Sustainable development and regulatory oversight: Lessons from Vanashakti v. Union of India

The Supreme Court’s decision in Vanashakti v. Union of India is a landmark pronouncement in the field of environmental law, particularly in relation to the regulation of building, construction, township, and area development projects. The case involved a challenge to the Ministry of Environment, Forest and Climate Change’s (“MoEF&CC”) Notification dated January 29, 2025 (“EIA 2025 Notification”) and the Office Memorandum dated January 30, 2025, both of which sought to amend and clarify the scheme of the Environment Impact Assessment Notification, S.O. 1533(E), dated September 14, 2006 (“2006 Notification”). The petitioners argued that these changes diluted important safeguards and effectively nullified prior judicial rulings, while the Union government defended them as clarificatory and necessary for effective environmental governance. The Supreme Court, while partly upholding the EIA 2025 Notification, struck down one of its key exemptions as arbitrary, thereby settling a long-disputed area of law.

The cornerstone of environmental clearance requirements lies in the 2006 Notification. Under this framework, projects were categorised into Category A (to be appraised by the MoEF&CC) and Category B (to be appraised by the State Environment Impact Assessment Authority, that is “SEIAA”). The notification introduced General Conditions (“GC”), which stipulated that even a Category B project would be treated as Category A if it was located within 10 km (later reduced to 5 km) of sensitive areas such as:

- Protected areas under the Wildlife (Protection) Act, 1972,

- Critically polluted areas notified by the Central Pollution Control Board,

- Eco-sensitive zones notified under the Environment (Protection) Act, 1986, and

- Inter-State or international boundaries.

This framework ensured heightened central oversight for ecologically fragile areas. However, for Entries 8(a) (building and construction projects) and 8(b) (township and area development projects), the 2006 Notification itself was silent on whether the General Conditions applied. The definition of “built-up area” was also vague, referring merely to “covered construction” without detailing basements or service areas.

The impugned Notification dated January 29, 2025, introduced three major changes:

1. General Conditions were declared inapplicable to Entries 8(a) and 8(b), reaffirming the SEIAA as the authority for such projects.

2. Definition of “Built-up Area” was clarified to include all covered areas across floors, basements, and service areas, removing prior vagueness.

3. Exemptions under Note 1: Industrial sheds, schools, colleges, and hostels were expressly exempted from environmental clearance, subject only to basic sustainable practices.

The Bench led by CJI Gavai first examined the scheme of the 2006 Notification. Applying the literal rule of interpretation, the Court held that the omission of Entries 8(a) and 8(b) from Column 5, which listed categories to which GCs applied, was deliberate. This indicated that the drafters never intended building, construction, township, and area development projects to fall within the ambit of GCs. The Hon’ble Court therefore rejected the petitioners’ contention that the 2025 Notification diluted safeguards, holding instead that it merely clarified what had been the position since 2006.

The Court then examined the earlier judicial pronouncements. The Bench clarified that the Kerala High Court’s quashing of the EIA Notification dated December 22, 2014, was on procedural grounds, not on the substantive issue of GCs. The National Green Tribunal’s decision to strike down the EIA Notification dated December 9, 2016, only struck down provisions relating to Environmental Cells at the municipal level, which were distinct from SEIAAs. The Delhi High Court in 2018 stayed the 14^th and 15^th November 2018 Notifications as they pertained to changes in threshold levels of built-up areas and did not bear upon the applicability of GCs. In this way, the Court distinguished prior judicial interventions and held that they did not undermine the validity of the EIA 2025 Notification.

At the same time, the Court reaffirmed the principle of sustainable development as laid down in Vellore Citizens’ Welfare Forum v. Union of India and other landmark decisions. The Court reiterated that environmental regulation is not meant to halt development but to ensure that it proceeds in a manner consistent with ecological balance and mitigation measures. Recognising the limitations of the MoEF&CC in appraising every project nationwide, the Court observed that SEIAAs, being statutory expert bodies constituted by the central government itself, were well-placed to assess the localised environmental impact of such projects.

However, the Court struck down Note 1 to Entry 8(a) as unconstitutional and arbitrary. It found that exempting industrial sheds, schools, colleges and hostels from environmental clearance lacked any rational nexus with the objectives of the Environment Protection Act, 1986. Large-scale institutional projects, particularly in metropolitan areas, had undeniable environmental consequences, ranging from increased water consumption and waste generation to traffic congestion and air pollution. The Court noted that educational infrastructure had become a large commercial enterprise in India and could no longer be treated as an activity devoid of environmental impact. The absence of a parallel expert assessment mechanism made the exemption arbitrary and unsustainable.

The Court has upheld the validity of the EIA Notification, 2025, as well as the Office Memorandum dated January 30, 2025. The Court has further clarified the definition of “built-up area”, thereby removing earlier ambiguities that led to disputes. With respect to Note 1 to Entry 8(a), the Bench led by CJI Gavai opined that large institutional projects such as industrial sheds, schools, colleges, and hostels cannot be exempted from environmental clearance and must be subjected to the same scrutiny as any other project of comparable scale. Consequently, the aforesaid note was struck down as being arbitrary in nature.

In conclusion, Vanashakti v. Union of India represents a carefully balanced judicial approach that clarifies the scope of environmental clearance for construction-related projects. It upholds the regulatory role of SEIAAs, ensures that large-scale institutions remain accountable to environmental scrutiny, and reinforces the constitutional commitment to sustainable development.

About the authors: Sonam Mhatre is a Partner and Ayden Pereira is an Associate at Dhaval Vussonji & Associates.

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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