The Union Ministry of Environment and Forests (MoEF) has refused to grant a clearance to Lavasa's ambitious lake city project in the hills near Pune. It cited the lack of credible action by the Maharashtra government against the company for violations as the reason.

In its order, dated October 13, MoEF notes that in its June order and affidavit to the Bombay High Court, it was willing to clear Lavasa's first phase, subject to five preconditions. Lavasa was responsible for four of these – an environmental restoration fund, 5 per cent of profits earmarked for CSR, a revised development plan and a commitment not to further violate green norms. The Ministry now says that the company has shown “willingness to comply with these stipulations”.

However, the first pre-condition remains unfulfilled: the state government must take credible action against the company for violations of environmental law.

“As the pre-condition on the credible action on violation of EIA Notification, 2006 has not been complied with, the Ministry is unable to issue the Environmental Clearance to the first phase of Hill City project (2000 ha) of M/s LCL," the Ministry's order said. The final decision on the Environmental Clearance cannot be taken till all the pre conditions are met including credible action by the State Government of Maharashtra and subject to the-final orders of the Hon'ble High Court of Bombay as the matter is sub-judice.”

Official sources said the Maharashtra government was asked to take action by the MoEF under the Environment Protection Act. However, Lavasa had stated that the Environment Impact assessment (EIA) notification of 2004 was not applicable to it and most of the violations emerged only if that notification was applied. However, the EIA notification of 2006 was applicable and the matter was raised in the public interest litigation (PIL) in the High Court.

The state government had sought legal opinion as the matter was in court. The environment department sought a clarification from the MoEF in July on the issue with a reminder in September. The clarification is still awaited by the state government. In any case, Tuesday (October 18) is the day for the matter in the High Court and the state government will wait till then before taking a decision, the sources said.

Last month, the Bombay High Court gave an ultimatum to MoEF directing it to pass the final order in the Lavasa matter within three weeks. The MoEF had written a letter to the state government on June 10 directing it to take action against Lavasa for violation of environmental norms. Since then the matter has been mired in court cases.