Supreme Court recalls May 16 order on ex‑post facto environmental clearances; restores petitions for fresh hearing

A three‑Judge Bench of the Supreme Court comprising Chief Justice B.R. Gavai and Justices Ujjal Bhuyan and K. Vinod Chandran heard a review petition by the Confederation of Real Estate Developers of India (CREDAI) challenging this Court’s May 16, 2025 judgment (the “JUR”) in Vanashakti v. Union of India, which had quashed the 2017 notification and the 2021 Office Memorandum permitting certain ex‑post facto environmental clearances (ECs). The Bench examined whether the earlier two‑Judge decision correctly interpreted precedents and statutory provisions governing ECs under the Environment (Protection) Act, 1986.

Decision Summary The Court, by a majority, allowed the review petition, recalled the May 16, 2025 order and restored the writ petitions and the related civil appeal to the file for fresh consideration. The majority held that the JUR had not adverted to or had misread key precedents and certain paragraphs in earlier decisions which bore directly on the permissibility and limits of ex‑post facto ECs, and that some conclusions in JUR were therefore per incuriam. The Court noted that several projects — including public hospitals, airports and effluent treatment plants — which had progressed under the administrative framework then in place would suffer severe public loss if demolition were mandated without a fresh, balanced adjudication.

The Court, in its reasoning, observed:

The majority further recorded that the JUR had relied on passages in Common Cause and Alembic but had not considered later relevant passages of those and other decisions — including those in Electrosteel, D. Swamy and Pahwa Plastics — which addressed when, if ever, ex‑post facto ECs might be considered in exceptional circumstances. The order recalled the earlier judgment and directed the Registry to place the matter before the Chief Justice on the administrative side for further orders; the Court expressly left the substantive issues open for fresh adjudication.

Background The controversy arose from the EIA regime framed under the Environment (Protection) Act and successive notifications beginning with the EIA Notification, 1994 and replaced by the EIA Notification, 2006 which required prior EC for listed projects. In March 2017 the Ministry of Environment, Forest & Climate Change issued a notification (S.O. 804(E)) creating a process to consider projects that had already started without prior EC; a later Office Memorandum dated July 7, 2021 set out a Standard Operating Procedure for handling such “violation” cases. Several public interest petitions challenged the legality of ex‑post facto clearances; in the May 16, 2025 judgment this Court held the 2017 notification and the 2021 OM illegal and struck them down while protecting ECs already granted. CREDAI and other applicants sought review, contending that relevant paragraphs and precedents were not placed before the earlier Bench and that the JUR’s interpretation of Section 15 and the effect on ongoing public projects caused grave consequences. The Court heard extensive submissions from the Solicitor General and senior counsel for States, industry and public interest intervenors; counsel appearing on both sides urged either recall or dismissal of the review. The majority allowed the review petition and recalled the May 16 order; a separate Bench judgment recorded the reasons of a dissenting Judge who would have dismissed the review.

Case Details: Case No.: Review Petition (C) Diary No. 41929 of 2025 in Writ Petition (C) No. 1394 of 2023 Case Title: Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Another Appearances: For the Petitioner(s): Shri Mukul Rohatgi, Senior Advocate (for CREDAI); Shri Kapil Sibal, Senior Advocate (for State of Karnataka); Shri Tushar Mehta, Solicitor General of India (appearing for intervenors/applicants) For the Respondent(s): Shri Gopal Sankaranarayanan, Senior Advocate; Shri Sanjay Parikh, Senior Advocate; Shri Raju Ramachandran, Senior Advocate; Shri Anand Grover, Senior Advocate; Ms. Anitha Shenoy, Senior Advocate (appearing for respondents/opponents)

(The Court ordered restoration of the matters for fresh consideration; no substantive directions were issued in the review order beyond recalling the earlier judgment and placing the matters for administrative listing.)