India: Environment v/s Real Estate

INTRODUCTION

One of the continuing struggles of the 21st century has been to attain a harmonious construct in achieving economic development, in a way which does not threaten or cause environmental degradation. In the wake of various environmental disasters witnessed in the past few decades, there has been a growing consensus to ensure that all real estate projects be developed in accordance with prescribed safety standards and consistent with environmental compliances and do not lead to any environmental hazard, specifically with respect to those projects which are constructed in close proximity to natural resources such as forest, wildlife, coastal zones and other eco-sensitive areas.

The Stockholm Conference in 1972 was the first global initiative concerning environment and sustainable development, which recognised principles of ecological management, and issued an Action Plan with 109 recommendations. To incorporate the decisions made at the Stockholm Conference of 1972, the Government of India, by Constitution 42nd Amendment Act, 1976 made an express provision for the protection and promotion of the environment, and introduced Articles 48-A and 51-A (g) in the Directive Principles of State Policy and the Fundamental Duties respectively. Article 48-A of the Indian Constitution states that "the State shall endeavour to protect and improve the environment and to safeguard the forest and wildlife of the country". Article 51-A (g) of the Constitution of India states that "It shall be the duty of every citizen of India to protect and improve the natural environment including forests, lakes, rivers and wildlife and to have compassion for living creatures".

KEY LEGISLATIONS

The key environmental legislations concerning real estate development are as follows:

  • Wildlife (Protection) Act, 1972 (Wildlife Act)
  • Water (Prevention and Control of Pollution) Act, 1974
  • Air (Prevention and Control of Pollution) Act, 1981
  • Forest (Conservation) Act, 1980 (Forest Act)
  • Environment (Protection) Act, 1986
  • Hazardous Waste (Management and Handing) Rules, 1989
  • Coastal Regulation Zone Notification, 2011

REGULATORY AUTHORITIES

The following are the regulatory authorities concerned with real estate development in India:

  • The Ministry of Environment & Forests (MOEF)
  • Central and State Pollution Control Board
  • National Green Tribunal (NGT)
  • Coastal Regulation Zone Management Authority
  • Forest Settlement Officer
  • National Board of Wild Life (NBWF)

MOEF is the apex administrative body responsible for the regulation, planning, promotion and coordination of environmental and forestry plans in India.

ENVIRONMENT (PROTECTION) ACT

The Parliament of India, in the wake of the Bhopal gas tragedy in 1984 at the Union Carbide India Limited pesticide plant in Bhopal, enacted the Environment (Protection) Act of 1986 (EPA) under Article 253 of the Constitution.

The primary objectives of the EPA are:

  • Creation of an authority or authorities with adequate powers for preservation and protection of environment;
  • Regulation of discharge of environmental pollutants and handling of hazardous substance; and
  • Speedy response in the event of accidents threatening environment and punishment to those who endanger human and wild life environment, safety and health.

Environment Impact Assessment Notifications:

Under the provisions of EPA, the Central Government has regularly released Environment Impact Assessment Notification (Notification), the first of which was issued by MOEF on 27 January 1994 (1994 Notification) which, inter alia, stated that, no new project, or the expansion or modernization of any existing project listed in Schedule-I, shall be undertaken unless it has been accorded with an environmental clearance (EC) by the Central Government. This notification did not contain any entry for construction projects and therefore EC was not required to be obtained for the same.

By virtue of Notification dated 7 July 2004 (2004 Amendment Notification) for amending certain provisions of the 1994 Notification, any construction project for more than 1,000 persons or discharging sewage of more than 50,000 litres per day or with investment of Rs 5,00,00,000 or more, would require prior EC.

Thereafter, MOEF issued a fresh Notification dated 14 September 2006 (2006 Notification) which superseded the 1994 Notification. The 2006 Notification prescribed definitive thresholds for obtaining prior EC for construction projects. In case a project is falling under Category 'A' of the schedule to 2006 Notification, then the project proponent is required to obtain prior EC from the Central Government (i.e. MOEF) and in case a project is falling Category 'B' of the schedule to 2006 Notification, then the project proponent is required to obtain prior EC from the State Government (i.e. State Environment Impact Assessment Authority (SEIAA)). 

As per the 2006 Notification, in case where the built up area of a construction project is more than 20,000 square meters but less than 1,50,000 square meters, then the project will fall under Category 'B' and the project proponent is required to obtain a prior EC from SEIAA, and if the built up area of a construction project is more than 1,50,000 square meters, then the project will fall under Category 'A' and the project proponent is required to obtain a prior EC from MOEF.

The 2006 Notification also lays down a General Condition (GC) which states that any project or activity specified in Category 'B' will be treated as Category A and permission of MOEF would be required, if located in whole or in part within 10 km from the boundary of (i) Protected Areas notified under the Wild Life Act, (ii) Critically Polluted areas as notified by the Central Pollution Control Board, (iii) Notified Eco-sensitive areas, and (iv) inter-State boundaries and international boundaries.

By virtue of a subsequent Notification dated 22 December 2014 (2014 Notification), following amendments were made to the 2006 Notification:

  • Construction projects comprising of industrial shed, schools, colleges, hostels for educational purpose, will not be required to obtain an EC subject to their compliance with sustainable environmental management, solid and liquid waste management, rain water harvesting, and they may use recycled material such as fly ash bricks; and
  • The GC mentioned above will not apply. This means, construction projects located within 10 km from the boundary of the areas mentioned above, will not be treated as Category 'A' project and would not be required to approach MOEF for prior EC.

Also, the MOEF has by its Office Memorandum dated 27 June 2011, decided that construction projects which have obtained Green Building Rating shall get priority and be listed for consideration for EC, out of turn, as compared to other cases.

Post Facto EC:

MOEF issued an Office Memorandum dated 16 November 2010 (OM of 2010) for consideration of proposals involving violation of the EPA and the 2006 Notification. MOEF issued another Office Memorandum dated 12 December 2012 (OM of 2012), superseding the OM of 2010 which was further amended by the Office Memorandum dated 27 June 2013 (OM of 2013).

OM of 2012 and OM of 2013 (OM's), in effect provided for a mechanism for grant of post facto EC in relation to such projects which had commenced substantial construction of the project and had made significate investment in the project without obtaining prior EC as mandated under the 2006 Notification. Based on these OM's various projects which had carried out construction without obtaining prior EC had applied to MOEF for grant of post facto EC for their respective projects.     

NGT on Post Facto EC:

However, the OM of 2012 and OM of 2013 (OM's) were subsequently challenged before NGT on the grounds that:

  • The OM's are contrary to and in contradiction with the provisions of the EPA and 2006 Notification;
  • The 2006 Notification mandatorily required developers to obtain prior EC before commencing construction work while these OM's state exactly to the contrary, thus, encouraging people to flout the law in force on the one hand and cause environmental damage and degradation on the other; and
  • The very purpose of obtaining prior EC is to conduct an environmental impact assessment before a project is granted clearance in order to ensure that no development takes place without sufficient assessment of the risks and damages that would be caused to the environment due to the project's construction and development.

The NGT has by its Order dated 7 July 2015 held that the said OM's are ultra vires the provisions of EPA and 2006 Notification and MOEF and SEIAA are prohibited from giving effect to these OM's in any manner whatsoever. Also, the concerned project proponents were directed to deposit an amount of 5% of their project value by way of compensation for restoration and restitution of the environment and ecology as well as towards their liability arising from impacts of the illegal and unauthorized constructions carried out by them without obtaining prior EC. NGT has also formed a Committee to scrutinize the impact of the projects of the concerned project proponents on the ecology and environment and to submit their report to NGT in order to enable NGT to grant post facto EC's to the concerned project proponents subject to payment of 5% of their project value.

In fact, one of the developer concerned with the NGT Order dated 7 July 2015, has paid the compensation of 5% of the project value and accordingly the project has been granted EC by SEIAA Tamil Nadu which has been confirmed by NGT by its Order dated 22 April 2016.

PROPOSED AMENDMENT

With a view to introduce an effective deterrent policy to ensure compliances with provisions of the EPA, the Central Government has on 7 October 2015 published a draft of the Environment Laws (Amendment) Bill, 2015 and the National Green Tribunal Act, 2010 (Draft Bill) for inviting objections and suggestions from any person interested. The Draft Bill, inter alia, proposes the formation of an adjudicatory authority to hold inquiries into violation of environmental laws, and provides for imposition of stricter penalties. It divides environmental violation into 3 categories, 'minor violation', 'non-substantial damage' and 'substantial damage' to the environment.

Depending upon the extent of substantial damage caused, penalty ranges from Rs 5,00,00,000 to Rs 20,00,00,000. Also, imprisonment for a term ranging from 7 (seven) years to life imprisonment has been prescribed in case of substantial damage. Penalties for minor violations and non-substantial damage ranges from Rs 1,000 to Rs 5,00,00,000. 

COASTAL REGULATION ZONE

The MOEF had issued the Coastal Regulation Zone (CRZ) Notification in 1991 and subsequently in 2011 (2011 Notification) for providing comprehensive measures of protection for coastal stretches (upto 500 metres from the High Tide Line along the seafront and 100 metres from the High Tide Line along the tidal influenced water bodies) and regulating the activities undertaken in such CRZ.

Under the 2011 Notification, coastal areas have been classified as CRZ-I (ecological sensitive), CRZ-II (built-up area), CRZ-III (rural area) and CRZ-IV (water area). A pre-clearance from MOEF or from the jurisdictional Coastal Zone Regulation Authority in a State is required before undertaking construction or development activities in areas falling in the close vicinity or under the CRZ.

FOREST ACT

Under the relevant Forest Act, a prior approval from the Central Government is essential before setting up any industries (or for undertaking other non-forest activities) involving diversion of forest land. There is a blanket restriction on setting up industry or projects in areas which are in close vicinity of national parks, wildlife sanctuaries, or core areas of biosphere reserves, fragile eco-systems, etc. Besides forest lands, diversion of prime agricultural lands for non-forest purposes are also restricted.

WILDLIFE PROTECTION

The Wildlife Act provides for protection of specified species of flora and fauna, along with protected areas which are ecologically significant. The Act prohibits any industrial activity within these protected areas.

On 4 December 2006, the Hon'ble Supreme Court of India has in the case of Goa Foundation v/s Union of India held that, in case any project has been granted EC by MOEF and if such project is located within 10 km from the boundaries of a sanctuary and national park, then MOEF shall also refer the matter for recommendation of the Standing Committee of NBWL.

Subsequently, by an Office Memorandum dated 2 December 2009 (2009 OM) and Guidelines dated 19 August 2010 issued by MOEF, MOEF has further directed at any project requiring EC from MOEF and falling within 10 km from the boundary of a sanctuary or national park, will be placed before the Standing Committee of NBWL.

Further, MOEF has vide its Office Memorandums dated 30 March 2015 and 1 May 2015 clarified that development projects located within 10 km of a sanctuary and national park will be referred for recommendation of the Standing Committee of NBWL in accordance with the procedure prescribed in the 2009 OM.

CONCLUSION

As seen from above, the laws on environment protection has been evolved over the time. It can be observed that Government has taken pro-active measures by formulating various legislations and policies with an intent to not only promote sustainable development but at the same time also ensure that such development does not undermine critical resources and ecological functions or the well-being, lifestyle and livelihood of the people who depend on them.

The content of this document do not necessarily reflect the views/position of Khaitan & Co but remain solely those of the author(s). For any further queries or follow up please contact Khaitan & Co at legalalerts@khaitanco.com

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
Dhir & Dhir Associates
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Dhir & Dhir Associates
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions