Mint Explainer | How the Supreme Court’s Vanashakti recall impacts India’s environmental laws and projects

Environmentalists warn the recall could weaken the principle of prior scrutiny, while industry groups see it as a practical correction that prevents the shutdown of major public and private works worth over ₹20,000 crore.

The lone dissent has amplified concerns that retrospective approvals may gain wider acceptance unless the law is clearly restated. Mint breaks down the case and its implications for both environmental governance and industry.

How the Vanashakti case began

The dispute began in 2023 when Mumbai-based NGO Vanashakti filed a public-interest litigation (PIL) challenging the government’s growing use of post-facto environmental clearances. These approvals were being granted to real estate, mining, industrial, and infrastructure projects that had already begun construction or operations without securing the mandatory prior clearance required under the Environment (Protection) Act, 1986, and the EIA Notification, 2006.

Vanashakti argued that retrospective approvals dismantled the preventive nature of India’s environmental governance, encouraged irreversible damage before scrutiny, violated statutory requirements for advance appraisal and contradicted earlier Supreme Court rulings that treated prior environmental clearances as essential. It sought a declaration that such clearances were unconstitutional.

What is an environmental clearance?

An environmental clearance is a mandatory approval required before any project begins construction or operations, backed by the Environment (Protection) Act, 1986, and the 1994 and 2006 EIA Notifications. It requires impact assessments, public consultation and expert appraisal to ensure environmental risks are examined in advance.

Post-facto environmental clearances emerged after a 2017 environment ministry notification created a six-month window to regularise projects that had already begun work illegally. Though intended as a one-time amnesty, the window was extended multiple times. A 2021 office memorandum from the ministry of environment, forest, and climate change later outlined a detailed procedure for addressing such violations, effectively establishing the practice as an ongoing administrative mechanism.

What the Supreme Court held in May 2025

In May 2025, a bench of Justices Abhay Oka and Ujjal Bhuyan struck down both the 2017 notification and the 2021 office memo of the environment ministry.

The top court ruled that post-facto environmental clearances were illegal as a general rule, reiterated that the EIA regime is preventive and requires strict prior approval, and held that administrative circulars cannot create parallel systems to regularise violations. While earlier clearances were protected, future reliance on the 2017 and 2021 mechanisms was prohibited.

Why was the judgment recalled?

The central government and industry bodies sought a review of the ruling. On 18 November, a three-judge bench led by Chief Justice B.R. Gavai, with Justice K. Vinod Chandran and Justice Ujjal Bhuyan, recalled the earlier judgment by a 2:1 majority.

The majority held that the May verdict had overlooked binding precedent, including earlier decisions permitting limited regularisation of violations in exceptional circumstances.

The top court reasoned that Section 3 of the Environment (Protection) Act gives the Centre broad powers to act in the public interest and that an absolute ban failed to account for administrative realities. It distinguished between deliberate violators and inadvertent lapses and said narrowly tailored post-facto approvals could be permitted where irreversible development had occurred and where penalties and restoration ensured accountability.

The bench also noted that a strict ban could jeopardise ongoing welfare and infrastructure projects worth over ₹20,000 crore.

What does the dissenting judgment say?

Justice Ujjal Bhuyan issued a strong dissent. He argued that projects that start without prior environmental clearance commit a clear legal violation and should not be allowed to legalize that breach later.

According to him, the majority weakened the precautionary principle, which requires environmental risks to be assessed before harm occurs. He cautioned that using economic loss or project delays to justify retrospective approvals creates a dangerous precedent and could embolden those who violate regulations.

Bhuyan also questioned the legality of the environment ministry's 2021 office memo, saying it cannot substitute the mandatory requirement of prior environmental clearance. In his view, the recall shifts the balance towards development at the expense of environmental safeguards.

What the recall means for industry

For industry, the recall eases a major source of uncertainty. Environmental clearances often stall metro networks, mining blocks, industrial units and real-estate projects.

According to an Indian Express report, the Expert Appraisal Committee considered 112 violation cases and approved 55 between 2017 and 2021. These included major coal, iron and bauxite mines operated by Singareni Collieries, Mahanadi Coalfields, Hindustan Copper and Lloyds Metals; cement plants owned by UltraTech, Jaypee, Ramco and others; large industrial units such as Bhushan Steel/Tata Steel and SAIL; and real-estate and commercial developments including Spaze Towers and Hotel Leela Venture. Hospitals such as Artemis and Pushpawati Singhania also obtained approvals.

The government stated before the court that 24 central projects worth ₹8,293 crore and 29 state projects worth ₹11,168 crore were pending under these pathways. Several major public-sector projects, including the AIIMS campus in Odisha and the greenfield airport in Karnataka, relied on post-facto clearances.

Prashant Thakur, executive director and head of research at real estate consultant Anarock, said the recall will be welcomed across the industry, which often faces long delays due to environmental clearances and Green Tribunal cases.

“Environmental clearances often become the biggest hurdle, and many projects remain stuck for years," he said, noting that the move will help several stalled developments progress. But he warned it must not be misused. “It’s a very thin line…the approach has to be balanced so violations don’t slip through."

Thakur emphasized that delays hurt buyers, lenders and developers, and stressed the need for developers to realistically assess environmental and litigation risks at the start of the approval process.

Do these projects now have legal backing?

Lawyers say the recall does not grant a blanket amnesty. It simply restores the possibility of applying for post-facto environmental clearances under existing rules. Since the 2017 amnesty window expired in 2018, projects initiated after that must rely solely on the environment ministry's 2021 office memo.

Bose Varghese, senior director–ESG at Cyril Amarchand Mangaldas, said the recall “does not make post-facto clearance easier—it merely keeps it a possibility," noting that the 2021 memorandum still provides for the closure of non-compliant projects and demolition of those that are impermissible.

Parul Kashyap, founder partner at SunLegal, said post-facto environmental clearance is now “legally permissible again, but not automatic," emphasising that only projects permissible under law can receive retrospective clearance and regulators retain full discretion to reject applications that violate environmental norms.

What this means for India's environmental laws

Environmental lawyers have raised serious concerns over the ruling and its implications.

Namitha Mathews, partner at Argus Partners, said allowing retrospective environmental clearances risks making the carefully designed prior-clearance safeguards redundant, and pointed out that the environment ministry’s decision not to defend the original Vanashakti judgment suggests that economic growth is being prioritised over environmental protection.

“This judgment creates a concern for environmental protection as it defeats the very purpose as to why we have the precautionary principle as an established principle of environmental law in India and across the world," said environmental lawyer Nawneet Vibhaw.

“As a country that suffers from extreme pollution and widespread ecological damage despite having sound and stringent environmental laws, India always looked up to the Supreme Court to curtail attempts to weaken the provisions of environmental laws. However, this recall sets a precedent in favour of violations of environmental compliance obligations," said Varghese of Cyril Amarchand.