Supreme Court Recalls Judgment Striking Down Ex-Post Facto EC; Holds 2017 Notification and 2021 OM Valid Under EP Act

Case Name: Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Another (Review Petition in WP (C) No. 1394/2023)
Citation: 2025 INSC 1326
Date of Judgment/Order: 18 November 2025
Bench: B.R. Gavai, CJI, and accompanying Judges (Inherent/Original Jurisdiction)

Held: The Supreme Court held that its earlier judgment dated 16 May 2025 (referred to as JUR), which had struck down the 2017 Notification and the 2021 Office Memorandum permitting ex post facto Environmental Clearances (ECs), suffered from errors apparent on the face of the record. The Court held that crucial binding precedents—including Electrosteel Steels, D. Swamy, and Pahwa Plastics—were not placed before the Bench deciding JUR. These precedents expressly recognise that the Environment (Protection) Act, 1986 does not prohibit ex post facto ECs and permit such clearances in exceptional circumstances based on proportionality, sustainability, and the polluter-pays principle. Consequently, the Court recalled the earlier judgment in its entirety, holding that the 2017 Notification and 2021 OM are valid statutory instruments issued under Sections 3(1), 3(2)(v) of the EP Act read with Rule 5(3)(d) of the EP Rules.

Summary: The review petition arose after the Supreme Court’s May 2025 judgment (JUR) declared the 2017 Notification and 2021 OM illegal and struck them down, thereby jeopardizing several ongoing national projects—including public infrastructure, hospitals, and industrial plants—that had relied on these instruments for regularizing technical EC violations. CREDAI, the Union of India, and various States contended that the JUR Bench was not shown binding precedents which specifically upheld the permissibility of ex post facto ECs, including Electrosteel Steels, D. Swamy, and Pahwa Plastics. These judgments held that although prior EC is mandatory, ex post facto clearance is legally permissible in exceptional cases, particularly when denial would cause significant economic harm, loss of livelihood, or unjustified demolition of completed or nearly completed projects, provided environmental compliance is achievable. The Court analyzed the evolution of environmental jurisprudence from Common Cause and Alembic Pharmaceuticals to later decisions, observing that the JUR order misapplied earlier case law and overlooked statutory powers under the EP Act to amend or issue notifications. It emphasized judicial discipline and the obligation of Benches to follow coordinate Bench decisions unless referred to a larger Bench.

Decision: The Supreme Court allowed the review petition and recalled the judgment dated 16 May 2025 in its entirety. It restored the validity of the 2017 Notification and the 2021 Office Memorandum, reaffirming that both instruments constitute valid exercises of statutory power under the Environment (Protection) Act, 1986. The Court held that ex post facto Environmental Clearances may be granted in exceptional circumstances subject to strict compliance with environmental norms, the principles of proportionality, sustainable development, and polluter-pays. All consequences flowing from the earlier struck-down judgment were nullified, and connected applications—including those seeking modification and clarification—were ordered to be considered afresh in light of the restored legal position.