Hindalco Industries Limited v. Union Of India & ORS.

$~1 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 10765/2024, CM APPL. 44327-44329/2024 HINDALCO INDUSTRIES LIMITED .....Petitioner Through:

Mr. Sandeep Sethi, Senior Advocate with Ms. Ashish Prasad, Ms. Mukta Dutta, Mr. Siddharth Sharma and Ms.

Riya Kumar, Mr. Kaustubh Mishra, Advocates.

versus UNION OF INDIA & ORS.

.....Respondents Through:

Mr. Kirtiman Singh, CGSC with Mr.

Waize Ali Noor, Mr. M. Khurrana, Mr. Ranjeev Khatana, Mr. Varun Rajawat, Mr. Kartik Baijal, Mr.

Varun P., Advocates for R-1 to R-3

CORAM:

HON'BLE MR. JUSTICE SANJEEV NARULA

O R D E R

% 08.08.2024 1.

The Petitioner, the allocatee of Chakla Coal Mine located at village Chakla, Tehsil Chandwa, District Latehar, Jharkhand executed a Coal Mine Development and Production Agreement1 dated 11th January, 2021 with Respondent No. 2 - the Nominated Authority, Ministry of Coal. According to the terms of the CMDA, the Petitioner was obligated to meet 'Milestone No. 3' as detailed in Schedule D, which required obtaining environmental clearance for the mine by 2nd June 2023. However, the necessary clearance 1 "CMDPA"

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was not secured by the stipulated deadline, resulting in a Show Cause Notice dated 20th June 2023 being issued to the Petitioner by Respondent No. 2. 2.

The Petitioner points out that the Expert Appraisal Committee2 constituted under the Environment Impact Notification, 2006, during its 46th meeting recommended the grant of environment clearance to the Coal Block in question. This recommendation was contingent upon the attainment of Stage I Forest Clearance. In response, the Petitioner requested an extension from Respondent No. 2 to fulfil Milestone No. 3. 3.

During its 22nd meeting held on 8th May 2024, the Scrutiny Committee accepted the Petitioner's request for additional time to secure the required Stage I Forest Clearance and environmental clearance but also stipulated that the Petitioner's Performance Bank Guarantee would be appropriated if the extended deadline was not met, without further recourse to the Committee.

4.

Subsequently, upon seeking verification from the State Government regarding compulsory afforestation land, the Petitioner was informed that on 5th July 2024, the Conservator of Forests, Jharkhand Government had declined the permission for the diversion of forest land for the Chakla Coal Mine project. During a field visit, it was observed that a herd of 10 to 15 elephants had established abode in the project area and its vicinity. 5.

In anticipation of the Performance Bank Guarantee being appropriated, the Petitioner submitted a representation to Respondent No. 2 on 29th July 2024. This representation requested their assistance in acquiring Stage I Forest Clearance and urged them to withhold any penalties as recommended by the Scrutiny Committee until the issue of non-grant of W.P.(C) 10765/2024 Page 2 of 5 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.

Stage I Forest Clearance was resolved.

6.

The recommendations made by the Scrutiny Committee have not yet been considered by the Nominated Authority; however, a review is expected imminently. The Petitioner fears that these recommendations will be endorsed by the Nominated Authority, leading to the immediate appropriation of the Performance Bank Guarantee. Given these concerns, the Petitioner has initiated this writ petition seeking judicial intervention. The Petitioner requests that the Court direct the Respondent to address the Petitioner's representation dated 29th July, 2024, specifically requesting a stay on any penalty enforcement pending the resolution of the Stage I Forest Clearance issue. Additionally, the writ petition seeks to set aside the Scrutiny Committee's Minutes of the Meeting dated 8th May, 2024. 7.

Mr. Sandeep Sethi, Senior Counsel for the Petitioner, urges that adherence to the timelines fixed under CMDPA was premised on the understanding the designated area would qualify for forest diversion and that the necessary Forest Clearance would be granted. He argues that the failure to achieve Milestone 3, due to the unanticipated denial of Stage I Forest Clearance, should be recognized as a 'change of event'. Consequently, he asserts that penalizing the Petitioner for non-compliance under these changed circumstances would be unjust and unwarranted. 8.

Mr. Sethi also challenges the legitimacy of the adverse recommendation of the Conservator of Forests, Jharkhand Government which was critical in denying the said forest clearance. He argues that the recommendation was reliant on an inspection report dated 5th July, 2024, which is at best anecdotal and lacks formal certification. He points out that 2 "EAC"

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numerous other coal blocks in proximity to the Chakla Coal Mine have been operational for an extended period without similar issues. Thus, Mr. Sethi calls for a thorough reassessment involving all stakeholders, arguing that the Petitioner should not be penalized for bureaucratic delays that are beyond their control.

9.

Mr. Kirtiman Singh, CGSC for Respondents No. 1 to 3, states that as pointed out by the Petitioner, the Scrutiny Committee recommendation are yet to be considered by the Nominated Authority. He suggests that the Petitioner's representation dated 29th July, 2024, should be formally presented to the Nominated Authority, which will consider it thoroughly in accordance with the prevailing circumstances and the applicable legal framework.

10.

Considering these submissions, in the opinion of the Court, since the Nominated Authority is yet to form it's view, the present writ petition can be disposed of with certain directions allaying the Petitioner's apprehensions: (a) Petitioner's representation dated 29th July, 2024 shall be placed before the Respondent No. 2, the Nominated Authority, and the same shall be considered while deliberating upon the recommendations of the Scrutiny Committee.

(b) Any adverse decision with respect to appropriation of the Performance Bank Guarantee furnished by the Petitioner shall not be given effect to for a period of two weeks from the date of the order and a copy thereof shall be provided to the Petitioner. (c) Petitioner shall be at liberty to take appropriate recourse against the said final decision of the Nominated Authority in accordance with law.

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11.

It is clarified that the Court has not examined the merits of the case and no opinion has been expressed thereon. All rights and contentions of the parties are left open.

12.

With the above directions, the writ petition is disposed of along with pending application(s).

SANJEEV NARULA, J AUGUST 8, 2024/ab W.P.(C) 10765/2024 Page 5 of 5 The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above.