Supreme Court permits ex post facto Environmental Clearance for Bio-Medical Waste Treatment Facilities: D. Swamy vs. Karnataka State Pollution Control Board (22 September 2022)

Introduction

Date of the Judgment: 22 September 2022
Citation: (2022) INSC 461
Judges: Indira Banerjee, J. and J. K. Maheshwari, J.

Can a Bio-Medical Waste Treatment Facility, crucial for public health, be shut down for not having prior Environmental Clearance (EC)? The Supreme Court of India recently addressed this critical question in a case concerning a facility in Karnataka. The court had to consider the balance between environmental protection and the practical needs of waste management. The judgment was delivered by a two-judge bench comprising Justice Indira Banerjee and Justice J. K. Maheshwari.

Case Background

The case revolves around a Common Bio-Medical Waste Treatment Facility established by Respondent No. 3 in Mysore, Karnataka. The facility was granted consent to establish by the Karnataka State Pollution Control Board (KSPCB) in 2012. However, a dispute arose when another operator, M/s Shree Consultant, challenged the consent, leading to a series of appeals and legal proceedings. The core issue was whether the facility required prior Environmental Clearance (EC) under the Environmental Impact Assessment (EIA) Notification of 2006, as amended in 2015.

The appellant, D. Swamy, filed an application before the National Green Tribunal (NGT) seeking closure of the facility, arguing that it violated the EIA Notification by not obtaining prior EC. The NGT dismissed the application, leading to the current appeal before the Supreme Court.

Timeline:

Course of Proceedings

Initially, M/s Shree Consultant challenged the consent granted to Respondent No. 3 before the Karnataka State Environment Appellate Authority, which initially granted an interim stay but ultimately dismissed the appeals. Subsequently, M/s Shree Consultant appealed to the National Green Tribunal (NGT), which also dismissed their appeals, upholding the consent granted to Respondent No. 3. However, the Principal Bench of the NGT had earlier ruled that Bio-Medical Waste Treatment Plants required EC, which led to the 2015 amendment of the EIA Notification.

The appellant, D. Swamy, then filed an appeal before the Karnataka State Environment Appellate Authority against the consent order dated 11th February 2016, which was later withdrawn as it became infructuous. The matter eventually reached the Supreme Court after the NGT dismissed D. Swamy’s application seeking closure of the facility.

Legal Framework

The case primarily concerns the interpretation and application of the Environmental Impact Assessment (EIA) Notification of 2006, as amended on 17th April 2015, and the Environment (Protection) Act, 1986 (EP Act). The 2015 amendment introduced Entry 7(da), which mandates that Common Bio-Medical Waste Treatment Facilities obtain prior Environmental Clearance (EC) from the Ministry of Environment and Forest (MoEF&CC).

The Environment (Protection) Act, 1986, empowers the Central Government to take measures to protect and improve the environment. Section 3(1) and 3(2)(v) of the EP Act read with Rule 5(3)(d) of the EP Rules were used to issue a Notification being S.O. 804(E) dated 14th March 2017, which provides for grant of ex post facto EC.

Section 21 of the General Clauses Act, 1897, was also considered, which allows the authority that issued a notification to amend, vary, or rescind it.

The court also considered the Water (Prevention and Control of Pollution) Act, 1974, and the Air (Prevention and Control of Pollution) Act, 1981, under which the KSPCB granted consent to the facility.

Arguments

The Appellant argued that the Respondent No. 3’s facility should be closed down for not obtaining prior EC, as required by the 2015 amendment to the EIA Notification. They contended that operating without prior EC is a violation of environmental law and poses a risk to the environment and public health.

The KSPCB argued that the 2015 amendment to the EIA Notification is prospective and does not apply to facilities that were already in operation or had obtained consent before the amendment. They also argued that the appeal was delayed and suffered from suppression of facts. The KSPCB contended that the facility was operating with valid consent and should not be closed down.

Respondent No. 3 argued that they had obtained all necessary consents and were operating within the legal framework. They relied on the fact that the facility was essential for managing bio-medical waste and should not be closed down due to a technicality. They also highlighted the 2017 notification allowing for ex post facto EC.

Issues Framed by the Supreme Court

The Supreme Court did not explicitly frame issues in a separate section, but the core issues addressed were:

• Whether the Bio-Medical Waste Treatment Facility could be closed down for not having prior Environmental Clearance (EC).
• Whether the 2015 amendment to the EIA Notification was prospective or retrospective in its application.
• Whether ex post facto EC could be granted to the facility.

Treatment of the Issue by the Court

The following table demonstrates as to how the Court decided the issues

Authorities

The Supreme Court considered the following authorities:

The court also considered the following legal provisions:

• Section 3 of the Environment (Protection) Act, 1986: This section empowers the Central Government to take measures to protect and improve the environment.
• Section 21 of the General Clauses Act, 1897: This section allows the authority that issued a notification to amend, vary, or rescind it.
• Entry 7(d) and 7(da) of the EIA Notification of 2006: These entries relate to the requirement of EC for projects, including Bio-Medical Waste Treatment Facilities.

Judgment

The Supreme Court dismissed the appeal, upholding the decision of the National Green Tribunal (NGT). The court held that the Bio-Medical Waste Treatment Facility should not be closed down for not having prior Environmental Clearance (EC), given that it was operating with the necessary consent to operate. The Court emphasized that the operation of such facilities was in the interest of preventing environmental pollution and that closure on the grounds of lack of prior EC would be against public interest.

The Court observed that the Environment (Protection) Act, 1986 does not prohibit ex post facto EC and that it can be granted in appropriate cases, in strict compliance with the rules, regulations and notifications. The Court also noted that it cannot be oblivious to the economy and the need to protect the livelihood of those dependent on such units.

The court clarified that while ex post facto EC should not be granted routinely, it can be considered in exceptional circumstances, taking into account all relevant environmental factors. It also emphasized that the deviant industry may be penalized by imposing heavy penalties on the principle of ‘polluter pays’ and the cost of restoration of the environment may be recovered from it.

The court distinguished its earlier judgment in Alembic Pharmaceuticals Ltd. v. Rohit Prajapati & Others [2020 SCC OnLine SC 347]*, stating that the said case was in the context of a circular which was inconsistent with the statutory Environment Impact Notification of 1994, whereas the present case was in the context of a statutory notification of 2017 which was valid.

The court also considered the following authorities:

What weighed in the mind of the Court?

The Supreme Court’s decision was primarily influenced by the need to balance environmental protection with the practical requirements of managing bio-medical waste and ensuring economic stability. The court recognized that while prior Environmental Clearance (EC) is essential, a rigid approach could lead to the closure of essential facilities, which would be against public interest. The court emphasized that the Environment (Protection) Act, 1986 does not prohibit ex post facto EC and that it can be granted in appropriate cases, in strict compliance with the rules, regulations and notifications.

The court’s reasoning was also influenced by the need to protect the livelihoods of those dependent on such units and the economy. The court recognized that a blanket ban on ex post facto EC could lead to the closure of many industries, which would have severe economic consequences. The court also considered the principle of ‘polluter pays’ and held that the deviant industry may be penalized by imposing heavy penalties and the cost of restoration of the environment may be recovered from it.

The Supreme Court’s reasoning can be logically represented as follows:

The court considered the principle of proportionality, ensuring that the measures taken to protect the environment are balanced with the need to maintain economic stability and protect livelihoods. The court also emphasized that the deviant industry may be penalized by imposing heavy penalties on the principle of ‘polluter pays’ and the cost of restoration of the environment may be recovered from it.

The court quoted from the judgment:

“Ex post facto environmental clearance should not however be granted routinely, but in exceptional circumstances taking into account all relevant environmental factors.”

“Where the adverse consequences of ex post facto approval outweigh the consequences of regularization of operation of an industry by grant of ex post facto approval and the industry or establishment concerned otherwise conforms to the requisite pollution norms, ex post facto approval should be given in accordance with law, in strict conformity with the applicable Rules, Regulations and/or Notifications.”

“Ex post facto approval should not be withheld only as a penal measure. The deviant industry may be penalised by an imposition of heavy penalty on the principle of ‘polluter pays’ and the cost of restoration of environment may be recovered from it.”

Key Takeaways

• Ex post facto Environmental Clearance (EC) is not prohibited under the Environment (Protection) Act, 1986.
• Ex post facto EC can be granted in exceptional circumstances, not routinely.
• The decision to grant ex post facto EC must balance environmental protection with public interest and economic stability.
• Industries operating without prior EC may be penalized under the ‘polluter pays’ principle.
• Closure of essential facilities like Bio-Medical Waste Treatment Facilities should be avoided if they comply with environmental norms.

Directions

The Supreme Court did not give any specific directions in this case.

Development of Law

The ratio decidendi of the case is that ex post facto Environmental Clearance (EC) can be granted in exceptional circumstances, in strict compliance with the rules, regulations, and notifications, and that the Environment (Protection) Act, 1986 does not prohibit ex post facto EC. This judgment clarifies the position of law by allowing for flexibility in granting EC, while ensuring that the principles of environmental protection are not compromised. This judgment reaffirms the position of law as laid down in Electrosteel Steels Limited v. Union of India [2021 SCC OnLine SC 1247]* and Pahwa Plastics Pvt. Ltd. and Anr. v. Dastak NGO and Ors. [2022 SCC Online SC 362]* .

Conclusion

In conclusion, the Supreme Court dismissed the appeal, allowing the Bio-Medical Waste Treatment Facility to continue operations. The court emphasized the need for a balanced approach, recognizing the importance of environmental protection, the practicalities of waste management, and the need to protect economic stability. The judgment clarifies that ex post facto EC is permissible in exceptional circumstances, provided that the facility complies with environmental norms and is penalized for the violation.