NEETU SOLVENTSversusVINEET NAGAR & ORS.

                 [2026] 5 S.C.R. 421 : 2026 INSC 455

                             Neetu Solvents
                                    v.
                           Vineet Nagar & Ors.
                       (Civil Appeal No. 2881 of 2021)
                                 06 May 2026
           [J.K. Maheshwari* and Atul S. Chandurkar, JJ.]


                           Issue for Consideration
       Whether the direction of closure of the appellant-units issued by
       the NGT is liable to be set aside; whether the judgment of Pahwa
       Plastics squarely applies to the facts of this case.

                                  Headnotes†
       Environment – Environmental Clearance – The appellants
       herein are the industries, and running the manufacturing units
       of Formaldehyde, its different resins – The NGT directed closure
       of the appellants-units – The NGT held that formaldehyde
       manufacturing units cannot be allowed to operate without
       prior Environmental Clearance (EC) – Correctness:
       Held: The case in hand is not a one where the appellants
       established the units of formaldehyde and started operation due
       to lack of bona fide ignoring any requirement of law – On the
       contrary it is a case where the Pollution Control Board (PCB)
       were not aware that prior EC to establish and operate such
       units is required in terms of Environment Impact Assessment
       notification dated 14.09.2006 (EIA 2006 notification) – Accordingly,
       in terms of the notices issued by the PCBs, the appellants-units
       have applied for grant of EC which remains pending – In view
       of this Court, the judgment of Pahwa Plastics squarely applies
       to the facts of this case – Accordingly, the direction of closure
       of the appellant-units by the impugned orders of NGT stands
       set aside – The parties are directed to apply the ratio of the
       judgment of Pahwa Plastics mutatis mutandis – Therefore, it is
       directed that, (i) the appellant-units, having been established and
       operated pursuant to the Consent to Establish (CTE) and Consent
       to Operate (CTO) granted by the PCB for the respective State, be
       allowed to function and operate; (ii) The respondent is directed


* Author
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       to take a decision on the applications of the appellant-units for
       EC in accordance with law; (iii) Electricity for the appellant-units,
       if disconnected, shall be restored subject to payment of charges,
       if any. [Paras 26, 27]

                                Case Law Cited
       Pahwa Plastics Private Limited and Anr. v. Dastak NGO and Ors.
       [2022] 16 SCR 855 : (2023) 12 SCC 774 – held applicable.
       Vanashakti v. Union of India, 2025 SCC OnLine SC 1139; Common
       Cause v. Union of India [2017] 13 SCR 361 : (2017) 9 SCC 499;
       Alembic Pharmaceuticals v. Rohit Prajapati [2020] 10 SCR 677 :
       (2020) 17 SCC 157; Elecctrosteel Steels Ltd. v. Union of India
       [2021] 14 SCR 863 : (2023) 6 SCC 615; Confederation of Real
       Estate Developers of India (CREDAI) v. Vanashakti and Another,
       2025 SCC OnLine SC 2474 – referred to.

                                  List of Acts
       Water (Prevention and Control of Pollution) Act, 1974;
       Air (Prevention and Control of Pollution) Act, 1981.

                               List of Keywords
       Environment; Environmental clearance; Formaldehyde
       manufacturing units; Pollution Control Board; Consent to Establish;
       Consent to Operate; Ex-post facto Environmental Clearance; EIA
       2006 notification.

                              Case Arising From
       CIVIL APPELLATE JURISDICTION: Civil Appeal No. 2881 of 2021
       From the Judgment and Order dated 03.06.2021 of the National
       Green Tribunal in OA No. 298 of 2020.
       With
       Civil Appeal No(s). 4432, 4431, 4654, 4748, 4902-4903 and 4908
       of 2021

                           Appearances for Parties
       Advs. for the Appellant(s):
       Nidhesh Gupta, Sr. Adv., Tarun Gupta, Bikram Dwivedi.
[2026] 5 S.C.R.                                                         423

                    Neetu Solvents v. Vineet Nagar & Ors.


     Advs. for the Respondent(s):
     Mrs. Archana Pathak Dave, A.S.G., B.K. Satija, Shiv Mangal
     Sharma, A.A.Gs. Ankit Jain, Sr. Adv., Harpreet Popli, Amarjeet
     Singh, Rahul Sambher, Eish Kesariwani, Dr. Surender Singh Hooda,
     Subhranshu Padhi, Ms. Priyanka Das, Ms. Preeti Rani, B.K. Satija,
     Vivek Gupta, Vijay Awana, Yogesh Vats, Dr. N. Visakamurthy,
     Mahesh Kasana, Ms. Aparna Rohatgi Jain, S. K. Verma, Rahul
     Khurana, Samar Vijay Singh, Ms. Sabarni Som, Anupam Saxena,
     Ashwini Kr. Mishra, Pradeep Misra, Daleep Dhyani, Anupam
     Misra, Suraj Singh, Ms. Abhinandini Sharma, Saurabh Rajpal, Ms.
     Saubhagya Sundriyal, Ms. Nidhi Jaswal, Gurmeet Singh Makker,
     Ms. Priyanka Das, B K Satija, Rohan Gupta, Shubhranshu Padhi,
     Ms. Preeti Rani, Kartikey Sahai, Tahir Ashraf Siddiqui, Rajesh
     Kumar Gautam.

                Judgment / Order of the Supreme Court

                                 Judgment

     J.K. Maheshwari, J.

1)   In all these appeals, the appellants are the industries, and running
     the manufacturing units of Formaldehyde, its different resins
     (including melamine formaldehyde, urea formaldehyde and phenol
     formaldehyde) in the States of Rajasthan and Haryana. In Civil
     Appeal No.2881 of 2021, Civil Appeal No.4432 of 2021, Civil Appeal
     No.4431 of 2021 and Civil Appeal No.4748 of 2021 the units are
     situated in State of Rajasthan while in Civil Appeal No.4654 of 2021,
     Civil Appeal No.4908 of 2021 and Civil Appeal No.4902-4903 of 2021
     the units are situated in State of Haryana.
2)   Three Original Applications were preferred, being O.A. No. 298/2020
     (Vineet Nagar v. CGWA), O.A. No. 287/2020 (Dastak N.G.O. v.
     Synochem Organics Pvt. Ltd. & Ors.) and O.A. No. 840/2019 (Ayush
     Garg v. Union of India) before the National Green Tribunal, Principal
     Bench, New Delhi (for brevity ‘NGT’). In those original applications,
     it was contended that the units of formaldehyde manufacturing have
     been established and are operating without prior Environmental
     Clearance (for brevity ‘EC’).
3)   The NGT decided all the said original applications on 03.06.2021,
     albeit by three different orders. The main order was passed in the
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       case of O.A. No. 287/2020 (Dastak N.G.O.) wherein it was directed
       that formaldehyde manufacturing units cannot be allowed to operate
       without prior EC. In O.A. No. 298/2020 (Vineet Nagar), the appellants-
       units herein were arrayed as respondents, and it was decided on the
       same date relying upon the directions issued in the case of Dastak
       N.G.O by NGT.
4)     The manufacturers of formaldehyde units, being aggrieved by the
       order of the NGT, have filed the present appeals. On 30.07.2021, this
       Court was pleased to issue notice and as an interim measure, stayed
       the operation of the order impugned. It is pertinent to note that C.A.
       No. 4795/2021 being Pahwa Plastics Private Limited and Anr. v.
       Dastak NGO and Ors.1 dealing with two units was filed against the
       order dated 03.06.2021 passed by the NGT in O.A. No. 287/2020
       of Dastak N.G.O (for brevity ‘Dastak N.G.O’). Initially, the present
       appeals were clubbed with Pahwa Plastics (supra), however later,
       only the case of Pahwa Plastics (supra) was decided vide judgment
       dated 25.03.2022, allowing the appeals filed by the manufacturing
       units. In the said judgement, this Court observed that the industrial
       units therein was established and operating on the basis of a valid
       Consent to Establish (for brevity ‘CTE’) and Consent to Operate (for
       brevity ‘CTO’) granted by the Pollution Control Board (for brevity
       ‘PCB’) of the concerned States. It was further held that the unit
       cannot be closed merely on account of technical irregularity for want
       of prior EC, when the PCB itself was not aware of the applicability of
       EC for such units. In consequence, the order of NGT was set aside
       with direction to continue the operation of the units.
5)     At this stage, it will not be out of place to refer to the judgement
       of this Court dated 16.11.2025 in Vanashakti v. Union of India2
       (hereinafter ‘Vanashakti judgement’) where challenge was laid to
       two Office Memorandums (for brevity ‘OM’) issued by the Ministry of
       Environment, Forests and Climate Change (for brevity ‘MoEF&CC’) in
       2017 and 2021. The OM dated 14.03.2017 was applicable to projects
       or activities that had started work on site, expanded production beyond
       the limit of the EC or changed the production mix without obtaining
       EC, ex-post facto clearance could be granted. However, this OM was


1    (2023) 12 SCC 774.
2    2025 SCC OnLine SC 1139.
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                        Neetu Solvents v. Vineet Nagar & Ors.


     only applicable to projects or activities that had commenced prior to
     14.03.2017 and provided a limited window of six months for eligible
     applicants, which was later extended to 13.04.2018. The OM dated
     07.07.2021 came to be issued after the NGT directed the MoEF&CC
     vide order dated 24.05.2021 to prepare a Standard Operating
     Procedure for granting EC in cases of any violation. This Court in
     the Vanashakti judgement, while relying on Common Cause v.
     Union of India3, Alembic Pharmaceuticals v. Rohit Prajapati4 and
     Elecctrosteel Steels Ltd. v. Union of India5 held that ex-post facto
     EC is alien to the Indian environmental jurisprudence and struck
     down the OMs dated 14.03.2017 and 07.07.2021 as being illegal.
     In doing so, this Court concluded as follows: –
            “20. Moreover, the 2017 notification is completely in
            violation of the law laid down by this court in the case of
            Common Cause2 and Alembic Pharmaceuticals3. From
            the recitals of the 2017 notification, it is apparent that it
            was a one-time measure to protect those who were in
            violation as on the date of the 2017 notification. In view
            of the settled law, even a ‘one-time measure’ or ‘one-
            time relaxation’ was illegal. The 2021 OM encourages
            the entities who contributed to pollution by not obtaining
            prior EC. Whenever EC is granted, it is always conditional.
            Certain conditions are imposed to abate or reduce the
            pollution. Such one-time measures add to air and/or water
            pollution. Such measures infringe the right to live in a
            pollution free environment guaranteed by Article 21. Thus,
            the 2017 notification was completely illegal.
                                          XXX
            23. Apart from the fact that the very concept of grant of
            ex-post facto EC is illegal, it is not possible to understand
            why the Central
            Government made efforts to protect those who committed
            illegality by not obtaining prior EC in terms of the EIA



3   (2017) 9 SCC 499.
4   (2020) 17 SCC 157.
5   (2023) 6 SCC 615.
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       notification. As the EIA notification was eleven years old
       when the 2017 notification was issued, there was no equity
       in favour of those who committed such gross illegality of
       not obtaining prior EC. The persons who acted without
       prior EC were not illiterate persons. They were companies,
       real estate developers, public sector undertakings, mining
       industries, etc. They were the persons who knowingly
       committed illegality. We, therefore, make it clear that
       hereafter, the Central Government shall not come out with
       a new version of the 2017 notification which provides for
       the grant of ex-post facto EC in any manner.
                                   XXX
       29. …Therefore, what is done by the 2021 OM is something
       which was completely prohibited by this Court in the cases
       of Common Cause2 and Alembic Pharmaceuticals3. It is an
       attempt to bring in an ex-post facto or retrospective regime
       by craftily drafting the SOP. The grant of EC under the 2021
       OM in substance and in effect amounts to ex post facto
       grant of EC. The Court must come down very heavily on
       the attempt of the Central Government to do something
       which is completely prohibited under the law. Cleverly, the
       words ex post facto have not been used, but without using
       those words, there is a provision to effectively grant ex post
       facto EC. The 2021 OM has been issued in violation of the
       decisions of this Court in the cases of Common Cause2
       and Alembic Pharmaceuticals3. Therefore, we have no
       manner of doubt that the 2021 OM which permits grant
       of EC is completely arbitrary and illegal. Moreover, the
       2021 OM does not refer to exercise of any power under
       the 1986 Act or the 1986 Rules.
                                   XXX
       31. The EIA notification is of 14th September 2006. When
       the 2021 OM was issued, it was nearly 15 years old.
       Therefore, all project proponents were fully aware of the
       stringent requirements under the EIA notification. The 2021
       OM seeks to protect the violations of the EIA notification
       which have taken place or continue to take place 15
       years after the EIA notification came into force. Thus,
[2026] 5 S.C.R.                                                              427

                     Neetu Solvents v. Vineet Nagar & Ors.


             the 2021 OM seeks to protect violators who have acted
             with full knowledge of consequences of violating the EIA
             notification. Those who violate the law regarding obtaining
             prior EC are not only committing gross illegality, but they
             are acting against the society at large. The violation of the
             condition of obtaining prior EC must be dealt with heavy
             hands. In environmental matters, the Courts must take a
             very strict view of the violations of the laws relating to the
             environment. It is the duty of the Constitutional Courts to
             do so.”
6)    The Vanashakti judgement was assailed seeking recall in Review
      Petition (C) Diary No. 41929/2025 being Confederation of Real
      Estate Developers of India (CREDAI) v. Vanashakti and Another6
      (hereinafter ‘Vanashakti Review judgement’). The said Review
      Petition was heard by a three-Judge Bench of this Court wherein
      Chief Justice B.R. Gavai, as he then was, concluded as under: –
             “95. Further, the judgments of this Court in the cases of
             D. Swamy (supra) and Pahwa Plastics Private Limited
             (supra) were not brought to the notice of this Court.
                                         XXX
             121. As already discussed hereinabove, the JUR though
             considers some of the paragraphs of Common Cause
             (supra), Alembic Pharmaceuticals Limited (supra) and
             Electrosteel Steels Limited (supra), various relevant
             paragraphs of these judgments which would have had a
             direct bearing on the JUR had not been brought to the
             notice of this Court and accordingly not considered by this
             Court. Apart from that, the law laid down in JUR is totally
             in conflict with the law laid down in D. Swamy (supra) and
             Pahwa Plastics Private Limited (supra).
                                         XXX
             140. I am in complete agreement with the aforesaid
             observations of this Court in the case of Bindu Kapurea
             (supra), to the effect that demolition of the projects already



6    2025 SCC OnLine SC 2474.
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            completed would rather than being in public interest would
            result in throwing the valuable public resources in dustbin.”
       In concurring opinion, Justice K. Vinod Chandran opined as follows: –
            “8. The balanced approach, in the wake of admitted
            violations, taken in Common Cause & Alembic, have
            been completely lost sight of, by the judgment under
            review. The judgment under review, with due respect did
            not look into the aspects of the power conferred under
            the Environment Protection Act and the legal principles
            regarding an undertaking given in derogation of the
            statutory provisions. The judgment under review failed
            to notice the decision in Electrosteel in its entirety and
            its attention was not drawn to Pahwa and D. Swamy. It
            is one thing to find Electrosteel, Pahwa and D. Swamy
            per-incuriam in the original proceeding, which would have
            restrained a review on that ground; but quite another to
            reject the prayer for review on the ground that though not
            noticed or referred to, those decisions are per incuriam;
            which still is a valid ground for review for not having been
            considered. I fully concur with the opinion of the Learned
            Chief Justice of India and find the review to be not only
            warranted, but imperative and expedient.”
7)     Mr. Nidhesh Gupta, Learned Senior counsel for the appellant-units
       claimed and urged that the units were set up on the basis of CTE
       and CTO granted by the concerned PCB and started operations.
       At that stage, the PCB itself was unaware of the requirement of
       prior EC to run the manufacturing units of formaldehyde. However,
       when CTE and CTO were granted, it would mean that the PCB was
       satisfied qua establishment and operation of the units, and hence,
       the requirements of law as sought by PCB were complied with. As
       such, the appellant-units started their operations and continued
       manufacturing. They have also claimed that the units are totally ‘non-
       polluting’ having ‘zero trade discharge’, which is also incorporated
       in the CTE and CTO granted to them.
8)     After establishment and starting operations by the units of
       formaldehyde, the PCB has considered the applicability of the
       provisions of the Environment Impact Assessment notification
       dated 14.09.2006 (for brevity ‘EIA 2006 notification’) issued by
[2026] 5 S.C.R.                                                           429

                    Neetu Solvents v. Vineet Nagar & Ors.


     the Government of India. It was communicated vide Office Order
     dated 19.08.2019 issued by the Rajasthan PCB that CTE and CTO
     pending for any unit in the State of Rajasthan shall be considered
     after submission of EC under the EIA 2006 notification. It was also
     informed that the units to which CTE and CTO were granted shall
     be asked to apply for EC as soon as possible and submit proof of
     such application within sixty days.
9)   Similarly, with respect to the units situated in the State of Haryana, the
     Haryana PCB issued an Office Order dated 10.11.2020 directing the
     operational units to apply for EC and submit proof within sixty days.
10) The units of the appellants, either situated in Rajasthan or Haryana,
    applied within the stipulated period and submitted the proof.
    Thereafter, operation of such units was challenged by filing the
    three original applications indicated above, wherein the impugned
    order was passed by NGT in O.A. No. 287/2020 (Dastak N.G.O.)
    allowing the same on account of not having prior EC. The other
    two original applications wherein the appellant-units affected were
    decided by relying upon the order in the case of Dastak N.G.O. The
    judgment of NGT in Dastak N.G.O was assailed before this Court in
    Pahwa Plastics (supra) and was set aside by this Court. Learned
    Senior counsel for the appellant-units submits that the judgment of
    NGT in Dastak N.G.O. has been relied upon by the appellants and
    on account of the same having been set aside, therefore, similar
    directions may be issued in the present appeals by applying the ratio
    of the judgement in Pahwa Plastics (supra) delivered by this Court.
11) Learned Senior counsel explaining the parity in the case of the
    appellant-units as well as of Pahwa Plastics (supra) contended
    that the CTE and CTO were granted by the respective PCBs, since
    it was not aware of the requirement of prior EC, and therefore,
    directed the units to apply for the same within the stipulated time
    in order to continue operation. As such, the factual situation being
    similar in the present appeals, therefore, direction issued by NGT
    to close the appellant-units by relying upon the judgment of Dastak
    N.G.O. is not justified.
12) In order to further advance such position, he has referred various
    paragraphs of the judgment in Pahwa Plastics (supra) to submit
    that this Court has considered all the aspects in detail while issuing
    direction to obtain ex-post facto EC and in the meantime, continue
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       running the units. Reference was further made to OM dated
       07.07.2021 issued by the MoEF&CC, which was challenged in the
       Vanashakti judgement and on account of order dated 02.01.2024
       passed by this Court, the operation of the said OM has been stayed.
       The said challenge was later allowed by the Vanashakti judgment
       dated 16.05.2025, thereby striking down the OM dated 07.07.2021.
       The Review Petition filed against the said judgement was allowed
       by the three-Judge Bench in the Vanashakti Review judgement on
       18.11.2025, and so, the delay in grant of ex-post facto EC was due
       to pendency of the above litigation.
13) At this stage, it was further contended that grant of EC involves four
    steps viz. Screening, Scoping, Public Consultation and Appraisal.
    Out of these, the first two steps i.e., Screening and Scoping are already
    complete in the case of appellant-units. The Terms of Reference
    (for brevity ‘TOR’) also stand granted and there is no requirement
    of Public Consultation since most of the units are situated in a
    Notified Industrial Estate, and so, step three is also over. It is only
    the last stage i.e., Appraisal which is left, and the same was stalled
    because of the above referred litigation. In addition, it is contended
    that the judgment of Pahwa Plastics (supra) still holds the field
    and the three-Judge Bench in the Vanashakti Review judgement
    has acknowledged its ratio. Learned Senior counsel has urged that
    these appeals be allowed on similar lines and permission to obtain
    ex-post facto EC be granted, while allowing the units to run in the
    meantime. Countering the arguments of the respondents’ counsel
    in respect of OM dated 07.07.2021, he has contended that such
    argument is fallacious in view of the judgment of Pahwa Plastics
    (supra) and the Vanashakti Review judgement.
14) Per contra, Mr. Ankit Jain, learned Senior counsel appearing for
    the Original Applicants submitted that while the judgment in Pahwa
    Plastics (supra) was delivered, it impressed the mind of this Court on
    the ground that due to closure of industry, approximately 8000 workers
    would be affected, and so, the said judgement was pronounced to
    save adverse impact on public employment and public purpose. It was
    submitted that in the appellant-units, 10-15 workers are employed,
    therefore, ratio of the said judgment cannot be made applicable.
    Learned Senior counsel is unable to dispute the factual aspect of
    granting CTE, CTO and TOR; but it is urged that in view of the OM
    dated 07.07.2021, prior EC was essential, and the judgment in the
[2026] 5 S.C.R.                                                       431

                    Neetu Solvents v. Vineet Nagar & Ors.


     case of Pahwa Plastics (supra) may not apply as precedent as it
     was based on incorrect information supplied to the Court.
15) Learned counsel representing the respective PCBs submit that
    CTE and CTO has rightly been granted to the appellant-units. On
    examining the issue as per EIA 2006 notification, the appellant-units
    were directed to apply for EC for the earliest and submit proof within
    sixty days. In compliance, the appellants-units have applied for grant
    of EC within the time frame, but the same remained pending because
    of the Vanashakti judgment. It is said that the delay in grant of EC
    has occurred till decision in Vanashakti Review judgment which is at
    the stage of appraisal, however, possibility to grant EC permission
    at the earliest may not be ruled out.
16) Ms. Archana Pathak Dave, learned Additional Solicitor General
    appearing for the Union of India has submitted that the issue herein
    has been dealt with in the case of Pahwa Plastics (supra), and
    at present, the said judgment holds the field. It is not disputed by
    her that the judgment impugned in the present appeals has been
    passed solely relying upon the judgment of NGT in Dastak N.G.O,
    which stands set aside by judgement of this Court in Pahwa Plastics
    (supra). It is further urged that looking at the peculiar facts of this
    case wherein the EC was sought after establishment of the units,
    the present appeals may be decided by issuing appropriate direction
    in the light of the applicable precedent.
17) After hearing learned counsel for the parties at length and in the wake
    of arguments as advanced, it is necessary to examine whether the
    judgment dated 03.06.2021 rendered by NGT in the case of Dastak
    N.G.O. and challenged before this Court in Pahwa Plastics (supra),
    and further relied upon to decide the other two original applications
    wherein the appellant-units were arrayed as respondents, was
    without independently appreciating the facts of each individual unit.
    The answer to the said issue is clear as day as the said judgment of
    NGT has been set aside in Pahwa Plastics (supra). With an intent
    to appreciate the ratio of the judgment of Pahwa Plastics (supra),
    certain paragraphs are relevant, hence, produced as under: –
           “22. By Communication No. HSPCB/Consent/ :
           2846616YAMCTE 3087415 dated 2-6-2016, the Haryana
           State Pollution Control Board (HSPCB) granted consent
           to establish (CTE) to Appellant 1 M/s Pahwa Plastics Pvt.
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       Ltd. 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.
                                   XXX
       24. By another Communication No. HSPCB/Consent/ :
       2846618YAMCTO3098246 dated 26-3-2018, HSPCB
       granted consent to Appellant 1 to operate its Yamuna
       Nagar unit from 8-2-2018 to 31-3-2022.
                                   XXX
       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.
                                   XXX
       37. The appellants duly applied for EC in respect of their
       manufacturing units. After scrutinising 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
       finalise the cases of the appellants for issuance of Terms
       of Reference (ToR).
                                   XXX
       40. The SOP formulated by the said Office Memorandum
       dated 7-7-2021 refers to and gives effect to various judicial
       pronouncements including the judgment of this Court in
       Alembic Pharmaceuticals Ltd. v. Rohit Prajapati [Alembic
       Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC
       157] .
                                   XXX
       49. The appellants have already applied for EC. The
       Expert Appraisal Committee of the MoEF&CC has, after
       scrutinising the application of the appellants and finding
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                    Neetu Solvents v. Vineet Nagar & Ors.


           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 conducted.
           Only last procedural step of issuance of EC is left.”
     From the above paras, it is clear that the PCB granted CTE to Pahwa
     Plastics and thereafter, Haryana PCB granted CTO to the Yamuna
     Nagar unit. When CTE & CTO were granted for manufacturing of
     formaldehyde, even the PCB of Haryana was not firm that prior
     EC was a requirement for such unit. In Pahwa Plastics (supra),
     the appellant-units duly applied for EC, which remained pending.
     The appellant-units have also applied for EC on asking and after
     scrutinizing the applications, recommendations were made for TOR,
     which came to be granted after conducting public hearing and only
     the procedural step of issuance of prior EC after appraisal was left.
18) In view of the said factual findings, this Court concluded in Pahwa
    Plastics (supra) as thus: –
           “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 statutory authorities
           concerned, and has 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. 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 counter-affidavit before the
           NGT clearly stated that a decision was taken to regularise
           units such as the Apcolite Yamuna Nagar and Pahwa
           Yamuna Nagar Units, since requisite approvals had been
           granted to those units, by the authorities concerned on
           the misconception that no EC was required.
           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,
434                                                      [2026] 5 S.C.R.

                      Supreme Court Reports


       in appropriate cases, where the projects are in compliance
       with environment norms, is not impermissible. As observed
       by this Court in Electrosteel Steels Ltd. [Electrosteel Steels
       Ltd. v. Union of India, (2023) 6 SCC 615], this 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 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 [Dastak N.G.O. v. Synochem Organics (P) Ltd., 2021
       SCC OnLine NGT 131] is set aside insofar 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 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, 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 the Union of India contended that
       the appellant had not submitted its final application for EC,
       after public hearing. It is not clear what more was required
[2026] 5 S.C.R.                                                           435

                    Neetu Solvents v. Vineet Nagar & Ors.


           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 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.”
19) Mr. Nidhesh Gupta, learned Senior counsel produced a comparative
    chart indicating similarity in the case of appellant-units with those
    involved in Pahwa Plastics (supra). In order to appreciate the
    individual facts in each appeal, the detailed facts are referred below
    for clear understanding in the succeeding sub-paragraphs: –
     19.1) C.A.No.2881/21 (Neetu Solvents) – CTE was granted on
           17.06.2015 as being valid w.e.f. 30.04.2015 to 31.03.2018, or
           commissioning of project whichever is earlier. As such, the unit
           was established. CTO was granted on 05.05.2016, and last
           renewed on 31.12.2023. Renewal for the same was applied for
           on 16.08.2023. Referring various documents, it is contended
           that such permissions are being granted on subsequent date
           by applying retrospective operation. Clarifying the status of
           EC, it was urged that the same was applied for on 01.10.2019.
           After Screening and Scoping, TOR was granted on 16.07.2021.
           In this case, Public Consultation was exempted because the
           unit is situated in Industrial area.
     19.2) C.A.No.4432/21 (Top Notch) – CTE was granted on 23.09.2014
           having validity w.e.f. 09.09.2014 to 31.08.2017, pursuant to
           which unit was established within the validity of CTE. CTO
           was granted on 05.05.2016 and last renewed on 31.10.2023.
           Renewal for the same was applied for on 30.05.2023. Such
           renewal is being granted ex-post facto from retrospective
           date. Similar is the position for EC, which was applied for on
           01.10.2019 after Screening and Scoping. TOR was granted on
           18.03.2022 and Public Consultation is exempted on account
           of the unit being in an industrial area.
     19.3) C.A.No.4431/2021 (D.C. Industries) – CTE was granted on
           12.12.2014, having validity w.e.f. 09.09.2014 to 31.08.2017.
           Pursuant thereto, the unit was established within the validity
436                                                         [2026] 5 S.C.R.

                          Supreme Court Reports


             of CTE. Later, CTO was granted on 13.08.2015 and last
             renewed till 30.09.2026, thus, the said CTO is valid till now.
             With regard to EC, the same was applied for on 20.09,2019.
             After Screening and Scoping, TOR was granted on 22.07.2021.
             Public Consultation is exempted since the units being run are
             in an industrial area.
       19.4) C.A.No.4748/21 (Dee Bee Organics) – CTE was granted
             on 26.11.1994 and the unit established within the validity
             period. CTO was granted on 25.05.1996 and last renewed
             till 30.06.2026. EC was applied for on 04.10.2019. After
             Screening and Scoping, TOR was granted on 18.03.2022.
             Public Consultation is exempted as the unit is situated in an
             industrial area.
       19.5) C.A.No.4654/21 consists of four units. Out of those, for two
             units; CTE, CTO and EC have already been granted. Details
             of the remaining two units are as under:
             19.5.1) Gayatri Industries – CTE was granted on 11.12.2017,
                     having validity from 11.12.2017 to 10.12.2022. The
                     unit was established within the validity of CTE. Later,
                     CTO was granted on 15.09.2018. last renewed till
                     30.09.2030 and so, is presently in existence. The
                     unit applied for EC and after Screening and Scoping,
                     TOR granted on 08.04.2022. Public Consultation is
                     exempted on account of the unit being situated in
                     an industrial area.
             19.5.2) Sanwaria Polymers – CTE was granted on
                     22.02.2009 and unit established within the validity.
                     Later, CTO was granted on 09.03.2017, last renewed
                     till 30.09.2028 and is in existence at present. The unit
                     applied for EC on 13.05.2021 wherein after Screening
                     and Scoping, TOR was granted on 08.04.2022. Public
                     Consultation for the unit is exempted as it is situated
                     in an industrial area.
       19.6) C.A.No.4908/21 consists of two units:
             19.6.1) Guruji Overseas – CTE was granted on 30.10.2018,
                     with validity till 29.10.2023. The unit started within
                     the said period and later, CTO was granted on
[2026] 5 S.C.R.                                                        437

                    Neetu Solvents v. Vineet Nagar & Ors.


                       05.07.2023. It was last renewed till 29.09.2026 and
                       is presently in existence. The unit applied for EC on
                       02.12.2020 and after Screening and Scoping, TOR
                       was granted on 15.03.2022. Public hearing was
                       conducted on 11.07.2022 and only the Appraisal
                       certificate remains to be issued, which is pending
                       due to the Vanashakti judgement.
            19.6.2) Chemwood Industries – CTE was granted on
                    20.12.2018, with validity till 19.12.2023. The unit
                    started within the validity period and CTO was granted
                    on 05.07.2023. It was last renewed till 30.09.2026
                    and is in existence at present. It applied for EC on
                    17.06.2021 and after Screening and Scoping, TOR
                    was granted on 20.07.2021. Public hearing was
                    conducted on 02.02.2022 and only the Appraisal
                    certificate remains to be issued, which is pending
                    because of the Vanashakti judgment.
20) Upon appraisal of the factual scenario with respect to the appellants-
    units comparing with the case of Pahwa Plastics (supra) we have
    no shadow of doubt in holding that the CTE and CTO were granted
    to the appellants-units as well as those in Pahwa Plastics (supra).
    In the said judgment, the judgment of NGT in Dastak N.G.O was
    assailed, which has been set aside with direction as contained in
    paragraphs 64 to 69 of Pahwa Plastics (supra). Since the judgment
    assailed by the appellant-units in these appeals solely relies upon
    Dastak N.G.O., in light of the same being set aside by this Court, the
    inescapable conclusion which can be drawn is to apply the judgment
    of Pahwa Plastics (supra) in the facts as discussed hereinabove.
21) Mr. Ankit Jain, learned Senior counsel for the original applicants,
    relying on the contents of the affidavit filed by the appellant-units
    has urged that though Section 25(7) of the Water (Prevention and
    Control of Pollution) Act, 1974 (for brevity ‘Water Act’) provides
    for deemed approval for CTO; in terms of Section 21(4) of the Air
    (Prevention and Control of Pollution) Act, 1981 (for brevity ‘Air Act’)
    there is no provision to grant deemed approval. He has made an
    attempt to distinguish the language of the Air Act with Water Act
    to satisfy this Court that in absence of deemed permission, CTO
    as indicated is completely misplaced. It was also submitted that
438                                                       [2026] 5 S.C.R.

                         Supreme Court Reports


       prior EC by complying the OM dated 07.07.2021 the judgment of
       Pahwa Plastics (supra) is necessary. At this stage, it is necessary
       to observe that the argument of not receiving permission under the
       Air Act is for the purpose of granting CTO. However, when CTO is
       not disputed by learned counsel for the PCBs, being the relevant
       authority in this case, the issue of such infraction is not germane
       and is hereby repelled.
22) Mr. Ankit Jain, learned Senior has laid much emphasis on paragraphs
    2 and 54 of the judgment in Pahwa Plastics (Supra) to contend that
    the foundation of the said judgment was of affecting 8000 workers
    of the industry, therefore, the said judgment may not be treated
    as precedent. In our view, the said argument is impressive at first
    blush but not worthy of much credence for being relied on. While
    it is true that in the unit of Pahwa Plastics, 10 to 15 employees
    were working and is ascertainable from the counter-affidavit filed
    by the Union of India, paragraphs 2 and 54 of the judgement in
    Pahwa Plastics (supra), refer to 8000 employees. Since, one
    of us (Justice J.K. Maheshwari) was a part of the said judgment,
    the intent of this Court in Pahwa Plastic (supra) is required
    to be explained. While deciding the said judgment, about 8000
    employees were referred with respect to all the manufacturing units
    of formaldehyde, including the appellant-units, herein which had
    already started functioning after CTE and CTO, and if closed, the
    employment of all those persons may be affected. Therefore, the
    number 8000 referred in those paragraphs is not only for Pahwa
    Plastics (supra), it includes employees of all manufacturing units
    of formaldehyde running in the industrial area, and with the said
    explanation, we repel his argument.
23) In view of the above, it is reiterated that after grant of CTE and CTO
    by the respective PCB, the argument of not having valid permission
    under Air Act is not germane and the infraction to grant CTO based
    on such argument is not acceptable and has no impediment. On
    assessing the cases of the appellant-units, on facts, it is similar to
    that of the case of Pahwa Plastics (supra). The impugned judgment
    in the other two original applications, passed by relying upon the
    judgment of NGT in Dastak N.G.O. which has been set aside by this
    Court in Pahwa Plastics (supra), therefore, having similarity of the
    facts, the appellant-units deserve similar direction.
[2026] 5 S.C.R.                                                        439

                    Neetu Solvents v. Vineet Nagar & Ors.


24) In the facts of the present case, it is necessary to emphasize that
    the units of the appellants are not at the stage of establishment or
    starting operation. These are the units which, where established and
    started operation based on CTE and CTO granted by the PCB of the
    concerned State. Thereafter, the respective PCBs have examined
    the EIA 2006 notification wherein it was found that formaldehyde
    manufacturing units are covered under synthetic organic chemical
    listed at Sr. No. 5(f) of the Schedule 1 of the notification and such
    being the case, it was appropriate that the units which are in operation
    be required to seek EC.
25) In this context notices were issued to the appellant-units by the
    Rajasthan PCB and Haryana PCB vide Office Orders dated
    19.08.2019 and 10.11.2020, respectively, to apply within for EC at
    the earliest and submit proof of the same within 60 days. It is not
    disputed that the appellant-units applied for EC within the stipulated
    time. After submitting the application, the first two steps of Screening
    and Scoping have been completed. TOR also stands granted.
    Since most of the units are situated in industrial area, therefore,
    public consultation was not found necessary. For two units, namely
    Guruji Overseas and Chemwood Industries, public consultation
    is already complete and only the fourth step of appraisal remains
    to be completed. It is also a fact that two units i.e., Banke Bihari
    Overseas and G.B. Overseas Pvt. Ltd., which are appellants in
    this batch of appeals have been granted EC and are running their
    formaldehyde units. In such backdrop, it can safely be concluded
    that ex-post facto EC is the right recourse taken on the insistence
    of the respective PCB in order to rectify the mistake. In terms of the
    said rectification, the appellants were duly noticed and after all the
    necessary steps for grant of EC, only appraisal by the MoEF&CC
    remains for consideration.
26) Therefore, the case in hand is not a one where the appellants
    established the units of formaldehyde and started operation due to
    lack of bona fide ignoring any requirement of law. On the contrary it
    is a case where the PCBs were not aware that prior EC to establish
    and operate such units is required in terms of EIA 2006 notification.
    Accordingly, in terms of the notices issued by the PCBs, the
    appellants-units have applied for grant of EC which remains pending.
    In our view, the judgment of Pahwa Plastics (supra) squarely applies
    to the facts of this case.
440                                                             [2026] 5 S.C.R.

                              Supreme Court Reports


27) Accordingly, the direction of closure of the appellant-units by the
    impugned orders of NGT stands set aside. The parties are directed
    to apply the ratio of the judgment of Pahwa Plastics (supra) mutatis
    mutandis and by allowing these appeals, following directions are
    issued:-
       (i)     The appellant-units, having been established and operated
               pursuant to the CTE and CTO granted by the PCB for the
               respective State, be allowed to function and operate.
       (ii)    The respondent shall take a decision on the applications of the
               appellant-units for EC in accordance with law within one month,
               if not already taken. Pending such decision, the operation of
               the appellant-units shall not be interfered with, if not otherwise
               required.
       (iii) Electricity for the appellant-units, if disconnected, shall be
             restored subject to payment of charges, if any. If application for
             EC is rejected on grounds of any contravention on part of the
             appellant-units, it will be open to the respondents to disconnect
             the supply of electricity and parties would be at liberty to take
             recourse afresh.
       (iv) The Union of India shall, within three working days from the
            date of receipt of this judgement, inform the appellant-units in
            writing whether anything further is required to be done by them
            and if so, the required steps be taken by the appellant-units
            within a week thereafter and do the needful.
       (v)     Pending application(s), if any, shall stand disposed of.

       Result of the case: Appeals allowed.




       †
           Headnotes prepared by: Ankit Gyan