Introduction:

In Confederation of Real Estate Developers of India CREDAI vs. Vanashakti and Vanashakti vs. Union of India, Diary Nos. 41929/2025 and 32452/2025, the Supreme Court of India delivered a highly consequential ruling on November 18, 2025, recalling by a 2:1 majority its earlier judgment in Vanashakti v. Union of India, which had imposed a strict prohibition on the grant of post-facto Environmental Clearances (ECs) by the Central Government. The recall judgment, authored by Chief Justice of India BR Gavai and supported by Justice K Vinod Chandran, marks a dramatic shift from the original ruling delivered in May 2024 by a bench of Justices Abhay S. Oka and Ujjal Bhuyan. The original Vanashakti judgment had struck down several Office Memoranda (OMs) that permitted post-facto ECs, holding that the environmental regulatory regime under the Environment Protection Act mandates prior environmental permission for any project, especially mining operations, and that allowing post-facto approvals would amount to legitimising illegality. The recall applications were heard by a bench composed of the CJI, Justice Bhuyan, and Justice Chandran, resulting in a split verdict where Justice Bhuyan, who authored the original judgment, issued a sharp dissent. At the heart of the matter are two competing visions of environmental law enforcement—one emphasising strict, no-tolerance compliance with statutory mandates, and the other advocating a pragmatic, consequences-oriented approach considering economic impact, public interest, and practical feasibility. The introduction of the issue begins with the petitioners—PSUs, developers, and industrial establishments—led by SAIL, arguing that the original Vanashakti verdict ignored binding precedents such as D Swamy v. Karnataka State Pollution Control Board, which permitted post-facto clearances in exceptional circumstances.

Arguments:

Represented by Solicitor General Tushar Mehta, ASG Aishwarya Bhati, and senior advocates like Kapil Sibal and Mukul Rohatgi, they asserted that the original ruling contains an “error apparent on the face of record.” They highlighted that Alembic Pharmaceuticals (2020), though discouraging post-facto ECs, still regularised several such clearances subject to penalties, proving that absolute prohibition was never the law declared by the Supreme Court. They further contended that the Vanashakti judgment had overlooked the Government’s 2021 and 2024 OMs which tightly regulated the grant of post-facto ECs, limiting them to permissible activities and imposing heavy fines for violations. They stressed that a blanket ban on post-facto clearances would jeopardise thousands of projects worth thousands of crores nationwide, creating an economic shock and dragging ongoing developmental work into limbo.

Several counsel argued that environmental compliance must be enforced, but in a way that balances public interest with environmental protection rather than causing wasteful demolition of projects already nearing completion. On the opposing side, environmental organisations, represented by senior advocates like Gopal Sankarnarayanan, Sanjay Parikh, Anand Grover, Anita Shenoy, and Raju Ramachandran, defended the original judgment with passion, arguing that the recall applications were nothing but an attempt to dilute stringent environmental norms. They argued that Common Cause (2018) and Alembic Pharmaceuticals (2020) categorically held that post-facto ECs were illegal for activities requiring prior approval, and any deviation from this principle would defeat the very purpose of India’s environmental regulatory regime. They asserted that D Swamy was rendered per incuriam, as it failed to correctly apply the binding principles laid down by larger benches. They rejected arguments about demolition leading to pollution, reasoning that violators cannot use their own wrongdoing to justify exemptions. They also emphasized that the Ministry of Environment and Forests had not filed a review petition, indicating the Union’s acceptance of the Vanashakti verdict. They warned that allowing post-facto clearances legitimises illegal construction and industrial operations, undermines environmental governance, and emboldens violators at the cost of ecological damage.

Judgement:

The judgment delivered by CJI BR Gavai begins by highlighting the oversight in the original Vanashakti decision, noting that it failed to consider prior coordinate bench decisions like D Swamy and the nuanced reading of Alembic, which did not impose an absolute bar. The CJI reasoned that environmental law does not operate in a vacuum and that a strict “no post-facto EC” rule could cause more harm than good, especially where demolition of massive projects might increase pollution and create economic shockwaves. He found that the original judgment’s selective protection of projects already granted post-facto ECs—but prohibition on future grants—was discriminatory and irrational. Invoking practical considerations and the principle under Section 21 of the General Clauses Act, the CJI observed that the authority which imposes a regulatory condition also has the power to relax or modify it. He held that the 2021 and 2024 OMs created a balanced, accountable system of granting post-facto ECs, containing adequate safeguards. Concluding that the original judgment must be recalled, he directed the matter to be placed before an appropriate bench for reconsideration. Justice K Vinod Chandran concurred with the CJI, stating that the recall was “imperative and expedient,” and reasoning that a rigid, pedantic approach would turn back the clock on developmental progress and environmental governance. He held that the power to regulate necessarily includes the power to relax, and that the OMs were designed to address practical realities, not encourage illegality. Justice Ujjal Bhuyan, in a powerful dissent, stated that the recall applications should be dismissed outright. He held that the original Vanashakti judgment correctly interpreted binding precedents, including Common Cause and Alembic, both of which condemned post-facto approvals as illegal. Justice Bhuyan held that demolition-based arguments were morally untenable and that violators cannot seek protection on the basis of resulting inconvenience. He declared D Swamy per incuriam and found no “error apparent on the record.” He emphasised that recall jurisdiction cannot be used to overturn a well-reasoned judgment because it causes inconvenience to violators or impacts commercial interests. He also noted that the Ministry of Environment had not sought a review, signalling its acceptance of the judgment. With this, the Supreme Court has reopened one of India’s most significant environmental law debates, placing before a larger bench the crucial question of whether post-facto environmental clearances should remain permissible under Indian law, and under what conditions.