Environmental Clearance Set Aside: Supreme Court Orders Public Hearing for Industrial Expansion

The case of M/s Electrotherm (India) Ltd. v. Patel Vipulkumar Ramjibhai & Others revolved around the issue of whether a large-scale industrial expansion required a fresh public hearing under the Environmental Impact Assessment (EIA) Notification, 2006. The Supreme Court, in its judgment dated August 2, 2016, ruled that an exemption from a public hearing for such an expansion was improper. The Court modified the Gujarat High Court’s ruling by ordering a post-decisional public hearing while allowing the industrial unit to continue operations in the meantime.

Background of the Case

The dispute arose when M/s Electrotherm (India) Ltd., an industrial company, sought to expand its steel plant in Kutch, Gujarat. The company had initially received an Environmental Clearance (EC) in 2008 after conducting a public hearing in 2007. However, in 2010, when it sought clearance for a further expansion, the government granted the approval without requiring another public hearing.

In response, a public interest petition was filed in the Gujarat High Court by Patel Vipulkumar Ramjibhai, challenging the 2010 EC on the ground that the exemption from public consultation violated environmental regulations. The High Court ruled in favor of the petitioner, setting aside the EC and ordering the plant’s operations to stop until fresh clearance was obtained.

Legal Issues

The Supreme Court was required to examine:

• Whether the exemption from public hearing for the 2010 expansion was legally valid under the EIA Notification, 2006.
• Whether the High Court was justified in ordering the complete shutdown of the plant due to this irregularity.

Petitioner’s Arguments (Electrotherm India Ltd.)

The company argued:

• The expansion was within the existing industrial premises and did not require additional land, so another public hearing was unnecessary.
• The Environmental Clearance process was conducted as per law, and the company had complied with all regulatory requirements.
• It had already made substantial investments based on the clearance and shutting down operations would cause significant financial harm.
• The Gujarat Pollution Control Board (GPCB) and the Ministry of Environment and Forests (MoEF) had approved the expansion after due consideration.

Respondent’s Arguments (Public Interest Litigant)

The respondent, representing public interest, countered:

• The expansion increased production capacity significantly, thereby increasing pollution levels.
• The 2007 public hearing was conducted before the expansion was proposed and could not account for new concerns.
• Under the EIA Notification, 2006, a public hearing is a mandatory step in the environmental clearance process.
• The exemption granted was arbitrary and deprived local communities of their right to participate in decisions affecting their environment.

Supreme Court’s Observations and Ruling

1. Public Hearing is a Mandatory Requirement

The Court ruled:

“Public consultation/public hearing is one of the important stages while considering the matter for grant of Environmental Clearance.”

The Court held that since the expansion significantly increased the plant’s production capacity and pollution load, a fresh public hearing should have been conducted.

2. Procedural Lapse in Granting Environmental Clearance

The Court found that the MoEF’s decision to exempt the expansion from a public hearing was incorrect:

“The decision-making process in doing away with or in granting exemption from public consultation/public hearing was not based on correct principles and as such the decision was invalid and improper.”

3. Modification of High Court’s Order

While upholding the need for a public hearing, the Supreme Court modified the High Court’s order to avoid shutting down the plant:

“At this length of time, when the expansion has already been undertaken, in the peculiar facts of this case and in order to meet the ends of justice, we deem it appropriate to change the nature of requirement of public consultation/public hearing from pre-decisional to post-decisional.”

Final Verdict

The Supreme Court disposed of the appeal with the following directives:

• A post-decisional public hearing must be conducted within three months.
• If the public consultation results in strong objections, authorities should consider scaling down the expansion.
• If the public consultation supports the expansion, the Environmental Clearance granted in 2010 will remain valid.
• The plant could continue operations in the meantime.

Key Takeaways

• The ruling reinforced that public hearings are essential in environmental decision-making.
• The judgment established that procedural lapses in environmental clearance do not always necessitate a shutdown.
• Future projects with significant expansion must undergo fresh public consultation unless explicitly exempted by law.

Impact of the Judgment

The ruling set an important precedent for industries seeking environmental clearance for expansion projects. It reaffirmed that:

• Public participation is a crucial component of the environmental clearance process.
• Government authorities must strictly follow environmental regulations and cannot arbitrarily exempt industries from public hearings.
• Judicial interventions in environmental matters should balance development and environmental sustainability.

In conclusion, the Supreme Court’s decision in M/s Electrotherm (India) Ltd. v. Patel Vipulkumar Ramjibhai & Others upheld environmental accountability while ensuring that industrial operations were not disrupted without due process. This ruling will influence future environmental regulations and public policy on industrial expansion in India.

Don’t miss out on the full details! Download the complete judgment in PDF format below and gain valuable insights instantly!

Download Judgment: Ms Electrotherm (In vs Patel Vipulkumar Ram Supreme Court of India Judgment Dated 02-08-2016-1741878426703.pdf

Direct Downlaod Judgment: Direct downlaod this Judgment

See all petitions in Environmental Cases
See all petitions in Judgment by T.S. Thakur
See all petitions in Judgment by R. Banumathi
See all petitions in Judgment by Uday Umesh Lalit
See all petitions in partially allowed
See all petitions in Modified
See all petitions in supreme court of India judgments August 2016
See all petitions in 2016 judgments

See all posts in Environmental Cases Category
See all allowed petitions in Environmental Cases Category
See all Dismissed petitions in Environmental Cases Category
See all partially allowed petitions in Environmental Cases Category