How India's law on retrospective environmental clearances evolved — and where it stands now

India's law on retrospective environmental clearances underwent significant changes following a recent Supreme Court judgment. The ruling, delivered by a three-judge bench led by Chief Justice of India Surya Kant, reversed the post-facto environmental clearance regime established by a 2021 executive order and reinstated the requirement of prior green clearance for development projects. However, it also reaffirmed the Central government's power to create limited exceptions through legal means.

To comprehend the implications of this judgment, it is essential to examine the evolution of the Environmental Impact Assessment (EIA) regime in India. The EIA regime dates back to 1986 when the Environment Protection Act (EPA) was enacted. The 1994 amendment to the EPA introduced the concept of prior environmental clearance, mandating that no project could commence without obtaining prior clearance. This provision formed the foundation of the EIA notification of 2006.

In 2017, the government introduced a notification that granted a single-window, time-bound exception for certain industries and projects to obtain green clearance after they had already commenced work on site. This exception was available to projects that applied for clearance within six months and was labeled as a "one-time exception."

However, the 2021 executive order marked a significant departure from the established EIA framework. Unlike the 2017 notification, the 2021 order was not a notification issued under the 1986 EPA but an executive instruction. Moreover, it was not time-bound and created a perpetual regime under which violators of the prior EC rule could seek regularization. The 2021 order essentially provided a mechanism for handling violation cases, including penalties, damage assessments, and remediation measures.

The Supreme Court's ruling struck down the 2021 executive order while preserving the 2017 notification. The court held that the EIA regime could only be modified through the notification route, not by an administrative order. The bench deemed the 2021 order to equate compliant entities with defiant ones and to promote a "pollute and then pay" principle rather than sustainable development.

The court also cautioned against the handling of violation cases under the 2021 order, emphasizing that it could lead to irreversible environmental degradation.