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Issues: (i) Whether the Tribunal's award on the height of the dam and related matters was binding and could not be re-opened in proceedings by a third party, (ii) whether the environmental clearance granted for the project was valid in the absence of complete data and assessment, (iii) whether the project could continue only if environmental safeguards and relief and rehabilitation measures were monitored pari passu with construction, and (iv) whether the petition was barred by delay and laches.
Issue (i): Whether the Tribunal's award on the height of the dam and related matters was binding and could not be re-opened in proceedings by a third party.
Analysis: The award under the Inter-State Water Disputes Act was final and binding on the States once published in the Official Gazette. The issues determined by the Tribunal, including the dam height and the rehabilitation framework, could not be collaterally challenged by a third party in writ proceedings. The Court treated the award as conclusive on the inter-State water dispute and declined to re-examine the merits of the Tribunal's determinations.
Conclusion: The Tribunal's award bound the States, and its settled issues were not open to reconsideration in this petition.
Issue (ii): Whether the environmental clearance granted for the project was valid in the absence of complete data and assessment.
Analysis: The majority held that, although environmental appraisal had begun before clearance, the project could not be treated as finally cleared on the basis of incomplete information alone. The Court emphasised that environmental impact assessment had to be carried out by the competent expert body under the 1994 notification, with power to gather further data and determine the needed safeguards. The prior clearance was not treated as a basis to halt the project permanently, but as requiring expert reassessment and continuing scrutiny.
Conclusion: The project required fresh expert assessment of environmental impact before further construction beyond the permitted stage.
Issue (iii): Whether the project could continue only if environmental safeguards and relief and rehabilitation measures were monitored pari passu with construction.
Analysis: The Court accepted that the project could proceed only with strict monitoring of environmental safeguards and rehabilitation. It directed the Narmada Control Authority, the Environment Sub-group, and the Grievance Redressal Authorities to oversee implementation stage-wise, with further raising of dam height contingent on clearances from the rehabilitation and environmental mechanisms. The Court treated relief and rehabilitation as integral to the lawful execution of the project and required each successive stage to be preceded by satisfactory compliance.
Conclusion: Further construction was permitted only subject to pari passu compliance with environmental protection and relief and rehabilitation requirements.
Issue (iv): Whether the petition was barred by delay and laches.
Analysis: The Court held that the petition was belated so far as broader challenges to policy, hydrology, and the award were concerned, but delay did not justify denying relief where public interest and fundamental rights under Article 21 were implicated, particularly on the rehabilitation side. The petition was therefore entertained to secure lawful implementation rather than to reopen the project policy itself.
Conclusion: The petition was not rejected on laches, though stale challenges to the project policy were not entertained.
Final Conclusion: The project was allowed to proceed, but only under continuing judicially mandated supervision of environmental assessment, relief and rehabilitation, and grievance redressal machinery, with construction beyond the immediate stage made conditional on compliance.
Ratio Decidendi: In a major inter-State infrastructure project, the Court will not reopen a binding tribunal award or substitute its own policy view, but it may require strict pari passu compliance with environmental safeguards and rehabilitation measures before permitting further construction.
Dissenting Opinion: Bharucha, J. took the view that the environmental clearance was granted without the requisite data and that an expert committee should first reassess environmental impact before further construction.
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