Environmental Laws: Environmental clearance (EC) for building project – On facts, Project Proponent-construction project made substantial compliance by obtaining the EC from the competent local authority – Subsequent changes in EC regimes – Effect of – Validity of the grant of EC to Project Proponent, challenged to – NGT held that further construction cannot be made without environment impact assessment, but protected the constructions already made by the appellant-Project Proponent on the basis of the EC issued by the Pimpri Chinchwad Municipal Corporation as per the notification – On appeal, held: Project Proponent can legitimately expect a certain degree of stability in the manner in which environmental regime is set and how the applications are processed – Public interest might possibly diminish the degree of legitimate expectation for a party but a balance has to be found – Project Proponent is not expected to anticipate the changes in EC 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 – Neither can it be expected to knock the doors of an authority, not empowered at the relevant time, to process its applications – On facts, the appellant acted on the EC and made substantial investments – They adhered to the applicable legal framework during the concerned period, as such cannot be pushed to a precipice and be made to fall – Doing so would be inequitable – Moreover, third-party interests have also come up –Thus, the order passed by NGT protecting the completed construction is endorsed and four constructed buildings are to be treated to be under a valid EC with all legal consequences – However, for any further construction proposed they must secure fresh clearance as required – Doctrine of legitimate expectation. Disposing of the appeals, the Court
HELD: 1.1 When the Project Proponent initially wanted to apply for the EC it had obtained the requisite layout sanction for applying to the SEIAA. As such, it was operating well within the applicable procedure, prior to the amendment. After grant of such sanction, while the construction was underway, the amendment came about on 9.12.2016 whereby, the local authority such as the Municipal Corporation was made the competent authority to grant EC. In the changed circumstances, the Project Proponent necessarily had to apply to the PCMC as during the interregnum before the NGT’s judgment on 8.12.2017, SEIAA was not the competent authority to consider application for EC. The Project Proponent was therefore, complying with the regime set out by the amended notification. It is apposite to note that the Committee appointed by the NGT, in its report dated 11.8.2020 had clearly indicated that when the Project Proponent had received the EC on 28.11.2017, the competent authority to issue the EC was the Environmental Cell of the PCMC. Thus, it is the discernible understanding as part of the NGT’s own expert Committee that the Project Proponent had obtained the EC from the competent authority of the relevant time-the PCMC. [Para 15][292-C-F]
1.2 Moreover, only after the earlier judgment of the NGT on 8.12.2017 in the OA No. 677/2016, the State of Maharashtra issued a clarification on 29.1.2018 directing that the Municipal authorities should not process pending applications. But neither the decision of the NGT nor of the Maharashtra Government categorically gave any guidance as to the implication on the EC obtained by the Project Proponent, on the strength of which, a substantial measure of construction was already made. It is also necessary to note that in the subsequent notification issued on 14.11.2018 and 15.11.2018 by the MoEFCC, the power to grant EC continued to vest in the local authority such as the PCMC, with the only change being that it is the municipality itself and not its Environmental Cell which is empowered to grant the EC. The said notifications of the MoEFCC is stayed by the Delhi High Court on 26.11.2018 in the WP(C) No. 12517/2018. [Para 16][292G-H; 293-A-B]
1.3 The Committee constituted by the NGT to report on the building project did not underscore any major deviation but instead found that the Project Proponent had made substantial compliance by obtaining the EC from the competent local authority. Moreover the OA, neither before the NGT or this Court, ever contended that appraisal done by the PCMC’s Environmental Cell was defective or any different from one done by SEIAA. Both processes are also similarly structured. This may be the reason why the NGT in the impugned judgment itself protected the already made construction. However, the Project Proponent was restrained from making any further construction without obtaining clearance from the statutory EC and adhering to the environmental norms. [Para 17][293-C-E]
1.4 The NGT rightly protected the already erected buildings and this protection in our view, should not be impacted by the earlier judgment of the NGT on 8.12.2017 in the OA No. 677/2016 whereby certain portions of the MoEFCC’s 9.12.2016 notification were invalidated and direction was issued to the Ministry to revisit the said notification. Importantly, 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. As the expert body exclusively occupying the environmental field, the NGT has assessed the factual circumstances to consciously lean towards protecting the already constructed structures. Nothing more need be added on this aspect. It is also not necessary in this appeal to venture into the question of the retrospective implication of the invalidation of certain parts of the 2016 Notification for other project proponents, which may have gained their ECs in the interregnum. [Para 19][293-G-H; 294-A-B]
1.5 In situations of this nature, the Doctrine of Legitimate Expectation is attracted. The principle of the rule of law 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 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 more compelling public interest might possibly diminish the degree of legitimate expectation for a party but a balance has to be found. In the instant matter, 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, thirdparty interests have also cropped up in the interregnum. [Para 20, 24][294-B-D; 295-G-H; 296-A-B]
1.6 A Project Proponent is not expected to anticipate the changes in EC 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. 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. [Para 25][296-B-C]
1.7 As seen, the NGT in the impugned judgment has protected the completed construction and, on this aspect, it is deemed appropriate to endorse the same. The four constructed buildings are resultantly to be treated to be under a valid EC with all legal consequences. It is, however, made clear that if any further construction is proposed by the appellant with the sanctioned layout, the same should not be done on the strength of the EC granted on 28.11.2017 by the PCMC. In other words, 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. [Para 26][296-D-E]
Goan Real Estate and Construction Ltd. v. Union of India (2010) 5 SCC 388; Food Corporation of India v. M/s Kamdhenu Cattle Feed Industries (1993) 1 SCC
71 – referred to.
Attorney General of Hong Kong v. NgYuen Shiu (1983)
2 AC 629 : (1983) 2 WLR 735 – referred to.
Judicial Review by De Smith – referred to.
As published in the Supreme Court Reports, Supreme Court of India. Text from the Indian Supreme Court Judgments open data set (Dattam Labs), CC BY 4.0.
This page is for informational and research purposes only and does not constitute legal advice. Consult a qualified advocate for advice specific to your situation.