FACTS OF THE CASE
Pahwa Plastics Private Limited(appellant) carries on a business of manufacturing and sale of organic chemicals named Formaldehyde in its two manufacturing units at Kharawar in Rohtak, and at Jathlana, Jagadhri in Yamuna Nagar in Haryana which is established and operated as an MSME.
● On 31 March 2014, an application was filed by the company to establish its Yamuna Nagar Unit for which the Haryana State Pollution Control Board (HSPCB) granted Consent to Establish (CTE) on 2nd June 2016. Later, the appellants under sections 3(1) and 3(2)(v) of the EP acts, which provides for the grant of ex post facto EC for projects which had commenced, continued, or completed a project without obtaining EC under the EP Rules, and had duly applied for EC for their units after a notification issued by the central government.
● After the units were found suitable for the grant of EC in terms of the general guidelines as revealed by the scrutinisation of their applications, the Ministry of Environment and Forests and Climate Change (MoEF&CC) constituted an Expert Appraisal Committee which subsequently conducted a public hearing to finalize the cases of the Appellants for issuance of Terms of Reference (TOR).
● Meanwhile, on 26th November 2020, an application was filed before the National Green Tribunal by a Non-Governmental organisation (NGO) named Dastak, praying that the order passed by the State of Haryana on 10th November 2020, granting ex post facto EC, be quashed and the closure of units which were operating without EC.
● Consequently, the court impugned the order, and the application of Dastak was disposed off. Later, challenging the rule held by the NGT, the aggrieved party moved to the Supreme court of India with an appeal seeking to cease the order of the NGO. On it then the Supreme Court of India held a remarkable judgment that would stand as a strong precedent in the ambit of environmental law.
PROCEDURES INVOLVED
● An NGO named Dastak filed an application before NGT against the decision of the Haryana Government granting ex post facto EC to the units.
● The Court impugned the order and disposed of the matter.
● An appeal was made by the aggrieved party to the supreme court against the impugned rule of the court.
● Supreme Court delivered a landmark judgment giving ‘post facto approval’ to the units.
ISSUE INVOLVED
The question in this appeal was whether a facility employing about 8000 people, which was established according to consent to establish (CTE) and consent to operate (CTO) from the relevant statutory authority and has applied for ex-post-facto EC [2], could be shut down in anticipation of the issuance of EC even though it may not cause pollution and/or may be found to comply with the necessary pollution norms.
JUDGMENT
The Supreme Court bench presided over by Justice Indira Banerjee, made its comments regarding the question's applicability after carefully weighing the arguments put forth by both parties. Court cited three important points.
First off, the appellants have already submitted a request for the grant of EC, and the Expert Appraisal Committee of the MoEF&CC has recommended their cases for the grant of Terms of Reference (ToR) on the basis that it determined the company to be qualified for the grant of EC after carefully examining the Appellants' application.
The ToR was granted to the Appellants, and the mandatory public hearing had already taken place, so only the final procedural step of issuing the EC remains.
Second, the units of the appellant have been operating for many years and strictly adhere to environmental regulations, not creating pollution hazards, and being non-polluting Units with "Zero Trade discharge." The court also cited the State's reply affidavit submitted to the NGT, in which it was stated unequivocally that the units were operating lawfully under CTOs issued by the HSPCB. Therefore, the units could only be held accountable for a procedural error that resulted in them failing to obtain EC, which is known as a "technical irregularity."
Finally, the manufacturing facilities of the Appellants employ a sizable workforce of about 8,000 people, and their high annual turnover rate is an outcome of this. The court also used its reasonable justification to explain why a facility that contributes significantly to the nation's economy and provides a living for a large population should be shut down due to a technicality—namely, the failure to obtain prior environmental clearance—regardless of whether or not the unit produces more dangerous pollution.
The ruling also cited the ruling made by the same court in Electro Steel Steels Limited v. Union of India. The question is whether a business that supports hundreds of people and contributes to the nation's economy should be shut down for the technical irregularity of changing its location without first obtaining environmental clearance, without giving the business the chance to regularize its operation by obtaining the necessary clearances and permissions, even though the business may not otherwise be in violation of pollution laws or the pollution, if any, there may be.
The answer must be no, but Ex post facto clearances, approvals, and/or removal of technical irregularities in respect to notifications under the 1986 Act cannot be declined. Without considering the repercussions of stopping the operation of an active steel plant, with pedantic rigidity. Thus, “Ex post facto approval should not be withheld only as a penal measure”.
Affirming the importance of Environmental Clearance, the court observed that “There can be no doubt that the need to comply with the requirement to obtain EC is non-negotiable. To protect future generations and to ensure sustainable development, pollution laws must be strictly enforced.”
In Electrosteel Steels Limited v. Union of India, the court reiterated its previous ruling by stating that “this Court cannot be oblivious to the economy or the need to protect the livelihood of hundreds of employees and others employed in the units and dependent on the units for their survival.”
The court noted that the Environment (Protection) Act of 1986 does not forbid ex post facto EC. Instead, certain exceptions to the law, strict adherence to rules and regulations, and grants of ex post facto EC where the projects are compliant with environmental standards are not prohibited. Ex post facto clearances, however, cannot be rejected with petty rigidity, regardless of the effects of stopping the operations.
The court, however, believed that the NGT erred in law when it ordered that the units be unable to operate until compliance with the statutory mandate. Additionally, the court overturned the contested order and granted the appellant permission to continue operating, along with a directive to restore electricity if it had been cut off, as a remedy. Additionally, the court granted the respondent permission to stop providing electricity if the application for EC is denied due to any violations committed by the appellants.
ANALYSIS
The decision that allowed for the "post facto approval" has been examined from two angles. The criticisms of the decision claim that the court has fundamentally changed its approach to handling environmental issues and deviated from its enviable track record.
Additionally, the strategy of viewing environmental pollution as merely a "technical irregularity" has also drawn criticism because it tries to address important environmental issues through the limited prism of pollution. They also expressed worry about the potentially grave ramifications of the court's ruling on environmental law and the citizens' right to life, which is protected by Article 21 of the Constitution.
It is clear from a straightforward factual reading of the court's conclusions that it gave the principle of social welfare a lot of weight. This is demonstrated by the industry's constant emphasis on its "8,000 employees," "huge annual turnover," contribution to the nation's "economy," and provision of "livelihoods."
According to the court, the issue at hand in the case was whether a unit that helped the nation's economy and supported the livelihoods of hundreds of people should be shut down due to a technicality—namely, the lack of prior environmental clearance—even though it might not have produced any pollution.
There is no reason to believe that the decision endangers India's environmental jurisprudence, contrary to some claims, because the appellant has no prior record of any act of pollution or serious infractions, and because the grant of ex post facto EC carries no serious consequences because the concerned authority has the right to take any action, including the rejection and cancellation of EC if any contravention is noticed from the appellant.
Furthermore, it has long been held that development projects and environmental protection are mutually exclusive and incompatible. The modern idea of sustainable development, which is defined as the development that satisfies the present without compromising the ability of future generations to satiate their own needs, stood as a balancing mechanic, despite the difficulty of maintaining a constant balance between the two.
Unfortunately, there are more reports of many progressive development projects in our country being abandoned because of political and public pressure to protect the environment. These projects may have helped our economy grow. The court's statement that "where the adverse consequences of ex post facto approval denial outweigh the consequences of regularisation of operations by a grant of ex post facto approval" displays its concerns over the social and economic problems that a factory closure causes.
CONCLUSION
Environmental law covers all preventative measures against any actions that might negatively impact the life, health, and safety of all creatures as well as the natural ecosystem. Human survival, especially in the modern world, depends on both wealth and health. One shouldn’t be a menace to the other.
Instead, both should coexist peacefully, without harming one another. Numerous industries in India have been operating without endangering the environment. Even though the legislature's environmental law plays a significant part in this integration of wealth and health measures, it's interesting to note that the judiciary's role in this regard is a phenomenal chapter of environmental jurisprudence, even though India has recently experienced an exponential leapfrog in terms of economic and social development.
While it served to deter many large factories and establishments by imposing harsh penalties for violations of safety precautions and destructive activities, it also assisted many establishments in escaping the shackles of excessive and unnecessary protective measures put in place by authorities, taking into account the major economic, social, and employment requirements the country must meet in the short and long terms. Since this movement is being emphasized in the Phawa Plastic Ltd. case, it would set a strong precedent for any ensuing legal disputes.
Aanchal and Ayushi
The authors are second and first year students respectively at Rajiv Gandhi National University of Law.
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