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M/s IL&FS Tamil Nadu Power Company Limited vs T. Muruganandam & Ors.

Civil Appeal · 2023 INSC 136Decided 17 Feb 2023
Civil Appeal Nos. 1811-1812 of 2015
M.R. Shah · C.T. Ravikumar

Background

IL&FS Tamil Nadu Power Company obtained an Environmental Clearance in 2010 to build a large imported-coal thermal power plant (planned at 3600 MW) in Cuddalore district, Tamil Nadu. Local fishermen and their representatives challenged the EC. In May 2012 the NGT upheld the EC but suspended it until the Environment Ministry reviewed it in light of a cumulative impact study; the company did a "rapid" cumulative impact study instead, and in August 2012 the Ministry issued a corrigendum adding extra conditions, including installing a flue-gas desulphurisation (FGD) system. The fishermen appealed again, and in November 2014 the NGT quashed that corrigendum. The company appealed to the Supreme Court, which stayed the NGT order in 2015; two 600 MW units have been operating since 2015-16, supplying power to around 40 lakh households.

Decision Breakdown

The Supreme Court declined to shut the plant, holding that closing units that have run for years in a power-deficit State and serve 40 lakh households would harm the larger public interest. However, it made continued operation strictly conditional: the company must comply with every condition of the original EC and of the 2012 corrigendum, and must fully comply within the timelines it itself proposed for the conditions that were only partly met (the latest compliance report showed substantial compliance and no fundamental breaches, and the company had spent about Rs. 775 crore on the FGD system). The Court deliberately left open the larger legal question of whether a full cumulative impact assessment is compulsory for projects like this, to be decided in a future case. On the procedural question, it held that an aggrieved person can appeal to the NGT against a corrigendum to an EC, but where the original EC is not under challenge (or has already been upheld), that appeal is confined to the additional conditions only. The Court directed that this order is not to be cited as a precedent.

Lesson Learnt

Once a large project is up and running, courts weigh the public cost of shutting it down heavily, but they will make continued operation conditional on strict, time-bound environmental compliance. Communities affected by a project retain the right to challenge later modifications to an environmental clearance, but only on the new conditions if the original clearance has already been settled.

Official source (sci.gov.in)View Judgment (PDF)

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