Supreme Court: In a case where a Project Proponent had adhered to the applicable legal framework for Environmental Clearance (EC) during the concerned period but has been left in the lurch due to changes in the EC regimes, the bench of R. Subhash Reddy and Hrishikesh Roy*, JJ has held that such Project Proponent cannot be pushed to a precipice and be made to fall. The Court said that,
“A Project Proponent is not expected to anticipate the changes in Environmental Clearance (EC) regimes, especially as a result of judicial interventions, and keep revisiting the sanctioned clearances by the competent authority or even raze down validly constructed structures. Neither can it be expected to knock the doors of an authority, not empowered at the relevant time, to process its applications. Such a scenario would render the process akin to a Sisyphean task, eternally inconclusive and never ending.”
The Project Proponent in the present case, had initially commenced construction on 14.5.2013 with a sanction plan of 15040.05 sq. mtrs., which, being lesser than the threshold limit of 20,000 sq. mtrs, did not require a prior EC. Thereafter, for the proposed expansion of the project, for total constructed area of 49,012 sq. mtrs., the Project Proponent approached the concerned authority on 7.11.2016 for issuance of “Proposed Development Certificate”, which is a prerequisite to apply for EC, and the said certificate was granted on 28.11.2016 for the purpose of obtaining the EC from the SEIAA. But at that stage, by virtue of the MoEFCC notification dated 9.12.2016, the concerned local authority was designated as the sanctioning authority for projects between 20,000 sq. mtrs. and 50,000 sq. mtrs. and accordingly under the changed regime the Project Proponent applied to Pimpri Chinchwad Municipal Corporation (PCMC) on 10.7.2017 and was sanctioned EC by the competent local authority, on 28.11.2017.
A Pune Resident challenged the construction and alleged that the Project Proponent had made construction without obtaining any EC. In this proceeding the NGT constituted a three Member Committee comprising the SEIAA – Maharashtra, the State PCB and the Municipal Commissioner, Pune. The Committee, after spot verification, in its Report dated 18.8.2020 noted that construction of total built up area of 22930.17 sq. mtrs. is already completed for Building Nos. A,E,B,D and the Club House.
The project of the appellant comprises six buildings of which three were constructed in full, and the super structure of the fourth building is completed and only the internal works remains to be done. In the fourth building, 40 out of the 64 apartments have already been sold.
The NGT observed that because of the invalidation of certain clauses in the 2016 notification, the EC obtained from the PCMC is unacceptable and accordingly rendered a finding that the Project Proponent had failed to obtain the valid EC. However, the NGT held that the construction already raised by the Project Proponent on the basis of EC issued by the PCMC as per the notification dated 9.12.2016should be protected.
Holding that the Project Proponent was therefore, complying with the regime set out by the amended notification, the Court explained that when the Project Proponent initially wanted to apply for the EC it had obtained the requisite layout sanction for applying to the SEIAA. As such, it was operating well within the applicable procedure, prior to the amendment. After grant of such sanction, while the construction was underway, the amendment came about on 9.12.2016 whereby, the local authority such as the Municipal Corporation was made the competent authority to grant EC. In the changed circumstances, the Project Proponent necessarily had to apply to the PCMC as during the interregnum before the NGT’s judgment on 8.12.2017, SEIAA was not the competent authority to consider application for EC. The Project Proponent had obtained the EC from the competent authority of the relevant time i.e. the PCMC.
The Court also took note of the fact that the Committee constituted by the NGT to report on the building project did not underscore any major deviation but instead found that the Project Proponent had made substantial compliance by obtaining the EC from the competent local authority. Moreover, neither before the NGT or this Court, it was ever contended that appraisal done by the PCMC’s Environmental Cell was defective or any different from one done by SEIAA. Both processes are also similarly structured. The Court, hence, found that this may be the reason why the NGT in the impugned judgment itself protected the already made construction. However, the Project Proponent was restrained from making any further construction without obtaining clearance from the statutory EC and adhering to the environmental norms.
The Court, hence, held that the NGT rightly protected the already erected buildings.
“As the expert body exclusively occupying the environmental field, the NGT has assessed the factual circumstances to consciously lean towards protecting the already constructed structures. Nothing more need be added on this aspect.”
Applying the Doctrine of Legitimate Expectation, the Court explained that the Project Proponent can legitimately expect a certain degree of stability in the manner in which environmental regime is set and how the applications are processed. The actions of the authorities are expected to adhere to the prevalent norms only, without the element of uncertainty for the executed project.
“In the present matter the appellant has acted on the EC and made substantial investments. They cannot be pushed to a precipice and be made to fall. Doing so would be inequitable particularly when, the appellant has scrupulously adhered to the applicable legal framework during the concerned period. Moreover, third-party interests have also cropped up in the interregnum.”
The Court, hence, directed that the four constructed buildings are resultantly to be treated to be under a valid EC with all legal consequences. It was, however, made clear that if the Project Proponent wishes to construct the remaining buildings, they must secure fresh clearance from the competent authority, as per the currently applicable framework.
[Sai Baba Sales Pvt. Ltd. v. Union of India, 2021 SCC OnLine SC 1133, decided on 26.11.2021]
For appellant: Senior Advocate Huzefa Ahmadi
For Original Applicant before NGT: Advocate Lonkar Nitin
For Ministry of Environment & Forest: Additional Solicitor General of India Aishwarya Bhati
For Government of Maharashtra: Advocate Rahul Chitnis
For the State Pollution Control Board: Advocate Mukesh Verma
*Judgment by: Justice Hrishikesh Roy