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REPORTABLE  

IN THE SUPREME COURT OF INDIA  

CIVIL APPELLATE JURISDICTION  

 Civil Appeal No.  2435 OF  2019  

Keystone Realtors Pvt. Ltd.                             …Appellant                             

                              Versus  

Shri Anil V Tharthare & Ors.              …Respondents  

J U D G M E N T  

Dr Dhananjaya Y Chandrachud, J  

1. The present Civil Appeal arises from an order dated 11 February 2019 of  

the Principal Bench of the National Green Tribunal 1 .  In its order, the NGT held  

that the increase in the total construction area of the appellant‟s project was an  

“expansion” under a notification (bearing number S.O. 1533) dated 14 September  

2006 2  of the Ministry of Environment and Forests. The NGT found that the  

appellant had undertaken an “expansion” as set out in Paragraph 2 of the EIA                                                         1  NGT  

2  EIA Notification  

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Notification without complying with the regulatory procedure prescribed. The  

appellant was directed to deposit an amount of Rupees one crore with the  

Central Pollution Control Board 3 . Noting that the construction at the project site  

had been completed, the NGT appointed a five-member expert committee to  

study the impact of the appellant‟s expanded project and to suggest remedial  

measures.     

The facts   

2. The appellant is the project proponent of a residential redevelopment,  

called „Oriana Residential Project‟ situated at CTS no 646, 646 (Pt) Gandhinagar,  

Bandra (East), Mumbai 400050. On 8 June 2010 the appellant received a  

Commencement Certificate to carry out the development and erect a building  

situated at the project property. The appellant began construction. When the  

construction commenced, the total construction area was 8,720.32 square  

metres. The ambit of the project was expanded, and the constructed area was  

increased to 32,395.17 square metres. Under the EIA Notification, an  

Environmental Clearance 4  was necessary if the total construction area exceeded  

20,000 square metres. Hence, the appellant applied for an EC under the EIA  

Notification.  

3. The fourth respondent, the State Level Expert Appraisal Committee for  

Maharashtra 5  recommended the grant of an EC for the project. On 2 May 2013  

the third respondent, the State Level Environment Impact Assessment Authority  

                                                      3  CPCB  

4  EC  

5  SEAC

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for Maharashtra 6 , based on the recommendations of the SEAC granted an EC. It  

is not in dispute that at the time when the EC dated 2 May 2013 was granted, the  

total construction area of the project was 32,395.17 square metres. The grant of  

the EC was conditional on the appellant obtaining a „consent for establishment‟  

from the Maharashtra Pollution Control Board under the Air (Prevention and  

Control of Pollution) Act 1981 and the Water (Prevention and Control of Pollution)  

Act 1974.    

4. By a letter dated 24 September 2013, the appellant informed the  

Environment Department of the Government of Maharashtra, the second  

respondent, that the construction area was being further increased by 8,085.71  

square metres, as a result of which the total construction area of the project   

would stand enhanced to 40,480.88 square metres. In its letter, the appellant  

sought an „amendment‟ to the EC dated 2 May 2013 by the third respondent to  

reflect the increase in the total construction area. On 13 March 2014, the third  

respondent granted an „amendment‟ to the EC dated 2 May 2013 on the ground  

that there was only a “marginal increase in built up and construction area”. The  

third respondent noted the changes in the specification of the project as follows:   

Description  As per EC dated 2 May  2013  

Amendment  

FSI area    

16,346.32 sq mts 21,365.54 sq mts  

Non FSI area    

16,048.85 sq mts  19,115.34 sq mts  

Total Construction area    

32,395.17 sq mts 40,480.88 sq mts  

Nos of tenements    

Members  64    

Sale 61 Members  64   

Sale 77  

                                                      6  SEIAA

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Building Configuration    

Member  2  Basement  

Member  2  Basement  

5. The first respondent, claiming to be a resident of MIG Colony,  

Gandhinagar, Bandra East, Mumbai, challenged the grant of the amended EC  

dated 13 March 2014 before the Pune Bench of the NGT. In response, the  

appellant filed two applications, challenging the standing of the first respondent  

and contending that the challenge was barred by limitation. By an order dated 4  

May 2016, the Pune Bench of the NGT rejected the applications questioning the   

maintainability of the proceedings and setting up the bar of limitation. The  

appellant filed a writ petition before the High Court of Judicature at Bombay to  

challenge the decision of the Pune Bench of the NGT. The Bombay High Court,  

allowing the writ petition held by an order dated 12 August 2016, that the appeal  

was not maintainable at the behest of the first respondent, and the challenge  

against the grant of the amended EC dated 13 March 2014 was barred by  

limitation. By an administrative order dated 31 July 2018, the dispute was  

transferred from the Pune Bench of the NGT to the Principal Bench which heard  

the parties and delivered the impugned order.      

Relevant clauses of the EIA Notification   

6. The present dispute raises important questions regarding the interpretation  

the EIA Notification. The EIA Notification seeks to ensure the protection and  

preservation of the environment during the execution of new projects and the  

expansion or modernisation of existing projects. It imposes restrictions on the  

execution of new projects and on the expansion of existing projects, until their

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potential environmental impact has been assessed and approved by the grant of  

an EC. Paragraph 2 of the EIA Notification reads thus:   

“2. Requirement for prior Environmental Clearance (EC): -  

The following projects or activities shall require prior  

environmental clearance from the concerned regulatory  

authority, which shall hereinafter be referred to as the Central  

Government in the Ministry of Environment and Forests for  

matters falling under Category „A‟ in the Schedule and at  

State level the State Environment Impact Assessment  

Authority (SEIAA) for matters falling under Category „B‟ in the  

said Schedule, before any construction work, or preparation  

of land by the project management except for securing the  

land, is started on the project or activity:   

(i) All new projects or activities listed in the Schedule to this  

notification;   

(ii) Expansion and modernisation of existing projects or  

activities listed in the Schedule to this notification with  

addition of capacity beyond the limits specified for the  

concerned sector, that is, projects or activities which  

cross the threshold limits given in the Schedule after  

expansion or modernisation;   

(iii) Any change in product – mix in an existing manufacturing  

unit included in Schedule beyond the specified range.”   

(Emphasis supplied)  

The Schedule to the EIA Notification classifies potential projects into Category „A‟  

and Category „B‟ based on their size and potential environmental impact.   

Category „A‟ projects require project proponents to secure an EC from the  

Ministry of Environment, Forests and Climate Change. Category „B‟ projects  

require project proponents to secure an EC from the SEIAA, based on the  

recommendations of the SEAC. Where a project falls within the parameters  

stipulated in the Schedule, paragraph 2 of the EIA Notification provides that no  

construction work shall begin unless an EC is granted in regard to three types of  

activity: (i) new projects or activities provided in the Schedule, (ii) expansion or

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modernisation of existing projects or activities provided in the Schedule, and (iii)  

changes in the product mix in existing manufacturing units provided in the  

Schedule beyond the specified range. The present dispute raises questions as to  

how the second type of activity, the “expansion” of existing projects, should be  

construed under the EIA Notification.   

7. In order to secure an EC, the project proponent must submit an application  

in the manner set out in Form 1 and Supplementary Form 1A (if applicable) of the  

EIA Notification. Under paragraph 7(i) of the EIA Notification, the project  

proponent must also submit a pre-feasibility report. However, in the case of  

projects under item 8 of the Schedule, only a conceptual plan is required to be  

submitted. Paragraph 7(ii) of the EIA Notification states that:   

“7(ii) Prior Environmental Clearance (EC) process for  

Expansion or Modernisation of Change of product mix in  

existing projects:  

All applications seeking prior environmental clearance  

for expansion with increase in the production capacity  

beyond the capacity for which prior environmental  

clearance has been granted under this notification or  

with increase in either lease area or production capacity in  

the case of mining projects or for the modernisation of an  

existing unit with increase in the total production capacity  

beyond the threshold limit prescribed in the Schedule to this  

notification through change in process and or technology or  

involving a change in the product mix shall be made in Form  

1 and they shall be considered by the concerned Expert  

Appraisal Committee or State Level Expert Appraisal  

Committee within sixty days, who will decide on the due  

diligence necessary including preparation of EIA and  

public consultation and the application shall be appraised  

accordingly for grant of environmental clearance.”   

(Emphasis supplied)  

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Clause (ii) of paragraph 2 of the EIA Notification requires the project proponent to  

secure an EC from the relevant regulatory authority prior to undertaking any  

“expansion” of an existing project. Paragraph 7(ii) further stipulates that all  

applications for an EC in cases of “expansion” resulting in the increase of  

production capacity or lease area beyond the capacity/area stipulated in the  

previous EC shall be made in the manner set out in Form 1 or 1A (as applicable).   

8. The appellant‟s application in Form 1 acknowledges that the project fell  

under entry 8(a) of Schedule 1 of the EIA Notification. Entry 8 deals with „Building  

and Construction projects having a built-up area of or greater than 20,000 square  

metres but less than 1,50,000 square metres.‟ Entry 8 of the Schedule to the EIA  

Notification is as follows:   

8 – Building / Construction projects / Area Development projects and  Townships  

8(a) Building and Construction  projects  

≥20,000 sq mts  and <1,50,000 sq  mts of built-up  area  

Built-up area for  covered  construction: in  the case of  facilities open to  the sky, it will be  the activity area    

8(b) Townships and Area  Development projects  

Covering an area  ≥ 50 ha and or  built up area  ≥1,50,000 sq mts    

All projects under  item 8(b) shall be  appraised as  Category B1   

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Issue  

9. In applying for the original EC, the appellant submitted an application in  

Form 1 as required under the provisions of the EIA Notification. The total  

construction area identified in the appellant‟s Form 1 was 32,395.17 square  

metres. However, in September 2013 the appellant informed the second  

respondent of an increase by 8,085.71 square metres as a result of which the  

total construction area of the project would be 40,480.88 square metres. In  

seeking an „amendment‟ to the EC dated 2 May 2013 the appellant did not submit  

an updated Form 1. Further, the „amendment‟ to the EC was granted by the  

SEIAA without the recommendations of the SEAC. The issue before this Court is  

whether the „amended‟ EC dated 13 March 2014 granted by the SEIAA without  

following the procedure stipulated in paragraph 7(ii) of the EIA Notification is  

valid.   

Submissions  

10. Mr Mukul Rohatgi, learned Senior Counsel appearing on behalf of the  

appellant submitted that:   

(i) When construction began, the total construction area of the  

appellant‟s project was 8,720.32 square metres. As the EIA  

Notification requires projects with a total built up area of or more  

than 20,000 square metres to procure an EC prior to the start of  

construction, no EC was required before construction of the  

appellant‟s project commenced;  

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(ii) Pursuant to the first increase, when the appellant‟s project crossed  

the 20,000 square metre threshold provided for in the EIA  

Notification, the appellant submitted a Form 1 and was granted a  

valid EC dated 2 May 2013 by the third respondent;   

(iii) Pursuant to the second increase, the built up area of the appellant‟s  

project only marginally increased by 8,085.71 square metres to a  

total construction area of 40,480.88 square metres, which is within  

the upper limit of 1,50,000 square metres prescribed by entry 8(a) of  

the Schedule to the EIA Notification. Therefore, the second increase  

was not an “expansion” within the meaning of clause (ii) of  

paragraph 2 of the EIA Notification and no fresh Form 1 or EC was  

required at the time of the second increase;   

(iv) Clause (ii) of paragraph 2 only applies to situations where the  

project crosses the lower or upper threshold limits stipulated in the  

Schedule. Any increase in production capacity or construction area  

within the limits set out in the Schedule would not constitute an  

“expansion” within the meaning of Clause (ii) of paragraph 2 and  

does not require compliance with the procedure under paragraph  

7(ii) of the EIA Notification;   

(v) The increase in the appellant‟s project is only marginal and does not  

have an adverse impact on the environment;    

(vi) The SEIAA applied its mind to the appellant‟s request for an  

„amendment‟; noted that the increase in construction area was only

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marginal and issued an amendment to the original EC dated 2 May  

2013; and   

(vii) The NGT had no basis to impose the fine of Rupees one crore on  

the appellant.  

11. Joining issue with the above submissions, Mr Aditya Pratap, learned  

counsel appearing on behalf of the first respondent submitted that:   

(i) Under clause (ii) of paragraph 2 read with paragraph 7(ii) of the EIA  

Notification, any expansion beyond the “threshold limit” requires a  

fresh EC. The appellant‟s project had crossed the threshold limit of  

20,000 square metres and the second increase of 8,085.71 square  

metres constituted an „expansion beyond the threshold limit‟ and  

hence required a fresh EC;   

(ii) Once a project breaches the lower threshold limit set out in the  

Schedule to the EIA Notification, any expansion or modernisation,  

even within the upper threshold set out in the Schedule, will require  

the submission of a fresh Form 1 and the matter to be placed before  

the Expert Appraisal Committee or the SEAC, as applicable in  

accordance with paragraph 7(ii) of the EIA Notification;  

(iii) Adopting the appellant‟s interpretation of clause (ii) of paragraph 2  

would defeat the object and purpose of the EIA Notification as a  

whole. It would allow project proponents to incrementally increase

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the construction area and over time significantly impinge on the  

environmental impact of the project without seeking a fresh EC;   

(iv) If the law prescribes an act to be done in a particular manner, it  

must be done only in that manner and no other. Under paragraph  

7(ii) of the EIA Notification, it was incumbent on the SEIAA to place  

the matter before the SEAC for appraisal and recommendations;  

and  

(v) The EIA Notification is an operationalisation of the precautionary  

principle, which forms a part of the environmental law of India. The  

EIA Notification must be read in a manner which gives effect to the  

precautionary principle.   

Interpreting paragraphs 2 and 7  

12. The central controversy between the parties to the present dispute is the  

manner in which paragraphs 2 and 7 of the EIA Notification should be interpreted.  

Clause (ii) of paragraph 2 of the EIA Notification stipulates that a project  

proponent shall require an EC prior to the start of construction in the case of an  

“expansion”. Clause (ii) uses the phrase “expansion…beyond the limits specified  

for the concerned sector”. The first respondent sought to lay emphasis on this  

construction to argue that any expansion beyond the lower limit stipulated in the  

Schedule would attract the requirement of a prior EC under paragraph 2.  

However, the above language in clause (ii) is further qualified by the phrase “that  

is, projects or activities which cross the threshold limits given in the Schedule

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after expansion or modernisation.” A plain reading of the second half of clause (ii)  

would indicate that it applies to cases where a project was initially below the  

threshold limits stipulated in the Schedule but after the proposed expansion,  

would breach the threshold limits. Clause (ii) of paragraph 2 of the EIA  

Notification therefore would not appear to cover a case where a project had  

already crossed the lower threshold limit set out in the Schedule and the  

expansion does not cross the upper limit stipulated by the Schedule.  

13. However, clause (ii) of paragraph 2 must be read with paragraph 7(ii) of  

the EIA Notification. Paragraph 7(ii) lays down the exact procedure to be followed  

by a project proponent in the case of an expansion. Two crucial points must be  

noted with respect to paragraph 7(ii). First, it uses the phrase, “expansion with  

increase in production capacity beyond the capacity for which prior environment  

clearance has been granted”. Second, the qualifying language referring to  

breaching the threshold limits “after expansion” is absent. An “expansion” can  

occur even after the grant of an EC when the project first crossed the lower limit  

stipulated in the threshold and it is not necessary for the project to breach the  

upper limit after the expansion. Therefore, a close reading of paragraph 7(ii)  

would support the interpretation put forth by the first respondent – that even after  

obtaining an EC if the project is expanded beyond the limits for which the prior  

EC was obtained, a fresh application would need to be made even if the  

expansion is within upper the limit prescribed in the Schedule.   

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14. The dangers effectively articulated by the learned counsel for the first  

respondent are real. If clause (ii) of paragraph 2 does not cover a case where the  

expansion is within the limits stipulated by the Schedule, a project proponent may  

incrementally keep increasing the size of the project area over time resulting in a  

significant increase in the project size without an assessment of the   

environmental impact resulting from the expansion. Such an outcome would  

defeat the entire scheme of the EIA Notification which is to ensure that any new  

or additional environmental impact is assessed and certified by the relevant  

regulatory authorities. In the present case, the lower limit of Entry 8(a) of the  

Schedule is a built up area of 20,000 square metres and the upper limit is  

1,50,000 square metres. It cannot be doubted that the environmental impact of a  

construction of 1,50,000 square metres is drastically more than construction of  

20,000 square metres. If the appellant‟s argument is accepted in totality, a project  

proponent could potentially secure an EC for constructing 20,000 square metres  

and by „amendment‟ steadily increase the area of construction up to 1,50,000  

square metres without submitting an updated Form 1 or any substantive review  

by the SEAC.    

15. We note that subsequent to the EIA Notification being published in 2006, a  

draft notification was issued on 19 January 2009. 7  The draft notification proposed  

the following amendment:   

“in para 2 [of the EIA Notification], after sub-para (iii), the  

following shall be inserted; namely:-   

                                                      7  Notification S.O. 195 (E) dated 19 January 2009.  

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However modernisation or expansion proposals without any  

increase in pollution load, and, or without any additional water  

and or land requirement are exempted from the provisions of  

this Notification:   

Provided that, a self certification, stating that the proposals  

shall not involve any additional pollution load, waste  

generation or water requirement, be submitted to the  

regulatory authority by the project proponent.”   

Prior to adopting the draft notification, hearings were conducted and written  

comments were solicited from various stakeholders including: (i) Central  

Ministries and Departments, (ii) State Governments and their Agencies, (ii)  

Industries and their Associations and (iv) Civil Society including NGOs. A  

committee was constituted by the Ministry of Environment and Forests,  

Government of India which published a report in October 2009. The committee  

specifically recommended against the adoption of the above amendment, noting:   

“The amendments propose to exempt modernisation and  

expansion of projects based on a self certification by project  

authorities that there is no increase in pollution load. It is  

totally unacceptable that the modernisation and  

expansion of projects be removed from the  

environmental clearance regime, with or without the  

requirement of self certification. There are several  

industries operating in critically polluted areas or are in  

violation of their environmental clearance conditions, which  

need to be considered before the expansion of a project is  

considered. What is to be considered is not just whether there  

is an increase in pollution load but also the current impact of  

the project and its compliance with environmental clearance  

conditions. We can provide clear examples wherein the non-

compliance of the clearance conditions has not been  

considered while granting clearance for expansion which  

includes adding new components to the existing industrial  

operations etc. This has allowed several projects to continue  

their activities and expand despite blatant non compliance.  

Finally, it is only with industrial, thermal power and other such  

related operations that one can decide on parameters of  

pollution. Development projects like highways, airports  

and other infrastructure projects which seek to expand  

might have a detrimental impact due to factors such as

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change in land use (i.e. construction over a wetland,  

grassland or agricultural land etc). Despite this, the project  

proponent can certify that there is no change in pollution load  

and hence expansion is to be allowed. The current process  

seeks a detailed EIA report to determine whether impacts  

can be mitigated. If the amendment is brought into force,  

it will simply do away with this critical and necessary  

step in the environmental clearance process. Therefore,  

this amendment should not be allowed.   

…  

The draft notification takes a myopic view of environmental  

and social impact of modernisation and expansion. Any  

modernisation/expansion projects will necessarily entail  

increase in production, increase in transportation,  

increase in pressure on the local infrastructure and local  

natural resources and increase in the pollution load  

during the construction phase. So, even if a  

modernisation/expansion does not lead to an increase in the  

pollution load or water or land requirement within the factory  

premises during the operation phase, it will lead to an  

increase in environmental and social impact outside the  

premise.”   

(Emphasis supplied)   

The draft amendment was not adopted in subsequent amendments to the EIA  

Notification. We find considerable merit in the observations of the committee that  

the requirement of an EC at the time of expansion forms a critical step in the  

environmental clearance regime. According to the committee, it assists officials  

not just in evaluating and mitigating any adverse impact caused by the expansion  

but also in assessing whether the project proponent is in compliance with their  

existing obligations. Crucially, any form of expansion necessarily puts a strain on  

the local environment and infrastructure and needs to be carefully evaluated in a  

holistic manner.   

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16. In a case where the text of the provisions requires interpretation, this Court  

must adopt an interpretation which is in consonance with the object and purpose  

of the legislation or delegated legislation as a whole. The EIA Notification was  

adopted with the intention of restricting new projects and the expansion of new  

projects until their environmental impact could be evaluated and understood. It  

cannot be disputed that as the size of the project increases, so does the  

magnitude of the project‟s environmental impact. This Court cannot adopt an  

interpretation of the EIA Notification which would permit, incrementally or  

otherwise, project proponents to increase the construction area of a project  

without any oversight from the Expert Appraisal Committee or the SEAC, as  

applicable. It is true that there may exist certain situations where the expansion  

sought by a project proponent is truly marginal or the environmental impact of  

such expansion is non-existent. However, it is not for this Court to lay down a  

bright-line test as to what constitutes a „marginal‟ increase and what constitutes a  

material increase warranting a fresh Form 1 and scrutiny by the Expert Appraisal  

Committee. If the government in its wisdom were to prescribe that a one-time  

„marginal‟ increase (e.g. 5% or 10%) in project size, within the threshold limit  

stipulated in the Schedule, could be subject to a lower standard of scrutiny  

without diluting the urgent need for environmental protection, conceivably this  

Court may give effect to such a provision. This would be subject to any challenge  

on the ground of their being a violation of the precautionary principle. However,  

as the EIA Notification currently stands, an expansion within the limits prescribed  

by the Schedules would be subject to the procedure set out in paragraph 7(ii).   

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17. At the time of the second increase, the total construction area of the  

appellant‟s project was enlarged from 32,395.17 square metres to 40,480.88  

square metres. As a result of the expansion, the appellant constructed sixteen  

additional flats which were sold at the prevailing market rate. The appellant did  

not comply with the procedure set out under paragraph 7(ii) of the EIA  

Notification but rather sought an „amendment‟ to the EC. The third respondent did  

not require the appellant to submit an updated Form 1 nor was the proposal  

processed and evaluated by the fourth respondent. The „amendment‟ to the EC  

dated 13 March 2014 does not discuss the potential environmental impact of the  

increase in construction area, but merely records that the construction area now  

stands at 40,480.88 square metres. The procedure set out under paragraph 7(ii)  

of the EIA Notification exists to ensure that where a project is expanded in size,  

the environmental impact on the surrounding area is evaluated holistically  

considering all the relevant factors including air and water availability and  

pollution, management of solid and wet waste and the urban carrying capacity of  

the area. This was not done in the case of the appellant‟s project. It was not open  

to the third respondent to grant an „amendment‟ to the EC without following the  

procedure set out in paragraph 7(ii) of the EIA Notification.   

18. We further note that as on the date of the impugned order construction at  

the project site had already been completed. A core tenet underlying the entire  

scheme of the EIA Notification is that construction should not be executed until  

ample scientific evidence has been compiled so as to understand the true  

environmental impact of a project. By completing the construction of the project,

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the appellant denied the third and fourth respondents the ability to evaluate the  

environmental impact and suggest methods to mitigate any environmental  

damage. At this stage, only remedial measures may be taken. The NGT has  

already directed the appellant to deposit Rupees one crore and has set up an  

expert committee to evaluate the impact of the appellant‟s project and suggest  

remedial measures. In view of these circumstances, we uphold the directions of  

the NGT and direct that the committee continue its evaluation of the appellant‟s  

project so as to bring its environmental impact as close as possible to that  

contemplated in the EC dated 2 May 2013 and also suggest the compensatory  

exaction to be imposed on the appellant.     

19. The appeal is dismissed. There shall be no order as to costs.    

20. Pending application(s), if any, shall stands disposed of.     

.……......................................................J                 [Dr Dhananjaya Y Chandrachud]        

.……......................................................J  

               [Ajay Rastogi]  

New Delhi;  December 3, 2019.