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M/s Electrotherm (India) Ltd. v. Patel Vipulkumar Ramjibhai and Ors.

Civil Appeal · Neutral citation not assigned (Civil Appeal No. 7222 of 2016)Decided 2 Aug 2016
Civil Appeal No. 7222 of 2016
Chief Justice T.S. Thakur · Justice R. Banumathi · Justice Uday Umesh Lalit

Background

Electrotherm had expanded its steel plant at Samakhiyali, Gujarat, and received Environmental Clearance in 2010 for the expansion without undergoing a public consultation/public hearing, after a draft exemption notification (which was never actually finalised) suggested such hearings could be skipped. The Gujarat High Court quashed the Environmental Clearance and ordered the entire plant shut down until a fresh clearance was obtained, prompting Electrotherm's appeal to the Supreme Court.

Decision Breakdown

Relying on its earlier ruling in the Lafarge case, the Supreme Court held that public consultation/public hearing is a mandatory step in the Environmental Clearance process, and since the draft notification exempting it was never actually adopted, the 2010 clearance's exemption from public hearing was based on incorrect principles and therefore invalid. However, noting that the expansion had already been built and was largely functioning in compliance with Pollution Control Board recommendations, the Court declined to order a full plant shutdown as the High Court had. Instead, it converted the public consultation requirement from "pre-decisional" to "post-decisional", directing the authorities to hold the public hearing within three months, after which the 2010 clearance would stand confirmed if the hearing favoured the expansion, or the plant would have to be scaled back to its earlier, 2008-approved capacity if the hearing went against it.

Lesson Learnt

Skipping a legally mandatory step like public consultation in an environmental clearance process is unlawful, but once a project has already been built on the strength of that flawed approval, courts may prefer a practical fix, ordering the missing public hearing to happen after the fact, over an outright shutdown, while still keeping the ultimate outcome tied to what that hearing decides.

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

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