Per Incuriam Correction and a Limited Opening for Ex Post Facto EC: CREDAI v. Vanashakti (Review) Restores a Balanced, Precedent‑Conscious Approach to Environmental Clearances

Case: Confederation of Real Estate Developers of India (CREDAI) v. Vanashakti & Anr., 2025 INSC 1326

Court: Supreme Court of India (Inherent/Original Jurisdiction, Review)

Date: 18 November 2025

Bench: B.R. Gavai, CJI (majority); Ujjal Bhuyan, J. (dissent); K. Vinod Chandran, J. (concurring)

I. Introduction

This review decision revisits the Supreme Court’s earlier judgment dated 16 May 2025 in Vanashakti v. Union of India (the “JUR”), which had struck down the Ministry of Environment, Forest and Climate Change’s (MoEF&CC) 14 March 2017 notification permitting a one-time route to process “violation” cases and its 7 July 2021 Office Memorandum (OM) laying down a Standard Operating Procedure (SOP) to handle such cases. The JUR had also adopted an uncompromising remedial consequence—demolition/closure for projects commenced/expanded without prior Environmental Clearance (EC), even where penalties were paid.

CREDAI sought review, supported by public-sector project proponents including the Steel Authority of India Limited (through its subsidiary) and the State of Karnataka (for an already-constructed greenfield airport). They contended that the JUR overlooked binding coordinate-bench precedent, misapplied section 15 of the Environment (Protection) Act, 1986 (EP Act), and would cause disproportionate and counterproductive demolition of public-interest infrastructure.

Key issues before the Court were:

Whether the JUR was per incuriam for failing to notice or follow binding coordinate-bench precedents (notably D. Swamy and Pahwa Plastics) and for misreading Common Cause, Alembic Pharmaceuticals, and Electrosteel Steels.
Whether, as a matter of doctrine and statutory interpretation, the EP Act absolutely prohibits ex post facto ECs, or admits narrow, exceptional regularisation with safeguards.
Whether section 15 of the EP Act mandates demolition/closure despite payment of penalties.
Whether far-reaching demolition of completed or near-complete projects initiated under the 2021 OM would itself be environmentally and economically irrational.

II. Summary of the Judgment

A. Majority (Gavai, CJI), with Chandran, J. concurring

JUR recalled; writs and appeal restored: The Court recalled the JUR and restored W.P.(C) No. 1394/2023, W.P.(C) No. 118/2019, W.P.(C) No. 115/2024, and C.A. Nos. 381–382/2025 for fresh consideration (paras 141–143).
Per incuriam and judicial discipline: The JUR failed to consider controlling or highly relevant portions of Common Cause, Alembic Pharmaceuticals, and especially Electrosteel Steels, and did not notice D. Swamy and Pahwa Plastics. A two-judge bench cannot depart from coordinate-bench precedent; departure without reference to a larger Bench renders a subsequent judgment per incuriam (paras 80–101, 121–126).
Section 15 EP Act confined to penalties: Section 15 deals with pecuniary penalties and neither authorises nor compels demolition/closure; the JUR’s demolition conclusion from section 15 was a misinterpretation (paras 99–101).
EP Act does not per se prohibit ex post facto EC: Following Electrosteel, D. Swamy, and Pahwa Plastics, the EP Act admits limited, exceptional ex post facto regularisation where projects are otherwise permissible and can be brought into compliance with environmental safeguards, subject to proportionality and the polluter-pays principle (paras 60–77).
2017 Notification and 2021 OM: The 2017 Notification and 2021 OM were issued under sections 3(1) and 3(2)(v) of the EP Act read with Rule 5(3)(d) of the EP Rules; the 2021 OM implemented NGT’s directions in Tanaji B. Gambhire by laying an SOP for violation cases. Both instruments emphasise inadmissibility of non-permissible projects and require remediation, augmentation plans, and bank guarantees (paras 29–38, 71–73).
Consequences of JUR: The JUR’s blanket demolition would squander nearly Rs 20,000 crore in public infrastructure, including a 962-bed AIIMS hospital in Odisha, a completed greenfield airport in Vijayanagar (Karnataka), and common effluent treatment plants—ironically exacerbating pollution by demolition debris and necessitating reconstruction of otherwise legally-permissible projects (paras 105–118, 126–127).
Pragmatic balancing: Drawing on Lafarge Umiam Mining, Alembic, Electrosteel, and recent pragmatic rulings on completed civic assets (MCGM v. Pankaj B. Kotecha; Bindu Kapurea), the Court endorsed a case-specific, proportional approach over pedantic rigidity (paras 55–57, 128–140).

B. Dissent (Bhuyan, J.)

Review not warranted: The dissent would have dismissed the review; any hardship in specific cases could be addressed by clarifying JUR’s para 35 to protect ECs already granted or where EAC had recommended EC, without recalling the whole judgment (paras 8–10, 55).
Non-regression and precautionary principle: Common Cause (2017) and Alembic (2020) are the controlling precedents: ex post facto EC is “completely alien” and “anathema” to Indian environmental jurisprudence; the subsequent two-judge rulings in Electrosteel, Pahwa, and D. Swamy are per incuriam and regressive (paras 19–27, 41–43, 45–50, 57).
2017 Notification a closed, one-time window; 2021 OM ultra vires: Paragraph 14 of the 2017 Notification created a six-month window (extended by 30 days) ending on 13 April 2018; the 2021 OM cannot revive or enlarge that window, and is contrary to the 2017 Notification; in any event, a solemn undertaking to the Madras High Court bound the Union that the 2017 measure was strictly one-time (paras 21–26, 35–36, 52–54).
Polluter pays cannot displace precaution: Penalties/restoration are not substitutes for the mandatory prior EC; the doctrine of non-regression bars roll-back of environmental standards (paras 45–49, 57).

III. Analysis

A. Precedents Cited and How They Shaped the Outcome

1) Common Cause v. Union of India, (2017) 9 SCC 499

Ratio decidendi: Prior EC is mandatory under the 1994 and 2006 EIA regimes; ex post facto or retrospective ECs are “completely alien” to environmental jurisprudence (para 125).
Remedial directions: Despite the doctrinal bar, the Court allowed leaseholders to seek ECs/clearances and to restart operations only after full statutory compliance and 100% compensation for illegal extraction (paras 188(5), 227). The majority reads these directions as a “balanced approach” guiding relief even while affirming the primacy of prior EC.

2) Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC 157

Ratio: Ex post facto ECs are “in derogation” of fundamental principles and an “anathema” to the 1994 EIA (para 23). Administrative circulars cannot dilute statutory EC mandates (paras 20–21).
Relief under Article 142: The Court declined to close units with long-standing ECs obtained belatedly, instead imposing Rs 10 crore per unit as restoration-aimed compensation (para 42–43). The majority treats this as a model of proportional relief; the dissent stresses that the Article 142 relief is not the ratio.

3) Electrosteel Steels Ltd. v. Union of India, (2023) 6 SCC 615

Held that while prior EC is non-negotiable, the EP Act does not prohibit ex post facto clearances; such relief may be granted exceptionally, not “for the asking”, applying proportionality and polluter-pays; avoid closures where compliance is possible (paras 72–75, 79).

4) D. Swamy v. Karnataka State Pollution Control Board, (2023) 20 SCC 469

Upheld the statutory character of the 2017 Notification and recognised the 2021 OM SOP as implementing NGT directions; reiterated the limited, exceptional space for ex post facto ECs with penalties, remediation, and prospective effect (paras 21–23, 30–33, 46–48).

5) Pahwa Plastics Pvt. Ltd. v. Dastak NGO, (2023) 12 SCC 774

Adopted the Electrosteel/D. Swamy approach: pending ex post facto ECs, do not close compliant units; apply proportionality, with penalties and restoration.

6) Judicial discipline and per incuriam doctrine

Official Liquidator v. Dayanand, (2008) 10 SCC 1; Dr. Shah Faesal v. Union of India, (2020) 4 SCC 1; Bajaj Allianz v. Rambha Devi, (2025) 3 SCC 95; Jayant Verma v. Union of India, (2018) 4 SCC 743: Coordinate benches must follow earlier coordinate benches or refer to larger benches; decisions rendered in ignorance of binding authority/statute are per incuriam and lack precedential force.

7) Pragmatic infrastructure cases

MCGM v. Pankaj Babulal Kotecha, 2025 SCC OnLine SC 1263: Avoid “counterproductive remedial intervention” where demolition of a matured public amenity worsens ecological outcomes and wastes public funds (paras 15–18).
Bindu Kapurea v. Subhashish Panda, 2025 INSC 784: Despite procedural breach, the Court weighed larger public interest and opted for remediation/compensatory afforestation over deconstruction (paras 19–26).

B. The Court’s Legal Reasoning

Grounds for review: The majority identified error apparent in the JUR’s (i) misapplication of section 15 EP Act to mandate demolition; (ii) failure to consider decisive portions of Common Cause, Alembic, and Electrosteel; and (iii) non-consideration of D. Swamy and Pahwa Plastics—both upholding the 2017/2021 regime (paras 88–101, 121–122).
Judicial discipline: A two-judge bench cannot depart from another coordinate bench’s ratio without referring to a larger bench. The JUR’s contrary stance rendered it per incuriam to D. Swamy and Pahwa (paras 82–87, 96).
Statutory basis and SOP safeguards: The 2017 Notification and 2021 OM were issued under section 3 EP Act and Rule 5; they explicitly bar regularisation of legally impermissible projects (e.g., “red” industry in CRZ-I), mandate closure/demolition in such cases, and require damage assessment, remediation, community augmentation, modification of non-sustainable projects and, where not possible, closure—backed by penalties and bank guarantees (paras 34–38, 71–73).
Consequential analysis and proportionality: The Court evaluated the practical fallout of the JUR—demolition of hospitals, airports, CETPs—where full EIAs had been undertaken and projects were otherwise permissible. Demolition would create further pollution and waste public exchequer, contradicting environmental protection aims (paras 105–118, 126–127).
Concurring lens: Chandran, J. underscored the State’s authority to relax a regulatory regime brought under the same statute, subject to environmental principles and safeguards, and cautioned against a rigid, “straitjacket” application that paradoxically harms the environment and society (Concurring paras 3–7).
Dissent’s doctrinal guardrails: Bhuyan, J. insisted that Common Cause and Alembic are binding and dispositive against ex post facto ECs; later coordinate decisions are per incuriam; the one-time window in para 14 of the 2017 Notification closed on 13 April 2018; the 2021 OM cannot lawfully reopen it; non-regression forbids roll-back of environmental standards (Dissent paras 41–43, 45–50, 52–54, 57).

C. Impact and What Comes Next

Ex post facto EC jurisprudence: The majority does not grant a carte blanche; it restores a limited, exceptional pathway for ex post facto regularisation where projects are (i) otherwise permissible in planning law and under the EIA regime, (ii) can be made environmentally sustainable, and (iii) are subjected to rigorous remediation, augmentation, penalties, and prospective ECs. The bright-line rule remains that prior EC is the norm; exceptions require principled justification.
2017 Notification and 2021 OM: While the majority’s analysis favours their validity and use, the ultimate merits of the writ petitions (challenging their legality) are restored for fresh adjudication. Until definitively pronounced, SEIAAs/EACs are likely to resume handling pending violation cases in line with the SOP’s safeguards, unless stayed.
Judicial method: The decision is a strong reaffirmation of coordinate-bench discipline and the corrective function of review for per incuriam oversights. Future benches must carefully track ratios, not just outcomes or relief under Article 142.
Project pipeline stability: Central and State projects (24 central projects worth ~Rs 8,293 crore; 29 State projects worth ~Rs 11,168 crore) and several public-interest facilities (e.g., AIIMS, airport, CETPs) avoid the immediate spectre of demolition. Project proponents who had substantially complied with the SOP and awaited formal ECs can seek case-by-case processing.
Environmental governance: Regulators should double down on robust damage assessment, tightly conditioned ECs, and credible enforcement (penalties, bank guarantees, and post-clearance monitoring). The majority’s emphasis on proportionality and restoration should not be read as tolerance of non-compliance; rather, as a structured pathway to remedy past violations while safeguarding the environment.
Continuing controversy: The dissent’s powerful invocation of non-regression, precaution, and the 2017 window’s finality ensures that this field remains contested. A larger bench reference in the restored proceedings is possible, given the clash between Common Cause/Alembic readings and Electrosteel/D. Swamy/Pahwa.

IV. Complex Concepts Simplified

Prior EC vs. ex post facto EC: The EIA regime requires an environmental clearance before starting a listed project or expanding/modernising beyond thresholds. Ex post facto EC means seeking clearance after starting/expanding—normally disfavoured, allowed only in narrow, exceptional cases with strict safeguards.
Per incuriam: A judgment rendered in ignorance of a binding statute or precedent, or inconsistent with a co-equal/larger bench’s ratio. Such decisions lack precedential force and may be corrected on review.
Ratio decidendi vs. relief: The binding part of a judgment is the legal rule applied to decide the case (ratio), not necessarily the specific relief (which may be granted under Article 142’s equitable power).
Precautionary principle: Where environmental risks are uncertain but potentially serious, regulators and courts should err on the side of caution—insisting on prior assessment and safeguards.
Polluter pays: Those who cause environmental harm must bear the costs of remediation and compensate for damage—used here to impose heavy penalties and to fund restoration plans.
Proportionality: Regulatory and judicial responses should be suited to the violation’s nature and impact—neither excessive nor inadequate—aiming to restore the environment effectively.
Non-regression: Environmental protection standards should not be rolled back; advances should be preserved. The dissent argues this forbids ex post facto ECs beyond the 2017 window.
2017 Notification: A statutory notification under the EP Act that set up a centralised appraisal track for “violation” cases, with damage assessment, remediation, and bank guarantees; it included a one-time application window (six months, later court-extended by 30 days).
2021 OM (SOP): An MoEF&CC SOP issued after NGT directions to standardise handling of “violation” cases: (i) close/limit operations pending appraisal; (ii) prosecute under the EP Act; (iii) appraise permissibility; (iv) where permissible, impose ToR, damage assessment, remediation and community augmentation plans; (v) non-permissible projects must be closed/demolished.
Section 15 EP Act: Provides for monetary penalties for contraventions; does not decide or compel demolition/closure—those consequences flow from substantive norms (e.g., non-permissibility) and tailored remedial orders.

V. Practical Guidance for Stakeholders

For project proponents (public and private):

Do not treat this ruling as a general amnesty. Prior EC remains the rule. Ex post facto EC will be considered only if your project is otherwise permissible in planning/ecology law and can be made environmentally sustainable.
Be prepared to:
- Demonstrate full EIA compliance (screening, scoping, public consultation, appraisal) going forward.
- Submit rigorous damage assessment and implement remediation and community resource augmentation plans.
- Furnish bank guarantees equal to remediation/augmentation costs; accept strict post-clearance monitoring conditions.
- Modify or scale back non-sustainable configurations, or accept closure if modification cannot mitigate impacts.
If you were at an advanced stage (EAC recommendation issued; procedural steps completed) before the JUR/interim stay, move for early listing and processing in the restored matters.

For regulators (MoEF&CC, SEIAAs, EACs/SEACs, SPCBs):

Resume SOP-based processing of violation cases with heightened scrutiny:
- Filter out non-permissible projects immediately (e.g., prohibited activities in CRZ-I or eco-sensitive zones).
- Insist on prospective EC effect only, robust conditions, bank guarantees, and transparent post-clearance compliance audits.
- Coordinate with SPCBs to prosecute under section 15 read with section 19 EP Act for deterrence, without confusing penalties with regularisation.
Document proportionality analyses to withstand judicial scrutiny; record why demolition would or would not better serve environmental protection in each case.

For civil society and affected communities:

Engage in public consultations and monitoring; scrutinise whether remediation/augmentation plans are credible and truly restorative; insist on timely disclosure of compliance reports.
Where projects are legally impermissible or cannot be rendered sustainable, seek closure/demolition with restoration of the site ecology.

VI. Conclusion

This review judgment makes two enduring contributions. First, it reasserts judicial discipline: coordinate benches must either follow prior coordinate-bench ratios or refer divergences to larger benches; ignoring controlling authority invites per incuriam correction on review. Second, it restores a balanced, impact-sensitive approach to environmental regularisation: prior EC remains foundational, but in narrow, exceptional cases where projects are legally permissible and can be made environmentally sustainable, ex post facto ECs may be granted subject to stringent remediation, penalties, and prospective effect.

The majority’s course correction averts the paradox of ecologically and economically counterproductive demolition of hospitals, airports, and pollution-control facilities built under the 2021 SOP, while reaffirming that non-permissible projects must be closed. The powerful dissent warns against any backsliding from the precautionary principle and non-regression. With the writ petitions and appeal restored to the docket, a larger bench pronouncement would be salutary to harmonise Common Cause/Alembic with Electrosteel/D. Swamy/Pahwa and to definitively fix the contours of permissible ex post facto regularisation within India’s environmental rule of law.