Reopening Of Vedanta's Copper Plant In TN : Supreme Court Suggests Forming Expert Committee To Balance Ecological Concerns & Investment

The bench comprising Chief Justice DY Chandrachud and Justices JB Pardiwala and Manoj Misra was of the opinion that a practical solution to the present dispute could be found in a bi-partisan expert committee where concerns of both parties relating to objective evaluation and the welfare of the public large could be considered.

“ On one hand, the concerns of the State as custodian of the people will also be protected, second, your concern of the investment into the plant..., you should not be a facility that is lost to the nation …some sort of a middle ground can be found and that committee can take a decision in a period of one month or so”

The CJI also clarified that in the instance that the committee does find the need for Vedanta to comply with the conditions, the Court will put the company to terms accordingly.

The CJI asked Senior Advocates Mr Gopal Sankaranarayanan and Mr Vaidyanathan, the counsels appearing for the State of Tamil Nadu to find a comprehensive modality which would best serve the public interest in this case.

“You also apply your mind to what could best subserve the public interest… because we cannot be oblivious to the fact that the community in Tuticorin has to also be carried along”

As per Senior Advocate Mr Shyam Divan, appearing on behalf of Vedanta, the action of rejecting the Consent to Operate (CTO) on the part of the State Government and Tamil Nadu Pollution Control Board(TNPCB) is not only wrong but also disproportionate.

The Senior Counsel highlighted that the State Authorities in May 2018 directed the permanent closure of the copper plant on 5 grounds : (1) Vendata failed to furnish certain groundwater reports; (2) An amount of copper slag which was lying on third-party land was not removed by Vedanta; (3) while Vedanta did apply for renewal of hazardous waste permission, it formally did not have a hazardous waste disposal license (which expired subsequently); (4) The ambient air quality was not furnished for arsenic substances and (5) The requirement for a gypsum pond has not be created as directed

It was argued by the senior counsel that the State Government's decision to reject the renewal of CTO and order the permanent closure of the copper plant was perhaps unreasonable and disproportionate considering that the plant has been in operation since 1997 and has contributed immensely to the national economy. It was further contended that the State Government does not have the power to direct a closure of the plant. Such an action could only be taken by the TNPCB under the Air Act 1981 and The Water Act, 1974. Mr Divan stated,

“Though the PCB could have done it, but there the government did and the board followed suit”

There are 67 industries today in the SIPCOT Industrial Area (Thoothukudi, Tamil Nadu) layout and there are 12 large red-category industries which are the most polluting industries, including Vedanta.

As per their written submissions, Vedanta's copper plant met 36% of India's Copper requirement and contributed over Rs.13,500/- crores to the exchequer during the period 2014 to 2018 (Rs.2559/- Crores in FY 2018 itself), directly employing 4000 people, indirectly employing 20000 people with an impact on over 200000 people dependent on downstream industry.

“Copper itself is a critical mineral for India realizing sustainable development goals. The country has lost at least USD 1.2 billion in foreign exchange due to the orders of the Respondents.”

Apart from the challenge to the above 5 grounds upon which the plant was closed, Mr Divan contended that the High Court in its impugned order has, instead of confining itself to the issues challenged, expanded on a large number of other issues which constitute a “judicial misadventure”. According to Mr Divan, “The High Court's decision is on erroneous grounds, the petitions have been treated as public interest exercise.”

The CJI, in terms of understanding how the CTO is renewed, posed a question to both sides, “ In the case of a running industry what is the industry practice by the board? Do they factor in the fact that they apply for renewal, therefore your are not going to be directed to shut down, pending the disposal of the application, because the application may take time to process, and there may be various tests which would be carried out…so what is the industry practice generally on this at so far as the renewal is concerned.”

The bench was informed that CTOs are required to be renewed periodically from time to time. The last CTO which was renewed for Vendetta was on 7.9.2017 which has not been extended ever since.

During the hearings, picking from the bench's suggestion of having an expert committee to oversee key compliances of the Petitioner's unit, Mr Divan indicated the need for refurbishing the plant in the interim.

“ I am first and foremost agreeing to any suggestion that comes from the board with regards to the conditionalities moving forward as far as my plant is concerned… the second point I want to mention at the threshold is, that I will have a very simple wish list which is not on manufacture, which has to do with the refurbishing of facilities at my risk and my costs, in the interregnum..because when your lordships characterize it as a national asset, it has to be kept as going in a manner.. I will at my risk and costs completely refurbish it and refurbish it to the extent, while this exercises your lordships in suggesting.”

This was however objected to by the respondents, stating that even before hearing the matter's main contentions, the bench cannot grant such an interim measure.

The bench additionally noted that while the High Court has gone into the public interest aspect under Article 48A of the Constitution, the matter at present only pertains to the 5 grounds as furnished in the TNPCB order of 9.4.2018.

The CJI explained to Senior Advocate Mr Vaidyanathan, appearing for the Respondents that “ The High Court is wrong because they were in a challenge against of the TNPCB order, their challenge had to be made based on the grounds made out in the impugned (TNPCB) Order …they were not carrying a PIL”

Background

The Copper Plant of Vedanta Limited has remained shut since 2018 pursuant to the orders of the TNPCB in April 2018 on grounds of procedural irregularities. The Petitioner initially approached the TNPCB Appellate Authority after the rejection of the renewal of the CTO. However, during the pendency of the appeal, the State Government on 28.05.2018 directed for permanent closure and sealing of the Plant, and the petitioner was compelled to approach the NGT, which after seeking a fresh report from the technical committee (which submitted its report on 20.11.2018)set aside all the impugned orders on 15.12.2018. Accordingly, the NGT found that the grounds on which the plant was shut down were erroneous and, in any case, not valid grounds to reject the renewal of CTO.

On appeal by the TNPCB, the Supreme Court set aside the NGT order on 18.02.2019 solely on the issue of maintainability since the impugned orders were composite in nature and granted the petitioner liberty to approach the Madras High Court to challenge the impugned orders. Accordingly, the Petitioner filed (10) Writ Petitions before the Madras High Court.

The Madras High Court in its order dated 18.8.2020 upheld the denial of the renewal of CTO along with the permanent closure of the plant. The Petitioners have now approached the Apex Court against the said decision.

Previously, during the COVID-19 crisis, the Supreme Court permitted Vedanta to operate its Oxygen production unit on a standalone basis at the Copper plant in Tuticorin, which had been closed for 3 years. The permission has been granted in view of acute Oxygen shortage being faced by many states in the country, amid the second wave of Covid-19.

Vedanta Limited v The State Of Tamil Nadu And Ors SLP(C) No. 10159-10168/2020