Environmental Law

Alembic Pharmaceuticals Ltd. v. Rohit Prajapati

(2020) 17 SCC 157

Facts

Several pharmaceutical and chemical industries in Gujarat expanded production without first obtaining the environmental clearance required under the EIA Notification.
They had other pollution-control permissions, but lacked prior EC for the expanded capacity.
The Ministry later considered applications for ex post facto environmental clearance.
The NGT criticised the violations and directed action.
The industries argued that:
the units had operated for years;
substantial investments had been made;
workers depended upon them;
later appraisal had found them capable of environmental compliance.
Environmental groups argued that allowing later clearance would destroy the preventive purpose of EIA.

Whether environmental clearance may ordinarily be granted after a project has already begun operating.
Whether closure was the only possible consequence of operating without prior EC.
What remedy was appropriate where projects subsequently underwent environmental appraisal.

Prior environmental clearance is central to the EIA regime.
EIA is anticipatory:
impacts must be studied before construction or expansion;
alternatives must be considered before irreversible commitment;
public participation must occur before the project becomes a fait accompli.
Routine ex post facto clearance is contrary to the precautionary principle.
Courts may nevertheless mould relief under Article 142 in exceptional circumstances.
Environmental violations require meaningful consequences, including restoration and deterrent compensation.

The Court clearly rejected the idea that ex post facto EC could become a normal administrative practice.
A project proponent cannot:
construct first;
create employment and investment;
then demand regularisation because closure has become difficult.
Such a system would reward deliberate non-compliance.
It would also deprive the EAC and public of the opportunity to influence:
site selection;
technology;
scale;
pollution controls;
alternatives.
However, the Court considered the factual position of the particular industries.
They had subsequently obtained environmental clearances after appraisal.
There was no finding that their continued operation was environmentally impossible.
Immediate closure could:
eliminate employment;
destroy major productive assets;
produce waste without necessarily improving environmental outcomes.
The Court therefore separated:
the illegality of operating without prior EC; and
the most proportionate remedy.
It imposed substantial financial liability for ecological restoration and deterrence instead of ordering permanent closure.
This did not validate the concept of routine post-facto clearance.
It was an exceptional exercise of judicial power based on the completed appraisal and existing circumstances.

The Supreme Court held that ex post facto environmental clearance is fundamentally inconsistent with the EIA Notification’s preventive structure.
Prior EC remains the legal rule.
On the special facts, the Court did not close the units because they had later undergone appraisal and received EC.
It imposed substantial environmental compensation upon the industries for restoration and for the period of unlawful operation.
The judgment must not be read as giving developers a right to regularisation.
Use this case for: the illegality of routine ex post facto EC and the possibility of exceptional, heavily penalised relief.