Alembic Pharmaceuticals v. Rohit Prajapati
2020 SCC OnLine SC 347
The Ministry of Environment and Forests (MoEF) issued the Environment Impact Assessment (EIA) Notification of 1994 which mandated that a list of industries (mentioned in Schedule I of the notification) had to get Environmental Clearances (ECs) for setting up and expanding their business (if the pollution load exceeded the existing one). The deadline for this was extended to 31st March 1999 and thereafter to 30th June 2001 through various circulars. On 14th May 2002, the MoEF issued a circular which allowed industries to get an EC after they had begun operations till 31st March 2003, thereby allowing ex post facto ECs. The circular also demanded that any defaulting units wishing to expand operations had to provide funds (proportionate with the investment) given towards eco-development or community development projects in India.
The bench of the National Green Tribunal (NGT) for the Western Zone gave a verdict on 8th January 2016. It struck down the 2002 notification and ordered to shut down all the units operating without a valid EC. It also ordered for each unit to pay a sum of Rs. 10 Lakhs as compensation. Alembic Pharmaceuticals is the appellant in the lead appeal in the Supreme Court and it also owns two of the other industries (6th and 7th respondent) that was before the NGT. United Phosphorus Ltd. and Unique Chemicals were the 8th and 9th respondent. Thus, making it three industries in the case.
The main issue was identified as, whether through the notice made on 14 May 2002, ex post facto environment clearances could be given. Following are the sub-issues addressing in the verdict that dealt with the main issue.
- Whether the NGT had jurisdiction to strike down the circular dated 14th May 2002 that extended the time for getting an EC.
- Whether the EIA notification of 1994 requires the industries listed under Schedule I to get an EC “prior” to commencement of operations.
- Whether the three industries came under the exception clause (clause 8) of the Explanatory Note for the EIA notification of 1994.
- What are the consequences that the three industries will have to face for not complying with the EIC notification of 1994?
- To adjudicate upon the matter of jurisdiction, the Supreme Court looked to Tamil Nadu Pollution Control Board v. Sterlite Industries Ltd. It was found that NGTs didn’t have the power to strike down regulations that are created under the Environment Protection Act (EPA) 1986. But was the circular dated 14th May 2002 issued by the MoEF a regulation under the EPA? Section 3(1) of the EPA gives the government power to act against pollution but what the Supreme Court found was that the circular dated 14th May 2002 was not a document enforced under section 3(1) of the EPA. This is because the circular in fact acted detrimentally to the environment by providing ex post facto ECs. The circular was also considered “a purely administrative action” by one of the appeals from the Union of India thus not under the EPA. Hence the NGT could strike it down.
- The words of the notification dated 1994 were very clear on the fact that it mandated the industries to get an EC before operations began. There was no need to put the word “prior” to indicate that. An ex post facto EC is considered as derogatory to fundamental principles of environmental jurisprudence. The purpose of an EC is for the government to properly assess the damage that the industrial unit could have on the environment and only after various stages of that the decision-making process can an EC be granted. The point of an EC is lost when it is granted after operations have begun and damage has been done to the environment. Hence this bench of the Supreme Court upheld the decision made in Common Cause v. Union of India and declared the circular invalid.
- The industries pleading that they were an exception under 1994 notifications was found to be outside the exception. The industries did not have the required clearances before 27th January 1994 and thus had to seek ECs from the Impact Assessment Agency, which they only received post the original deadline.
- Seeing that the industries hadn’t followed the mandates of the 1994 notification and held that the 2002 circular was invalid, the Supreme Court ordered the three industries to pay a sum of Rs. 10 Crores each to the Gujarat Pollution Control Board and it reversed the prior order of the NGT that mandated the shutdown of the industries because several people had been employed by them and a lot of investments had been made for their expansions.