A bench of Justices Arijit Pasayat and S.H. Kapadia granted permission on the basis of a report by an expert technical committee, which examined the environmental and other consequences of dismantling it. It allowed the dismantling observing that the process had become "irreversible" after "beaching" of the ship at the Alang coast.
Terming the dismantling as a "fate accompli," the court however asked the government and other concerned authorities to take appropriate precautionary measures.
"Since the court has accepted the technical expert committee report, we permit the Blue Lady to be dismantled," the bench said.
It said dismantling must be overseen by the district collector, ensuring that a 12-point guideline issued by the court earlier is strictly adhered to. The court had appointed an expert committee to provide guidelines on how to safely dismantle all ships that come to India.
According to the guidelines, ship breaking of the Blue Lady should follow procedures to ensure worker safety, including decontamination as well as proper disposal of any toxic waste. Environmentalists, including Greenpeace, say the 46,000-tonne Blue Lady contains more than 900 tonnes of toxic waste like asbestos, which puts at risk the health of poorly-equipped workers at the Alang yard.
In June last year, the court had allowed the ship to enter Indian waters but ruled that it remain anchored off the coast of Gujarat pending a legal battle between environmentalists and its owner.
In February last year, France had recalled its former aircraft carrier Clemenceau, which had been heading for Alang, after a lengthy campaign by Greenpeace that said it carried toxic waste.