SC by 2:1 majority recalls its verdict barring post-facto green clearance; Justice Bhuyan dissents, cites Delhi smog

New Delhi, Nov 18 (PTI) Reversing its own verdict, the Supreme Court on Tuesday paved the way for retrospective environmental clearance by the Centre and other authorities to projects found violating environmental norms on payment of heavy penalties, observing that otherwise “thousands of crores of rupees would go in waste”.

The top court by a 2:1 majority held that numerous vital public projects constructed out of public exchequer to the tune of nearly Rs 20,000 crore will be demolished if the May 16 verdict, which barred the Centre from granting retrospective environmental clearance (EC) to projects, is not recalled.

The projects include an AIIMS in Odisha, a greenfield airport in Vijayanagar in Karnataka and several common effluent treatment plants crucial for pollution control and they were mentioned by the court by way of an example.

Chief Justice B R Gavai and Justice K Vinod Chandran formed the majority and gave two separate and concurring judgments.

The CJI based his decision on two primary grounds that there was a “grave error” in judicial discipline and the “catastrophic impact” on public interest.

He also warned that a rigid approach of "demolition and re-construction" would not only be a colossal waste of public funds but would also be "counter-productive to the public interest" by generating more pollution from the demolition and rebuilding process.

Justice Ujjal Bhuyan, who was part of the May 16 verdict penned by Justice A S Oka, who has since retired, wrote a strong dissent and said that post-facto grant of EC is unknown and "anathema" to environmental law as they are contrary to both the precautionary principle as well as the need for sustainable development.

Justice Bhuyan, who described the review judgment as a "step in retrogression", also referred to air pollution in the national capital and said that the "deadly" Delhi smog reminds us every day about the hazards of environmental pollution.

The majority verdict will effectively revive, for now, the controversial 2017 notification and a 2021 Office Memorandum(OM) that created a pathway for projects that had started construction without mandatory prior EC to regularize their operations by paying penalties.

Justice Gavai directed the registry to place the matter before the CJI on the administrative side for necessary orders to ensure a fresh hearing on pleas against the Centre’s notification and OM.

The Congress termed as "doubly disappointing" the Supreme Court recalling its judgement and said retrospective approvals with penalties howsoever heavy is no solution as it only regularises the by-passing of laws.

Congress general secretary in-charge communications Jairam Ramesh, a former environment minister, said retrospective approvals are bad in law and make a mockery of governance, he said.

Writing a 84-page judgement, the CJI ordered, “The judgment and order dated May 16, 2025 (Judgement under review) is recalled. The writ petitions and the appeal are restored to file.” “If the JUR (judgement under review) is not recalled, it will result in demolition of various buildings/projects constructed out of public exchequer to the tune of nearly Rs. 20,000 crore. I may give only three instances of the same,” the CJI said.

His verdict held the judgement under review was passed without considering key legal precedents and would lead to "devastating effects," including the demolition of vital public projects.

The majority verdict cited the potentially "devastating effects" on projects of national importance, including the 962-bed AIIMS hospital in Odisha and a greenfield airport in Vijayanagar.

"I, therefore, ask a question to myself as to whether it would be in the public interest to demolish all such projects and permit the money spent from the pocket of public exchequer to go in the dustbin?" the CJI asked.

During the hearing, the Centre had given a list of projects that were stalled and at risk.

Referring to the earlier judgement, the CJI said, “It is thus clear that though this court held that ex-post facto EC should not ordinarily be granted, but in exceptional circumstances they can be granted.

"It was held that where the adverse consequences of denial of ex-post facto approval outweigh the consequences of regularisation of operations by grant of ex-post facto approval, and the establishment concerned otherwise conforms to the requisite pollution norms, ex-post facto approval should be granted. ” The CJI said earlier judgment was rendered per incuriam, as it had failed to consider at least three binding precedents from benches of the same strength in other cases.

"It is trite law that a Bench of two-Judges is bound by an earlier view taken by the other two-Judge Benches." Justice Chandran, concurring, added that the failure of the previous bench to even notice the earlier crucial judgments was in itself a valid ground for review. He found it "imperative and expedient" to allow the review.

Referring to earlier three binding precedents in the earlier judgements, he said the top court had adopted a balanced approach by holding the industries to account for having operated without EC in the past but without ordering a closure of operations.

Ex-post facto EC should not ordinarily be granted, and certainly not for the asking, at the same time, he said, adding the EC cannot be declined with “pedantic rigidity, oblivious of the consequences of stopping the operation of a running steel plant”.

The top court also referred to details of projects of Centre and states affected by the May 16 judgement.

“At the Central Government level, 24 projects involving expenditure to the tune of Rs 8,293 crore are pending. At the State level, 29 projects worth Rs 11,168 crore are pending,” it said, adding some are concerning construction of hospitals, medical colleges, airports and some are with regard to common effluent treatment plants." The verdict was pronounced after the top court heard several senior advocates, including Kapil Sibal, Mukul Rohatgi, and Solicitor General Tushar Mehta, appearing for various industrial and infrastructural entities as well as government bodies, in favour of the review or modification of the impugned judgement.PTI SJK PKS ASK RT GSN GSN GSN