Explained: How a Supreme Court judgment unlocks nearly 500 real estate projects across Mumbai and Pune

The Supreme Court noted that state-level authorites are best placed to assess projects for environmental clearances

A Supreme Court ruling that allows state authorities to resume environmental impact assessments of specified projects across the Mumbai Metropolitan Region (MMR) and Pune has meant that around 500 such developments can hope to be out of limbo, according to industry figures.

They added that the judgment has removed a long-pending legal ambiguity that was leading to the delay in developers breaking ground in key markets.

The Supreme Court last week said that the State Environment Impact Assessment Authority (SEIAA), as well as the advisory State Expert Appraisal Committee (SEAC), will remain the "competent authorities" to seek environmental clearance (EC) for Category B projects in the EIA notification of 2006, which includes buildings or township projects.

All Category A projects must be assessed for an EC by the Union government, through the Union Ministry of Environment, Forests and Climate Change and its EAC.

It also ruled that the General Condition to the EIA notification of 2006, in which Category B projects with 20,000 square metres of built-up area are deemed to be Category A if they are located within 5 kilometres of an eco-sensitive zone, will not be applicable to real estate projects under Category B and will continue to be assessed for an EC at the state level only. The legal matter had held up the approval of such projects across India, including around 700 in Maharashtra alone, according to legal experts and real estate observers.

In 2014, the Union government clarified that the General Condition does not apply to real estate projects. That exemption was ended by the Kerala High Court in 2024, and the National Green Tribunal also sided with the Kerala HC regarding the "5 kilometre" clause.

Following this, CREDAI-MCHI, the developers' advocacy group in the MMR, filed a writ petition in the Supreme Court to clarify the matter, with intervention from CREDAI National as well as Godrej Properties.

"This judgment is a direct result of CREDAI-MCHI’s proactive legal intervention to protect the interests of our members and the thousands of homebuyers impacted by stalled projects. We initiated this petition to bring clarity to an increasingly complex and ambiguous environmental clearance process, and we are grateful that the Hon’ble Supreme Court has upheld the role of SEIAA and SEAC as competent authorities," said Domnic Romell, president, CREDAI-MCHI.

The body noted that the ruling removes ambiguity around 70,000 housing units across the stalled projects, mainly in the affordable and mid-income categories.

Markets affected

Developers said that projects in a number of MMR areas were stalled as a result of the regulatory issues, due to much of Mumbai being located within a short distance from eco-sensitive zones such as mangroves, forests or hills.

Many were held up in areas such as Mulund and Thane, which adjoin the Thane creek mangroves and the saltpans along the eastern seaboard of the city. Some were also stuck in areas such as Borivali, Dahisar and Goregaon due to these areas being located close to the Sanjay Gandhi National Park, as well as the Aarey Milk Colony forests.

"Prior to the ruling, projects in areas such as Mahim and Dadar, which are highly built-up and populated areas, were stalled due to the EC requirement from the Union government. In areas such as Mulund, Kanjurmarg and Thane, especially in the Navi Mumbai to Thane corridor, some of the projects were stuck due to the mangroves nearby as well as the flamingo sanctuary near the Eastern Express Highway," said a real estate observer based in Mumbai.

Legal experts said that the sheer volume of projects made the deemed Category A status of some real estate projects unviable, even if Union government clearance was needed.

"If the condition of Union government assessment for all deemed Category A real estate projects stood, more projects would have been stuck at the approvals process. The Union government also submitted to the court that it does not have the bandwidth to process the environmental clearances of hundreds of such projects at any given time," Samit Shukla, partner, dispute resolution practice, Trilegal, told Moneycontrol.

Trilegal represented CREDAI National and Godrej Properties in the matter. Shukla added that the judgment can clear over 1,000 cases nationally.