SC draws firmer line on environmental compliance and approvals

By quashing a 2021 Office Memorandum (OM) that granted retrospective environmental clearance to projects starting work without green approval, the Supreme Court has taken a step towards restoring the primacy of the compliance regime. The three-judge Bench pointed out that the 2021 OM was an administrative order that, in effect, established a perpetual post facto clearance regime and “substantially” altered the criteria for granting environment clearance under the 2006 notification. This 20-year-old notification requires projects to undergo a rigorous “Environmental Impact Assessment” under the Environment Protection Act, 1986. At the same time, the apex court upheld the Centre’s 2017 notification, which provided a six-month window for projects that started, expanded or changed the product mix without prior environmental clearance to apply for regularisation. The court described this notification as a “narrowly tailored one-time regulatory measure”. 

The latest judgment can be seen as seeking a balancing act between a May 2025 judgment of a two-judge Bench and its recall in November. The first judgment (Vanashakti  versus Union Of India ) struck down both the 2017 notification and the 2021 OM as illegal and arbitrary and a violation of the fundamental principles of environmental jurisprudence. A Karnataka-based construction confederation and the Union government appearing for Steel Authority of India Ltd (SAIL) appealed against this judgment, which was recalled in November by a 2:1 majority of a three-judge Bench led by then Chief Justice B R Gavai on the grounds that demolishing big-ticket ongoing projects would waste thousands of crores of rupees and harm the public interest. These projects included, among others, a greenfield airport in Karnataka, an AIIMS (All-India Institute of Medical Sciences) hospital in Odisha, a SAIL plant and, ironically, some effluent-treatment plants (the dissenting note came from Justice Ujjal Bhuyan, who was part of the Bench that delivered the May 2025 ruling).   

The latest judgment does three things. First, it has been made applicable with prospective effect so that projects started under the 2017 and 2021 relaxations will not be impacted, the idea being to minimise disruption. Second, it underlines that projects do not have the carte blanche to violate environmental laws with impunity. Third, it has held that the Union government may still permit environmental clearance in exceptional cases and in the public interest if it does so through a valid notification under the Environment Protection Act, 1986. The latter ruling acts as a check on executive powers by subjecting the exemption to greater scrutiny. Under the Act, exemptions require a formal statutory notification and hold the potential for judicial scrutiny to ensure that projects do not violate the precautionary principle in the law — by causing serious or irreversible environment damage, for instance. The efficacy of the latest ruling lies in the degree to which the central government and states choose to honour the spirit of the environment-protection principle. Streamlining a somewhat cumbersome approval system, which can take up to 18 months and includes expert-committee appraisals and public hearings, would be a practical first step. This would deter investors from resorting to the cycle of non-compliance and lobbying, which has resulted in a feeble green governance regime so evident in India’s steadily degraded air, rivers, forests and other natural resources.