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Noting that Ex post facto environmental clearance should not be granted routinely, the Supreme Court on Friday held that the same can be granted 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...", opined a bench of Justices Indira Banerjee and JK Maheshwari.

The division bench went on to add that in such cases 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.

M/S Pahwa Plastics Pvt Ltd approached the Supreme Court under Section 22 of the National Green Tribunal Act, 2010, against an order passed by the Principal Bench of the National Green Tribunal (NGT) holding that establishments such as the manufacturing units of Pahwa, which did not have prior Environmental Clearance (EC) could not be allowed to operate.

At the outset, the Court noted that the need to comply with the requirement to obtain EC was non-negotiable and under no circumstances can industries, which pollute, be allowed to operate unchecked and degrade the environment.

Justice Indira Banerjee in her judgment remarked that the question of law involved posed before the Court was 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 norm.

Pahwa Plastics was found to have a manufacturing units which employed 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...", further said the bench.

It was also noted that The Environment (Protection) Act, 1986, did 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 with environment norms, is in our view 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."

Further relying on Electrosteel Steels Limited v. Union of India the Court noted ex post facto clearances and/or approvals and/or removal of technical irregularities in terms of a Notification under the EP Act cannot be declined with pedantic rigidity, oblivious of the consequences of stopping the operation of mines, running factories and plants.

Accordingly, the court was 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.

Case Title: M/S PAHWA PLASTICS PVT. LTD. AND ANR. v. DASTAK NGO AND ORS.