Abstract
India’s Environmental Impact Assessment Notification, 2006 mandates prior environmental clearance as a non-negotiable precondition for project commencement. The Ministry of Environment, Forest and Climate Change’s (MoEFCC) 2017 Gazette Notification and 2021 Office Memoranda (OM) provided systematic mechanisms for ex post facto clearances, leading to mass violations. The Supreme Court’s May 2025 judgment in Vanashakti v Union of India (2025 INSC 718) rendered these instruments unconstitutional, ruling out ex post facto clearance as an illegitimate lack of environmental protection. Subsequently, in CREDAI v Vanashakti (2025 INSC 1326) six months later, a 2:1 majority recalled this decision under pressure from the real estate lobby and the Government of India, replacing demolition with fines. This article argues that the line of thought used by the majority in CREDAI indicates that mere compliance with the legislation can be waived due to economic considerations through the application of the Polluter Pays principle, resulting in the loss of rights for communities that had not been consulted. The case now awaits definitive adjudication by a larger bench, which elevates its constitutional importance.
Introduction
The EIA, 2006, issued in accordance with Section 3 of the Environment Protection Act, 1986, lays down a robust framework of mandatory procedures; no project listed in the Schedule may commence without obtaining prior environmental clearance from the competent authority. The term ‘prior’ is not used without reason, as the overall construction of the EIA process provides for screening, scoping, public hearing and evaluation of projects to determine whether such projects can be undertaken while ensuring no irreversible harm to the environment. As long as no work has started, the baseline data on the environment’s status will remain intact, allowing the EIA to be carried out effectively.
This legal position was affirmed by the Supreme Court in Common Cause v Union of India (2017 9 SCC 499) and Alembic Pharmaceuticals v Rohit Prajapati (2020 INSC 326). Although this position has been the law for some time, the 2017 Notification allowed for ex post facto clearance of projects already being implemented, and the 2021 OM extended that time indefinitely through an SOP. The resulting jurisprudential collision and its recall are the subject of this paper.
Part I: What Vanashakti Got Right
In Vanashakti v Union of India (2025 INSC 718), a bench comprising Justices Oka and Bhuyan ruled that the 2017 Notification and the 2021 OM were illegal on three independent grounds.
To begin with, the instruments were inconsistent with the legal requirement. Clause 2 of the EIA Notification is clear about the fact that prior approvals have to be obtained before any construction work, or preparation of land by the project management, except for securing the land, is started on the project or activity. The OM countered this legal requirement by permitting the grant of environmental clearance after construction and operation had started. The Court correctly pointed out that the OM had “cleverly’’ avoided using the phrase “ex post facto” while creating precisely the same effect.
Second, the instruments fundamentally violated Article 21’s guarantee of a pollution-free environment. Issued fifteen years after the EIA Notification, the OM created a retrospective shield for developers who knowingly commenced work without approval. By actively regularising deliberate ecological harm rather than preventing it, the state stripped citizens of their constitutional protection and reduced a fundamental right to a dispensable procedural hurdle.
Third, the public hearing dimension; Section 3(2)(v), EPA 1986 and the EIA Notification together create the public hearing as a mandatory stage at which affected communities formally participate in the clearance decision. Once a project is built, this stage is irretrievably lost. No penalty payment can restore to a community the right to have been consulted before the project began.
The Court’s order at paragraph 36 was accordingly clear: the 2017 Notification and 2021 OM were struck down; the Central Government was restrained from issuing any future instruments providing for ex post facto clearance in any form; and only ECs already granted before the judgment date were saved.
Part II: The CREDAI Recall and Its Doctrinal Cost
In the case CREDAI v Vanashakti (2026 5 SCC 201), a three-judge bench recalled Vanashakti’s decision with a majority decision of 2:1 on 18 November 2025. Chief Justice Gavai stated, for the majority, that Vanashakti has not paid attention to important parts of the decisions of Common Cause, Alembic, and Electrosteel Steels Ltd. v. Union of India (2023 6 SCC 615), and the outcome- the destruction of completed projects worth ₹20,000 crore, is unacceptable. The projects mentioned (AIIMS Odisha, Vijayanagar greenfield airport, common effluent treatment plants, etc.) are public goods.
Yet the reasoning suffers from two structural flaws: First, it conflates public and private infrastructure. While the majority’s concerns centred on public projects, the revived ex post facto clearance regime primarily benefits private real estate developers. CREDAI represents developers, not public infrastructure authorities. By failing to distinguish between the two, the judgment extends the justification for protecting essential public projects to private violators.
Second, it transforms the Polluter Pays principle from a deterrent into a compliance mechanism. Penalties under Section 15, EPA 1986 exist to punish violations, not validate them. Vanashakti correctly held that payment of penalties does not regularise a project. As Justice Bhuyan observed, “The precautionary principle is the cornerstone of environmental jurisprudence. Polluter pays are only a principle of reparation.”
Part III: Justice Bhuyan’s Dissent and the Constitutional Anchor
Justice Bhuyan’s dissenting opinion in the CREDAI case forms the main constitutional work of this paper. The main thesis of his reasoning is structural in its essence: if courts protect completed illegal projects because of the demolition costs involved, this creates a long-run incentive for developers to construct complexes as quickly as they can without going through the entire permission process, knowing that if they commit their capital, it will be otherwise protected by courts. This incentive is not just a side consequence of the majority reasoning; it is the consequence that follows logically.
The dissenting opinion invokes the principle of non-regression as established by the 1992 Rio Declaration and confirmed by the Indian environmental law: environmental law should not be altered to reduce levels of environmental protection. By recalling the judgment in Vanashakti v Union of India (2025 INSC 718) and re-establishing a basis for ex post facto clearances, the majority in this case is actually implementing the regression.
The community rights dimension of the dissent is equally significant. The dissent notes that CREDAI had filed the review petition on behalf of members who had applied under the 2021 OM, applicants who had commenced construction after the window under the 2017 Notification had closed on April 13, 2018. These were not projects caught in procedural ambiguity; they were projects that began in knowing violation of settled law. The communities neighbouring these projects received no public hearing. The majority’s order gives those communities no remedy.
The Stakes for the Larger Bench
The matter now stands referred to a larger bench after the CJI directed its placement on the administrative side. Three issues require resolution.
First, the Vanashakti bench refused to follow Electrosteel Steels Ltd. v. Union of India (2023 6 SCC 615), Pahwa Plastics Pvt. Ltd. and Ors. vs. Dastak NGO and Ors. (2023 12 SCC 774), & D. Swamy v. Karnataka State Pollution Control Board (2023 20 SCC 469) , as these smaller-bench decisions had failed to implement the binding principles of Common Cause and Alembic. Nonetheless, the majority in CREDAI found that Vanashakti itself was per incuriam as it disregarded the decisions of these cases. The resolution of this issue will clarify whether ex post facto environmental clearances are to be governed by the precautionary principle or the balancing approach;
Second, the public-private distinction. If CREDAI is upheld without qualification, the EIA Notification, 2006, would be rendered optional for financially secured private projects. A balanced interpretation would allow some exceptions for completed public infrastructure, as demolishing such infrastructure might cause more harm than good, while denying the same benefit to private commercial developments.
Third, the community remedy question. Regardless of the validity of ex post facto clearances, the Court must address the loss of public participation. Penalties routed to the Central Pollution Control Board or general environmental funds do not compensate affected communities. At a minimum, any regularisation framework should require community-directed remediation, independent environmental monitoring, and statutory community representation.
Conclusion
Vanashakti represented the culmination of three decades of Indian environmental jurisprudence, affirming that the idea of clearance is not just a mere formality but a substantive constitutional protection. CREDAI recalled that judgment within six months, owing to economic pressure from the construction sector coupled with legitimate but poorly bounded concern about public infrastructure. The result is a live constitutional question about whether Article 21 means what it says when compliance is expensive enough.
The larger bench’s answer will not merely resolve a conflict between two judgments. It will determine whether the EIA Notification’s public hearing, the only formal mechanism through which affected communities participate in decisions about their environment, could be permanently lost merely because a developer moved fast enough. That is not a technical question grounded in environmental law, but rather a question about who the Constitution protects.
Author Bio
Ansh Goel is a II year Law student at O.P. Jindal Global University and a columnist at Nickeled & Dimed. His research interests span across environmental law, the regulation of artificial intelligence, and intellectual property rights.
Image Source : https://www.theguardian.com/environment/gallery/2024/jul/26/roots-and-refuge-the-years-best-mangrove-images-in-pictures