M/S Sai Baba Sales Pvt. Ltd. vs Union Of India on 26 November, 2021


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Supreme Court of India

M/S Sai Baba Sales Pvt. Ltd. vs Union Of India on 26 November, 2021

Author: Hrishikesh Roy

Bench: R. Subhash Reddy, Hrishikesh Roy

                                                                                      [REPORTABLE]

                                       IN THE SUPREME COURT OF INDIA
                                        CIVIL APPELLATE JURISDICTION

                                       CIVIL APPEAL NO. 595 OF 2021


          M/S. SAI BABA SALES PVT. LTD.                                       APPELLANT(S)

                                                     VERSUS


          UNION OF INDIA & ORS.                                              RESPONDENT(S)


                                                       WITH

                                       CIVIL APPEAL NO. 5768 OF 2021




                                               J U D G M E N T

Hrishikesh Roy, J.

1. Heard Mr. Huzefa Ahmadi, learned senior counsel

appearing for the appellant in Civil Appeal No.

595/2021. Mr. Lonkar Nitin representing the Original

Applicant before the National Green Tribunal. Ms.
Signature Not Verified

Aishwarya Bhati, learned Additional Solicitor General of
Digitally signed by
Rajni Mukhi
Date: 2021.11.26
14:01:35 IST
Reason:

India appears for the Ministry of Environment & Forest.

Page 1 of 18
The Government of Maharashtra and the State Pollution

Control Board are represented by Mr. Rahul Chitnis and

Mr. Mukesh Verma, learned counsel respectively.

2. These two appeals are filed under Section 22 of the

National Green Tribunal Act, 2010 (for short “the NGT

Act”) assailing the judgment and final order dated

18.1.2021 in the OA No. 83/2019. Under the impugned

judgment, the NGT held that further construction cannot

be made without environment impact assessment, but

protected the constructions already made by the

appellant, M/s Sai Baba Sales Pvt. Ltd. (“Project

Proponent”) on the basis of the Environmental Clearance

(“EC” for short) issued by the Pimpri Chinchwad

Municipal Corporation (“PCMC” for short) as per the

notification dated 9.12.2016. The Original Applicant, on

the other hand, is aggrieved by the decision of the NGT

to protect the standing construction and limiting the

impact of the impugned judgment on further construction

to be made by the project proponent.

3. The main issue that arises for consideration in these

matters is whether the Project Proponent herein

Page 2 of 18
possesses a validly granted Environmental Clearance (EC)

under the Environmental Impact Assessment (EIA)

notification dated 14.9.2006. The 2006 EIA notification

provided that the projects above 20,000 sq. meter and

below 1,50,000 sq. meter should obtain an EC from the

State Environment Impact Assessment Authority (SEIAA) of

the Ministry of Environment, Forest and Climate Change

(MoEFCC).

4. For deciding the issue, the necessary facts in brief

are that the Project Proponent initially conceived a

project of 15,040 sq. mtrs. (below the EC threshold

limit of 20,000 sq. mtrs.) and it approached the PCMC

for a lay out order which was a prerequisite, to obtain

an EC from the SEIAA of the MoEFCC. The application was

processed and the Building Permission Department of the

PCMC granted the commencement certificate to the Project

Proponent for an area of 15,040 sq. mtrs. and approved

the plan under the sanction letter dated 14.5.2013. With

such permission, the Project Proponent could construct

the permitted structures, and since the built up area

was less than the threshold limit of 20000 sq. mtrs.,

Page 3 of 18
the EC permission was not needed for the intended

construction.

5. The Project Proponent builder then applied and was

granted additional FSI as it intended to expand the

project to one with built up area of 49,012 sq. mtrs.

and for this they approached the PCMC for a lay out

order, which as noted earlier was essential to obtain an

EC from the SEIAA of the Ministry of Environment, Forest

and Climate Change (MoEFCC). The required approval was

issued by the Corporation on 28.11.2016.

6. Under the Ministry’s notification dated 9.12.2016,

the EIA regime was altered to indicate that the EC could

be obtained from the Environmental Cell of a local

authority, such as the PCMC. The State of Maharashtra

opted for the new regime and adopted the environmental

condition stipulated in the MoEFCC notification dated

9.12.2016. This was followed by the communication of

the MoEFCC on 7.7.2017 which clarified that separate

environmental clearance is not required for projects

upto 1,50,000 sq. mtrs. built up area in respect of

municipal corporations in Pune and Konkan division.

Page 4 of 18

7. The Project Proponent then filed an application for

EC under the 2016 notification which was considered by

the Environmental Cell of the PCMC which appraised the

project, as contemplated in the notification dated

9.12.2016. The necessary permission for construction to

the builder was issued on 28.11.2017, stipulating the

environmental conditions for buildings and constructions

and this permission was accorded as per the amended

regime under the notification dated 9.12.2016 of the

MoEFCC and consequential one dated 13.4.2017 of the

Maharashtra Government.

8. While the matter stood thus, the NGT while

considering the challenge by certain applicants to the

exemption from EC, in a batch matter, quashed certain

portions of the MoEFCC notification dated 9.12.2016. The

NGT in the analogous judgment dated 8.12.2017 in the OA

No. 677/2016 (Society for Protection of Environment and

Biodiversity Vs. Union of India) and other cases,

directed the MoEFCC to revisit its notification dated

9.12.2016 and to take appropriate steps to amend/rectify

Page 5 of 18
certain clauses in the Ministry’s notification, in terms

of the NGT’s judgment.

9. Nearly two years after the Project Proponent secured

construction permission on 8.12.2017 from the PCMC, the

OA No. 83/2019 was filed by the Pune resident

(respondent No. 10) with the allegation that the Project

Proponent had made construction without obtaining any

EC. In this proceeding the NGT constituted a three

Member Committee comprising the SEIAA – Maharashtra, the

State PCB and the Municipal Commissioner, Pune. The

Committee, after spot verification, in its Report dated

18.8.2020 noted that construction of total built up area

of 22930.17 sq. mtrs. is already completed for Building

Nos. A,E,B,D and the Club House. Thereafter, the NGT

considered the submission of the original applicant, who

contended that while the authority to grant EC is SEIAA

as per the EIA notification dated 14.9.2006, the EC for

the project in question was granted by the PCMC. The

NGT in its order on 17.11.2020, in the first round,

opined that the constructions were irregular and

Page 6 of 18
remedial measures were directed for the project in

question.

10. The above order of the NGT was challenged before

this Court and the Project Proponent’s CA No. 3893/2020

was allowed on 11.12.2020 whereby, the NGT’s order was

set aside and the matter was remitted back to the NGT to

afford hearing to the appellants and to pass a fresh

order.

11. The case of the Project Proponent as can be seen

from the pleadings was that he had initially commenced

construction on 14.5.2013 with a sanction plan of

15040.05 sq. mtrs., which, being lesser than the

threshold limit of 20,000 sq. mtrs, did not require a

prior EC. Thereafter, for the proposed expansion of the

project, for total constructed area of 49,012 sq. mtrs.,

the Project Proponent approached the concerned authority

on 7.11.2016 for issuance of “Proposed Development

Certificate”, which is a prerequisite to apply for EC,

and the said certificate was granted on 28.11.2016 for

the purpose of obtaining the EC from the SEIAA. But at

that stage, by virtue of the MoEFCC notification dated

Page 7 of 18
9.12.2016, the concerned local authority was designated

as the sanctioning authority for projects between 20,000

sq. mtrs. and 50,000 sq. mtrs. and accordingly under the

changed regime the Project Proponent applied to PCMC on

10.7.2017 and was sanctioned EC by the competent local

authority, on 28.11.2017.

12. It is the further contention of the Project

Proponent that when the NGT on 8.12.2017 had invalidated

certain portions of the 2016 notification, it did not

issue any order nullifying those ECs which were granted

by the local authority under the altered regime.

13. The original applicant on the other hand, contended

that when the NGT struck down certain provisions of the

MoEFCC’s 2016 notification, the 28.11.2017 EC granted by

the Municipal Corporation, would not legitimize the

construction and therefore the Project Proponent should

be prevented from proceeding with the construction and

also be penalized for the unauthorized construction.

14. The NGT then observed that because of the

invalidation of certain clauses in the 2016

Page 8 of 18
notification, the EC obtained from the PCMC is

unacceptable and accordingly rendered a finding that the

Project Proponent had failed to obtain the valid EC. The

maintainability challenge of the OA on the ground of

limitation was however rejected by observing that the

cause of action arose only in 2017 when the builder

allegedly exceeded the threshold limit of 20,000 sq.

mtrs. Accordingly, the authorities were directed to take

coercive action against the Project Proponent for

construction done after 8.12.2017, when the NGT’s

judgment was rendered in the OA No. 677/2016. However,

even with such finding having regard to the regime that

existed at the relevant time and adverting to the ratio

in Goan Real Estate and Construction Ltd. Vs. Union of

India,1 the NGT held that the construction already raised

should be protected. However, further construction

should be permitted only after securing the EC from the

competent authority, under the current regime.

15. The picture which emerges from the above discussion

is that when the Project Proponent initially wanted to

1 (2010) 5 SCC 388

Page 9 of 18
apply for the EC it had obtained the requisite layout

sanction for applying to the SEIAA. As such, it was

operating well within the applicable procedure, prior to

the amendment. After grant of such sanction, while the

construction was underway, the amendment came about on

9.12.2016 whereby, the local authority such as the

Municipal Corporation was made the competent authority

to grant EC. In the changed circumstances, the Project

Proponent necessarily had to apply to the PCMC as during

the interregnum before the NGT’s judgment on 8.12.2017,

SEIAA was not the competent authority to consider

application for EC. The Project Proponent was

therefore, complying with the regime set out by the

amended notification. It is apposite to note that the

Committee appointed by the NGT, in its report dated

11.8.2020 had clearly indicated that when the Project

Proponent had received the EC on 28.11.2017, the

competent authority to issue the EC was the

Environmental Cell of the PCMC. Thus, it is the

discernible understanding as part of the NGT’s own

expert Committee that the Project Proponent had obtained

Page 10 of 18
the EC from the competent authority of the relevant time

i.e. the PCMC. Interestingly, the constituted Committee

also included a member of the SEIAA.

16. Moreover, only after the earlier judgment of the

NGT on 8.12.2017 in the OA No. 677/2016, the State of

Maharashtra issued a clarification on 29.1.2018

directing that the Municipal authorities should not

process pending applications. But neither the decision

of the NGT nor of the Maharashtra Government

categorically gave any guidance as to the implication on

the EC obtained by the Project Proponent, on the

strength of which, a substantial measure of construction

was already made. It is also necessary to note that in

the subsequent notification issued on 14.11.2018 and

15.11.2018 by the MoEFCC, the power to grant EC

continued to vest in the local authority such as the

PCMC, with the only change being that it is the

municipality itself and not its Environmental Cell which

is empowered to grant the EC. For the sake of

completion, it may be recorded that the said

Page 11 of 18
notifications of the MoEFCC is stayed by the Delhi High

Court on 26.11.2018 in the WP(C) No. 12517/2018.

17. It is important to bear in mind that the Committee

constituted by the NGT to report on the building project

did not underscore any major deviation but instead found

that the Project Proponent had made substantial

compliance by obtaining the EC from the competent local

authority. Moreover the OA, neither before the NGT or

this Court, ever contended that appraisal done by the

PCMC’s Environmental Cell was defective or any different

from one done by SEIAA. Both processes are also

similarly structured. This may be the reason why the NGT

in the impugned judgment itself protected the already

made construction. However, the Project Proponent was

restrained from making any further construction without

obtaining clearance from the statutory EC and adhering

to the environmental norms.

18. The project of the appellant comprises six buildings

of which three were constructed in full, and the super

structure of the fourth building is completed and only

the internal works remains to be done. In the fourth

Page 12 of 18
building, 40 out of the 64 apartments have already been

sold. In this context, it would be appropriate to advert

to the submission of Ms. Aishwarya Bhati, the learned

ASG who had clearly stated that at the relevant time,

the competent authority to grant EC is the PCMC and not

the SEIAA and therefore the internal works for the

fourth constructed building, can be allowed to be

completed.

19. Considering the above circumstances, the NGT rightly

protected the already erected buildings and this

protection in our view, should not be impacted by the

earlier judgment of the NGT on 8.12.2017 in the OA No.

677/2016 whereby certain portions of the MoEFCC’s

9.12.2016 notification were invalidated and direction

was issued to the Ministry to revisit the said

notification. Importantly, neither the NGT’s

invalidation order nor the subsequent clarifications by

the State of Maharashtra, have suggested any adverse

action against the pre-existing structures. As the

expert body exclusively occupying the environmental

field, the NGT has assessed the factual circumstances to

Page 13 of 18
consciously lean towards protecting the already

constructed structures. Nothing more need be added on

this aspect. It is also not necessary in this appeal to

venture into the question of the retrospective

implication of the invalidation of certain parts of the

2016 Notification for other project proponents, which

may have gained their ECs in the interregnum.

20. In situations of this nature, the Doctrine of

Legitimate Expectation is attracted. The principle of

the rule of law as explained in De Smith’s Judicial

Review, such as, Regularity, Predictability and

Certainty in Government’s dealings with the Public, must

operate in the present matter. The Project Proponent can

legitimately expect a certain degree of stability in the

manner in which environmental regime is set and how the

applications are processed. The actions of the

authorities are expected to adhere to the prevalent

norms only, without the element of uncertainty for the

executed project.

21. In the above context we may benefit by referring to

the seminal case of Attorney General of Hong Kong v. Ng

Page 14 of 18
Yuen Shiu2, where Lord Fraser speaking for the Privy

Council, appositely observed thus,

“… when a public authority has promised to follow a
certain procedure, it is in the interest of good
administration that it should act fairly and should
implement its promise, so long as implementation does
not interfere with its statutory duty.”

22. This Court in Sethi Auto Service Station vs Delhi

Development Authority & Ors3, speaking through Justice

D.K. Jain, has cited other opinions and elucidated on

the concept of legitimate expectation, in the following

manner,

“24. The House of Lords in Council of Civil Service
Unions & Ors. Vs. Minister for the Civil Service, a
locus classicus on the subject, wherein for the
first time an attempt was made to give a
comprehensive definition to the principle of
legitimate expectation. Enunciating the basic
principles relating to legitimate expectation, Lord
Diplock observed that for a legitimate expectation
to arise, the decision of the administrative
authority must affect such person either

(a) **** **** **** **** ****

(b) by depriving him of some benefit or advantage
which either: (i) he has in the past been permitted
by the decision maker to enjoy and which he can
legitimately expect to be permitted to continue to do
until some rational ground for withdrawing it has
been communicated to him and he has been given an
opportunity to comment thereon or (ii) he has
received assurance from the decisionmaker that they

2 (1983) 2 AC 629 : (1983) 2 WLR 735
3 (2009) 1 SCC 180

Page 15 of 18
will not be withdrawn without first giving him an
opportunity of advancing reasons for contending that
they should be withdrawn.” (emphasis supplied)

23. The Doctrine of Legitimate Expectation is further

explained in Food Corporation of India Vs. M/s Kamdhenu

Cattle Feed Industries4 where for a Three-Judge Bench of

this Court Justice J.S. Verma observed thus: –

“The mere reasonable or legitimate expectation of a
citizen, in such a situation, may not by itself be a
distinct enforceable right, but failure to consider
and give due weight to it may render the decision
arbitrary, and this is how the requirement of due
consideration of a legitimate expectation forms part
of the principle of non-arbitrariness, a necessary
concomitant of the rule of law. Every legitimate
expectation is a relevant factor requiring due
consideration in a fair decision-making process.
Whether the expectation of the claimant is reasonable
or legitimate in the context is a question of fact in
each case. Whenever the question arises, it is to be
determined not according to the claimant’s perception
but in larger public interest wherein other more
important considerations may outweigh what would
otherwise have been the legitimate expectation of the
claimant. A bona fide decision of the public
authority reached in this manner would satisfy the
requirement of non-arbitrariness and withstand
judicial scrutiny. The doctrine of legitimate
expectation gets assimilated in the rule of law and
operates in our legal system in this manner and to
this extent.”

24. The more compelling public interest might possibly

diminish the degree of legitimate expectation for a

party but a balance has to be found. In the present

4 (1993) 1 SCC 71

Page 16 of 18
matter the appellant has acted on the EC and made

substantial investments. They cannot be pushed to a

precipice and be made to fall. Doing so would be

inequitable particularly when, the appellant has

scrupulously adhered to the applicable legal framework

during the concerned period. Moreover, third-party

interests have also cropped up in the interregnum.

25. A Project Proponent is not expected to anticipate the

changes in EC regimes, especially as a result of

judicial interventions, and keep revisiting the

sanctioned clearances by the competent authority or even

raze down validly constructed structures. Neither can it

be expected to knock the doors of an authority, not

empowered at the relevant time, to process its

applications. Such a scenario would render the process

akin to a Sisyphean task, eternally inconclusive and

never ending.

26. As seen, the NGT in the impugned judgment has

protected the completed construction and, on this

aspect, we deem it appropriate to endorse the same, by

Page 17 of 18
accepting the submission of the appellant’s Counsel and

the learned ASG. The four constructed buildings are

resultantly to be treated to be under a valid EC with

all legal consequences. It is, however, made clear that

if any further construction is proposed by the appellant

with the sanctioned layout, the same should not be done

on the strength of the EC granted on 28.11.2017 by the

PCMC. In other words, if the Project Proponent wishes to

construct the remaining buildings, they must secure

fresh clearance from the competent authority, as per the

currently applicable framework. It is ordered

accordingly.

27. With the above order, the appeals are disposed of

without any order on cost.

………………………………………………………J.

[R. SUBHASH REDDY]

….…………………………………………………J.

[HRISHIKESH ROY]
NEW DELHI
NOVEMBER 26, 2021

Page 18 of 18



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