The Supreme Court on Wednesday ruled that prior environment clearance (EC) is mandatory for beginning all development and mining projects in the country. But it made an exception for existing projects that had received post-facto EC under central government orders issued in 2017 and 2021, preventing the destruction of hospitals, civic amenities, bridges, highways and civic amenities worth thousands of crores of rupees.
Event Context
The decision of the court has decided a long-standing debate on the fate of several projects that failed to obtain prior EC before beginning construction work. At the centre of controversy are two central government orders of 2017 and 2021 allowing projects that commenced work without obtaining prior EC (as per the 2006 Environment Impact Assessment (EIA) notification) to do so by getting ex-post facto EC.
Player Focus
A two-judge bench of the top court in May 2025 struck down the two notifications against which a review petition was filed by an apex body of real estate developers as the effect of the order will lead to demolition of development projects worth over ₹20,000 crore which includes hospitals, civic amenities, bridges, highways and civic amenities. A three-judge bench on November 18, 2025 by a 2:1 majority set aside the May judgment and set the matter to be heard again
The projects included an AIIMS hospital in West Bengal, airport in Karnataka, hospital projects in Tamil Nadu, mining project of SAIL among others. Solicitor general Tushar Mehta appearing for SAIL and other public interest projects claimed that thousands of crores of investment would go waste if an exception is not carved out in their favour.
While reserving the verdict in April this year, the bench made it clear that it will not be deciding individual applications but laying down the general rule to be applied by the authorities. But it did indicate that a distinction should be made for projects guided solely by profit motive.
Additional solicitor general (ASG) Aishwarya Bhati appearing for Centre had argued that the 2017 notification followed by 2021 order facilitated ex-post facto EC as a measure to stop further harm to the environment.
“The notification does not guarantee grant of EC. If the project is not permissible on appraisal under the 2006 EIA notification, EC has to be either modified or struck down,” Bhati had argued.
Team Analysis
The court directed that the central government shall no longer issue notifications granting post-facto EC. The bench upheld the 2017 notification to the extent that it was a valid exercise of power by the Centre under Section 3 of Environment Protection Act. At the same time, it set aside the 2021 order noting that it was an administrative order which could not supplant the requirement of prior EC under the 2006 EIA notification.
The bench headed by Chief justice of India (CJI) Surya Kant and comprising justices Joymalya Bagchi and Vipul M Pancholi said, “The prior EC regime is mandatory under the 2006 notification. However, they do not put a clog on power of the Centre to issue orders in supervening public interest.”
While scrapping the 2021 office memorandum (OM) being an administrative order that altered the nature of enquiry and criteria for grant of EC, the court held, “All ECs under the 2017 and 2021 order shall remain valid.”
The court said that its order will not affect all ECs granted under the post-facto regime introduced by 2017 and 2021 orders but held, “No further grant of post-facto EC shall be entertained. The Centre is restrained from granting any order on post-facto EC, save and except a notification under section 3 of EP Act.” The court clarified that the Centre is not constrained from granting EC for projects that have already begun construction in specific cases.
Senior advocate Gopal Sankaranarayanan appearing for Vanashakti had told the court that they would not be averse to a special consideration being made for projects of public interest. He argued that grant of post-facto EC on a case-to-case basis is quite different from a wholesale, blanket exemption to all projects, which strikes at the root of the environmental law framework developed by courts over the years.
