M/S SAI BABA SALES PVT. LTD. versus UNION OF INDIA

Citation: [2021] 11 S.C.R. 284 · Decided: 26-11-2021 · Supreme Court of India · Bench: R. SUBHASH REDDY · Disposal: Disposed off

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2021] 11 S.C.R.
M/S SAI BABA SALES PVT. LTD.
v.
UNION OF INDIA
(Civil Appeal No. 595 of 2021)
NOVEMBER 26, 2021
[R. SUBHASH REDDY AND HRISHIKESH ROY, JJ]
Environmental Laws: Environmental clearance (EC) for
building project – On facts, Project Proponent-construction project
made substantial compliance by obtaining the EC from the competent
local authority – Subsequent changes in EC regimes – Effect of –
Validity of the grant of EC to Project Proponent, challenged to –
NGT held that further construction cannot be made without
environment impact assessment, but protected the constructions
already made by the appellant-Project Proponent on the basis of
the EC issued by the Pimpri Chinchwad Municipal Corporation as
per the notification – On appeal, held: Project Proponent can
legitimately expect a certain degree of stability in the manner in
which environmental regime is set and how the applications are
processed – Public interest might possibly diminish the degree of
legitimate expectation for a party but a balance has to be found –
Project Proponent is not expected to anticipate the changes in EC
regimes, especially as a result of judicial interventions, and keep
revisiting the sanctioned clearances by the competent authority or
even raze down validly constructed structures – Neither can it be
expected to knock the doors of an authority, not empowered at the
relevant time, to process its applications – On facts, the appellant
acted on the EC and made substantial investments – They adhered
to the applicable legal framework during the concerned period, as
such cannot be pushed to a precipice and be made to fall – Doing
so would be inequitable – Moreover, third-party interests have also
come up –Thus, the order passed by NGT protecting the completed
construction is endorsed and four constructed buildings are to be
treated to be under a valid EC with all legal consequences –
However, for any further construction proposed they must secure
fresh clearance as required – Doctrine of legitimate expectation.
[2021] 11 S.C.R. 284
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Disposing of the appeals, the Court
HELD: 1.1 When the Project Proponent initially wanted to
apply for the EC it had obtained the requisite layout sanction for
applying to the SEIAA. As such, it was operating well within the
applicable procedure, prior to the amendment. After grant of such
sanction, while the construction was underway, the amendment
came about on 9.12.2016 whereby, the local authority such as the
Municipal Corporation was made the competent authority to grant
EC. In the changed circumstances, the Project Proponent
necessarily had to apply to the PCMC as during the interregnum
before the NGT’s judgment on 8.12.2017, SEIAA was not the
competent authority to consider application for EC. The Project
Proponent was therefore, complying with the regime set out by
the amended notification. It is apposite to note that the Committee
appointed by the NGT, in its report dated 11.8.2020 had clearly
indicated that when the Project Proponent had received the EC
on 28.11.2017, the competent authority to issue the EC was the
Environmental Cell of the PCMC. Thus, it is the discernible
understanding as part of the NGT’s own expert Committee that
the Project Proponent had obtained the EC from the competent
authority of the relevant time-the PCMC. [Para 15][292-C-F]
1.2 Moreover, only after the earlier judgment of the NGT
on 8.12.2017 in the OA No. 677/2016, the State of Maharashtra
issued a clarification on 29.1.2018 directing that the Municipal
authorities should not process pending applications. But neither
the decision of the NGT nor of the Maharashtra Government
categorically gave any guidance as to the implication on the EC
obtained by the Project Proponent, on the strength of which, a
substantial measure of construction was already made. It is also
necessary to note that in the subsequent notification issued on
14.11.2018 and 15.11.2018 by the MoEFCC, the power to grant
EC continued to vest in the local authority such as the PCMC,
with the only change being that it is the municipality itself and
not its Environmental Cell which is empowered to grant the EC.
The said notifications of the MoEFCC is stayed by the Delhi High
Court on 26.11.2018 in the WP(C) No. 12517/2018. [Para 16][292-
G-H; 293-A-B]
M/S SAI BABA SALES PVT. LTD. v. UNION OF INDIA
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[2021] 11 S.C.R.
1.3 The Committee constituted by t

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