Post facto environmental clearance: Abhishek Sharma and Amit H Wadhwani

ABHISHEK SHARMA and AMIT H WADHWANI offer a bird’s-eye view on post facto environmental clearance. 

The Ministry of Environment, Forest and Climate Change (MOEFCC) had published a draft Environment Impact Assessment (EIA) Notification on March 23, 2020 (Draft Notification) and invited suggestions from the general public. Once finalised, the Draft Notification will replace the EIA Notification dated September 14, 2006 (2006 Notification), which had replaced the EIA Notification dated January 27, 1994 (1994 Notification). The 1994 and 2006 Notifications mandated obtaining Environmental Clearance (EC) prior to commencing any project or activity listed in the schedule thereto. These notifications provide for a comprehensive procedure for grant of prior EC, which involves calling for the project report, conducting public hearing, screening, scoping and appraisal.

Several projects had commenced operations without obtaining prior EC. The above two notifications did not contain any provisions allowing projects to obtain post facto EC. Hence, various circulars, notifications and office memorandums (OMs) were issued from time to time pursuant to these notifications allowing grant of post facto EC, which were the subject matter of numerous litigations and were set aside being contrary to the law. It would be noteworthy to understand how the guidelines with respect to post facto EC have been formulated over the years. 

The law relating to preservation and improvement of environment is principally laid down under the Environment (Protection) Act, 1986 (EPA). MOEFCC is the nodal authority constituted by the Central Government for regulating environmental and forestry plans in India and granting EC. 

The powers of the Central Government/MOEFCC to publish the aforesaid notifications are derived from Section 3 of the EPA, which inter alia states that the Central Government shall have the powers to take such measures as it deems necessary for the purpose of protecting and improving the quality of the environment.

Post facto EC Despite the above, several persons had commenced their activities or expanded their existing activities without obtaining prior EC. In order to address these violations, from 1998 onwards MOEFCC issued various circulars or OMs allowing projects to apply for post facto EC, the last being the notification dated March 14, 2017 (2017 Notification). This notification provides that projects requiring prior EC under the 2006 Notification, but being undertaken without obtaining prior EC, shall be considered a case of violation, and shall be appraised for grant of EC only by the Expert Appraisal Committee; however, such projects were required to apply for EC within a period of six months from the date of notification.

Post facto circulars issued prior to 2006 were challenged before the National Green Tribunal (NGT), wherein NGT held that the post facto circular was contrary to provisions of the 1994 Notification. 

In an appeal, Supreme Court of India upheld the above judgement in April 2020 and observed that the concept of post facto EC is in derogation of the fundamental principles of environmental jurisprudence. Moreover, if post facto EC were to be ultimately refused, irreparable harm would have been caused to the environment. In any event, environment law cannot countenance the notion of a post facto clearance and it would be contrary to both the precautionary principle as well as the need for sustainable development. In light of the above, the Supreme Court inter alia held that the post facto circular cannot be said to be a measure for the purpose of protecting and improving the quality of environment, hence the same was unsustainable in law.

The OMs issued after 2006 were also challenged before NGT on the grounds that the 2006 Notification mandatorily required developers to obtain prior EC before commencing construction work while these OMs state the contrary. NGT held that OMs are ultra vires the provisions of the EPA and 2006 Notification and MOEFCC is prohibited from giving effect to these OMs in any manner whatsoever. In an appeal filed before the Supreme Court against the aforesaid judgement, the matter was disposed of in July 2018.

The 2017 Notification was challenged before the Madras High Court on the grounds that public hearing and scoping were dispensed with and it was in breach of the precautionary principle.

The Madras High Court upheld the validity of 2017 Notification and inter alia observed that it was a onetime relaxation and that too only in cases where projects are otherwise in compliance with or can be made to comply with pollution norms. The Court observed that the 2017 Notification did not compromise upon the need to preserve environmental purity, but only allowed projects that might otherwise have been given prior EC but omitted to obtain EC to operate on the conditions imposed by the authorities concerned, including their liability under the ‘polluter pays’ principle.

The Draft Notification through Paragraph 22 endeavours to make a fresh attempt to reintroduce the concept of post facto EC and also provide for a fast-track process for assessment of a project. 

Paragraph 22 proposes to assess cases of violations through an Appraisal Committee with respect to projects that have commenced operations without obtaining prior EC. In case the findings are negative, closure of the project shall be recommended along with other actions under law including directions for remediation. In case the findings are positive, the project shall be considered for EC subject to certain conditions, including imposing fines, remediation plan, demanding bank guarantee, restricting issuance of consent to operate or occupancy certificate until the conditions are fulfilled, and initiating action under Section 19 of the EPA (cognisance of offence). 

The concept of obtaining ‘prior’ EC is not specifically provided under the EPA Act, but has been mandated by MOEFCC under the 1994 and 2006 Notifications. Considering the history, one cannot rule out the possibility of the Draft Notification being challenged, at least to the extent of provisions relating to post facto EC. The moot question the courts would be required to examine would be whether such a provision can be considered as fulfilling the statutory requirement of protecting and improving the quality of environment and preventing, controlling and abating environment pollution as prescribed under Section 3 of the EPA. Hence, the judiciary would play a pivotal role in the matter as it would be expected to strike a balance between protecting and preserving the environment on one hand, and promoting sustainable development and employment on the other.

Over nearly the past two decades, we all have witnessed that despite obtaining various development permissions from local authorities, many real-estate, construction and infrastructure projects fail to commence construction owing to delay in grant of EC, as the process of conducting a study or assessment of the impact of the projects on the environment is relatively scientific, complex and time-consuming. The Draft Notification seems to have learnt from the past. It has unified several notifications, orders, circulars and decisions of courts and NGT since the 2006 Notification to make the process of grant of EC more transparent and robust and, at the same time, expeditious, thereby striking a balance between minimum procedural compliance and maximum scrutiny. 

Abhishek Sharma is Partner and Co-Head and Amit H Wadhwani is Director of Cyril Amarchand Mangaldas. This article was written with the assistance of Mohammed Bengali, Associate.