Vanashakti revisited: Constitutional limits on prior environmental clearance and post-facto regularisation

The recent judgment of the Supreme Court in Vanashakti v. Union of India, 2026 SCC OnLine SC 1404, marks one of the most significant developments in Indian environmental jurisprudence. At its core, the decision addresses a question that has troubled courts, regulators and project proponents for over two decades: Can a project commenced or expanded without obtaining prior environmental clearance (“prior EC”) ever be permitted to continue, or must every such violation inevitably result in closure and demolition?

The answer carries consequences extending far beyond environmental regulation. It determines the legal certainty surrounding infrastructure development, mining operations, manufacturing industries, public utilities and commercial investments worth thousands of crores. Equally, it tests the constitutional balance between environmental protection under Article 21 and the practical realities of governance, where violations have already occurred and irreversible investments have been made.

The litigation arose from a long-standing conflict concerning executive attempts to regularise projects that had commenced or expanded operations without obtaining the mandatory prior EC under the Environment Impact Assessment Notification, 2006 (“2006 Notification”). The immediate challenge concerned two regulatory instruments issued by the Ministry of Environment, Forest, and Climate Change (“MoEFCC”): (i) Notification dated 14.03.2017, which created a limited one-time statutory window for projects already operating in violation of environmental law to seek regularisation upon satisfying stringent conditions (“2017 Notification”), and (ii) Office Memorandum dated 07.07.2021 prescribing a Standard Operating Procedure for processing violation cases on a continuing basis (“2021 OM”).

Both instruments were challenged in a writ petition under Article 32 of the Constitution on the ground that they diluted the precautionary principle, incentivised proponents to “violate first and regularise later,” and were inconsistent with the mandatory prior EC regime under the 2006 Notification, as well as with the Supreme Court’s earlier rulings in Common Cause v. Union of India (2017) 9 SCC 499 and Alembic Pharmaceuticals Ltd. v. Rohit Prajapati, (2020) 17 SCC 157.

The litigation had already travelled an unusually complex procedural path: a Division Bench of the Supreme Court in Vanashakti vs. Union of India, 2025 SCC OnLine SC 1139 had first struck down both instruments as alien to environmental jurisprudence and directed the Union Government to refrain from issuing any future ex post facto clearance mechanism. That ruling was subsequently recalled in review proceedings in Confederation of Real Estate Developers of India vs. Vanashakti, (2026) 5 SCC 201, for failing to consider binding coordinate-Bench authority in Pahwa Plastics Pvt. Ltd. vs. Dastak NGO, (2023) 12 SCC 774 and D. Swamy vs. Karnataka State Pollution Control Board, (2023) 20 SCC 469, with the review Bench expressly leaving the merits open for fresh adjudication.

The first proposition emerging from Vanashakti is unequivocal: prior EC remains a mandatory requirement under the 2006 Notification. The Court held that the four-stage appraisal process, i.e. screening, scoping, public consultation and appraisal, is meaningful only if it precedes commencement of project activity; once construction has progressed or operations have begun, public participation and expert appraisal are reduced to a formality.

On this basis, the Court held unambiguously that prior EC is a mandatory, non-derogable requirement, and that the substitution of criminal prosecution with civil penalty by the Jan Vishwas (Amendment of Provisions) Act, 2023 reflects only a change in the severity of sanction, not any dilution of the underlying obligation. Decriminalisation, the Court holds, is not deregulation.

The Court, however, distinguished between the existence of a mandatory prior-EC requirement and the consequences that necessarily follow from its breach. Neither the Environment Protection Act, 1986 (“EP Act”) nor the 2006 Notification provides an automatic answer that every violation must invariably result in closure or demolition.

Equally, the statutory scheme cannot be understood as permitting a project to continue merely because the proponent is willing to pay a penalty.

The Court therefore rejected both extremes. The appropriate response must be determined within the applicable statutory framework and with due regard to environmental harm, remediation, proportionality and public interest. This distinction is central to understanding the judgment. The Court has not legitimised ex post facto compliance; it has recognised that the legal system may require a proportionate mechanism for dealing with an illegality that has already occurred.

The Court upheld the 2017 Notification because it was materially different from an open-ended administrative relaxation. It was a one-time and time-bound mechanism directed towards a defined category of projects which had already committed violations. Further, it did not simply extinguish the consequences of those violations. The mechanism contemplated environmental appraisal, assessment of ecological damage, remediation and environmental compensation. The Court therefore viewed the 2017 Notification as a regulatory response directed towards bringing historical violations within an environmental compliance framework, rather than as an unconditional amnesty. More importantly, the 2017 Notification derived its authority from Sections 3 and 5 of the EP Act and had the character of delegated legislation. The source of power was therefore critical.

The 2021 OM failed precisely at this point. Unlike the 2017 Notification, it was an executive instruction rather than delegated legislation. More significantly, it established a continuing mechanism through which projects that had commenced without prior EC could subsequently seek clearance. The Court found that this effectively altered the regulatory architecture of the 2006 Notification. An Office Memorandum may explain or implement an existing statutory framework; it cannot create a parallel regulatory regime that substantially changes the substance or operation of that framework.

Further, the 2021 OM failed the test of reasonable classification under Article 14 as it equates the compliant and non-compliant projects, treating unequals as equals. Thus, the constitutional problem with the 2021 OM was not merely that it dealt with environmental violations after the event. It was that an executive instrument had assumed the role of legislation or delegated legislation. Further, the 2021 OM was neither circumscribed by a cut- off date nor tailored to a narrow amnesty window intended to secure compliance through remedial measures.

The Court accordingly held that future mechanisms of this nature cannot be created merely through administrative instructions. If the Central Government seeks to establish such a mechanism, it must do so through a legally competent statutory source, including a valid notification under Section 3 of the EP Act.

The judgment also clarifies the apparent tension between Common Cause and Alembic Pharmaceuticals, on the one hand, and Electrosteel Steels, Pahwa Plastics and D. Swamy, on the other. The former line of cases emphasised the preventive nature of EC and rejected the normalisation of ex post facto clearance. The latter cases arose in the context of mechanisms dealing with existing violations.

The apparent conflict is resolved by distinguishing between the rule requiring prior EC and the remedial response to an existing violation. The Court has nevertheless rejected the broader proposition in Electrosteel that the EP Act itself contains no prohibition against ex post facto clearance. Pahwa Plastics and D. Swamy were also overruled to the extent that they treated the 2021 OM as valid and traceable to the 2017 Notification.

Perhaps the most difficult practical issue concerns applications that remained pending when the 2021 OM was struck down. The Court directed that pending applications under the two frameworks be taken to their “logical conclusion in accordance with law”, while applications rejected or returned solely because of the earlier Vanashakti judgment or interim orders may be reconsidered. At the same time, no fresh applications under the 2017 Notification or 2021 OM can now be entertained. This creates an obvious transitional difficulty. The 2021 OM has been quashed, while the one-time window under the 2017 Notification has already exhausted itself. What, then, is the legal basis for processing an application which was validly made under a framework that no longer survives?

Simply rejecting such applications may operate harshly against applicants who approached the authorities when the mechanism was available. Yet continuing to process them mechanically under the invalidated 2021 OM could amount to preserving the very regime declared impermissible. The expression “logical conclusion in accordance with law” therefore leaves an important question for the executive and potentially the courts: what is the applicable legal framework for pending applications in the absence of an operative mechanism?

The larger importance of Vanashakti lies in the constitutional line it draws. The judgment does not say that environmental violations can be regularised whenever economic or administrative considerations make that convenient. Nor does it say that every violation requires the destruction of the project, regardless of the environmental consequences or statutory framework. Instead, it establishes a more demanding proposition. The substantive obligation must remain intact; remedial flexibility must have a lawful source; and executive instructions cannot be used to create a parallel regulatory regime.

This distinction has consequences for both regulators and project proponents. For regulators, the judgment makes clear that future mechanisms dealing with environmental violations must be anchored in valid delegated legislative authority. An office memorandum cannot perform the work of legislation or delegated legislation. For project proponents, the judgment provides no safe harbour for commencing or expanding operations without prior EC. The fact that a mechanism for dealing with past violations may exist does not transform regulatory non-compliance into a legitimate commercial strategy. Prior EC remains the legally secure route.

Ultimately, Vanashakti is best understood not as a retreat from environmental constitutionalism but as a recalibration of it. The Court preserves the preventive logic of prior EC while recognising that the legal response to an already committed violation may require proportionality and remediation. At the same time, it insists that such flexibility cannot come at the cost of the rule of law.

About the authors: Yogendra Aldak is an Executive Partner and Tamanna Sharma is a Principal Associate at Lakshmikumaran & Sridharan attorneys.

Disclaimer: The opinions expressed in this article are those of the author(s). The opinions presented do not necessarily reflect the views of Bar & Bench.

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