In a significant reversal, the Supreme Court has recalled its May 16th ruling that prohibited the granting of ex-post facto environmental clearances. The decision, reached by a 2-1 majority, effectively reinstates the government's authority to issue retroactive approvals for projects found to be in violation of environmental regulations.
The original May ruling, delivered by a two-judge bench comprising Justices Abhay S. Oka (since retired) and Ujjal Bhuyan, had barred the Ministry of Environment, Forests and Climate Change (MoEFCC) and other authorities from granting retrospective environmental clearances (ECs). This meant that projects which had commenced construction or operations without obtaining the necessary prior environmental approvals could not regularize their operations, even by paying penalties.
The recall of this verdict came after a batch of review petitions were filed by various industrial, mining, and infrastructure entities, as well as government bodies, who argued that the May ruling had severe consequences for major projects. These parties were represented by senior advocates including Kapil Sibal, Mukul Rohatgi, and Solicitor General Tushar Mehta. They contended that many ongoing and completed projects risked closure or demolition under the earlier verdict. Chief Justice of India (CJI) Bhushan R. Gavai and Justice K. Vinod Chandran, in separate but concurring opinions, allowed the review petitions, stating that the original ruling had failed to consider binding earlier precedents where limited situations permitted post-facto EC. The Chief Justice noted that the previous bench "did not fully consider the relevant paragraphs of earlier judgments" on the issue and should have referred the matter to a larger bench if it did not concur with the earlier rulings. He specifically cited the D. Swami (2022) and Pahwa Plastic (2022) cases, which examined the 2017 notification and 2021 Office Memoranda (OMs) that enabled limited post-facto EC with stringent conditions and penalties, and stated that these were not brought to the attention of the May bench.
CJI Gavai also highlighted the potential practical implications of the May judgment, noting that projects worth ₹20,000 crore would face demolition if the ruling was not reviewed. He stated that it would be against public interest to demolish buildings and then reconstruct them after obtaining EC. Justice Chandran concurred, stating that the May ruling "could not have taken a divergent view from previous rulings" and that a rigid application of regulations would be "counter-productive for those who adjusted their affairs in accordance with the legal regime".
Justice Bhuyan, who had co-authored the original May 16 judgment, dissented, declaring the concept of ex-post facto clearance an "anathema to environmental jurisprudence". He rejected the argument that demolition would cause greater environmental damage. He also stressed that the Union government had not sought review of the May judgment, suggesting that concerns could have been addressed through clarification rather than a full review.
The majority decision effectively revives the 2017 notification and a 2021 Office Memorandum (OM) that allowed projects that started construction without a mandatory prior EC to regularize their operations by paying penalties. The court has ordered restoration of the petitions for a fresh hearing. While it upheld some clearances previously granted under the 2017 notification and the 2021 memorandum, it had barred any future retrospective approvals.
This ruling is expected to provide significant relief to industries and infrastructure agencies awaiting regulatory certainty. The Supreme Court's decision has stirred debate, pitting economic considerations against environmental protection.
