Tuesday, May 8, 2012

News Article: Himachal Green Court imposes Rs 100 Cr damages on Jaypee Cement Plant

By: Ravinder Makhaik

High Court orders dismantling of captive thermal plant

Shimla: Getting tough on blatant violations of environment laws, a green bench of HP High Court on Friday not only imposed Rs 100 crore damages on Jaiprakash Associates Ltd. (JAL) for having set up a whole cement plant by adopting fraudulent means but also cancelled permissions for a 62 MW captive thermal plant and directed that it be dismantled within 3 months. To fix official responsibility for allowing the illegality, the court set up a special investigation team (SIT) for the purpose.

Jaypee Cement plant in Bagheri Himachal Pradesh
 
Disposing of a PIL (No 15 of 2009) and a petition (No 586 of 2010) challenging the setting up of a cement plant at Bagheri village in Solan district, the green bench headed by Justice Deepak Gupta with Justice Sanjay Karol held that that “the entire project of Jaiprakash Associates Ltd is based on a tissue of lies.”

Writing the order for the bench Justice Deepak Gupta observes “this company has behaved like a law unto itself. At every stage JAL has either given wrong information or has tried to mislead the authorities.”

Firstly to obtain environment clearance, the company fraudulently claimed costs of the plant to be less than Rs 100 crore where as actually having invested between Rs 400 to Rs 500 crore setting up the cement plant.

Laws on September 16, 2004, when the cement plant was cleared by the states single window clearance authority, for a project with less than Rs 100 cr investment did not require to obtain any clearances from ministry of environment of forest and environment (MoEF).

The court struck down the company’s contention that project costs escalated to over Rs 400 crore because of delays and increase in prices of plant machinery. The judges pointed out that the plant construction began on November 2, 2004 with the promoters not holding any public hearing or obtaining any environment clearance. No delays occurred as the plant was completed within the scheduled 5 year period.

The court even expressed shock at transfer of 325 bighas of villagers’ common lands worth crores of rupees without any authority whatsoever.

Can the state act like a land mafia, take over possession of the village common land and hand it over to a private company without even following the semblance of the rule of law,” the judges questioned?

The court held that the possession of land was illegally handed over to JAL and clearance from MoEF for diverting forest land for the cement plant was only taken after it had been set up.

Holding JAL guilty of deceit the court adopted the ‘polluter pays’ principal to impose Rs 100 damages on the company that is to be paid in four equal installments with the first one due by August 31, 2012 and the last one by March 31, 2015.

Before ordering dismantling of the thermal plant set up purportedly for captive use of the cement plant, the court observed that it “was set up without any valid approval and construction was carried out even after the consent was withdrawn.”

The court recorded that an application for setting up a 25 MW captive multi fuel power plant at Bagheri was first moved before director industries on December 20, 2005.

Though environment clearances were not obtained or project costs shown, the proposal was cleared on September 27, 2006 and JAL started construction immediately.

On realizing that environment clearance under an Environment Impact Assessment (EIA) 2006 notification was mandatory, HP Pollution Control Board on February 15, 2007 asked JAL hold a public hearing and obtain environment clearance for the thermal plant under construction. The projected investment for the plant was Rs 90.45 crores.

A public hearing was conducted on July 2, 2007 and minutes of the meeting revealed that the entire public present opposed setting up of the thermal plant.

On July 16, 2007 the government took a decision to withdraw all no objection certificates for setting up thermal plants in the state.

Despite PCB withdrawing the consent to establish on July 17, 2007 and MoEF as for keeping the project in abeyance on September 7, 2007, the company did not stop construction.

JAL behaved as if it is above the law,” the court observed.

However with a change of government in December 2007, on November 10, 2008 the policy was changed by the cabinet at the behest of an overactive bureaucracy to permit captive consumption thermal plants.

Interestingly on the same day JAL through its executive chairman sent a letter seeking permission to set up a 60 MW captive thermal plant at Bagheri.

JAL seems to have its eyes and ears in every wing of the government because even before the ink had dried on the letters conveying the new policy, JAL had sent its own detailed proposal for setting up a thermal plant on the same day,” the judges observed.

Till date there is no permission from MoEF permitting use of forest land for setting up a thermal plant, the order records.

JAL applied to MoEF for obtaining environment clearance for a integrated 62 MW project on February 18, 2009 and a public hearing was held on September 7, 2009.

Striking down the environment clearance for the thermal plant, the judges concluded that the entire foundation of the environment clearance obtained by JAL was based on falsehood.

With the court observing that the company could not have succeeded in its illegal endeavour to establish the plant and get permissions without active connivance of officials, it ordered setting up of a three member special investigation team to be headed by KC Sadyal, additional director general of vigilance bureau.

The court has empowered SIT to investigate and identify the public servants who connived to with and helped JAL and those who were negligent in discharge of their duties.

The investigation has also been asked to indentify whether any official directly or indirectly received undue benefits from JAL or any of its associate companies whether in the form of grant of business outlets, reemployment etc.

Directed to submit its report December 31, 2012, the court asked SIT to also recommend initiation of criminal or disciplinary action against erring officials

About official apathy, the order observed, “most shocking aspect of the matter is that neither the department of industries nor the pollution control board thought it fit to verify whether the cost of the project of Rs 90 Cr submitted by JAL was in fact correct or not.

On the one hand JAL was stating that it was investing Rs.450 crores on this project and on the other hand it was claiming that the cement plant would cost only Rs.90 crores. The industry department in its reply has, like the proverbial ostrich, hidden its head in the sand and has not replied to the allegations regarding costings. If this is the state of affairs, the state of Himachal Pradesh is headed for environmental ruination.”

Petitioners Him Privesh Enviorment Protection Society and panchayat representatives of the area had alleged that the cement plant had been set up in total violation of environment laws, no proper public hearing was conducted and 325 bighas of village common lands had been wrongly transferred by the state in favour of the company.


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