SC’s decision to recall Vanashakti judgement risks making prior environmental clearance optional
The Supreme Court has recalled its Vanashakti judgment following a review petition by CREDAI.
The original judgement had declared retrospective environmental clearances illegal.
This new decision allows for a fresh hearing to reconcile conflicting legal precedents on the issue.
On November 18, 2025, the Supreme Court of India recalled its judgement that barred granting of retrospective environmental clearances (EC).
In the initial Vanashakti vs Union of India judgment delivered on May 15, 2025, the apex court had taken a firm stand on the precautionary principle. It had struck down the 2017 Notification and 2021 Office Memorandum by the Union Ministry of Environment, Forest and Climate Change, both of which allows ex post facto (retrospective) ECs, calling them illegal and unconstitutional.
Subsequently, industry bodies, notably the Confederation of Real Estate Developers of India (CREDAI), filed a review petition arguing that the two-judge bench had failed to consider earlier coordinate bench rulings (Electrosteel Steels Ltd and Pahwa Plastics Pvt Ltd) that had, in exceptional cases, permitted the regularisation of post-facto ECs.
The petition stated that this review is "imperative and expedient", highlighting the industry's push for practical mechanisms to regularise existing violations.
In the latest split-majority decision, the Supreme Court allowed the review petition and recalled the original Vanashakti judgment, thereby restoring the case for a fresh and comprehensive hearing to reconcile the conflicting legal precedents on the permissibility of retrospective environmental approvals.
Court’s directive: Foresight over forgiveness
During the May ruling, the bench consisting of justices Abhay S Oka and Ujjal Bhuyan, emphasised that prior EC is the only legal recourse for setting up or modifying industrial and real estate projects.
The court’s firm stance was rooted in the Indian Constitution’s recognition of the right to a pollution-free environment under Article 21 (Right to Life). The judgment issued a strong criticism of the central government's repeated efforts to protect entities — including companies and real estate developers — that had knowingly proceeded without necessary environmental permissions.
The ruling made the following clear:
Environmental protection must be a foundational requirement, not merely a system for penalties or fines.
The Court has restrained the Central Government from issuing any future circulars or orders that provide for retrospective EC in any form.
This upholds the precautionary principle, ensuring environmental safeguards are implemented before any potential damage occurs.
Despite clarity in the SC verdict, the ruling is now facing a challenge. In the review petition, CREDAI's main argument was that the judgment "lost sight of" the "balanced approach" taken by the court in earlier, influential cases, such as Common Cause and Alembic Pharmaceuticals.
Risk of dilution
While the industry seeks a “balanced approach”, granting exceptions to strict compliance risks undermining the entire Environmental Impact Assessment process.
The core purpose of the prior EC process is prevention. It mandates thorough studies, public hearings and careful planning to prevent irreparable environmental harm. Allowing a project to secure clearance after construction is already complete turns the EC process into a mere formality, removing its preventative power.
The SC mandate on prior EC is fundamental. If regularisation of violations is institutionalised, it'll send a clear, dangerous message that non-compliance can be corrected later through fines or administrative measures.
This approach will only encourage future environmental breaches by making prior clearance optional, not mandatory.