Holding

An expansion of a project, even if within the Schedule’s limits, must be processed through a fresh application under paragraph 7(ii) of the EIA Notification; consequently, the amendment EC is invalid and the NGT’s order stands.

Summary

Keystone Realtors Pvt. Ltd. undertook a residential redevelopment project in Mumbai. The project’s built‑up area grew from 8,720.32 sq m to 32,395.17 sq m, triggering the need for an Environmental Clearance (EC) under the 2006 EIA Notification, which was granted on 2 May 2013. The appellant later increased the area by another 8,085.71 sq m to 40,480.88 sq m and sought an amendment to the EC without filing a fresh Form 1 or obtaining a new appraisal by the State Level Expert Appraisal Committee (SEAC). The SEIAA granted the amendment on 13 March 2014. The National Green Tribunal (NGT) held that the increase constituted an “expansion” requiring compliance with paragraph 7(ii) of the Notification, directed the appellant to deposit Rs 1 crore and appointed an expert committee. On appeal, the Supreme Court affirmed that any expansion, even within the Schedule’s upper limit, must follow the procedure in paragraph 7(ii); the amendment EC was therefore invalid and the NGT’s directions were upheld.

Issues considered

The increase in built‑up area from 32,395.17 sq m to 40,480.88 sq m constitutes an “expansion” under the EIA Notification requiring a fresh environmental clearance.
Whether the amendment to the EC dated 13 March 2014, granted without a fresh Form 1 or SEAC appraisal, is valid.
Interpretation of clause (ii) of paragraph 2 in conjunction with paragraph 7(ii) of the 2006 EIA Notification.

Legislation cited

Subjects

Environmental ClearanceEIA Notification 2006Expansion of projectNational Green TribunalPrecautionary principleParagraph 7(ii)SEIAASEACExpert CommitteeConstruction area

Judgment

[2019] 17 S.C.R. 539 539

KEYSTONE REALTORS PVT. LTD. A
v
SHRI ANIL V THARTHARE & ORS.
(Civil Appeal No. 2435 of 2019)
DECEMBER 03, 2019 B
[DR. DHANANJAYA Y CHANDRACHUD AND
AJAY RASTOGI, JJ.]
Environmental Law: EIA Notification – S.O.1533 dated
14.09.2006 – Paragraph 2 – Expansion – Appellant project
proponent of a residential redevelopment project, commenced C
construction of building at the project property – At the time of
commencement of construction, total construction area was
8720.320 sq. mtrs – Appellant expanded the ambit of project and
increased construction area to 32,395.17 sq. mtrs. – Under EIA
Notification, an Environment Clearance (EC) was necessary if the D
total construction area exceeded 20,000 sq.mtrs and so appellant
applied for the EC – On recommendations of SEAC, SEIAA granted
EC on 02.05.2013 – By letter dated 24.09.2013, the appellant
informed the Environment Department that construction was further
increased by 8085.71 sq.mtrs as a result of which the total E
construction area of the project was enhanced to 40,482.88 sq.
mtrs – On 13.03.2014, an amendment to EC dated 02.05.2013 was
granted on the ground that there was only a marginal increase in
built up and construction area – Challenge to the grant of amended
EC dated 13.03.2014 by first respondent – NGT held that the
increase in the total construction area of the appellant’s project F
was an expansion under Notification dated 14.09.2006 – NGT
found that the appellant had undertaken an expansion as set out
in Paragraph 2 of the Notification without complying with the
regulatory procedure prescribed and directed the appellant to
deposit Rs. One crore with the CPCB – Further, noting that the G
construction at the project site had been completed, the NGT
appointed a five-member expert committee to study the impact of
the appellant’s expanded project and to suggest remedial measures
– In the instant appeal challenge was made to this order of the
NGT – Held: The entire scheme of the EIA Notification is to ensure H
539
540 SUPREME COURT REPORTS [2019] 17 S.C.R.

A that any new or additional environmental impact is assessed and
certified by the relevant regulatory authorities – The lower limit
of Entry 8(a) of the Schedule is a built up area of 20,000 sq. mtrs
and the upper limit is 1,50,000 sq. mtrs – No doubt, the
environmental impact of a construction of 1,50,000 sq. mtrs would
B be drastically more than construction of 20,000 sq. mtrs – It cannot
be disputed that as the size of the project increases, so does the
magnitude of the project’s environmental impact – There may exist
certain situations where the expansion sought by a project
proponent is truly marginal or the environmental impact of such
expansion is non-existent – However, it is not for this Court to lay
C
down a bright-line test as to what constitutes a ‘marginal’ increase
and what constitutes a material increase warranting a fresh Form
1 and scrutiny by the Expert Appraisal Committee – Thus, an
expansion within the limits prescribed by the Schedules would be
subject to the procedure set out in paragraph 7(ii) – At the time of
D the second increase, the total construction area of the appellant’s
project was enlarged to 40,480.88 sq.mtrs – As a result of
expansion, appellant constructed sixteen additional flats –
Appellant did not comply with the procedure set out under
paragraph 7(ii) of the EIA Notification but rather sought an
E ‘amendment’ to the EC – SEIAA did not require the appellant to
submit an updated Form 1 nor was the proposal processed and
evaluated by SEAC – The ‘amendment’ to EC dated 13.03.2014
did not discuss the potential environmental impact of the increase
in construction area – The procedure set out under paragraph 7(ii)
F of the EIA Notification exists to ensure that where a project is
expanded in size, the environmental impact on the surrounding area
is evaluated holistically considering all the relevant factors
including air and water availability and pollution, management of
solid and wet waste and the urban carrying capacity of the area
– This was not done in the case of the appellant’s project – It was
G
not open to SEIAA to grant an ‘amendment’ to the EC without
following the procedure set out in paragraph 7(ii) of the EIA
Notification – Further, as on the date of the impugned order
construction at the project site had already been completed – By
completing the construction of the project, the appellant denied
H SEIAA and SEAC, the ability to evaluate the environmental impact
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 541
V THARTHARE

and suggest methods to mitigate any environmental damage – At A
this stage, only remedial measures may be taken – The NGT already
directed the appellant to deposit one crore and has set up an expert
committee to evaluate the impact of the appellant’s project and
suggest remedial measures – In view of these circumstances, the
directions of the NGT are upheld and the Committee is directed to B
continue its evaluation of the appellant’s project so as to bring its
environmental impact as close as possible to that contemplated in
EC dated 02.05.2013 and also suggest the compensatory exaction
to be imposed on the appellant.
Interpretation of Statutes: Interpretation of Notification – In C
a case where the text of the provisions requires interpretation,
Courts must adopt an interpretation which is in consonance with
the object and purpose of the legislation or delegated legislation
as a whole – EIA Notification was adopted with the intention of
restricting new projects and the expansion of new projects until
D
their environmental impact could be evaluated and understood –
Environmental law.
Dismissing the appeal, the Court
HELD: 1. The EIA Notification seeks to ensure the
protection and preservation of the environment during the E
execution of new projects and the expansion or modernisation
of existing projects. It imposes restrictions on the execution of
new projects and on the expansion of existing projects, until their
potential environmental impact has been assessed and approved
by the grant of an EC. Where a project falls within the
F
parameters stipulated in the Schedule, paragraph 2 of the EIA
Notification provides that no construction work shall begin
unless an EC is granted in regard to three types of activity: (i)
new projects or activities provided in the Schedule, (ii)
expansion or modernisation of existing projects or activities
provided in the Schedule, and (iii) changes in the product mix G
in existing manufacturing units provided in the Schedule beyond
the specified range. [Para 6] [547-G-H; 548-G-H]
2. In order to secure an EC, the project proponent must
submit an application in the manner set out in Form 1 and
Supplementary Form 1A (if applicable) of the EIA Notification. H
542 SUPREME COURT REPORTS [2019] 17 S.C.R.

A Clause (ii) of paragraph 2 of the EIA Notification requires the
project proponent to secure an EC from the relevant regulatory
authority prior to undertaking any “expansion” of an existing
project. Paragraph 7(ii) further stipulates that all applications for
an EC in cases of “expansion” resulting in the increase of
B production capacity or lease area beyond the capacity/area
stipulated in the previous EC shall be made in the manner set
out in Form 1 or 1A (as applicable). The appellant’s application
in Form 1 acknowledges that the project fell under entry 8(a) of
Schedule 1 of the EIA Notification. Entry 8 deals with ‘Building
and Construction projects having a built-up area of or greater
C than 20,000 square metres but less than 1,50,000 square metres.’
In applying for the original EC, the appellant submitted an
application in Form 1 as required under the provisions of the
EIA Notification. The total construction area identified in the
appellant’s Form 1 was 32,395.17 square metres. However, in
D September 2013, the appellant informed the second respondent
of an increase by 8,085.71 square metres as a result of which
the total construction area of the project would be 40,480.88
square metres. [Paras 7, 8] [549-B-G-H; 550-A-D-E]
3.1 Clause (ii) of paragraph 2 of the EIA Notification
E stipulates that a project proponent shall require an EC prior to
the start of construction in the case of an “expansion”. Clause
(ii) uses the phrase “expansion…beyond the limits specified for
the concerned sector”. A plain reading of the second half of
clause (ii) indicate that it applies to cases where a project was
F initially below the threshold limits stipulated in the Schedule but
after the proposed expansion, would breach the threshold limits.
However, clause (ii) of paragraph 2 must be read with paragraph
7(ii) of the EIA Notification. Paragraph 7(ii) says that even after
obtaining an EC if the project is expanded beyond the limits for
which the prior EC was obtained, a fresh application would need
G
to be made even if the expansion is within upper the limit
prescribed in the Schedule. [Paras 12, 13] [552-H; 553-A-F]
3.2 If clause (ii) of paragraph 2 does not cover a case
where the expansion is within the limits stipulated by the
H Schedule, a project proponent may incrementally keep
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 543
V THARTHARE

increasing the size of the project area over time resulting in a A
significant increase in the project size without an assessment of
the environmental impact resulting from the expansion. Such
an outcome would defeat the entire scheme of the EIA
Notification which is to ensure that any new or additional
environmental impact is assessed and certified by the relevant B
regulatory authorities. In the instant case, the lower limit of Entry
8(a) of the Schedule is a built up area of 20,000 square metres
and the upper limit is 1,50,000 square metres. It cannot be
doubted that the environmental impact of a construction of
1,50,000 square metres is drastically more than construction of
20,000 square metres. If the appellant’s argument is accepted C
in totality, a project proponent could potentially secure an EC
for constructing 20,000 square metres and by ‘amendment’
steadily increase the area of construction up to 1,50,000 square
metres without submitting an updated Form 1 or any substantive
review by the SEAC. [Para 14] [553-G-H; 554-A-B] D
4. In a case where the text of the provisions requires
interpretation, this Court must adopt an interpretation which is
in consonance with the object and purpose of the legislation or
delegated legislation as a whole. The EIA Notification was
adopted with the intention of restricting new projects and the E
expansion of new projects until their environmental impact could
be evaluated and understood. It cannot be disputed that as the
size of the project increases, so does the magnitude of the
project’s environmental impact. This Court cannot adopt an
interpretation of the EIA Notification which would permit,
F
incrementally or otherwise, project proponents to increase the
construction area of a project without any oversight from the
Expert Appraisal Committee or the SEAC, as applicable. It is
true that there may exist certain situations where the expansion
sought by a project proponent is truly marginal or the
environmental impact of such expansion is non-existent. G
However, it is not for this Court to lay down a bright-line test
as to what constitutes a ‘marginal’ increase and what constitutes
a material increase warranting a fresh Form 1 and scrutiny by
the Expert Appraisal Committee. If the government in its
wisdom were to prescribe that a one-time ‘marginal’ increase H
544 SUPREME COURT REPORTS [2019] 17 S.C.R.

A (e.g. 5% or 10%) in project size, within the threshold limit
stipulated in the Schedule, could be subject to a lower standard
of scrutiny without diluting the urgent need for environmental
protection, conceivably this Court may give effect to such a
provision. This would be subject to any challenge on the ground
B of their being a violation of the precautionary principle. However,
as the EIA Notification currently stands, an expansion within the
limits prescribed by the Schedules would be subject to the
procedure set out in paragraph 7(ii). [Para 16] [556-D-H; 557-
A]

C 5. At the time of the second increase, the total construction
area of the appellant’s project was enlarged from 32,395.17
square metres to 40,480.88 square metres. As a result of the
expansion, the appellant constructed sixteen additional flats. The
appellant did not comply with the procedure set out under
paragraph 7(ii) of the EIA Notification but rather sought an
D ‘amendment’ to the EC. The third respondent did not require
the appellant to submit an updated Form 1 nor was the proposal
processed and evaluated by the fourth respondent. The
‘amendment’ to the EC dated 13 March 2014 did not discuss
the potential environmental impact of the increase in
E construction area, but merely recorded that the construction area
stood at 40,480.88 square metres. The procedure set out under
paragraph 7(ii) of the EIA Notification exists to ensure that
where a project is expanded in size, the environmental impact
on the surrounding area is evaluated holistically considering all
the relevant factors including air and water availability and
F pollution, management of solid and wet waste and the urban
carrying capacity of the area. This was not done here. It was not
open to the third respondent to grant an ‘amendment’ to the EC
without following the procedure set out in paragraph 7(ii).
Further, as on the date of the impugned order, construction at
G the project site had already been completed. By completing the
construction of the project, the appellant denied the third and
fourth respondents the ability to evaluate the environmental
impact and suggest methods to mitigate any environmental
damage. The NGT has already directed the appellant to deposit
Rs. One crore and has set up an expert committee to evaluate
H the impact of the appellant’s project and suggest remedial
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 545
V THARTHARE

measures. In view of these circumstances, the directions of the A
NGT are upheld and the committee is directed to continue its
evaluation of the appellant’s project so as to bring its
environmental impact as close as possible to that contemplated
in the EC dated 2 May 2013 and also suggest the compensatory
exaction to be imposed on the appellant. [Paras 17, 18] [557-B-
B
H; 558-A]
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 2435
of 2019.
From the Judgment and Order dated 11.02.2019 of the National
Green Tribunal, Principal Bench, New Delhi in Appeal No. 122 of 2018 C
(Earlier Appeal No. 09 of 2014.
Mukul Rohatgi, Sr. Adv., Kunal Tandan, Pranaya Goyal, Aman
Raj Gandhi, Nikhil Rohatgi, Abhishek Sharma, Ms. Sanjana Arora,
Ms. Richa Saudilya, Ms. Narayani Bhattacharyya, Advs. for the
Appellant.
D
Aditya Pratap, Munawwar Naseem, Chirag M. Shroff,
Ms. Mahima C. Shroff, Ms. Yashika Verma, Riya Thomas, Advs. for
the Respondents.
The Judgment of the Court was delivered by
DR. DHANANJAYA Y CHANDRACHUD, J. E
1. The present Civil Appeal arises from an order dated 11
February 2019 of the Principal Bench of the National Green Tribunal 1.
In its order, the NGT held that the increase in the total construction
area of the appellant’s project was an “expansion” under a notification
(bearing number S.O. 1533) dated 14 September 2006 2 of the Ministry F
of Environment and Forests. The NGT found that the appellant had
undertaken an “expansion” as set out in Paragraph 2 of the EIA
Notification without complying with the regulatory procedure prescribed.
The appellant was directed to deposit an amount of Rupees one crore
with the Central Pollution Control Board3. Noting that the construction
at the project site had been completed, the NGT appointed a five- G
member expert committee to study the impact of the appellant’s
expanded project and to suggest remedial measures.
1
NGT
2
EIA Notification
3
CPCB H
546 SUPREME COURT REPORTS [2019] 17 S.C.R.

A The facts
2. The appellant is the project proponent of a residential
redevelopment, called ‘Oriana Residential Project’ situated at CTS no
646, 646 (Pt) Gandhinagar, Bandra (East), Mumbai 400050. On 8 June
2010 the appellant received a Commencement Certificate to carry out
B the development and erect a building situated at the project property.
The appellant began construction. When the construction commenced,
the total construction area was 8,720.32 square metres. The ambit of
the project was expanded, and the constructed area was increased to
32,395.17 square metres. Under the EIA Notification, an Environmental
C Clearance4 was necessary if the total construction area exceeded
20,000 square metres. Hence, the appellant applied for an EC under
the EIA Notification.
3. The fourth respondent, the State Level Expert Appraisal
Committee for Maharashtra5 recommended the grant of an EC for the
D project. On 2 May 2013 the third respondent, the State Level
Environment Impact Assessment Authority for Maharashtra6, based on
the recommendations of the SEAC granted an EC. It is not in dispute
that at the time when the EC dated 2 May 2013 was granted, the total
construction area of the project was 32,395.17 square metres. The grant
of the EC was conditional on the appellant obtaining a ‘consent for
E establishment’ from the Maharashtra Pollution Control Board under the
Air (Prevention and Control of Pollution) Act 1981 and the Water
(Prevention and Control of Pollution) Act 1974.
4. By a letter dated 24 September 2013, the appellant informed
the Environment Department of the Government of Maharashtra, the
F second respondent, that the construction area was being further
increased by 8,085.71 square metres, as a result of which the total
construction area of the project would stand enhanced to 40,480.88
square metres. In its letter, the appellant sought an ‘amendment’ to the
EC dated 2 May 2013 by the third respondent to reflect the increase
G in the total construction area. On 13 March 2014, the third respondent
granted an ‘amendment’ to the EC dated 2 May 2013 on the ground
that there was only a “marginal increase in built up and construction
4
EC
5
SEAC
6
H SEIAA
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 547
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

area”. The third respondent noted the changes in the specification of A
the project as follows:
Description As per EC Amendment
dated 2 May 2013
FSI area 16,346.32 sq mts 21,365.54 sq mts

Non FSI area 16,048.85 sq mts 19,115.34 sq mts B
Total Construction area 32,395.17 sq mts 40,480.88 sq mts

Nos of tenements Members 64 Sale 61 Members 64 Sale 77

Building Configuration Member 2 Basement Member 2 Basement
C
5. The first respondent, claiming to be a resident of MIG Colony,
Gandhinagar, Bandra East, Mumbai, challenged the grant of the
amended EC dated 13 March 2014 before the Pune Bench of the NGT.
In response, the appellant filed two applications, challenging the standing
of the first respondent and contending that the challenge was barred
D
by limitation. By an order dated 4 May 2016, the Pune Bench of the
NGT rejected the applications questioning the maintainability of the
proceedings and setting up the bar of limitation. The appellant filed a
writ petition before the High Court of Judicature at Bombay to challenge
the decision of the Pune Bench of the NGT. The Bombay High Court,
allowing the writ petition held by an order dated 12 August 2016, that E
the appeal was not maintainable at the behest of the first respondent,
and the challenge against the grant of the amended EC dated 13 March
2014 was barred by limitation. By an administrative order dated 31 July
2018, the dispute was transferred from the Pune Bench of the NGT to
the Principal Bench which heard the parties and delivered the impugned F
order.
Relevant clauses of the EIA Notification
6. The present dispute raises important questions regarding the
interpretation the EIA Notification. The EIA Notification seeks to ensure
the protection and preservation of the environment during the execution G
of new projects and the expansion or modernisation of existing projects.
It imposes restrictions on the execution of new projects and on the
expansion of existing projects, until their potential environmental impact
has been assessed and approved by the grant of an EC. Paragraph 2
of the EIA Notification reads thus: H
548 SUPREME COURT REPORTS [2019] 17 S.C.R.

A “2. Requirement for prior Environmental Clearance (EC):
- The following projects or activities shall require prior
environmental clearance from the concerned regulatory authority,
which shall hereinafter be referred to as the Central Government
in the Ministry of Environment and Forests for matters falling
under Category ‘A’ in the Schedule and at State level the State
B
Environment Impact Assessment Authority (SEIAA) for matters
falling under Category ‘B’ in the said Schedule, before any
construction work, or preparation of land by the project
management except for securing the land, is started on the project
or activity:
C
(i) All new projects or activities listed in the Schedule to
this notification;
(ii) Expansion and modernisation of existing projects
or activities listed in the Schedule to this
notification with addition of capacity beyond the
D
limits specified for the concerned sector, that is,
projects or activities which cross the threshold
limits given in the Schedule after expansion or
modernisation;
(iii) Any change in product – mix in an existing
E
manufacturing unit included in Schedule beyond the
specified range.”
(Emphasis supplied)
The Schedule to the EIA Notification classifies potential projects
F into Category ‘A’ and Category ‘B’ based on their size and potential
environmental impact. Category ‘A’ projects require project proponents
to secure an EC from the Ministry of Environment, Forests and Climate
Change. Category ‘B’ projects require project proponents to secure an
EC from the SEIAA, based on the recommendations of the SEAC.
G Where a project falls within the parameters stipulated in the Schedule,
paragraph 2 of the EIA Notification provides that no construction work
shall begin unless an EC is granted in regard to three types of activity:
(i) new projects or activities provided in the Schedule, (ii) expansion or
modernisation of existing projects or activities provided in the Schedule,
and (iii) changes in the product mix in existing manufacturing units
H provided in the Schedule beyond the specified range. The present
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 549
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

dispute raises questions as to how the second type of activity, the A
“expansion” of existing projects, should be construed under the EIA
Notification.
7. In order to secure an EC, the project proponent must submit
an application in the manner set out in Form 1 and Supplementary Form
1A (if applicable) of the EIA Notification. Under paragraph 7(i) of the B
EIA Notification, the project proponent must also submit a pre-feasibility
report. However, in the case of projects under item 8 of the Schedule,
only a conceptual plan is required to be submitted. Paragraph 7(ii) of
the EIA Notification states that:
“7(ii) Prior Environmental Clearance (EC) process for C
Expansion or Modernisation of Change of product mix in
existing projects:
All applications seeking prior environmental clearance for
expansion with increase in the production capacity beyond
the capacity for which prior environmental clearance has D
been granted under this notification or with increase in
either lease area or production capacity in the case of mining
projects or for the modernisation of an existing unit with increase
in the total production capacity beyond the threshold limit
prescribed in the Schedule to this notification through change in
E
process and or technology or involving a change in the product
mix shall be made in Form 1 and they shall be considered
by the concerned Expert Appraisal Committee or State
Level Expert Appraisal Committee within sixty days, who
will decide on the due diligence necessary including
preparation of EIA and public consultation and the application F
shall be appraised accordingly for grant of environmental
clearance.”
(Emphasis supplied)
Clause (ii) of paragraph 2 of the EIA Notification requires the G
project proponent to secure an EC from the relevant regulatory
authority prior to undertaking any “expansion” of an existing project.
Paragraph 7(ii) further stipulates that all applications for an EC in cases
of “expansion” resulting in the increase of production capacity or lease
area beyond the capacity/area stipulated in the previous EC shall be
made in the manner set out in Form 1 or 1A (as applicable). H
550 SUPREME COURT REPORTS [2019] 17 S.C.R.

A 8. The appellant’s application in Form 1 acknowledges that the
project fell under entry 8(a) of Schedule 1 of the EIA Notification. Entry
8 deals with ‘Building and Construction projects having a built-up area
of or greater than 20,000 square metres but less than 1,50,000 square
metres.’ Entry 8 of the Schedule to the EIA Notification is as follows:
B 8 – Building / Construction projects / Area Development projects and
Townships
8(a) Building and =20,000 sq mts Built-up area for
Construction projects and <1,50,000 sq covered construction:
mt s of built-up in the case of facilities
area open to the sky, it will
C be the activity area
8(b) Townships and Area Covering an area All projects under
Development = 50 ha and or item 8(b) shall be
projects built up area appraised as Category
= 1,50,000 sq mts B1
Issue
D 9. In applying for the original EC, the appellant submitted an
application in Form 1 as required under the provisions of the EIA
Notification. The total construction area identified in the appellant’s Form
1 was 32,395.17 square metres. However, in September 2013 the
appellant informed the second respondent of an increase by 8,085.71
square metres as a result of which the total construction area of the
E project would be 40,480.88 square metres. In seeking an ‘amendment’
to the EC dated 2 May 2013 the appellant did not submit an updated
Form 1. Further, the ‘amendment’ to the EC was granted by the SEIAA
without the recommendations of the SEAC. The issue before this Court
is whether the ‘amended’ EC dated 13 March 2014 granted by the
SEIAA without following the procedure stipulated in paragraph 7(ii) of
F
the EIA Notification is valid.
Submissions
10. Mr Mukul Rohatgi, learned Senior Counsel appearing on
behalf of the appellant submitted that:
G (i) When construction began, the total construction area of
the appellant’s project was 8,720.32 square metres. As
the EIA Notification requires projects with a total built
up area of or more than 20,000 square metres to procure
an EC prior to the start of construction, no EC was
required before construction of the appellant’s project
H commenced;
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 551
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

(ii) Pursuant to the first increase, when the appellant’s A
project crossed the 20,000 square metre threshold
provided for in the EIA Notification, the appellant
submitted a Form 1 and was granted a valid EC dated
2 May 2013 by the third respondent;
(iii) Pursuant to the second increase, the built up area of the B
appellant’s project only marginally increased by 8,085.71
square metres to a total construction area of 40,480.88
square metres, which is within the upper limit of 1,50,000
square metres prescribed by entry 8(a) of the Schedule
to the EIA Notification. Therefore, the second increase
was not an “expansion” within the meaning of clause C
(ii) of paragraph 2 of the EIA Notification and no fresh
Form 1 or EC was required at the time of the second
increase;
(iv) Clause (ii) of paragraph 2 only applies to situations
where the project crosses the lower or upper threshold D
limits stipulated in the Schedule. Any increase in
production capacity or construction area within the limits
set out in the Schedule would not constitute an
“expansion” within the meaning of Clause (ii) of
paragraph 2 and does not require compliance with the
E
procedure under paragraph 7(ii) of the EIA Notification;
(v) The increase in the appellant’s project is only marginal
and does not have an adverse impact on the
environment;
(vi) The SEIAA applied its mind to the appellant’s request F
for an ‘amendment’; noted that the increase in
construction area was only marginal and issued an
amendment to the original EC dated 2 May 2013; and
(vii) The NGT had no basis to impose the fine of Rupees
one crore on the appellant. G
11. Joining issue with the above submissions, Mr Aditya Pratap,
learned counsel appearing on behalf of the first respondent submitted
that:
(i) Under clause (ii) of paragraph 2 read with paragraph
7(ii) of the EIA Notification, any expansion beyond the H
552 SUPREME COURT REPORTS [2019] 17 S.C.R.

A “threshold limit” requires a fresh EC. The appellant’s
project had crossed the threshold limit of 20,000 square
metres and the second increase of 8,085.71 square
metres constituted an ‘expansion beyond the threshold
limit’ and hence required a fresh EC;
B (ii) Once a project breaches the lower threshold limit set
out in the Schedule to the EIA Notification, any
expansion or modernisation, even within the upper
threshold set out in the Schedule, will require the
submission of a fresh Form 1 and the matter to be placed
before the Expert Appraisal Committee or the SEAC,
C as applicable in accordance with paragraph 7(ii) of the
EIA Notification;
(iii) Adopting the appellant’s interpretation of clause (ii) of
paragraph 2 would defeat the object and purpose of the
EIA Notification as a whole. It would allow project
D proponents to incrementally increase the construction
area and over time significantly impinge on the
environmental impact of the project without seeking a
fresh EC;
(iv) If the law prescribes an act to be done in a particular
E manner, it must be done only in that manner and no other.
Under paragraph 7(ii) of the EIA Notification, it was
incumbent on the SEIAA to place the matter before the
SEAC for appraisal and recommendations; and
(v) The EIA Notification is an operationalisation of the
F precautionary principle, which forms a part of the
environmental law of India. The EIA Notification must
be read in a manner which gives effect to the
precautionary principle.
Interpreting paragraphs 2 and 7
G
12. The central controversy between the parties to the present
dispute is the manner in which paragraphs 2 and 7 of the EIA
Notification should be interpreted. Clause (ii) of paragraph 2 of the EIA
Notification stipulates that a project proponent shall require an EC prior
to the start of construction in the case of an “expansion”. Clause (ii)
H uses the phrase “expansion…beyond the limits specified for the
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 553
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

concerned sector”. The first respondent sought to lay emphasis on this A
construction to argue that any expansion beyond the lower limit
stipulated in the Schedule would attract the requirement of a prior EC
under paragraph 2. However, the above language in clause (ii) is further
qualified by the phrase “that is, projects or activities which cross the
threshold limits given in the Schedule after expansion or modernisation.”
B
A plain reading of the second half of clause (ii) would indicate that it
applies to cases where a project was initially below the threshold limits
stipulated in the Schedule but after the proposed expansion, would
breach the threshold limits. Clause (ii) of paragraph 2 of the EIA
Notification therefore would not appear to cover a case where a project
had already crossed the lower threshold limit set out in the Schedule C
and the expansion does not cross the upper limit stipulated by the
Schedule.
13. However, clause (ii) of paragraph 2 must be read with
paragraph 7(ii) of the EIA Notification. Paragraph 7(ii) lays down the
exact procedure to be followed by a project proponent in the case of D
an expansion. Two crucial points must be noted with respect to
paragraph 7(ii). First, it uses the phrase, “expansion with increase in
production capacity beyond the capacity for which prior environment
clearance has been granted”. Second, the qualifying language referring
to breaching the threshold limits “after expansion” is absent. An
“expansion” can occur even after the grant of an EC when the project E
first crossed the lower limit stipulated in the threshold and it is not
necessary for the project to breach the upper limit after the expansion.
Therefore, a close reading of paragraph 7(ii) would support the
interpretation put forth by the first respondent – that even after obtaining
an EC if the project is expanded beyond the limits for which the prior F
EC was obtained, a fresh application would need to be made even if
the expansion is within upper the limit prescribed in the Schedule.
14. The dangers effectively articulated by the learned counsel
for the first respondent are real. If clause (ii) of paragraph 2 does not
cover a case where the expansion is within the limits stipulated by the G
Schedule, a project proponent may incrementally keep increasing the
size of the project area over time resulting in a significant increase in
the project size without an assessment of the environmental impact
resulting from the expansion. Such an outcome would defeat the entire
scheme of the EIA Notification which is to ensure that any new or
additional environmental impact is assessed and certified by the relevant H
554 SUPREME COURT REPORTS [2019] 17 S.C.R.

A regulatory authorities. In the present case, the lower limit of Entry 8(a)
of the Schedule is a built up area of 20,000 square metres and the upper
limit is 1,50,000 square metres. It cannot be doubted that the
environmental impact of a construction of 1,50,000 square metres is
drastically more than construction of 20,000 square metres. If the
appellant’s argument is accepted in totality, a project proponent could
B
potentially secure an EC for constructing 20,000 square metres and by
‘amendment’ steadily increase the area of construction up to 1,50,000
square metres without submitting an updated Form 1 or any substantive
review by the SEAC.
15. We note that subsequent to the EIA Notification being
C
published in 2006, a draft notification was issued on 19 January 2009. 7
The draft notification proposed the following amendment:
“in para 2 [of the EIA Notification], after sub-para (iii), the
following shall be inserted; namely:-
D However modernisation or expansion proposals without any
increase in pollution load, and, or without any additional water
and or land requirement are exempted from the provisions of this
Notification:
Provided that, a self certification, stating that the proposals shall
E not involve any additional pollution load, waste generation or water
requirement, be submitted to the regulatory authority by the
project proponent.”
Prior to adopting the draft notification, hearings were conducted
and written comments were solicited from various stakeholders including:
F (i) Central Ministries and Departments, (ii) State Governments and their
Agencies, (ii) Industries and their Associations and (iv) Civil Society
including NGOs. A committee was constituted by the Ministry of
Environment and Forests, Government of India which published a report
in October 2009. The committee specifically recommended against the
adoption of the above amendment, noting:
G
“The amendments propose to exempt modernisation and
expansion of projects based on a self certification by project
authorities that there is no increase in pollution load. It is totally
unacceptable that the modernisation and expansion of

H 7
Notification S.O. 195 (E) dated 19 January 2009.
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 555
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

projects be removed from the environmental clearance A
regime, with or without the requirement of self
certification. There are several industries operating in critically
polluted areas or are in violation of their environmental clearance
conditions, which need to be considered before the expansion of
a project is considered. What is to be considered is not just
B
whether there is an increase in pollution load but also the current
impact of the project and its compliance with environmental
clearance conditions. We can provide clear examples wherein
the non-compliance of the clearance conditions has not been
considered while granting clearance for expansion which includes
adding new components to the existing industrial operations etc. C
This has allowed several projects to continue their activities and
expand despite blatant non compliance. Finally, it is only with
industrial, thermal power and other such related operations that
one can decide on parameters of pollution. Development
projects like highways, airports and other infrastructure
D
projects which seek to expand might have a detrimental
impact due to factors such as change in land use (i.e.
construction over a wetland, grassland or agricultural land
etc). Despite this, the project proponent can certify that there is
no change in pollution load and hence expansion is to be allowed.
The current process seeks a detailed EIA report to E
determine whether impacts can be mitigated. If the
amendment is brought into force, it will simply do away
with this critical and necessary step in the environmental
clearance process. Therefore, this amendment should not be
allowed.
F
…
The draft notification takes a myopic view of environmental and
social impact of modernisation and expansion. Any
modernisation/expansion projects will necessarily entail
increase in production, increase in transportation, increase G
in pressure on the local infrastructure and local natural
resources and increase in the pollution load during the
construction phase. So, even if a modernisation/expansion does
not lead to an increase in the pollution load or water or land
requirement within the factory premises during the operation H
556 SUPREME COURT REPORTS [2019] 17 S.C.R.

A phase, it will lead to an increase in environmental and social
impact outside the premise.”
(Emphasis supplied)
The draft amendment was not adopted in subsequent amendments
to the EIA Notification. We find considerable merit in the observations
B of the committee that the requirement of an EC at the time of expansion
forms a critical step in the environmental clearance regime. According
to the committee, it assists officials not just in evaluating and mitigating
any adverse impact caused by the expansion but also in assessing
whether the project proponent is in compliance with their existing
C obligations. Crucially, any form of expansion necessarily puts a strain
on the local environment and infrastructure and needs to be carefully
evaluated in a holistic manner.
16. In a case where the text of the provisions requires
interpretation, this Court must adopt an interpretation which is in
D consonance with the object and purpose of the legislation or delegated
legislation as a whole. The EIA Notification was adopted with the
intention of restricting new projects and the expansion of new projects
until their environmental impact could be evaluated and understood. It
cannot be disputed that as the size of the project increases, so does
the magnitude of the project’s environmental impact. This Court cannot
E adopt an interpretation of the EIA Notification which would permit,
incrementally or otherwise, project proponents to increase the
construction area of a project without any oversight from the Expert
Appraisal Committee or the SEAC, as applicable. It is true that there
may exist certain situations where the expansion sought by a project
F proponent is truly marginal or the environmental impact of such
expansion is non-existent. However, it is not for this Court to lay down
a bright-line test as to what constitutes a ‘marginal’ increase and what
constitutes a material increase warranting a fresh Form 1 and scrutiny
by the Expert Appraisal Committee. If the government in its wisdom
were to prescribe that a one-time ‘marginal’ increase (e.g. 5% or 10%)
G in project size, within the threshold limit stipulated in the Schedule, could
be subject to a lower standard of scrutiny without diluting the urgent
need for environmental protection, conceivably this Court may give
effect to such a provision. This would be subject to any challenge on
the ground of their being a violation of the precautionary principle.
H However, as the EIA Notification currently stands, an expansion within
KEYSTONE REALTORS PVT. LTD. v SHRI ANIL 557
V THARTHARE [DR. DHANANJAYA Y CHANDRACHUD, J.]

the limits prescribed by the Schedules would be subject to the procedure A
set out in paragraph 7(ii).
17. At the time of the second increase, the total construction area
of the appellant’s project was enlarged from 32,395.17 square metres
to 40,480.88 square metres. As a result of the expansion, the appellant
constructed sixteen additional flats which were sold at the prevailing B
market rate. The appellant did not comply with the procedure set out
under paragraph 7(ii) of the EIA Notification but rather sought an
‘amendment’ to the EC. The third respondent did not require the
appellant to submit an updated Form 1 nor was the proposal processed
and evaluated by the fourth respondent. The ‘amendment’ to the EC C
dated 13 March 2014 does not discuss the potential environmental impact
of the increase in construction area, but merely records that the
construction area now stands at 40,480.88 square metres. The
procedure set out under paragraph 7(ii) of the EIA Notification exists
to ensure that where a project is expanded in size, the environmental
impact on the surrounding area is evaluated holistically considering all D
the relevant factors including air and water availability and pollution,
management of solid and wet waste and the urban carrying capacity
of the area. This was not done in the case of the appellant’s project. It
was not open to the third respondent to grant an ‘amendment’ to the
EC without following the procedure set out in paragraph 7(ii) of the E
EIA Notification.
18. We further note that as on the date of the impugned order
construction at the project site had already been completed. A core
tenet underlying the entire scheme of the EIA Notification is that
construction should not be executed until ample scientific evidence has F
been compiled so as to understand the true environmental impact of a
project. By completing the construction of the project, the appellant
denied the third and fourth respondents the ability to evaluate the
environmental impact and suggest methods to mitigate any
environmental damage. At this stage, only remedial measures may be
taken. The NGT has already directed the appellant to deposit Rupees G
one crore and has set up an expert committee to evaluate the impact
of the appellant’s project and suggest remedial measures. In view of
these circumstances, we uphold the directions of the NGT and direct
that the committee continue its evaluation of the appellant’s project so
as to bring its environmental impact as close as possible to that H
558 SUPREME COURT REPORTS [2019] 17 S.C.R.

A contemplated in the EC dated 2 May 2013 and also suggest the
compensatory exaction to be imposed on the appellant.
19. The appeal is dismissed. There shall be no order as to costs.
20. Pending application(s), if any, shall stands disposed of.
B
Devika Gujral Appeal dismissed.

C

D

E

F

G

H