M/S PAHWA PLASTICS PVT. LTD. AND ANRversusDASTAK NGO AND ORS.

                          [2022] 16 S.C.R. 855                            855


         M/S PAHWA PLASTICS PVT. LTD. AND ANR.                            A
                                  v.
                    DASTAK NGO AND ORS.
                   (Civil Appeal No. 4795 of 2021)
                          MARCH 25, 2022                                  B
    [INDIRA BANERJEE AND J.K. MAHESHWARI, JJ.]
       National Green Tribunal Act, 2010 : s. 22 – Micro, Small and
Medium Enterprises Development Act, 2006 – Environment
(Protection) Act, 1986 – Environment (Protection) Rules, 1986 –
                                                                          C
Environment clearance – Grant of – Ex post facto environment
clearance – Appellants engaged in manufacture and sale of basic
organic chemicals – Appellant granted Consent to Establish (CTE)
and Consent to Operate (CTO) for its unit by State Pollution Control
Board-HSPCB – Subsequently, the Government issued a Notification
which provides for grant of ex post facto Environmental clearance-        D
EC for project proponents who had commenced, continued or
completed a project without obtaining EC – Thereafter, issuance of
an order by the State Government where the units which did not
have EC, be allowed to continue their operations for a period of
six months, with the conditions that they would apply for EC –
                                                                          E
Respondent No.1 then filed a petition seeking quashing of the said
order and units operating without EC be closed – NGT held that the
manufacturing units of the appellants, which did not have prior EC
could not be allowed to operate – On appeal, held: Unit contributing
to the economy of the country and providing livelihood to hundreds
of people, which has been set up pursuant to requisite approvals          F
from the concerned statutory authorities, and has applied for ex
post facto EC, should not be closed down for the technical irregularity
of want of prior environmental clearance, pending the issuance of
EC, even though it may not cause pollution and/or may be found to
comply with the required norms – More so, the HSPCB was itself
                                                                          G
under the misconception that no environment clearance was required
for the units in question – Ex post facto EC should not ordinarily be
granted, and certainly not for the asking – At the same time ex post
facto clearances and/or approvals cannot be declined with pedantic
rigidity, regardless of the consequences of stopping the operations
                                                                          H
                                 855
856           SUPREME COURT REPORTS                     [2022] 16 S.C.R.


A     – Impugned order is set aside – Appellants would be allowed to
      operate the units.
            Allowing the appeal, the Court
            HELD: 1.1 It is well settled that words and phrases and/or
      sentences in a judgment cannot be read in the manner of a statute,
B     and that too out of context. The observation of the Division Bench
      that a one time relaxation was permissible, is not to be construed
      as a finding that relaxation cannot be made more than once. If
      power to amend or modify or relax a notification and/or order
      exists, the notification and/or order may be amended and/or
C     modified as many times, as may be necessary. A statement made
      by counsel in Court would not prevent the authority concerned
      from making amendments and/or modifications provided such
      amendments and/or modifications were as per the procedure
      prescribed by law. [Para 47][877-B-D]

D           1.2 The Division Bench of the High Court erred in staying
      the said office memorandum, by relying on observations made by
      this Court in Alembic Pharmaceuticals Ltd.’s case, in the context
      of a circular which was contrary to the statutory Environment
      Impact Notification of 1994. The attention of the High Court was
      perhaps not drawn to the fact that the notification of 7th July
E     2021 was in pursuance of the statutory notification of 2017 which
      was valid. [Para 48][877-D-E]
            1.3 The manufacturing units of the appellants appoint about
      8,000 employees and have a huge annual turnover. An
      establishment contributing to the economy of the country and
F     providing livelihood ought not to be closed down only on the
      ground of the technical irregularity of not obtaining prior
      Environmental Clearance irrespective of whether or not the unit
      actually causes pollution. [Para 54][878-H; 879-A]
            1.4 The 1986 Act does not prohibit ex post facto
G     Environmental Clearance. Grant of ex post facto EC in accordance
      with law, in strict compliance with Rules, Regulations,
      Notifications and/or applicable orders, in appropriate cases, where
      the projects are in compliance with, or can be made to comply

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      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                       857


with environment norms, is not impermissible. The Court cannot         A
be oblivious to the economy or the need to protect the livelihood
of hundreds of employees and others employed in the project
and others dependent on the project, if such projects comply with
environmental norms. [Para 57][881-A-C]
      1.5 There can be no doubt that the need to comply with the       B
requirement to obtain EC is non–negotiable. A unit can be set up
or allowed to expand subject to compliance of the requisite
environmental norms. EC is granted on condition of the suitability
of the site to set up the unit, from the environmental angle, and
also existence of necessary infrastructural facilities and equipment
for compliance of environmental norms. To protect future               C
generations and to ensure sustainable development, it is
imperative that pollution laws be strictly enforced. Under no
circumstances can industries, which pollute, be allowed to operate
unchecked and degrade the environment. [Para 62][883-B-D]
      1.6 Ex post facto environmental clearance should not be          D
granted routinely, but in exceptional circumstances taking into
account all relevant environmental factors. Where the adverse
consequences of denial of ex post facto approval outweigh the
consequences of regularization of operations by grant of ex post
facto approval, and the establishment concerned otherwise              E
conforms to the requisite pollution norms, ex post facto approval
should be given in accordance with law, in strict conformity with
the applicable Rules, Regulations and/or Notifications. The
deviant industry may be penalised by an imposition of heavy
penalty on the principle of ‘polluter pays’ and the cost of
restoration of environment may be recovered from it. [Para             F
63][883-D-F]
      1.7 The question in this case is, whether a unit contributing
to the economy of the country and providing livelihood to
hundreds of people, which has been set up pursuant to requisite
approvals from the concerned statutory authorities, and has            G
applied for ex post facto EC, should be closed down for the
technical irregularity of want of prior environmental clearance,
pending the issuance of EC, even though it may not cause
pollution and/or may be found to comply with the required norms.
                                                                       H
858           SUPREME COURT REPORTS                    [2022] 16 S.C.R.


A     The answer to the said question has to be in the negative, more
      so when the HSPCB was itself under the misconception that no
      environment clearance was required for the units in question.
      HSPCB has in its counter affidavit before the NGT clearly stated
      that a decision was taken to regularize units such as the Apcolite
      Yamuna Nagar and Pahwa Yamuna Nagar Units, since requisite
B
      approvals had been granted to those units, by the concerned
      authorities on the misconception that no EC was required. [Para
      64][883-F-H; 884-A-B]
            1.8 Ex post facto EC should not ordinarily be granted, and
      certainly not for the asking. At the same time ex post facto
C     clearances and/or approvals cannot be declined with pedantic
      rigidity, regardless of the consequences of stopping the
      operations. This Court is of the view that the NGT erred in law in
      directing that the units cannot be allowed to function till
      compliance of the statutory mandate. [Para 66][884-D]
D           1.9 The appellants would be allowed to operate the units.
      Electricity, if disconnected, shall be restored subject to payment
      of charges. [Para 68][884-G]
           Shree Sidhbali Steels Ltd. & Others v. State of Uttar
           Pradesh & Others (2011) 3 SCC 193 : [2011] 3 SCR
E          134; Fatima v. Union of India 2020 SCC Online SC
           347; Puducherry Environment Protection Association
           v. Union of India 2017 SCC OnLine Mad 7056;
           Electrosteel Steels Limited v. Union of India 2021 SCC
           Online SC 1247; Lafarge Umiam Mining Private Limited
F          v. Union of India (2011) 7 SCC 338 : [2011] 7 SCR
           954 – referred to.
           Alembic Pharmaceuticals Ltd. v. Rohit Prajapati &
           Others 2020 SCC Online SC 347 – distinguished.
                            Case Law Reference
G
      [2011] 3 SCR 134                 referred to             Para 32
      [2011] 7 SCR 954                 referred to              Para 58



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      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                             859


      CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4795                   A
of 2021.
      From the Judgment and Order dated 03.06.2021 of the National
Green Tribunal, Principal Bench, New Delhi in Original Application No.
287 of 2020.
      Nidesh Gupta, Sr. Adv., Tarun Gupta, Advs. for the Appellants.         B

      Anil Grover, Sr. AAG, Maninder Singh, Sr. Adv., Ms. Noopur
Singhal, Rahul Khurana, Sanjay Kumar Visen, Amit Sahni, Harpreet
Singh Popli, Vineet Nagar, Ms. Ambika Kajal, Pawan Kr. Sharma,
Rameshwar Prasad Goyal, Dr. Surender Singh Hooda, Aayushman
Aeron, Aditya Hooda, Rahul Besoya, Pradeep Misra, Daleep Dhyani,             C
Suraj Singh, Bhuwan Chandra, Tahir Ashraf Siddiqui, Rajesh Kumar
Gautam, Advs. for the Respondents.
      The Judgment of the Court was delivered by
      INDIRA BANERJEE, J.                                                    D
      1. This appeal under Section 22 of the National Green Tribunal
Act, 2010, is against an order dated 3rd June 2021 passed by the Principal
Bench of the National Green Tribunal (NGT) in O.A No.287/2020 at
New Delhi, inter alia, holding that establishments such as the
manufacturing units of the Appellants, which did not have prior
                                                                             E
Environmental Clearance (EC) could not be allowed to operate.
       2. The question of law involved in this appeal is, whether an
establishment employing about 8000 workers, which has been set up
pursuant to Consent to Establish (CTE) and Consent to Operate (CTO)
from the concerned statutory authority and has applied for ex post facto
                                                                             F
EC can be closed down pending issuance of EC, even though it may not
cause pollution and/or may be found to comply with the required pollution
norms.
       3. With increasing industrialization and the establishment of
factories which emitted smoke and other pollutants, there was worldwide
concern for protection of environment. In June 1972, the United Nations      G
Conference on the Human Environment was held in Stockholm, where
decisions were taken to take appropriate steps for preservation of the
natural resources of the earth, which, among other things, included
preservation of the quality of air and water by controlling pollution.
                                                                             H
860             SUPREME COURT REPORTS                           [2022] 16 S.C.R.


A            4. In 1974, Parliament enacted the Water (Prevention and Control
      of Pollution) Act, 1974, with a view to prevent and control water pollution
      and to maintain and restore wholesomeness of water.
            5. In furtherance of the decisions taken at Stockholm, Parliament
      enacted the Air (Prevention and Control of Pollution) Act, 1981,
B     hereinafter referred to as “the Air Pollution Act”, to provide for prevention,
      control and abatement of air pollution.
             6. The Air Pollution Act provides for the constitution of a Central
      Pollution Control Board (CPCB) and State Pollution Control Boards
      (SPCB) to deal with the problem of air pollution. Section 16 of the Air
C     Pollution Act enables the Central Pollution Control Board to take steps
      to improve the quality of air and to prevent, control or abate air pollution
      in the country. Section 17 of the Air Pollution Act enables the State
      Pollution Control Boards to plan comprehensive programmes for the
      prevention, control or abatement of air pollution, inter alia, by laying
      down standards for emission of air pollutants.
D
            7. Section 18 of the Air Pollution Act enables the Central
      Government to give directions by which the CPCB is to be bound.
      Similarly, every SPCB is to be bound by directions in writing as might be
      given by the CPCB or the State Government.

E            8. Where a notification is issued under the Air Pollution Act, placing
      an area within the control area of air pollution, permission is necessary
      to set up and operate any factory or plant thereat. No person operating
      any factory or plant in any air pollution control area is to discharge or
      cause or permit to be discharged the emission of any air pollutants, in
      excess of the standards laid down by the SPCB under Clause (g) of
F     sub-Section (1) of Section 17.
             9. The Environment (Protection) Act, 1986, hereinafter referred
      to as “the EP Act” was also enacted pursuant to the decisions taken at
      the United Nations Conference on the Human Environment, held in
      Stockholm in June, 1972. As per the Statement of Objects and Reasons
G     for enactment of the EP Act, the said Act has been prompted by concern
      over the environment, that has grown all over the world since the 60s.
            10. Sub-section (1) of Section 3 of the EP Act empowers the
      Central Government to take all such measures as it might deem necessary

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      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                          861
                 [INDIRA BANERJEE, J.]

or expedient for the purpose of protecting and improving the quality of   A
the environment and preventing, controlling and reducing environmental
pollution.
     11. Sub-section (2) of Section 3 of the EP Act enables the Central
Government to take, inter alia, the following measures:
      “(i) co-ordination of actions by the State Governments,             B
      officers and other authorities—
      (a) under this Act, or the rules made thereunder; or
      (b) under any other law for the time being in force which is
      relatable to the objects of this Act;                               C
      (ii) planning and execution of a nation-wide programme for
      the prevention, control and abatement of environmental
      pollution;
      (iii) laying down standards for the quality of environment in
      its various aspects;                                                D
      (iv) laying down standards for emission or discharge of
      environmental pollutants from various sources whatsoever:
      Provided that different standards for emission or discharge
      may be laid down under this clause from different sources
      having regard to the quality or composition of the emission         E
      or discharge of environmental pollutants from such sources;
      (v) restriction of areas in which any industries, operations or
      processes or class of industries, operations or processes shall
      not be carried out or shall be carried out subject to certain
      safeguards;                                                         F

      (vi) laying down procedures and safeguards for the prevention
      of accidents which may cause environmental pollution and
      remedial measures for such accidents;
      (vii) laying down procedures and safeguards for the handling        G
      of hazardous substances;
      (viii) examination of such manufacturing processes, materials
      and substances as are likely to cause environmental pollution;
      (ix) carrying out and sponsoring investigations and research
      relating to problems of environmental pollution;                    H
862      SUPREME COURT REPORTS                        [2022] 16 S.C.R.


A     (x) inspection of any premises, plant, equipment, machinery,
      manufacturing or other processes, materials or substances
      and giving, by order, of such directions to such authorities,
      officers or persons as it may consider necessary to take steps
      for the prevention, control and abatement of environmental
      pollution;
B
      (xi) establishment or recognition of environmental laboratories
      and institutes to carry out the functions entrusted to such
      environmental laboratories and institutes under this Act;
      (xii) collection and dissemination of information in respect of
C     matters relating to environmental pollution;
      (xiii) preparation of manuals, codes or guides relating to the
      prevention, control and abatement of environmental pollution;
      (xiv) such other matters as the Central Government deems
      necessary or expedient for the purpose of securing the
D     effective implementation of the provisions of this Act.”
      12. Sub-section (3) of Section 3 of the EP Act provides as follows:
      “3. Power of Central Government to take measures to
      protect and improve environment.—
E                       ...
         (3) The Central Government may, if it considers it necessary
         or expedient so to do for the purposes of this Act, by order,
         published in the Official Gazette, constitute an authority
         or authorities by such name or names as may be specified
F        in the order for the purpose of exercising and performing
         such of the powers and functions (including the power to
         issue directions under Section 5) of the Central Government
         under this Act and for taking measures with respect to such
         of the matters referred to in sub-section (2) as may be
         mentioned in the order and subject to the supervision and
G        control of the Central Government and the provisions of
         such order, such authority or authorities may exercise the
         powers or perform the functions or take the measures so
         mentioned in the order as if such authority or authorities
         had been empowered by this Act to exercise those powers
H        or perform those functions or take such measures.”
      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                                863
                 [INDIRA BANERJEE, J.]

       13. Subject to the provisions of the EP Act, the Central Government      A
has power under sub-Section (1) of Section 3, to take all such measures,
as it deems necessary or expedient, for the purpose of protecting and
improving the quality of environment and preventing, controlling or
reducing environmental pollution.
        14. Section 5 of the EP Act provides that notwithstanding anything      B
contained in any other law, but subject to the provisions of the EP Act,
the Central Government may, in exercise of its powers and performance
of its functions under the EP Act, issue directions in writing to any person,
officer or any authority and such person, officer or authority shall be
bound to comply with such directions.
                                                                                C
      15. In exercise of powers conferred by Sections 6 and 25 of the
EP Act, the Central Government has made the Environment (Protection)
Rules, 1986, hereinafter referred to as “the EP Rules”.
        16. The Central Government issued an Environmental Impact
Assessment Notification dated 27th January 1994 in exercise of powers           D
conferred by sub-section (1) and clause (v) of sub-section (2) of Section
3 of the EP Act read with clause (d) of sub-rule (3) of Rule 5 of the EP
Rules, directing that on and from the date of publication of the said
notification in the Official Gazette, expansion or modernization of any
activity or a new project listed in Schedule I to the said notification shall
not be undertaken in any part of India, unless it has been accorded EC          E
by the Central Government in accordance with the procedures specified
in the said notification.
       17. In exercise of powers conferred by sub-section (1) and clause
(v) of sub-section (2) of Section 3 of the EP Act read with clause (d) of
sub-rule (3) of Rule 5 of the EP Rules and in supersession of notification      F
number S.O. 60 (E) dated 27th January 1994, except in respect of things
done or omitted to be done before such supersession, the Central
Government issued a notification dated 14th September 2006, being
Notification S.O. 1533 (E) requiring prior environmental clearance from
the Central Government or as the case may be, by the State-Level                G
Environment Assessment Authority, duly constituted by the Central
Government under sub-section (3) of Section 3 of the EP Act.
       18. In terms of the said notification dated 14th September 2006,
the process of environmental clearance for new projects was to comprise
of a maximum of four stages, all of which might not apply to particular
                                                                                H
864            SUPREME COURT REPORTS                         [2022] 16 S.C.R.


A     cases. The stages were (1) Screening, (2) Scoping, (3) Public
      Consultation and (4) Appraisal.
             19. In the meanwhile, by a notification being S.O. 327 (E) dated
      10th April 2001, published in the Gazette of India on 12th April 2001, the
      Central Government has delegated the powers vested in it under the EP
B     Act, to the Chairpersons of the respective State Pollution Control Boards/
      Committees to issue directions to any industry or any local or other
      authority to prevent violation of the Rules.
             20. The Appellants carry on business, inter alia, of manufacture
      and sale of basic organic chemicals, namely, Formaldehyde. The Appellant
C     No.1, M/s Pahwa Plastics Private Limited has two manufacturing units,
      one at village Kharawar in Rohtak, hereinafter referred to as the “Rohtak
      Unit” and the other at village Jathlana, Jagadhri in Yamuna Nagar in
      Haryana, hereinafter referred to as the “Yamuna Nagar Unit”. The
      Appellant No.2 has a manufacturing unit at village Ghespur in Yamuna
      Nagar, Haryana which is hereinafter referred to as the “Yamuna Nagar
D     Unit”. The manufacturing units established, run and operated by the
      respective Appellants fall in the category of Micro, Small and Medium
      Enterprise (MSME) as defined under the Micro, Small and Medium
      Enterprises Development Act, 2006, hereinafter referred to as “the MSME
      Act”.
E            21. On or about 31st March 2014, the Appellant No.1, M/s Pahwa
      Plastics Ltd. applied for Consent to Establish (CTE) its Yamuna Nagar
      unit for manufacture of Formaldehyde.
             22. By a communication No. HSPCB/Consent/:2846616YAMCTE
      3087415 dated 2nd June 2016, the Haryana State Pollution Control Board
F     (HSPCB) granted Consent to Establish (CTE) to the Appellant No.1 M/
      s Pahwa Plastics Private Limited in respect of its Yamuna Nagar Unit.
      The CTE was to remain valid for 60 months from the date of its issue, to
      be extended for another year at the discretion of the Board or till the
      time the unit started its trial production, whichever was earlier.
G            23. Some of the terms and conditions on which CTE was granted
      are set out hereinbelow:-
            “3. The officer/official of the Board shall have the right to
            access and inspection of the industry in connection with the
            various processes and the treatment facilities being provided
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M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                         865
           [INDIRA BANERJEE, J.]

simultaneously with the construction of building/machinery.        A
The effluent should conform the effluent standards as
applicable.
4. That necessary arrangement shall be made by the industry
for the control of Air Pollution before commissioning the plant.
The emitted pollutants will meet the emission and other            B
standards as laid/will be prescribed by the Board from time to
time.
5. The applicant will obtain consent under section 25/26 of
the Water (Prevention & Control of Pollution) Act, 1974 and
under section 21/22 of the Air (Prevention & Control of            C
Pollution) Act, 1981 as amended to-date-even before starting
trial production.
6. The above Consent to Establish is further subject to the
conditions that the unit complies with all the laws/rules/
decisions and competent directions of the Board/Government         D
and its functionaries in all respect before commissioning of
the operation and during its actual working strictly.
                                  ***
8. The Electricity Department will give only temporary
connection and permanent connection to the unit will be given      E
after verifying the consent granted by the Board, both under
Water Act and Air Act.
                                  ***
12. That there is no discharge directly or indirectly from the
                                                                   F
unit or the process into any interstate river or Yamuna River
or River Ghaggar.
13. That the industry or the unit concerned is not sited within
any prohibited distances according to the Environmental Laws
and Rules, Notification, Orders and Policies of Central
Pollution Control Board and Haryana State Pollution Control        G
Board.
                                  ***
17. In case of change of name from previous Consent to
Establish granted, fresh Consent to Establish fee shall be         H
levied.
866            SUPREME COURT REPORTS                      [2022] 16 S.C.R.


A            18. Industry should adopt water conservation measures to
            ensure minimum consumption of water in their Process. Ground
            water based proposals of new industries should get clearance
            from Central Ground Water Authority for scientific
            development of previous resources.
B           19. That the unit will take all other clearances from concerned
            agencies, whenever required.
            20. That the unit will not change its process without the prior
            permission of the Board.
            21. That the Consent to Establish so granted will be invalid,
C           if the unit falls in Aravali Area or non conforming area.
            22. That the unit will comply with the Hazardous Waste
            Management Rules and will also make the non-leachate pit
            for storage of Hazardous waste and will undertake not to
            dispose off the same except for pit in their own premises or
D           with the authorized disposal authority.
            23. That the unit will submit an undertaking that it will comply
            with all the specific and general conditions as imposed in the
            above Consent to Establish within 30 days failing which
            Consent to Establish will be revoked.”
E
             24. By another communication No.HSPCB/Consent/:
      2846618YAMCTO3098246 dated 26th March 2018, HSPCB granted
      consent to the Appellant No.1 to operate its Yamuna Nagar Unit from
      8th February 2018 to 31st March 2022.
            25. By an order No.HSPCB/YMN/2242, dated 31st March 2010,
F
      the Appellant No.2, M/s Apcolite Polymer Private Limited was granted
      CTE to establish its Yamuna Nagar Unit for manufacture of
      Formaldehyde with the manufacturing capacity of 80 tonnes per day.
            26. By another communication Nos. HSPCB/Consent/: HSPCB/
      YMN/DLC/2011/4027 & HSPCB/YMN/DLC/2011/4029 dated 16th
G     January 2012, HSPCB granted the Appellant No.2, M/s Apcolite
      Polymers Private Limited, Consent to Operate (CTO) its Yamuna Nagar
      Unit. The CTO has been extended from 1st April 2016 till 31st March
      2026, by a letter dated 13th March 2016. The CTO is valid till March
      2026.
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      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                           867
                 [INDIRA BANERJEE, J.]

      27. By a communication No. HSPCB/Consent/: 2846616YAMCT              A
OHWM2630357 dated 13th March 2016, HSPCB granted consent for
emission of AIR to Appellant No.2, M/s Apcolite Polymers Private Limited
in respect of its Yamuna Nagar Unit on, inter alia, the terms and
conditions specified in the said letter, some of which are extracted
hereinbelow:-
                                                                           B
      “10. The air pollution control equipment of such specification
      which shall keep the emissions within the emission standard
      as approved by the State Board from time to time shall be
      installed and operated in the premises where the industry is
      carrying on/proposed to carry on its business.
                                                                           C
      11. The existing air pollution control equipment if required
      shall be alerted or replaced in accordance with the direction
      on the Board.
      12. All solid wastes arising in the factory premises shall be
      properly graded and disposed of by:-                                 D
      (i) In case of Land fill material, care should be taken to ensure
      that the material does not give rise to leachate which may
      percolate in ground water of carried away with storm run
      off.
      (ii) Composting in case of bio degradable materials.                 E
      (iii) If the method of incineration is used for the disposal of
      solid waste the consent application should be processed
      separately and it should be taken up which consent is granted.
      13. The industry shall submit an undertaking to the effect
                                                                           F
      that the above conditions shall be complied with by them.
      14. The applicant shall submit its undertaking to the effect
      that the above conditions shall be complied with by them.
      15. The applicant shall make an application for grant of fresh
      consent at least 90 days before the date of expiry of this           G
      consent.
                                         ***
      18. There should not be any fugitive emission from the
      premises.
                                                                           H
868            SUPREME COURT REPORTS                         [2022] 16 S.C.R.


A           19. The liquid effluent arising out of the operation of the air
            pollution control equipment shall also be treated in a manner
            and to the standards stipulated in the consent granted under
            Water (Prevention & Control of Pollution) Act, 1974 by this
            Board.
B                                              ***
            21. If the industry fails to adhere to any of the condition of
            this consent order the consent so granted shall automatically
            lapse.
                                                ***
C
            33. The industry shall submit Environment Audit report once
            in a year.
                                                ***
            38. In case of by passing the emissions, the consent shall be
D           deemed revoked.”
             28. It is the case of the Appellants that at the time when CTE was
      granted to the Appellants, it was thought that EC was not required for
      units which manufactured Formaldehyde. Even HSPCB itself was not
      sure of whether EC was required for such units.
E            29. Mr. Gupta argued that the Appellants were bona fide under
      the impression that the Appellants were not required to obtain prior EC
      for setting up this establishment to manufacture Formaldehyde. On the
      basis of CTE granted by HSPCB, the Appellants set up their units taking
      huge loans from banks for which repayments have to be paid in
F     installments.
            30. In exercise of power under Section 3(1) and Section 3(2)(v)
      of the EP Act read with Rule 5(3)(d) of the EP Rules, the Central
      Government issued a notification being S.O. 804(E) dated 14th March
      2017 which provides for grant of ex post facto EC for project proponents
G     who had commenced, continued or completed a project without obtaining
      EC under the EP Act/ EP Rules or the Environmental Impact Notification
      issued thereunder. Paragraphs 3, 4 and 5 of the said notification, read as
      hereunder:
            “(3) In cases of violation, action will be taken against the
H           project proponent by the respective State or State Pollution
      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                              869
                 [INDIRA BANERJEE, J.]

      Control Board under the provisions of section 19 of the                 A
      Environment (Protection) Act, 1986 and further, no consent
      to operate or occupancy certificate will be issued till the
      project is granted the environmental clearance.
      (4) The cases of violation will be appraised by respective sector
      Expert Appraisal Committees constituted under sub-section               B
      (3) of Section 3 of the Environment (Protection) Act, 1986
      with a view to assess that the project has been constructed at
      a site which under prevailing laws is permissible and
      expansion has been done which can be run sustainably under
      compliance of environmental norms with adequate
      environmental safeguards; and in case, where the finding of             C
      the Expert Appraisal Committee is negative, closure of the
      project will be recommended along with other actions under
      the law.
      (5) In case, where the findings of the Expert Appraisal
      Committee on point at sub-para(4) above are affirmative, the            D
      projects under this category will be prescribed the appropriate
      Terms of Reference for undertaking Environment Impact
      Assessment and preparation of Environment Management
      Plan. Further, the Expert Appraisal Committee will prescribe
      a specific Terms of Reference for the project on assessment             E
      of ecological damage, remediation plan and natural and
      community resource augmentation plan and it shall be
      prepared as an independent chapter in the environment impact
      assessment report by the accredited consultants. The collection
      and analysis of data for assessment of ecological damage,
      preparation of remediation plan and natural and community               F
      resource augmentation plan shall be done by an environmental
      laboratory duly notified under Environment (Protection) Act,
      1986, or a environmental laboratory accredited by National
      Accreditation Board for Testing and Calibration Laboratories,
      or a laboratory of a Council of Scientific and Industrial               G
      Research institution working in the field of environment.”
      31. The Notification of 2017 is a valid statutory notification issued
by the Central Government in exercise of power under Sections 3(1)
and 3(2)(v) of the EP Act read with Rule 5(3)(d) of the EP Rules in the
                                                                              H
870               SUPREME COURT REPORTS                       [2022] 16 S.C.R.


A     same manner as the EIA Notification dated 27th January 1994 and the
      Notification dated 14th September 2006.
              32. Section 21 of the General Clauses Act, 1897 provides that
      where any Central Act or Regulations confer a power to issue
      notifications, orders, rules or bye-laws, that power includes the power,
B     exercisable in like manner, and subject to like sanction and conditions, if
      any, to add to, amend, vary or rescind any notification, order, rule or bye-
      law so issued. The authority, which had the power to issue Notifications
      dated 27th January 1994 and 14th September 2006 undoubtedly had, and
      still has the power to rescind or modify or amend those notifications in
      like manner. As held by this Court in Shree Sidhbali Steels Ltd. &
C     Others v. State of Uttar Pradesh & Others1, power under Section 21
      to amend, vary or rescind notifications, orders, rules or bye-laws can be
      exercised from time to time having regard to the exigency.
             33. Puducherry Environment Protection Association filed a Writ
      Petition being W.P. No.11189 of 2017 in the High Court of Madras assailing
D     the said notification dated 14th March 2017. By a judgment and order
      dated 13th October 2017, a Division Bench of the High Court refused to
      interfere with the said notification, holding that the impugned notification
      did not compromise with the need to preserve environmental purity.
             34. The Ministry of Environment, Forest and Climate Change
E     (MoEF &CC) issued a draft notification dated 23rd March 2020 which
      was duly published in the Gazette of India Extraordinary Part II. The
      Notification was proposed to be issued in exercise of powers conferred
      by sub-section (1) and clause (v) of sub-section (2) of Section 3 of the
      EP Act for dealing with cases of violation of the notification with regard
F     to EC. It was proposed that cases of violation would be appraised by
      the Appraisal Committee with a view to assess whether the project had
      been constructed or operated at a site which was permissible under
      prevailing laws and could be run sustainably on compliance of
      environmental norms with adequate environmental safeguards. Closure
      was to be recommended if the findings of the Appraisal Committee were
G     in the negative. If the Appraisal Committee found that such unit had
      been running sustainably upon compliance of environmental norms with
      adequate environment safeguards, the unit would be prescribed
      appropriate Terms of Reference (TOR) after which the procedure for
      grant of EC would follow.
      1
H         (2011) 3 SCC 193
     M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                          871
                [INDIRA BANERJEE, J.]

       35. On 10th November 2020, the Department of Environment and      A
Climate Change of the Government of Haryana issued an order which
is extracted hereinbelow for convenience:
      “Whereas the process of manufacturing of Formaldehyde is
      covered under the provisions of 5(f) of Schedule of
      Environment Impact Assessment Notification (EIA), 2006 of          B
      Government of India, and requires the prior Environmental
      Clearance (EC) from the competent authority State Environment
      Impact Assessment Authority (SEIAA)/Ministry of
      Environment, Forest and Climate Change, Government of
      India, before establishment and operation of such units,
      besides other mandatory clearance, as applicable;                  C

             Whereas, it has come to the notice of Government that
      around 15 such units have been permitted to establish/operate
      in the State of Haryana, without obtaining the necessary Prior
      Environmental Clearances, but with the Consent of the
      Haryana State Pollution Control Bureau (HSPCB), which              D
      misinterpreted the category of such units and on realising the
      requirement of EC in these cases, has revoked its consents
      issued earlier to these units recently;
             Whereas, some of these units approached the
      Government explaining their hardship due to such sudden            E
      revocation of their consents and have sought time for obtaining
      the necessary EC from the competent authority as the process
      is likely to take a minimum of 6 months to one year period,
      and to allow them to operate with all pollution control
      measures, following the pollution control norms applicable,        F
      and,
             Whereas, the Government has carefully considered their
      request and the competent authority has decided that these
      units shall be allowed to continue their operations for a period
      of six months, without prejudice to any legal action taken         G
      against the violations committed by them, by the competent
      authorities, with the conditions that they will immediately
      apply for Environmental Clearance from the competent
      authority and provide the proof of such application within 60
      days from the issuance of this communication to Environment
                                                                         H
872             SUPREME COURT REPORTS                         [2022] 16 S.C.R.


A           and Climate Change Department and to Haryana State
            Pollution Control Board.
                   Therefore, it is ordered accordingly.”
             36. Referring to the Counter Affidavit filed by HSPCB before the
      NGT, Mr. Gupta pointed out that, since HSPCB itself was under the
B     misconception that prior EC was not necessary for units such as the
      Yamunanagar units of the Appellants Nos. 1 and 2 respectively. HSPCB
      took a policy decision to allow the units which did not have prior EC to
      operate for six months, on condition that they would apply for EC within
      sixty days.
C           37. The Appellants duly applied for EC in respect of their
      manufacturing units. After scrutinizing their applications and after finding
      the units suitable for grant of EC in terms of the prevailing guidelines,
      the Expert Appraisal Committee constituted by the MoEF&CC conducted
      a public hearing to finalize the cases of the Appellants for issuance of
D     Terms of Reference (TOR).
             38. By an Office Memorandum, being F.No. 22-21/2020-1A III,
      dated 7th July 2021, the MoEF&CC issued Standard Operating Procedure
      (SOP) for identification and handling of violation cases under EIA
      Notification 2006.
E           39. The said Office Memorandum, inter alia, reads:
              “The Ministry had issued a notification number S.O.804(E),
            dated the 14th March, 2017 detailing the process for grant of
            Terms of Reference and Environmental Clearance in respect
            of projects or activities which have started the work on site
F           and/or expanded the production beyond the limit of Prior EC
            or changed the product mix without obtaining Prior EC under
            the EIA Notification, 2006.
            2. This Notification was applicable for six months from the
            date of publication i.e. 14.03.2017 to 13.09.2017 and further
G           based on court direction from 14.03.2018 to 13.04.2018.
            3. Hon’ble NGT in Original Application No.287 of 2020 in
            the matter of Dastak N.G.O. Vs Synochem Organics Pvt. Ltd.
            & Ors. and in applications pertaining to same subject matter
            in Original Application No. 298 of 2020 in Vineet Nagar vs.
H           Central Ground Water Authority & Ors., vide order dated
         M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                             873
                    [INDIRA BANERJEE, J.]

         03.06.2021 held that “(...) for past violations, the concerned         A
         authorities are free to take appropriate action in accordance
         with polluter pays principle, following due process”.
         4. Further, the Hon’ble National Green Tribunal in O.A. No.
         34/2020 WZ in the matter of Tanaji B. Gambhire vs. Chief
         Secretary, Government of Maharashtra and Ors., vide order              B
         dated 24.05.2021 has directed that”.... a proper SoP be laid
         down for grant of EC in such cases so as to address the gaps
         in binding law and practice being currently followed. The
         MoEF may also consider circulating such SoP to all SEIAAs
         in the country”.
                                                                                C
         5. Therefore, in compliance to the directions of the Hon’ble
         NGT a Standard Operating Procedure (SoP) for dealing with
         violation cases is required to be drawn. The Ministry is also
         seized of different categories of ‘violation’ cases which have
         been pending for want of an approved structural/procedural
         framework based on ‘Polluter Pays Principle’ and ‘Principle            D
         of Proportionality’. It is undoubtedly important that action
         under statutory provisions is taken against the defaulters/
         violators and a decision on the closure of the project or
         activity or otherwise is taken expeditiously.
         6. In the light of the above directions of the Hon’ble Tribunal        E
         and the issues involved, the matter has accordingly been
         examined in detail in the Ministry. A detailed SoP has
         accordingly been framed and is outlined herein. The SoP is
         also guided by the observations/decisions of the Hon’ble
         Courts wherein principles of proportionality and polluters pay         F
         have been outlined.”
        40. The SOP formulated by the said Office Memorandum dated
7th July 2021 refers to and gives effect to various judicial pronouncements
including the judgment of this Court in Alembic Pharmaceuticals Ltd.
v. Rohit Prajapati & Others2.                                                   G
       41. In terms of the SOP, the proposal for grant of EC in cases of
violation are to be considered on merits, with prospective effect, applying
principles of proportionality and the principle that the polluter pays and is
liable for costs of remedial measures.
2
    2020 SCC Online SC 347                                                      H
874               SUPREME COURT REPORTS                        [2022] 16 S.C.R.


A           42. By an order dated 9th July 2021, the MoEF&CC confirmed
      the minutes of an earlier meeting of the Expert Appraisal Committee
      and recommended issuance of terms of reference to the Appellant No.1,
      M/s Pahwa Plastics Private Limited for expansion of its Formaldehyde
      Manufacturing unit from 60 TPD to 150 TPD.
B            43. In the meanwhile, on or about 26th November 2020, the
      Respondent No.1, a Non-Governmental Organisation (NGO) hereinafter
      referred to as “Dastak” filed an application being O.A. No./287/2020
      before the NGT praying that the order dated 10th November 2020 passed
      by the State of Haryana be quashed and units which were operating
      without EC be closed. The NGT disposed of the said application of
C     Dastak by the impugned order dated 3rd June 2021.
             44. A Public Interest Litigation being W.P. (MD) No. 11757 of
      2021 (Fatima v. Union of India) was filed before the Madurai Bench
      of the Madras High Court challenging the said Memorandum dated 7th
      July 2021. By an interim order dated 15th July 2021 a Division Bench of
D     the Madras High Court admitted the Writ Petition and stayed the said
      memorandum.
               45. The Madurai Bench of the Madras High Court observed and
      held:-

E               “This writ petition has been filed as a public interest litigation
               challenging the validity of the office memorandum dated
               07.07.2021, issued by the respondent.
               2. We have heard Mr.A.Yogeshwaran, learned counsel
               appearing for the writ petitioner and Mr.L.Victoria Gowri,
F              learned Assistant Solicitor General of India, accepts notice
               for the respondent.
               3. The impugned office memorandum is challenged as being
               wholly without jurisdiction, contrary to the Environment
               Impact Assessment Notification, 2006, ultra vires the powers
               of the respondent under the Environment (Protection) Act,
G
               1986 and violative of the various principles enunciated by
               the Hon’ble Supreme Court, while interpreting Article 21 and
               Article 48-A of the Constitution of India.
               4. Further, it is submitted that the impugned notification is in
               gross violation of the undertaking given before the Hon’ble
H
M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                          875
           [INDIRA BANERJEE, J.]

Full Bench of this Court in W.P.No.11189 of 2017, wherein,          A
the Court took note of the submissions made on behalf of the
Government of India, that the notification impugned therein
is only a one-time measure. Further, it is submitted that the
respondent failed to see that concept of ex-post facto approval
is alien to environment jurisprudence and it is anathema to
                                                                    B
the Environment Impact Assessment Notification, 2006.
5. Further, it is submitted that the impugned notification is in
gross violation of the judgment of the Hon’ble Supreme Court
in the case of Alembic Pharmaceuticals Ltd. vs Rohit
Prajapati, 2020 SCC Online SC 347 and the orders passed
by the National Green Tribunal, Principal Bench, New Delhi,         C
in the case of S.P.Muthuraman vs. Union of India & Another,
2015 SCC Online NGT 169.
6 .Identical grounds were considered by us in a challenge to
an office memorandum dated 19.02.2021, which provided a
procedure for granting post facto clearance under Coastal           D
Regulation Zone (CRZ) Notification 2011, on the ground that
despite no such provisions in the notification and being
contrary to the earlier judgments and undertaking. The said
writ petition in W.P(MD).No.8866 of 2021 was admitted and
by order dated 30.04.2021, the said office memorandum dated         E
19.02.2021 has been stayed.
7. The core issue in this writ petition is whether the
Government of India could have issued the office
memorandum and brought about the Standard Operating
Procedure for dealing with violators, who failed to comply          F
with the mandatory condition of obtaining prior environment
clearance under the Environment Impact Assessment
Notification 2006, read with the provisions of Environment
(Protection) Act, 1986. This issue was considered by the
Hon’ble Supreme Court in Alembic Pharmaceuticals Ltd (cited
supra), and it was held that such office memorandum in the          G
nature of circular is without jurisdiction. The operative portion
of the judgment reads as follows:
“...What is sought to be achieved by the administrative circular
dated 14 May 2002 is contrary to the statutory notification
                                                                    H
876     SUPREME COURT REPORTS                       [2022] 16 S.C.R.


A     dated 27 January 1994. The circular dated 14 May 2002
      does not stipulate how the detrimental effects on the
      environment would be taken care of if the project proponent
      is granted an ex post facto EC. The EIA notification of 1994
      mandates a prior environmental clearance. The circular
      substantially amends or alters the application of the EIA
B
      notification of 1994. The mandate of not commencing a new
      project or expanding or modernising an existing one unless
      an environmental clearance has been obtained stands diluted
      and is rendered ineffective by the issuance of the
      administrative circular dated 14 May 2002. This discussion
C     leads us to the conclusion that the administrative circular is
      not a measure protected by Section 3. Hence there was no
      jurisdictional bar on the NGT to enquire into its legitimacy or
      vires. Moreover, the administrative circular is contrary to the
      EIA Notification 1994 which has a statutory character. The
      circular is unsustainable in law.”
D
      8. Despite the above decision, once again the Government of
      India, Ministry of Environment, Forest and Climate Change
      have chosen to adopt the route of issuing the office
      memorandum and virtually setting at naught the provisions
      of the Environment Impact Assessment Notification and the
E     Environment (Protection) Act.
      9. Before the Hon’ble First Bench, a public interest litigation
      was filed by the Puducherry Environment Protection
      Association, challenging the notification dated 14.03.2017,
      on identical grounds and the Hon’ble First Bench by judgment
F     dated 13.10.2017, recorded the submissions of the learned
      Assistant Solicitor General of India that the said notification
      was a one-time measure and accordingly, disposed of the writ
      petition.
      10. Once again, the Ministry of Environment, Forest and
G     Climate Change have issued the impugned office
      memorandum. Thus, from what we have noted above, we are
      of the clear view that the petitioner has made out a prima
      facie case for entertaining the writ petition. Accordingly, the
      writ petition is admitted and there shall be an order of interim
H     stay.”
         M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                          877
                    [INDIRA BANERJEE, J.]

      46. It is true that in the case of Puducherry Environment              A
Protection Association v. Union of India3, the Division Bench of Madras
High Court took note of and recorded the submission made on behalf of
the Union of India that the relaxation was a one time relaxation. In view
of such submission, this Court held that a one time relaxation was
permissible.
                                                                             B
       47. It is, however, well settled that words and phrases and/or
sentences in a judgment cannot be read in the manner of a statute, and
that too out of context. The observation of the Division Bench that a one
time relaxation was permissible, is not to be construed as a finding that
relaxation cannot be made more than once. If power to amend or modify
or relax a notification and/or order exists, the notification and/or order   C
may be amended and/or modified as many times, as may be necessary.
A statement made by counsel in Court would not prevent the authority
concerned from making amendments and/or modifications provided such
amendments and/or modifications were as per the procedure prescribed
by law.                                                                      D
       48. The Division Bench of Madras High Court fell in error in
staying the said office memorandum, by relying on observations made
by this Court in Alembic Pharmaceuticals Ltd. (supra), in the context
of a circular which was contrary to the statutory Environment Impact
Notification of 1994. The attention of the High Court was perhaps not        E
drawn to the fact that the notification of 7th July 2021 was in pursuance
of the statutory notification of 2017 which was valid. The judgment of
this Court in Alembic Pharmaceuticals Ltd. (supra), was clearly
distinguishable and could have no application to the office memorandum
dated 7th July 2021 which was issued pursuant to the notification dated
14th March 2017.                                                             F

      49. The Appellants have already applied for EC. The Expert
Appraisal Committee of the MoEF&CC has, after scrutinizing the
application of the Appellants and finding them eligible for grant of EC,
recommended their cases for grant of Terms of Reference (ToR). ToR
was granted to the Appellants and a public hearing had also been             G
conducted. Only last procedural step of issuance of EC is left.
      50. It is claimed that the units of the Appellants are totally non-
polluting units having “Zero Trade discharge”. They have been in
3
    2017 SCC OnLine Mad 7056                                                 H
878            SUPREME COURT REPORTS                         [2022] 16 S.C.R.


A     operation for many years. In the reply affidavit filed by the State before
      the NGT, it was mentioned that the units were operating in good faith
      with valid CTOs granted by the HSPCB. It was stated that the units
      were not causing pollution hazards. The only thing against the units was
      the procedural lapse of not obtaining EC.
B            51. By a communication No. F. No. IA-J-110011/185/2020-IA-
      II(I) dated 20th July 2021 issued to the Appellant No.1, the MoEF&CC
      rejected the proposal for terms of reference on the purported ground
      that the activity of the Appellant No.1 was covered under category “A”
      of item 5(f) “Synthetic Organic Chemicals” of the Schedule to the EIA
      Notification, 2006. A similar communication was issued in respect of
C     M/s Apcolite Polymers Pvt. Ltd. Significantly, by an order dated 9 th July
      2021, the MoEF&CC had confirmed the minutes of an earlier meeting
      of the Expert Appraisal Committee and recommended issuance of ToR
      to the Appellant No.1, as observed above. The proposal for Terms of
      Reference has obviously been rejected at the final stage after the public
D     hearing, by reason of the impugned order dated 3rd June 2021 passed by
      the NGT on the application of Dastak, which is under appeal.
            52. This appeal was listed for admission on 30th September 2021,
      along with an application for interim relief being I.A. No.110064 of 2021
      praying for orders permitting the Appellants to operate their units during
E     the pendency of the appeal. The appeal was heard at length at the
      admission stage and reserved for judgment along with the interim
      application by an order dated 30th September 2021.
             53. After receiving the communication dated 20th July 2021
      rejecting the proposal for Terms of Reference, the Appellants requested
F     HSPCB to forward to the Appellants the proceedings of public hearing
      in respect of the manufacturing units of the Appellants. By a
      communication No. HSPCB/YR/2021/2830 dated 15th February 2022,
      HSPCB forwarded proceedings of the public hearing in respect of the
      Yamuna Nagar unit of the Appellant No.1. By another Communication
      No. HSPCB/YR/29021/2829 dated 15th February 2022 the HSPCB
G     forwarded to the Appellant No.2 the proceedings of the public hearing
      held on 3rd February 2022 in connection with the Yamuna Nagar Unit of
      the Appellant No.2.
             54. The manufacturing units of the Appellants appoint about 8,000
      employees and have a huge annual turnover. An establishment
H     contributing to the economy of the country and providing livelihood ought
         M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                          879
                    [INDIRA BANERJEE, J.]

not to be closed down only on the ground of the technical irregularity of    A
not obtaining prior Environmental Clearance irrespective of whether or
not the unit actually causes pollution.
         55. In Electrosteel Steels Limited v. Union of India4, this Court
held:-
         “82. The question is whether an establishment contributing          B
         to the economy of the country and providing livelihood to
         hundreds of people should be closed down for the technical
         irregularity of shifting its site without prior environmental
         clearance, without opportunity to the establishment to
         regularize its operation by obtaining the requisite clearances      C
         and permissions, even though the establishment may not
         otherwise be violating pollution laws, or the pollution, if any,
         can conveniently and effectively be checked. The answer has
         to be in the negative.
         83. The Central Government is well within the scope of its          D
         powers under Section 3 of the 1986 Act to issue directions to
         control and/or prevent pollution including directions for prior
         Environmental Clearance before a project is commenced. Such
         prior Environmental Clearance is necessarily granted upon
         examining the impact of the project on the environment. Ex-
         Post facto Environmental Clearance should not ordinarily be         E
         granted, and certainly not for the asking. At the same time
         ex post facto clearances and/or approvals and/or removal of
         technical irregularities in terms of Notifications under the
         1986 Act cannot be declined with pedantic rigidity, oblivious
         of the consequences of stopping the operation of a running          F
         steel plant.
         84. The 1986 Act does not prohibit ex post facto
         Environmental Clearance. Some relaxations and even grant
         of ex post facto EC in accordance with law, in strict compliance
         with Rules, Regulations Notifications and/or applicable             G
         orders, in appropriate cases, where the projects are in
         compliance with, or can be made to comply with environment
         norms, is in over view not impermissible. The Court cannot
         be oblivious to the economy or the need to protect the
4
    2021 SCC Online SC 1247                                                  H
880            SUPREME COURT REPORTS                        [2022] 16 S.C.R.


A           livelihood of hundreds of employees and others employed in
            the project and others dependent on the project, if such
            projects comply with environmental norms.
                                           ***
            88. The Notification being SO 804(E) dated 14th March, 2017
B           was not an issue in Alembic Pharmaceuticals (supra). This
            Court was examining the propriety and/or legality of a 2002
            circular which was inconsistent with the EIA Notification dated
            27th January, 1994, which was statutory. Ex post facto
            environmental clearance should not however be granted
C           routinely, but in exceptional circumstances taking into account
            all relevant environmental factors. Where the adverse
            consequences of ex post facto approval outweigh the
            consequences of regularization of operation of an industry
            by grant of ex post facto approval and the industry or
            establishment concerned otherwise conforms to the requisite
D           pollution norms, ex post facto approval should be given in
            accordance with law, in strict conformity with the applicable
            Rules, Regulations and/or Notifications. Ex post facto
            approval should not be withheld only as a penal measure.
            The deviant industry may be penalised by an imposition of
E           heavy penalty on the principle of ‘polluter pays’ and the cost
            of restoration of environment may be recovered from it.
                                           ***
            96. The appeals are allowed. The impugned order is set aside.
            The Respondent No. 1 shall take a decision on the application
F           of the Appellant for revised EC in accordance with law, within
            three months from date. Pending such decision, the operation
            of the steel plant shall not be interfered with on the ground of
            want of EC, FC, CTE or CTO.”
            56. As held by this Court in Electrosteel Steels Limited (supra)
G     ex post facto Environmental Clearance should not ordinarily be granted,
      and certainly not for the asking. At the same time ex post facto
      clearances and/or approvals and/or removal of technical irregularities in
      terms of a Notification under the EP Act cannot be declined with pedantic

H
         M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                           881
                    [INDIRA BANERJEE, J.]

rigidity, oblivious of the consequences of stopping the operation of mines,   A
running factories and plants.
      57. The 1986 Act does not prohibit ex post facto Environmental
Clearance. Grant of ex post facto EC in accordance with law, in strict
compliance with Rules, Regulations, Notifications and/or applicable
orders, in appropriate cases, where the projects are in compliance with,      B
or can be made to comply with environment norms, is in our view not
impermissible. The Court cannot be oblivious to the economy or the
need to protect the livelihood of hundreds of employees and others
employed in the project and others dependent on the project, if such
projects comply with environmental norms.
                                                                              C
    58. As held by a three Judge Bench of this Court in Lafarge
Umiam Mining Private Limited v. Union of India 5:-
         “119. The time has come for us to apply the constitutional
         “doctrine of proportionality” to the matters concerning
         environment as a part of the process of judicial review in           D
         contradistinction to merit review. It cannot be gainsaid that
         utilization of the environment and its natural resources has to
         be in a way that is consistent with principles of sustainable
         development and intergenerational equity, but balancing of
         these equities may entail policy choices. In the circumstances,
         barring exceptions, decisions relating to utilisation of natural     E
         resources have to be tested on the anvil of the well-recognized
         principles of judicial review. Have all the relevant factors
         been taken into account? Have any extraneous factors
         influenced the decision? Is the decision strictly in accordance
         with the legislative policy underlying the law (if any) that         F
         governs the field? Is the decision consistent with the principles
         of sustainable development in the sense that has the decision-
         maker taken into account the said principle and, on the basis
         of relevant considerations, arrived at a balanced decision?
         Thus, the Court should review the decision-making process
         to ensure that the decision of MoEF is fair and fully informed,      G
         based on the correct principles, and free from any bias or
         restraint. Once this is ensured, then the doctrine of “margin
         of appreciation” in favour of the decision-maker would come
         into play.”
5
    (2011) 7 SCC 338                                                          H
882            SUPREME COURT REPORTS                      [2022] 16 S.C.R.


A           59. In Alembic Pharmaceuticals Ltd.(supra), this Court
      observed:-
            “27. The concept of an ex post facto EC is in derogation of
            the fundamental principles of environmental jurisprudence
            and is an anathema to the EIA notification dated 27 January
B           1994. It is, as the judgment in Common Cause holds,
            detrimental to the environment and could lead to irreparable
            degradation. The reason why a retrospective EC or an ex post
            facto clearance is alien to environmental jurisprudence is
            that before the issuance of an EC, the statutory notification
            warrants a careful application of mind, besides a study into
C           the likely consequences of a proposed activity on the
            environment. An EC can be issued only after various stages
            of the decision-making process have been completed.
            Requirements such as conducting a public hearing, screening,
            scoping and appraisal are components of the decision-making
D           process which ensure that the likely impacts of the industrial
            activity or the expansion of an existing industrial activity are
            considered in the decision-making calculus. Allowing for an
            ex post facto clearance would essentially condone the
            operation of industrial activities without the grant of an EC.
            In the absence of an EC, there would be no conditions that
E           would safeguard the environment. Moreover, if the EC was to
            be ultimately refused, irreparable harm would have been
            caused to the environment. In either view of the matter,
            environment law cannot countenance the notion of an ex post
            facto clearance. This would be contrary to both the
F           precautionary principle as well as the need for sustainable
            development.”
            60. Even though this Court deprecated ex post facto clearances,
      in Alembic Pharmaceuticals Ltd. (supra), this Court did not direct
      closure of the units concerned but explored measures to control the
G     damage caused by the industrial units. This Court held:-
             “However, since the expansion has been undertaken and the
            industry has been functioning, we do not deem it appropriate
            to order closure of the entire plant as directed by the High
            Court.”
H
      M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                               883
                 [INDIRA BANERJEE, J.]

       61. The Notification being SO. 804(E) dated 14th March 2017             A
was not in issue in Alembic Pharmaceuticals Ltd. (supra). In Alembic
Pharmaceuticals Ltd. (supra) this Court was examining the propriety
and/or legality of a 2002 circular which was inconsistent with the EIA
Notification dated 27th January 1994, which was statutory. The EIA
Notification dated 27th January 1994 has, as stated above, been superseded
                                                                               B
by the Notification dated 14th September 2006.
       62. There can be no doubt that the need to comply with the
requirement to obtain EC is non-negotiable. A unit can be set up or
allowed to expand subject to compliance of the requisite environmental
norms. EC is granted on condition of the suitability of the site to set up
the unit, from the environmental angle, and also existence of necessary        C
infrastructural facilities and equipment for compliance of environmental
norms. To protect future generations and to ensure sustainable
development, it is imperative that pollution laws be strictly enforced.
Under no circumstances can industries, which pollute, be allowed to
operate unchecked and degrade the environment.                                 D
       63. Ex post facto environmental clearance should not be granted
routinely, but in exceptional circumstances taking into account all relevant
environmental factors. Where the adverse consequences of denial of ex
post facto approval outweigh the consequences of regularization of
operations by grant of ex post facto approval, and the establishment           E
concerned otherwise conforms to the requisite pollution norms, ex post
facto approval should be given in accordance with law, in strict conformity
with the applicable Rules, Regulations and/or Notifications. The deviant
industry may be penalised by an imposition of heavy penalty on the
principle of ‘polluter pays’ and the cost of restoration of environment
may be recovered from it.                                                      F

       64. The question in this case is, whether a unit contributing to the
economy of the country and providing livelihood to hundreds of people,
which has been set up pursuant to requisite approvals from the concerned
statutory authorities, and has applied for ex post facto EC, should be
closed down for the technical irregularity of want of prior environmental      G
clearance, pending the issuance of EC, even though it may not cause
pollution and/or may be found to comply with the required norms. The
answer to the aforesaid question has to be in the negative, more so
when the HSPCB was itself under the misconception that no environment
clearance was required for the units in question. HSPCB has in its             H
884             SUPREME COURT REPORTS                          [2022] 16 S.C.R.


A     counter affidavit before the NGT clearly stated that a decision was taken
      to regularize units such as the Apcolite Yamuna Nagar and Pahwa
      Yamuna Nagar Units, since requisite approvals had been granted to those
      units, by the concerned authorities on the misconception that no EC was
      required.
B            65. It is reiterated that the 1986 Act does not prohibit ex post
      facto EC. Some relaxations and even grant of ex post facto EC in
      accordance with law, in strict compliance with Rules, Regulations,
      Notifications and/or applicable orders, in appropriate cases, where the
      projects are in compliance with environment norms, is not impermissible.
      As observed by this Court in Electrosteel Steels Limited (supra), this
C     Court cannot be oblivious to the economy or the need to protect the
      livelihood of hundreds of employees and others employed in the units
      and dependent on the units in their survival.
            66. Ex post facto EC should not ordinarily be granted, and certainly
      not for the asking. At the same time ex post facto clearances and/or
D     approvals cannot be declined with pedantic rigidity, regardless of the
      consequences of stopping the operations. This Court is of the view that
      the NGT erred in law in directing that the units cannot be allowed to
      function till compliance of the statutory mandate.
             67. Accordingly, the appeal is allowed. The impugned order is set
E     aside in so far as the same is applicable to the units of the Appellants
      established and operated pursuant to CTE and CTO from the HSPCB
      in respect of which applications for ex post facto EC have been filed.
      The Respondent shall take a decision on the applications of the Appellants
      for EC in accordance with law within one month from date. Pending
F     decision, the operation of the Pahwa Yamuna Nagar Unit and the Apcolite
      Yamuna Nagar Unit, in respect of which consents have been granted
      and even public hearing held in connection with grant of EC, shall not be
      interfered with.
              68. The Appellants will be allowed to operate the units. Electricity,
G     if disconnected, shall be restored subject to payment of charges, if any.
      If the application for EC is rejected on the ground of any contravention
      on the part of the Appellants, it will be open to the Respondents to
      disconnect the supply of electricity.
            69. The Union of India had proceeded with the application for EC
      and even public hearing had been held. Counsel appearing on behalf of
H
       M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO                               885
                  [INDIRA BANERJEE, J.]

the Union of India contended that the Appellant had not submitted its           A
final application for EC, after public hearing. It is not clear what more
was required of the Appellants. Be that as it may, the Union of India
shall, within three working days from the date of receipt of a copy of this
judgment and order, inform the Appellants in writing of whether anything
further is required to be done by the Appellants, and if so what is required
                                                                                B
to be done. The Appellants shall, within a week thereafter do the needful.
The final decision on the application of the Appellants for EC shall be
taken within three weeks thereafter.
      70. The application being I.A. No.110064/2021 and other pending
applications, if any, in this appeal are disposed of accordingly.
                                                                                C
Nidhi Jain and Amarendra Kumar                                Appeal allowed.
(Assisted by : Priyanshu Agarwal, LCRA)




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