SC Stays Imposition Of NGT's Environmental Compensation On Thermal Plants For 100% Fly Ash Non Utilisation

The Supreme Court on Tuesday stayed the recovery of 'Environmental Compensation' imposed by the National Green Tribunal (NGT), for non-achievement of 100 % Fly Ash utilization and disposal by Thermal Power Plants (TPPs).

A bench of Justices RF Nariman, Navin Sinha & Indira Banerjee stayed an order of February 2, 2020 passed by the National Green Tribunal, wherein Environment Compensation on all TPPs which were unable to achieve 100% Fly Ash Utilization viz a Ministry of Environment & Forest & Climate Change notification dated December 25, 2016. 

The bench was hearing an appeal filed by Association of Power Producers (who's members include Essar, Sembcorp, DB Power, Adani Power Ltd. CP India Ltd. etc.) against the NGT order along with intervening parties including Jaiprakash Power Ventures Limited, Sasan Power Limited, Hinduja National Power Corporation Limited, RKM Powergen Private Limited and ACB India Ltd.

The NGT had taken a view that cutoff date of December 31, 2017 as stipulated in the notification is "sacrosanct" and that all such projects which were not able to ensure/achieve 100% Fly Ash Utilisation till such date shall be liable to pay Environmental Compensation to the Central Pollution Control Board (CPCB).

In this backdrop, the CPCB had issued en masse notices to various TPPs in India including members of APP, demanding Environment Compensation.

Thus, the top court has stayed the recovery of the Environmental Compensation from such projects, who had received notices of payment by CPCB.

The appeal has been filed under Section 22 of the National Green Tribunal Act, 2010 stating that on account of the ongoing pandemic and the ensuing countrywide lockdown, there has been a significant disruption in the functioning of the courts, and other sectors, including the power sector.

"While power/electricity remains an essential service, owing to the lockdown, several activities linked with the process of supply of electricity, including disposal of fly-ash, have been adversely affected," the plea reads.

Further to this, the appellants have inter alia averred that the NGT has violated the specific direction passed by the top court in another plea (CA Diary No. 2959 of 2019) wherein it had specifically directed the NGT to determine the nature of obligation imposed by the Fly Ash Notification 2016. 

"From the perusal of the Impugned Order, it is evident that no such exercise has been carried out. The Ld. Tribunal has not examined a single case before arriving at its decision and has not examined the nature of the Fly Ash Notification 2016. In other words, no case to case analysis of each TPP was done before levying of any penalty. Therefore, the Impugned Order passed by the Ld. Tribunal is without application of mind and is in violation of the directions of this Hon'ble Court and is liable to be set aside," - Excerpt of Plea

Thus, the the Ld. Tribunal without applying its mind has essentially made all TPPs, including those owned and operated by the members of Appellant No.1, along with member Independent Power Producers ("IPPs"), liable to deposit Environment Compensation, reads the plea.

Apropos this, the appellants argue that the tribunal passed the impugned order in a mechanical manner, without considering the specific facts of each TPPs and appreciating the issues involved and problems being faced by TPPs in achieving 100% fly-ash utilisation.

Appellants were represented by Senior Advocate Sajjan Poovayya, SKV Law Offices Partner Shri Venkatesh along with Advocates Vikas Maini, Anant Singh, Nitin Saluja & Nishtha Kumar.

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