Keystone Realtors Pvt. Ltd. vs Shri Anil V Tharthare & Ors.

1 and scrutiny by the Expert Appraisal Committee – Thus, an expansion within the limits prescribed by the Schedules would be subject to the procedure set out in paragraph 7(ii) – At the time of the second increase, the total construction area of the appellant’s project was enlarged to 40,480.88 sq.mtrs – As a result of expansion, appellant constructed sixteen additional flats – Appellant did not comply with the procedure set out under paragraph 7(ii) of the EIA Notification but rather sought an ‘amendment’ to the EC – SEIAA did not require the appellant to submit an updated Form 1 nor was the proposal processed and evaluated by SEAC – The ‘amendment’ to EC dated 13.03.2014 did not discuss the potential environmental impact of the increase in construction area – The procedure set out under paragraph 7(ii) of the EIA Notification exists to ensure that where a project is expanded in size, the environmental impact on the surrounding area is evaluated holistically considering all the relevant factors including air and water availability and pollution, management of solid and wet waste and the urban carrying capacity of the area – This was not done in the case of the appellant’s project – It was not open to SEIAA to grant an ‘amendment’ to the EC without following the procedure set out in paragraph 7(ii) of the EIA Notification – Further, as on the date of the impugned order construction at the project site had already been completed – By completing the construction of the project, the appellant denied SEIAA and SEAC, the ability to evaluate the environmental impact and suggest methods to mitigate any environmental damage – At this stage, only remedial measures may be taken – The NGT already directed the appellant to deposit one crore and has set up an expert committee to evaluate the impact of the appellant’s project and suggest remedial measures – In view of these circumstances, the directions of the NGT are upheld and the Committee is directed to continue its evaluation of the appellant’s project so as to bring its environmental impact as close as possible to that contemplated in EC dated 02.05.2013 and also suggest the compensatory exaction to be imposed on the appellant.

Interpretation of Statutes: Interpretation of Notification – In a case where the text of the provisions requires interpretation, Courts must adopt an interpretation which is in consonance with the object and purpose of the legislation or delegated legislation as a whole – EIA Notification was adopted with the intention of restricting new projects and the expansion of new projects until their environmental impact could be evaluated and understood – Environmental law.

Dismissing the appeal, the Court

HELD: 1. The EIA Notification seeks to ensure the protection and preservation of the environment during the execution of new projects and the expansion or modernisation of existing projects. It imposes restrictions on the execution of new projects and on the expansion of existing projects, until their potential environmental impact has been assessed and approved by the grant of an EC. Where a project falls within the parameters stipulated in the Schedule, paragraph 2 of the EIA Notification provides that no construction work shall begin unless an EC is granted in regard to three types of activity: (i) new projects or activities provided in the Schedule, (ii) expansion or modernisation of existing projects or activities provided in the Schedule, and (iii) changes in the product mix in existing manufacturing units provided in the Schedule beyond the specified range. [Para 6] [547-G-H; 548-G-H]

2. In order to secure an EC, the project proponent must submit an application in the manner set out in Form 1 and Supplementary Form 1A (if applicable) of the EIA Notification. Clause (ii) of paragraph 2 of the EIA Notification requires the project proponent to secure an EC from the relevant regulatory authority prior to undertaking any “expansion” of an existing project. Paragraph 7(ii) further stipulates that all applications for an EC in cases of “expansion” resulting in the increase of production capacity or lease area beyond the capacity/area stipulated in the previous EC shall be made in the manner set out in Form 1 or 1A (as applicable). The appellant’s application in Form 1 acknowledges that the project fell under entry 8(a) of Schedule 1 of the EIA Notification. Entry 8 deals with ‘Building and Construction projects having a built-up area of or greater than 20,000 square metres but less than 1,50,000 square metres.’ In applying for the original EC, the appellant submitted an application in Form 1 as required under the provisions of the EIA Notification. The total construction area identified in the appellant’s Form 1 was 32,395.17 square metres. However, in September 2013, the appellant informed the second respondent of an increase by 8,085.71 square metres as a result of which the total construction area of the project would be 40,480.88 square metres. [Paras 7, 8] [549-B-G-H; 550-A-D-E]

3.1 Clause (ii) of paragraph 2 of the EIA Notification stipulates that a project proponent shall require an EC prior to the start of construction in the case of an “expansion”. Clause

(ii) uses the phrase “expansion…beyond the limits specified for the concerned sector”. A plain reading of the second half of clause (ii) indicate that it applies to cases where a project was initially below the threshold limits stipulated in the Schedule but after the proposed expansion, would breach the threshold limits. However, clause (ii) of paragraph 2 must be read with paragraph 7(ii) of the EIA Notification. Paragraph 7(ii) says that even after obtaining an EC if the project is expanded beyond the limits for which the prior EC was obtained, a fresh application would need to be made even if the expansion is within upper the limit prescribed in the Schedule. [Paras 12, 13] [552-H; 553-A-F]

3.2 If clause (ii) of paragraph 2 does not cover a case where the expansion is within the limits stipulated by the Schedule, a project proponent may incrementally keep increasing the size of the project area over time resulting in a significant increase in the project size without an assessment of the environmental impact resulting from the expansion. Such an outcome would defeat the entire scheme of the EIA Notification which is to ensure that any new or additional environmental impact is assessed and certified by the relevant regulatory authorities. In the instant case, the lower limit of Entry 8(a) of the Schedule is a built up area of 20,000 square metres and the upper limit is 1,50,000 square metres. It cannot be doubted that the environmental impact of a construction of 1,50,000 square metres is drastically more than construction of 20,000 square metres. If the appellant’s argument is accepted in totality, a project proponent could potentially secure an EC for constructing 20,000 square metres and by ‘amendment’ steadily increase the area of construction up to 1,50,000 square metres without submitting an updated Form 1 or any substantive review by the SEAC. [Para 14] [553-G-H; 554-A-B]

4. In a case where the text of the provisions requires interpretation, this Court must adopt an interpretation which is in consonance with the object and purpose of the legislation or delegated legislation as a whole. The EIA Notification was adopted with the intention of restricting new projects and the expansion of new projects until their environmental impact could be evaluated and understood. It cannot be disputed that as the size of the project increases, so does the magnitude of the project’s environmental impact. This Court cannot adopt an interpretation of the EIA Notification which would permit, incrementally or otherwise, project proponents to increase the construction area of a project without any oversight from the Expert Appraisal Committee or the SEAC, as applicable. It is true that there may exist certain situations where the expansion sought by a project proponent is truly marginal or the environmental impact of such expansion is non-existent. However, it is not for this Court to lay down a bright-line test as to what constitutes a ‘marginal’ increase and what constitutes a material increase warranting a fresh Form 1 and scrutiny by the Expert Appraisal Committee. If the government in its wisdom were to prescribe that a one-time ‘marginal’ increase (e.g. 5% or 10%) in project size, within the threshold limit stipulated in the Schedule, could be subject to a lower standard of scrutiny without diluting the urgent need for environmental protection, conceivably this Court may give effect to such a provision. This would be subject to any challenge on the ground of their being a violation of the precautionary principle. However, as the EIA Notification currently stands, an expansion within the limits prescribed by the Schedules would be subject to the procedure set out in paragraph 7(ii). [Para 16] [556-D-H; 557A]

5. At the time of the second increase, the total construction area of the appellant’s project was enlarged from 32,395.17 square metres to 40,480.88 square metres. As a result of the expansion, the appellant constructed sixteen additional flats. The appellant did not comply with the procedure set out under paragraph 7(ii) of the EIA Notification but rather sought an ‘amendment’ to the EC. The third respondent did not require the appellant to submit an updated Form 1 nor was the proposal processed and evaluated by the fourth respondent. The ‘amendment’ to the EC dated 13 March 2014 did not discuss the potential environmental impact of the increase in construction area, but merely recorded that the construction area stood at 40,480.88 square metres. The procedure set out under paragraph 7(ii) of the EIA Notification exists to ensure that where a project is expanded in size, the environmental impact on the surrounding area is evaluated holistically considering all the relevant factors including air and water availability and pollution, management of solid and wet waste and the urban carrying capacity of the area. This was not done here. It was not open to the third respondent to grant an ‘amendment’ to the EC without following the procedure set out in paragraph 7(ii). Further, as on the date of the impugned order, construction at the project site had already been completed. By completing the construction of the project, the appellant denied the third and fourth respondents the ability to evaluate the environmental impact and suggest methods to mitigate any environmental damage. The NGT has already directed the appellant to deposit Rs. One crore and has set up an expert committee to evaluate the impact of the appellant’s project and suggest remedial measures. In view of these circumstances, the directions of the NGT are upheld and the committee is directed to continue its evaluation of the appellant’s project so as to bring its environmental impact as close as possible to that contemplated in the EC dated 2 May 2013 and also suggest the compensatory exaction to be imposed on the appellant. [Paras 17, 18] [557-BH; 558-A]