Supreme Court Recalls Vanashakti Judgment Restricting Post-Facto Environmental Clearances Through 2:1 Majority; Justice Bhuyan Records Dissent
Kiran Raj
The Supreme Court of India Division Bench of Chief Justice BR Gavai and Justices K Vinod Chandran and Ujjal Bhuyan recalled by a 2:1 majority, its earlier decision in the Vanashakti matter that had prohibited the Union Government from issuing post-facto environmental clearances. The dispute involved the question of whether projects initiated without prior environmental approval could later be validated, an issue previously addressed in a May judgment delivered by Justices Abhay S Oka and Ujjal Bhuyan, which had invalidated the executive directions permitting retrospective clearances for mining activities. While the present bench concluded that the earlier prohibition required recall, Justice Bhuyan dissented and maintained the position taken in the original ruling requiring prior clearance.
The proceedings arose from multiple challenges to the Ministry of Environment, Forest and Climate Change’s 2017 Notification and 2021 Office Memorandum, both of which introduced a framework for appraisal of violation cases where projects had commenced operations without obtaining prior environmental clearance under the 2006 EIA Notification. Several petitioners questioned the legality of permitting such post-facto clearances, asserting that the statutory scheme required mandatory prior environmental approval.
A series of writ petitions sought quashing of the 2021 Office Memorandum, invalidation of the 2017 Notification, and disclosure of projects that had begun operations without prior approval. Other petitions challenged the permissibility of regularising violation cases and sought a direction preventing authorities from considering applications for retrospective clearance. Civil appeals were also filed against a decision of the Madras High Court that set aside the 2021 Office Memorandum but made its order prospective.
After the May Vanashakti ruling—which barred grant of future post-facto environmental clearances—multiple review petitions and intervention applications were filed. Project proponents stated that they had completed all procedural steps, including environmental impact assessment and appraisal, and were prevented from obtaining clearance solely due to interim orders. Applicants also submitted that the earlier judgment protected already-granted post-facto clearances but disallowed future ones, resulting in similarly situated projects being treated differently.
Solicitor General Tushar Mehta, appearing for PSU SAIL, argued that the impugned judgment suffered from an “error apparent on record.” He submitted that the Court decided the matter without noticing the decision in D. Swamy, which upheld the 2017 Office Memorandum. Additional Solicitor General Aishwarya Bhati submitted that numerous public projects worth significant sums had been adversely affected. Senior advocates Kapil Sibal and Mukul Rohatgi also supported the petitions for review.
Opposing the review, Senior Advocate Gopal Sankarnarayanan referred to the 2020 decision in Alembic Pharmaceuticals Ltd, noting that a two-judge bench had already held post-facto clearances impermissible. He submitted that Vanashakti merely applied the principle already settled in Alembic and restrained continuation of a mechanism enabling unlawful clearances. Senior Advocates Sanjay Parikh, Anand Grover, Anita Shenoy, and Raju Ramachandran also argued against review.
Judgement of CJI B R Gavai
Chief Justice Gavai recounted the basis for review and reproduced portions of the earlier decision. He noted the consequences of continuing the Judgment Under Review and stated that “if the project proponents apply for an EC in respect of projects which are permissible in law, they would be entitled to get the EC. However, such projects will now have to be first demolished since they did not have the EC initially, but since these projects are otherwise permissible in law, the project proponents would be entitled to apply for an EC and upon obtaining such an EC, they would have to again construct the said project.” He then posed the central issue: “The question, therefore, is whether such a modus operandi of demolition and re-construction would be in the larger public interest or would in fact be counter-productive to the public interest?”
He referred to the effect on ongoing works and observed that “If the Judgment Under Review is not recalled, it will have serious consequences in terms of demolition of projects which are either completed or about to be completed in the near future and which are of vital public importance constructed out of the public exchequer.” He added that “As already observed hereinabove, if JUR is continued to operate, thousands of crores of rupees would go in waste.”
The Chief Justice further recorded that the earlier judgment protected previously granted clearances but disallowed future ones, creating inconsistent outcomes. He concluded that “the effect of JUR would be disastrous inasmuch as the projects referred to hereinabove, which are otherwise permissible in law… would have to be demolished and thereafter the project proponents can be permitted to construct the project again.”
CJI Gavai directed: “Taking into consideration all these aspects of the matter, I am inclined to allow the review petition. The judgment and order dated 16th May 2025 (JUR) is recalled. The writ petitions and the appeal are restored to file. The Registry is directed to place the matter before the Chief Justice of India on the administrative side for obtaining the necessary orders.”
Judgement of Justice Ujjal Bhuyan
Justice Bhuyan opened by stating “I have carefully gone through the judgment penned by the learned Chief Justice. Regretfully, I am unable to persuade myself to agree with the conclusions reached by him.” He rejected the grounds urged for review, recording that “Such assertions are not at all tenable and certainly cannot form the basis for review.”
He reiterated the principle applied in the original judgment, stating that “Environmental clearance is a condition precedent… Ex post facto environmental clearance is anathema to the scheme of the Environment (Protection) Act, 1986.” He further observed that “Projects which have commenced operations without prior environmental clearance have committed a violation and such violations cannot be condoned by granting retrospective clearances.” He concluded that “No grounds have been made out to review or recall the judgment.”
Justice Bhuyan stated: “Before parting with the record, I would like to painfully observe that the deadly Delhi smog reminds us everyday about the hazards of environmental pollution. Supreme Court as the highest constitutional court of the country has the duty and obligation under the Constitution of India and the laws framed thereunder to safeguard the environment. It cannot be seen backtracking on the sound environmental jurisprudence that has evolved in this country, that too, on a review petition filed by persons who have shown scant regard for the rule of law.”
Justice Bhuyan concluded: “The review judgment is an innocent expression of opinion. It overlooks the very fundamentals of environmental jurisprudence. Precautionary principle is the cornerstone of environmental jurisprudence. Polluter pays is only a principle of reparation. Precautionary principle cannot be given a short shrift by relying on polluter pays principle. The review judgment is a step in retrogression.”
Justice Bhuyan directed: “For all the aforesaid reasons, review petition is dismissed.”
Judgement of Justice K. Vinod Chandran
Justice Chandran agreed with the Chief Justice and stated that the review was “not only warranted but imperative and expedient.” He recorded that the requirement of prior clearance originated in executive action and reasoned that the authority that imposes such a requirement also retains the power to relax it. He noted that the power to frame a regulation includes the power to amend or rescind it.
He stated that earlier decisions such as D. Swamy and Electrosteel could not be treated as inconsistent with Alembic or Common Cause, as the former judgments had taken account of the latter. He referred to D. Swamy, which applied Section 21 of the General Clauses Act, recognising that the power to issue a notification includes the power to undo it. He also stated that the notifications governing violation cases were issued after considering practical realities and that a rigid approach requiring demolition before applying for clearance would be regressive. He recorded that the Vanashakti judgment did not address the full scope of statutory authority under the Environment (Protection) Act.
Justice Chandran directed: “I fully concur with the opinion of the Learned Chief Justice of India and find the review to be not only warranted, but imperative and expedient.”
Case Title: Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti and Another
Neutral Citation: 2025 INSC 1326
Case Number: Review Petition (C) No. ___ of 2025; Diary No. 41929 of 2025; Writ Petition (C) No. 1394 of 2023
Bench: Chief Justice B.R. Gavai, Justice Ujjal Bhuyan, Justice K. Vinod Chandran
