A Note on ESZ Regulation, NBWL Clearance and Limits of Retrospective Application
The decision of the Rajasthan High Court in Kanha Hotels and Spa Pvt. Ltd. v. Union of India is a significant contribution to the law governing eco-sensitive zones (ESZ), wildlife clearance under the National Board for Wildlife (NBWL), and the limits of retrospective environmental regulation in India.
The matter was argued on behalf of the petitioner by Learned Senior Counsel Mr. R.B. Mathur, whose submissions centred on the impermissibility of retrospectively unsettling a project that had been lawfully approved and had become operational under the prevailing regulatory regime.
Background of the Dispute
The petitioner operates a five-star hotel by the name of Taj Amer situated in proximity to the Nahargarh Wildlife Sanctuary, Jaipur. The project had been undertaken after obtaining a range of statutory approvals, including environmental clearance dated 23.06.2017, building permissions, tourism approvals, and requisite consents under pollution control laws. By the time the controversy arose, the project had been fully constructed and was operational, involving substantial investment and ongoing commercial activity.
The dispute emerged when the Standing Committee of the National Board for Wildlife (NBWL), by its decision dated 22.02.2024 (communicated on 28.02.2024), declined wildlife clearance by treating the project as a fresh proposal under the Eco-Sensitive Zone Notification dated 08.03.2019. The effect of this classification was to subject an already completed project to a regulatory framework that came into force subsequent to its approval and execution.
Issues Before the Court
The central issue before the Court was whether the ESZ Notification, 2019 could be applied retrospectively to a project that had already been sanctioned and operationalised. This raised broader questions concerning the distinction between an “existing unit” and a “new project,” the extent of judicial review over decisions of expert bodies such as the NBWL, and the requirement that such decisions adhere to principles of natural justice.
Submissions on Behalf of the Petitioner
It was contended that the impugned decision proceeded on a fundamental mischaracterisation of the project. The petitioner’s case was that the project had been lawfully established under the regulatory framework prevailing at the time, and could not subsequently be reclassified so as to attract restrictions introduced by the ESZ Notification, 2019.
It was further submitted that hotels fall within the category of regulated activities under ESZ norms and are not per se prohibited. The decision of the NBWL Standing Committee was assailed as non-speaking and arbitrary, failing to take into account material facts including prior approvals and the operational status of the project.
A significant emphasis was placed on the absence of any meaningful opportunity of hearing, rendering the decision violative of principles of natural justice. Reliance was placed on the order of the Supreme Court in T.N. Godavarman Thirumulpad v. Union of India (2022), which recognises the continuation of pre-existing activities within ESZ frameworks subject to regulatory compliance.
Submissions of the Respondents
The respondents defended the impugned decision by emphasising that the NBWL is a statutory expert body entrusted with the protection of wildlife and ecological balance, and that its decisions are entitled to judicial deference. It was contended that prior wildlife clearance was mandatory and that failure to obtain such clearance rendered the project liable to regulatory action notwithstanding other approvals. The respondents also stressed that environmental considerations must take precedence over commercial interests, particularly in ecologically sensitive zones.
Judicial Review and Applicable Principles
The High Court rejected the preliminary objection to maintainability and reaffirmed that judicial review under Article 226 extends to decisions of expert bodies where the decision-making process is arbitrary, suffers from non-application of mind, or violates principles of natural justice.
In doing so, the Court relied upon established precedents including Syed Yakoob v. K.S. Radhakrishnan (AIR 1964 SC 477), CCT v. Shukla & Bros. (2010) 4 SCC 785, and Whirlpool Corporation v. Registrar of Trade Marks (AIR 1999 SC 22), which collectively underscore the necessity of reasoned decision-making and procedural fairness.
Findings of the Court
On merits, the Court found that the impugned decision could not be sustained. The minutes of the NBWL Standing Committee were cryptic and devoid of reasons, reflecting a failure to consider relevant material placed on record. The Court also noted that the petitioner had not been afforded any effective opportunity of hearing prior to the rejection of wildlife clearance.
Most importantly, the Court rejected the retrospective application of the ESZ Notification, 2019. Invoking the principle lex prospicit non respicit, it held that the law looks forward and not backward, and that a project which had already been sanctioned and completed under the existing legal regime could not be invalidated by subsequent regulatory changes.
Ratio and Significance
The judgment clarifies that environmental regulation, while essential, must operate within the framework of legality and fairness. It affirms that projects qualifying as “existing units” cannot be reclassified as new proposals to attract subsequent restrictions, and that decisions of expert bodies such as the NBWL must be reasoned and consistent with principles of natural justice.
The ruling is likely to have wider implications for disputes involving eco-sensitive zones, wildlife clearance, NBWL approvals, and environmental regulation of hospitality and infrastructure projects near protected areas.
Conclusion
The Court ultimately set aside the impugned decision as arbitrary and unsustainable, restoring the petitioner’s position. In doing so, it reinforces the principle that regulatory frameworks cannot be applied retrospectively to unsettle completed and lawfully approved projects, thereby strengthening certainty in environmental governance.
