M/S ARAVALI POWER CO PVT LTD

VEDPRAKASH AND ANOTHER

(Civil Appeal Nos. 1692-1693 of 2020)

MAY 10, 2022

[DR. DHANANJAYA Y CHANDRACHUD AND

PAMIDIGHANTAM SRI NARASIMHA, JJ.]

Environment (Protection) Act 1986: s. 3 - Environmental Compensation - Utilization and disposal of accumulated fly ash at the units of thermal power producers - Statutory notification by the Ministry of Environment and Forest and Climate Change-MoEF&CC requiring manufacturers of clay to mix 25% of Ash which was amended by notification requiring construction agencies to use 100% of the fly ash in a phased manner up to 03.08.2007; and by further notification time period extended until 31.12.2017 - National Green Tribunal held that the Thermal Power Plants-TPPs failed to take adequate steps for the scientific disposal of fly ash in accordance with the statutory notifications issued by the Ministry - Direction by NGT that for non-compliant TPPs', the environmental compensation to be determined with effect from 31.12.2017 - During pendency, the Ministry by Notification dated 31.12.2021 granted extension of ten years to TPPs to comply with the requirement of 100% utilization of accumulated legacy fly ash, subsuming the earlier notifications - Sustainability of the order passed by the NGT - Held: NGT found fault with the TPPs due to their failure to comply with the notification dated 25.01.2016 and the extended deadline which was fixed for the utilization of fly ash - In view of the subsequent development, the basis of the order of the NGT altered - Thus, in view of the notification dated 31.12.2021, the orders of the NGT set aside - Furthermore, having noticed certain deficiencies in the notification dated 31.12.2021, as regards the loading, unloading, transport, storage and disposal of fly ash in an environmentally sound manner, MoEF&CC to revisit whether the parameters prescribed by the notification dated 31.12.2021 - Hazardous and Other Wastes (Management and Transboundary Movement) Rules 2016 - rr. 3(17), 3(23), 3(33), 3(34).

[2022] 4 S.C.R. 753

SUPREME COURT REPORTS


CIVIL APPELLATE JURISDICTION: Civil Appeal Nos. 1692- 1693 of 2020.

From the Judgment and Order dated 24.10.2019 of the National Green Tribunal, Principal Bench, New Delhi in Original Application No.834 of 2018 and Order dated 22.11.2019 in M.A. No.231 of 2019 in Original Application No. 834 of 2018.

With

Civil Appeal Nos. 3236, 3171-3172, 3231, 3229-3230, 2947, 3235, 3237, 3398, 2838, 3040, 2713, 2760, 2803, 3232-3233, 2946, 3038-3039, 3234 of 2020, 4489 of 2022, 3173, 3575 of 2020, 4487-4488 of 2022, 3971-3972 of 2020, 225 of 2021 and 4265 of 2022.

Ms. Aishwarya Bhati, ASG, Anil Grover, Sr. AAG, Tapesh Kumar Singh, Saurabh Mishra, AAGs, Ashok K. Gupta, Sajan Poovayya, Bharat Sangal, Manish Singhvi, Dr. Manish Singhvi, S.C. Verma, Sr. Advs., Ms. Noopur Singhal, Rahul Khurana, Satish Kumar, Sanjay Kumar Visen, Ms. Ritu Rastogi, Suresh Kumar Bhan, Ms. Madhumita Bhattacharjee, Deep Rao Palepu, Ms. Prerna Priyadarshini, Ms. Priyashree Sharma PH, Arjun Agarwal, Ms. Syed F. Alam, Abhishek Gupta, Ms. Ikshita Singh, Kapil Raghav, Ms. Sunita Sharma, Dishant Bhati, Shri Venkatesh, Ms. Nishtha Kumar, Suhael Buttan, V. N. Kannan, Ms. Raksha Agrawal, Shailesh Madiyal, Sudhanshu Prakash, Ms. Babita Kushwaha, Nagarkatti Kartik Uday, Kaustubh Shukla, Ms. Ranjana Roy Gawai, Ms. Vasudha Sen, Vineet Wadhwa, Ms. Divya Roy, Sanjay Ghalawat, Kedar Nath Tripathy, Kartik Seth, Ms. Shriya Gilhotra, Ms. Garima Saxena, Sahil Nagpal, M/s. Chambers of Kartik Seth, Mahesh Agarwal, Rishi Agrawala, Aniket Prasoon, Ms. Parul Shukla, Nishant Rao, Ms. Shweta Vashisth, E. C. Agrawala, Adarsh Tripathi, Vikaran Singh Baid, Saurabh Yadav, Gaurav, Mahfooz Ahsan Nazki, Polanki Gowtham, Ms. Rajeswari Mukherjee, Mukesh Kumar Maroria, Rajat Nair, Udai Khanna, Sughosh Subramaniyam, Udit Khanna, Ms. Deepabali Dutta, Amrish Kumar, Ms. Ruchi Kohli, Siddhant Kohli, Ms. Suhasini Sen, Shantanu Sharma, Athulesh Kumar, Harish Pandey, Ajay Kumar Singh, Rahul G. Tanwani, Rustam Singh Chauhan, Manvendra Singh, Sarad Kumar Singhania, Gurmeet Singh Makker, Vardhman Kaushik, Ms. Manika Tripathy Pandey, Ashutosh Kaushik, Shubham Hasija, Manish Vashist, Neeraj

Kumar Gupta, Ranjeet Kumar Singh, Ms. Anjali Mishra, Ms. Pallavi Kumari, Ms. Arti Prasad, Abhishek Kumar, Nikilesh Ramachandran, Shubham Seth, Ms. Mrinal Chaudhry, Ms. Neha Jain, Prateek Samjpati, Rajan Parmar, Raj Bahadur Yadav, Pradeep Misra, Daleep Dhyani, Manoj Kr. Sharma, Praveen Swarup, Ms. Payal Swarup, Kaushik Chaudhary, Mrs. Archana Sharma, Nishit Agrawal, Harsh Mishra, Azmat Hayat Amanullah, Ms. Nitya Sharma, Ms. Aswathi M.K., Ms. Shirin Khajuria, Abhishek Atrey, Ms. Deepanwita Priyanka, Kumar Anurag Singh, Ms. Tulika Mukherjee, Ms. Aastha Shrestha, Beenu Sharma, Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Ms. Shewtal Shepal, Sunny Choudhary, Ms. Mrinal Gopal Elker, Manish Yadav, Ms. Pratibha Yadav, Prafull Singh Chandel, Sibo Sankar Mishra, Rajesh Kumar Nayak, M. Yogesh Kanna, Ajay Vikram Singh, Ms. Priyanka Singh, Ms. Himanshi, Narendra Rana, Abhimanyu Tewari, Ms. Eliza Bar, Pashupathi Nath Razdan, Susheel Tomar, Prakhar Srivastava, Ms. Sneh Bairwa, Arpit Parkash, D. K. Devesh, Upendra Pratap Singh, Harsh Singh Rawat, Abhinav S. Raghuvanshi, Suprabh Kumar Roshan, Ms. Aparna Rohatgi Jain, Mahesh Kasana, S.K. Verma, Avijit Roy, Manish Kumar Choudhary, Ms. Namita Choudhary, Ms. Raj Lakshmi Singh, Sumeer Sodhi, Prannoy Joe Sebastian, G.M. Kawoosa, Ms. Taruna Ardhendumauli Prasad, V. N. Raghupathy, Apzal Ansari, Prakash Jadav, Arjun Garg, Shibashish Misra, Chirag M. Shroff, Amandeep Mehta, Suvendu Suvasis Dash, Kunal Chatterji, Ms. Maitrayee Banerjee, Rohit Bansal, Rupesh Kumar, Ms. Pankhuri Shrivastava, Ms. Neelam Sharma, Firdouse Qutb Wani, Akshay Verma, Pawan, Ms. Uttara Babbar, Ms. Binu Tamta, Nitin Mishra, Ashwani Kumar, Anshay Dhatwalia, Ms. Kumud Nijhawan, Alok Gupta, Ms. Richa Kapoor, Kunal Anand, Ms. Jyoti Zongluju, Prateek Bhandari, Ms. Asha Gopalan Nair, Ms. Nivedita Nair, Anjani Kumar Singh, Arun Gopalan Nair, Siddhesh Kotwal, Ms. Ana Upadhyay, Ms. Manya Hasija, Ms. Preeti Singh, Akash Singh, Nirnimesh Dube, Shri Venkatesh, Ms. Kanika Chugh, Nitin Saluja, V. M. Kannan, Jatin Ghuliani, Suhael Buttan, Ms. Priyanka, Yashish Chandra, Ramakant Rai, Somesh Srivastava, Sandeep Devashish Das, Ms. Mehak Sood, Deep Roy, Rony Oommen John, Piyush Swami, Arshdeep Singh, Dr. Joseph Aristotle S., Ms. Nupur Sharma, Shobhit Dwivedi, Sanjeev Kumar Mahara, Advs. for the appearing parties.

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER


The Judgment of the Court was delivered by

DR DHANANJAYA Y CHANDRACHUD, J.

1. Permission to file the civil appeal is granted.

2. This batch of connected appeals has arisen from the judgments of the National Green Tribunal1 pertaining to the utilization and disposal of fly ash by thermal power plants. Among the orders of the NGT are orders dated 24 October 2019, 22 November 2019, 12 February 2020, 21 August 2020, 16 September 2020 (rejecting a review of the order dated 21 August 2020) and 28 September 2020 (rejecting a review of the order dated 12 February 2020). A tabulated chart indicating the civil appeals and the corresponding orders of the NGT is set out below:

1 "NGT"

757 M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]


759 M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]


761 M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]


3. The NGT was seized of the issue pertaining to the handling of accumulated fly ash at the units of several thermal power producers. In the course of its analysis in the above orders, the NGT came to the conclusion that the Thermal Power Plants2 had failed to take adequate steps for the scientific disposal of fly ash in accordance with the statutory notifications issued by the Ministry of Environment and Forest and Climate Change3 under the provisions of the Environment Protection Act 1986.

4. The MoEF & CC issued a Notification dated 14 October 1999 requiring manufacturers of clay bricks, tiles, blocks or construction activities to mix at least 25% of ash. By a notification dated 27 August 2003, amendments were made to the above notification requiring construction agencies to use 100% of the fly ash in a phased manner up to 3 August 2007. A further amendment was made by a notification dated 27 January 2016 which extended the time period to achieve 100% utilization of fly ash until 31 December 2017. The NGT directed that for non-compliant TPPs', the environmental compensation must be determined with effect from 31 December 2017, which is the cut-off date stipulated in the Notification dated 27 January 2016. The Central Pollution Control Board4, was accordingly directed to compute

2 "TPP"

3 "MoEF & CC"

4 "CPCB"

environmental compensation in accordance with the formula accepted by the NGT and to report compliance. Consequential directions have been issued in pursuance of the above directions.

5. During the pendency of the proceedings before this Court, a notification was issued by the MoEF&CC on 31 December 2021 in exercise of powers conferred by Section 3 of the Environment (Protection) Act 1986.5 This notification was issued in supersession of Notification No 763(E) dated 14 September 1999. By the notification, the Union Government has formulated parameters for ash utilization from coal or lignite thermal power plants. Paragraph A(5) of the said notification provides a timeline for the utilization of 'legacy ash', that is unutilized accumulated ash which was stored before the publication of the notification:

"The unutilized accumulated ash i.e. legacy ash, which is stored before the publication of this notification, shall be utilized progressively by the thermal power plants in such manner that the utilization of legacy ash shall be completed fully within ten years from the date of publication of this notification and this will be over and above the utilization targets prescribed for ash generation through current operations of that particular year:

Provided that the minimum quantity of legacy ash in percentages as mentioned below shall be utilized during the corresponding year and the minimum quantity of legacy ash is to be calculated based on the annual ash generation as per installed capacity of thermal power plant.

Provided further that the legacy ash utilisation shall not be required where ash pond or dyke has stabilised and the reclamation has taken place with greenbelt or plantation and the concerned State Pollution Control Board shall certify in this regard. Stabilisation and reclamation of an ash pond or dyke including certification by the Central Pollution Control Board (CPCB) or State Pollution

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]

5 Notification No. 5481(E)


Control Board (SPCB) or Pollution Control Committee (PCC) shall be carried out within a year from the date of publication of this notification. The ash remaining in all other ash ponds or dykes shall be utilised in progressive manner as per the above mentioned timelines.

Note: The obligations under sub-paragraph (4) and (5) above for achieving the ash utilisation targets shall be applicable from 1st April, 2022.

[…]"

6. The consequence of the notification dated 31 December 2021 is that the earlier notifications would get subsumed by the terms of the notification. The NGT in the impugned orders had found fault with the TPPs due to their failure to comply with the notification dated 25 January 2016 and the extended deadline which was fixed for the utilization of fly ash. In view of the subsequent development which has taken place, the basis of the order of the NGT would be fundamentally altered by the modalities and time-lines which are prescribed by the notification dated 31 December 2021. In view of the latest notification, the orders of the NGT would have to be set aside together with the imposition of the measure of compensation as directed in the impugned orders.

7. During the course of the hearing, counsel appearing on behalf of some of the contesting parties have fairly alluded to certain deficiencies in the notification dated 31 December 2021, particularly in the context of the loading, unloading, transport, storage and disposal of fly ash in an environmentally sound manner to ensure that it does not cause air and water pollution. Mr Tapesh Kumar Singh, learned AAG who appears for the State of Jharkand submitted a note of submissions to assist the court, in his personal capacity as an officer of the court. In this context, reliance has been placed on an order dated 24 September 2013 of a two-Judge Bench of this Court in SLP(C) No 30381 of 2011 when the Court was seized of a tender dispute relating to transportation of fly ash.

While dealing with the dispute, the following directions were issued by the Court:

"Allotment of the contract and transportation work shall, however, be subject to the following further conditions:

1. The contractor shall abide by the directions issued by the Government of India, if any, under Section 5 of the Act, or the

requirement of any Rules that may be framed by the Government of India under Section 6 of the Act, or instructions/ circulars, if any, issued by the Central Pollution Control Board as to nuisance free transportation of ash, including Pond Ash from the Thermal Power Stations to abandoned mines and to other destinations, as the case may be;

2. Pending issue of any directions or framing of any Rules by the Government of India or issuance of any instructions/circulars by the Central Pollution Control Board, the transportation work shall be undertaken by the contractors who emerge successful only by using mechanized steel covered container trucks which would ensure that after the Pond Ash is loaded into the truck, it has no opportunity to fly out of the container to cause any kind of environmental hazard. We leave the details of specifications, if any, of such trucks to the Corporation and its Engineers to be specified in the course of negotiations to be conducted with the bidders."

8. By an earlier order dated 13 August 2013 in the above proceedings, this Court had impleaded CPCB in order to ascertain whether it had prescribed any standards or framed any rules regarding the loading, unloading, utilization and nuisance free transportation of all types of ash including fly ash, bottom ash and pond ash generated by TPPs. During the pendency of those proceedings, certain steps were taken by this Court to scrutinize whether any standards or measures have been prescribed by the CPCB. However, on 22 January 2016, SLP(C) No 30381 of 2011 and the connected matters were dismissed on the ground that they had been rendered infructuous.

9. Apart from the above proceedings, during the course of the hearing, this Court has been apprised of the regulatory provisions contained in the Hazardous and Other Wastes (Management and Transboundary Movement) Rules 20166 including rules 3(17), 3(23), 3(33) and 3(34) of the Rules. In this context, it has been submitted that the Union Government is duty bound to formulate rules to guarantee that the loading, unloading, utilization and transportation of fly ash takes place in a manner to prevent environmental hazards.

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]

6 "Rules of 2016"


10. At this stage, it would be material to note the provisions of paragraph A(7) of the notification dated 31 December 2021 which reads as follows:

"(7) Every coal or lignite based thermal power plant shall ensure that loading, unloading, transport, storage and disposal of ash is done in an environmentally sound manner and that all precautions to prevent air and water pollution are taken and status in this regard shall be reported to the concerned State Pollution Control Board (SPCB) or Pollution Control Committee (PCC) in Annexure attached to this notification."

11. Paragraph E of the notification deals with enforcement, monitoring, audit and reporting. Paragraphs (3) and (5) of paragraph E are extracted below:

"(3) For the purpose of monitoring the implementation of the provisions of this notification, a committee shall be constituted under the Chairperson, Central Pollution Control Board (CPCB) with members from Ministry of Power, Ministry of Coal, Ministry of Mines, Ministry of Environment, Forest and Climate Change, Ministry of Road Transportation and Highways, Department of Heavy Industry as well as any concerned stakeholder(s), to be nominated by the Chairman of the committee. The committee may make recommendations for effective and efficient implementation of the provisions of the notification. The committee shall meet at least once in six months and review annual implementation reports and the committee shall also hold stakeholder consultations for monitoring of ash utilisation as mandated by this notification by inviting relevant stakeholder(s) at least once in six months. The committee shall submit the six monthly report to Ministry of Environment, Forest and Climate Change (MoEFCC).

(5) The compliance audit for ash disposal by the thermal power plants and the user agency shall be conducted by auditors, authorised by Central Pollution Control Board (CPCB) and audit report shall be submitted to Central Pollution Control Board (CBCB) and concerned State Pollution Control Board (SPCB) or Pollution Control Committee (PCC) by 30th November every year. Central Pollution Control Board

(CPCB) and concerned State Pollution Control Board (SPCB) or Pollution Control Committee (PCC) shall initiate action against non-compliant thermal power plants within fifteen days of receipt of audit report."

12. In view of the above background, it would be necessary for the MoEF&CC to revisit whether the parameters which have been prescribed by the notification dated 31 December 2021 must be modified taking into account the provisions of the Rules of 2016, to the extent to which the applicability of the Rules is attracted to the utilization, transportation and disposal of fly ash. Besides conducting this exercise, MoEF&CC shall ensure that the enforcement, monitoring, audit and reporting mechanism which is envisaged in paragraphs E(3) and E(5) of the notification dated 31 December 2021 is duly put into place and enforced scrupulously. Unless steps have already been taken to enforce the precautionary steps envisaged in the notification, MoEF&CC shall do so within a period of three months from the date of this judgment. In doing so the precautionary principle shall be followed. The MoEF&CC shall also determine upon due analysis whether any further modification of the notification is necessary to comply with the provisions of the Rules of 2016 noticed above and other cognate legislation, including subordinate legislation bearing on the utilization, transport and disposal of fly ash in an environmentally sustainable manner.

13. In view of the above discussions, and having regard to the notification dated 31 December 2021, the impugned orders of the National Green Tribunal shall stand set aside.

14. The appeals shall stand disposed in terms of the above directions.

15. We clarify that this judgment shall not be construed as a decision on merits upholding the validity of the notification dated 31 December

2021. Any party aggrieved by the terms of the notification would be at liberty to pursue the remedies which are available in law before the appropriate forum.

16. IA No 111919 of 2020 in Civil Appeal Nos 3171-3172 of 2020 for impleadment stands allowed.

17. Pending applications, if any, stand disposed of.

Nidhi Jain Appeals disposed of.

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH AND

ANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]