India’s Supreme Court has struck down the Central government’s 2021 office memorandum that allowed for retrospective environmental clearances, stating that administrative orders cannot override valid laws.
A three-judge bench, led by Chief Justice Surya Kant, found that the 2021 Office Memorandum (OM) unlawfully supplanted the Environment Impact Assessment (EIA) Notification of 2006. The Court ruled that the OM created a “perpetual amnesty scheme” which is ultra vires the Environment (Protection) Act, 1986. Because the OM was a mere administrative instruction, it could not substantially alter the nature of the enquiry or criteria for grant of clearance as mandated by the 2006 Notification.
The Court emphasized that prior Environmental Clearance is usually mandatory unless amended by a valid notification. It noted that the OM failed to lay down an intelligible differentia for selecting projects, violating the rational nexus to public interest required under constitutional law.
“The 2021 Office Memorandum is an administrative order and envisages a perpetual regime for grant of environmental clearances to projects undertaken without prior EC,” the Court observed.
While the 2021 OM is quashed, the Supreme Court clarified that the Central government retains the power to grant ex post facto clearances in exceptional public interest cases. However, this must be done through a valid amending notification under Section 3 of the Environment (Protection) Act, not via an office memorandum. The Court also directed the Centre not to grant retrospective clearances through administrative orders in the future.
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Existing clearances granted under the 2017 Notification or the 2021 OM will remain valid unless individually challenged in court. The Court, however, barred any further applications for such clearances.
The Court’s decision highlights the importance of adhering to the Environment Impact Assessment (EIA) Notification of 2006, which mandates prior environmental clearance for projects. The 2006 Notification is a delegated legislation that outlines the procedures for environmental clearance, and any attempts to circumvent it through administrative orders are ultra vires. The Court’s ruling reinforces the principle that environmental clearance is a critical component of sustainable development and that any exceptions to this rule must be narrowly tailored and justified by supervening public interest.
The distinction between the 2021 OM and the 2017 notification is key in this context. While the 2021 OM was struck down for its perpetuity and lack of intelligible differentia, the 2017 notification was upheld as a validly introduced amending notification. This distinction shows the Court’s emphasis on the need for a rational nexus between the grant of ex post facto clearances and public interest. The Court’s ruling also suggests that any future attempts to grant retrospective clearances must be done through a valid notification, rather than an administrative order, to ensure that the principles of environmental protection and sustainable development are upheld.
The implications of the Court’s ruling are far-reaching, as it affects not only the real estate industry but also other sectors that rely on environmental clearances. The Court’s decision is likely to lead to greater scrutiny of projects that have commenced without prior environmental clearance, and may result in increased compliance costs for industries that have relied on retrospective clearances in the past. However, the ruling also provides clarity on the legal framework governing environmental clearances, and reinforces the importance of prioritizing environmental protection and sustainable development in India’s economic growth trajectory.
The Court’s inherent power under Article 142 of the Constitution to grant ex post facto clearance in appropriate cases provides a safety valve for exceptional circumstances. This power can be exercised in cases where the grant of retrospective clearance is necessary to prevent irreparable harm or to promote public interest. However, the Court’s ruling makes it clear that this power will be exercised sparingly, and only in cases where the grant of clearance is justified by compelling reasons of public interest.
