Sterlite Industries India Ltd v. Union of India, (2013) 4 SCC 575
Supreme Court explains how far High Courts can go while reviewing an environmental clearance (EC)—focus on legality, rationality, and procedure; also orders compensation for past pollution.
Table of Contents
Quick Summary
The Supreme Court set aside the Madras High Court’s closure of Sterlite’s copper smelter. It clarified that a High Court can review an environmental clearance only for illegality, irrationality, or procedural impropriety. Since Sterlite met 29 of 30 TNPCB directions (one pending), full closure was excessive. Still, the Court ordered Rs 100 crore compensation for past pollution and lapses.
Issues
- Can a High Court interfere with ECs granted by MoEF and the State for policy and technical reasons?
- Was the HC’s closure order, based on environmental impact and siting concerns, irrational or within review limits?
Rules
- Judicial Review Scope: Illegality, irrationality, procedural impropriety—not merits re-appraisal.
- EPA/EPR Framework: Regulators assess project limits and ensure statutory steps are followed.
- Deference to Experts: HC cannot replace the Pollution Control Board’s role mere in the name of review.
Facts — Timeline
Timeline view1995: MoEF grants conditional EC for a copper smelter in Tuticorin; TNPCB issues NOC/consents (Air s.21; Water s.25).
Challenge: NTCE moves Madras HC against EC citing irrationality and geographical siting issues.
Operations begin: Plant set up; injunction applications filed by affected persons.
HC Decision: Division Bench orders closure; directs Collector to ensure compensation and re-employment.
Appeal: Sterlite approaches the Supreme Court.
Arguments — Appellant vs Respondents
Appellant: Sterlite Industries
- Substantial compliance: 29/30 TNPCB directions met; one pending.
- EC based on EIA, State NOC, risk studies—no irrationality.
- HC applied later public-hearing norms retrospectively.
Respondents: Union/TNPCB/NGOs
- Environmental impacts and siting near sensitive areas breached conditions.
- Regulatory lapses and non-renewal warranted strong action.
- Public interest required closure until full safety ensured.
Judgment
- Appeal allowed; HC closure order set aside.
- Plant directed to pay Rs 100 crore for pollution (1997–2012) and operating without timely license renewal.
- HC erred on public hearing—requirement arose after the EC; cannot be applied retroactively.
- MoEF relied on EIA, TNPCB NOC, and risk study—no irrationality in granting EC.
- Siting: TNPCB’s 25 km direction vs. actual industrial complex location showed mismatch; HC was right that siting norms were not correctly applied.
Ratio Decidendi
Judicial review of ECs is limited. Courts examine legality, rationality, and procedure—not technical merits best left to expert bodies. Remedy must fit the degree of non-compliance; compensation and targeted directions can replace blanket closure.
Why It Matters
The case sets clear boundaries for High Court review in environmental matters, balances regulatory expertise with accountability, and shows how courts can use compensation and compliance to protect the environment without overstepping.
Key Takeaways
- HC review of ECs is narrow: illegality / irrationality / procedure.
- Substantial compliance matters; use proportionate remedies.
- Don’t apply new hearing rules to old ECs.
- Compensation can address past pollution and regulatory lapses.
Mnemonic + 3-Step Hook
Mnemonic: “IIP → PFC” — Illegality, Irrationality, Procedure → Proportion, Fix, Compensate.
- Check IIP: Is there a review ground?
- Choose remedy: Proportionate fix over blanket closure.
- Compensate: Address past harm and enforce compliance.
IRAC Outline
Issue
Could the HC close the plant by re-assessing EC merits beyond the bounds of judicial review?
Rule
Review limited to illegality, irrationality, procedural impropriety; deference to expert regulators (EPA/EPR, TNPCB).
Application
EC supported by EIA, NOC, risk study; plant complied with most directions; but siting norms were imperfectly applied.
Conclusion
Set aside closure; impose compensation; require completion of pending compliance and correct siting oversight.
Glossary
- Environmental Clearance (EC)
- Government approval allowing a project after assessing environmental impact and safeguards.
- Judicial Review
- Court’s limited check on decisions for legality, rationality, and procedure—not technical merits.
- TNPCB
- Tamil Nadu Pollution Control Board; issues consents and compliance directions for industries.
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