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Jaypee to pay Rs. 100-cr fine, demolish thermal plant: HP HC

Anup Rattan , Hindustan Times  Shimla , May 04, 2012
First Published: 21:33 IST(4/5/2012) | Last Updated: 22:04 IST(4/5/2012)

In a major setback to Jaypee Associate Limited, the Himachal high Court has directed the company to demolish its thermal power plant in Bagheri village in district Solan and imposed Rs. 100 crore damages for violating the law and making false pleas before the authorities and court.


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A division bench comprising justices Deepak Gupta and Sanjay Karol observed that the entire foundation of the environmental clearance obtained by Jaypee Associates was based on falsehood as the company lied about the cost of the cement plant.

The court said that the company managed to get permission without Environmental Impact Assessment (EIA) clearance and even after it was brought to the notice of the company that EIA clearance was required, it continued to build the thermal plant.

When company submitted a new proposal for grant of environmental clearance, it successfully managed to fool the Himachal government, Pollution Control Board, the MoEF and the EAC into believing that the plant being set up by it was a standalone grinding unit not requiring environmental clearance. This statement was also totally false.

Writing for the bench, Justice Deepak Gupta observed that the company had the audacity and temerity to again give totally false information with regard to the cases and tried to give an impression that the company was not aware about these cases at that time. 

The court added that the manner in which the company obtained possession of the property as well as managed to get the government to allot land from the common pool clearly indicates that it was successfully managing to exert its influence to get highly illegal decision taken in its favour.

The HC added that  the company had wrongly projected the project cost of the cement plant at less than Rs. 100 crore to circumvent the EIA notification of 1994. Not only this , in the second integrated draft EIA report, it was wrongly projected that what was being set up was a standalone grinding unit.

The court added that the company behaved as if it was above law and set up the  plant in total violation of the EIA notification of 2006 which had come into force at the time when consent to establish this plant was given.

It was set up without any valid approval and construction was carried out even after the consent to establish was withdrawn. In fact the HP Pollution Control Board was negligent in not withdrawing the consent to establish the thermal plant much earlier.

"…normally, the only course open to the court would have been to revoke the environmental clearances and direct that the cement plants and thermal plants be dismantled," the court observed.

However, the court said, being a court of law, we are also not oblivious to the effect which our order may have if we quash the environmental clearance and direct that the cement plant be demolished.

The court said it imposed damages of Rs. 100 crore upon the company, which may be paid in four equal installments, the first to be paid by August 31, 2012; second by March 31, 2013, third by March 31, 2014 and the last installment by March 31, 2015.

"We may make it clear that the damages shall be used only for improving the ecology and environment of the area," the court added.


SIT formed to probe role of officials

Himachal high court constituted a special investigation team to investigate the role of government officials in the grant of permission to Jaypee Associates for the construction of thermal power plant and cement plant.

The HC has observed in the 94-page judgment that the company was guilty of making false statements for obtaining environmental clearances for all its Projects and it successfully misled and hoodwinked the state government, HP State Pollution Control Board, Ministry of Environment and Forest, Environment Appraisal Committee and all other authorities. These authorities and officials who were manning these authorities were supposed to act like watchdogs to fiercely protect public interest. They unfortunately behaved like meek lambs being led for slaughter.

"We constitute a special investigating team (SIT) who shall investigate the matter and identify the public servants who connived with and helped Jaypee Associates and also those who were negligent in the discharge of their duties," the division bench comprising justice Deepak Gupta and justice Sanjay Karol observed. 

The court added that the SIT may recommend initiation of criminal action/disciplinary proceedings against erring public servants/officials keeping in view the facts of each case. 

The SIT shall be headed by KC Sadyal, ADG (Vigilance) and Himanshu Mishra, DIG (Vigilance) shall be a member of the SIT. These two may co-opt a third member not below the rank of deputy superintendent of police as member of SIT to assist them in the investigation.

The SIT shall also investigate whether any officials/public servants have 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.

The court directed the SIT to submit its report to the Court latest by December 31, 2012.

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