SC's post-facto green nod rollback pulls core sectors 'back from brink'

Reversal restores 2017 and 2021 norms, reopening door to regularise past lapses

The Supreme Court’s decision to recall its May ruling that prohibited post-facto environmental clearances has “fundamentally altered the compliance landscape” and brought sectors such as real estate, construction, mining, and large public infrastructure “back from the brink”, according to legal experts.

 

Calling it a “significant reversal”, Ashutosh K. Srivastava, partner at SKV Law Offices, said the judgment revives the 2017 and 2021 government notifications that allowed retrospective environmental clearances.

 

“Projects that faced imminent demolition can now proceed through proper assessment mechanisms rather than automatic closure,” he said. The court has shifted from a blanket prohibition to a position that permits retrospective clearances in exceptional cases, provided damage assessments, remediation plans, and penalties are imposed.

 

The ruling carries wide-ranging implications, including for real estate and construction projects that began without prior clearance and now have a viable route to regularisation, he said.

 

Similarly, mining and steel operations can seek retrospective approval where activities are legally permissible, while major public infrastructure projects — including All India Institute of Medical Sciences hospitals and greenfield airports — avoid the threat of complete demolition, Srivastava said.

 

“Operational continuity is the biggest immediate impact,” he added, cautioning that activities in ecologically sensitive zones remain barred.

 

Ramanuj Kumar, partner at Cyril Amarchand Mangaldas, said the recall restores the central government’s flexibility. “The power to make regulations includes the power to relax them. Upholding the earlier judgment would have meant the government could not regularise even genuine lapses. The court has attempted to strike a balance between development and environmental imperatives.”

 

Suchitra Chitale, managing partner at Chitale & Chitale Partners, supported the move on practical grounds. “Demolition of what is already constructed would cause more pollution than the construction itself. The recall is correct,” she said, adding that planning authorities must now impose stronger penalties for future violations.

 

Parth Contractor, founder of the tax firm Chambers of Parth Contractor, however, warned that the judgment puts the country in an era where even projects that breached environmental law are given “a chance at validation”.

 

He criticised the ruling for not fully engaging with the environmental impact of post-facto approvals and described Justice Ujjal Bhuyan’s dissent as an “eye-opener”.

 

With the case now to be reheard, he said, “the situation remains in flux”, and enforcement actions are likely to pause.

 

What the court held

 

The Bench of Chief Justice of India (CJI) B R Gavai and Justices Ujjal Bhuyan and K Vinod Chandran decided the review by a 2:1 majority. CJI Gavai and Justice Chandran recalled the earlier Vanashakti ruling; Justice Bhuyan dissented.

 

CJI Gavai held that the May judgment was per incuriam (through lack of care) because it overlooked binding precedents such as Alembic Pharmaceuticals, D Swamy, Electrosteel Steels, and Pahwa Plastics, which had recognised that post-facto environmental clearances may be granted in exceptional cases.

 

Invalidating clearances issued under the 2017 and 2021 office memoranda, he warned, would lead to the demolition of completed or near-complete projects worth “thousands of crores”, adding to pollution rather than reducing it.

 

Justice Bhuyan, who authored the original ruling, held that post-facto clearances are impermissible for projects requiring mandatory prior environmental clearance and said later judgments permitting them deviated from established law. Violators, he said, cannot invoke demolition-induced pollution as a defence.

 

“Precautionary principle is the cornerstone of environmental jurisprudence. ‘Polluter pays’ is only a principle of reparation. The precautionary principle cannot be given a short shrift by relying on the ‘polluter pays’ principle. The review judgment is a step in retrogression,” he said.

 

Justice Chandran agreed with the CJI, calling the review “imperative” and reasoning that the government’s power to mandate prior environmental clearance inherently includes the power to relax that requirement.