of the said Act to decide all civil cases where
any substantial question relating to environment including
enforcement of any right relating to environment is involved and
such question arises out of the implementation of the enactments
specified in Schedule I to the said Act, which includes the Air
B
(Prevention and Control of Pollution) Act, 1981 and the
Environment (Protection) Act, 1986.
42. In view of the definition of “substantial question relating to
environment” in Section 2(1)(m) of the NGT Act, the learned
Tribunal can examine and decide the question of violation of any
specific statutory environmental obligation, which affects or is C
likely to affect a group of individuals, or the community at large.
43. For exercise of power under Section 14 of the NGT Act, a
substantial question of law should be involved including any legal
right to environment and such question should arise out of
implementation of the specified enactments. D

44. Violation of any specific statutory environmental obligation
gives rise to a substantial question of law and not just statutory
obligations under the enactments specified in Schedule I.
However, the question must arise out of implementation of one or
more of the enactments specified in Schedule I.” E

The provisions of the TCP Act required the appellant and second
respondent to take prior permission from the TCP Department before
changing the nature of the land through their construction. Non-conformity
with this stipulation led to a violation of their environmental obligations.
In any case, this question is academic because the NGT’s impugned F
judgment grounds its decision in the appellant and second respondent’s
violation of Section 2 of the Forest Act, which is an Act present within
Schedule I of the NGT Act.
J. Conclusion
G
64. Based on our analysis above, we uphold the directions which
have been issued by the NGT in its judgment. By the earlier orders
dated 16 May 2016 and 9 September 2016, this court only stayed NGT’s
direction in relation to the demolition of the Hotel-cum-Restaurant
structure. The appellant has tried to argue against the demolition of the
Hotel-cum-Restaurant structure in the Bus Stand Complex, submitting H
388 SUPREME COURT REPORTS [2021] 1 S.C.R.

A that it may be allowed to stand for their use. However, we cannot accept
this submission. Doing so would legalise what is an otherwise entirely
illegal construction, the reasons for which have been adduced by us in
the judgment above.
65. Hence, we direct that the process of demolishing the Hotel-
B cum-Restaurant structure in the Bus Stand Complex be commenced
within two weeks from the date of the judgment and the structure shall
be demolished by the second respondent within one month thereafter. In
the event of default, the Chief Conservator of Forest along with the
administration of district Dharamshala shall demolish the structure and
recover the cost and expenses as arrears of land revenue from the second
C respondent.
66. Further, as directed by the NGT, the State of Himachal Pradesh
and the second respondent can utilise the parking space and the bus
stand in the Bus Stand Complex, after the demolition of the Hotel-cum-
Restaurant structure. However, this has to be in accordance with orders
D dated 12 November 1997 and 1 March 2001 issued by the MOEF, i.e., it
shall not be used for any purpose other than parking of cars and buses,
as the case may be.
67. The appeals are accordingly disposed of.

E 68. Pending application(s), if any, stand disposed of.

Devika Gujral Appeals disposed of.

F

G

H