Supreme Court Recalls 'Vanashakti' Judgment Which Barred Grant Of Post-Facto Environmental Clearances; Justice Bhuyan Dissents

The Supreme Court on Tuesday (November 18), by 2:1 majority, recalled its judgment in Vanashakti judgment, which barred the Union from granting post-facto environmental clearances.

In Vanashakti v. Union of India, the bench of Justice Abhay S Oka and Justice Ujjal Bhuyan, by judgment delivered on May 15, restrained the Central Government from granting "ex-post facto" Environmental Clearances (EC) in future and set aside the previous Office Memoranda and notifications which allowed for the grant of ex-post facto Environmental Clearance for mining projects.

The applications seeking review/recall of the judgment were considered by a bench comprising Chief Justice of India BR Gavai and Justices Ujjal Bhuyan and K Vinod Chandran. While CJI Gavai and Justice Vinod Chandran were in the majority, Justice Bhuyan (who was part of the original judgment) dissented.

Judgment of the CJI

Pronouncing the judgment, CJI BR Gavai observed that in Alembic Pharmaceuticals Ltd (2020), a two-judge bench, even while holding that post-facto EC should not be normally granted, regularised the post-facto ECs with a direction to pay monetary penalties. CJI also observed that in D Swamy vs Karnataka State Pollution Control Board,  Electrosteel Steels Limited v. Union of India and Others(2021), and Pahwa Plastics Private Limited and Another v. Dastak NGO(2023), it was held that post-facto EC can be granted in exceptional cases. The CJI observed that the Vanashakti judgment was rendered without taking notice of these judgments of coordinate benches and hence per incurium.

CJI also noted that the 2017 and 2021 OMs, EC can be granted only for permissible activities. If EC is held to be invalid, the only course available is to demolish the construction and then to apply for a fresh EC. It was opined that demolition of such huge number of constructions, rather than reducing pollution, will add to the pollution and will not be in public interest.

"As such, 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. 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?"

CJI Gavai also observed that Vanashakti judgment also protected the projects which were already granted post-facto EC and only barred the grant of such ECs in future. This meant that the projects, which were on the verge of getting EC but were denied it due to an interim order passed by the Court, will have to be scrapped. According to the CJI, this results in discrimination.

"If the Judgment Under Revie 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. If JUR is continued to operate, thousands of crores of rupees would go in waste," CJI held.

Hence, the CJI held that he has decided to recall the Vanashakti judgment and directed it to be placed before the appropriate bench.

Judgment of Justice Ujjal Bhuyan

Justice Ujjal Bhuyan disagreed with the CJI and opined that no case is made for review/recall. Justice Bhuyan said that earlier judgments such as Common Cause(2018) and Alembic clearly laid down that post-facto EC was impermissible for projects requiring mandatory prior EC, the later judgments like D Swamy deviated from those precedents. Hence, the judgments such as D Swamy are contrary to the ratio in Common Cause and Alembic and hence those judgments are per incuriam. A per incuriam judgment is not binding on the subsequent coordinate bench.  

The argument that demolition of properties will add to pollution cannot be accepted. It does not lie in the mouth of violators to advance such an argument to defend their illegalities.

Justice Bhuyan further observed that the review petitions are liable to be dismissed

The Ministry of Environment and Forests has also not filed any review and has accepted the Vanashakti judgment.

Also Read - Citing Delhi's Smog, Justice Bhuyan's Dissent Warns Against Allowing Post-Facto EC; Says Court Shouldn't Backtrack

Judgment of Justice K Vinod Chandran

Justice K Vinod Chandran agreed with the CJI and observed that the review was "not only warranted but imperative and expedient."

When the prior requirement of EC was brought by the Government itself, the Government has the power to relax it as well. The power to bring in a regulation would also encompass within itself the power to cancel it. The power to relax a requirement cannot be termed totally absurd.

Judgments such as D Swamy, Electrosteel cannot be termed as per incurium of Alembic and Common Cause, as the former judgments took notice of the latter judgments. D Swamy placed reliance on Section 21 of the General Clauses Act, which holds that the power to do something also includes the power to undo it.

The notifications were issued, taking note of the practical realities to balance the needs, noticing that a straighjacket implementation of a strict regulatory regime will also be counter-productive.

A pedantic approach first directing demolition and then applying for EC would amount to setting the clock back. The Vanashakti judgment did not take into consideration the powers under the Environment Protection Act. 

 On Application Of D Swamy vs Karnataka State Pollution Control Board

During the hearing, the CJI remarked that the issue was whether the two-judge bench ought to have referred the matter to larger bench, given that a coordinate bench had earlier held that post-facto EC can be granted in exceptional cases in the D Swamy case.

In D Swamy vs Karnataka State Pollution Control Board, the bench of Justices Indira Banerjee and JK Maheshwari observed that ex post facto clearances and/or approvals cannot be declined with pedantic rigidity, regardless of the consequences of stopping the operations.

Arguments Raised By The Parties 

Solicitor General Tushar Mehta, appearing for PSU SAIL, argued that the impugned judgment suffered from an "error apparent on record." He said that the judgment was rendered without noticing the D Swamy judgment which upheld the 2017 Office Memorandum.

Additional Solicitor General of India Aishwarya Bhati stressed that due to the decision, several projects worth crores were getting affected.

Sr Advocates Kapil Sibal, Mukul Rohatgi etc, also argued for the petitioners seeking review of the judgment.

Senior Advocate Gopal Sankarnarayanan, opposing the review, stated that way back in 2020, a two-judge bench, in Alembic Pharmaceuticals Ltd had ruled that post-facto environmental clearances were bad in law. He pointed out that the Vanshakti judgment merely followed the judgment in Alembic. In Vanshakti, the Court merely restrained the perpetuation of the mischief of granting post-facto ECs through circulars, considering the fact that such post-facto approvals were previously held to be illegal.

Senior Advocates Sanjay Parikh, Anand Grover, Anita Shenoy, Raju Ramachandran etc also argued against the review.

Case : CONFEDERATION OF REAL ESTATE DEVELOPERS OF INDIA CREDAI Vs VANASHAKTI | Diary No. 41929/2025, VANASHAKTI vs. UNION OF INDIA | Diary No. - 32452/2025

Citation : 2025 LiveLaw (SC) 1116

Click Here To Read/Download Judgment