M/S ARAVALI POWER CO PVT LTD versus VEDPRAKASH AND ANOTHER on 10 May 2022

[2022] 4 S.C.R. 753

M/S ARAVALI POWER CO PVT LTD

v.

VEDPRAKASH AND ANOTHER

(Civil Appeal Nos. 1692-1693 of 2020)

MAY 10, 2022

[DR. DHANANJAYA Y CHANDRACHUD ANDPAMIDIGHANTAM SRI NARASIMHA, JJ.]

Environment (Protection) Act 1986: s. 3 – EnvironmentalCompensation – Utilization and disposal of accumulated fly ash atthe units of thermal power producers – Statutory notification by theMinistry of Environment and Forest and Climate Change-MoEF&CCrequiring manufacturers of clay to mix 25% of Ash which wasamended by notification requiring construction agencies to use100% of the fly ash in a phased manner up to 03.08.2007; and byfurther notification time period extended until 31.12.2017 – NationalGreen Tribunal held that the Thermal Power Plants-TPPs failed totake adequate steps for the scientific disposal of fly ash inaccordance with the statutory notifications issued by the Ministry –Direction by NGT that for non-compliant TPPs’, the environmentalcompensation to be determined with effect from 31.12.2017 – Duringpendency, the Ministry by Notification dated 31.12.2021 grantedextension of ten years to TPPs to comply with the requirement of100% utilization of accumulated legacy fly ash, subsuming theearlier notifications – Sustainability of the order passed by the NGT– Held: NGT found fault with the TPPs due to their failure to complywith the notification dated 25.01.2016 and the extended deadlinewhich was fixed for the utilization of fly ash – In view of thesubsequent development, the basis of the order of the NGT altered– Thus, in view of the notification dated 31.12.2021, the orders ofthe NGT set aside – Furthermore, having noticed certain deficienciesin the notification dated 31.12.2021, as regards the loading,unloading, transport, storage and disposal of fly ash in anenvironmentally sound manner, MoEF&CC to revisit whether theparameters prescribed by the notification dated 31.12.2021 –Hazardous and Other Wastes (Management and TransboundaryMovement) Rules 2016 – rr. 3(17), 3(23), 3(33), 3(34).

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

From the Judgment and Order dated 24.10.2019 of the NationalGreen Tribunal, Principal Bench, New Delhi in Original ApplicationNo.834 of 2018 and Order dated 22.11.2019 in M.A. No.231 of 2019 inBOriginal 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,C3971-3972 of 2020, 225 of 2021 and 4265 of 2022.

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

Kumar Gupta, Ranjeet Kumar Singh, Ms. Anjali Mishra, Ms. PallaviKumari, 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, KaushikChaudhary, Mrs. Archana Sharma, Nishit Agrawal, Harsh Mishra, AzmatHayat Amanullah, Ms. Nitya Sharma, Ms. Aswathi M.K., Ms. ShirinKhajuria, Abhishek Atrey, Ms. Deepanwita Priyanka, Kumar AnuragSingh, Ms. Tulika Mukherjee, Ms. Aastha Shrestha, Beenu Sharma,Sachin Patil, Rahul Chitnis, Aaditya A. Pande, Geo Joseph, Ms. ShewtalShepal, Sunny Choudhary, Ms. Mrinal Gopal Elker, Manish Yadav,Ms. Pratibha Yadav, Prafull Singh Chandel, Sibo Sankar Mishra, RajeshKumar Nayak, M. Yogesh Kanna, Ajay Vikram Singh, Ms. PriyankaSingh, Ms. Himanshi, Narendra Rana, Abhimanyu Tewari, Ms. ElizaBar, 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, ManishKumar Choudhary, Ms. Namita Choudhary, Ms. Raj Lakshmi Singh,Sumeer Sodhi, Prannoy Joe Sebastian, G.M. Kawoosa, Ms. TarunaArdhendumauli 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, RohitBansal, 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, SiddheshKotwal, Ms. Ana Upadhyay, Ms. Manya Hasija, Ms. Preeti Singh, AkashSingh, Nirnimesh Dube, Shri Venkatesh, Ms. Kanika Chugh, Nitin Saluja,V. M. Kannan, Jatin Ghuliani, Suhael Buttan, Ms. Priyanka, YashishChandra, 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, ShobhitDwivedi, Sanjeev Kumar Mahara, Advs. for the appearing parties.

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756SUPREME COURT REPORTS

AThe Judgment of the Court was delivered byDR DHANANJAYA Y CHANDRACHUD, J.

1. Permission to file the civil appeal is granted.

2. This batch of connected appeals has arisen from the judgmentsBof the National Green Tribunal[1] pertaining to the utilization and disposalof fly ash by thermal power plants. Among the orders of the NGT areorders dated 24 October 2019, 22 November 2019, 12 February 2020,21 August 2020, 16 September 2020 (rejecting a review of the orderdated 21 August 2020) and 28 September 2020 (rejecting a review ofthe order dated 12 February 2020). A tabulated chart indicating the civilCappeals and the corresponding orders of the NGT is set out below:

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H1 “NGT”

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH ANDANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]

757ABCDEFGH

758SUPREME COURT REPORTSABCDEFGH

[2022] 4 S.C.R.

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760SUPREME COURT REPORTSABCDEFGH

[2022] 4 S.C.R.

M/S ARAVALI POWER CO PVT LTD v. VEDPRAKASH ANDANOTHER [DR DHANANJAYA Y CHANDRACHUD, J.]

761ABCDEFGH

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3. The NGT was seized of the issue pertaining to the handling ofDaccumulated fly ash at the units of several thermal power producers. Inthe course of its analysis in the above orders, the NGT came to theconclusion that the Thermal Power Plants[2] had failed to take adequatesteps for the scientific disposal of fly ash in accordance with the statutorynotifications issued by the Ministry of Environment and Forest and ClimateEChange[3] under the provisions of the Environment Protection Act 1986.

4. The MoEF & CC issued a Notification dated 14 October 1999requiring manufacturers of clay bricks, tiles, blocks or constructionactivities to mix at least 25% of ash. By a notification dated 27 August2003, amendments were made to the above notification requiringFconstruction agencies to use 100% of the fly ash in a phased manner upto 3 August 2007. A further amendment was made by a notificationdated 27 January 2016 which extended the time period to achieve 100%utilization of fly ash until 31 December 2017. The NGT directed that fornon-compliant TPPs’, the environmental compensation must bedetermined with effect from 31 December 2017, which is the cut-offGdate stipulated in the Notification dated 27 January 2016. The CentralPollution Control Board[4], was accordingly directed to compute 2 “TPP”

3 “MoEF & CC”H4 “CPCB”

environmental compensation in accordance with the formula acceptedby the NGT and to report compliance. Consequential directions havebeen issued in pursuance of the above directions.

5. During the pendency of the proceedings before this Court, anotification was issued by the MoEF&CC on 31 December 2021 inexercise of powers conferred by Section 3 of the Environment (Protection)Act 1986.[5] This notification was issued in supersession of NotificationNo 763(E) dated 14 September 1999. By the notification, the UnionGovernment has formulated parameters for ash utilization from coal orlignite thermal power plants. Paragraph A(5) of the said notificationprovides a timeline for the utilization of ‘legacy ash’, that is unutilizedaccumulated ash which was stored before the publication of thenotification:

“The unutilized accumulated ash i.e. legacy ash, which is storedbefore the publication of this notification, shall be utilizedprogressively by the thermal power plants in such manner thatthe utilization of legacy ash shall be completed fully within tenyears from the date of publication of this notification and this willbe over and above the utilization targets prescribed for ashgeneration through current operations of that particular year:

Provided that the minimum quantity of legacy ash in percentagesas mentioned below shall be utilized during the corresponding yearand the minimum quantity of legacy ash is to be calculated basedon the annual ash generation as per installed capacity of thermalpower plant.

Provided further that the legacy ash utilisation shall not be requiredwhere ash pond or dyke has stabilised and the reclamation hastaken place with greenbelt or plantation and the concerned StatePollution Control Board shall certify in this regard. Stabilisationand reclamation of an ash pond or dyke including certification bythe Central Pollution Control Board (CPCB) or State Pollution 5 Notification No. 5481(E)

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

BNote: The obligations under sub-paragraph (4) and (5) above forachieving the ash utilisation targets shall be applicable from 1stApril, 2022.

[…]”

6. The consequence of the notification dated 31 December 2021Cis that the earlier notifications would get subsumed by the terms of thenotification. The NGT in the impugned orders had found fault with theTPPs due to their failure to comply with the notification dated 25 January2016 and the extended deadline which was fixed for the utilization of flyash. In view of the subsequent development which has taken place, theDbasis of the order of the NGT would be fundamentally altered by themodalities and time-lines which are prescribed by the notification dated31 December 2021. In view of the latest notification, the orders of theNGT would have to be set aside together with the imposition of themeasure of compensation as directed in the impugned orders.

E7. During the course of the hearing, counsel appearing on behalfof some of the contesting parties have fairly alluded to certain deficienciesin the notification dated 31 December 2021, particularly in the context ofthe loading, unloading, transport, storage and disposal of fly ash in anenvironmentally sound manner to ensure that it does not cause air andwater pollution. Mr Tapesh Kumar Singh, learned AAG who appearsFfor the State of Jharkand submitted a note of submissions to assist thecourt, 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 atwo-Judge Bench of this Court in SLP(C) No 30381 of 2011 when theCourt was seized of a tender dispute relating to transportation of fly ash.GWhile dealing with the dispute, the following directions were issued bythe 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 theHGovernment of India, if any, under Section 5 of the Act, or the requirement of any Rules that may be framed by theGovernment of India under Section 6 of the Act, or instructions/circulars, if any, issued by the Central Pollution Control Boardas to nuisance free transportation of ash, including Pond Ashfrom the Thermal Power Stations to abandoned mines and toother destinations, as the case may be;

2. Pending issue of any directions or framing of any Rules by theGovernment of India or issuance of any instructions/circularsby the Central Pollution Control Board, the transportation workshall be undertaken by the contractors who emerge successfulonly by using mechanized steel covered container trucks whichwould ensure that after the Pond Ash is loaded into the truck,it has no opportunity to fly out of the container to cause anykind of environmental hazard. We leave the details ofspecifications, if any, of such trucks to the Corporation and itsEngineers to be specified in the course of negotiations to beconducted with the bidders.”

8. By an earlier order dated 13 August 2013 in the aboveproceedings, this Court had impleaded CPCB in order to ascertainwhether it had prescribed any standards or framed any rules regardingthe loading, unloading, utilization and nuisance free transportation of alltypes of ash including fly ash, bottom ash and pond ash generated byTPPs. During the pendency of those proceedings, certain steps weretaken by this Court to scrutinize whether any standards or measureshave been prescribed by the CPCB. However, on 22 January 2016,SLP(C) No 30381 of 2011 and the connected matters were dismissedon the ground that they had been rendered infructuous.

9. Apart from the above proceedings, during the course of thehearing, this Court has been apprised of the regulatory provisions containedin the Hazardous and Other Wastes (Management and TransboundaryMovement) Rules 2016[6] including rules 3(17), 3(23), 3(33) and 3(34) ofthe Rules. In this context, it has been submitted that the Union Governmentis duty bound to formulate rules to guarantee that the loading, unloading,utilization and transportation of fly ash takes place in a manner to preventenvironmental hazards.

6 “Rules of 2016”

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A10. At this stage, it would be material to note the provisions ofparagraph A(7) of the notification dated 31 December 2021 which readsas follows:

“(7) Every coal or lignite based thermal power plant shall ensurethat loading, unloading, transport, storage and disposal of ash isBdone in an environmentally sound manner and that all precautionsto prevent air and water pollution are taken and status in thisregard shall be reported to the concerned State Pollution ControlBoard (SPCB) or Pollution Control Committee (PCC) in Annexureattached to this notification.”

C11. Paragraph E of the notification deals with enforcement,monitoring, audit and reporting. Paragraphs (3) and (5) of paragraph Eare extracted below:

“(3)For the purpose of monitoring the implementation of theprovisions of this notification, a committee shall be constitutedunder the Chairperson, Central Pollution Control BoardD(CPCB) with members from Ministry of Power, Ministryof Coal, Ministry of Mines, Ministry of Environment, Forestand Climate Change, Ministry of Road Transportation andHighways, Department of Heavy Industry as well as anyconcerned stakeholder(s), to be nominated by the ChairmanEof the committee. The committee may makerecommendations for effective and efficient implementationof the provisions of the notification. The committee shallmeet at least once in six months and review annualimplementation reports and the committee shall also holdstakeholder consultations for monitoring of ash utilisationFas mandated by this notification by inviting relevantstakeholder(s) at least once in six months. The committeeshall submit the six monthly report to Ministry ofEnvironment, Forest and Climate Change (MoEFCC).

(5) The compliance audit for ash disposal by the thermal powerGplants and the user agency shall be conducted by auditors,authorised by Central Pollution Control Board (CPCB) andaudit report shall be submitted to Central Pollution ControlBoard (CBCB) and concerned State Pollution ControlBoard (SPCB) or Pollution Control Committee (PCC) byH30[th] November every year. Central Pollution Control Board (CPCB) and concerned State Pollution Control Board(SPCB) or Pollution Control Committee (PCC) shall initiateaction against non-compliant thermal power plants withinfifteen days of receipt of audit report.”

12. In view of the above background, it would be necessary forthe MoEF&CC to revisit whether the parameters which have beenprescribed by the notification dated 31 December 2021 must be modifiedtaking into account the provisions of the Rules of 2016, to the extent towhich 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 andreporting mechanism which is envisaged in paragraphs E(3) and E(5) ofthe notification dated 31 December 2021 is duly put into place andenforced scrupulously. Unless steps have already been taken to enforcethe precautionary steps envisaged in the notification, MoEF&CC shalldo so within a period of three months from the date of this judgment. Indoing so the precautionary principle shall be followed. The MoEF&CCshall also determine upon due analysis whether any further modificationof the notification is necessary to comply with the provisions of the Rulesof 2016 noticed above and other cognate legislation, including subordinatelegislation bearing on the utilization, transport and disposal of fly ash inan environmentally sustainable manner.

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

14. The appeals shall stand disposed in terms of the abovedirections.

15. We clarify that this judgment shall not be construed as a decisionon merits upholding the validity of the notification dated 31 December2021. Any party aggrieved by the terms of the notification would be atliberty to pursue the remedies which are available in law before theappropriate forum.

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

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

Appeals disposed of.

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