The Supreme Court has allowed several formaldehyde manufacturing units in Rajasthan and Haryana to continue operations despite the absence of prior Environmental Clearance (EC), holding that the industries had been established and operated pursuant to valid statutory consents granted by State Pollution Control Boards.
A Bench of Justice J.K. Maheshwari and Justice Atul S. Chandurkar set aside orders of the National Green Tribunal (NGT) directing closure of the units for operating without prior EC under the Environment Impact Assessment Notification, 2006.
The Court noted that the units had obtained Consent to Establish (CTE) and Consent to Operate (CTO) from the respective Pollution Control Boards at a time when even the authorities themselves were unaware that prior EC was required for formaldehyde manufacturing units. The Bench observed that the industries had subsequently applied for ECs after directions were issued by the State Boards in 2019 and 2020.
The Court referred to Pahwa Plastics Private Limited v. Dastak NGO, (2023) 12 SCC 774, where it was held that industries contributing to the economy and employment cannot be shut down merely due to a “technical irregularity” of lack of prior EC, particularly where the regulatory authorities themselves had initially proceeded on the basis that no such clearance was necessary.
The Bench clarified that the present case was not one involving deliberate violation of environmental norms, but rather one arising from regulatory misunderstanding regarding the applicability of the EC regime. It noted that most of the units had already completed stages such as screening, scoping and grant of Terms of Reference, while only the final appraisal stage remained pending for grant of EC.
“the case in hand is not a one where the appellants established the units of formaldehyde and started operation due to lack of bona fide ignoring any requirement of law. On the contrary it is a case where the PCBs were not aware that prior EC to establish and operate such units is required in terms of EIA 2006 notification. Accordingly, in terms of the notices issued by the PCBs, the appellant units have applied for grant of EC which remains pending…Accordingly, the direction of closure of the appellant-units by the impugned orders of NGT stands set aside.”
Accordingly, the Court directed that the appellant-units be allowed to continue operations pending consideration of their EC applications, and issued the following directions:
• The Supreme Court directed that the appellant-units, established and operating pursuant to valid Consent to Establish (CTE) and Consent to Operate (CTO), shall be allowed to continue functioning.
• Authorities were directed to decide the pending Environmental Clearance (EC) applications within one month, and till then, operations of the units shall not be interfered with.
• The Court ordered restoration of electricity supply to units where disconnected, subject to payment of dues, if any. It clarified that if EC applications are ultimately rejected due to statutory violations, authorities would be free to disconnect electricity supply and take action in accordance with law.
• The Union Government was directed to inform the appellant-units within three working days if any further compliances or documents were required for processing their EC applications.
Appearances
For Appellant: Mr. Tarun Gupta, AOR Mr. Hirday Virdi, Adv.
For Respondents: Mr. Amarjeet Singh, AOR Dr. Surender Singh Hooda, AOR Dr. N. Visakamurthy, AOR Mr. Mahesh Kasana, Adv. Ms. Aparna Rohatgi Jain, Adv. Mr. S. K. Verma, AOR Mr. B.K. Satija, A.A.G. Mr. Rahul Khurana, Adv. Mr. Samar Vijay Singh, AOR Ms. Sabarni Som, Adv. Mr. Aman Dev Sharma, Adv. Mr. Gaj Singh, Adv. Mr. Vivek Bedi, Adv. Mr. Pradeep Misra, AOR Mr. Shiv Mangal Sharma, A.A.G. Mr. Shivansh Panday, Adv. Mr. Saurabh Rajpal, Adv. Ms. Nidhi Jaswal, AOR Mr. Gurmeet Singh Makker, AOR Mr. Tahir Ashraf Siddiqui, AOR Mr. Rajesh Kumar Gautam, AOR
