The Supreme Court has recalled its May 2025 judgment in Vanashakti v. Union of India, which had struck down the 2017 notification and the 2021 Office Memorandum permitting ex post facto environmental clearances. That ruling had barred the Central Government from granting such clearances in the future.

The Chief Justice held that the earlier judgment was per incuriam because it overlooked binding decisions of coordinate benches. He noted that although the Vanashakti judgment protected clearances already issued, it unintentionally created a discriminatory outcome. Many projects were close to receiving ECs but were stalled by interim orders and would now have to be abandoned. This, the Court said, would be unfair.

The Court also warned that strict enforcement would force the demolition of large public projects worth thousands of crores. Such demolition would waste resources and generate debris, increasing pollution instead of reducing it. This would not serve the public interest.

The judgment brings significant relief to the real estate sector. Developers whose projects were stalled due to the Vanashakti ruling now avoid the risk of forced demolition, financial loss, and regulatory uncertainty. The recall restores a workable pathway for projects that had substantially complied with requirements and were only awaiting final ECs. This stabilises investor confidence, prevents large-scale value erosion, and ensures continuity for ongoing housing and infrastructure projects. By recognising practical realities and avoiding wasteful demolition, the decision promotes regulatory clarity and creates space for a balanced, uniform approach to environmental compliance going forward.