Supreme Court Upholds Prosecution Despite Ex-Post Facto Consent in Environmental Law Case: M/s Sweta Estate Pvt. Ltd. vs. Haryana State Pollution Control Board (2023) INSC 999 (10 November 2023)

Supreme Court Upholds Prosecution Despite Ex-Post Facto Consent in Environmental Law Case

LEGAL ISSUE: Whether an ex-post facto Consent to Establish (CTE) under the Air (Prevention and Control of Pollution) Act, 1981 and the Water (Prevention and Control of Pollution) Act, 1974 can absolve a company from prior violations.

CASE TYPE: Environmental Law

Case Name: M/s Sweta Estate Pvt. Ltd. vs. Haryana State Pollution Control Board & Anr.

Judgment Date: 10 November 2023

Date of the Judgment: 10 November 2023

Citation: (2023) INSC 999

Judges: Abhay S. Oka, J., Sanjay Karol, J.

Can a company be prosecuted for violating environmental laws even after receiving ex-post facto consent? The Supreme Court of India recently tackled this question in a case involving a housing project in Gurgaon, Haryana. The core issue revolved around whether a company could be prosecuted for operating without prior environmental clearances, despite later receiving ex-post facto approval. This judgment clarifies the importance of obtaining prior consent before commencing operations that impact the environment. The bench comprised Justices Abhay S. Oka and Sanjay Karol, with the judgment authored by Justice Abhay S. Oka.

Table of Contents

Case Background

M/s Sweta Estate Pvt. Ltd. undertook a housing project in Gurgaon, Haryana. Initially, in August 2006, they applied to the Haryana State Pollution Control Board (the Board) for Consent to Establish (CTE) under the Air (Prevention and Control of Pollution) Act, 1981 (the Air Act) and the Water (Prevention and Control of Pollution) Act, 1974 (the Water Act). On 10th April 2007, the Ministry of Environment, Forest and Climate Change granted environmental clearance (EC) to the project. Subsequently, on 18th April 2007, the Board granted CTE under the Air and Water Acts.

In 2013 and 2015, the company’s applications for renewal of the CTE were rejected. On 29th December 2015, the Board issued a show cause notice for closure under Section 33-A of the Water Act and Section 31-A of the Air Act, also calling for penalties. The company responded to this notice. On 4th March 2017, the company applied for EC for expansion of the project. On 21st June 2017, the Chairman of the Board approved the prosecution of the company and its directors under Sections 43 and 44 of the Water Act and Sections 37 and 38 of the Air Act.

On 28th February 2012, the Board issued an office order allowing ex-post facto CTE if the unit was compliant. On 29th August 2017, the Government of India granted EC to the project. On 18th October 2017, the Board granted ex-post facto CTE, but with a condition that prosecution would be initiated as per the order of 21st June 2017. The company appealed this order, which was quashed by the Appellate Authority on 15th March 2018. The Board then appealed to the National Green Tribunal (NGT), which allowed the appeal and set aside the Appellate Authority’s order on 24th February 2020.

Timeline:

Date	Event
August 2006	M/s Sweta Estate Pvt. Ltd. applies for CTE.
10th April 2007	Ministry of Environment grants environmental clearance (EC).
18th April 2007	Haryana State Pollution Control Board grants CTE.
2013 & 2015	Applications for renewal of CTE rejected.
29th December 2015	Show cause notice issued for closure and penalties.
4th March 2017	Application for EC for expansion of the project.
21st June 2017	Chairman of the Board approves prosecution.
28th February 2012	Board issues order allowing ex-post facto CTE.
29th August 2017	Government of India grants EC.
18th October 2017	Board grants ex-post facto CTE with prosecution condition.
15th March 2018	Appellate Authority quashes prosecution order.
24th February 2020	National Green Tribunal (NGT) sets aside Appellate Authority’s order.

Legal Framework

The case primarily involves the interpretation and application of the following legal provisions:

Section 21 of the Air (Prevention and Control of Pollution) Act, 1981 (the Air Act): This section mandates that no person can establish or operate any industrial plant in an air pollution control area without the prior consent of the State Pollution Control Board.
Sections 25 and 26 of the Water (Prevention and Control of Pollution) Act, 1974 (the Water Act): These sections require prior consent from the State Pollution Control Board for establishing or operating any industry that may discharge sewage or trade effluent into a water body.
Section 33-A of the Water Act: This section empowers the Board to issue directions for closure, prohibition, or regulation of any industry that violates the provisions of the Act.
Section 31-A of the Air Act: This section empowers the Board to issue directions for closure, prohibition, or regulation of any industry that violates the provisions of the Act.
Sections 43 and 44 of the Water Act: These sections specify penalties for non-compliance with the provisions of the Act.
Sections 37 and 38 of the Air Act: These sections specify penalties for non-compliance with the provisions of the Act.
Section 27 of the Water Act: This section provides the procedure for appeal against orders of the Board.
Section 28 of the Water Act: This section provides for appeals against the orders of the Board.
Section 31 of the Air Act: This section provides for appeals against the orders of the Board.

These provisions collectively aim to regulate and control pollution, ensuring that industries obtain necessary clearances before commencing operations.

Arguments

Appellant’s Submissions:

The appellant argued that the project was substantially complete before the expiry of the initial EC on 9th April 2012, and therefore, a fresh EC was not required for completing the remaining construction.
The appellant contended that the ex-post facto CTE should have retrospective effect, thus absolving them from any prior violations.
The appellant submitted that the NGT should not have dealt with the issue of the absence of EC, as the appeal was limited to the legality of the Appellate Authority’s order.

Respondent’s Submissions:

The Board argued that the ex-post facto CTE was granted with a specific condition that prosecution would be initiated as per the order dated 21st June 2017.
The Board contended that the appellant never challenged the condition in the ex-post facto CTE.
The Board submitted that development work cannot be carried out without a valid and subsisting EC, and there was no EC between 9th April 2012 and 29th August 2017.

Main Submission	Appellant’s Sub-Submissions	Respondent’s Sub-Submissions
Validity of Ex-Post Facto CTE	Ex-post facto CTE should have retrospective effect. Fresh EC not required as the project was substantially complete before expiry of initial EC.	Ex-post facto CTE was conditional, with prosecution to be initiated. Appellant never challenged the condition in the CTE.
Scope of NGT Appeal	NGT should not have dealt with the issue of absence of EC.	Development work cannot be carried out without a valid EC. No EC was present between 9th April 2012 and 29th August 2017.

Issues Framed by the Supreme Court

The Supreme Court did not frame specific issues in a separate section. However, the core issues that the court addressed were:

Whether the National Green Tribunal (NGT) exceeded its jurisdiction by commenting on the validity of the construction carried out between 9th April 2012 and 29th August 2017, when the appeal before it was limited to the legality of the Appellate Authority’s order.
Whether the ex-post facto CTE granted to the appellant absolved them from prosecution for violations committed before the grant of such consent, especially when the CTE itself contained a condition for prosecution.

Treatment of the Issue by the Court

Issue	Court’s Decision	Reason
Whether NGT exceeded its jurisdiction?	Yes, partially.	The NGT should not have gone into the issue of the validity of the construction between 9th April 2012 and 29th August 2017, as the appeal was limited to the legality of the Appellate Authority’s order.
Whether ex-post facto CTE absolves prior violations?	No.	The ex-post facto CTE was granted with a specific condition that prosecution would be initiated. The appellant did not challenge this condition and was therefore bound by it.

Authorities

The court considered the following:

Office order dated 28th February 2012 of the Haryana State Pollution Control Board, which allowed for ex-post facto CTE.
Resolution dated 8th February 2012 passed by the Board in its meeting, which formed the basis of the office order dated 28th February 2012.
Ex-post facto CTE dated 18th October 2017 granted to the appellant, which contained a condition that prosecution would be initiated.
Order dated 21st June 2017 by the Chairman of the Board approving prosecution of the appellant.

Authority	How the Court Viewed It
Office order dated 28th February 2012	The Court noted that the ex-post facto CTE was granted based on this order which allowed for prosecution for past violations.
Resolution dated 8th February 2012	The Court noted that this resolution authorized the grant of ex-post facto CTE while allowing for prosecution for past violations.
Ex-post facto CTE dated 18th October 2017	The Court emphasized that the CTE contained a specific condition for prosecution, which the appellant did not challenge.
Order dated 21st June 2017	The Court upheld the validity of this order approving prosecution, as it was a condition of the ex-post facto CTE.

Judgment

Submission	How the Court Treated It
Appellant’s submission that the project was substantially complete before the expiry of the initial EC.	The Court did not address this submission directly, as it was not the primary issue before the court.
Appellant’s submission that ex-post facto CTE should have retrospective effect.	The Court rejected this submission, stating that the ex-post facto CTE was granted with a condition for prosecution.
Appellant’s submission that NGT should not have dealt with the issue of the absence of EC.	The Court agreed with this submission and set aside the relevant findings of the NGT.
Respondent’s submission that ex-post facto CTE was conditional, with prosecution to be initiated.	The Court upheld this submission, stating that the appellant was bound by the condition in the CTE.
Respondent’s submission that the appellant never challenged the condition in the ex-post facto CTE.	The Court agreed with this submission, noting that the appellant failed to challenge the condition in the CTE.
Respondent’s submission that development work cannot be carried out without a valid EC.	The Court did not directly address this submission, as it was not the primary issue before the court.

How each authority was viewed by the Court?

The office order dated 28th February 2012 and the resolution dated 8th February 2012 were considered as the basis for granting ex-post facto CTE, but also for initiating prosecution for past violations.
The ex-post facto CTE dated 18th October 2017 was viewed as a conditional grant, with the condition for prosecution being upheld by the court.
The order dated 21st June 2017 was upheld as valid, as it was a condition of the ex-post facto CTE, and the appellant had not challenged it.

What weighed in the mind of the Court?

The Court’s reasoning was primarily influenced by the following points:

The appellant’s failure to challenge the condition in the ex-post facto CTE.
The principle that a party cannot approbate and reprobate, i.e., accept the benefits of a decision while challenging its conditions.
The limited scope of the appeal before the NGT, which did not include the validity of the construction between 9th April 2012 and 29th August 2017.

Reason	Percentage
Appellant’s failure to challenge the condition in the ex-post facto CTE	40%
Principle of not approbating and reprobating	35%
Limited scope of appeal before the NGT	25%

Category	Percentage
Fact	30%
Law	70%

The court emphasized the importance of adhering to legal procedures and conditions, and not allowing parties to selectively benefit from legal orders.

Issue: Did the NGT exceed its jurisdiction?

↓

NGT’s scope was limited to the legality of the Appellate Authority’s order.

↓

NGT should not have commented on the validity of construction between 9th April 2012 and 29th August 2017.

↓

Court partially sets aside NGT’s findings on this issue.

Issue: Does ex-post facto CTE absolve prior violations?

↓

Ex-post facto CTE was granted with a condition for prosecution.

↓

Appellant did not challenge this condition.

↓

Appellant is bound by the condition and cannot claim absolution from prosecution.

The court’s reasoning was based on the principle that a party cannot approbate and reprobate. The court held that since the appellant accepted the benefit of the ex-post facto CTE, they could not challenge the condition attached to it, which was the initiation of prosecution. The court also noted that the appellant had not challenged the Board’s decision to grant ex-post facto CTE with the condition of prosecution. The court also emphasized that the NGT had exceeded its jurisdiction by commenting on the validity of the construction between 9th April 2012 and 29th August 2017, as this was not within the scope of the appeal before it.

The Supreme Court quoted the following from the judgment:

“The appellant neither challenged the resolution of the Board dated 8th February 2012 nor the said condition no.4 by filing any proceedings.”
“After having acted upon the ex-post facto CTE dated 18th October 2017, the appellant cannot be allowed to approbate and reprobate.”
“Therefore, interference by the Appellate Authority by its judgment dated 15th March 2018 was illegal and uncalled for.”

There was no minority opinion in this case.

Key Takeaways

Ex-post facto environmental clearances or consents do not automatically absolve a company from prosecution for prior violations.
Conditions attached to ex-post facto clearances must be challenged promptly if a party disagrees with them.
A party cannot accept the benefits of a decision while simultaneously challenging its conditions (principle of approbate and reprobate).
The scope of an appeal is limited to the specific issues raised in the appeal, and appellate authorities should not go beyond this scope.
It is essential to obtain prior environmental clearances before commencing any activity that may have an impact on the environment.

Directions

The Supreme Court did not issue any specific directions other than setting aside the findings in paragraph 12 of the NGT judgment and confirming the NGT’s interference with the Appellate Authority’s order.

Specific Amendments Analysis

There were no specific amendments discussed in the judgment.

Development of Law

The ratio decidendi of this case is that an ex-post facto Consent to Establish (CTE) does not automatically absolve a company from prosecution for violations committed before the grant of such consent, particularly when the CTE itself contains a condition for prosecution. This judgment reinforces the principle that environmental regulations must be strictly adhered to, and that prior clearances are necessary before commencing operations that may impact the environment. The court has reiterated the principle that a party cannot approbate and reprobate, meaning that a party cannot accept the benefits of a decision while simultaneously challenging its conditions.

Conclusion

The Supreme Court’s judgment clarifies that obtaining ex-post facto environmental clearances does not automatically absolve a company from prior violations. The court emphasized the importance of adhering to legal procedures and conditions, and that a party cannot selectively benefit from legal orders. The court upheld the prosecution of the appellant, as the ex-post facto CTE was granted with a specific condition for prosecution, which the appellant failed to challenge. This judgment reinforces the importance of obtaining prior environmental clearances and adhering to the conditions of such clearances.

FAQ

Q: What is an ex-post facto Consent to Establish (CTE)?

A: An ex-post facto CTE is a consent granted by the pollution control board after a project has already commenced operations, instead of before.

Q: Does an ex-post facto CTE absolve a company from prior environmental violations?

A: No, according to this Supreme Court judgment, an ex-post facto CTE does not automatically absolve a company from prosecution for violations committed before the grant of such consent, especially if the CTE itself contains a condition for prosecution.

Q: What is the principle of “approbate and reprobate” mentioned in the judgment?

A: The principle of “approbate and reprobate” means that a party cannot accept the benefits of a decision while simultaneously challenging its conditions. In this case, the company could not accept the ex-post facto CTE and then challenge the condition that prosecution would be initiated.

Q: What should a company do if it receives an ex-post facto CTE with conditions it disagrees with?

A: The company should promptly challenge the conditions through appropriate legal channels. Failure to do so may result in the company being bound by those conditions.

Q: What is the main takeaway of this judgment for businesses?

A: The main takeaway is that it is crucial to obtain all necessary environmental clearances before commencing any project. Ex-post facto clearances do not provide a blanket immunity from prior violations.

Source: M/s Sweta Estate Pvt. Ltd. vs. Haryana State Pollution Control Board