Appellate Authority’s Decision to Quash Prosecution Approval Set Aside: The Legality of Ex-Post Facto CTE and Environmental Compliance
Case Title: M/s Sweta Estate Pvt.Ltd. Gurgaon v. Haryana State Pollution Control Board & Anr.
Case No: Civil Appeal No.2212 of 2020
Dated on: 10 November 2023
Coram: Hon’ble JUSTICE ABHAY S. OKA and JUSTICE SANJAY KAROL
FACTS OF THE CASE
The appellant initiated a housing project at Gurgaon-Sohna Road, Sector 48, Gurgaon, Haryana. The project included multiple buildings with apartments and service apartments. In August 2006, the appellant 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) for the project. On 18th April 2007, the Board granted CTE under the Air and Water Acts. In 2013 and 2015, the appellant’s applications for renewal of the CTE were rejected. On 29th December 2015, the Board issued a show cause notice of closure under Section 33-A of the Water Act and Section 31-A of the Air Act, questioning the appellant about potential penalties for non-compliance. The appellant responded to the notice. On 4th March 2017, the appellant applied for environmental clearance (EC) for expanding the housing project. On 21st June 2017, the Chairman of the Board approved prosecuting the appellant and its responsible Directors for offenses punishable 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 stating that industries that began operations without obtaining CTE could be granted ex-post facto CTE if they were compliant in all respects. On 29th August 2017, the Government of India granted EC for the housing complex. On 18th October 2017, the Board granted ex-post facto CTE to the appellant with a condition that prosecution would be initiated as per the approval dated 21st June 2017. In January 2018, the appellant appealed to the Appellate Authority under the Air and Water Acts to set aside the 21st June 2017 prosecution approval. On 15th March 2018, the Appellate Authority quashed the prosecution approval, noting the subsequent grant of ex-post facto CTE. The Board appealed the Appellate Authority’s decision to the National Green Tribunal (NGT) under Section 16 of the National Green Tribunal Act, 2010. On 24th February 2020, the NGT allowed the Board’s appeal, quashing the Appellate Authority’s decision and observing that the EC granted on 29th August 2017 could not condone the illegal construction carried out from 9th April 2012 to 29th August 2017. The NGT held that the environmental clearance granted on 10th April 2007 expired on 9th April 2012. By appeal in the Supreme court the appellant has taken an exception to the judgment and order dated 24th February 2020 passed by the National Green Tribunal, Principal Bench at Delhi.
ISSUES
- whether the EC granted earlier expired on 9th April 2012.
- whether the construction carried out by the appellant between 9th April 2012 to 29th August 2017 was illegal.
- whether there exists a power in the Board to grant ex-post facto CTE.
- whether ex-post facto CTE could be granted.
LEGAL PROVISIONS
Air (Prevention and Control of Pollution) Act, 1981 (Air Act):
- Section 21: Requires consent to establish (CTE) from the State Pollution Control Board before establishing or operating any industrial plant in an air pollution control area.
- Sections 37 and 38: Provide penalties for offenses under the Act.
- Section 31: Allows for appeals against orders of the State Pollution Control Board to an appellate authority.
Water (Prevention and Control of Pollution) Act, 1974 (Water Act):
- Sections 25 and 26: Requirement of consent to establish (CTE) and operate from the State Pollution Control Board before establishing or operating any outlet that discharges sewage or trade effluent into a stream or well or sewer or on land.
- Sections 43 and 44: Penalty provisions for offenses under the Act.
- Section 33-A: Allows the Board to issue directions, including orders to close, prohibit, or regulate any industry, operation, or process.
- Section 28: Allows for appeals against orders of the State Pollution Control Board to an appellate authority.
- Section 27(2)(a): Allows for the modification of consent conditions.
National Green Tribunal Act, 2010 (NGT Act):
Section 16: Provides for appeals to the National Green Tribunal against orders or decisions of the State Pollution Control Board or appellate authority under the Water Act and Air Act.
Ministry of Environment, Forest and Climate Change Regulations:
Environmental Clearance (EC): Required for certain types of projects, including large construction projects, to ensure they comply with environmental regulations.
Haryana State Pollution Control Board Office Order (28th February 2012):
Provides for the grant of ex-post facto CTE for industries that have started operations without obtaining the initial consent, provided they are compliant in all respects. However, it also mandates prosecution for past violations.
Administrative Orders:
- Order dated 21st June 2017: Chairman of the Board granted approval for prosecuting the appellant for violations under the Air and Water Acts.
- Order dated 28th February 2012: Board’s resolution to grant ex-post facto CTE with prosecution for past violations.
CONTENTIONS OF THE APPELLANT
The learned senior counsel appearing for the appellant urged that out of a total of 28 towers, 26 towers have been constructed. He pointed out that in 2010 and 2014, occupation certificates were granted for nine and ten towers, respectively. On 24th May 2016, an occupancy certificate was granted with respect to seven towers. He submitted that even assuming without admitting that the EC expired on 9th April 2012, renewal or grant of a fresh EC was not required as the superstructure of the building was complete before 9th April 2012, and for completing the further construction, EC was not required. In any event, EC was granted on 29th August 2017. The learned senior counsel urged that in any event, NGT had no reason to deal with the controversy regarding the effect of the absence of EC as the appeal was limited to the legality and validity of the order dated 15th March 2018 passed by the Appellate Authority. The learned senior counsel appearing for the appellant further submitted that once ex-post facto CTE was granted, even if the appellant conducted certain activities before the grant of ex-post facto CTE which required CTE, the appellant cannot be prosecuted as in this case, there is not a mere grant of CTE but the same will have retrospective effect. He would, therefore, submit that the impugned judgment and order is completely illegal.
CONTENTIONS OF THE RESPONDENTS
The learned counsel appearing for the Board submitted that there was a specific condition imposed in the ex-post facto CTE that as per the prosecution the approval order dated 21st June 2017 will be filed. He submitted that the appellant never challenged the said condition, and therefore, the appellant had no right to challenge the order dated 21st June 2017 approving the prosecution. He submitted that prior to the grant of the ex-post facto CTE, on three occasions, the applications made by the appellant for the grant of CTE were rejected. He submitted that work of development cannot be carried out unless there is a valid and subsisting EC, and for a period between 9th April 2012 and 29th August 2017, admittedly, no EC was granted to the appellant. He would, therefore, submit that no interference was called for with the impugned judgment.
COURT’S ANALYSIS AND JUDGEMENT
The court first addressed the scope of the appeal before the National Green Tribunal (NGT). It noted that the appeal was specifically to challenge the order dated 15th March 2018 by the Appellate Authority, which set aside the approval for prosecution granted by the Chairman of the Board on 21st June 2017. The court found that NGT should not have addressed the issue of whether the environmental clearance (EC) granted earlier expired on 9th April 2012. This was beyond the scope of the appeal, which was limited to the legality and validity of the prosecution approval. The court observed that the ex-post facto CTE granted on 18th October 2017 contained a condition (condition no. 4) that prosecution would be initiated as per the approval dated 21st June 2017. The appellant had not challenged the Board’s resolution authorizing ex-post facto CTE, nor had they sought to modify the specific condition for prosecution. The court noted that the appellant, after acting upon the ex-post facto CTE, cannot challenge the prosecution condition, as it would be inconsistent and illegal. The court found that the interference by the Appellate Authority in its judgment dated 15th March 2018 was illegal and uncalled for. The Appellate Authority had quashed the approval for prosecution without considering that the appellant was bound by condition no. 4 in the ex-post facto CTE. The court set aside the findings recorded in paragraph 12 of the impugned NGT judgment, which dealt with the issue of whether the EC granted on 29th August 2017 could condone illegal construction between 9th April 2012 and 29th August 2017. The court held that these issues were beyond the scope of the appeal before the NGT and left them open for future proceedings. The court confirmed the impugned NGT judgment insofar as it interfered with the Appellate Authority’s judgment and order dated 15th March 2018, thereby upholding the NGT’s decision to reinstate the Board’s approval for prosecution. The appeal was partly allowed and there were no order as to costs.
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Judgement Reviewed by – PRATYASA MISHRA