M/S IL&FS TAMIL NADU POWER COMPANY LIMITED versus T. MURUGANANDAM & OTHERS on 17 February 2023

1. Feeling aggrieved and dissatisfied with the impugned judgmentand order dated 23.05.2012 in Appeal No. 17/2011 and judgment andorder dated 10.11.2014 in Appeal No. 50/2012 passed by the NationalGreen Tribunal (Principal Bench), New Delhi (hereinafter referred toas the ‘NGT’), M/s IL&FS Tamil Nadu Power Company Limited haspreferred the present appeals.

2. The facts leading to the present appeals in nutshell are as under:

The appellant herein has been incorporated in the year 2006 toimplement the Project for establishing a 2x600 MW and 3x800 MW(aggregating to 3600 MW) imported coal based thermal power plant atvillage Kottatai, Ariyagoshti, Villianallur and Silambimangalam inChidambram Taluk, District Cuddalore, Tamil Nadu. Now the appellantcompany is under the control of Government of India. The appellantsubmitted Form I under EIA Notification, 2006 to obtain Terms ofReference for the EIA study on 5.2.2008. The Terms of Referenceapproval letter was issued by the Ministry of Environment, Forest andClimate Change (hereinafter referred to as the ‘MoEF’) on 9.7.2008.Public hearing was carried out for the project on 5.2.2010. The appellantcompleted the EIA study in accordance with EIA Notification, 2006.That thereafter the Expert Appraisal Committee (for short, ‘EAC’)considered the EIA study and directed the appellant to undertake certainadditional submissions to address specific points and directed that an A

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Aupdated Form I be submitted. That thereafter the appellant submittedupdated Form I reflecting recommendations of EAC meeting dated19.03.2010 to MoEF. The EAC meeting considered the project andrecommended the project for Environment Clearance (for short, ‘EC’),subject to stipulation of specific conditions including project to keep spacefor providing Flue Gas De-sulfurization (for short, ‘FGD’) system withBall the five units of the power plant to enable the system to be installedwhenever required. The appellant herein was granted the EC inaccordance with the recommendations of the EAC under EIANotification, 2006.

2.1 The original petitioners claiming to be fishermen and personsCacting for welfare of fishermen filed appeals against the EC beforeNational Environment Appellate Authority being NEAA Appeal Nos. 19& 20 of 2010. On the constitution of the NGT, Appeal No. 20/2010 filedbefore the National Environment Appellate Authority came to betransferred to the NGT, which was re-numbered as Appeal Nos. 16/2011 & 17/2011.D2.2 Vide order dated 23.05.2012 in Appeal No. 17/2011, the NGTupheld the validity of the EC but directed the MoEF to review the ECbased on the cumulative impact assessment study and stipulate anyadditional conditions, if required and directed that till then the EC shallremain suspended. Instead of the cumulative impact assessment study,Ethe appellant completed the Rapid Cumulative Impact Assessment (forshort, ‘RCIA’) study and submitted a copy thereof to the MoEF. Thatthereafter the EAC, after extensive deliberations on the RCIA and afterhearing the representative of the original petitioners and the appellant/project proponent, recommended certain additional conditions to be addedto the EC including the requirement of installing a FGD system as partFof the power plant. At this stage, it is required to be noted that as suchneither the original petitioners nor even the appellant challenged the firstjudgment and order dated 23.05.2012 passed in Appeal No. 17/2011 bywhich the NGT upheld the validity of the EC but directed MoEF toreview the EC based on the cumulative impact assessment study andstipulate any additional conditions, if required. That thereafter, onG14.08.2012, MoEF based on the recommendations of the EAC, issued acorrigendum to the EC imposing additional conditions to the EC. Thatthereafter the original petitioners who filed the earlier appeal against thegrant of EC, filed Appeal No. 50/2012 against the corrigendum dated14.08.2012 issued by the MoEF. By the impugned judgment and orderdated 10.11.2014, the NGT has disposed of Appeal No. 50/2012, quashingH

the corrigendum dated 14.08.2012. The judgment and order dated23.05.2012 in Appeal No. 17/2011 and subsequent judgment and orderdated 10.11.2014 in Appeal No. 50/2012 passed by the NGT are thesubject matter of present appeals.

3. By an interim order dated 10.02.2015, this Court stayed theimpugned order dated 10.11.2014 passed in Appeal No. 50/2012, whichhas been continued till date. Pursuant to the interim order passed by thisCourt, the appellant-company had commenced two power plants inPhase-I, which are in operation since 2015.

4. Dr. Abhishek Manu Singhvi, learned Senior Advocate appearingon behalf of the appellant-company has submitted that to close the powerplant now would not be in public interest. It is submitted that the appellant’spower plant is running since September 2015 in power deficit State ofTamil Nadu. Appellant operates two units of 600MW each sinceSeptember, 2015 and April, 2016, which presently supply power toapproximately 40 lakhs households. The power plant is situated in anenergy deficient State (Tamil Nadu) and therefore closing the powerplant would adversely affect power sector of the State.

4.1 In support of his submission that to close the power plant nowwould not be in public interest, it is submitted as under:

(i) That Appellant’s power plant is running since September 2015in power-deficit state of Tamil Nadu: Appellant operates two unitof 600MW each since September 2015 and April 2016, whichpresently supply power to approximately 40 lakhs households. Thepower plant is situated in an energy deficient State (Tamil Nadu),and closing the plant would adversely affect power section of theState;

(ii) Plant running in compliance with EC and Corrigendum: Thatthe plant is in compliance with clearance conditions, and six-monthly reports being submitted to Ministry of Environment, Forest& Climate Change, latest report of April-September;

(iii) Plant uses imported coal with low sulphur and uses FGDsystem: That Appellant uses imported coal from Indonesia for itsthermal power plant, which already has low sulphur content.Pursuant to MoEF Corrigendum, has spent Rs. 775 crores to installFlue Gas De- sulphurisation (FGD) system. Report of Centre forScience and Environment identifies Appellant’s plant as compliantwith SO2 standards. All over India only 20 power plants haveFDGs, of which two units are the Appellant’s power plant; A

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A(iv) Appellant part of IL&FS Group and value to be maximized:That ITPCL/ Appellant is a group company of IL&FS which isunder control of Govt. of India and is undergoing restructuring.Larger public interest is to realize value and recover PSU debt.Appellant’s restructuring plan has been approved by Hon’bleNCLAT on 01.12.2021. Appellant incurred expense of Rs. 11,000Bcrores (approx.) to build 2 x 600 MW units, which are operationalsince September 2015 and April 2016. Of this, Rs. 6,080 crorewas through loans from public sector banks (Punjab National Bank,Bank of Baroda, LIC, SBM Bank, SBI) and Rs. 4,560 crores inequity by IL&FS Energy Development (another IL&FS groupCentity); and

(v) Appellant’s CSR initiatives: That till date approx. Rs. 30 croresspent on CSR activities, including adopting several villages in thesurrounding areas. As of February, 2022, the Appellant has 1466employees of which 87% are from Tamil Nadu. Overall, 69%(1005 persons) are from Cuddalore District itself.D

4.2 It is further submitted that instead of cumulative impactassessment study, the appellant bonafidely and taking into considerationthe order passed by the NGT in Application No. 25/201 conducted/completed RCIA, a copy of which was submitted to MoEF and afterundertaking extensive deliberations on the RCIA and after hearing theErepresentative of the original petitioners and the appellant/projectproponent, the EAC recommended certain additional conditions to beadded to the EC including the requirement of installing FGD system andpursuant to which and based on the recommendations of the EAC, MoEFissued a corrigendum to the EC imposing additional conditions to theEC.F4.3 It is further submitted that taking into consideration theadditional conditions imposed vide corrigendum dated 14.08.2012, theappellant- company had installed FGD system at a cost of Rs. 775 crores,the only thermal power plant in the country to commence operationswith FGD system.G4.4 Dr. Abhishek Manu Singhvi, learned senior counsel appearingon behalf of the appellant has also made an elaborate submission on themaintainability of Appeal No. 50/2012 before the NGT, filed by the originalpetitioners against the corrigendum dated 14.08.2012 issued by the MoEF.It is submitted that as such the first judgment dated 23.05.2012 passed inAppeal No. 17/2011, by which the NGT specifically upheld the validityHof the EC but directed MoEF to deal with the EC based on cumulative impact assessment study and stipulate any additional conditions, was notchallenged by the original petitioners. It is submitted that the originalpetitioners had no locus and therefore the original petitioners could nothave challenged the subsequent corrigendum dated 14.08.2012 by whichcertain additional conditions were imposed to the original EC by theMoEF.

4.5 Dr. Abhishek Manu Singhvi, learned senior counsel has takenus to the additional affidavits dated 20.09.2022 and 28.11.2022. He hasalso taken us to the EC & CRZ Compliance Report dated 12.01.2022 aswell as the subsequent Compliance Report dated 20.09.2022 and thecopy of the response of the project proponent. He has stated at the Barthat by and large all the conditions of the original EC as well ascorrigendum to the EC have been complied with by the appellant/projectproponent and few conditions are under continuous compliance. He hasstated that the conditions imposed while issuing the EC and thecorrigendum have been substantially complied with and there are nofundamental breaches and/or non-compliance. He has stated at the Barthat whichever conditions are not complied with and not complied withfully and/or there are continuous compliance, the same shall be compliedwith within the time stipulated in the response of the project proponent.

4.6 Making above submissions and praying for keeping the questionof law , if any, namely, “Whether for the project like this, a cumulativeimpact assessment study is required or not” open and also the question,“whether an appeal before the NGT against the corrigendum to the ECand the additional conditions imposed as per the corrigendum to the ECwould be maintainable or not” and keeping the aforesaid questions(s) oflaw open, it is prayed to dispose of the present appeals by permitting theappellant to continue the power plants which are in operation since 2015.

5. Shri Shiv Mangal Sharma, learned counsel appearing on behalfof the MoEF has submitted that as such the appellant had neverchallenged earlier conditions imposed while issuing the EC and the firstjudgment and order passed by the NGT dated 23.05.2012 and even thecorrigendum dated 14.08.2012 issued by the MoEF imposing additionalconditions and therefore the appellant is bound by the conditions imposedwhile issuing the EC and corrigendum to the EC dated 14.08.2012 andthe appellant has to comply with all the conditions imposed while issuingEC as well as additional conditions imposed vide corrigendum dated14.08.2012. He has pointed out certain non- compliances/part compliancesof certain conditions and the response by the appellant. Therefore, hehas submitted that if this Court is inclined to permit the appellant to A

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Acontinue with the power plants in the public interest, in that case, theappellant may be directed to comply with all the conditions imposedwhile issuing EC as well as additional conditions imposed while issuingcorrigendum dated 14.08.2012.

6. Ms. Srishti Agnihotri, learned counsel appearing on behalf ofthe original petitioners has prayed that in case this Court is inclined toBpermit the appellant to continue with the power plants as per the EC andthe corrigendum dated 14.08.2012 which are in operation since 2015, inthat case, the question of law, namely, “whether for the project like thisconducting a cumulative environment impact assessment study is mustor not”, may be kept open as so many other such projects may comeCand that on conducting cumulative environment impact assessment study,the Tribunal may consider the said issue in detail.

6.1 Insofar as maintainability of appeal before the NGT againstthe order of corrigendum is concerned, it is submitted that against theadditional conditions imposed vide corrigendum dated 14.08.2012, anappeal would be maintainable before the NGT against the corrigendumDto the EC.

7. Having heard Dr. Abhishek Manu Singhvi, learned SeniorCounsel appearing on behalf of the appellant and the learned counselappearing on behalf of the MoEF and original petitioners and the factsnarrated hereinabove, it is to be noted that pursuant to the interim orderEpassed by this Court, the appellant has commenced two power plants inPhase- I, which are in operation since September, 2015. The appellant isoperating two units of 600MW since September, 2015 and April, 2016,which presently supply power to approximately 40 lakhs households.The power plants are situated in an energy deficit State (Tamil Nadu).Thus, closing the power plants/units would adversely affect power sectorFof the State and which shall not be in the larger public interest, moreparticularly the power deficient State of Tamil Nadu.

7.1 However, at the same time, the appellant has to comply withall the conditions imposed while issuing EC as well as the additionalconditions imposed vide corrigendum to the EC dated 14.08.2012. FromGthe compliance report dated 20.09.2022 (latest compliance report) andthe response of the project proponent, it appears that by and large thereis a substantial compliance of the conditions imposed while issuing ECas well as the additional conditions imposed vide corrigendum to the ECdated 14.08.2012. There do not appear to be any fundamental breachesor non-compliance of the conditions imposed while issuing EC as well asHadditional conditions imposed vide corrigendum to the EC dated M/S IL&FS TAMIL NADU POWER COMPANY LIMITED v. T.MURUGANANDAM & OTHERS [M. R. SHAH, J.]

14.08.2012. However, some conditions are still partly complied with,which have been responded by the appellant and has agreed to complywith the same. The particulars of the specific conditions, part compliancesand the response to the same are as under:

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M/S IL&FS TAMIL NADU POWER COMPANY LIMITED v. T.MURUGANANDAM & OTHERS [M. R. SHAH, J.]

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204SUPREME COURT REPORTS[2023] 3 S.C.R.ABCDEFGH

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A8. Considering the aforesaid facts and circumstances and subjectto compliance of the conditions imposed while issuing EC and theadditional conditions imposed vide corrigendum to the EC dated14.08.2012 and subject to the conditions/additional conditions which arepartly complied with, to be complied with within the time suggested inthe response of the appellant/project proponent, reproduced hereinaboveBand keeping the larger question of law, namely, “whether for the projectlike this, a cumulative impact assessment study is required or not”, openand to be decided in an appropriate case, we dispose of the presentappeals by permitting/allowing the appellant/project proponent to continuewith the power plants which are in operation since September, 2015 andCApril, 2016 on the conditions as above, i.e., subject to compliance of allthe conditions mentioned in the EC as well as additional conditionsimposed vide corrigendum to the EC dated 14.08.2012 and to fully complywith the conditions which are partly complied with within the stipulatedtime as suggested and prayed by the appellant company, prayed inresponse to the compliance report dated 20.09.2022, reproducedDhereinabove.

9. Now so far as the issue, “whether against the corrigendum tothe EC along with additional conditions, an appeal before the NGT wouldbe maintainable or not” is concerned, having heard learned counselappearing on behalf of the respective parties, we are of the opinion thatEan aggrieved person may always challenge the corrigendum to the EC,however, the appeal will be restricted to the corrigendum to the EC onadditional conditions only, if the original EC is not under challenge and/orthe original EC has been confirmed by the NGT earlier on certainconditions which have not been challenged.F

10. The present appeals stand disposed of in the aforesaid terms.We make it clear that the present order shall not be cited as a precedentin any other matter.

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Divya Pandey

(Assisted by : Abhishek Pratap Singh and Roopanshi Virang, LCRAs)

Appeals disposed of.

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