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Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Ors.

Civil Appeal · 2020 INSC 326Decided 1 Apr 2020
Civil Appeal No. 1526 of 2016
Dr. Justice D.Y. Chandrachud · Justice Ajay Rastogi

Background

Several industrial units, including Alembic Pharmaceuticals, had begun operations without first obtaining the mandatory prior Environmental Clearance (EC) required for their category of industry under a 1994 government notification. A later 2002 government circular allowed such units to apply for and receive EC "after the fact." The National Green Tribunal (NGT) struck down that 2002 circular as contrary to law and ordered revocation of the clearances and closure of the industrial units that had operated without valid consent, and later dismissed a review petition by one of the affected companies. The industries and the Ministry of Environment appealed to the Supreme Court.

Decision Breakdown

The Supreme Court agreed that granting clearances "ex post facto" undermines the very purpose of environmental law, which is to assess and prevent environmental harm before a project begins, not legitimise it afterward. However, considering that the industries in question had since obtained valid clearances for years, made substantial investments, and employed many workers, the Court held that ordering an outright closure of the units at this stage would be disproportionate. Instead, applying the "precautionary principle" and using its special powers under Article 142 of the Constitution, the Court set aside the NGT's closure and revocation directions but ordered each of the three industries to pay Rs. 10 crore as compensation (on top of amounts already directed by the NGT), to be used by the Gujarat Pollution Control Board for environmental restoration in the affected industrial area.

Lesson Learnt

Environmental clearances cannot be validly granted "after the fact" to legalise industrial operations that began without permission, but courts can balance strict enforcement against practical realities (like years of lawful operation and livelihoods at stake) by substituting heavy financial penalties for restoration, instead of ordering a plant's closure, when the facts make closure disproportionate.

Official source (sci.gov.in)View Judgment (PDF)

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