REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 3116 OF 2020

GAJUBHA JADEJA JESAR .....APPELLANT(S)

VERSUS

UNION OF INDIA & ORS. .....RESPONDENT(S)

W I T H

CIVIL APPEAL NO. 3576 OF 2020

J U D G M E N T

HEMANT GUPTA, J.

1. This order shall dispose of Civil Appeal No. 3116 of 2020 arising out

of an application filed by the appellant

1

before the National Green

Tribunal

2

and Civil Appeal No. 3576 of 2020 filed by the Project

Proponent, both arising out of the same order passed by the Tribunal

on 12.2.2020.

2. The Project Proponent applied for Consent to Establish (CTE) Cold

Rolled Coils of stainless steel on 20.1.2018, the permission of which

was granted by Gujarat State Pollution Control Board. After the unit

was erected, Project Proponent was granted permission to operate

the unit on 6.2.2020. It is noted that the Project Proponent has

1For short, the ‘Applicant’

2 For short, the ‘Tribunal’

1

invested Rs.1100 crores for the development of infrastructure and

had a turnover of approximately Rs.743 crores and paid Rs.286.17

crores as Goods and Services Tax till the Financial Year 2020-21.

The applicant also earned US Dollars 15.52 million foreign exchange

for the country.

3. An application was filed before the Tribunal on 20.7.2019 on the

ground that the Project Proponent has set up the unit in violation of

Environment Impact Assessment (EIA) notification dated 14.9.2006,

as such plant would fall within category 3(a) i.e., secondary

metallurgical industry for which a prior environmental clearance is

required. The relevant extract from the EIA notification reads thus:

3(a)Metallurgica

l industries

(ferrous &

non ferrous)

a) Primary

metallurgical

industry All

projects

b) Sponge iron

manufacturing

≥200 TPD

c) Secondary

metallurgical

processing

industry All

toxic and

heavy metal

producing

units ≥ 20,000

tonnes/annum

-

Sponge iron

manufacturing

<200 TPD

Secondary

metallurgical

processing

industry i) All

toxic and heavy

metal producing

units <20,000

tonnes/annum

ii) All other non-

toxic secondary

metallurgical

processing

industries

>5000

tonnes/annum

General Condition

shall apply for

Sponge iron

manufacturing

Note:

(i) The recycling

industrial units

covered under HSM

Rules are

exempted.

(ii) In case of

secondary

metallurgical

processing

industrial units

only those projects

involving operation

of furnaces such as

induction and

electric are

furnace,

submerged are

furnace, cupola

and crucible

furnace with

capacity more than

30,000 tonnes per

annum (TPA) would

2

require

environmental

clearance

(iii) Plant/units

other than power

plants (given

against entry no. 1

(d) of the

schedule), based

on municipal solid

waste (non

hazardous) are

exempted).

4. The Tribunal set up a Joint Committee on 28.7.2019. The Committee

concluded that the applicability of the notification would be

determined by the Ministry of Environment, Forest and Climate

Change

3

. The Ministry filed an affidavit on 21.11.2019, on the basis

of which the Tribunal took a prima facie view that the industry

requires an environmental clearance and thus stayed all activities of

the project as the Ministry sought time to file an additional

response. Later, an affidavit was filed by the Ministry that a Group of

Experts had been appointed on the issue. After the said report, the

Project Proponent filed an application for modification of the order

passed by the Tribunal on 21.11.2019 and the stay was thereafter

vacated on 16.1.2020.

5. The Expert Appraisal Committee

4

in its meeting held on 23-

24.12.2019 concluded that grace period of one year could be

granted where the industry has been established after CTE/CTO. The

Ministry filed an affidavit accepting the recommendation No. 3(iii) of

the EAC recommending one year grace period for the industry. The

3 For short, the ‘Ministry’

4 For short, the ‘EAC’

3

relevant part of the recommendation is reproduced as under:

“i. Project activity of CSPL falls under Category B of Schedule

3(a) Metallurgical Industries (ferrous and non-ferrous) of EIA

Notification, 2006.

ii. The committee also noted that there are a few issues which

may have diverse interpretations. The reports submitted by

the Committee formed by the Hon'ble NGT and the joint

inspection report by the Regional office of Bhopal and RO of

GPCB for Kutch have also left the final interpretation to the

MoEF&CC. It is also noted that the present unit has obtained

CTE from GPCB which is a Statutory authority. There may be

other similarly placed cases in the country. This shows that

there is a scope and need for further clarification in the

matter regarding certain issues so that there is no subjective

interpretation in future. These issues are (1) definition of

secondary metallurgy units for the purpose of EIA process, (2)

clarification about the types of furnaces under applicability of

MoEF&CC notification 2006 and (3) clarifying re rolling vs.

cold rolling in the context of Environment Clearance.

Therefore, for further smoothening the EC process for present

unit and proposals in future, the MoEF&CC may consider

issuing further clarifications.

iii. In order to address to instant and similar cases where such

re rolling/cold rolling units are established or operating with a

CTE/CTO from the concerned State Pollution Control Boards,

the Ministry may consider directing the State Pollution Control

Boards to get a list of all such cases and take further quick

actions so that they apply for EC and get covered by the EIA

notification 2006. Since, these units are established or

operating under the CTEs/CTOs obtained from a statutory

authority i.e. the respective Stale Pollution Control Boards, a

period of one year may be allowed for this recommended

conversion to EC. This will also ensure that the units remain in

operation for the allowed period and closures, unemployment

and related social issues/unrests are avoided. During this

period of one year, they will have to follow all the conditions

imposed under the CTE/CTO."

6. It is on the basis of the said recommendation that the Tribunal

passed the order dated 12.2.2020 that in view of the large number

of such mills operating on the strength of CTE/CTO, opportunity

4

should be provided to such units to fall within EC regime by granting

a period of at least one year to operate for the purpose.

7. The applicant challenged the time granted by the Tribunal on the

ground that the Tribunal has no jurisdiction to grant period for

obtaining Environmental Clearance as the EIA notification mandates

a prior Environmental Clearance. Since such consent was not

obtained before the setting up of the industry, the time limit of one

year is against the mandate of the statute. It was further argued

that under Section 21 of the National Green Tribunal Act, 2010

5

, the

Tribunal has the jurisdiction to set aside the Environmental

Clearance but has no jurisdiction for the grant of time for

Environmental Clearance.

8. The Project Proponent, aggrieved against the order passed by the

Tribunal, challenged the findings recorded that Environmental

Clearance is required. During the pendency of the appeal before this

Court, the Project Proponent was served with a closure notice on

25.6.2021 by the Gujarat State Pollution Control Board and the unit

was closed in terms of the said notice. This closure notice has been

assailed by way of I.A. No. 81563 of 2021.

9. While the appeals were pending before this Court, the Government

of India has published a notification on 20.7.2022 in terms of Section

3 of the Environment (Protection) Act, 1986

6

to apply Terms of

Reference within one year followed by Environmental Clearance.

The notification reads thus:

5 For short, the ‘NGT Act’

6 For short, the ‘Environment Act’

5

“MINISTRY OF ENVIRONMENT, FOREST AND CLIMATE CHANGE

NOTIFICATION

New Delhi, the 20th July, 2022

S.O. 3250(E).—Whereas, the Hon’ble National Green

Tribunal vide its order, dated the 12th February, 2020, in

Original Application No. 55/2019 (WZ), (Gajubha Jesar Jadeja

vs Union of India &Ors.), has inter alia observed that Cold

Rolled Stainless Steel Manufacturing Industries require prior

environment clearance but, having regard to the fact that

there were a large number of such mills operating on the

strength of Consent to Establish (CTE) and Consent to

Operate (CTO), the Hon’ble Tribunal has held that opportunity

should be provided to such units to fall within the

Environment Clearance regime by granting a period of at

least one year to operate for the purpose;

And whereas, the Central Government, keeping in view

the impact caused due to the Covid19 pandemic has taken a

considered decision in line with the above said order of the

Hon’ble National Green Tribunal, so as to provide a window

period for such re-rolling or cold rolling units to obtain prior

Environmental Clearance;

And whereas, the Central Government is of the view

that steel re-rolling operations fall under the purview of the

secondary metallurgical processing industry and require

Environment Clearance as per item 3(a), relating to

Metallurgical Industries (Ferrous and Non-ferrous), of the

Schedule to the notification of the Government of India in the

erstwhile Ministry of Environment and Forest, published in the

Gazette of India, Extraordinary, Part II, Section 3, Sub-section

(ii), vide notification number S.O. 1533 (E), dated the 14th

September, 2006, mandating the requirement of prior

environmental clearance for the projects covered in its

Schedule (hereinafter referred to as the said notification),

wherein all non–toxic secondary metallurgical processing

units with capacities greater than 5000 tonnes/annum (TPA)

fall under category B;

Now, therefore, in exercise of the powers conferred by

section 3 of the Environment (Protection) Act, 1986 (29 of

1986), the Central Government hereby directs that all the

standalone re-rolling units or cold rolling units, which are in

existence and in operation as on the date of this notification,

with valid Consent to Establish (CTE) and Consent to Operate

(CTO) from the concerned State Pollution Control Board or the

6

Union territory Pollution Control Committee, as the case may

be, shall apply online for grant of Terms of Reference (ToR)

followed by Environment Clearance and the said units shall be

granted Standard Terms of Reference as per item 3(a) of the

said notification and shall be exempted from the requirement

of public consultation:

Provided that the application for the grant of ToR shall

be made within a period of one year from the date of this

notification.

2. This notification shall come in to force from the date

of its publication in the Official Gazette.

[F. No. IA-J-11013/8/2019-IA.II(I)]

Dr. SUJIT KUMAR BAJPAYEE, Jt. Secy”

10.With this background, the parties have addressed arguments on the

question of jurisdiction of the Tribunal to pass an order to operate a

unit without Environmental Clearance and the decision of closure of

the unit.

11.It may be stated that there are 1689 similar Re-Rolling/Cold Re-

Rolling Steel Plants in the country out of which 403 plants are in the

State of Gujarat itself. All the units have been set up without

obtaining prior Environmental Clearance as there was an ambiguity

whether such Rolling Steel Mills are required to obtain prior

Environmental Clearance.

12.Ms. Anitha Shenoy, learned senior counsel for the applicant relies

upon judgments of this Court reported as Common Cause v. Union

of India & Ors.

7

, Hanuman Laxman Aroskar v. Union of India

8

and Alembic Pharmaceuticals Limited v. Rohit Prajapati &

7 (2017) 9 SCC 499

8 (2019) 15 SCC 401

7

Ors.

9

to contend that prior Environmental Clearance is mandatory.

Since the unit has been set up in violation of the notification, the

Tribunal could not permit the unit to operate.

13.On the other hand, Mr. Shyam Divan, learned senior counsel for the

Project Proponent submitted that in terms of Section 21 of the NGT

Act, the Tribunal is competent to pass an order towards sustainable

development. It is contended that the order of the Tribunal granting

time of at least one year is based upon report of the

recommendation of the EAC. The EAC recommended that Re-Rolling

Units are established or operating with CTE/CTO from the concerned

State Pollution Control Boards, therefore, a period of one year may

be allowed for this recommended conversion to Environment

Clearance regime.

14.Mr. Divan also referred to an affidavit filed on behalf of the Ministry

referring to the report submitted by a high-level Expert Committee

under the Chairmanship of Dr. Indranil Chattoraj, Director, National

Metallurgical Laboratory, Jamshedpur. The Committee noted that

there is ambiguity in the EIA notification with respect to applicability

of Environmental Clearance for non-toxic secondary metallurgical

processing industry. Therefore, in order to bring out clarity, the

Ministry may amend schedule 3(a) of the EIA notification. The

relevant assertion from the affidavit reads thus:

“7. That the committee after conducting a series of meetings

submitted its report on 17/01/2022. The committee, inter-

alia, has recommended that

9 (2020) 17 SCC 157

8

i. “That there is an ambiguity in the EIA notification, 2006

with respect to the applicability of EC for non-toxic secondary

metallurgical processing industry.

ii. Steel re-rolling mills [Hot rolling (or) Cold rolling] are one of

the processes in the secondary metallurgical processes and

attracts the provisions of the Environment Impact Assessment

(EIA) Notification, 2006.

iii. There are around 1689 standalone steel re-rolling mills

operating across the country without requisite Environment

Clearance and such unit may be brought under EC regime by

providing an adequate time frame.

iv. Revised threshold limits for primary and secondary

metallurgical industry prescribed under chapter 6 may be

considered by the Ministry for amending the schedule 3(a) of

EIA Notification, 2006 in order to bring out clarity on the

applicability of EC for difference secondary processes in

metallurgical industry.

That a copy of the report of the HLEC has been annexed as

ANNEXURE R/2.

8. That it is humbly submitted that Ministry is in the process

of bringing out suitable amendment in the EIA Notification

2006 in line with the recommendations made by the

Committee, in order to remove the ambiguity with respect to

the applicability of EC for non-toxic secondary metallurgical

processing industry.”

15.It is in pursuance of such report, the amendment was published on

20.7.2022.

16.Mr. Divan further relies upon an order passed by this Court in

Municipal Corporation of Greater Mumbai v. Ankita Sinha &

Ors.

10

wherein the question as to whether the Tribunal has suo

moto jurisdiction to entertain proceedings under the NGT Act were

examined. The scope of jurisdiction of the Tribunal was also

considered.

10 2021 SCC OnLine SC 897

9

17.Mr. Divan also refers to an order passed by this Court reported as

Pahwa Plastics Pvt. Ltd. & Anr. v. Dastak NGO & Ors.

11

wherein

the order passed by the Tribunal, holding that the manufacturing

units which do not have prior Environmental Clearance could not be

allowed to operate, was set aside.

18.We have heard learned counsel for the parties and find no error in

the order passed by the Tribunal. The order of the Tribunal is based

upon recommendation of the EAC which suggested that one year

time should be granted to the industry to comply with the EIA

notification dated 14.9.2006. The stand of the Ministry as well as the

Project Proponent is that there was ambiguity in the EIA notification

2006. 1689 units have come up in the country on the basis of CTE

and CTO regime. It is not a case of ambiguous interpretation in

respect of one or two units but the entire country was having the

same interpretation that Re-Rolling Steel Plants do not require a

prior Environmental Clearance. The ambiguity has been removed

only on 20.7.2022 when the notification has been amended, as

reproduced above. Since there was ambiguity earlier, the Tribunal

had granted time to the Project Proponent to comply with the

requirement of Environmental Clearance.

19.Such direction of the Tribunal is, in fact, arising out of scope of

powers conferred on the Tribunal under Section 21 of the NGT Act.

This Court in Ankita Sinha considering the suo moto powers of the

Tribunal held as under:

“98. The NGT Act, when read as a whole, gives much leeway

11 2022 SCC OnLine SC 362

10

to the NGT to go beyond a mere adjudicatory role. The

Parliament's intention is clearly discernible to create a

multifunctional body, with the capacity to provide redressal

for environmental exigencies. Accordingly, the principles of

environmental justice and environmental equity must be

explicitly acknowledged as pivotal threads of the NGT's fabric.

The NGT must be seen as a sui generis institution and

not unus multorum, and its special and exclusive role to

foster public interest in the area of environmental domain

delineated in the enactment of 2010 must necessarily receive

legal recognition of this Court.

xxx xxx xxx

102. In circumstances where adverse environmental impact

may be egregious, but the community affected is unable to

effectively get the machinery into action, a forum created

specifically to address such concerns should surely be

expected to move with expediency, and of its own accord.

The potentiality of disproportionate harm imposes a higher

obligation on authorities to preserve rights which may be

waylaid due to such restrictive access. It is also noteworthy

that the “global impacts of climate change will fall

disproportionately on minority and low-income

communities”.

12

Thus, an affirmative role, beyond mere

adjudication at the instance of applicant, is certainly required

for serving the ends of environmental justice, as the statute

itself requires of the NGT. We cannot validate an argument

which furthers uncertainty to justify the role of a spectator, if

not inaction, and would most assuredly result in injustice.

103. The NGT, with the distinct role envisaged for it, can

hardly afford to remain a mute spectator when no-one knocks

on its door. The forum itself has correctly identified the need

for collective stratagem for addressing environmental

concerns. Such a society centric approach must be allowed to

work within the established safety valves of the principles of

natural justice and appeal to the Supreme Court. The hands-

off mode for the NGT, when faced with exigencies requiring

immediate and effective response, would debilitate the forum

from discharging its responsibility and this must be ruled out

in the interest of justice.”

20.In Pahwa Plastics Pvt. Ltd., an establishment had been set up

12 Scott La Franchi, Surveying the Precautionary Principle's Ongoing Global Development : The

Evolution of an Emergent Environmental Management Tool, [32 B.C. Envtl. Aff. L. Rev. 679

(2005)

11

pursuant to CTE and CTO from the concerned statutory authority.

The establishment applied for ex-post facto Environmental

Clearance. In these circumstances, this Court held that ex-post

Environmental Clearance should not ordinarily be granted but it

cannot be declined with pedantic rigidity, regardless of the

consequences of stopping the operation. Hence, the order of the

Tribunal to close the units was found to be erroneous. The order of

closure of establishments for the lack of Environmental Clearance

was set aside by this Court, inter alia, for the reason that whether

the unit contributing to the economy and providing livelihood to

hundreds of people set up in pursuance to requisite approvals of the

concerned statutory authorities should be closed down for the

technical irregularity or want of prior Environmental Clearance. This

Court held as under:

“54. The manufacturing units of the Appellants appoint about

8,000 employees and have a huge annual turnover. 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 irrespective of whether or not the

unit actually causes pollution.

xx xx xx

56. As held by this Court in Electrosteel Steels

Limited (supra) ex post facto Environmental Clearance should

not ordinarily be granted, and certainly not for the asking. At

the same time 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.

57. The 1986 Act does not prohibit ex post

12

facto Environmental Clearance. 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 in our

view not impermissible. The Court cannot be oblivious to the

economy or the need to protect the livelihood of hundreds of

employees and others employed in the project and others

dependent on the project, if such projects comply with

environmental norms.

xx xx xx

60. Even though this Court deprecated ex post facto

clearances, in Alembic Pharmaceuticals Ltd. (supra), this

Court did not direct closure of the units concerned but

explored measures to control the damage caused by the

industrial units. This Court held:—

“However, since the expansion has been undertaken

and the industry has been functioning, we do not deem

it appropriate to order closure of the entire plant as

directed by the High Court.”

xx xx xx

63. 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.

64. The question in this case is, whether 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 be closed down

for the technical irregularity of want of prior environmental

clearance, pending the issuance of EC, even though it may

13

not cause pollution and/or may be found to comply with the

required norms. The answer to the aforesaid question has to

be in the negative, more so when the HSPCB was itself under

the misconception that no environment clearance was

required for the units in question. HSPCB has in its counter

affidavit before the NGT clearly stated that a decision was

taken to regularize units such as the Apcolite Yamuna Nagar

and Pahwa Yamuna Nagar Units, since requisite approvals had

been granted to those units, by the concerned authorities on

the misconception that no EC was required.

xx xx xx

66. Ex post facto EC should not ordinarily be granted, and

certainly not for the asking. At the same time ex post

facto clearances and/or approvals cannot be declined with

pedantic rigidity, regardless of the consequences of stopping

the operations. This Court is of the view that the NGT erred in

law in directing that the units cannot be allowed to function

till compliance of the statutory mandate.”

21.The judgment in Common Cause referred to by Ms. Shenoy is of no

help to support her arguments as the question was whether illegal

mining can be said to be within the leased area for mining. It was

held that illegal mining takes within its fold excess extraction of a

mineral over the permissible limit even within the mining lease area

under the Mines and Minerals (Development and Regulation) Act,

1957.

22.In Hanuman Laxman Aroskar, this Court held that the EIA

notification of the year 2006 demonstrates an increasing awareness

of the complexities of the environment and the heightened scrutiny

required to ensure its continued sustenance, for today and for

generations to come. It embodies a commitment to sustainable

development. It was held as under:

14

“56. The 2006 Notification embodies the notion that the

development agenda of the nation must be carried out in

compliance with norms stipulated for the protection of the

environment and its complexities. It serves as a balance

between development and protection of the environment:

there is no trade-off between the two. The protection of the

environment is an essential facet of development. It cannot

be reduced to a technical formula. The notification

demonstrates an increasing awareness of the complexities of

the environment and the heightened scrutiny required to

ensure its continued sustenance, for today and for

generations to come. It embodies a commitment to

sustainable development. In laying down a detailed procedure

for the grant of an EC, the 2006 Notification attempts to

bridge the perceived gap between the environment and

development.”

23.In Alembic Pharmaceuticals Limited, the validity of circular

dated 14.5.2002 was in question. This Court found that such circular

is contrary to the EIA notification of 1994. It was decided by the

Ministry that the industrial units which had gone into production

without obtaining an EC would have to apply for and obtain an ex-

post facto EC. The said judgment has no applicability to the facts of

the present case where the Ministry itself is of the opinion that there

was an ambiguity in the EIA notification of 2006. Such ambiguity has

been removed only when the EIA notification was subsequently

amended on 20.7.2022. Therefore, the judgments referred to by Ms.

Shenoy are not applicable to the facts of the present case.

24.We are constrained to point out that out of 1689 units in the

country, the applicant has chosen the Project Proponent as it

appears to be a motivated petition to target the Project Proponent

though the Cold Steel Rolling Mills in the country were operating

under the same regime. Not only the Project Proponent, but the

15

country also has suffered immensely on account of closure of the

unit which was export oriented unit. It may be noticed that the

Gujarat State Pollution Control Board has chosen the Project

Proponent to serve with a closure notice on 25.6.2021. The unit is

lying closed since then. In view of the amendment in the EIA

notification dated 20.7.2022, the unit has time to seek

Environmental Clearance in terms of the time line mentioned in the

notification. Therefore, the order of closure of the unit cannot be

sustained.

25.In view of the said fact, Civil Appeal No. 3116 of 2020 is dismissed.

I.A. No. 81563 of 2021 in Civil Appeal No. 3576 of 2020 challenging

the closure notice issued by Gujarat State Pollution Control Board

dated 25.6.2021 is allowed and the closure notice is quashed. The

Civil Appeal No. 3576 of 2020 stands disposed of in the above

terms.

.............................................J.

(HEMANT GUPTA)

.............................................J.

(VIKRAM NATH)

NEW DELHI;

AUGUST 10, 2022.

16