# M/S PAHWA PLASTICS PVT. LTD. AND ANR v. DASTAK NGO AND ORS

- **Citation:** [2022] 16 S.C.R. 855
- **Court:** Supreme Court of India
- **Decided:** 2022-03-25
- **Case number:** Civil Appeal No. 4795 of 2021
- **Bench:** Indira Banerjee, J.K. Maheshwari
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/m-s-pahwa-plastics-pvt-ltd-and-anr-v-dastak-ngo-and-ors-35482
- **Pages:** 31

## Headnote

National Green Tribunal Act, 2010 : s. 22 - Micro, Small and
Medium Enterprises Development Act, 2006 - Environment
(Protection) Act, 1986 - Environment (Protection) Rules, 1986 -
Environment clearance - Grant of - Ex post facto environment
clearance - Appellants engaged in manufacture and sale of basic
organic chemicals - Appellant granted Consent to Establish (CTE)
and Consent to Operate (CTO) for its unit by State Pollution Control
Board-HSPCB - Subsequently, the Government issued a Notification
which provides for grant of ex post facto Environmental clearanceEC for project proponents who had commenced, continued or
completed a project without obtaining EC - Thereafter, issuance of
an order by the State Government where the units which did not
have EC, be allowed to continue their operations for a period of
six months, with the conditions that they would apply for EC -
Respondent No.1 then filed a petition seeking quashing of the said
order and units operating without EC be closed - NGT held that the
manufacturing units of the appellants, which did not have prior EC
could not be allowed to operate - On appeal, held: 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 not be closed down for the technical irregularity
of want of prior environmental clearance, pending the issuance of
EC, even though it may not cause pollution and/or may be found to
comply with the required norms - More so, the HSPCB was itself
under the misconception that no environment clearance was required
for the units in question - 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
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SUPREME COURT REPORTS
[2022] 16 S.C.R.
- Impugned order is set aside - Appellants would be allowed to
operate the units.
Allowing the appeal, the Court
HELD: 1.1 It is well settled that words and phrases and/or
sentences in a judgment cannot be read in the manner of a statute,
and that too out of context. The observation of the Division Bench
that a one time relaxation was permissible, is not to be construed
as a finding that relaxation cannot be made more than once. If
power to amend or modify or relax a notification and/or order
exists, the notification and/or order may be amended and/or
modified as many times, as may be necessary. A statement made
by counsel in Court would not prevent the authority concerned
from making amendments and/or modifications provided such
amendments and/or modifications were as per the procedure
prescribed by law. [Para 47][877-B-D]
1.2 The Division Bench of the High Court erred in staying
the said office memorandum, by relying on observations made by
this Court in Alembic Pharmaceuticals Ltd.'s case, in the context
of a circular which was contrary to the statutory Environment
Impact Notification of 1994. The attention of the High Court was
perhaps not drawn to the fact that the notification of 7th July
2021 was in pursuance of the statutory notification of 2017 which
was valid. [Para 48][877-D-E]
1.3 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. [Para 54][878-H; 879-A]
1.4 The 1986 Act does not prohibit ex post 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 com

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 [2022] 16 S.C.R. 855
855
M/S PAHWA PLASTICS PVT. LTD. AND ANR.
v.
DASTAK NGO AND ORS.
(Civil Appeal No. 4795 of 2021)
MARCH 25, 2022
[INDIRA BANERJEE AND J.K. MAHESHWARI, JJ.]
National Green Tribunal Act, 2010 : s. 22 - Micro, Small and
Medium Enterprises Development Act, 2006 - Environment
(Protection) Act, 1986 - Environment (Protection) Rules, 1986 -
Environment clearance - Grant of - Ex post facto environment
clearance - Appellants engaged in manufacture and sale of basic
organic chemicals - Appellant granted Consent to Establish (CTE)
and Consent to Operate (CTO) for its unit by State Pollution Control
Board-HSPCB - Subsequently, the Government issued a Notification
which provides for grant of ex post facto Environmental clearanceEC for project proponents who had commenced, continued or
completed a project without obtaining EC - Thereafter, issuance of
an order by the State Government where the units which did not
have EC, be allowed to continue their operations for a period of
six months, with the conditions that they would apply for EC -
Respondent No.1 then filed a petition seeking quashing of the said
order and units operating without EC be closed - NGT held that the
manufacturing units of the appellants, which did not have prior EC
could not be allowed to operate - On appeal, held: 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 not be closed down for the technical irregularity
of want of prior environmental clearance, pending the issuance of
EC, even though it may not cause pollution and/or may be found to
comply with the required norms - More so, the HSPCB was itself
under the misconception that no environment clearance was required
for the units in question - 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
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856
SUPREME COURT REPORTS
[2022] 16 S.C.R.
- Impugned order is set aside - Appellants would be allowed to
operate the units.
Allowing the appeal, the Court
HELD: 1.1 It is well settled that words and phrases and/or
sentences in a judgment cannot be read in the manner of a statute,
and that too out of context. The observation of the Division Bench
that a one time relaxation was permissible, is not to be construed
as a finding that relaxation cannot be made more than once. If
power to amend or modify or relax a notification and/or order
exists, the notification and/or order may be amended and/or
modified as many times, as may be necessary. A statement made
by counsel in Court would not prevent the authority concerned
from making amendments and/or modifications provided such
amendments and/or modifications were as per the procedure
prescribed by law. [Para 47][877-B-D]
1.2 The Division Bench of the High Court erred in staying
the said office memorandum, by relying on observations made by
this Court in Alembic Pharmaceuticals Ltd.'s case, in the context
of a circular which was contrary to the statutory Environment
Impact Notification of 1994. The attention of the High Court was
perhaps not drawn to the fact that the notification of 7th July
2021 was in pursuance of the statutory notification of 2017 which
was valid. [Para 48][877-D-E]
1.3 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. [Para 54][878-H; 879-A]
1.4 The 1986 Act does not prohibit ex post 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
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M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO
with environment norms, is 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. [Para 57][881-A-C]
1.5 There can be no doubt that the need to comply with the
requirement to obtain EC is non-negotiable. A unit can be set up
or allowed to expand subject to compliance of the requisite
environmental norms. EC is granted on condition of the suitability
of the site to set up the unit, from the environmental angle, and
also existence of necessary infrastructural facilities and equipment
for compliance of environmental norms. To protect future
generations and to ensure sustainable development, it is
imperative that pollution laws be strictly enforced. Under no
circumstances can industries, which pollute, be allowed to operate
unchecked and degrade the environment. [Para 62][883-B-D]
1.6 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. [Para
63][883-D-F]
1.7 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 not cause
pollution and/or may be found to comply with the required norms.
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The answer to the said 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. [Para
64][883-F-H; 884-A-B]
1.8 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. [Para 66][884-D]
1.9 The appellants would be allowed to operate the units.
Electricity, if disconnected, shall be restored subject to payment
of charges. [Para 68][884-G]
Shree Sidhbali Steels Ltd. & Others v. State of Uttar
Pradesh & Others (2011) 3 SCC 193 : [2011] 3 SCR
134; Fatima v. Union of India 2020 SCC Online SC
347; Puducherry Environment Protection Association
v. Union of India 2017 SCC OnLine Mad 7056;
Electrosteel Steels Limited v. Union of India 2021 SCC
Online SC 1247; Lafarge Umiam Mining Private Limited
v. Union of India (2011) 7 SCC 338 : [2011] 7 SCR
954 - referred to.
Alembic Pharmaceuticals Ltd. v. Rohit Prajapati &
Others 2020 SCC Online SC 347 - distinguished.
Case Law Reference
[2011] 3 SCR 134
referred to Para 32
[2011] 7 SCR 954
referred to Para 58
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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4795
of 2021.
From the Judgment and Order dated 03.06.2021 of the National
Green Tribunal, Principal Bench, New Delhi in Original Application No.
287 of 2020.
Nidesh Gupta, Sr. Adv., Tarun Gupta, Advs. for the Appellants.
Anil Grover, Sr. AAG, Maninder Singh, Sr. Adv., Ms. Noopur
Singhal, Rahul Khurana, Sanjay Kumar Visen, Amit Sahni, Harpreet
Singh Popli, Vineet Nagar, Ms. Ambika Kajal, Pawan Kr. Sharma,
Rameshwar Prasad Goyal, Dr. Surender Singh Hooda, Aayushman
Aeron, Aditya Hooda, Rahul Besoya, Pradeep Misra, Daleep Dhyani,
Suraj Singh, Bhuwan Chandra, Tahir Ashraf Siddiqui, Rajesh Kumar
Gautam, Advs. for the Respondents.
The Judgment of the Court was delivered by
INDIRA BANERJEE, J.
1. This appeal under Section 22 of the National Green Tribunal
Act, 2010, is against an order dated 3rd June 2021 passed by the Principal
Bench of the National Green Tribunal (NGT) in O.A No.287/2020 at
New Delhi, inter alia, holding that establishments such as the
manufacturing units of the Appellants, which did not have prior
Environmental Clearance (EC) could not be allowed to operate.
2. The question of law involved in this appeal is, whether an
establishment employing about 8000 workers, which has been set up
pursuant to Consent to Establish (CTE) and Consent to Operate (CTO)
from the concerned statutory authority and has applied for ex post facto
EC can be closed down pending issuance of EC, even though it may not
cause pollution and/or may be found to comply with the required pollution
norms.
3. With increasing industrialization and the establishment of
factories which emitted smoke and other pollutants, there was worldwide
concern for protection of environment. In June 1972, the United Nations
Conference on the Human Environment was held in Stockholm, where
decisions were taken to take appropriate steps for preservation of the
natural resources of the earth, which, among other things, included
preservation of the quality of air and water by controlling pollution.
M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO
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4. In 1974, Parliament enacted the Water (Prevention and Control
of Pollution) Act, 1974, with a view to prevent and control water pollution
and to maintain and restore wholesomeness of water.
5. In furtherance of the decisions taken at Stockholm, Parliament
enacted the Air (Prevention and Control of Pollution) Act, 1981,
hereinafter referred to as "the Air Pollution Act", to provide for prevention,
control and abatement of air pollution.
6. The Air Pollution Act provides for the constitution of a Central
Pollution Control Board (CPCB) and State Pollution Control Boards
(SPCB) to deal with the problem of air pollution. Section 16 of the Air
Pollution Act enables the Central Pollution Control Board to take steps
to improve the quality of air and to prevent, control or abate air pollution
in the country. Section 17 of the Air Pollution Act enables the State
Pollution Control Boards to plan comprehensive programmes for the
prevention, control or abatement of air pollution, inter alia, by laying
down standards for emission of air pollutants.
7. Section 18 of the Air Pollution Act enables the Central
Government to give directions by which the CPCB is to be bound.
Similarly, every SPCB is to be bound by directions in writing as might be
given by the CPCB or the State Government.
8. Where a notification is issued under the Air Pollution Act, placing
an area within the control area of air pollution, permission is necessary
to set up and operate any factory or plant thereat. No person operating
any factory or plant in any air pollution control area is to discharge or
cause or permit to be discharged the emission of any air pollutants, in
excess of the standards laid down by the SPCB under Clause (g) of
sub-Section (1) of Section 17.
9. The Environment (Protection) Act, 1986, hereinafter referred
to as "the EP Act" was also enacted pursuant to the decisions taken at
the United Nations Conference on the Human Environment, held in
Stockholm in June, 1972. As per the Statement of Objects and Reasons
for enactment of the EP Act, the said Act has been prompted by concern
over the environment, that has grown all over the world since the 60s.
10. Sub-section (1) of Section 3 of the EP Act empowers the
Central Government to take all such measures as it might deem necessary
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or expedient for the purpose of protecting and improving the quality of
the environment and preventing, controlling and reducing environmental
pollution.
11. Sub-section (2) of Section 3 of the EP Act enables the Central
Government to take, inter alia, the following measures:
"(i) co-ordination of actions by the State Governments,
officers and other authorities-
(a) under this Act, or the rules made thereunder; or
(b) under any other law for the time being in force which is
relatable to the objects of this Act;
(ii) planning and execution of a nation-wide programme for
the prevention, control and abatement of environmental
pollution;
(iii) laying down standards for the quality of environment in
its various aspects;
(iv) laying down standards for emission or discharge of
environmental pollutants from various sources whatsoever:
Provided that different standards for emission or discharge
may be laid down under this clause from different sources
having regard to the quality or composition of the emission
or discharge of environmental pollutants from such sources;
(v) restriction of areas in which any industries, operations or
processes or class of industries, operations or processes shall
not be carried out or shall be carried out subject to certain
safeguards;
(vi) laying down procedures and safeguards for the prevention
of accidents which may cause environmental pollution and
remedial measures for such accidents;
(vii) laying down procedures and safeguards for the handling
of hazardous substances;
(viii) examination of such manufacturing processes, materials
and substances as are likely to cause environmental pollution;
(ix) carrying out and sponsoring investigations and research
relating to problems of environmental pollution;
M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO
[INDIRA BANERJEE, J.]
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(x) inspection of any premises, plant, equipment, machinery,
manufacturing or other processes, materials or substances
and giving, by order, of such directions to such authorities,
officers or persons as it may consider necessary to take steps
for the prevention, control and abatement of environmental
pollution;
(xi) establishment or recognition of environmental laboratories
and institutes to carry out the functions entrusted to such
environmental laboratories and institutes under this Act;
(xii) collection and dissemination of information in respect of
matters relating to environmental pollution;
(xiii) preparation of manuals, codes or guides relating to the
prevention, control and abatement of environmental pollution;
(xiv) such other matters as the Central Government deems
necessary or expedient for the purpose of securing the
effective implementation of the provisions of this Act."
12. Sub-section (3) of Section 3 of the EP Act provides as follows:
"3. Power of Central Government to take measures to
protect and improve environment.-
...
(3) The Central Government may, if it considers it necessary
or expedient so to do for the purposes of this Act, by order,
published in the Official Gazette, constitute an authority
or authorities by such name or names as may be specified
in the order for the purpose of exercising and performing
such of the powers and functions (including the power to
issue directions under Section 5) of the Central Government
under this Act and for taking measures with respect to such
of the matters referred to in sub-section (2) as may be
mentioned in the order and subject to the supervision and
control of the Central Government and the provisions of
such order, such authority or authorities may exercise the
powers or perform the functions or take the measures so
mentioned in the order as if such authority or authorities
had been empowered by this Act to exercise those powers
or perform those functions or take such measures."
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13. Subject to the provisions of the EP Act, the Central Government
has power under sub-Section (1) of Section 3, to take all such measures,
as it deems necessary or expedient, for the purpose of protecting and
improving the quality of environment and preventing, controlling or
reducing environmental pollution.
14. Section 5 of the EP Act provides that notwithstanding anything
contained in any other law, but subject to the provisions of the EP Act,
the Central Government may, in exercise of its powers and performance
of its functions under the EP Act, issue directions in writing to any person,
officer or any authority and such person, officer or authority shall be
bound to comply with such directions.
15. In exercise of powers conferred by Sections 6 and 25 of the
EP Act, the Central Government has made the Environment (Protection)
Rules, 1986, hereinafter referred to as "the EP Rules".
16. The Central Government issued an Environmental Impact
Assessment Notification dated 27th January 1994 in exercise of powers
conferred by sub-section (1) and clause (v) of sub-section (2) of Section
3 of the EP Act read with clause (d) of sub-rule (3) of Rule 5 of the EP
Rules, directing that on and from the date of publication of the said
notification in the Official Gazette, expansion or modernization of any
activity or a new project listed in Schedule I to the said notification shall
not be undertaken in any part of India, unless it has been accorded EC
by the Central Government in accordance with the procedures specified
in the said notification.
17. In exercise of powers conferred by sub-section (1) and clause
(v) of sub-section (2) of Section 3 of the EP Act read with clause (d) of
sub-rule (3) of Rule 5 of the EP Rules and in supersession of notification
number S.O. 60 (E) dated 27th January 1994, except in respect of things
done or omitted to be done before such supersession, the Central
Government issued a notification dated 14th September 2006, being
Notification S.O. 1533 (E) requiring prior environmental clearance from
the Central Government or as the case may be, by the State-Level
Environment Assessment Authority, duly constituted by the Central
Government under sub-section (3) of Section 3 of the EP Act.
18. In terms of the said notification dated 14th September 2006,
the process of environmental clearance for new projects was to comprise
of a maximum of four stages, all of which might not apply to particular
M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO
[INDIRA BANERJEE, J.]
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cases. The stages were (1) Screening, (2) Scoping, (3) Public
Consultation and (4) Appraisal.
19. In the meanwhile, by a notification being S.O. 327 (E) dated
10th April 2001, published in the Gazette of India on 12th April 2001, the
Central Government has delegated the powers vested in it under the EP
Act, to the Chairpersons of the respective State Pollution Control Boards/
Committees to issue directions to any industry or any local or other
authority to prevent violation of the Rules.
20. The Appellants carry on business, inter alia, of manufacture
and sale of basic organic chemicals, namely, Formaldehyde. The Appellant
No.1, M/s Pahwa Plastics Private Limited has two manufacturing units,
one at village Kharawar in Rohtak, hereinafter referred to as the "Rohtak
Unit" and the other at village Jathlana, Jagadhri in Yamuna Nagar in
Haryana, hereinafter referred to as the "Yamuna Nagar Unit". The
Appellant No.2 has a manufacturing unit at village Ghespur in Yamuna
Nagar, Haryana which is hereinafter referred to as the "Yamuna Nagar
Unit". The manufacturing units established, run and operated by the
respective Appellants fall in the category of Micro, Small and Medium
Enterprise (MSME) as defined under the Micro, Small and Medium
Enterprises Development Act, 2006, hereinafter referred to as "the MSME
Act".
21. On or about 31st March 2014, the Appellant No.1, M/s Pahwa
Plastics Ltd. applied for Consent to Establish (CTE) its Yamuna Nagar
unit for manufacture of Formaldehyde.
22. By a communication No. HSPCB/Consent/:2846616YAMCTE
3087415 dated 2nd June 2016, the Haryana State Pollution Control Board
(HSPCB) granted Consent to Establish (CTE) to the Appellant No.1 M/
s Pahwa Plastics Private Limited in respect of its Yamuna Nagar Unit.
The CTE was to remain valid for 60 months from the date of its issue, to
be extended for another year at the discretion of the Board or till the
time the unit started its trial production, whichever was earlier.
23. Some of the terms and conditions on which CTE was granted
are set out hereinbelow:-
"3. The officer/official of the Board shall have the right to
access and inspection of the industry in connection with the
various processes and the treatment facilities being provided
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simultaneously with the construction of building/machinery.
The effluent should conform the effluent standards as
applicable.
4. That necessary arrangement shall be made by the industry
for the control of Air Pollution before commissioning the plant.
The emitted pollutants will meet the emission and other
standards as laid/will be prescribed by the Board from time to
time.
5. The applicant will obtain consent under section 25/26 of
the Water (Prevention & Control of Pollution) Act, 1974 and
under section 21/22 of the Air (Prevention & Control of
Pollution) Act, 1981 as amended to-date-even before starting
trial production.
6. The above Consent to Establish is further subject to the
conditions that the unit complies with all the laws/rules/
decisions and competent directions of the Board/Government
and its functionaries in all respect before commissioning of
the operation and during its actual working strictly.
***
8. The Electricity Department will give only temporary
connection and permanent connection to the unit will be given
after verifying the consent granted by the Board, both under
Water Act and Air Act.
***
12. That there is no discharge directly or indirectly from the
unit or the process into any interstate river or Yamuna River
or River Ghaggar.
13. That the industry or the unit concerned is not sited within
any prohibited distances according to the Environmental Laws
and Rules, Notification, Orders and Policies of Central
Pollution Control Board and Haryana State Pollution Control
Board.
***
17. In case of change of name from previous Consent to
Establish granted, fresh Consent to Establish fee shall be
levied.
M/S PAHWA PLASTICS PVT. LTD. v. DASTAK NGO
[INDIRA BANERJEE, J.]
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 18. Industry should adopt water conservation measures to
ensure minimum consumption of water in their Process. Ground
water based proposals of new industries should get clearance
from Central Ground Water Authority for scientific
development of previous resources.
19. That the unit will take all other clearances from concerned
agencies, whenever required.
20. That the unit will not change its process without the prior
permission of the Board.
21. That the Consent to Establish so granted will be invalid,
if the unit falls in Aravali Area or non conforming area.
22. That the unit will comply with the Hazardous Waste
Management Rules and will also make the non-leachate pit
for storage of Hazardous waste and will undertake not to
dispose off the same except for pit in their own premises or
with the authorized disposal authority.
23. That the unit will submit an undertaking that it will comply
with all the specific and general conditions as imposed in the
above Consent to Establish within 30 days failing which
Consent to Establish will be revoked."
24. By another communication No.HSPCB/Consent/:
2846618YAMCTO3098246 dated 26th March 2018, HSPCB granted
consent to the Appellant No.1 to operate its Yamuna Nagar Unit from
8th February 2018 to 31st March 2022.
25. By an order No.HSPCB/YMN/2242, dated 31st March 2010,
the Appellant No.2, M/s Apcolite Polymer Private Limited was granted
CTE to establish its Yamuna Nagar Unit for manufacture of
Formaldehyde with the manufacturing capacity of 80 tonnes per day.
26. By another communication Nos. HSPCB/Consent/: HSPCB/
YMN/DLC/2011/4027 & HSPCB/YMN/DLC/2011/4029 dated 16th
January 2012, HSPCB granted the Appellant No.2, M/s Apcolite
Polymers Private Limited, Consent to Operate (CTO) its Yamuna Nagar
Unit. The CTO has been extended from 1st April 2016 till 31st March
2026, by a letter dated 13th March 2016. The CTO is valid till March
2026.
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27. By a communication No. HSPCB/Consent/: 2846616YAMCT
OHWM2630357 dated 13th March 2016, HSPCB granted consent for
emission of AIR to Appellant No.2, M/s Apcolite Polymers Private Limited
in respect of its Yamuna Nagar Unit on, inter alia, the terms and
conditions specified in the said letter, some of which are extracted
hereinbelow:-
"10. The air pollution control equipment of such specification
which shall keep the emissions within the emission standard
as approved by the State Board from time to time shall be
installed and operated in the premises where the industry is
carrying on/proposed to carry on its business.
11. The existing air pollution control equipment if required
shall be alerted or replaced in accordance with the direction
on the Board.
12. All solid wastes arising in the factory premises shall be
properly graded and disposed of by:-
(i) In case of Land fill material, care should be taken to ensure
that the material does not give rise to leachate which may
percolate in ground water of carried away with storm run
off.
(ii) Composting in case of bio degradable materials.
(iii) If the method of incineration is used for the disposal of
solid waste the consent application should be processed
separately and it should be taken up which consent is granted.
13. The industry shall submit an undertaking to the effect
that the above conditions shall be complied with by them.
14. The applicant shall submit its undertaking to the effect
that the above conditions shall be complied with by them.
15. The applicant shall make an application for grant of fresh
consent at least 90 days before the date of expiry of this
consent.
***
18. There should not be any fugitive emission from the
premises.
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19. The liquid effluent arising out of the operation of the air
pollution control equipment shall also be treated in a manner
and to the standards stipulated in the consent granted under
Water (Prevention & Control of Pollution) Act, 1974 by this
Board.
 ***
21. If the industry fails to adhere to any of the condition of
this consent order the consent so granted shall automatically
lapse.
***
33. The industry shall submit Environment Audit report once
in a year.
***
38. In case of by passing the emissions, the consent shall be
deemed revoked."
28. It is the case of the Appellants that at the time when CTE was
granted to the Appellants, it was thought that EC was not required for
units which manufactured Formaldehyde. Even HSPCB itself was not
sure of whether EC was required for such units.
29. Mr. Gupta argued that the Appellants were bona fide under
the impression that the Appellants were not required to obtain prior EC
for setting up this establishment to manufacture Formaldehyde. On the
basis of CTE granted by HSPCB, the Appellants set up their units taking
huge loans from banks for which repayments have to be paid in
installments.
30. In exercise of power under Section 3(1) and Section 3(2)(v)
of the EP Act read with Rule 5(3)(d) of the EP Rules, the Central
Government issued a notification being S.O. 804(E) dated 14th March
2017 which provides for grant of ex post facto EC for project proponents
who had commenced, continued or completed a project without obtaining
EC under the EP Act/ EP Rules or the Environmental Impact Notification
issued thereunder. Paragraphs 3, 4 and 5 of the said notification, read as
hereunder:
"(3) In cases of violation, action will be taken against the
project proponent by the respective State or State Pollution
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Control Board under the provisions of section 19 of the
Environment (Protection) Act, 1986 and further, no consent
to operate or occupancy certificate will be issued till the
project is granted the environmental clearance.
(4) The cases of violation will be appraised by respective sector
Expert Appraisal Committees constituted under sub-section
(3) of Section 3 of the Environment (Protection) Act, 1986
with a view to assess that the project has been constructed at
a site which under prevailing laws is permissible and
expansion has been done which can be run sustainably under
compliance of environmental norms with adequate
environmental safeguards; and in case, where the finding of
the Expert Appraisal Committee is negative, closure of the
project will be recommended along with other actions under
the law.
(5) In case, where the findings of the Expert Appraisal
Committee on point at sub-para(4) above are affirmative, the
projects under this category will be prescribed the appropriate
Terms of Reference for undertaking Environment Impact
Assessment and preparation of Environment Management
Plan. Further, the Expert Appraisal Committee will prescribe
a specific Terms of Reference for the project on assessment
of ecological damage, remediation plan and natural and
community resource augmentation plan and it shall be
prepared as an independent chapter in the environment impact
assessment report by the accredited consultants. The collection
and analysis of data for assessment of ecological damage,
preparation of remediation plan and natural and community
resource augmentation plan shall be done by an environmental
laboratory duly notified under Environment (Protection) Act,
1986, or a environmental laboratory accredited by National
Accreditation Board for Testing and Calibration Laboratories,
or a laboratory of a Council of Scientific and Industrial
Research institution working in the field of environment."
31. The Notification of 2017 is a valid statutory notification issued
by the Central Government in exercise of power under Sections 3(1)
and 3(2)(v) of the EP Act read with Rule 5(3)(d) of the EP Rules in the
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same manner as the EIA Notification dated 27th January 1994 and the
Notification dated 14th September 2006.
32. Section 21 of the General Clauses Act, 1897 provides that
where any Central Act or Regulations confer a power to issue
notifications, orders, rules or bye-laws, that power includes the power,
exercisable in like manner, and subject to like sanction and conditions, if
any, to add to, amend, vary or rescind any notification, order, rule or byelaw so issued. The authority, which had the power to issue Notifications
dated 27th January 1994 and 14th September 2006 undoubtedly had, and
still has the power to rescind or modify or amend those notifications in
like manner. As held by this Court in Shree Sidhbali Steels Ltd. &
Others v. State of Uttar Pradesh & Others1, power under Section 21
to amend, vary or rescind notifications, orders, rules or bye-laws can be
exercised from time to time having regard to the exigency.
33. Puducherry Environment Protection Association filed a Writ
Petition being W.P. No.11189 of 2017 in the High Court of Madras assailing
the said notification dated 14th March 2017. By a judgment and order
dated 13th October 2017, a Division Bench of the High Court refused to
interfere with the said notification, holding that the impugned notification
did not compromise with the need to preserve environmental purity.
34. The Ministry of Environment, Forest and Climate Change
(MoEF &CC) issued a draft notification dated 23rd March 2020 which
was duly published in the Gazette of India Extraordinary Part II. The
Notification was proposed to be issued in exercise of powers conferred
by sub-section (1) and clause (v) of sub-section (2) of Section 3 of the
EP Act for dealing with cases of violation of the notification with regard
to EC. It was proposed that cases of violation would be appraised by
the Appraisal Committee with a view to assess whether the project had
been constructed or operated at a site which was permissible under
prevailing laws and could be run sustainably on compliance of
environmental norms with adequate environmental safeguards. Closure
was to be recommended if the findings of the Appraisal Committee were
in the negative. If the Appraisal Committee found that such unit had
been running sustainably upon compliance of environmental norms with
adequate environment safeguards, the unit would be prescribed
appropriate Terms of Reference (TOR) after which the procedure for
grant of EC would follow.
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35. On 10th November 2020, the Department of Environment and
Climate Change of the Government of Haryana issued an order which
is extracted hereinbelow for convenience:
"Whereas the process of manufacturing of Formaldehyde is
covered under the provisions of 5(f) of Schedule of
Environment Impact Assessment Notification (EIA), 2006 of
Government of India, and requires the prior Environmental
Clearance (EC) from the competent authority State Environment
Impact Assessment Authority (SEIAA)/Ministry of
Environment, Forest and Climate Change, Government of
India, before establishment and operation of such units,
besides other mandatory clearance, as applicable;
Whereas, it has come to the notice of Government that
around 15 such units have been permitted to establish/operate
in the State of Haryana, without obtaining the necessary Prior
Environmental Clearances, but with the Consent of the
Haryana State Pollution Control Bureau (HSPCB), which
misinterpreted the category of such units and on realising the
requirement of EC in these cases, has revoked its consents
issued earlier to these units recently;
Whereas, some of these units approached the
Government explaining their hardship due to such sudden
revocation of their consents and have sought time for obtaining
the necessary EC from the competent authority as the process
is likely to take a minimum of 6 months to one year period,
and to allow them to operate with all pollution control
measures, following the pollution control norms applicable,
and,
Whereas, the Government has carefully considered their
request and the competent authority has decided that these
units shall be allowed to continue their operations for a period
of six months, without prejudice to any legal action taken
against the violations committed by them, by the competent
authorities, with the conditions that they will immediately
apply for Environmental Clearance from the competent
authority and provide the proof of such application within 60
days from the issuance of this communication to Environment
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and Climate Change Department and to Haryana State
Pollution Control Board.
Therefore, it is ordered accordingly."
36. Referring to the Counter Affidavit filed by HSPCB before the
NGT, Mr. Gupta pointed out that, since HSPCB itself was under the
misconception that prior EC was not necessary for units such as the
Yamunanagar units of the Appellants Nos. 1 and 2 respectively. HSPCB
took a policy decision to allow the units which did not have prior EC to
operate for six months, on condition that they would apply for EC within
sixty days.
37. The Appellants duly applied for EC in respect of their
manufacturing units. After scrutinizing their applications and after finding
the units suitable for grant of EC in terms of the prevailing guidelines,
the Expert Appraisal Committee constituted by the MoEF&CC conducted
a public hearing to finalize the cases of the Appellants for issuance of
Terms of Reference (TOR).
38. By an Office Memorandum, being F.No. 22-21/2020-1A III,
dated 7th July 2021, the MoEF&CC issued Standard Operating Procedure
(SOP) for identification and handling of violation cases under EIA
Notification 2006.
39. The said Office Memorandum, inter alia, reads:
"The Ministry had issued a notification number S.O.804(E),
dated the 14th March, 2017 detailing the process for grant of
Terms of Reference and Environmental Clearance in respect
of projects or activities which have started the work on site
and/or expanded the production beyond the limit of Prior EC
or changed the product mix without obtaining Prior EC under
the EIA Notification, 2006.
2. This Notification was applicable for six months from the
date of publication i.e. 14.03.2017 to 13.09.2017 and further
based on court direction from 14.03.2018 to 13.04.2018.
3. Hon'ble NGT in Original Application No.287 of 2020 in
the matter of Dastak N.G.O. Vs Synochem Organics Pvt. Ltd.
& Ors. and in applications pertaining to same subject matter
in Original Application No. 298 of 2020 in Vineet Nagar vs.
Central Ground Water Authority & Ors., vide order dated
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03.06.2021 held that "(...) for past violations, the concerned
authorities are free to take appropriate action in accordance
with polluter pays principle, following due process".
4. Further, the Hon'ble National Green Tribunal in O.A. No.
34/2020 WZ in the matter of Tanaji B. Gambhire vs. Chief
Secretary, Government of Maharashtra and Ors., vide order
dated 24.05.2021 has directed that".... a proper SoP be laid
down for grant of EC in such cases so as to address the gaps
in binding law and practice being currently followed. The
MoEF may also consider circulating such SoP to all SEIAAs
in the country".
5. Therefore, in compliance to the directions of the Hon'ble
NGT a Standard Operating Procedure (SoP) for dealing with
violation cases is required to be drawn. The Ministry is also
seized of different categories of 'violation' cases which have
been pending for want of an approved structural/procedural
framework based on 'Polluter Pays Principle' and 'Principle
of Proportionality'. It is undoubtedly important that action
under statutory provisions is taken against the defaulters/
violators and a decision on the closure of the project or
activity or otherwise is taken expeditiously.
6. In the light of the above directions of the Hon'ble Tribunal
and the issues involved, the matter has accordingly been
examined in detail in the Ministry. A detailed SoP has
accordingly been framed and is outlined herein. The SoP is
also guided by the observations/decisions of the Hon'ble
Courts wherein principles of proportionality and polluters pay
have been outlined."
40. The SOP formulated by the said Office Memorandum dated
7th July 2021 refers to and gives effect to various judicial pronouncements
including the judgment of this Court in Alembic Pharmaceuticals Ltd.
v. Rohit Prajapati & Others2.
41.