Out Of 1689 Cold Stone Rolling Units In Country, Only Project Proponent Was Targeted - SC Terms Petition Motivated

The Court opined that "We are constrained to point out that out of 1689 units in the country, the applicant has chosen the Project Proponent as it appears to be a motivated petition to target the Project Proponent though the Cold Steel Rolling Mills in the country were operating under the same regime. Not only the Project Proponent, but the country also has suffered immensely on account of closure of the unit which was export oriented unit. It may be noticed that the Gujarat State Pollution Control Board has chosen the Project Proponent to serve with a closure notice on 25.6.2021. The unit is lying closed since then. In view of the amendment in the EIA notification dated 20.7.2022, the unit has time to seek Environmental Clearance in terms of the time line mentioned in the notification. Therefore, the order of closure of the unit cannot be sustained."

Senior Counsel Anitha Shenoy appeared for the Appellant. Senior Counsel Shyam Divan appeared for the Project Proponent.

In this case, the Project Proponent applied for Consent to Establish (CTE) Cold Rolled Coils of stainless steel in 2018. The permission for the same was granted by the State Pollution Control Board. After the erection of the unit, the Project Proponent was granted permission to operate the unit.

An application was filed before the National Green Tribunal that the Project Proponent set up the unit in violation of an Environment Impact Assessment (EIA) notification, as such plant would fall within category 3(a) i.e., secondary metallurgical industry for which a prior environmental clearance is required.

The Tribunal set up a Joint Committee, which concluded that the applicability of the notification would be determined by the Ministry of Environment, Forest and Climate Change.

The Ministry filed an affidavit, on the basis of which the Tribunal took a prima facie view that the industry requires an environmental clearance and thus stayed all activities of the project as the Ministry sought time to file an additional response. Later, an affidavit was filed by the Ministry that a Group of Experts had been appointed on the issue. After the said report, the Project Proponent filed an application for modification of the order passed by the Tribunal and the stay was thereafter vacated.

The Expert Appraisal Committee held a meeting in which it was concluded that a grace period of one year could be granted where the industry has been established after the CTE. The Ministry accepted this recommendation.

On the basis of the recommendation, the Tribunal passed the order that in view of the large number of such mills operating on the strength of the CTE, opportunity should be provided to such units to fall within EC regime by granting a period of at least one year to operate for the purpose.

The Appellant challenged the time granted by the Tribunal on the ground that the Tribunal had no jurisdiction to grant period for obtaining Environmental Clearance as the EIA notification mandates a prior Environmental Clearance, and as this clearance was not obtained before the setting up of the industry, the time limit of one year is against the mandate of the statute. It was also argued that under Section 21 of the National Green Tribunal Act 2010, the Tribunal has the jurisdiction to set aside the Environmental Clearance but has no jurisdiction for the grant of time for Environmental Clearance.

Aggrieved by the orders of the Tribunal, the Project Proponent challenged the finding of the requirement of Environmental Clearance. During the pendency of the appeal, the Project Proponent was served with a closure notice by the State Pollution Control Board and accordingly, the unit was closed.

While appeals were pending before the Supreme Court, the Government of India published a notification in terms of Section 3 of the Environment Act to apply Terms of Reference within one year followed by the Environment Clearance in 2022. Accordingly, an amendment in the EIA notification was issued.

The parties approached the Supreme Court, regarding the jurisdiction of the Tribunal to pass an order to operate a unit without Environmental Clearance and the decision of closure of the unit.

The Supreme Court opined that it would no error in the order passed by the Tribunal. In that context, it was said that "The order of the Tribunal is based upon recommendation of the EAC which suggested that one year time should be granted to the industry to comply with the EIA notification dated 14.9.2006. The stand of the Ministry as well as the Project Proponent is that there was ambiguity in the EIA notification 2006. 1689 units have come up in the country on the basis of CTE and CTO regime. It is not a case of ambiguous interpretation in respect of one or two units but the entire country was having the same interpretation that Re-Rolling Steel Plants do not require a prior Environmental Clearance. The ambiguity has been removed only on 20.7.2022 when the notification has been amended, as reproduced above. Since there was ambiguity earlier, the Tribunal had granted time to the Project Proponent to comply with the requirement of Environmental Clearance."

Analyzing the judgments cited by the counsel for the Appellant, the Court found that they were not applicable to the facts of the case.

The Supreme Court also found that out of the 1689 units, the Appellant had only targeted the Project Proponent. In view of the 2022 amendment to the EIA notification, the Court opined that the unit had time to seek environmental clearance in terms of the timeline mentioned in the notification. Therefore, the Supreme Court held that the order of closure of the unit could not be sustained.

Therefore, the Supreme Court dismissed the appeal challenging the jurisdiction of the Tribunal. The Court allowed the appeal challenging the closure of the unit and quashed the closure notice.