Supreme Court stays Tamil Nadu pollution control board’s closure order on Arkay Energy

By: |
September 30, 2021 2:45 AM

With regard to Hazardous Waste Category 5.2 (oil-soaked cotton waste), the company clarified that this waste is not generated at its plant and the waste referred to in the show cause notices refers to the cotton which is used to wipe or clean the engine during engine servicing.

A Bench led by Justice Hemant Gupta stayed the TNPCB’s August 24 closure order issued under Section 33-A of the Water (Prevention and Control of Pollution) Act, and the Air (Prevention and Control of Pollution) Act. It also posted the matter for further hearing after two weeks.A Bench led by Justice Hemant Gupta stayed the TNPCB’s August 24 closure order issued under Section 33-A of the Water (Prevention and Control of Pollution) Act, and the Air (Prevention and Control of Pollution) Act. It also posted the matter for further hearing after two weeks.

The Supreme Court has stayed the Tamil Nadu Pollution Control Board’s order that had directed the closure of Arkay Energy (Rameswaram) for shortcomings in the disposal of hazardous waste category 5.2 – oil-soaked cotton and for not having an Environmental Management Cell. The board had also ordered disconnection of electricity supply to Arkay’s plant.

A Bench led by Justice Hemant Gupta stayed the TNPCB’s August 24 closure order issued under Section 33-A of the Water (Prevention and Control of Pollution) Act, and the Air (Prevention and Control of Pollution) Act. It also posted the matter for further hearing after two weeks.

Tamil-Nadu based independent power producer Arkay had challenged the Madras High Court September 6 judgment that asked the company to approach the National Green Tribunal against a composite order of closure issued by the Board.

The company said that it was being targeted by the TNPCB and other limbs of the TN government like Tamil Nadu Transmission Corporation and Tamil Nadu Generation and Distribution Company (Tangedco) as it had levelled allegations of mala fide against them.

While Arkay said that it had taken all the measures to comply with the shortcomings specified in the show-cause notices issued by the Board on August 12, it told the SC that the closure orders were extremely drastic in nature and would bring the operation of its captive power generation unit to a grinding halt as was servicing about 111 customers and employing significant manpower.

There exists no cause of action for TNPCB to order closure or any other restrictive measures as Arkay had complied with all applicable laws since inception and has all the clearances from the concerned authorities, senior counsel S Krishnana and counsel Anirudh Krishnana argued, adding that its Environment and Management Cell and the laboratory infrastructure already in operation since September 17.

With regard to Hazardous Waste Category 5.2 (oil-soaked cotton waste), the company clarified that this waste is not generated at its plant and the waste referred to in the show cause notices refers to the cotton which is used to wipe or clean the engine during engine servicing.

They alleged that the actions of the respondents were only aimed at disrupting the activities of Arkay.

While Arkay had been supplying electricity to the Tangedco since January 2009, the latter had failed to pay thousands of crores towards electricity dues, thus forcing the former its sister companies and other power firms to initiate multiple recovery and insolvency proceedings against it, including contempt proceedings, before different fora including National Company Law Tribunal.

“The effect of all litigation and especially the contempt proceedings were that the respondent entirely stopped making payments… The aggressive pursuit of legal remedies to seek payment of its legitimate dues has resulted in a backlash from Tangedco,” Arkay said in its appeal filed through counsel Balaji Srinivasan.

Arkay had also moved the HC seeking to restrain the respondents from obstructing it in any manner from evacuating electricity at its full capacity pending disposal of the petition. It had also sought direction from the respondents to compensate it at the rate of around `1.35 crore per day for the losses caused to the Petitioner to the arbitrary action.

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