The Madras High Court has held that the obligation on thermal power plants to supply fly ash free of cost and transportation was not confined to 10 years from the 1999 notification and continued for road projects whose bid due dates fell between January 25, 2016 and December 31, 2021.
A Division Bench comprising Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan delivered the judgment in two writ appeals arising from claims concerning the Bangalore-Chennai Expressway and the Madathukulam-Pollachi section of NH-209.
The dispute centred on whether amendments to the 1999 fly-ash notification and the subsequent 2021 notification had extinguished the entitlement of road projects to receive fly ash free of cost and transportation.
The Bench rejected the view that the original obligation expired after 10 years. It observed that the 1999 notification used the expression “at least 10 years”, which prescribed a floor rather than a ceiling. The court noted that the provision containing the 10-year limitation was itself deleted in 2009 and replaced with an obligation to supply pond ash free of charge to road construction agencies.
The court considered the following 9 questions and answered accordingly:
| 1. | Did the free fly ash obligation survive beyond 10 years? | Yes. The 10-year period was a floor, not a ceiling. The obligation continued after the 2009 amendment and was saved for projects with bid dates between January 25, 2016 and December 31, 2021. |
| 2. | Were the appellants’ projects within the saved category? | Yes. Both the Pollachi and Bangalore-Chennai Expressway projects fell within the eligible period and were recognised in government/NHAI records. |
| 3. | Was NHAI bound by its stand before other courts? | Yes. NHAI could not take a contrary position before the Madras HC after asserting before the Punjab & Haryana HC and Supreme Court that the obligation existed. |
| 4. | Did absence of an MoU defeat the statutory entitlement? | No. An MoU was only a facilitative mechanism, and non-execution of MoU does not extinguish, or operate as a condition precedent to the statutory obligation |
| 5. | Were the writ petitions barred by arbitration/DRB proceedings? | No. The writ court could decide the statutory entitlement and issue mandamus against a TPP that was not a party to the arbitration agreement. Monetary quantification was left to the DRB/Arbitral Tribunal. |
| 6. | Were the claims barred by delay and laches? | No. The Court particularly rejected the plea in the Pollachi case because the crucial government document recognising the entitlement had not been disclosed until the appellate stage. A party cannot be faulted for delay in asserting a right, when such right was itself kept unaware by the very authorities resisting the claim. Delay was not found to be either inordinate or such as to disentitle the appellants to relief. |
| 7. | Would free ash/ reimbursement result in double payment or unjust enrichment? | No. The contractual construction price and the actual cost of raw material were distinct. Any demonstrable additional expenditure could be considered for reimbursement by DRB/Arbitral Tribunal. |
| 8. | Could NTECL be unconditionally directed to supply free ash to the Bangalore-Chennai project? | No. NTECL had demonstrated ash utilisation through e-auctions exceeding 100%. Free supply would arise only if it was unable to otherwise dispose of the ash and the statutory conditions were satisfied. |
| 9. | What relief were the appellants entitled to? | Both appeals succeeded. Bangalore-Chennai was declared eligible for free fly ash/free transportation, with monetary claims left to the DRB. Pollachi was declared eligible for 23,20,782 MT of free fly ash with free transportation from Mettur Thermal Power Station. |
On the question of NHAI’s contradictory stands, the Bench made a particularly significant observation, holding that “NHAI cannot be permitted to disclaim in Tamil Nadu what it has affirmed on oath in Punjab and before the Supreme Court.” The Court accordingly answered this issue against NHAI.
The Bench also rejected NHAI’s contention that the absence of an MoU with the thermal power plants in Tamil Nadu defeated the contractors’ claims. It held that the obligation arose from subordinate legislation under the Environment (Protection) Act and could not be defeated by NHAI’s own failure to execute an administrative arrangement.
However, the Court drew a distinction in the case of NTECL/Vallur. It declined to issue an unconditional direction to NTECL to supply fly ash to the Bangalore-Chennai Expressway because NTECL had placed material showing ash utilisation of 137.79%, 104.01% and 108.52% in successive years. The Court directed NHAI to take up the matter afresh with NTECL/TANGEDCO and follow the procedure contemplated under the 2021 notification.
In contrast, the Pollachi project had a specific government record establishing its entitlement. Entry 28 of the June 26, 2023 OM expressly recorded that the project was eligible for 23,20,782 MT of free fly ash with free transportation from Mettur Thermal Power Station. The Bench described this as compelling documentary proof of eligibility.
Ultimately, Bangalore-Chennai Expressways matter was partly allowed, with the project declared eligible for free fly ash and transportation. Its claim for reimbursement, including the claimed Rs.1,80,16,79,436, was left to the DRB/Arbitral Tribunal. Pollachi HAM Project matter was allowed, with the Court declaring entitlement to 23,20,782 MT of free fly ash and transportation.
The Bench also set aside the Single Judge’s finding that the free-fly-ash obligation was limited to 10 years from 1999, holding that the finding was “contrary to law.”
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