caselaws.org
Supreme Court of India
M/S Sai Baba Sales Pvt. Ltd. vs Union Of India on 26 November, 2021Author: Hrishikesh Roy
Bench: R. Subhash Reddy, Hrishikesh Roy
[REPORTABLE]
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 595 OF 2021
M/S. SAI BABA SALES PVT. LTD. APPELLANT(S)
VERSUS
UNION OF INDIA & ORS. RESPONDENT(S)
WITH
CIVIL APPEAL NO. 5768 OF 2021
J U D G M E N T
Hrishikesh Roy, J.
1. Heard Mr. Huzefa Ahmadi, learned senior counsel
appearing for the appellant in Civil Appeal No.
595/2021. Mr. Lonkar Nitin representing the Original
Applicant before the National Green Tribunal. Ms.
Signature Not Verified
Aishwarya Bhati, learned Additional Solicitor General of
Digitally signed by
Rajni Mukhi
Date: 2021.11.26
14:01:35 IST
Reason:
India appears for the Ministry of Environment & Forest.
Page 1 of 18
The Government of Maharashtra and the State Pollution
Control Board are represented by Mr. Rahul Chitnis and
Mr. Mukesh Verma, learned counsel respectively.
2. These two appeals are filed under Section 22 of the
National Green Tribunal Act, 2010 (for short “the NGT
Act”) assailing the judgment and final order dated
18.1.2021 in the OA No. 83/2019. Under the impugned
judgment, the NGT held that further construction cannot
be made without environment impact assessment, but
protected the constructions already made by the
appellant, M/s Sai Baba Sales Pvt. Ltd. (“Project
Proponent”) on the basis of the Environmental Clearance
(“EC” for short) issued by the Pimpri Chinchwad
Municipal Corporation (“PCMC” for short) as per the
notification dated 9.12.2016. The Original Applicant, on
the other hand, is aggrieved by the decision of the NGT
to protect the standing construction and limiting the
impact of the impugned judgment on further construction
to be made by the project proponent.
3. The main issue that arises for consideration in these
matters is whether the Project Proponent herein
Page 2 of 18
possesses a validly granted Environmental Clearance (EC)
under the Environmental Impact Assessment (EIA)
notification dated 14.9.2006. The 2006 EIA notification
provided that the projects above 20,000 sq. meter and
below 1,50,000 sq. meter should obtain an EC from the
State Environment Impact Assessment Authority (SEIAA) of
the Ministry of Environment, Forest and Climate Change
(MoEFCC).
4. For deciding the issue, the necessary facts in brief
are that the Project Proponent initially conceived a
project of 15,040 sq. mtrs. (below the EC threshold
limit of 20,000 sq. mtrs.) and it approached the PCMC
for a lay out order which was a prerequisite, to obtain
an EC from the SEIAA of the MoEFCC. The application was
processed and the Building Permission Department of the
PCMC granted the commencement certificate to the Project
Proponent for an area of 15,040 sq. mtrs. and approved
the plan under the sanction letter dated 14.5.2013. With
such permission, the Project Proponent could construct
the permitted structures, and since the built up area
was less than the threshold limit of 20000 sq. mtrs.,
Page 3 of 18
the EC permission was not needed for the intended
construction.
5. The Project Proponent builder then applied and was
granted additional FSI as it intended to expand the
project to one with built up area of 49,012 sq. mtrs.
and for this they approached the PCMC for a lay out
order, which as noted earlier was essential to obtain an
EC from the SEIAA of the Ministry of Environment, Forest
and Climate Change (MoEFCC). The required approval was
issued by the Corporation on 28.11.2016.
6. Under the Ministry’s notification dated 9.12.2016,
the EIA regime was altered to indicate that the EC could
be obtained from the Environmental Cell of a local
authority, such as the PCMC. The State of Maharashtra
opted for the new regime and adopted the environmental
condition stipulated in the MoEFCC notification dated
9.12.2016. This was followed by the communication of
the MoEFCC on 7.7.2017 which clarified that separate
environmental clearance is not required for projects
upto 1,50,000 sq. mtrs. built up area in respect of
municipal corporations in Pune and Konkan division.
Page 4 of 18
7. The Project Proponent then filed an application for
EC under the 2016 notification which was considered by
the Environmental Cell of the PCMC which appraised the
project, as contemplated in the notification dated
9.12.2016. The necessary permission for construction to
the builder was issued on 28.11.2017, stipulating the
environmental conditions for buildings and constructions
and this permission was accorded as per the amended
regime under the notification dated 9.12.2016 of the
MoEFCC and consequential one dated 13.4.2017 of the
Maharashtra Government.
8. While the matter stood thus, the NGT while
considering the challenge by certain applicants to the
exemption from EC, in a batch matter, quashed certain
portions of the MoEFCC notification dated 9.12.2016. The
NGT in the analogous judgment dated 8.12.2017 in the OA
No. 677/2016 (Society for Protection of Environment and
Biodiversity Vs. Union of India) and other cases,
directed the MoEFCC to revisit its notification dated
9.12.2016 and to take appropriate steps to amend/rectify
Page 5 of 18
certain clauses in the Ministry’s notification, in terms
of the NGT’s judgment.
9. Nearly two years after the Project Proponent secured
construction permission on 8.12.2017 from the PCMC, the
OA No. 83/2019 was filed by the Pune resident
(respondent No. 10) with the allegation that the Project
Proponent had made construction without obtaining any
EC. In this proceeding the NGT constituted a three
Member Committee comprising the SEIAA – Maharashtra, the
State PCB and the Municipal Commissioner, Pune. The
Committee, after spot verification, in its Report dated
18.8.2020 noted that construction of total built up area
of 22930.17 sq. mtrs. is already completed for Building
Nos. A,E,B,D and the Club House. Thereafter, the NGT
considered the submission of the original applicant, who
contended that while the authority to grant EC is SEIAA
as per the EIA notification dated 14.9.2006, the EC for
the project in question was granted by the PCMC. The
NGT in its order on 17.11.2020, in the first round,
opined that the constructions were irregular and
Page 6 of 18
remedial measures were directed for the project in
question.
10. The above order of the NGT was challenged before
this Court and the Project Proponent’s CA No. 3893/2020
was allowed on 11.12.2020 whereby, the NGT’s order was
set aside and the matter was remitted back to the NGT to
afford hearing to the appellants and to pass a fresh
order.
11. The case of the Project Proponent as can be seen
from the pleadings was that he had initially commenced
construction on 14.5.2013 with a sanction plan of
15040.05 sq. mtrs., which, being lesser than the
threshold limit of 20,000 sq. mtrs, did not require a
prior EC. Thereafter, for the proposed expansion of the
project, for total constructed area of 49,012 sq. mtrs.,
the Project Proponent approached the concerned authority
on 7.11.2016 for issuance of “Proposed Development
Certificate”, which is a prerequisite to apply for EC,
and the said certificate was granted on 28.11.2016 for
the purpose of obtaining the EC from the SEIAA. But at
that stage, by virtue of the MoEFCC notification dated
Page 7 of 18
9.12.2016, the concerned local authority was designated
as the sanctioning authority for projects between 20,000
sq. mtrs. and 50,000 sq. mtrs. and accordingly under the
changed regime the Project Proponent applied to PCMC on
10.7.2017 and was sanctioned EC by the competent local
authority, on 28.11.2017.
12. It is the further contention of the Project
Proponent that when the NGT on 8.12.2017 had invalidated
certain portions of the 2016 notification, it did not
issue any order nullifying those ECs which were granted
by the local authority under the altered regime.
13. The original applicant on the other hand, contended
that when the NGT struck down certain provisions of the
MoEFCC’s 2016 notification, the 28.11.2017 EC granted by
the Municipal Corporation, would not legitimize the
construction and therefore the Project Proponent should
be prevented from proceeding with the construction and
also be penalized for the unauthorized construction.
14. The NGT then observed that because of the
invalidation of certain clauses in the 2016
Page 8 of 18
notification, the EC obtained from the PCMC is
unacceptable and accordingly rendered a finding that the
Project Proponent had failed to obtain the valid EC. The
maintainability challenge of the OA on the ground of
limitation was however rejected by observing that the
cause of action arose only in 2017 when the builder
allegedly exceeded the threshold limit of 20,000 sq.
mtrs. Accordingly, the authorities were directed to take
coercive action against the Project Proponent for
construction done after 8.12.2017, when the NGT’s
judgment was rendered in the OA No. 677/2016. However,
even with such finding having regard to the regime that
existed at the relevant time and adverting to the ratio
in Goan Real Estate and Construction Ltd. Vs. Union of
India,1 the NGT held that the construction already raised
should be protected. However, further construction
should be permitted only after securing the EC from the
competent authority, under the current regime.
15. The picture which emerges from the above discussion
is that when the Project Proponent initially wanted to
1 (2010) 5 SCC 388
Page 9 of 18
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
Page 10 of 18
the EC from the competent authority of the relevant time
i.e. the PCMC. Interestingly, the constituted Committee
also included a member of the SEIAA.
16. 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. For the sake of
completion, it may be recorded that the said
Page 11 of 18
notifications of the MoEFCC is stayed by the Delhi High
Court on 26.11.2018 in the WP(C) No. 12517/2018.
17. It is important to bear in mind that the Committee
constituted by the NGT to report on the building project
did not underscore any major deviation but instead found
that the Project Proponent had made substantial
compliance by obtaining the EC from the competent local
authority. Moreover the OA, neither before the NGT or
this Court, ever contended that appraisal done by the
PCMC’s Environmental Cell was defective or any different
from one done by SEIAA. Both processes are also
similarly structured. This may be the reason why the NGT
in the impugned judgment itself protected the already
made construction. However, the Project Proponent was
restrained from making any further construction without
obtaining clearance from the statutory EC and adhering
to the environmental norms.
18. The project of the appellant comprises six buildings
of which three were constructed in full, and the super
structure of the fourth building is completed and only
the internal works remains to be done. In the fourth
Page 12 of 18
building, 40 out of the 64 apartments have already been
sold. In this context, it would be appropriate to advert
to the submission of Ms. Aishwarya Bhati, the learned
ASG who had clearly stated that at the relevant time,
the competent authority to grant EC is the PCMC and not
the SEIAA and therefore the internal works for the
fourth constructed building, can be allowed to be
completed.
19. Considering the above circumstances, the NGT rightly
protected the already erected buildings and this
protection in our view, should not be impacted by the
earlier judgment of the NGT on 8.12.2017 in the OA No.
677/2016 whereby certain portions of the MoEFCC’s
9.12.2016 notification were invalidated and direction
was issued to the Ministry to revisit the said
notification. Importantly, neither the NGT’s
invalidation order nor the subsequent clarifications by
the State of Maharashtra, have suggested any adverse
action against the pre-existing structures. As the
expert body exclusively occupying the environmental
field, the NGT has assessed the factual circumstances to
Page 13 of 18
consciously lean towards protecting the already
constructed structures. Nothing more need be added on
this aspect. It is also not necessary in this appeal to
venture into the question of the retrospective
implication of the invalidation of certain parts of the
2016 Notification for other project proponents, which
may have gained their ECs in the interregnum.
20. In situations of this nature, the Doctrine of
Legitimate Expectation is attracted. The principle of
the rule of law as explained in De Smith’s Judicial
Review, such as, Regularity, Predictability and
Certainty in Government’s dealings with the Public, must
operate in the present matter. The 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. The actions of the
authorities are expected to adhere to the prevalent
norms only, without the element of uncertainty for the
executed project.
21. In the above context we may benefit by referring to
the seminal case of Attorney General of Hong Kong v. Ng
Page 14 of 18
Yuen Shiu2, where Lord Fraser speaking for the Privy
Council, appositely observed thus,
“… when a public authority has promised to follow a
certain procedure, it is in the interest of good
administration that it should act fairly and should
implement its promise, so long as implementation does
not interfere with its statutory duty.”
22. This Court in Sethi Auto Service Station vs Delhi
Development Authority & Ors3, speaking through Justice
D.K. Jain, has cited other opinions and elucidated on
the concept of legitimate expectation, in the following
manner,
“24. The House of Lords in Council of Civil Service
Unions & Ors. Vs. Minister for the Civil Service, a
locus classicus on the subject, wherein for the
first time an attempt was made to give a
comprehensive definition to the principle of
legitimate expectation. Enunciating the basic
principles relating to legitimate expectation, Lord
Diplock observed that for a legitimate expectation
to arise, the decision of the administrative
authority must affect such person either
(a) **** **** **** **** ****
(b) by depriving him of some benefit or advantage
which either: (i) he has in the past been permitted
by the decision maker to enjoy and which he can
legitimately expect to be permitted to continue to do
until some rational ground for withdrawing it has
been communicated to him and he has been given an
opportunity to comment thereon or (ii) he has
received assurance from the decisionmaker that they
2 (1983) 2 AC 629 : (1983) 2 WLR 735
3 (2009) 1 SCC 180
Page 15 of 18
will not be withdrawn without first giving him an
opportunity of advancing reasons for contending that
they should be withdrawn.” (emphasis supplied)
23. The Doctrine of Legitimate Expectation is further
explained in Food Corporation of India Vs. M/s Kamdhenu
Cattle Feed Industries4 where for a Three-Judge Bench of
this Court Justice J.S. Verma observed thus: –
“The mere reasonable or legitimate expectation of a
citizen, in such a situation, may not by itself be a
distinct enforceable right, but failure to consider
and give due weight to it may render the decision
arbitrary, and this is how the requirement of due
consideration of a legitimate expectation forms part
of the principle of non-arbitrariness, a necessary
concomitant of the rule of law. Every legitimate
expectation is a relevant factor requiring due
consideration in a fair decision-making process.
Whether the expectation of the claimant is reasonable
or legitimate in the context is a question of fact in
each case. Whenever the question arises, it is to be
determined not according to the claimant’s perception
but in larger public interest wherein other more
important considerations may outweigh what would
otherwise have been the legitimate expectation of the
claimant. A bona fide decision of the public
authority reached in this manner would satisfy the
requirement of non-arbitrariness and withstand
judicial scrutiny. The doctrine of legitimate
expectation gets assimilated in the rule of law and
operates in our legal system in this manner and to
this extent.”
24. The more compelling public interest might possibly
diminish the degree of legitimate expectation for a
party but a balance has to be found. In the present
4 (1993) 1 SCC 71
Page 16 of 18
matter the appellant has acted on the EC and made
substantial investments. They cannot be pushed to a
precipice and be made to fall. Doing so would be
inequitable particularly when, the appellant has
scrupulously adhered to the applicable legal framework
during the concerned period. Moreover, third-party
interests have also cropped up in the interregnum.
25. A 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. Such a scenario would render the process
akin to a Sisyphean task, eternally inconclusive and
never ending.
26. As seen, the NGT in the impugned judgment has
protected the completed construction and, on this
aspect, we deem it appropriate to endorse the same, by
Page 17 of 18
accepting the submission of the appellant’s Counsel and
the learned ASG. The four constructed buildings are
resultantly to be treated to be under a valid EC with
all legal consequences. It is, however, made clear that
if any further construction is proposed by the appellant
with the sanctioned layout, the same should not be done
on the strength of the EC granted on 28.11.2017 by the
PCMC. In other words, if the Project Proponent wishes to
construct the remaining buildings, they must secure
fresh clearance from the competent authority, as per the
currently applicable framework. It is ordered
accordingly.
27. With the above order, the appeals are disposed of
without any order on cost.
………………………………………………………J.
[R. SUBHASH REDDY]
….…………………………………………………J.
[HRISHIKESH ROY]
NEW DELHI
NOVEMBER 26, 2021
Page 18 of 18
Comments