Supreme Court Reverses its Ruling on Retrospective Environmental Clearances

Context

1. A three-judge Bench of the Supreme Court has, by a majority, recalled its judgment that had declared the Union government’s practice of granting ex post facto (retrospective) environmental clearances (ECs) to building projects as illegal.
2. The decision affects dozens of public and private projects worth nearly ₹20,000 crore and raises central issues about environmental rule of law, public interest, and remedies for illegal constructions.

Background of the Case

1. May 16 judgment (two-judge Bench):
   1. A Bench had held that granting retrospective ECs to regularise illegal constructions was clearly illegal.
   2. It struck down a 2017 notification and a 2021 office memorandum (OM) that allowed ex post facto clearances, finding they were used to shield violators who began work without prior clearance.
2. Review petitions filed:
   1. Developers (e.g., CREDAI, Karnataka), public bodies (e.g., SAIL), and the Union government challenged the May decision, arguing it would cause devastations if applied rigidly.
3. Recent three-judge review (majority recalls May 16 judgement):
   1. CJI Gavai and Justice Chandran formed the majority and recalled the earlier ruling, allowing retrospective clearances in exceptional circumstances and pointing to severe economic and public-interest consequences if the May order were enforced.
   2. Dissent by Justice Bhuyan: He wrote a detailed 97-page dissent arguing the recall weakens environmental jurisprudence and amounts to favouring violators; he warned of environmental harm (citing Delhi smog) and criticised backtracking.

Why the Issue Matters (Legal and policy stakes)

1. Rule of law vs. public interest: The case tests whether courts should enforce strict legality (no retroactive legitimisation of illegal acts) or allow practical remedies (retain structures and levy penalties) to avoid huge public losses.
2. Environmental protection and deterrence: If retrospective ECs become routine, the deterrent effect of environmental laws weakens and developers might bypass regulations knowing they can seek regularisation later.
3. Public money and essential services: Several government-funded projects (AIIMS hospital, airport, effluent treatment plants) are affected; demolishing them could waste public funds and harm service delivery.
4. Precedent and executive conduct: The judgment examines the legality of the 2017 notification and 2021 OM and whether the Centre improperly authored “crafty drafting” to regularise illegal projects.

How the Court Reasoned (Majority vs Dissent)

1. Majority (CJI Gavai & Justice Chandran):
   1. Practical public interest: Striking down retrospective ECs would force demolition of projects in use or under construction, causing loss of thousands of crores and harming employment and public services.
   2. Exceptional approach: Ex post facto approvals should not be automatically denied as a punitive measure; exceptional circumstances may justify retrospective regularisation with heavy penalties.
   3. Precedent flexibility: Past judicial precedents have sometimes accepted ex post facto clearances under limited conditions; therefore, a narrow, pedantic denial is not always appropriate.
   4. Quantified impact cited: The CJI listed central projects costing ₹8,293 crore (24 projects) and State projects worth ₹11,168 crore (29 projects) that were pending because of the May 16 order — total near ₹20,000 crore.
2. Dissent (Justice Bhuyan):
   1. Environmental jurisprudence: The May 16 ruling reinforced environmental law and deterrence; recalling it undermines legal strictness and encourages violation.
   2. Policy capture concern: Allowing retrospective ECs may signal the court’s favouring of violators and reduce accountability.
   3. Public health warning: Environmental pollution (e.g., Delhi smog) shows the stakes of weakening protections.
   4. Rule of law argument: Legalising post facto clearances weakens statutory requirements that mandate prior environmental appraisal.

Implications

1. For projects and public funds: Immediate relief for projects (public and private) that were stalled; avoids costly demolition and restart.
2. For environmental enforcement: Risk that developers see retrospective clearance as an alternative to compliance, weakening preventive environmental regulation.
3. For jurisprudence: The case creates a tension in precedent — future courts may be split on strict versus pragmatic enforcement.
4. For governance: Signals need for clearer administrative rules on when retrospective clearances may be allowed, and how to balance penalties, remediation and public interest.
5. For public trust: Dissent highlights perception of judicial backtracking; public confidence in environmental protection might be shaken.

Challenges & Way Forward

Conclusion

The Supreme Court’s review decision on retrospective environmental clearances resolves a short-term crisis for many public and private projects, but it raises hard questions about the rule of law, environmental protection and deterrence. The right path is a middle way: allow very limited retrospective approvals only under transparent, strict, and enforceable conditions, combined with significant penalties, independent environmental remediation, and measures to prevent future violations. Clear statutory guidance or a well-reasoned binding precedent is needed so that both environmental protection and public interest are preserved.