Supreme Court settles that EIA “General Conditions” do not apply to Building and Township Projects; SEIAA remains the appraising authority; exemption for industrial/educational buildings struck down

Introduction

In Confederation of Real Estate Developers Association of India (CREDAI) v. Union of India (2025 INSC 1112), the Supreme Court of India considered appeals under Section 22 of the National Green Tribunal Act, 2010 challenging an order of the National Green Tribunal (NGT) that had mandated central-level appraisal for building and construction projects falling within proximity to protected, eco-sensitive and critically polluted areas by applying the “General Conditions” (GC) of the 14.09.2006 Environmental Impact Assessment Notification (EIA 2006).

The appellants—CREDAI, Godrej Properties Ltd., and Sai Sahara Developers Ltd.—argued that items 8(a) (Building and Construction Projects) and 8(b) (Township and Area Development Projects) under the EIA 2006 Schedule were never subject to the GC and must be appraised at the State level by SEIAA/SEAC. The Union of India broadly aligned with this position, emphasizing decentralization and the statutory competence of State-level bodies. Environmental NGO Respondent No. 3 defended the NGT’s view, invoking the pollution management mechanism for Critically and Severely Polluted Areas (CPA/SPA) and highlighting the need for heightened scrutiny near sensitive zones.

A decisive development had intervened: a coordinate Bench of the Supreme Court had, on 05.08.2025, partly allowed VANASHAKTI v. UNION OF INDIA (W.P.(C) No. 166 of 2025), upholding the MoEF&CC’s Notification dated 29.01.2025 that expressly states “General Conditions shall not apply” to Entry 8(a) and 8(b), while striking down Note 1 that purported to exempt industrial sheds and certain educational buildings from the EIA regime. Relying on that binding pronouncement, the present Bench disposed of the appeals.

Summary of the Judgment

The Court disposed of the appeals, holding that the legal issues raised already stood concluded by the coordinate Bench’s judgment dated 05.08.2025 in Vanashakti:

• It affirmed that the “General Conditions” in EIA 2006 do not apply to items 8(a) and 8(b). This flows from a literal interpretation of the Schedule: wherever the GC was intended to apply, Column 5 explicitly says so; Entries 8(a)/8(b) have no such stipulation.
• The MoEF&CC’s Notification dated 29.01.2025, expressly recording that “General Conditions shall not apply” to Entry 8, was upheld, except for Note 1 to Entry 8(a), which exempted industrial sheds, schools, colleges, and hostels. The Court quashed Note 1 as arbitrary and contrary to the objectives of the Environment (Protection) Act, 1986.
• The Office Memorandum dated 30.01.2025 clarifying applicability of the 2025 Notification to Kerala was upheld.
• The NGT’s earlier order of 09.08.2024, which had read GC into Entry 8 and mandated Central EAC appraisal for such projects near sensitive areas, “does not survive” in view of the coordinate Bench’s authoritative pronouncement and the 2025 Notification now holding the field.
• SEIAAs/SEACs remain the competent, expert bodies to appraise Entry 8(a) and 8(b) projects at the State level, consistent with the EIA framework and the principle of decentralization.

Background and Procedural History

• 14.09.2006: EIA 2006 Notification issued under the EP Act introduces Category A (Central EAC appraisal) and Category B (SEIAA/SEAC appraisal). A “General Conditions” clause re-categorizes certain Category B projects to Category A if located within 10 km (later 5 km) of protected areas, CPAs, eco-sensitive areas, or inter-State/international boundaries. Crucially, Column 5 of the Schedule does not apply GC to Entry 8(a)/8(b).
• 2011: MoEF&CC OM clarifies that GC do not apply to 8(a)/8(b); these remain with SEIAA/SEAC.
• 22.12.2014: MoEF&CC inserts a note under Entry 8 stating “GC shall not apply” (EIA 2014). Kerala High Court (06.03.2024) quashes this notification on procedural grounds (variance from draft; objections not duly considered), without addressing substance.
• 2018–2019: NGT’s suo motu OA No.1038/2018 (“The Asian Age”) leads to a 24.10.2019 mechanism to manage CPAs/SPAs. MoEF reiterates on 13.03.2020 that, notwithstanding the mechanism, Entry 8(a)/8(b) continue under SEIAA/SEAC.
• 09.08.2024: NGT Central Zone holds GC to be applicable to Entry 8 and directs central appraisal for projects within 5 km of sensitive zones; asks MoEF&CC to implement EIA 2006 or issue clarification.
• 29.01.2025: MoEF&CC issues a fresh Notification explicitly stating “General Conditions shall not apply” to Entry 8, while adding Note 1 exempting industrial sheds and educational buildings; 30.01.2025 OM clarifies applicability to Kerala.
• 05.08.2025: Supreme Court in Vanashakti partly allows the writ: upholds the 29.01.2025 Notification and 30.01.2025 OM, but strikes down Note 1 to Entry 8(a). This coordinate Bench decision becomes determinative for the present appeals.

Issues

• Whether the “General Conditions” in the EIA 2006 Notification apply to Entry 8(a) and 8(b), thereby upshifting building/township projects within 5/10 km of sensitive areas to Category A for central appraisal.
• Whether, notwithstanding the GC, other mechanisms (e.g., the 24.10.2019 CPA/SPA directions) require central appraisal of Entry 8 projects.
• Ancillary: The competence of SEIAAs/SEACs; the correctness of the NGT’s approach; the validity and effect of the MoEF&CC’s 2025 Notification and OM; and the legality of exempting certain large “industrial/educational” buildings from appraisal.

Detailed Analysis

Precedents Cited and Their Influence

• In Re: Construction of Park at Noida near Okhla Bird Sanctuary (2011) 1 SCC 744:
  • The Court noted that clarity was needed on Entry 8 and the GC, and recorded high-level policy intent to decentralize appraisal of building/township projects.
  • This judgment provided the backdrop for MoEF&CC’s 2011 OM and later the 2014 amendment clarifying inapplicability of GC to Entry 8.
• One Earth One Life v. MoEF&CC (Kerala HC, 06.03.2024):
  • Quashed the 22.12.2014 notification on procedural (technical) grounds; did not pronounce on substantive correctness of excluding GC.
  • Triggered MoEF&CC’s recourse to a fresh, procedurally sound notification (29.01.2025).
• B.N. Tiwari v. Union of India (AIR 1965 SC 1430):
  • Underpinned the Law Ministry’s advice that quashing a substituted entry does not automatically revive the original; a fresh notification is needed—hence the 2025 notification.
• East India Commercial Co. Ltd. v. Collector of Customs (AIR 1962 SC 1893):
  • Cited by intervenors to emphasize that a High Court’s decision binds within its territory; the NGT could not extend Kerala HC’s decision nationwide to rewrite Entry 8’s scheme.
• Alembic Pharmaceuticals v. Rohit Prajapati (2020) 17 SCC 157:
  • Clarifies that administrative circulars/OMs cannot override statutory frameworks; here, the 2011 and 2020 OMs were consistent with the Schedule and clarified rather than altered it.
• Mantri Techzone v. Forward Foundation (2019) 18 SCC 494; MCGM v. Ankita Sinha (2022) 13 SCC 401; Indian Oil Corporation Ltd. v. V.B.R. Menon (2023) 7 SCC 368:
  • Recognize the NGT’s wide remit for environmental protection, yet within statutory confines; pertinent to stressing that the Tribunal cannot contradict the EIA’s textual scheme.
• Sustainable development line of cases: Vellore Citizens’ Welfare Forum (1996) 5 SCC 647; S. Jagannath (1997) 2 SCC 87; Consumer Education & Research Society (2000) 2 SCC 599; Intellectuals Forum (2006) 3 SCC 549; Tata Housing v. Aalok Jagga (2020) 15 SCC 784; State of U.P. v. Uday Education & Welfare Trust (2022 SCC OnLine SC 1469); In Re: Zudpi Jungle Lands:
  • The coordinate Bench invoked these to balance development needs with environmental safeguards; it also informed the invalidation of Note 1 that had exempted large “industrial/educational” buildings.
• NGT OA No. 1038/2018 (“The Asian Age”) and SC decision dated 25.02.2022 upholding the CPA/SPA mechanism:
  • The mechanism mandates stringent oversight in CPAs/SPAs. However, neither the NGT order nor the SC’s 2022 judgment squarely held that Entry 8 must be shifted to Central EAC appraisal; MoEF&CC’s subsequent 13.03.2020 OM maintained Entry 8 at SEIAA/SEAC.

Legal Reasoning

• Literal construction of subordinate legislation:
  • The Court applied the literal rule to the EIA 2006 Schedule. Column 5 expressly mentions where GC apply (numerous industrial/mining/infra entries). Entry 8(a)/8(b) do not mention GC. Absence is deliberate and legally conclusive. The NGT’s inference to the contrary was a misreading.
• Decentralization and institutional competence:
  • SEIAAs/SEACs are expert bodies constituted under the EIA framework with prescribed eligibility in Appendix VI. They are better placed to assess local environmental contexts. Centralizing all Entry 8 appraisals would overburden MoEF&CC, encourage forum shopping, and impair timelines.
• Validation of 2025 Notification; invalidation of Note 1:
  • The 29.01.2025 Notification was a procedurally proper re-statement that GC do not apply to Entry 8. Yet, Note 1 to Entry 8(a), exempting large industrial and educational buildings from the EIA regime, lacked a rational nexus with environmental objectives; constructions exceeding 20,000 sq. m. regardless of use materially impact environment. The Court struck down Note 1, preserving parity and statutory purpose.
• Effect of Kerala HC’s quash of 2014 notification:
  • The quash was on technical grounds only; it did not revive GC applicability to Entry 8. Doctrinally, a substituted provision’s quash does not ipso facto revive the earlier text—necessitating a fresh, valid notification (which MoEF&CC issued in 2025).
• Sustainable development as the balancing principle:
  • While reiterating environmental trusteeship for future generations, the Court emphasized the need to enable development through clear, manageable procedures—hence cementing the State-level appraisal for Entry 8, coupled with robust conditions and oversight.

Impact and Implications

• Immediate regulatory clarity:
  • Entry 8(a) and 8(b) projects will be appraised by SEIAA/SEAC as Category B (8(a) as B2; 8(b) as B1) notwithstanding proximity to protected areas, ESZs, CPA/SPA, or inter-State borders—because GC do not apply to Entry 8.
• No blanket centralization due to sensitive location:
  • Location within 5/10 km of sensitive areas does not upshift Entry 8 to Category A. However, SEIAAs must impose stringent, context-specific safeguards where projects lie near sensitive receptors.
• Industrial/educational buildings brought back under EIA where thresholds are met:
  • The striking down of Note 1 means industrial sheds, schools, colleges, and hostels above the threshold are not exempt; they must comply with Entry 8 requirements (EC where applicable).
• Relief from policy paralysis:
  • The “vacuum” and standstill caused by contradictory readings between the NGT order and agency practice end. Pending Entry 8 proposals should resume at SEIAA/SEAC, benefiting developers, homebuyers, and redevelopment stakeholders subject to conditions.
• NGT’s role recalibrated to the statutory text:
  • While the NGT’s broad remedial remit remains intact, it cannot override the explicit scheme of the EIA Schedule. Systemic directions must align with the text of the notification unless the statute/notification is altered.
• CPA/SPA oversight continues but does not alter Entry 8 forum:
  • The Section 5 mechanism for CPAs/SPAs, as upheld in 2022, remains relevant for stringent control and conditions. However, absent express re-categorization by a valid notification, it does not change Entry 8’s appraisal forum from SEIAA/SEAC to the Central EAC.
• Capacity-building imperative:
  • With Entry 8 decisively anchored at State level, SEIAAs/SEACs must be adequately staffed, trained, and resourced to ensure rigorous appraisal, monitoring, and compliance, particularly for dense urban and ecologically sensitive contexts.

Complex Concepts Simplified

• EIA 2006 Notification:
  • A delegated legislation under the EP Act requiring prior Environmental Clearance (EC) for listed projects. The Schedule classifies projects into Category A (Central appraisal) and Category B (State appraisal).
• General Conditions (GC):
  • A clause that upshifts certain Category B projects to Category A if they lie within a set distance (now 5 km) of protected areas, ESZs, CPAs, or inter-State/international borders. GC apply only where Column 5 expressly says so. The Court confirms GC never applied to Entry 8.
• Category B1 vs B2:
  • B1 projects require EIA study and public consultation; B2 projects are typically exempt from EIA studies. Under Entry 8, 8(a) projects are B2; 8(b) projects are B1.
• SEIAA/SEAC vs Central EAC:
  • State-level bodies (SEIAA/SEAC) appraise Category B projects; Central EAC appraises Category A. Members must meet expertise criteria in Appendix VI. The Court reaffirms SEIAA/SEAC competence and decentralization.
• Critically Polluted Areas (CPA) and Severely Polluted Areas (SPA):
  • Identified by CPCB based on pollution indices; projects in/near these areas are subject to stricter controls and conditions. The mechanism of 24.10.2019 addresses these, but does not itself recategorize Entry 8.
• Substitution and revival in delegated legislation:
  • When a substituted provision is quashed, the original does not automatically revive unless provided. A fresh notification may be required (as recognized in B.N. Tiwari), which MoEF&CC issued in 2025.
• Built-up area definition:
  • The 2025 Notification clarifies that “built-up area” means the covered area on all floors combined, including basements and service areas—addressing past ambiguity noted in Okhla Bird Sanctuary.

Practical Compliance Guidance

For Developers

• Confirm project classification:
  • Entry 8(a): Building and Construction projects (>20,000 sq m and <1,50,000 sq m built-up area) — typically B2; EC route and conditions as per EIA 2006 and subsequent clarifications.
  • Entry 8(b): Townships and Area Development (>50 ha and/or >1,50,000 sq m built-up) — B1; requires EIA report and SEIAA/SEAC appraisal.
• No GC override for location near sensitive areas:
  • Even if near protected areas/CPAs/ESZs, your forum remains SEIAA/SEAC. Expect stricter, location-specific conditions; plan baseline studies and mitigation early.
• Industrial/education buildings:
  • Exemption under Note 1 has been struck down; comply with Entry 8 if above thresholds.
• Align EC timeline with RERA milestones:
  • Delays in EC can trigger RERA consequences. Build realistic buffers; maintain transparent communication with allottees; document force majeure where applicable.
• Robust environmental design:
  • Integrate energy efficiency, water conservation (including rainwater harvesting), solid and liquid waste management, and construction-phase pollution controls into design and contracts to ease appraisal and compliance.

For Regulators (SEIAA/SEAC)

• Capacity and quality:
  • Ensure panels are fully constituted with requisite experts; standardize scrutiny checklists for Entry 8; insist on scientifically robust EIA/EMP for 8(b).
• Sensitive location conditions:
  • Where projects lie near protected/eco-sensitive/CPA/SPA areas, impose tailored mitigation, monitoring, and post-EC compliance conditions; coordinate with wildlife, forest, and pollution control authorities.
• Avoid processing paralysis:
  • In light of the Supreme Court’s clarity, promptly resume appraisal of pending Entry 8 applications; issue speaking orders and ensure predictable timelines.

For Civil Society and Litigants

• Focus on substance over forum:
  • Challenges should target the adequacy of appraisal, robustness of conditions, and compliance monitoring rather than simply seeking centralization contrary to the Schedule’s text.
• Leverage CPA/SPA mechanisms appropriately:
  • Seek stronger project-specific safeguards where warranted; gather scientific evidence on cumulative impacts for SEIAA consideration.

Open Questions and Future Directions

• CPA/SPA interplay:
  • While the 24.10.2019 mechanism remains, its precise interaction with Entry 8 has been clarified administratively (13.03.2020 OM) and implicitly accepted judicially; any future policy expressly re-categorizing Entry 8 would require a valid notification.
• Measurement protocols:
  • The Schedule uses distance triggers (5 km). Uniform, updated technical guidance on how to measure “as the crow flies” vs. road distance, and from which project boundary, would aid consistency.
• Threshold policy:
  • The Court noted earlier attempts (2018) to alter thresholds were stayed. The 2025 Notification maintains the 2006 thresholds. Any future threshold changes must withstand environmental scrutiny and procedural rigour.
• Strengthening post-EC monitoring:
  • With Entry 8 anchored at State level, resourcing pollution control boards and SEIAAs for inspection and compliance enforcement is critical.

Conclusion

The Supreme Court has conclusively clarified a contentious area of environmental regulation. Reading the EIA 2006 Schedule by its plain text, the Court holds that the “General Conditions” do not apply to building and construction (Entry 8(a)) and township/area development (Entry 8(b)) projects. These projects, even when located near protected or pollution-stressed areas, remain within the State-level appraisal framework of SEIAA/SEAC. At the same time, the Court removed an unjustified carve-out: large industrial and educational buildings cannot be exempted from EIA merely by their use; their environmental footprint warrants scrutiny where thresholds are met.

The judgment realigns practice with principle—decentralization, clarity, and sustainable development—while insisting on rigorous environmental safeguards. It reverses the disruption caused by the NGT’s misapplication of GC to Entry 8 and restores a predictable, lawful appraisal pathway. For the real estate sector and environmental governance alike, the ruling provides stability, protects stakeholders from paralysis, and channels attention to the real work: robust, science-based appraisal, tailored conditions, and vigilant compliance.