Ex-Post Facto Environmental clearance unsustainable in law. SC directs industries to pay reparations of Rs. 10 Crore

This Appeal was filed by three industries operating in Ankleshwar, Gujarat, against an order of the NGT which ordered revocation of the ex post facto environmental clearances given to them, shutting down of their operations, and for a further payment of Rs. 10 lakh as reparations. The Ministry of Environment and Forest, Government of India also filed an appeal against the NGT order in order to defend its action of granting ex post facto environmental clearances to these three industries. It was an undisputed position before the Supreme Court that these industries had obtained successive environmental clearances and thus shutting down of their industries was no longer necessary. Thus, the Supreme Court was to address the following issues raised by the respondents (original complainants before the NGT) (para 16):

1. Whether the circular allowing for ex post facto ECs is illegal because environmental jurisprudence does not recognise any concept of ex post facto clearances.

2.Whether the circular was beyond the scope of Section 3 of the Environment Protection Act since it did not protect or improve the quality of the environment and thus whether the NGT order was within its jurisdiction.

3. Whether compensation should be directed to be paid by the industries for restoration of the environment.

Key takeaways from the judgment:

1. The concept of ex post facto clearance is alien to environmental jurisprudence. It is in derogation of the fundamental principles of environmental jurisprudence and is an anathema to the EIA notification dated 27 January 1994. (para 23)
2. The circular allowing for ex post facto clearance is contrary to the objective of Section 3 of the Environment Protection Act. There was no jurisdictional bar on the NGT to enquire into its legitimacy or vires. Moreover, the administrative circular is contrary to the EIA Notification 1994 which has a statutory character. The circular is thus unsustainable in law. (para 21)
3. The Comprehensive Environmental Pollution Index report issued by the Central Pollution Control Board for 2009, 2010, 2013 and 2018 show critical figures of pollution in the Ankleshwar area which is an indication that industrial units have been operating in an unregulated manner and in defiance of the law. (para 35)
4. Since the three industries have evaded the legally binding regime of obtaining ECs, they cannot escape the liability incurred on account of such non- compliance and penalties must be imposed for the disobedience with a binding legal regime. Accordingly, each industry is to deposit a compensation of Rs. 10 crore each (in addition to the Rs. 10 lakh ordered by the NGT) with the Gujarat Pollution Control Board, which is to use the money for restoration and remedial measures to improve the quality of the environment in the industrial area in which the industries operate. (para 39)

Judgement passed by the Supreme Court on 1st April 2020: