Read Judgment: M/s Pahwa Plastics Pvt. Ltd. And Anr. V. Dastak Ngo 

Pankaj Bajpai

New Delhi, March 28, 2022: Finding that the manufacturing units of the Appellant- Company (Pahwa Plastics) has a huge  annual  turnover and also employs around 8000 people, the Supreme Court has held that an establishment contributing to the economy of  the  country and  providing livelihood  ought  not  to  be  closed down only on  the  ground  of  the  technical  irregularity of not obtaining  prior  Environmental  Clearance (EC) irrespective of whether or not the unit actually causes pollution. 

A Division Bench of Justice Indira Banerjee and Justice J.K Maheshwari observed that ex-post facto clearances and/or approvals and/or removal of technical irregularities in terms of a Notification under the EP Act cannot be declined with pedantic rigidity, oblivious of the consequences of stopping the operation of mines, running factories and plants.

The 1986 Act does not prohibit ex post facto Environmental Clearance, as grant of ex post facto EC in accordance with law, in strict compliance with Rules, Regulations, Notifications and/or applicable orders, in appropriate cases, where the projects are in compliance with, or can be made to comply with environment norms, is not impermissible, added the Bench. 

The observation came pursuant to an appeal u/s 22 of the National Green Tribunal Act, 2010, challenging an order whereby, the Principal Bench of the National Green Tribunal (NGT) had held that establishments such as the manufacturing units of Pahwa Plastics (Appellants), which did not have prior Environmental Clearance (EC) could not be allowed to operate. 

After considering the submissions, the Top Court found that the question of law involved in this appeal was, whether an establishment employing about 8000 workers, which has been set up pursuant to Consent to Establish (CTE) and Consent to Operate (CTO) from the concerned statutory authority and has applied for ex post facto EC can be closed down pending issuance of EC, even though it may not cause pollution and/or may be found to comply with the required pollution norms. 

Section 21 of the General Clauses Act, 1897 provides that where any Central Act or Regulations  confer  a  power to issue notifications, orders, rules or  bye-laws,  that  power  includes  the  power,  exercisable  in  like  manner, and subject to like sanction  and  conditions,  if  any,  to  add  to,  amend,  vary  or  rescind  any  notification,  order,  rule or bye-law so issued, added the Court. 

Speaking for the Bench, Justice Banerjee observed that if power to amend or modify or relax a notification and/or order exists, the  notification  and/or  order  may  be  amended and/or modified as many times, as may be necessary.

Finding that the need  to  comply  with  the  requirement  to  obtain  EC  is  non-negotiable, Justice Banerjee observed that a unit can be set up or allowed to expand subject to compliance of the requisite environmental norms, as EC is granted on condition of the suitability of the site to set up the unit, from the environmental  angle,  and  also  existence  of necessary infrastructural facilities and equipment for compliance of environmental norms. 

The Apex Court observed that ex post facto environmental clearance should not be granted routinely, but in exceptional circumstances taking into account all relevant environmental factors. 

Where the adverse consequences  of  denial  of  ex  post  facto  approval outweigh the consequences of regularization of operations by grant of ex post facto approval, and the establishment concerned otherwise conforms to  the  requisite  pollution  norms,  ex  post  facto  approval  should  be  given in accordance with law, in strict conformity with the applicable Rules,  Regulations  and/or  Notifications.  The deviant industry may be penalised  by  an  imposition  of  heavy  penalty  on  the  principle  of  ‘polluter  pays’  and  the  cost of restoration of environment may be recovered from it”, added the Court.

The Apex Court therefore concluded that a unit contributing to the economy of  the  country  and providing livelihood to hundreds of people, which has been set up pursuant to  requisite  approvals  from  the  concerned  statutory authorities, and has applied for ex post facto EC, should not be closed down for the technical irregularity of want of prior environmental clearance, pending the issuance of EC, even though it may not cause pollution and/or may be found to comply with the required norms. 

Hence, the Top Court set aside the order of NGT. 

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