India is fast emerging as a major global business giant, and the investments in urban infrastructure are projected to be higher than ever before. But construction activities have to be pursued giving due attention to environmental issues as well.

Environmental Clearance is a long-drawn process that is mandatory to be undertaken for projects beyond a certain size. It often involves an environment impact assessment of a potential project as well as public hearings. The process for clearance is outlined by the Environmental Impact Assessment (EIA) Notification of 2006. There are cases when compliance with such guidelines becomes a stumbling block in the development of such projects.

Recently, in the case of The Project Director, Project Implementation Unit v. PV Krishnamoorthy & Ors, a similar issue arose before the Supreme Court of India relating to the ₹10,000 crore Chennai-Salem eight-lane green corridor project being part of “Bharatmala Pariyojna – Phase I”. The Court was faced with the question whether the project can be allowed to be implemented prior to the requirement of environment/forest clearances.

A Bench of Justices AM Khanwilkar, BR Gavai and Krishna Murari extensively analysed the relevant provisions of the National Highways Act, 1956, the National Highways Rules, 1957 and the National Highways Authority of India Act, 1988 while examining the Madras High Court’s decision that a prior environmental clearance was needed for the project, and upheld the notifications for acquisition of land for the project.

The Court set aside the Madras High Court verdict in a 140-page judgment and held that the Central government is not required to obtain prior environmental or forest clearance before declaring a stretch as a national highway, and thereby expressing its intention to acquire the land for building, maintenance or operating such roads.

Factual background

Writ petitions were filed before the Madras High Court challenging the notifications issued by National Highway Authority of India (NHAI) under Section 3A of the National Highway Act, 1956 (NH Act) towards land acquisition for the development/construction of the Chennai-­Salem National Highway, as illegal and bad in law on various grounds. 15 questions were framed for consideration by the High Court, amongst which one of the moot questions was whether a project can be allowed to be implemented prior to environment clearance.

After assessing the viability of the project, the High Court held that the project cannot be allowed to be implemented at the stage of Section 3A notification, without prior environment clearance. Consequently, Section 3A notifications were quashed by the High Court and the construction of the highway was stalled.

Aggrieved by the aforesaid judgment, NHAI filed a Special leave Petition before the apex court. It was argued by NHAI that the land acquisition proceedings under the NH Act and the grant of environment clearance (EC) under the EIA Notification, 2006 are two distinct proceedings operating in different fields. Therefore, the challenge by the land owners to the land acquisition for setting aside the preliminary notification u/s 3A of the NH Act on the ground of absence of EC clearance, is legally unsustainable. In fact, the process for obtaining EC cannot be initiated without the publication of the notification u/s 3A(1) of the NH Act, which is mandatorily required for determining the exact extent of land to be acquired, which in turn is required from a practical perspective to conduct the activities necessary for the purposes of applying for an environmental clearance.

The Environmental Impact Assessment Guidance Manual for Highways, 2010 issued by the Union Ministry of Environment, Forests and Climate Change (MoEF) also provides that for prior EC clearance, a brief description of the project is required to be given which includes the details of the nature of project, size, location, regions which are to be included, project site description-survey/village, tehsil, district, state and the extent of the land, latitude and longitude of the boundaries (as contained in S. 3A notification).

It is apposite to highlight the relevant land acquisition provisions under the NH Act which were in consideration before the Court. The NH Act is a self-contained Act which lays down the complete procedure of acquisition for the purpose of highways. A preliminary notification under Section 3A(1) of the NH Act is published showing an “intention” to acquire the land. The relevant sections are:

“3A. Power to acquire land, etc.—(1) Where the Central Government is satisfied that for a public purpose any land is required for the building, maintenance, management or operation of a national highway or part thereof, it may, by notification in the Official Gazette, declare its intention to acquire such land.

…..

“3D. Declaration of acquisition.—(1) Where no objection under sub-section (1) of section 3C has been made to the competent authority within the period specified therein or where the competent authority has disallowed the objection under subsection (2) of that section, the competent authority shall, as soon as may be, submit a report accordingly to the Central Government and on receipt of such report, the Central Government shall declare, by notification in the Official Gazette, that the land should be acquired for the purpose or purposes mentioned in sub-section (1) of section 3A.

(2) On the publication of the declaration under sub-section (1), the land shall vest absolutely in the Central Government free from all encumbrances.

(3) Where in respect of any land, a notification has been published under sub-section (1) of section 3A for its acquisition but no declaration under sub-section (1) has been published within a period of one year from the date of publication of that notification, the said notification shall cease to have any effect:

Provided that in computing the said period of one year, the period or periods during which any action or proceedings to be taken in pursuance of the notification issued under sub-section (1) of section 3A is stayed by an order of a court shall be excluded.

(4) A declaration made by the Central Government under sub-section (1) shall not be called in question in any court or by any other authority.”

Supreme Court's decision

The Supreme Court discussed at length the basis of the scheme of the enactments with respect to the NHAI and its functions and the procedure for acquisition of land expounded under Sections 3A to 3J of the NH Act. It was observed that it is not in dispute that environmental/forest clearance is always site-specific and, therefore, until the site is identified for construction of national highways manifested vide a Section 3A notification, the question of making any application for permission under the environmental/forest laws would not arise.

The requirement of prior environmental forest clearance would arise only if finally, the land in question (site-specific) is notified under Section 3D. The purpose being, as per Section 3D(2), the land vests absolutely in the Central government free from all encumbrances. Keeping this objective in mind, it is necessary to obtain prior environmental/forest clearance before the publication of the Section 3D notification. This is primarily to assuage the concerns of land owners that even if eventually no environment permission or forest clearance is accorded, the land cannot revert to the original owner, as it had de jure vested in the Central government upon issuance of notification under Section 3D of the 1956 Act, and that no power is bestowed on the Central government under 1956 Act to withdraw from acquisition.

The Court did not lose sight of the importance of the environment and referred to the case of Karnataka Industrial Areas Development Board v. C Kenchappa & Ors. In that judgment, a general direction was issued that in the future, before the acquisition of land for development, the consequence and adverse impact of development on the environment must be properly comprehended, so that it does not gravely impair the ecology and environment. The relevant portion of the judgment is extracted hereunder:

“100. The importance and awareness of environment and ecology is becoming so vital and important that we, in our judgment, want the appellant to insist on the conditions emanating from the principle of “Sustainable Development”:

(1) We direct that, in future, before acquisition of lands for development, the consequence and adverse impact of development on environment must be properly comprehended and the lands be acquired for development that they do not gravely impair the ecology and environment."

The Court was sanguine about the practical difficulty which may arise in cases where it takes more than ‘one year’ to obtain environment/forest clearance after the notification under Section 3A is published, as the land acquisition proceedings will lapse as per Section 3D(3) of the NH Act. In such cases, if more than one year is taken to obtain such clearances, Section 3A will cease to have effect as per Section 3D(3).

Considering the interplay between the environment and the construction of highways, the Court invoked its plenary powers under Article 142 of the Constitution of India to hold that the dictum of the apex court in Karnataka Industrial Areas Development Board be regarded as stay granted by the Court to all such notifications issued under Section 3A of the NH Act, until the grant or non-grant of permissions by the competent authorities under the environmental and forest laws attains finality. In other words, the Court held that the time period taken for obtaining environment/forest clearance shall be excluded from the period of ‘one year’ as stipulated under Section 3D(3) of the Act, so that the Section 3A notification does not cease to have effect.

On the issue of viability of the project, the Court referred to its judgment in the case of Union of India v. Kushala Shetty & Ors, and after analysing the provisions of the 1956 Act (Sections 3A to 3D), opined that it is not open to the Court to castigate the reasons that weighed with the competent authority for the development and construction of highways.

Conclusion

In the present case, the Supreme Court invoked its plenary powers under Article 142 of the Constitution of India in order to give an expansive meaning to the proviso in Section 3D (3) of the NH Act. It thereby achieved the objective of balancing the competing public interests/public purposes that come in the way of accomplishing the goal of sustainable development.

Madhu Sweta is a Partner and Shivangi Khanna is a Principal Associate at Singhania and Partners LLP.

Disclosure: The former defended the case before the Supreme Court.