Neetu Solvents v. Vineet Nagar
Background
This judgment disposed of a batch of appeals filed by several formaldehyde-manufacturing units (resins used in adhesives etc.) located in Rajasthan and Haryana, all of which had been directed to stop operating by the National Green Tribunal (NGT) for lacking prior "Environmental Clearance" (EC) under the EIA 2006 notification. The NGT's key ruling came in a case called Dastak N.G.O., which the units challenged; a related batch of similarly-placed units (Pahwa Plastics) had already succeeded before the Supreme Court in 2022, where the Court held that units operating validly under a "Consent to Establish" and "Consent to Operate" from the State Pollution Control Board could not be shut down merely for a technical EC irregularity that the Pollution Control Board itself hadn't flagged. The present appellant-units argued their situation was identical to Pahwa Plastics.
Decision Breakdown
The Supreme Court found that, like in Pahwa Plastics, the appellant-units here had been validly established and were operating under Consent to Establish and Consent to Operate granted by their respective State Pollution Control Boards, which themselves had only later realised formaldehyde units required prior EC and issued notices to the units to apply for it. Since the units had duly applied for EC within the given time, completed several steps of the process (screening, scoping, and in some cases public consultation), and two units had already been granted EC, the Court held this was not a case of bad faith non-compliance but of a bona fide procedural gap that the PCBs themselves had missed. Applying Pahwa Plastics' reasoning, the Court set aside the NGT's closure directions and allowed the units to continue operating pending a decision on their EC applications (to be made within one month), with electricity supply restored subject to dues, while preserving the regulators' right to act if the EC application is ultimately rejected for genuine contraventions.
Lesson Learnt
An industrial unit that has been validly permitted to operate by the state Pollution Control Board should not automatically be shut down for a subsequently-discovered requirement (like prior Environmental Clearance) that the regulator itself had failed to flag at the outset: the appropriate remedy is to let the unit continue operating while the missing clearance is processed, not immediate closure, unless the unit itself acted in bad faith.