The middle path | Explaining Supreme Court’s latest verdict on post facto environmental clearances

The story so far:The Supreme Court has quashed an Office Memorandum issued by the Ministry of Environment, Forest and Climate Change in 2021 on the ground that an administrative order cannot create a perpetual and parallel regime to grant retrospective authorisation to big-ticket infrastructure projects commenced without prior, valid environmental clearance. A three-judge Bench of Chief Justice of India Surya Kant and Justices Joymalya Bagchi and Vipul M. Pancholi held on Wednesday (July 29, 2026) that the permanent regime of ex post facto grant of environmental clearances (EC) introduced through the 2021 Office Memorandum (OM) supplanted the mandate of prior green permit under an Environment Impact Assessment (EIA) notification of 2006. However, the court has not barred retrospective ECs totally. It has in fact adopted a note of reconciliation and called for "measured regularisation". The court held that ex post facto environmental regularisation must be restricted to "a narrow, time-bound, reasoned and supervised window", and done only in projects of "supervening public interest".What is the post facto environmental clearance regime?India’s EIA framework is built around a simple principle: projects requiring environmental clearance (EC) must obtain it before construction or operations begin. The 2006 EIA Notification explicitly mandates “prior environmental clearance”, allowing regulators to evaluate ecological impacts, hear public objections and prescribe safeguards before irreversible environmental damage occurs.A post facto or ex post facto clearance reverses this sequence. It allows projects that have already commenced work without mandatory approval to subsequently seek legalisation. The Centre first introduced the concept through a March 2017 notification. It was presented as a one-time amnesty window for projects that had already violated the prior clearance requirement. Such projects were allowed six months to disclose violations, undergo environmental appraisal, pay compensation, undertake remediation measures and seek environmental clearance.The controversy arose after the Ministry of Environment, Forest and Climate Change issued a 2021 Office Memorandum laying down a Standard Operating Procedure that effectively converted this one-time exercise into a continuing mechanism. Unlike the 2017 notification, the OM prescribed no cut-off date, enabling projects commencing without prior clearance to routinely seek retrospective approval. It was this perpetual regime that became the centrepiece of litigation.Which projects benefited from retrospective clearances?The regime extended across sectors requiring environmental clearance, including highways, airports, mining, ports, industrial plants and large real-estate developments.During the review proceedings in Supreme Court in 2025, the Union government argued that striking down the regime would affect public projects worth nearly ₹20,000 crore. These included a 962-bed AIIMS hospital in Odisha, a greenfield airport at Vijayanagar in Karnataka, common effluent treatment plants, Steel Authority of India projects and other public infrastructure that were otherwise environmentally permissible but lacked prior clearance. The Court repeatedly cited these projects to illustrate the practical consequences of an absolute prohibition on post facto approvals.When did the Supreme Court step in?The principal challenge for the OM came from environmental groups, led by Vanashakti, who challenged the 2017 notification and the subsequent OM in the Supreme Court in 2023. They argued that retrospective clearances fundamentally undermine the precautionary principle that lies at the heart of India’s environmental jurisprudence.In January 2024, a two-judge Bench headed by Justice A.S. Oka stayed the 2021 OM and subsequently, in May 2025, struck it down along with the 2017 notification. It held that retrospective clearances violated Articles 14 and 21 and rewarded deliberate illegality.However, in November 2025, a three-judge Bench hearing review petitions recalled that judgment by a 2:1 majority. The majority held that the earlier Bench had overlooked parts of previous Supreme Court judgments where the Court had allowed projects to continue after imposing compensation and safeguards instead of ordering demolition. It also noted that several completed public projects would otherwise face closure or demolition, potentially causing greater environmental and economic harm than allowing them to continue with stringent conditions.Justice Ujjal Bhuyan dissented sharply, warning that the Court was retreating from the precautionary principle and weakening decades of environmental jurisprudence.Subsequently in February this year, a three-judge Bench headed by CJI Surya Kant began a detailed hearing on appeals concerning ex post facto environmental clearance of construction and public projects across the country.What does the latest verdict say?The July 30 Supreme Court judgment authored by Justice Bagchi addressed the legal challenge raised in the petitions - whether retrospective clearances of projects commenced or completed in breach of prior environmental clearance was violative of the Environment (Protection) Act of 1986 and the 2006 notification.The court said the prior EC regime was mandatory in nature. The 2006 notification’s mandate could have only been amended through a subsequent and appropriate amnesty notification for select, deserving projects to serve a greater public purpose. The judgment found that the 2021 OM, as a perpetual amnesty scheme, had indiscriminately allowed every permissible industry to be regularised for a meagre compensation. It had yielded to a principle of ‘pollute and then pay’, rather than to sustainable development.The decriminalisation of the offence of breaching the prior clearance regime through the Jan Vishwas (Amendment of Provisions) Act of 2023 did not help matters either. A lax implementation of the prior EC regime was coupled with a regularisation scheme unlimited in time and subject to capped environmental compensation at a “flea-bite level”. The court pointed to instances in which the government itself had broken the prior EC regime. It directed that future amnesty schemes should provide effective deterrent measures against individual public servants who violate the prior EC regime.It held that the Centre has the power to issue narrowly tailored amnesty notifications allowing retrospective clearances justified by public interest, and not private gain. The Bench upheld the 2017 notification as a valid, one-time, time-bound amnesty measure for projects in violation as of its date, subject to strict conditions and central appraisal. It struck down the 2021 OM as an invalid administrative order which could not override the prior EC regime. The court said the OM had failed both the tests of proportionality and reasonable classification under Articles 14 and 21.Has India’s environmental clearance system been able to stop violations at the outset?Not consistently. India’s environmental governance architecture contains multiple layers of oversight - State Environment Impact Assessment Authorities (SEIAAs), Expert Appraisal Committees, State Pollution Control Boards, district administrations, environmental regulators, and judicial forums such as the National Green Tribunal. In theory, these institutions should ensure that projects requiring prior environmental clearance are identified before construction begins.In practice, however, many violations come to light only after projects have substantially progressed or become operational. The very existence of successive amnesty schemes since 2017 reflects this regulatory gap. By the time the Supreme Court considered the present challenge, projects awaiting retrospective clearance included hospitals, airports, steel plants, common effluent treatment plants and large real-estate developments involving investments of nearly ₹20,000 crore. Earlier Supreme Court cases, including Electrosteel, Pahwa Plastics and D. Swamy, similarly concerned projects that had already been completed or were in operation before their lack of prior environmental clearance came under judicial scrutiny.This regulatory lag creates a difficult policy dilemma. Once a project has generated employment, attracted ancillary industries, become integrated into public infrastructure or evolved into an essential public facility, ordering its demolition may itself impose significant environmental and social costs. Demolition generates vast quantities of construction debris, requires fresh extraction of raw materials for rebuilding and may interrupt essential services such as hospitals, airports or pollution-treatment facilities.It is this reality that underlies the Supreme Court’s gradual shift from an absolutist approach towards one rooted in proportionality. The latest judgment can therefore be read as acknowledging not only the legal debate over post facto clearances but also a deeper institutional problem: environmental regulators have often failed to identify and halt violations before projects acquire such economic and social significance that undoing them becomes more damaging than regulating them.What are the consequences of the judgment?ECs already granted under the 2017 Notification and 2021 OM remain valid unless individually challenged. Pending applications under these instruments have to be processed to their logical conclusion. No new applications would be entertained. The court restrained the Centre from issuing future administrative orders for post facto ECs except by valid notification under Section 3 of the 1986 Act. The Supreme Court has retained the power to grant ex post facto EC in appropriate cases under its extraordinary powers to do complete justice under Article 142 of the Constitution.The judgment has reinforced the primacy of the precautionary principle and the need for prior environmental assessment.Does this mean post facto environmental clearance has survived?Not entirely. The Court reaffirms that prior environmental clearance remains the mandatory legal rule. But it simultaneously concludes that the Environment (Protection) Act empowers the Centre to frame a carefully designed statutory notification dealing with violations, provided such a measure satisfies the tests of proportionality, sustainable development and public interest.The distinction is therefore both procedural and substantive. A perpetual retrospective regime created through an Office Memorandum is invalid because an executive order cannot amend delegated legislation. However, a narrowly tailored amnesty notification, issued under statutory powers after following the prescribed rule-making process and justified by exceptional public interest, may survive judicial scrutiny.Can environmental violations really be treated like tax amnesty?Perhaps the most far-reaching aspect of the judgment is its acceptance of the concept of environmental amnesty.The Court reasons that governments occasionally introduce tax or regulatory amnesty schemes to bring violators back within the legal framework without necessarily undoing every past default. It concludes that environmental law may similarly permit limited amnesty measures where demolishing completed projects would produce greater environmental and public harm than regulating them through compensation, remediation and safeguards.Whether the analogy is persuasive is likely to remain contested. Tax defaults primarily involve recovering revenue owed to the State. Environmental violations, by contrast, often involve irreversible ecological damage and the loss of opportunities for public participation and scientific scrutiny before harm occurs. Once forests are cleared, wetlands reclaimed or coastlines altered, no amount of monetary compensation can fully restore the original ecological condition.For that reason, critics argue that environmental regulation differs fundamentally from fiscal law. The precautionary principle seeks to prevent harm before it occurs, whereas amnesty schemes necessarily operate after damage has already taken place. The latest judgment therefore marks an important shift in India’s environmental jurisprudence -f rom one centred almost exclusively on prevention to one that increasingly weighs proportionality, remediation and public consequences alongside strict legal compliance.The court does not see the precautionary principle and the polluter pays principle as antagonists, between which the law must make an absolute and invariable choice. It said the competing imperatives of environment protection and sustainable development would be balanced better if the ‘amnesty’ regime was guided by supervening public interest, such as the protection of homebuyers or workmen or the benefit of the environment itself, and in each it was hedged with deterrent damages, refusal of the offending portion or supervised remediation.It is in this spirit of reconciliation that the court has set aside the 2021 OM with prospective effect, so that the judgment did not affect ongoing public interest projects like the AIIMS Medical College and Hospital building in Odisha, the Centre of Excellence for Cancer Diseases in Tamil Nadu, the Vijayanagar airport in Karnataka, medical colleges, slum rehabilitation, and irrigation projects intended for drought-prone areas.