Relief for Tata Power, Vedanta: SC stays fines imposed by NGT for not utilising ash from thermal projects

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September 15, 2020 5:20 AM

A Bench led by DY Chandrachud while seeking response from the firms and others said that “there shall be an ad-interim stay of recoveries in pursuance of the impugned order of the NGT.”

Though the fines are not precisely quantified yet, on an aggregate basis, these may run into several hunderds of crores, according to sources.Though the fines are not precisely quantified yet, on an aggregate basis, these may run into several hunderds of crores, according to sources.

The Supreme Court has stayed hefty fines imposed on Tata Power Company, Vedanta and others for not fully utilising ash generated from its thermal projects, as ordered by the National Green Tribunal. A Bench led by DY Chandrachud while seeking response from the firms and others said that “there shall be an ad-interim stay of recoveries in pursuance of the impugned order of the NGT.”

Last year, the apex court had stayed the NGT’s fines imposed on state-run power producer NTPC for not fully utilising ash generated from its thermal projects. NTPC had challenged the order alleging that the tribunal had failed to consider the reluctance of user industries like cement plants to take fly ash from power plants as they have an obligation to do so.

Though the fines are not precisely quantified yet, on an aggregate basis, these may run into several hunderds of crores, according to sources.

The NGT in its February 12 interim order had held that thermal power plants (TTPs) which have been unable to achieve 100% fly ash utilisation as on cut-off date of December 31, 2017 in terms of the the Union Environment Ministry’s 2016 notification are liable to pay environmental compensation in accordance with the formula provided by it. The tribunal had also in November 2018 ordered that TPPs which had failed to dispose of 100% fly ash up to December 2017 to deposit damages for environment restoration to the tune of Rs 5 crore for TPPs beyond the capacity of 1000 MW.

Vedanta counsel Ranjana Roy Gawai told FE that “since the Vedanta group had achieved 100% utilisation by FY2017-18, there is no demand yet for environmental compensation. However, the main challenges are two fold – constitution of joint committee contrary to the MoEF notification and also the formula for compensation for 2020.”

Vedanta which has two thermal power plant in district Jharsuguda, Odisha, in its appeal said that it had undertaken effective steps to fulfill the 100% fly ash utilisation obligation as per the MoEF notifications by entering into various contracts with brick manufacturers, cement plants, Nagar Nigam, etc., to facilitate these users by providing them fly ash generated by it.

However, both the NGT and the joint committee have not looked into such proactive steps and had erroneously held that the individual circumstances cannot be a ground to disobey law, it said.

Vedanta said that the NGT had “mechanically and without application of mind” rejected its contentions and “turned a blind eye to the utilisation norms” despite all sincere and prudent measures adopted by it. According to Vedanta, the NGT-appointed the joint committee, which has representatives from the MoEF, and various other ministries of power, coal, housing and urban affairs, Central Pollution Control Board and the Odisha State Pollution Control Board, was contrary to the statutory mandate where setting up of a statutory expert committee and monitoring committee is provided for monitoring implementation of the notification.

It further alleged that there is no evaluation on case-to-case basis of the steps being taken by TPPs in compliance of the MoEF notification as directed by the SC. Besides there has been no determination of nature of breach on the basis of obligation cast on various parties under the MoEF notification for 100% utilisation of fly ash, Vedanta added.
While stating that the tribunal had only examined the facts pertaining to pollution caused by TPPs in Singrauli and Sonebhadra districts, the appeal filed through counsel Divya Roy argued that “the defaults and environmental damage caused by TTP ought not to have been taken as the yardstick for arriving at a conclusion regarding fly ash utilisation by all other TPPs including Vedanta and imposing environmental compensation.”

Besides a thermal power plant of 2400 MW capacity operational since August 2010, Vedanta also has two captive power plant of 1215 MW and 75 MW capacities for feeding its aluminum smelter refinery.

As per the MoEF notifications of 1999, 2003 and 2009, fly ash can be used in construction activity like road laying, embankments or used as land fill to reclaim low lying areas including backfilling in abandoned mines or pitheads or for any such other use as permitted strictly in accordance with the provisions of notifications.

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