M/S PAHWA PLASTICS PVT. LTD. AND ANR versus DASTAK NGO AND ORS. on 25 March 2022

[2022] 16 S.C.R. 855

M/S PAHWA PLASTICS PVT. LTD. AND ANR.

v.

DASTAK NGO AND ORS.

(Civil Appeal No. 4795 of 2021)

MARCH 25, 2022

[INDIRA BANERJEE AND J.K. MAHESHWARI, JJ.]

National Green Tribunal Act, 2010 : s. 22 – Micro, Small andMedium Enterprises Development Act, 2006 – Environment(Protection) Act, 1986 – Environment (Protection) Rules, 1986 –Environment clearance – Grant of – Ex post facto environmentclearance – Appellants engaged in manufacture and sale of basicorganic chemicals – Appellant granted Consent to Establish (CTE)and Consent to Operate (CTO) for its unit by State Pollution ControlBoard-HSPCB – Subsequently, the Government issued a Notificationwhich provides for grant of ex post facto Environmental clearance-EC for project proponents who had commenced, continued orcompleted a project without obtaining EC – Thereafter, issuance ofan order by the State Government where the units which did nothave EC, be allowed to continue their operations for a period ofsix months, with the conditions that they would apply for EC –Respondent No.1 then filed a petition seeking quashing of the saidorder and units operating without EC be closed – NGT held that themanufacturing units of the appellants, which did not have prior ECcould not be allowed to operate – On appeal, held: Unit contributingto the economy of the country and providing livelihood to hundredsof people, which has been set up pursuant to requisite approvalsfrom the concerned statutory authorities, and has applied for expost facto EC, should not 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 found tocomply with the required norms – More so, the HSPCB was itselfunder the misconception that no environment clearance was requiredfor the units in question – Ex post facto EC should not ordinarily begranted, and certainly not for the asking – At the same time ex postfacto clearances and/or approvals cannot be declined with pedanticrigidity, regardless of the consequences of stopping the operations

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[2022] 16 S.C.R.

A– Impugned order is set aside – Appellants would be allowed tooperate the units.

Allowing the appeal, the Court

HELD: 1.1 It is well settled that words and phrases and/orsentences in a judgment cannot be read in the manner of a statute,Band that too out of context. The observation of the Division Benchthat a one time relaxation was permissible, is not to be construedas a finding that relaxation cannot be made more than once. Ifpower to amend or modify or relax a notification and/or orderexists, the notification and/or order may be amended and/orCmodified as many times, as may be necessary. A statement madeby counsel in Court would not prevent the authority concernedfrom making amendments and/or modifications provided suchamendments and/or modifications were as per the procedureprescribed by law. [Para 47][877-B-D]

D1.2 The Division Bench of the High Court erred in stayingthe said office memorandum, by relying on observations made bythis Court in Alembic Pharmaceuticals Ltd.’s case, in the contextof a circular which was contrary to the statutory EnvironmentImpact Notification of 1994. The attention of the High Court wasperhaps not drawn to the fact that the notification of 7th JulyE2021 was in pursuance of the statutory notification of 2017 whichwas valid. [Para 48][877-D-E]

1.3 The manufacturing units of the appellants appoint about8,000 employees and have a huge annual turnover. Anestablishment contributing to the economy of the country andFproviding livelihood ought not to be closed down only on theground of the technical irregularity of not obtaining priorEnvironmental Clearance irrespective of whether or not the unitactually causes pollution. [Para 54][878-H; 879-A]

1.4 The 1986 Act does not prohibit ex post factoGEnvironmental Clearance. Grant of ex post facto EC in accordancewith law, in strict compliance with Rules, Regulations,Notifications and/or applicable orders, in appropriate cases, wherethe projects are in compliance with, or can be made to comply H

with environment norms, is not impermissible. The Court cannotbe oblivious to the economy or the need to protect the livelihoodof hundreds of employees and others employed in the projectand others dependent on the project, if such projects comply withenvironmental norms. [Para 57][881-A-C]

1.5 There can be no doubt that the need to comply with therequirement to obtain EC is non–negotiable. A unit can be set upor allowed to expand subject to compliance of the requisiteenvironmental norms. EC is granted on condition of the suitabilityof the site to set up the unit, from the environmental angle, andalso existence of necessary infrastructural facilities and equipmentfor compliance of environmental norms. To protect futuregenerations and to ensure sustainable development, it isimperative that pollution laws be strictly enforced. Under nocircumstances can industries, which pollute, be allowed to operateunchecked and degrade the environment. [Para 62][883-B-D]

1.6 Ex post facto environmental clearance should not begranted routinely, but in exceptional circumstances taking intoaccount all relevant environmental factors. Where the adverseconsequences of denial of ex post facto approval outweigh theconsequences of regularization of operations by grant of ex postfacto approval, and the establishment concerned otherwiseconforms to the requisite pollution norms, ex post facto approvalshould be given in accordance with law, in strict conformity withthe applicable Rules, Regulations and/or Notifications. Thedeviant industry may be penalised by an imposition of heavypenalty on the principle of ‘polluter pays’ and the cost ofrestoration of environment may be recovered from it. [Para63][883-D-F]

1.7 The question in this case is, whether a unit contributingto the economy of the country and providing livelihood tohundreds of people, which has been set up pursuant to requisiteapprovals from the concerned statutory authorities, and hasapplied for ex post facto EC, should be closed down for thetechnical irregularity of want of prior environmental clearance,pending the issuance of EC, even though it may not causepollution and/or may be found to comply with the required norms.

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AThe answer to the said question has to be in the negative, moreso when the HSPCB was itself under the misconception that noenvironment clearance was required for the units in question.HSPCB has in its counter affidavit before the NGT clearly statedthat a decision was taken to regularize units such as the ApcoliteYamuna Nagar and Pahwa Yamuna Nagar Units, since requisiteBapprovals had been granted to those units, by the concernedauthorities on the misconception that no EC was required. [Para64][883-F-H; 884-A-B]

1.8 Ex post facto EC should not ordinarily be granted, andcertainly not for the asking. At the same time ex post factoCclearances and/or approvals cannot be declined with pedanticrigidity, regardless of the consequences of stopping theoperations. This Court is of the view that the NGT erred in law indirecting that the units cannot be allowed to function tillcompliance of the statutory mandate. [Para 66][884-D]

D1.9 The appellants would be allowed to operate the units.Electricity, if disconnected, shall be restored subject to paymentof charges. [Para 68][884-G]

Shree Sidhbali Steels Ltd. & Others v. State of UttarPradesh & Others (2011) 3 SCC 193 : [2011] 3 SCRE134; Fatima v. Union of India 2020 SCC Online SC347; Puducherry Environment Protection Associationv. Union of India 2017 SCC OnLine Mad 7056;Electrosteel Steels Limited v. Union of India 2021 SCCOnline SC 1247; Lafarge Umiam Mining Private LimitedFv. Union of India (2011) 7 SCC 338 : [2011] 7 SCR954 – referred to.

Alembic Pharmaceuticals Ltd. v. Rohit Prajapati &Others 2020 SCC Online SC 347 – distinguished.

Case Law Reference

G[2011] 3 SCR 134[2011] 7 SCR 954

referred to Para 32

referred to Para 58

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4795of 2021.

From the Judgment and Order dated 03.06.2021 of the NationalGreen Tribunal, Principal Bench, New Delhi in Original Application No.287 of 2020.

Nidesh Gupta, Sr. Adv., Tarun Gupta, Advs. for the Appellants.

Anil Grover, Sr. AAG, Maninder Singh, Sr. Adv., Ms. NoopurSinghal, Rahul Khurana, Sanjay Kumar Visen, Amit Sahni, HarpreetSingh Popli, Vineet Nagar, Ms. Ambika Kajal, Pawan Kr. Sharma,Rameshwar Prasad Goyal, Dr. Surender Singh Hooda, AayushmanAeron, Aditya Hooda, Rahul Besoya, Pradeep Misra, Daleep Dhyani,Suraj Singh, Bhuwan Chandra, Tahir Ashraf Siddiqui, Rajesh KumarGautam, Advs. for the Respondents.

The Judgment of the Court was delivered by INDIRA BANERJEE, J.

1. This appeal under Section 22 of the National Green TribunalAct, 2010, is against an order dated 3[rd] June 2021 passed by the PrincipalBench of the National Green Tribunal (NGT) in O.A No.287/2020 atNew Delhi, inter alia, holding that establishments such as themanufacturing units of the Appellants, which did not have priorEnvironmental Clearance (EC) could not be allowed to operate.

2. The question of law involved in this appeal is, whether anestablishment employing about 8000 workers, which has been set uppursuant to Consent to Establish (CTE) and Consent to Operate (CTO)from the concerned statutory authority and has applied for ex post factoEC can be closed down pending issuance of EC, even though it may notcause pollution and/or may be found to comply with the required pollutionnorms.

3. With increasing industrialization and the establishment offactories which emitted smoke and other pollutants, there was worldwideconcern for protection of environment. In June 1972, the United NationsConference on the Human Environment was held in Stockholm, wheredecisions were taken to take appropriate steps for preservation of thenatural resources of the earth, which, among other things, includedpreservation of the quality of air and water by controlling pollution.

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4. In 1974, Parliament enacted the Water (Prevention and Controlof Pollution) Act, 1974, with a view to prevent and control water pollutionand to maintain and restore wholesomeness of water.

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5. In furtherance of the decisions taken at Stockholm, Parliamentenacted the Air (Prevention and Control of Pollution) Act, 1981,Bhereinafter 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 CentralPollution Control Board (CPCB) and State Pollution Control Boards(SPCB) to deal with the problem of air pollution. Section 16 of the AirCPollution Act enables the Central Pollution Control Board to take stepsto improve the quality of air and to prevent, control or abate air pollutionin the country. Section 17 of the Air Pollution Act enables the StatePollution Control Boards to plan comprehensive programmes for theprevention, control or abatement of air pollution, inter alia, by layingdown standards for emission of air pollutants.D

7. Section 18 of the Air Pollution Act enables the CentralGovernment to give directions by which the CPCB is to be bound.Similarly, every SPCB is to be bound by directions in writing as might begiven by the CPCB or the State Government.

E8. Where a notification is issued under the Air Pollution Act, placingan area within the control area of air pollution, permission is necessaryto set up and operate any factory or plant thereat. No person operatingany factory or plant in any air pollution control area is to discharge orcause or permit to be discharged the emission of any air pollutants, inexcess of the standards laid down by the SPCB under Clause (g) ofFsub-Section (1) of Section 17.

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9. The Environment (Protection) Act, 1986, hereinafter referredto as “the EP Act” was also enacted pursuant to the decisions taken atthe United Nations Conference on the Human Environment, held inStockholm in June, 1972. As per the Statement of Objects and ReasonsGfor enactment of the EP Act, the said Act has been prompted by concernover the environment, that has grown all over the world since the 60s.

10. Sub-section (1) of Section 3 of the EP Act empowers theCentral Government to take all such measures as it might deem necessary H

or expedient for the purpose of protecting and improving the quality ofthe environment and preventing, controlling and reducing environmentalpollution.

11. Sub-section (2) of Section 3 of the EP Act enables the CentralGovernment to take, inter alia, the following measures:

“(i) co-ordination of actions by the State Governments,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 isrelatable to the objects of this Act;

(ii) planning and execution of a nation-wide programme forthe prevention, control and abatement of environmentalpollution;

(iii) laying down standards for the quality of environment inits various aspects;

(iv) laying down standards for emission or discharge ofenvironmental pollutants from various sources whatsoever:

Provided that different standards for emission or dischargemay be laid down under this clause from different sourceshaving regard to the quality or composition of the emissionor discharge of environmental pollutants from such sources;

(v) restriction of areas in which any industries, operations orprocesses or class of industries, operations or processes shallnot be carried out or shall be carried out subject to certainsafeguards;

(vi) laying down procedures and safeguards for the preventionof accidents which may cause environmental pollution andremedial measures for such accidents;

(vii) laying down procedures and safeguards for the handlingof hazardous substances;

(viii) examination of such manufacturing processes, materialsand substances as are likely to cause environmental pollution;

(ix) carrying out and sponsoring investigations and researchrelating to problems of environmental pollution; A

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(x) inspection of any premises, plant, equipment, machinery,manufacturing or other processes, materials or substancesand giving, by order, of such directions to such authorities,officers or persons as it may consider necessary to take stepsfor the prevention, control and abatement of environmentalpollution;

(xi) establishment or recognition of environmental laboratoriesand institutes to carry out the functions entrusted to suchenvironmental laboratories and institutes under this Act;

(xii) collection and dissemination of information in respect ofmatters relating to environmental pollution;

(xiii) preparation of manuals, codes or guides relating to theprevention, control and abatement of environmental pollution;

(xiv) such other matters as the Central Government deemsnecessary or expedient for the purpose of securing theeffective 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 toprotect and improve environment.—

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(3) The Central Government may, if it considers it necessaryor expedient so to do for the purposes of this Act, by order,published in the Official Gazette, constitute an authorityor authorities by such name or names as may be specifiedin the order for the purpose of exercising and performingsuch of the powers and functions (including the power toissue directions under Section 5) of the Central Governmentunder this Act and for taking measures with respect to suchof the matters referred to in sub-section (2) as may bementioned in the order and subject to the supervision andcontrol of the Central Government and the provisions ofsuch order, such authority or authorities may exercise thepowers or perform the functions or take the measures somentioned in the order as if such authority or authoritieshad been empowered by this Act to exercise those powersor perform those functions or take such measures.”

13. Subject to the provisions of the EP Act, the Central Governmenthas power under sub-Section (1) of Section 3, to take all such measures,as it deems necessary or expedient, for the purpose of protecting andimproving the quality of environment and preventing, controlling orreducing environmental pollution.

14. Section 5 of the EP Act provides that notwithstanding anythingcontained in any other law, but subject to the provisions of the EP Act,the Central Government may, in exercise of its powers and performanceof its functions under the EP Act, issue directions in writing to any person,officer or any authority and such person, officer or authority shall bebound to comply with such directions.

15. In exercise of powers conferred by Sections 6 and 25 of theEP 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 ImpactAssessment Notification dated 27[th] January 1994 in exercise of powersconferred by sub-section (1) and clause (v) of sub-section (2) of Section3 of the EP Act read with clause (d) of sub-rule (3) of Rule 5 of the EPRules, directing that on and from the date of publication of the saidnotification in the Official Gazette, expansion or modernization of anyactivity or a new project listed in Schedule I to the said notification shallnot be undertaken in any part of India, unless it has been accorded ECby the Central Government in accordance with the procedures specifiedin 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) ofsub-rule (3) of Rule 5 of the EP Rules and in supersession of notificationnumber S.O. 60 (E) dated 27[th] January 1994, except in respect of thingsdone or omitted to be done before such supersession, the CentralGovernment issued a notification dated 14[th] September 2006, beingNotification S.O. 1533 (E) requiring prior environmental clearance fromthe Central Government or as the case may be, by the State-LevelEnvironment Assessment Authority, duly constituted by the CentralGovernment under sub-section (3) of Section 3 of the EP Act.

18. In terms of the said notification dated 14[th] September 2006,the process of environmental clearance for new projects was to compriseof a maximum of four stages, all of which might not apply to particular A

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Acases. The stages were (1) Screening, (2) Scoping, (3) PublicConsultation and (4) Appraisal.

19. In the meanwhile, by a notification being S.O. 327 (E) dated10[th] April 2001, published in the Gazette of India on 12[th] April 2001, theCentral Government has delegated the powers vested in it under the EPBAct, to the Chairpersons of the respective State Pollution Control Boards/Committees to issue directions to any industry or any local or otherauthority to prevent violation of the Rules.

20. The Appellants carry on business, inter alia, of manufactureand sale of basic organic chemicals, namely, Formaldehyde. The AppellantCNo.1, M/s Pahwa Plastics Private Limited has two manufacturing units,one at village Kharawar in Rohtak, hereinafter referred to as the “RohtakUnit” and the other at village Jathlana, Jagadhri in Yamuna Nagar inHaryana, hereinafter referred to as the “Yamuna Nagar Unit”. TheAppellant No.2 has a manufacturing unit at village Ghespur in YamunaNagar, Haryana which is hereinafter referred to as the “Yamuna NagarDUnit”. The manufacturing units established, run and operated by therespective Appellants fall in the category of Micro, Small and MediumEnterprise (MSME) as defined under the Micro, Small and MediumEnterprises Development Act, 2006, hereinafter referred to as “the MSMEAct”.

E21. On or about 31[st] March 2014, the Appellant No.1, M/s PahwaPlastics Ltd. applied for Consent to Establish (CTE) its Yamuna Nagarunit for manufacture of Formaldehyde.

22. By a communication No. HSPCB/Consent/:2846616YAMCTE3087415 dated 2[nd] June 2016, the Haryana State Pollution Control BoardF(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, tobe extended for another year at the discretion of the Board or till thetime the unit started its trial production, whichever was earlier.

G23. Some of the terms and conditions on which CTE was grantedare set out hereinbelow:- “3. The officer/official of the Board shall have the right toaccess and inspection of the industry in connection with thevarious processes and the treatment facilities being provided H

simultaneously with the construction of building/machinery.The effluent should conform the effluent standards asapplicable.

4. That necessary arrangement shall be made by the industryfor the control of Air Pollution before commissioning the plant.The emitted pollutants will meet the emission and otherstandards as laid/will be prescribed by the Board from time totime.

5. The applicant will obtain consent under section 25/26 ofthe Water (Prevention & Control of Pollution) Act, 1974 andunder section 21/22 of the Air (Prevention & Control ofPollution) Act, 1981 as amended to-date-even before startingtrial production.

6. The above Consent to Establish is further subject to theconditions that the unit complies with all the laws/rules/decisions and competent directions of the Board/Governmentand its functionaries in all respect before commissioning ofthe operation and during its actual working strictly.

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8. The Electricity Department will give only temporaryconnection and permanent connection to the unit will be givenafter verifying the consent granted by the Board, both underWater Act and Air Act.

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12. That there is no discharge directly or indirectly from theunit or the process into any interstate river or Yamuna Riveror River Ghaggar.

13. That the industry or the unit concerned is not sited withinany prohibited distances according to the Environmental Lawsand Rules, Notification, Orders and Policies of CentralPollution Control Board and Haryana State Pollution ControlBoard.

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17. In case of change of name from previous Consent toEstablish granted, fresh Consent to Establish fee shall belevied.

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18. Industry should adopt water conservation measures toensure minimum consumption of water in their Process. Groundwater based proposals of new industries should get clearancefrom Central Ground Water Authority for scientificdevelopment of previous resources.

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B19. That the unit will take all other clearances from concernedagencies, whenever required.

20. That the unit will not change its process without the priorpermission of the Board.

21. That the Consent to Establish so granted will be invalid,Cif the unit falls in Aravali Area or non conforming area.

22. That the unit will comply with the Hazardous WasteManagement Rules and will also make the non-leachate pitfor storage of Hazardous waste and will undertake not todispose off the same except for pit in their own premises orDwith the authorized disposal authority.

23. That the unit will submit an undertaking that it will complywith all the specific and general conditions as imposed in theabove Consent to Establish within 30 days failing whichConsent to Establish will be revoked.”

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24. By another communication No.HSPCB/Consent/:2846618YAMCTO3098246 dated 26[th] March 2018, HSPCB grantedconsent to the Appellant No.1 to operate its Yamuna Nagar Unit from8[th] February 2018 to 31[st] March 2022.

25. By an order No.HSPCB/YMN/2242, dated 31[st] March 2010,Fthe Appellant No.2, M/s Apcolite Polymer Private Limited was grantedCTE to establish its Yamuna Nagar Unit for manufacture ofFormaldehyde 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 16[th]GJanuary 2012, HSPCB granted the Appellant No.2, M/s ApcolitePolymers Private Limited, Consent to Operate (CTO) its Yamuna NagarUnit. The CTO has been extended from 1[st] April 2016 till 31[st] March2026, by a letter dated 13[th] March 2016. The CTO is valid till March2026.

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27. By a communication No. HSPCB/Consent/: 2846616YAMCTOHWM2630357 dated 13[th] March 2016, HSPCB granted consent foremission of AIR to Appellant No.2, M/s Apcolite Polymers Private Limitedin respect of its Yamuna Nagar Unit on, inter alia, the terms andconditions specified in the said letter, some of which are extractedhereinbelow:- “10. The air pollution control equipment of such specificationwhich shall keep the emissions within the emission standardas approved by the State Board from time to time shall beinstalled and operated in the premises where the industry iscarrying on/proposed to carry on its business.

11. The existing air pollution control equipment if requiredshall be alerted or replaced in accordance with the directionon the Board.

12. All solid wastes arising in the factory premises shall beproperly graded and disposed of by:-

(i) In case of Land fill material, care should be taken to ensurethat the material does not give rise to leachate which maypercolate in ground water of carried away with storm runoff.

(ii) Composting in case of bio degradable materials.

(iii) If the method of incineration is used for the disposal ofsolid waste the consent application should be processedseparately and it should be taken up which consent is granted.

13. The industry shall submit an undertaking to the effectthat the above conditions shall be complied with by them.

14. The applicant shall submit its undertaking to the effectthat the above conditions shall be complied with by them.

15. The applicant shall make an application for grant of freshconsent at least 90 days before the date of expiry of thisconsent.

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18. There should not be any fugitive emission from thepremises.

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19. The liquid effluent arising out of the operation of the airpollution control equipment shall also be treated in a mannerand to the standards stipulated in the consent granted underWater (Prevention & Control of Pollution) Act, 1974 by thisBoard.

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21. If the industry fails to adhere to any of the condition ofthis consent order the consent so granted shall automaticallylapse.

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33. The industry shall submit Environment Audit report once in a year.

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38. In case of by passing the emissions, the consent shall beDdeemed revoked.”

28. It is the case of the Appellants that at the time when CTE wasgranted to the Appellants, it was thought that EC was not required forunits which manufactured Formaldehyde. Even HSPCB itself was notsure of whether EC was required for such units.

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29. Mr. Gupta argued that the Appellants were bona fide underthe impression that the Appellants were not required to obtain prior ECfor setting up this establishment to manufacture Formaldehyde. On thebasis of CTE granted by HSPCB, the Appellants set up their units takinghuge loans from banks for which repayments have to be paid inFinstallments.

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 CentralGovernment issued a notification being S.O. 804(E) dated 14[th] March2017 which provides for grant of ex post facto EC for project proponentsGwho had commenced, continued or completed a project without obtainingEC under the EP Act/ EP Rules or the Environmental Impact Notificationissued thereunder. Paragraphs 3, 4 and 5 of the said notification, read ashereunder:

“(3) In cases of violation, action will be taken against theHproject proponent by the respective State or State Pollution Control Board under the provisions of section 19 of theEnvironment (Protection) Act, 1986 and further, no consentto operate or occupancy certificate will be issued till theproject is granted the environmental clearance.

(4) The cases of violation will be appraised by respective sectorExpert Appraisal Committees constituted under sub-section(3) of Section 3 of the Environment (Protection) Act, 1986with a view to assess that the project has been constructed ata site which under prevailing laws is permissible andexpansion has been done which can be run sustainably undercompliance of environmental norms with adequateenvironmental safeguards; and in case, where the finding ofthe Expert Appraisal Committee is negative, closure of theproject will be recommended along with other actions underthe law.

(5) In case, where the findings of the Expert AppraisalCommittee on point at sub-para(4) above are affirmative, theprojects under this category will be prescribed the appropriateTerms of Reference for undertaking Environment ImpactAssessment and preparation of Environment ManagementPlan. Further, the Expert Appraisal Committee will prescribea specific Terms of Reference for the project on assessmentof ecological damage, remediation plan and natural andcommunity resource augmentation plan and it shall beprepared as an independent chapter in the environment impactassessment report by the accredited consultants. The collectionand analysis of data for assessment of ecological damage,preparation of remediation plan and natural and communityresource augmentation plan shall be done by an environmentallaboratory duly notified under Environment (Protection) Act,1986, or a environmental laboratory accredited by NationalAccreditation Board for Testing and Calibration Laboratories,or a laboratory of a Council of Scientific and IndustrialResearch institution working in the field of environment.”

31. The Notification of 2017 is a valid statutory notification issuedby 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 A

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Asame manner as the EIA Notification dated 27[th] January 1994 and theNotification dated 14[th] September 2006.

32. Section 21 of the General Clauses Act, 1897 provides thatwhere any Central Act or Regulations confer a power to issuenotifications, orders, rules or bye-laws, that power includes the power,Bexercisable in like manner, and subject to like sanction and conditions, ifany, to add to, amend, vary or rescind any notification, order, rule or bye-law so issued. The authority, which had the power to issue Notificationsdated 27[th] January 1994 and 14[th] September 2006 undoubtedly had, andstill has the power to rescind or modify or amend those notifications inlike manner. As held by this Court in Shree Sidhbali Steels Ltd. &COthers v. State of Uttar Pradesh & Others[1], power under Section 21to amend, vary or rescind notifications, orders, rules or bye-laws can beexercised from time to time having regard to the exigency.

33. Puducherry Environment Protection Association filed a WritPetition being W.P. No.11189 of 2017 in the High Court of Madras assailingDthe said notification dated 14[th] March 2017. By a judgment and orderdated 13[th] October 2017, a Division Bench of the High Court refused tointerfere with the said notification, holding that the impugned notificationdid not compromise with the need to preserve environmental purity.

34. The Ministry of Environment, Forest and Climate ChangeE(MoEF &CC) issued a draft notification dated 23[rd] March 2020 whichwas duly published in the Gazette of India Extraordinary Part II. TheNotification was proposed to be issued in exercise of powers conferredby sub-section (1) and clause (v) of sub-section (2) of Section 3 of theEP Act for dealing with cases of violation of the notification with regardFto EC. It was proposed that cases of violation would be appraised bythe Appraisal Committee with a view to assess whether the project hadbeen constructed or operated at a site which was permissible underprevailing laws and could be run sustainably on compliance ofenvironmental norms with adequate environmental safeguards. Closurewas to be recommended if the findings of the Appraisal Committee wereGin the negative. If the Appraisal Committee found that such unit hadbeen running sustainably upon compliance of environmental norms withadequate environment safeguards, the unit would be prescribedappropriate Terms of Reference (TOR) after which the procedure forgrant of EC would follow.H1 (2011) 3 SCC 193

35. On 10[th] November 2020, the Department of Environment andClimate Change of the Government of Haryana issued an order whichis extracted hereinbelow for convenience:

“Whereas the process of manufacturing of Formaldehyde iscovered under the provisions of 5(f) of Schedule ofEnvironment Impact Assessment Notification (EIA), 2006 ofGovernment of India, and requires the prior EnvironmentalClearance (EC) from the competent authority State EnvironmentImpact Assessment Authority (SEIAA)/Ministry ofEnvironment, Forest and Climate Change, Government ofIndia, before establishment and operation of such units,besides other mandatory clearance, as applicable; Whereas, it has come to the notice of Government thataround 15 such units have been permitted to establish/operatein the State of Haryana, without obtaining the necessary PriorEnvironmental Clearances, but with the Consent of theHaryana State Pollution Control Bureau (HSPCB), whichmisinterpreted the category of such units and on realising therequirement of EC in these cases, has revoked its consentsissued earlier to these units recently; Whereas, some of these units approached theGovernment explaining their hardship due to such suddenrevocation of their consents and have sought time for obtainingthe necessary EC from the competent authority as the processis likely to take a minimum of 6 months to one year period,and to allow them to operate with all pollution controlmeasures, following the pollution control norms applicable,and, Whereas, the Government has carefully considered theirrequest and the competent authority has decided that theseunits shall be allowed to continue their operations for a periodof six months, without prejudice to any legal action takenagainst the violations committed by them, by the competentauthorities, with the conditions that they will immediatelyapply for Environmental Clearance from the competentauthority and provide the proof of such application within 60days from the issuance of this communication to Environment ABC

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Aand Climate Change Department and to Haryana StatePollution Control Board.

Therefore, it is ordered accordingly.”

36. Referring to the Counter Affidavit filed by HSPCB before theNGT, Mr. Gupta pointed out that, since HSPCB itself was under theBmisconception that prior EC was not necessary for units such as theYamunanagar units of the Appellants Nos. 1 and 2 respectively. HSPCBtook a policy decision to allow the units which did not have prior EC tooperate for six months, on condition that they would apply for EC withinsixty days.

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37. The Appellants duly applied for EC in respect of theirmanufacturing units. After scrutinizing their applications and after findingthe units suitable for grant of EC in terms of the prevailing guidelines,the Expert Appraisal Committee constituted by the MoEF&CC conducteda public hearing to finalize the cases of the Appellants for issuance ofDTerms of Reference (TOR).

38. By an Office Memorandum, being F.No. 22-21/2020-1A III,dated 7[th] July 2021, the MoEF&CC issued Standard Operating Procedure(SOP) for identification and handling of violation cases under EIANotification 2006.

E39. The said Office Memorandum, inter alia, reads:

“The Ministry had issued a notification number S.O.804(E),dated the 14[th] March, 2017 detailing the process for grant ofTerms of Reference and Environmental Clearance in respectof projects or activities which have started the work on siteFand/or expanded the production beyond the limit of Prior ECor changed the product mix without obtaining Prior EC underthe EIA Notification, 2006.

2. This Notification was applicable for six months from thedate of publication i.e. 14.03.2017 to 13.09.2017 and furtherbased on court direction from 14.03.2018 to 13.04.2018.

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3. Hon’ble NGT in Original Application No.287 of 2020 inthe matter of Dastak N.G.O. Vs Synochem Organics Pvt. Ltd.& Ors. and in applications pertaining to same subject matterin Original Application No. 298 of 2020 in Vineet Nagar vs.Central Ground Water Authority & Ors., vide order dated H

03.06.2021 held that “(...) for past violations, the concernedauthorities are free to take appropriate action in accordancewith 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. ChiefSecretary, Government of Maharashtra and Ors., vide orderdated 24.05.2021 has directed that”.... a proper SoP be laiddown for grant of EC in such cases so as to address the gapsin binding law and practice being currently followed. TheMoEF may also consider circulating such SoP to all SEIAAsin the country”.

5. Therefore, in compliance to the directions of the Hon’bleNGT a Standard Operating Procedure (SoP) for dealing withviolation cases is required to be drawn. The Ministry is alsoseized of different categories of ‘violation’ cases which havebeen pending for want of an approved structural/proceduralframework based on ‘Polluter Pays Principle’ and ‘Principleof Proportionality’. It is undoubtedly important that actionunder statutory provisions is taken against the defaulters/violators and a decision on the closure of the project oractivity or otherwise is taken expeditiously.

6. In the light of the above directions of the Hon’ble Tribunaland the issues involved, the matter has accordingly beenexamined in detail in the Ministry. A detailed SoP hasaccordingly been framed and is outlined herein. The SoP isalso guided by the observations/decisions of the Hon’bleCourts wherein principles of proportionality and polluters payhave been outlined.”

40. The SOP formulated by the said Office Memorandum dated7[th] July 2021 refers to and gives effect to various judicial pronouncementsincluding the judgment of this Court in Alembic Pharmaceuticals Ltd.v. Rohit Prajapati & Others[2].

41. In terms of the SOP, the proposal for grant of EC in cases ofviolation are to be considered on merits, with prospective effect, applyingprinciples of proportionality and the principle that the polluter pays and isliable for costs of remedial measures.

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42. By an order dated 9[th] July 2021, the MoEF&CC confirmedthe minutes of an earlier meeting of the Expert Appraisal Committeeand recommended issuance of terms of reference to the Appellant No.1,M/s Pahwa Plastics Private Limited for expansion of its FormaldehydeManufacturing unit from 60 TPD to 150 TPD.

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B43. In the meanwhile, on or about 26[th] November 2020, theRespondent No.1, a Non-Governmental Organisation (NGO) hereinafterreferred to as “Dastak” filed an application being O.A. No./287/2020before the NGT praying that the order dated 10[th] November 2020 passedby the State of Haryana be quashed and units which were operatingwithout EC be closed. The NGT disposed of the said application ofCDastak by the impugned order dated 3[rd] June 2021.

44. A Public Interest Litigation being W.P. (MD) No. 11757 of2021 (Fatima v. Union of India) was filed before the Madurai Benchof the Madras High Court challenging the said Memorandum dated 7[th]July 2021. By an interim order dated 15[th] July 2021 a Division Bench ofDthe Madras High Court admitted the Writ Petition and stayed the saidmemorandum.

45. The Madurai Bench of the Madras High Court observed andheld:- E“This writ petition has been filed as a public interest litigationchallenging the validity of the office memorandum dated07.07.2021, issued by the respondent.

2. We have heard Mr.A.Yogeshwaran, learned counselappearing for the writ petitioner and Mr.L.Victoria Gowri,Flearned Assistant Solicitor General of India, accepts noticefor the respondent.

3. The impugned office memorandum is challenged as beingwholly without jurisdiction, contrary to the EnvironmentImpact Assessment Notification, 2006, ultra vires the powersof the respondent under the Environment (Protection) Act,G1986 and violative of the various principles enunciated bythe Hon’ble Supreme Court, while interpreting Article 21 andArticle 48-A of the Constitution of India.

4. Further, it is submitted that the impugned notification is ingross violation of the undertaking given before the Hon’ble H

Full Bench of this Court in W.P.No.11189 of 2017, wherein,the Court took note of the submissions made on behalf of theGovernment of India, that the notification impugned thereinis only a one-time measure. Further, it is submitted that therespondent failed to see that concept of ex-post facto approvalis alien to environment jurisprudence and it is anathema tothe Environment Impact Assessment Notification, 2006.

5. Further, it is submitted that the impugned notification is ingross violation of the judgment of the Hon’ble Supreme Courtin the case of Alembic Pharmaceuticals Ltd. vs RohitPrajapati, 2020 SCC Online SC 347 and the orders passedby the National Green Tribunal, Principal Bench, New Delhi,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 toan office memorandum dated 19.02.2021, which provided aprocedure for granting post facto clearance under CoastalRegulation Zone (CRZ) Notification 2011, on the ground thatdespite no such provisions in the notification and beingcontrary to the earlier judgments and undertaking. The saidwrit petition in W.P(MD).No.8866 of 2021 was admitted andby order dated 30.04.2021, the said office memorandum dated19.02.2021 has been stayed.

7. The core issue in this writ petition is whether theGovernment of India could have issued the officememorandum and brought about the Standard OperatingProcedure for dealing with violators, who failed to complywith the mandatory condition of obtaining prior environmentclearance under the Environment Impact AssessmentNotification 2006, read with the provisions of Environment(Protection) Act, 1986. This issue was considered by theHon’ble Supreme Court in Alembic Pharmaceuticals Ltd (citedsupra), and it was held that such office memorandum in thenature of circular is without jurisdiction. The operative portionof the judgment reads as follows:

“...What is sought to be achieved by the administrative circulardated 14 May 2002 is contrary to the statutory notification AB

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dated 27 January 1994. The circular dated 14 May 2002does not stipulate how the detrimental effects on theenvironment would be taken care of if the project proponentis granted an ex post facto EC. The EIA notification of 1994mandates a prior environmental clearance. The circularsubstantially amends or alters the application of the EIAnotification of 1994. The mandate of not commencing a newproject or expanding or modernising an existing one unlessan environmental clearance has been obtained stands dilutedand is rendered ineffective by the issuance of theadministrative circular dated 14 May 2002. This discussionleads us to the conclusion that the administrative circular isnot a measure protected by Section 3. Hence there was nojurisdictional bar on the NGT to enquire into its legitimacy orvires. Moreover, the administrative circular is contrary to theEIA Notification 1994 which has a statutory character. Thecircular is unsustainable in law.”

8. Despite the above decision, once again the Government ofIndia, Ministry of Environment, Forest and Climate Changehave chosen to adopt the route of issuing the officememorandum and virtually setting at naught the provisionsof the Environment Impact Assessment Notification and theEnvironment (Protection) Act.

9. Before the Hon’ble First Bench, a public interest litigationwas filed by the Puducherry Environment ProtectionAssociation, challenging the notification dated 14.03.2017,on identical grounds and the Hon’ble First Bench by judgmentdated 13.10.2017, recorded the submissions of the learnedAssistant Solicitor General of India that the said notificationwas a one-time measure and accordingly, disposed of the writpetition.

10. Once again, the Ministry of Environment, Forest andClimate Change have issued the impugned officememorandum. Thus, from what we have noted above, we areof the clear view that the petitioner has made out a primafacie case for entertaining the writ petition. Accordingly, thewrit petition is admitted and there shall be an order of interimstay.”

46. It is true that in the case of Puducherry EnvironmentProtection Association v. Union of India[3], the Division Bench of MadrasHigh Court took note of and recorded the submission made on behalf ofthe Union of India that the relaxation was a one time relaxation. In viewof such submission, this Court held that a one time relaxation waspermissible.

47. It is, however, well settled that words and phrases and/orsentences in a judgment cannot be read in the manner of a statute, andthat too out of context. The observation of the Division Bench that a onetime relaxation was permissible, is not to be construed as a finding thatrelaxation cannot be made more than once. If power to amend or modifyor relax a notification and/or order exists, the notification and/or ordermay be amended and/or modified as many times, as may be necessary.A statement made by counsel in Court would not prevent the authorityconcerned from making amendments and/or modifications provided suchamendments and/or modifications were as per the procedure prescribedby law.

48. The Division Bench of Madras High Court fell in error instaying the said office memorandum, by relying on observations madeby this Court in Alembic Pharmaceuticals Ltd. (supra), in the contextof a circular which was contrary to the statutory Environment ImpactNotification of 1994. The attention of the High Court was perhaps notdrawn to the fact that the notification of 7[th] July 2021 was in pursuanceof the statutory notification of 2017 which was valid. The judgment ofthis Court in Alembic Pharmaceuticals Ltd. (supra), was clearlydistinguishable and could have no application to the office memorandumdated 7[th] July 2021 which was issued pursuant to the notification dated14[th] March 2017.

49. The Appellants have already applied for EC. The ExpertAppraisal Committee of the MoEF&CC has, after scrutinizing theapplication of the Appellants and finding them eligible for grant of EC,recommended their cases for grant of Terms of Reference (ToR). ToRwas granted to the Appellants and a public hearing had also beenconducted. 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 A

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Aoperation for many years. In the reply affidavit filed by the State beforethe NGT, it was mentioned that the units were operating in good faithwith valid CTOs granted by the HSPCB. It was stated that the unitswere not causing pollution hazards. The only thing against the units wasthe procedural lapse of not obtaining EC.B51. By a communication No. F. No. IA-J-110011/185/2020-IA-II(I) dated 20[th] July 2021 issued to the Appellant No.1, the MoEF&CCrejected the proposal for terms of reference on the purported groundthat the activity of the Appellant No.1 was covered under category “A”of item 5(f) “Synthetic Organic Chemicals” of the Schedule to the EIANotification, 2006. A similar communication was issued in respect ofCM/s Apcolite Polymers Pvt. Ltd. Significantly, by an order dated 9[th] July2021, the MoEF&CC had confirmed the minutes of an earlier meetingof the Expert Appraisal Committee and recommended issuance of ToRto the Appellant No.1, as observed above. The proposal for Terms ofReference has obviously been rejected at the final stage after the publicDhearing, by reason of the impugned order dated 3[rd] June 2021 passed bythe NGT on the application of Dastak, which is under appeal.

52. This appeal was listed for admission on 30[th] September 2021,along with an application for interim relief being I.A. No.110064 of 2021praying for orders permitting the Appellants to operate their units duringEthe pendency of the appeal. The appeal was heard at length at theadmission stage and reserved for judgment along with the interimapplication by an order dated 30[th] September 2021.

53. After receiving the communication dated 20[th] July 2021rejecting the proposal for Terms of Reference, the Appellants requestedFHSPCB to forward to the Appellants the proceedings of public hearingin respect of the manufacturing units of the Appellants. By acommunication No. HSPCB/YR/2021/2830 dated 15[th] February 2022,HSPCB forwarded proceedings of the public hearing in respect of theYamuna Nagar unit of the Appellant No.1. By another CommunicationNo. HSPCB/YR/29021/2829 dated 15[th] February 2022 the HSPCBGforwarded to the Appellant No.2 the proceedings of the public hearingheld on 3[rd] February 2022 in connection with the Yamuna Nagar Unit ofthe Appellant No.2.

54. The manufacturing units of the Appellants appoint about 8,000employees and have a huge annual turnover. An establishmentHcontributing to the economy of the country and providing livelihood ought not to be closed down only on the ground of the technical irregularity ofnot obtaining prior Environmental Clearance irrespective of whether ornot the unit actually causes pollution.

55. In Electrosteel Steels Limited v. Union of India[4], this Courtheld:- “82. The question is whether an establishment contributingto the economy of the country and providing livelihood tohundreds of people should be closed down for the technicalirregularity of shifting its site without prior environmentalclearance, without opportunity to the establishment toregularize its operation by obtaining the requisite clearancesand permissions, even though the establishment may nototherwise be violating pollution laws, or the pollution, if any,can conveniently and effectively be checked. The answer hasto be in the negative.

83. The Central Government is well within the scope of itspowers under Section 3 of the 1986 Act to issue directions tocontrol and/or prevent pollution including directions for priorEnvironmental Clearance before a project is commenced. Suchprior Environmental Clearance is necessarily granted uponexamining the impact of the project on the environment. Ex-Post facto Environmental Clearance should not ordinarily begranted, and certainly not for the asking. At the same timeex post facto clearances and/or approvals and/or removal oftechnical irregularities in terms of Notifications under the1986 Act cannot be declined with pedantic rigidity, obliviousof the consequences of stopping the operation of a runningsteel plant.

84. The 1986 Act does not prohibit ex post factoEnvironmental Clearance. Some relaxations and even grantof ex post facto EC in accordance with law, in strict compliancewith Rules, Regulations Notifications and/or applicableorders, in appropriate cases, where the projects are incompliance with, or can be made to comply with environmentnorms, is in over view not impermissible. The Court cannotbe oblivious to the economy or the need to protect the A

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Alivelihood of hundreds of employees and others employed inthe project and others dependent on the project, if suchprojects comply with environmental norms.

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88. The Notification being SO 804(E) dated 14th March, 2017Bwas not an issue in Alembic Pharmaceuticals (supra). ThisCourt was examining the propriety and/or legality of a 2002circular which was inconsistent with the EIA Notification dated27th January, 1994, which was statutory. Ex post factoenvironmental clearance should not however be grantedCroutinely, but in exceptional circumstances taking into accountall relevant environmental factors. Where the adverseconsequences of ex post facto approval outweigh theconsequences of regularization of operation of an industryby grant of ex post facto approval and the industry orestablishment concerned otherwise conforms to the requisiteDpollution norms, ex post facto approval should be given inaccordance with law, in strict conformity with the applicableRules, Regulations and/or Notifications. Ex post factoapproval should not be withheld only as a penal measure.The deviant industry may be penalised by an imposition ofEheavy penalty on the principle of ‘polluter pays’ and the costof restoration of environment may be recovered from it.

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96. The appeals are allowed. The impugned order is set aside.The Respondent No. 1 shall take a decision on the applicationFof the Appellant for revised EC in accordance with law, withinthree months from date. Pending such decision, the operationof the steel plant shall not be interfered with on the ground ofwant of EC, FC, CTE or CTO.”

56. As held by this Court in Electrosteel Steels Limited (supra)Gex post facto Environmental Clearance should not ordinarily be granted,and certainly not for the asking. At the same time ex post factoclearances and/or approvals and/or removal of technical irregularities interms of a Notification under the EP Act cannot be declined with pedantic H

rigidity, oblivious of the consequences of stopping the operation of mines,running factories and plants.

57. The 1986 Act does not prohibit ex post facto EnvironmentalClearance. Grant of ex post facto EC in accordance with law, in strictcompliance with Rules, Regulations, Notifications and/or applicableorders, in appropriate cases, where the projects are in compliance with,or can be made to comply with environment norms, is in our view notimpermissible. The Court cannot be oblivious to the economy or theneed to protect the livelihood of hundreds of employees and othersemployed in the project and others dependent on the project, if suchprojects comply with environmental norms.

58. As held by a three Judge Bench of this Court in LafargeUmiam 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 concerningenvironment as a part of the process of judicial review incontradistinction to merit review. It cannot be gainsaid thatutilization of the environment and its natural resources has tobe in a way that is consistent with principles of sustainabledevelopment and intergenerational equity, but balancing ofthese equities may entail policy choices. In the circumstances,barring exceptions, decisions relating to utilisation of naturalresources have to be tested on the anvil of the well-recognizedprinciples of judicial review. Have all the relevant factorsbeen taken into account? Have any extraneous factorsinfluenced the decision? Is the decision strictly in accordancewith the legislative policy underlying the law (if any) thatgoverns the field? Is the decision consistent with the principlesof sustainable development in the sense that has the decision-maker taken into account the said principle and, on the basisof relevant considerations, arrived at a balanced decision?Thus, the Court should review the decision-making processto ensure that the decision of MoEF is fair and fully informed,based on the correct principles, and free from any bias orrestraint. Once this is ensured, then the doctrine of “marginof appreciation” in favour of the decision-maker would comeinto play.”

5 (2011) 7 SCC 338

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A59. In Alembic Pharmaceuticals Ltd.(supra), this Courtobserved:- “27. The concept of an ex post facto EC is in derogation ofthe fundamental principles of environmental jurisprudenceand is an anathema to the EIA notification dated 27 JanuaryB1994. It is, as the judgment in Common Cause holds,detrimental to the environment and could lead to irreparabledegradation. The reason why a retrospective EC or an ex postfacto clearance is alien to environmental jurisprudence isthat before the issuance of an EC, the statutory notificationwarrants a careful application of mind, besides a study intoCthe likely consequences of a proposed activity on theenvironment. An EC can be issued only after various stagesof the decision-making process have been completed.Requirements such as conducting a public hearing, screening,scoping and appraisal are components of the decision-makingDprocess which ensure that the likely impacts of the industrialactivity or the expansion of an existing industrial activity areconsidered in the decision-making calculus. Allowing for anex post facto clearance would essentially condone theoperation of industrial activities without the grant of an EC.In the absence of an EC, there would be no conditions thatEwould safeguard the environment. Moreover, if the EC was tobe ultimately refused, irreparable harm would have beencaused to the environment. In either view of the matter,environment law cannot countenance the notion of an ex postfacto clearance. This would be contrary to both theFprecautionary principle as well as the need for sustainabledevelopment.”

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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 control theGdamage caused by the industrial units. This Court held:- “However, since the expansion has been undertaken and theindustry has been functioning, we do not deem it appropriateto order closure of the entire plant as directed by the HighCourt.”

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61. The Notification being SO. 804(E) dated 14[th] March 2017was not in issue in Alembic Pharmaceuticals Ltd. (supra). In AlembicPharmaceuticals Ltd. (supra) this Court was examining the proprietyand/or legality of a 2002 circular which was inconsistent with the EIANotification dated 27[th] January 1994, which was statutory. The EIANotification dated 27[th] January 1994 has, as stated above, been supersededby the Notification dated 14[th] September 2006.

62. There can be no doubt that the need to comply with therequirement to obtain EC is non-negotiable. A unit can be set up orallowed to expand subject to compliance of the requisite environmentalnorms. EC is granted on condition of the suitability of the site to set upthe unit, from the environmental angle, and also existence of necessaryinfrastructural facilities and equipment for compliance of environmentalnorms. To protect future generations and to ensure sustainabledevelopment, it is imperative that pollution laws be strictly enforced.Under no circumstances can industries, which pollute, be allowed tooperate unchecked and degrade the environment.

63. Ex post facto environmental clearance should not be grantedroutinely, but in exceptional circumstances taking into account all relevantenvironmental factors. Where the adverse consequences of denial of expost facto approval outweigh the consequences of regularization ofoperations by grant of ex post facto approval, and the establishmentconcerned otherwise conforms to the requisite pollution norms, ex postfacto approval should be given in accordance with law, in strict conformitywith the applicable Rules, Regulations and/or Notifications. The deviantindustry may be penalised by an imposition of heavy penalty on theprinciple of ‘polluter pays’ and the cost of restoration of environmentmay be recovered from it.

64. The question in this case is, whether a unit contributing to theeconomy of the country and providing livelihood to hundreds of people,which has been set up pursuant to requisite approvals from the concernedstatutory authorities, and has applied for ex post facto EC, should beclosed down for the technical irregularity of want of prior environmentalclearance, pending the issuance of EC, even though it may not causepollution and/or may be found to comply with the required norms. Theanswer to the aforesaid question has to be in the negative, more sowhen the HSPCB was itself under the misconception that no environmentclearance was required for the units in question. HSPCB has in its A

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Acounter affidavit 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 granted to thoseunits, by the concerned authorities on the misconception that no EC wasrequired.B65. It is reiterated that the 1986 Act does not prohibit ex postfacto EC. Some relaxations and even grant of ex post facto EC inaccordance with law, in strict compliance with Rules, Regulations,Notifications and/or applicable orders, in appropriate cases, where theprojects are in compliance with environment norms, is not impermissible.As observed by this Court in Electrosteel Steels Limited (supra), thisCCourt cannot be oblivious to the economy or the need to protect thelivelihood of hundreds of employees and others employed in the unitsand dependent on the units in their survival.

66. Ex post facto EC should not ordinarily be granted, and certainlynot for the asking. At the same time ex post facto clearances and/orDapprovals cannot be declined with pedantic rigidity, regardless of theconsequences of stopping the operations. This Court is of the view thatthe NGT erred in law in directing that the units cannot be allowed tofunction till compliance of the statutory mandate.

67. Accordingly, the appeal is allowed. The impugned order is setEaside in so far as the same is applicable to the units of the Appellantsestablished and operated pursuant to CTE and CTO from the HSPCBin respect of which applications for ex post facto EC have been filed.The Respondent shall take a decision on the applications of the Appellantsfor EC in accordance with law within one month from date. PendingFdecision, the operation of the Pahwa Yamuna Nagar Unit and the ApcoliteYamuna Nagar Unit, in respect of which consents have been grantedand even public hearing held in connection with grant of EC, shall not beinterfered with.

68. The Appellants will be allowed to operate the units. Electricity,Gif disconnected, shall be restored subject to payment of charges, if any.If the application for EC is rejected on the ground of any contraventionon the part of the Appellants, it will be open to the Respondents todisconnect the supply of electricity.69. The Union of India had proceeded with the application for ECand even public hearing had been held. Counsel appearing on behalf ofH

the Union of India contended that the Appellant had not submitted itsfinal application for EC, after public hearing. It is not clear what morewas required of the Appellants. Be that as it may, the Union of Indiashall, within three working days from the date of receipt of a copy of thisjudgment and order, inform the Appellants in writing of whether anythingfurther is required to be done by the Appellants, and if so what is requiredto be done. The Appellants shall, within a week thereafter do the needful.The final decision on the application of the Appellants for EC shall betaken within three weeks thereafter.

70. The application being I.A. No.110064/2021 and other pendingapplications, if any, in this appeal are disposed of accordingly.

Nidhi Jain and Amarendra Kumar(Assisted by : Priyanshu Agarwal, LCRA)

Appeal allowed.

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