New Delhi, Nov 18 (PTI) The Supreme Court, in a 2:1 majority decision on Tuesday, recalled its May 16 judgment against retrospective environmental clearances, paving the way for the grant of such approvals by the Centre and other authorities to projects found violating environmental norms on payment of heavy penalties.

Numerous vital public projects will be stalled or demolished and thousands of crores of rupees would go to waste if the May 16 verdict, which barred the Centre from granting retrospective environmental clearances (ECs) to projects, is not recalled, Chief Justice of India (CJI) B R Gavai and Justice K Vinod Chandran said in two separate and concurring judgments.

The majority verdicts effectively revive, for now, the controversial 2017 notification and a 2021 Office Memorandum (OM) that created a pathway for projects that had started construction without a mandatory prior ECs to regularise their operations by paying penalties.

“If the JUR (judgement under review) is not recalled, it will result in demolition of various buildings/projects constructed out of the public exchequer to the tune of nearly Rs. 20,000 crore. I may give only three instances of the same,” the CJI said.

Justice Ujjal Bhuyan, who was part of the May 16 verdict penned by Justice A S Oka, since retired, wrote a strong dissent and said that post-facto grant of ECs is unknown and "anathema" to environmental law as they are contrary to both the precautionary principle as well as the need for sustainable development.

Writing the 84-page judgement, the CJI ordered, “The judgment and order dated May 16, 2025 (Judgement under review) is recalled. The writ petitions and the appeal are restored to file.” Justice Gavai directed the registry to place the matter before the CJI on the administrative side for necessary orders to ensure a fresh hearing on pleas against the Centre's notifications and office memorandum.

His verdict held that the judgment under review was passed without considering key legal precedents and would lead to "devastating effects," including the demolition of vital public projects worth nearly Rs 20,000 crore.

Referring to judgements, the CJI said, “It is thus clear that though this court held that ex-post facto EC should not ordinarily be granted, but in exceptional circumstances they can be granted.

"It was held that where the adverse consequences of denial of ex-post facto approval outweigh the consequences of regularisation of operations by grant of ex-post facto approval, and the establishment concerned otherwise conforms to the requisite pollution norms, ex-post facto approval should be granted. ” The CJI based his decision on two primary grounds that there was a grave error in judicial discipline and the catastrophic impact on public interest.

He said earlier judgment was rendered per incuriam, as it had failed to consider at least three binding precedents from benches of the same strength in other cases.

"It is trite law that a Bench of two judges is bound by an earlier view taken by the other two-judge Benches," he said.

His judgment referred to severe consequences and said if it is not recalled, then numerous projects, undertaken by the central and state PSUs will be stalled and demolished.

The projects include an AIIMS in Odisha, a greenfield airport in Vijayanagar, Karnataka, and several common effluent treatment plants crucial for pollution control.

"I, therefore, ask a question to myself as to whether it would be in the public interest to demolish all such projects and permit the money spent from the pocket of the public exchequer to go in the dustbin?" the CJI asked.

He warned that a rigid approach of "demolition and reconstruction" would not only be a colossal waste of public funds but would also be "counter-productive to the public interest" by generating more pollution from the demolition and rebuilding process.

Justice Chandran, concurring, added that the failure of the previous bench to even notice these crucial judgments was in itself a valid ground for review. He found it "imperative and expedient" to allow the review.

Referring to judgments, he said the top court had adopted a balanced approach by holding the industries to account for having operated without ECs in the past but without ordering a closure of operations.

Ex-post facto EC should not ordinarily be granted, and certainly not for the asking at the same time, it said, adding the EC cannot be declined with “pedantic rigidity, oblivious of the consequences of stopping the operation of a running steel plant”.

It referred to details of projects of the Centre and states affected by the May 16 judgement.

“At the central government level, 24 projects involving the expenditure to the tune of Rs 8,293 crore are pending. At the state level, 29 projects worth Rs 11,168 crore are pending,” it said, adding some are concerning the construction of hospitals, medical colleges, airports and some are with regard to common effluent treatment plants. PTI SJK RT RT