A Bench of the Supreme Court consisting of Justice R Subhash Reddy and Justice Hrishikesh Roy has ruled that, "A Project Proponent is not expected to anticipate the changes in EC (Environment Clearance) regimes, especially as a result of judicial interventions, and keep revisiting the sanctioned clearances by the competent authority or even raze down validly constructed structures."

The Bench has held that such an exercise would lead to a never ending government clearance process akin to a Sisyphean task. "Neither can it be expected to knock the doors of an authority, not empowered at the relevant time, to process its applications. Such a scenario would render the process akin to a Sisyphean task, eternally inconclusive and never ending," it observed.

In this case, the Court decided the issue that the Project Proponent (the Appellant) herein possesses a validly granted Environmental Clearance (EC) under the Environmental Impact Assessment (EIA) notification dated 14.9.2006.

The issue cropped up following a judgment of the National Green Tribunal (NGT) on December 8, 2017 in the case of Society for Protection of Environment and Biodiversity Versus Union of India. In the said verdict, the NGT had invalidated certain portions of the 2016 notification issued by the Ministry of Environment, Forest and Climate Change (MoEFCC) altering certain provisions in its notification issued in 2006.

The Original Applicant (the Respondent herein) approached the NGT in 2019 submitting that when the NGT struck down certain provisions of the MoEFCC's 2016 notification, the EC granted by the Municipal Corporation, would not legitimize the construction and therefore the Project Proponent should be prevented from proceeding with the further construction and also be penalized for the unauthorized construction. The NGT, on January 18, 2021, held that further construction cannot be made without an environment impact assessment, but protected the constructions already made by the appellant. Both the parties challenged the judgment.

Senior Counsel Huzefa Ahmadi appeared for the Appellant, Advocate Lonkar Nitin represented Original Applicant, Additional Solicitor General Aishwarya Bhati appeared for the Ministry of Environment & Forest. The Government of Maharashtra and the State Pollution Control Board were represented by Advocate Rahul Chitnis and Advocate Mukesh Verma respectively.

The Appellant would contend that the NGT did not issue any order nullifying those ECs which were granted by the local authority under the altered regime. The Respondent submitted that, because of the invalidation of certain clauses in the 2016 notification, the EC obtained from the local civic authority is unacceptable and the Appellant had failed to obtain the valid EC.

After hearing the parties, the Bench mentioned that neither the NGT's invalidation order nor the subsequent clarifications by the State of Maharashtra, have suggested any adverse action against the pre-existing structures.

The Bench observed that in situations of this nature, the Doctrine of Legitimate Expectation is attracted. The principle of the rule of law as explained in De Smith's Judicial Review, such as, Regularity, Predictability and Certainty in Government's dealings with the Public, must operate in the present matter.

"The Project Proponent can legitimately expect a certain degree of stability in the manner in which the environmental regime is set and how the applications are processed. The actions of the authorities are expected to adhere to the prevalent norms only, without the element of uncertainty for the executed project," the Bench observed.

The Court cited previous judgments to hold that the more compelling public interest might possibly diminish the degree of legitimate expectation for a party but a balance has to be found.

"In the present matter the appellant has acted on the EC and made substantial investments. They cannot be pushed to a precipice and be made to fall. Doing so would be inequitable particularly when, the appellant has scrupulously adhered to the applicable legal framework during the concerned period. Moreover, third-party interests have also cropped up in the interregnum," the Bench stated.

The Bench then endorsed the NGT order qua completed construction and treated them under valid EC and clarified that if the Project Proponent wishes to construct the remaining buildings, they must secure fresh clearance from the competent authority, as per the currently applicable framework and not by the EC granted by the local civic authority.

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