An environmental clearance (“EC”) is a project-specific approval that is granted to a legal person for a specific activity. The EIA Notification, 2006 permits the transfer of an EC during its validity to another legal person who is entitled to undertake the project, on the application of the transferor or the transferee with the transferor’s no-objection. The transfer is not automatic, and the transferee company must apply to the regulatory authority for the transfer.
The Para 11 Procedure
Paragraph 11 of the EIA Notification, 2006 provides for the transferability of an EC. The application must be made to the regulatory authority that granted the EC—the MoEFCC for Category A projects and the SEIAA for Category B projects. The application must be accompanied by the transferor’s no-objection, the transferee’s undertaking to comply with the conditions of the EC, and the other documents prescribed by the authority.
The Timing
The EC transfer should be initiated before the effective date of the scheme, and it should be completed as soon as possible after the NCLT order. The regulatory authority may take several weeks to process the application, and the delay can affect the project’s operations. The scheme should include a condition that the transfer of the EC is a condition subsequent, and the transferee company should not assume that the EC has transferred until the authority issues the transfer order.
The Risks
Operating a project without a valid EC is an offence under the Environment (Protection) Act, 1986, and it can attract penalty and closure. The transferee company should verify the status of the EC before the effective date, and it should ensure that the transfer is completed before it takes over the project’s operations.
A technically sound scheme identifies the ECs that are material to the business, initiates the transfer applications before the effective date, and provides for the contingency where the transfer is delayed.
Call to Action
Anuj Desai & Associates advises companies on the environmental clearance aspects of an NCLT scheme—from the EC due diligence and the Para 11 transfer application to the regulatory compliance and the defence against a closure notice. If your scheme involves projects with ECs, we can help you manage the transfer.
📧 office@anujdesaiassociates.com
📞 9619456656
🌐 https://anujdesaiassociates.com
🔗 linkedin.com/in/ca-anuj-desai-122547230
Article 261