GAJUBHA JADEJA JESAR versus UNION OF INDIA & ORS. on 10 August 2022

1. This order shall dispose of Civil Appeal No. 3116 of 2020 arisingFout of an application filed by the appellant[1] before the National GreenTribunal[2] and Civil Appeal No. 3576 of 2020 filed by the ProjectProponent, both arising out of the same order passed by the Tribunal on12.2.2020.

2. The Project Proponent applied for Consent to Establish (CTE)GCold Rolled Coils of stainless steel on 20.1.2018, the permission of whichwas granted by Gujarat State Pollution Control Board. After the unitwas erected, Project Proponent was granted permission to operate theunit on 6.2.2020. It is noted that the Project Proponent has invested 1 For short, the ‘Applicant’H2 For short, the ‘Tribunal’

Rs.1100 crores for the development of infrastructure and had a turnoverof approximately Rs.743 crores and paid Rs.286.17 crores as Goodsand Services Tax till the Financial Year 2020-21. The applicant also earnedUS Dollars 15.52 million foreign exchange for the country.

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3. An application was filed before the Tribunal on 20.7.2019 onthe ground that the Project Proponent has set up the unit in violation ofEnvironment Impact Assessment (EIA) notification dated 14.9.2006, assuch plant would fall within category 3(a) i.e., secondary metallurgicalindustry for which a prior environmental clearance is required. Therelevant extract from the EIA notification reads thus:

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A4. The Tribunal set up a Joint Committee on 28.7.2019. TheCommittee concluded that the applicability of the notification would bedetermined by the Ministry of Environment, Forest and Climate Change[3].The Ministry filed an affidavit on 21.11.2019, on the basis of which theTribunal took a prima facie view that the industry requires anenvironmental clearance and thus stayed all activities of the project asBthe Ministry sought time to file an additional response. Later, an affidavitwas filed by the Ministry that a Group of Experts had been appointed onthe issue. After the said report, the Project Proponent filed an applicationfor modification of the order passed by the Tribunal on 21.11.2019 andthe stay was thereafter vacated on 16.1.2020.C[[4]]

5. The Expert Appraisal Committee[[4]] in its meeting held on 23-24.12.2019 concluded that grace period of one year could be grantedwhere the industry has been established after CTE/CTO. The Ministryfiled an affidavit accepting the recommendation No. 3(iii) of the EACrecommending one year grace period for the industry. The relevant part Dof the recommendation is reproduced as under:

“i. Project activity of CSPL falls under Category B of Schedule3(a) Metallurgical Industries (ferrous and non-ferrous) of EIANotification, 2006.

ii. The committee also noted that there are a few issues whichmay have diverse interpretations. The reports submitted by theECommittee formed by the Hon’ble NGT and the joint inspectionreport by the Regional office of Bhopal and RO of GPCB forKutch have also left the final interpretation to the MoEF&CC. Itis also noted that the present unit has obtained CTE from GPCBwhich is a Statutory authority. There may be other similarly placedFcases in the country. This shows that there is a scope and needfor further clarification in the matter regarding certain issues sothat there is no subjective interpretation in future. These issuesare (1) definition of secondary metallurgy units for the purpose ofEIA process, (2) clarification about the types of furnaces underapplicability of MoEF&CC notification 2006 and (3) clarifying reGrolling vs. cold rolling in the context of Environment Clearance.Therefore, for further smoothening the EC process for presentunit and proposals in future, the MoEF&CC may consider issuingfurther clarifications.

3 For short, the ‘Ministry’

4 For short, the ‘EAC’

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iii. In order to address to instant and similar cases where such rerolling/cold rolling units are established or operating with a CTE/CTO from the concerned State Pollution Control Boards, theMinistry may consider directing the State Pollution Control Boardsto get a list of all such cases and take further quick actions so thatthey apply for EC and get covered by the EIA notification 2006.Since, these units are established or operating under the CTEs/CTOs obtained from a statutory authority i.e. the respective StalePollution Control Boards, a period of one year may be allowed forthis recommended conversion to EC. This will also ensure thatthe units remain in operation for the allowed period and closures,unemployment and related social issues/unrests are avoided.During this period of one year, they will have to follow all theconditions imposed under the CTE/CTO.”

6. It is on the basis of the said recommendation that the Tribunalpassed the order dated 12.2.2020 that in view of the large number ofsuch mills operating on the strength of CTE/CTO, opportunity should beprovided to such units to fall within EC regime by granting a period of atleast one year to operate for the purpose.

7. The applicant challenged the time granted by the Tribunal onthe ground that the Tribunal has no jurisdiction to grant period for obtainingEnvironmental Clearance as the EIA notification mandates a priorEnvironmental Clearance. Since such consent was not obtained beforethe setting up of the industry, the time limit of one year is against themandate of the statute. It was further argued that under Section 21 ofthe National Green Tribunal Act, 2010[5], the Tribunal has the jurisdictionto set aside the Environmental Clearance but has no jurisdiction for thegrant of time for Environmental Clearance.

8. The Project Proponent, aggrieved against the order passed bythe Tribunal, challenged the findings recorded that EnvironmentalClearance is required. During the pendency of the appeal before thisCourt, the Project Proponent was served with a closure notice on25.6.2021 by the Gujarat State Pollution Control Board and the unit wasclosed in terms of the said notice. This closure notice has been assailedby way of I.A. No. 81563 of 2021.

9. While the appeals were pending before this Court, theGovernment of India has published a notification on 20.7.2022 in terms 5 For short, the ‘NGT Act’

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Aof Section 3 of the Environment (Protection) Act, 1986[6] to apply Termsof Reference within one year followed by Environmental Clearance.The notification reads thus:

“MINISTRY OF ENVIRONMENT, FOREST ANDCLIMATE CHANGE

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NOTIFICATION

New Delhi, the 20th July, 2022

S.O. 3250(E).—Whereas, the Hon’ble National GreenTribunal vide its order, dated the 12th February, 2020, in OriginalApplication No. 55/2019 (WZ), (Gajubha Jesar Jadeja vs UnionCof India &Ors.), has inter alia observed that Cold Rolled StainlessSteel Manufacturing Industries require prior environment clearancebut, having regard to the fact that there were a large number ofsuch mills operating on the strength of Consent to Establish (CTE)and Consent to Operate (CTO), the Hon’ble Tribunal has heldDthat opportunity should be provided to such units to fall within theEnvironment Clearance regime by granting a period of at leastone year to operate for the purpose; And whereas, the Central Government, keeping in viewthe impact caused due to the Covid19 pandemic has taken aEconsidered decision in line with the above said order of the Hon’bleNational Green Tribunal, so as to provide a window period forsuch re-rolling or cold rolling units to obtain prior EnvironmentalClearance; And whereas, the Central Government is of the view thatFsteel re-rolling operations fall under the purview of the secondarymetallurgical processing industry and require EnvironmentClearance as per item 3(a), relating to Metallurgical Industries(Ferrous and Non-ferrous), of the Schedule to the notification ofthe Government of India in the erstwhile Ministry of Environmentand Forest, published in the Gazette of India, Extraordinary, PartGII, Section 3, Sub-section (ii), vide notification number S.O. 1533(E), dated the 14th September, 2006, mandating the requirementof prior environmental clearance for the projects covered in itsSchedule (hereinafter referred to as the said notification), whereinall non–toxic secondary metallurgical processing units with 6 For short, the ‘Environment Act’

capacities greater than 5000 tonnes/annum (TPA) fall undercategory B; Now, therefore, in exercise of the powers conferred bysection 3 of the Environment (Protection) Act, 1986 (29 of 1986),the Central Government hereby directs that all the standalone re-rolling units or cold rolling units, which are in existence and inoperation as on the date of this notification, with valid Consent toEstablish (CTE) and Consent to Operate (CTO) from theconcerned State Pollution Control Board or the Union territoryPollution Control Committee, as the case may be, shall apply onlinefor grant of Terms of Reference (ToR) followed by EnvironmentClearance and the said units shall be granted Standard Terms ofReference as per item 3(a) of the said notification and shall beexempted from the requirement of public consultation:

Provided that the application for the grant of ToR shall bemade within a period of one year from the date of this notification.

2. This notification shall come in to force from the date ofits publication in the Official Gazette.

[F. No. IA-J-11013/8/2019-IA.II(I)]

Dr. SUJIT KUMAR BAJPAYEE, Jt. Secy”

10. With this background, the parties have addressed argumentson the question of jurisdiction of the Tribunal to pass an order to operatea unit without Environmental Clearance and the decision of closure ofthe unit.

11. It may be stated that there are 1689 similar Re-Rolling/ColdRe- Rolling Steel Plants in the country out of which 403 plants are in theState of Gujarat itself. All the units have been set up without obtainingprior Environmental Clearance as there was an ambiguity whether suchRolling Steel Mills are required to obtain prior Environmental Clearance.

12. Ms. Anitha Shenoy, learned senior counsel for the applicantrelies upon judgments of this Court reported as Common Cause v. Unionof India & Ors.[7], Hanuman Laxman Aroskar v. Union of India[8]and Alembic Pharmaceuticals Limited v. Rohit Prajapati & Ors.[9]to 7 (2017) 9 SCC 4998 (2019) 15 SCC 4019 (2020) 17 SCC 157

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Acontend that prior Environmental Clearance is mandatory. Since the unithas been set up in violation of the notification, the Tribunal could notpermit the unit to operate.

13. On the other hand, Mr. Shyam Divan, learned senior counselfor the Project Proponent submitted that in terms of Section 21 of theBNGT Act, the Tribunal is competent to pass an order towards sustainabledevelopment. It is contended that the order of the Tribunal granting timeof at least one year is based upon report of the recommendation of theEAC. The EAC recommended that Re-Rolling Units are established oroperating with CTE/CTO from the concerned State Pollution ControlBoards, therefore, a period of one year may be allowed for thisCrecommended conversion to Environment Clearance regime.

14. Mr. Divan also referred to an affidavit filed on behalf of theMinistry referring to the report submitted by a high-level ExpertCommittee under the Chairmanship of Dr. Indranil Chattoraj, Director,National Metallurgical Laboratory, Jamshedpur. The Committee notedDthat there is ambiguity in the EIA notification with respect to applicabilityof Environmental Clearance for non-toxic secondary metallurgicalprocessing industry. Therefore, in order to bring out clarity, the Ministrymay amend schedule 3(a) of the EIA notification. The relevant assertionfrom the affidavit reads thus:

“7. That the committee after conducting a series of meetingsEsubmitted its report on 17/01/2022. The committee, inter- alia, hasrecommended that

i. “That there is an ambiguity in the EIA notification, 2006 withrespect to the applicability of EC for non-toxic secondarymetallurgical processing industry.Fii. Steel re-rolling mills [Hot rolling (or) Cold rolling] are one of theprocesses in the secondary metallurgical processes and attractsthe provisions of the Environment Impact Assessment (EIA)Notification, 2006.

iii. There are around 1689 standalone steel re-rolling mills operatingGacross the country without requisite Environment Clearance andsuch unit may be brought under EC regime by providing an adequatetime frame.

iv. Revised threshold limits for primary and secondary metallurgicalindustry prescribed under chapter 6 may be considered by theHMinistry for amending the schedule 3(a) of EIA Notification, 2006

in order to bring out clarity on the applicability of EC for differencesecondary processes in metallurgical industry.

That a copy of the report of the HLEC has been annexed asANNEXURE R/2.

8. That it is humbly submitted that Ministry is in the process ofbringing out suitable amendment in the EIA Notification 2006 inline with the recommendations made by the Committee, in orderto remove the ambiguity with respect to the applicability of ECfor non-toxic secondary metallurgical processing industry.”

15. It is in pursuance of such report, the amendment was publishedon 20.7.2022.

16. Mr. Divan further relies upon an order passed by this Court inMunicipal Corporation of Greater Mumbai v. Ankita Sinha & Ors.[10]wherein the question as to whether the Tribunal has suo moto jurisdictionto entertain proceedings under the NGT Act were examined. The scopeof jurisdiction of the Tribunal was also considered.

17. Mr. Divan also refers to an order passed by this Court reportedas Pahwa Plastics Pvt. Ltd. & Anr. v. Dastak NGO & Ors.[11]whereinthe order passed by the Tribunal, holding that the manufacturing unitswhich do not have prior Environmental Clearance could not be allowedto operate, was set aside.

18. We have heard learned counsel for the parties and find noerror in the order passed by the Tribunal. The order of the Tribunal isbased upon recommendation of the EAC which suggested that one yeartime should be granted to the industry to comply with the EIA notificationdated 14.9.2006. The stand of the Ministry as well as the ProjectProponent is that there was ambiguity in the EIA notification 2006. 1689units have come up in the country on the basis of CTE and CTO regime.It is not a case of ambiguous interpretation in respect of one or two unitsbut the entire country was having the same interpretation that Re-RollingSteel Plants do not require a prior Environmental Clearance. Theambiguity has been removed only on 20.7.2022 when the notificationhas been amended, as reproduced above. Since there was ambiguityearlier, the Tribunal had granted time to the Project Proponent to complywith the requirement of Environmental Clearance.

10 2021 SCC OnLine SC 897

11 2022 SCC OnLine SC 362

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19. Such direction of the Tribunal is, in fact, arising out of scopeof powers conferred on the Tribunal under Section 21 of the NGT Act.This Court in Ankita Sinha considering the suo moto powers of theTribunal held as under:

“98. The NGT Act, when read as a whole, gives much leeway tothe NGT to go beyond a mere adjudicatory role. The Parliament’sintention is clearly discernible to create a multifunctional body,with the capacity to provide redressal for environmental exigencies.Accordingly, the principles of environmental justice andenvironmental equity must be explicitly acknowledged as pivotalthreads of the NGT’s fabric. The NGT must be seen as a suigeneris institution and not unus multorum, and its special andexclusive role to foster public interest in the area of environmentaldomain delineated in the enactment of 2010 must necessarilyreceive legal recognition of this Court.

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102. In circumstances where adverse environmental impact maybe egregious, but the community affected is unable to effectivelyget the machinery into action, a forum created specifically toaddress such concerns should surely be expected to move withexpediency, and of its own accord. The potentiality ofEdisproportionate harm imposes a higher obligation on authoritiesto preserve rights which may be waylaid due to such restrictiveaccess. It is also noteworthy that the “global impacts of climatechange will fall disproportionately on minority and low-income communities”.[12] Thus, an affirmative role, beyond mereFadjudication at the instance of applicant, is certainly required forserving the ends of environmental justice, as the statute itselfrequires of the NGT. We cannot validate an argument whichfurthers uncertainty to justify the role of a spectator, if not inaction,and would most assuredly result in injustice.

G103. The NGT, with the distinct role envisaged for it, can hardlyafford to remain a mute spectator when no-one knocks on itsdoor. The forum itself has correctly identified the need forcollective stratagem for addressing environmental concerns. Such12 Scott La Franchi, Surveying the Precautionary Principle’s Ongoing GlobalDevelopment : The Evolution of an Emergent Environmental Management Tool, [32HB.C. Envtl. Aff. L. Rev. 679 (2005)

a society centric approach must be allowed to work within theestablished safety valves of the principles of natural justice andappeal to the Supreme Court. The hands- off mode for the NGT,when faced with exigencies requiring immediate and effectiveresponse, would debilitate the forum from discharging itsresponsibility and this must be ruled out in the interest of justice.”

20. In Pahwa Plastics Pvt. Ltd., an establishment had been setup pursuant to CTE and CTO from the concerned statutory authority.The establishment applied for ex-post facto Environmental Clearance.In these circumstances, this Court held that ex-post EnvironmentalClearance should not ordinarily be granted but it cannot be declined withpedantic rigidity, regardless of the consequences of stopping the operation.Hence, the order of the Tribunal to close the units was found to beerroneous. The order of closure of establishments for the lack ofEnvironmental Clearance was set aside by this Court, inter alia, for thereason that whether the unit contributing to the economy and providinglivelihood to hundreds of people set up in pursuance to requisite approvalsof the concerned statutory authorities should be closed down for thetechnical irregularity or want of prior Environmental Clearance. ThisCourt held as under:

“54. The manufacturing units of the Appellants appoint about 8,000employees and have a huge annual turnover. An establishmentcontributing to the economy of the country and providing livelihoodought not to be closed down only on the ground of the technicalirregularity of not obtaining prior Environmental Clearanceirrespective of whether or not the unit actually causes pollution.

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56. As held by this Court in Electrosteel Steels Limited (supra)ex post facto Environmental Clearance should not ordinarily begranted, and certainly not for the asking. At the same time expost facto clearances and/or approvals and/or removal oftechnical irregularities in terms of a Notification under the EP Actcannot be declined with pedantic rigidity, oblivious of theconsequences of stopping the operation of mines, running factoriesand plants.

57. The 1986 Act does not prohibit ex post facto EnvironmentalClearance. Grant of ex post facto EC in accordance with law, in AB

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strict compliance with Rules, Regulations, Notifications and/orapplicable orders, in appropriate cases, where the projects are incompliance with, or can be made to comply with environmentnorms, is in our view not impermissible. The Court cannot beoblivious to the economy or the need to protect the livelihood ofhundreds of employees and others employed in the project andothers dependent on the project, if such projects comply withenvironmental norms.

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60. Even though this Court deprecated ex post facto clearances,in Alembic Pharmaceuticals Ltd. (supra), this Court did not directclosure of the units concerned but explored measures to controlthe damage caused by the industrial units. This Court held:—

“However, since the expansion has been undertaken andthe industry has been functioning, we do not deem itappropriate to order closure of the entire plant as directedby the High Court.”

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63. Ex post facto environmental clearance should not be grantedroutinely, but in exceptional circumstances taking into account allrelevant environmental factors. Where the adverse consequencesof denial of ex post facto approval outweigh the consequencesof regularization of operations by grant of ex post facto approval,and the establishment concerned otherwise conforms to therequisite pollution norms, ex post facto approval should be givenin accordance with law, in strict conformity with the applicableRules, Regulations and/or Notifications. The deviant industry maybe penalised by an imposition of heavy penalty on the principle of‘polluter pays’ and the cost of restoration of environment may berecovered from it.

64. The question in this case is, whether a unit contributing to theeconomy of the country and providing livelihood to hundreds ofpeople, which has been set up pursuant to requisite approvalsfrom the concerned statutory authorities, and has applied for expost facto EC, should be closed down for the technical irregularityof want of prior environmental clearance, pending the issuance ofEC, even though it may not cause pollution and/or may be foundto comply with the required norms. The answer to the aforesaid question has to be in the negative, more so when the HSPCB wasitself under the misconception that no environment clearance wasrequired for the units in question. HSPCB has in its counteraffidavit before the NGT clearly stated that a decision was takento regularize units such as the Apcolite Yamuna Nagar and PahwaYamuna Nagar Units, since requisite approvals had been grantedto those units, by the concerned authorities on the misconceptionthat no EC was required.

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66. Ex post facto EC should not ordinarily be granted, and certainlynot for the asking. At the same time ex post facto clearancesand/or approvals cannot be declined with pedantic rigidity,regardless of the consequences of stopping the operations. ThisCourt is of the view that the NGT erred in law in directing that theunits cannot be allowed to function till compliance of the statutorymandate.”

21. The judgment in Common Cause referred to by Ms. Shenoyis of no help to support her arguments as the question was whetherillegal mining can be said to be within the leased area for mining. It washeld that illegal mining takes within its fold excess extraction of a mineralover the permissible limit even within the mining lease area under theMines and Minerals (Development and Regulation) Act, 1957.

22. In Hanuman Laxman Aroskar, this Court held that the EIAnotification of the year 2006 demonstrates an increasing awareness ofthe complexities of the environment and the heightened scrutiny requiredto ensure its continued sustenance, for today and for generations to come.It embodies a commitment to sustainable development. It was held asunder:

“56. The 2006 Notification embodies the notion that thedevelopment agenda of the nation must be carried out incompliance with norms stipulated for the protection of theenvironment and its complexities. It serves as a balance betweendevelopment and protection of the environment: there is no trade-off between the two. The protection of the environment is anessential facet of development. It cannot be reduced to a technicalformula. The notification demonstrates an increasing awarenessof the complexities of the environment and the heightened scrutinyrequired to ensure its continued sustenance, for today and for A

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Agenerations to come. It embodies a commitment to sustainabledevelopment. In laying down a detailed procedure for the grant ofan EC, the 2006 Notification attempts to bridge the perceived gapbetween the environment and development.”

23. In Alembic Pharmaceuticals Limited, the validity of circularBdated 14.5.2002 was in question. This Court found that such circular iscontrary to the EIA notification of 1994. It was decided by the Ministrythat the industrial units which had gone into production without obtainingan EC would have to apply for and obtain an ex- post facto EC. The saidjudgment has no applicability to the facts of the present case where theMinistry itself is of the opinion that there was an ambiguity in the EIACnotification of 2006. Such ambiguity has been removed only when theEIA notification was subsequently amended on 20.7.2022. Therefore,the judgments referred to by Ms. Shenoy are not applicable to the factsof the present case.

24. We are constrained to point out that out of 1689 units in theDcountry, the applicant has chosen the Project Proponent as it appears tobe a motivated petition to target the Project Proponent though the ColdSteel Rolling Mills in the country were operating under the same regime.Not only the Project Proponent, but the country also has sufferedimmensely on account of closure of the unit which was export orientedunit. It may be noticed that the Gujarat State Pollution Control BoardEhas chosen the Project Proponent to serve with a closure notice on25.6.2021. The unit is lying closed since then. In view of the amendmentin the EIA notification dated 20.7.2022, the unit has time to seekEnvironmental Clearance in terms of the time line mentioned in thenotification. Therefore, the order of closure of the unit cannot beFsustained.

25. In view of the said fact, Civil Appeal No. 3116 of 2020 isdismissed. I.A. No. 81563 of 2021 in Civil Appeal No. 3576 of 2020challenging the closure notice issued by Gujarat State Pollution ControlBoard dated 25.6.2021 is allowed and the closure notice is quashed. TheCivil Appeal No. 3576 of 2020 stands disposed of in the above terms.

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Ankit Gyan and Anurag Bhaskar(Assisted by : Bodhi Ramteke, LCRA)

Appeals disposed of.

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