Prior Clearance Endures, Amnesty Narrows: The Supreme Court’s Verdict In Vanashakti v. Union Of India

Introduction

The Supreme Court’s judgment dated 29 July 2026 in Vanashakti v. Union of India settles when, and on what terms, a project that began without the required prior environmental clearance (“prior EC”) can be regularized. The Court holds that prior EC remains mandatory, upholds the narrow and time-bound 2017 Notification as a valid one-time amnesty, strikes down the open-ended 2021 Office Memorandum (“2021 OM”), and protects completed projects and parties who relied on either instrument in good faith.

The Court frames this balance as “eco-centric proportionality,” weighing environmental protection against development on a case-by-case basis. For real estate and infrastructure developers, the ruling is directly consequential: it fixes which past regularizations remain safe, closes the door on further ad hoc amnesty schemes, and confirms that any future regularization must come through a properly notified law with robust safeguards.

Background to the Dispute and Procedural History

The dispute concerns two instruments issued by the Ministry of Environment, Forest and Climate Change (“MoEFCC”) under the Environment (Protection) Act, 1986 (“EP Act”), permitting¹ ex post facto environmental clearances without the prior EC required under the Environmental Impact Assessment Notification, 2006 (“EIA Notification, 2006”): the 2017 Notification, a one-time measure upheld by the Madras High Court and extended to 13 April 2018, and the 2021 OM, issued under the National Green Tribunal’s (“NGT”) direction in Tanaji B. Gambhire. Three writ petitions challenging both instruments were combined with appeals from the Madras High Court’s 30 August 2024 judgment in Fatima v. Union of India, which prospectively quashed the 2021 OM. A two-judge Bench stayed the 2021 OM on 2 January 2024 and, in Vanashakti-I (16 May 2025), struck down both instruments as “alien” to environmental jurisprudence. On a review petition filed by the Confederation of Real Estate Developers’ Associations of India (“CREDAI”), a three-judge Bench recalled Vanashakti-I by a 2:1 majority on 18 November 2025, finding it had overlooked relief granted in Common Cause, Alembic, and Electrosteel and was per incuriam (decided without regard to binding precedent) for ignoring coordinate Bench decisions in Pahwa Plastics and D. Swamy. The MoEFCC directed that pending applications proceed subject to the outcome, and the Bench confined the review’s ratio to those two grounds before examining their validity.

Six Issues Framed by the Court

In examining the substantive validity of both instruments, the Court framed six questions for determination:

1. whether the EP Act, read with the EIA Notification, 2006, mandates prior EC, and what follows in law from commencing a project without it;
2. whether Common Cause and Alembic conflict with, or can be reconciled with, Electrosteel, Pahwa Plastics, and D. Swamy;
3. whether the 2017 Notification is a valid exercise of delegated legislative power under the EP Act;
4. whether the 2021 OM, issued pursuant to the NGT’s direction in Tanaji B. Gambhire, is² ultra vires the EP Act and the EIA Notification, 2006;
5. whether the Madras High Court was justified in prospectively quashing the 2021 OM and the OM dated 19 February 2021 in Fatima v. Union of India; and
6. what is the status of ECs granted, and applications still pending, under both instruments.

Parties’ Contentions

The petitioners contended that the EIA Notification, 2006 mandates prior EC before a project commences, embodying the precautionary principle recognized in Vellore Citizens’ Welfare Forum v. Union of India. They argued that Common Cause and Alembic hold ex post facto EC “anathema” to environmental jurisprudence, with Electrosteel, Pahwa Plastics, and D. Swamy confined to their exceptional facts under Article 142. They further noted that the 2017 Notification’s window, extended only once to 13 April 2018, had long closed. Finally, they argued that the 2021 OM created a parallel framework encouraging a “violate first, regularise later” approach, placing non-compliant proponents on the same footing as compliant ones and violating Articles 14 and 21.

The respondents — the Union of India, the States of Telangana and Tamil Nadu, and various project proponents — countered that the “alien” language in Common Cause was context-specific and did not preclude ex post facto EC subject to stringent safeguards. They argued that the 2017 Notification validly exercised the Central Government’s Section 3 powers, and that the 2021 OM implemented the NGT’s direction in Tanaji B. Gambhire as a graded regulatory response that supplemented, rather than diluted, prior EC. That response provided for suspension of prohibited activities, prosecution and penalties, damage remediation on the polluter pays principle, and consideration only of projects meeting sustainable development requirements.

Court’s Core Reasoning and Reconciliation of Precedent

The Court then addressed each of the six issues, considering in turn whether prior clearance is mandatory, what scope exists for regularization, and how the competing precedents can be reconciled.

1. Prior EC Is Mandatory
   The Court first reaffirmed that prior EC under the EIA Notification, 2006 is mandatory, applying the precautionary “look before you leap” principle underlying Common Cause and Alembic. Relying on Asha John Divianathan v. Vikram Malhotra, it held that a project undertaken without prior EC is³ void ab initio, requiring restoration of the status quo ante (the pre-project position), potentially through demolition or closure.
2. Power to Provide Limited Regularization
   Section 3 of the EP Act, particularly the words “control” and “abate,” authorizes the Central Government to carve out narrow exceptions through delegated legislation (Corpn. of City of Nagpur v. Ramchandra; Indian Council for Enviro-Legal Action v. Union of India). Any such mechanism must be exceptional, time-bound, and justified by genuine supervening public interest. Environmental permissibility or willingness to pay compensation alone will not suffice. The mechanism must also satisfy both Article 14’s reasonable classification test and the⁴ doctrine of proportionality.
3. Reconciling the Precedents
   The Court found no irreconcilable conflict among Lafarge, Common Cause, Alembic, Electrosteel, Pahwa Plastics, and D. Swamy. Common Cause and Alembic declare the norm that prior clearance is mandatory; Lafarge, Electrosteel, Pahwa Plastics, and D. Swamy address the consequences of breach. Electrosteel’s broader holding that the EP Act does not prohibit ex post facto clearance is incorrect and should not be followed, and Pahwa Plastics and D. Swamy were overruled to the extent they upheld the 2021 OM’s validity.
4. Validity of the 2017 Notification
   Applying this reconciled framework, the Court upheld the 2017 Notification as a valid, narrowly tailored, and time-bound exercise of delegated legislative power under Section 3 of the EP Act (read with Section 21 of the General Clauses Act, 1897), citing the following safeguards:
   1. no cap on environmental damage compensation;
   2. mandatory central-level processing for all projects;
   3. evaluation by sectoral Expert Appraisal Committees, even for Category B projects;
   4. damage assessment by accredited laboratories;
   5. closed eligibility: confined to violations existing as of the notification date; and
   6. closed six-month application window (extended to 13 April 2018).
   These features satisfy the Article 14 reasonable classification test and the Court’s proportionality analysis. The Court also rejected the non-regression challenge, holding that the principle, though a persuasive norm of international principles, is not binding domestic law and cannot override validly enacted delegated legislation with rigorous statutory safeguards.

Invalidity of the 2021 OM and Its Prospective Quashing

Having sustained the 2017 Notification, the Court next addressed the 2021 OM, examining whether that instrument could withstand the same statutory and constitutional scrutiny.

1. 2021 OM Is Ultra Vires
   The 2021 OM was inconsistent with the statutory framework and ultra vires the EP Act for the following reasons:
   1. An administrative instruction (which is what an Office Memorandum is) cannot amend or supplant a statutory notification such as the EIA Notification, 2006;
   2. It used “permissibility of the project” as the sole differentia (classifying criterion), without tying eligibility to any supervening public interest, thereby equating compliant and non-compliant projects in violation of Article 14;
   3. It lacked any cut-off date or defined class of eligible projects, and provided only for capped environmental compensation;
   4. It could not derive validity from the NGT’s Tanaji B. Gambhire direction, which only authorized a standard operating procedure within the existing regime, not an open-ended regularization mechanism; and
   5. It violated Articles 14 and 21 of the Constitution.
2. Jan Vishwas Act, 2023 Does Not Cure the Infirmity
   The Jan Vishwas (Amendment of Provisions) Act, 2023 substituted civil penalties for criminal prosecution. It does not, however, dilute the mandatory nature of prior EC or cure the 2021 OM’s infirmity. Where the State itself is the violator, Section 15B fixes accountability on the Head of Department. The Court also directed that future amnesty schemes incorporate individual accountability for the public servants responsible.
3. Prospective Quashing Under Article 142
   Notwithstanding its invalidity, the Court quashed the 2021 OM prospectively under Article 142 to do complete justice, leaving past actions undisturbed, for two reasons. First, shifting legal positions — the interim stay of 2 January 2024, Vanashakti-I, the review order recalling it, and MoEFCC’s OM of 20 January 2026 — had created genuine uncertainty on which applicants and authorities had reasonably relied. Second, significant public interest in projects already completed or substantially progressed, including AIIMS Medical College and Hospital (Odisha), the Centre of Excellence for Cancer Diseases (Tamil Nadu), and Vijayapura Airport (Karnataka), justified prospective application.

Court’s Operative Directions

The operative directions of the judgment reflect this nuanced approach:

1. ECs granted under the 2017 Notification and the 2021 OM remain valid unless independently challenged on merits;
2. all pending applications under these instruments are to be taken to their logical conclusion in accordance with law;
3. applications that were dismissed or returned solely because of the interim stay order or the Vanashakti-I decision may be reconsidered;
4. no fresh applications under either instrument will be entertained going forward;
5. the Central Government is restrained from issuing future administrative orders (as opposed to valid Section 3 notifications) granting ex post facto clearance; and
6. the Court’s residual power under Article 142 to grant ex post facto clearance in exceptional cases for complete justice is expressly preserved.

The Court disposed of the writ petitions and connected appeals, including those arising from Fatima v. Union of India, and directed that one related matter be delinked and listed separately in view of its distinct factual background.

Broader Doctrinal Contribution: Proportionality as the Organizing Principle

The Court framed its holding within a broader pattern of cases that show how courts have crafted remedies once a breach has already occurred:

1. Lafarge Umiam Mining (2011) introduced the “doctrine of proportionality” with a “margin of appreciation” for the decision-maker (latitude allowed once a fair process is followed), allowing mining to continue conditions including a Rs. 55 crore deposit.
2. In Municipal Corporation of Greater Mumbai v. Pankaj Babulal Kotecha, the Court refused restoration of Khajuria Lake, converted into a park, as more ecologically harmful than beneficial.
3. In Bindu Kapurea v. Subhashish Panda, the Court refused demolition of completed, irreversible hospital approach roads, directing compensatory afforestation over 185 acres instead.
4. In Goel Ganga Developers India v. Union of India, the Court declined to demolish excess construction to protect innocent homebuyers, imposing damages of Rs. 100 crore or 10% of project cost, whichever is higher.
5. In Keystone Realtors v. Anil V. Tharthare, the Court left an expanded residential project undone, directing a Rs. 1 crore deposit and expert committee oversight.

The common principle is that indulgence for completed or substantially progressed works is granted only where genuine supervening public interest exists, and is always coupled with deterrent compensation, refusal of the offending portion, or supervised remediation. This reflects not indulgence to the wrongdoer, but a reconciliation of enforcement with demonstrable public interest.

Practical Implications

The judgment carries the following practical consequences for stakeholders in environmental clearance and regularization matters.

For the Real Estate and Infrastructure Sectors

Applying the Court’s proportionality analysis and its prospective quashing of the 2021 OM, the judgment provides greater certainty for the development sector. Projects that obtained clearances under the 2017 Notification or the 2021 OM need not fear retrospective invalidation despite the litigation history, and the prospective quashing of the 2021 OM protects completed public infrastructure from being unwound. Pending applications will proceed to conclusion rather than remain in administrative limbo, giving proponents finality.

For Environmental Governance

For environmental regulators, the judgment narrows the pathway for future regularization and overrules Electrosteel’s more permissive view that the EP Act does not prohibit ex post facto clearance. Any future regularization mechanism must take the form of a properly notified law, not an internal administrative order, incorporating safeguards such as closed eligibility, closed application windows, full damage assessment, and no cap on compensation. It also adds a new deterrence mechanism by holding public servants personally accountable when the State is responsible for a violation.

For Administrative Law and Future Disputes

For administrative lawyers and future litigants, the Court’s treatment of the 2021 OM as an invalid administrative instrument, together with its proportionality framework, supplies concrete guidance for future regularization disputes. The decision confirms that an Office Memorandum cannot override a statutory notification. At the same time, the Central Government retains Section 3 competence to design tailored, proportionate solutions. The resulting template is straightforward: the norm is prior clearance, and a breach ordinarily requires restoring the pre-project position through demolition or closure. But where genuine public interest and irreversibility are shown, proportionate compensatory remedies with accountability may substitute, provided the mechanism carries statutory authority and rigorous safeguards.

Conclusion

In sum, the Supreme Court’s decision to uphold the closely circumscribed 2017 Notification while striking down the open-ended 2021 OM confirms that regularization is available only through a duly notified measure, not administrative order. For real estate and infrastructure developers, the judgment converts years of litigation uncertainty into a clear compliance roadmap: clearances already granted survive, pending applications proceed, and no further ad hoc amnesty windows will open.

Footnotes

1. after-the-fact

2. beyond the legal authority of

3. invalid from the outset , as though it never existed

4. formal rules issued under statutory authority, as distinct from internal administrative instructions

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