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PETITIONER: M.C.  MEHTA VERSUS

       Vs.

RESPONDENT: UNION OF INDIA & OTHERS

DATE OF JUDGMENT:       31/08/1999

BENCH: S S Ahmad, M Jagannadha Rao

JUDGMENT:

D E R

M.JAGANNADHA RAO,J.

     This  application has been filed by the Gas  Authority of  India  Limited  (for  short ‘GAIL’)  for  the  following reliefs:

     "(a)  extend  the  schedule  for   supply  of  gas  to industries  in Zone-I of Agra City, laid down vide the order dated  3/04/98 passed by this Hon’ble court in such a manner that  in respect of cupola based industries supply of gas by GAIL coincides with the readiness of the consumer industries to draw gas;

     (b)  direct  non-cupola based industries in Zone-I  of Agra to draw gas latest by September, 1999;

     (c)  direct  the Secretary, PWD, Government  of  Uttar Pradesh,  and  Secretary/Director   General,  Government  of India, Ministry of Surface Transport to grant the permission for  underpinning the gas pipeline to the Yamuna Road Bridge within  four weeks so that GAIL may be able to the  schedule for  supply  of  gas to Zone-II and III laid  down  by  this Hon’ble Court vide its order dated 3/04/98."

     The first relief concerns Zone-I and the second relief concerns  Zone-II  and  III in the city of Agra.   We  shall first  deal with Zone-I and thereafter with Zone II and III. Zone  I.  On 3.4.1998, this Court directed the GAIL that  it should  start  supply  of Natural Gas to the  Industries  in Zone-I  from  July, 1998 so as to make available gas to  the specified industries by December, 1998.  It is now stated by GAIL  that  till  December, 1998, 115 consumers out  of  168 (referred  to the order of this Court dated 30.12.96)  alone had  contacted  GAIL  for  supply  of  natural  gas.   Other industries  in  Zone-I did not contact GAIL.  It was  stated that GAIL had made gas available in April, 1998 to its first consumer  in May, 1998 and that by September, 1998, GAIL had completed  gas pipeline network to supply gas to all the 115 consumers  with whom it had entered into a contract in Zone- I.   The complaint is that 79 out of these 115 consumers are not  coming  forward  in Zone-I and are  cupola  based  iron foundries.   The  rest  are non cupola.  All these  115  had given  an  undertaking earlier to receive natural  gas  from

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GAIL.  These 79 industries have been awaiting the technology to  be  developed by the National  Metallurgical  Laboratory (hereinafter  called  the ‘NML’) for conversion  to  natural gas.   GAIL  feels that there is likelihood of delay in  the drawal  of  gas  by the 79 cupola based  iron  foundries  in Zone-I  by the target dated 31.12.1998.  Only 4 cupola based - customers are likely to draw Gas by December, 1998.

     On   12.4.1999,  this  Court   issued  notice  to   79 industries  in Zone-I requiring them to show cause why  they were  not  availing  of the gas facility to be  supplied  by GAIL.   They were also asked to state why they did not  want to  draw  the  gas and why their industries  should  not  be allowed to be closed down.

     On  5.4.1999,  an affidavit of the Agra Iron  Founding Association has been filed stating that 78 (and not 79) were cupola  based (item 74 Diwan Chand Suraj Prakash Jain is not cupola  based).   The  affidavit is filed on  behalf  of  78 cupola  based industries.  They admit that on 30.12.1996, in M.C.Mehta  vs.  Union of India 1997 (2) SCC 353, orders have been  passed  recording the undertaking on behalf  of  these industries  for receiving gas as industrial fuel.  They then refer  to the chronology of the steps taken by them bonafide for  conversion  by approaching NML and Tata-Korf and  their spending  huge sums of money in that connection.  They state that  the problem is that fool-proof technology for these 78 industries  to use natural gas is not yet ready, though  now it is in the last stages of completion, -through the efforts of  NML of Tata-Korf who have been working on a project.  As soon  as the technology is available, the 78 industries will switch-over  to  natural  gas.  They rely on  the  extension granted to GAIL earlier upto December, 1998 as the cause for delay in switching over.  NML has conducted 10 trials on its new  technology  but  these tests have  not  been  initially successful.   The 78 industries have entered into  agreement with  GAIL  agreeing to switch over to natural gas and  have paid   Rs.2  lakhs  as  security   and  given   Rs.6   lakhs guarantee/indemnity.   They  have paid Rs.14 lakhs  to  Tata Korf  in  January,  1998.   On 6.2.1998 NML  and  Tata  Korf visited  Agra and on 10.2.78, the Association placed  orders with  Tata Korf for supply of the technology.  On 19.3.1998, the  Association  has entered into agreement with Tata  Korf under  which  Rs.20 lakhs have been paid as advance  out  of Rs.40  lakhs.   Know how has been agreed to be  provided  by 31.7.1999  but the trial runs have failed.  A chart is filed in  this  behalf.  In all, 32 lakhs have been paid  to  Tata Korf.   On  22.4.1999, there has been a meeting  with  Tata- Korf.   All  these steps have been taken during  1997,  1998 upto 22.4.1999.

     On 26.4.1999, Tata Korf has written to the Association that  the  commissioning of the cupola and  stabilizing  the same  will  take  place in 1st part of July, 1999  and  they expect "to receive the orders" from the Association in July, 1999  after  the  cupola  is   successfully  worked  to  the satisfaction  of the Association.  The schedule of supply of cupola is:

     (a) 10 cupolas in 4 months

     (b) in each month 5-6 cupolas can be completed.

     After installation, those cupolas require fine tuning.

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     On  3.8.1999, Tata Korf has written to the Association that they had installed the new instrumentation successfully on  15.6.1999.   Some more heats have to be developed.   The demonstration  unit  will  be established fully  by  end  of September,  1999.  Same schedule of supply as stated earlier is given.

     We have heard learned senior counsel Sri V.R.Reddy for GAIL  and  Sri Sanjay Parikh for the Association.   We  have also  heard  Sri  Krishan Mahajan and  Sri  Vijay  Panjwani. Learned counsel Sri Krishan Mahajan has suggested that these 78  industries  have  been dodging  and  procrastinating  in shifting  to natural gas and that as per the orders of  this Court dated 30.12.1996 in M.C.Mehta vs.  Union of India 1997 (2) SCC 353, direction No.  5 requires that once the GAIL is ready,  the  industries, if they did not convert to  natural gas,  they have to close down.  Now GAIL has been ready  for supply  of natural gas in September 1999 and at any rate  by December, 1999 in respect of all the 115 industries who have agreed  to convert to gas.  Inasmuch as these 78  industries have  not  become  ready to convert, they are liable  to  be closed down forthwith.

     On the other hand, learned counsel for the Association Sri  Sanjay  Parikh has contended that in view of the  above steps  taken by the industries during 1997, 1998 and 1999 as narrated  earlier, the stage is now set for switch over  and that  it will create great hardship if the industries are to be  directed  to  be  closed   down  now.   Summarising  the position,  it is as follows.  The correspondence between the Association  and NML and Tata Korf, it shows that by end  of September, 1999, the demonstration unit will be established. Thereafter,  cupola  will be supplied - 10 in 4  months  and then  in each month, 5 or 6 cupolas will be supplied.   Now, going  by the date September, 1999, it looks as if 10 cupola units  will be supplied by January, 2000 ( i.e.  in 4 months ) and by the time all these 78 cupola industries change over to  gas,  ( as per the time schedule given by Tata Korf)  it will  be  another  17 months - which will take us  to  July, 2001.   This  will be the time span on the  assumption  that conversion  to  natural  gas  will be started  by  these  78 industries after September, 1999.

     Now  in the orders of this Court dated 30.12.1996, the directions (4) and (5) read as follows:  (at p.304):

     "(4).   Those  industries which neither apply for  gas connection  nor  for alternative industrial plot shall  stop functioning  with  the  aid of coke/coal in the  TTZ  w.e.f. April  30,  1997.  supply of coke/coal to  these  industries shall be stopped forthwith.  The District Magistrate and the Superintendent  of  Police  shall have this  order  complied with.

     (5)  The  GAIL  shall commence supply of  gas  to  the industries  by June 30, 1997.  As soon as the gas supply  to an  industry commences, the supply of coke/coal to the  said industry shall be stopped with immediate effect."

     In the above background, the question is whether these 78  cupola  industries  are  to be allowed  to  function  on coal/coke  without  receiving  natural gas.  So far  as  the remaining  non-cupola  industries which are 37 (out of  115)

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who  have  contracted to draw, there is no reason  why  they have  not accepted the supply of natural gas.  Out of these, we are told only 8 industries were drawing natural gas.  The rest  29 have been obviously taking it easy.  We can  divide the  discussion into the various categories as follows:  (1) The  overall  total was 168 and only 115 have  entered  into agreement  with  GAIL.  Therefore, so far as  the  remaining (168-115)  =  53 iron foundries are concerned, there  is  no justification  for  them  to  function -  unless  they  have shifted  out  -  and  under  clause 4  of  the  order  dated 30.12.1996  of  this Court, the said 53 iron  foundries  are already  liable  to  be closed.  If they have  not  shifted, these  53 industries must stop forthwith as they have  acted in  breach  of  direction  No.4.   (2)  So  far  as  the  29 non-cupola  industries  out of 115 (excluding 8  which  have switched  over  to  gas),  there can  be  no  difficulty  in applying  clause  5  of  the order of  this  Court.   If  by 15.9.1999,  these 29 industries do not accept gas, clause  5 of the order dated 30.12.1996 shall apply forthwith to them.

     (3)  So  far  as the 78 cupola  based  industries  are concerned,  the question is what order is to be passed?   We have  shown that even if the conversion starts from October, 1999,  the  time  frame for all the 78  industries  will  be easily  21  months - which will take us to July 2001.   This Court  has given enough time to these industries right  from 31.12.1996.   We do not mean to say that they have not taken some steps for conversion but if the Tata Korf time-schedule can  give the conversion technology to all the 78 of them at the  earliest  only  by July 2001, the question  is  whether these  78 coke/coal based industries which are  continuously using  coke/coal  can be allowed to pollute the air  in  and around  the  Taj Trapezium and also whether they are  to  be allowed  such a long period upto July 2001.  We cannot  lose sight  of the fact that GAIL has completed its obligation to be  ready, even by September, 1998.  No doubt, even now,  as stated by counsel, these 78 industries are prepared to stand by the undertaking given by them to to this Court to receive natural  gas.   In our view, having regard to the fact  that the  conversion  of all these 78 cupola based industries  is likely  to  be not completed till July, 2001 - it will be  a matter  of  grave  concern if the  atmospheric  pollution(as noted  in  the  Neeri and Dr.  Varadarajan reports  and  our earlier  orders)  is allowed to continue.  Question  is  not strictly  whether  the 78 industries have or have not  acted bonafide  in  making some efforts for conversion to  natural gas but assuming they have taken some steps, the question is whether  the  danger  to the environment  does  not  require urgent action.  The data already collected shows high levels of  pollution in Agra in this area affecting the environment in the TTZ area.

     In the circumstances, we are of the view that there is no other way to deal with the situation than to apply clause (5)  of  the  order of this Court dated 30.12.1996  set  out above, strictly to these 78 cupola based industries.  We are conscious  that any order to stop supply of coke/coal to the 78 coke/coal based iron foundries will result in the closing down  of these 78 industries for some time, before they  are able  to  switch on to natural gas.  Obviously, the  closure will  have  not be permanent one but of a temporary  nature. There will be no difficulty in permitting them to re-open as soon as they have the cupola conversion technology installed in   their  respective  industries.    We  are,   therefore, compelled  to put clause (5) of the order of this Court into

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full  effect  in  respect  of  these  78  industries  w.e.f. 15.9.1999.  In the result, we direct as follows:- (1) Out of 168,  53 iron foundries which have not agreed to accept  gas have  to  be closed forthwith, if not already closed as  per orders  of  this  Court dated 30.12.1996  unless  they  have shifted.   The  District  Magistrate and  Superintendent  of Police,  Agra shall take action accordingly.  (2)(i) Out  of 115  which have opted and entered into agreements with GAIL, 37  are  non-cupola based and among the 8 have converted  to natural  gas while in respect of the remaining 29 non-cupola industries.   Clause  (5) of the order of this  Court  dated 30.12.96  shall  come into operation w.e.f.  15.9.1999,  for they  have no excuse for not accepting the natural gas  from GAIL.  The District Magistrate and Superintendent of Police, Agra  will  take  steps to close down  these  industries  by 15.9.1999.   (ii)  However, as and when these 29  non-cupola industries  take steps to receive gas, they shall be allowed to  function.  (3)(i) In respect of the remaining 78,  which are cupola based, in view of the reasons given above, clause (5) of the order dated 30.12.96 of this Court will come into operation w.e.f.  15.9.1999.  That will mean that in respect of   these  78  iron   founding  industries,  the   District Magistrate, Agra and the Superintendent of Police, Agra will have  to  see  to it that no coal/coke is supplied  to  them after 15.9.1999.

     (ii) Out of the 78 cupola based iron foundries, as and when  any  of them gets converted to natural gas  and  takes steps  to  receive  gas from GAIL, they will be  allowed  to function.   We  dispose  of  the IA  in  respect  of  Zone-I accordingly.  Copy to be communicated to District Magistrate and Superintendent of Police, Agra.

     GAIL  and Sri Krishan Mahajan are requested to furnish a  list of the respective industries to the above  officials in a week.  ZONE II & ZONE III

     So far as Zone II and Zone III are concerned, a number of  affidavits  have been filed by the GAIL and one  by  the Government  of India.  As the matter is to be adjourned,  we do  not  propose to give a detailed order.   Sri  V.R.Reddy, learned  senior  counsel for GAIL has placed before  us  the correspondence  and  contended that, by its  affidavit,  the Union of India appears to have in principle, accepted that a pipeline  can  be  allowed to be laid along the  Old  Yamuna Bridge  but  that  the Union of India want to  put  GAIL  on notice  that,  inasmuch as the old Bridge may require to  be dismantled  by  Government,  - GAIL must be prepared  to  go ahead with laying down the pipeline with that possibility of the  Old Bridge being dismantled.  Sri Reddy however  points out  that  there are reports of some technical experts  that the  old  Bridge need not be dismantled in the near  future. He contends that, unfortunately, the Government of India has not  so far applied its mind to these reports and  therefore it has to take a final decision in the matter of dismantling of  the Old Yamuna Bridge, after considering these  reports. Learned  senior counsel contends that appropriate directions be  given to the Union of India in this behalf.  In view  of the  above  contention,  we  direct the Union  of  India  to examine  the  expert  reports given in connection  with  the dismantling  of the old Bridge and take a final decision  in regard  to  the same and give its response to this Court  by way  of affidavit so that GAIL can take a decision as to the laying of its pipeline for supply of natural gas to Zones II and III.  Response of Union of India to be filed within four

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weeks.   Thus, we dispose of this I.A.  so far as Zone I  is concerned.  The I.A.  now remains pending in respect of Zone II and III.  List I.A.  after four weeks.