The Supreme Court on Tuesday, by a 2-1 majority, recalled its May 16 judgment that had barred the grant of ex-post-facto environment clearance (EC) to development projects, holding that the ruling failed to consider binding earlier precedent and thereby violated judicial discipline.
Chief Justice of India (CJI) Bhushan R Gavai and Justice K Vinod Chandran, writing separate but concurring opinions, allowed a batch of review petitions and declared that the May verdict, delivered by a two-judge bench of justices Abhay S Oka (since retired) and Ujjal Bhuyan, could not stand in the face of earlier Supreme Court rulings that had recognised limited situations where post-facto EC may be permissible.
Reading out the operative part of his judgment, CJI Gavai said the May bench “did not fully consider the relevant paragraphs of earlier judgments” on the issue. These judgments, he noted, had taken a “balanced view” by holding that while ex-post-facto EC should not ordinarily be granted, “certain stipulations and exceptions were underlined in specific circumstances.”
He added that decisions in D Swami (2022) and Pahwa Plastic (2022) cases, which had examined the very same Office Memoranda (OMs) of 2017 and 2021, were not brought to or considered by the May bench. “The previous bench had to refer the matter to a larger bench if it did not concur with the earlier rulings,” the CJI said.
CJI Gavai also highlighted the practical fallout of the May judgment. “The effect of the May judgment would be to first demolish the buildings, then go for EC and construct again, which will not be in the public interest. We have also noted that government properties worth ₹20,000 crore will be razed down,” he said. “I have recalled the May judgment and have said the matter should be listed before an appropriate bench upon the orders of the CJI.”
Justice Chandran, concurring, said in court that the May ruling “could not have taken a divergent view from previous rulings.” The OMs, he noted, were not legislative instruments but were framed “in reckoning of ground realities,” and a rigid application of regulations would be “counter-productive for those who adjusted their affairs in accordance with the legal regime.”
The review, he said, was not only “warranted but expedient and necessary.”
Justice Bhuyan, who had co-authored the original May 16 judgment, dissented sharply. In court, he declared, “The concept of ex-post facto clearance is an anathema to environmental jurisprudence…a curse against environmental protection.” He held that D Swami and Pahwa Plastics rulings cited by the majority were per incuriam, having “digressed” from earlier authoritative judgments, and therefore the May ruling was correct not to rely on them.
Rejecting the argument that demolition would cause greater environmental damage, he said, “Such a submission cannot be accepted.”
Justice Bhuyan also stressed that the Union government had not sought review of the May judgment. “Some of the concerns raised by the petitioners were capable of being addressed by way of further clarification, and the entire judgment ought not to have been reviewed.”
CJI Gavai’s lead opinion elaborated that the May ruling had overlooked binding precedent, particularly D Swami v Karnataka Pollution Control Board (2022), where a coordinate bench held that post-facto EC may be granted in exceptional cases. This omission, he said, tangibly affected the court’s interpretation of the 2017 and 2021 OMs that enabled limited post-facto EC with stringent conditions and penalties.
“As a matter of judicial discipline, a bench of equal strength is bound to notice and consider earlier judgments,” CJI Gavai wrote.
Justice Chandran, in his concurring opinion, underscored that ignoring precedent had created “legal uncertainty of the gravest order”, risking demolition of public and private projects worth thousands of crores despite their compliance with other statutory permissions.
During the previous hearings, Solicitor General Tushar Mehta, appearing for Steel Authority of India and AIIMS Kalyani, had argued that the May bench ignored D Swami and imposed a blanket prohibition that destabilised the regulatory framework.
The environment ministry told the court that 45 major Central projects worth ₹79,000 crore were in limbo, 33 under appraisal, and 12 awaiting final EC.
The CREDAI, representing over 13,000 real estate firms, warned that hundreds of substantially completed projects faced demolition.
Senior advocate Kapil Sibal, appearing for a greenfield airport project, pointed out that even with a recall, all such projects must undergo fresh appraisal.
Environmental groups such as Vanashakti and One Earth One Life opposed the recall, arguing through senior advocate Gopal Sankaranarayanan that post-facto EC incentivises illegal construction and undermines the Environment Impact Assessment framework.
With Tuesday’s majority judgment, the May 16 decision stands recalled. The 2017 and 2021 OMs, which permit post-facto EC in limited circumstances subject to penalties and strict scrutiny, revive, though each violating project must undergo full appraisal and cannot seek automatic clearance.