Madras HC Upholds Fly Ash Rights

Authority: Madras High Court (Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan)

Order Date: 20 August 2026

Case Overview

• Appellants: DP Jain Bangalore‑Chennai Expressways Private Limited (W.A. No.3215/2025) and DPJ Pollachi HAM Project Private Limited (W.A. No.3216/2025), each represented by authorised signatory Gautam Sharma.
• Respondents: Union of India (Ministry of Power, Ministry of Road Transport & Highways, Ministry of Environment, Forest & Climate Change), National Highways Authority of India (NHAI), and the respective thermal power plants – NTPC Tamil Nadu Energy Company Ltd (operating Vallur Thermal Power Project) for the Bangalore‑Chennai Expressway, and Mettur Thermal Power Station for the Pollachi project, together with Tamilnadu Generation and Distribution Corporation Ltd.
• Nature of Proceedings: Writ petitions under Article 226 seeking certiorari‑mandamus to quash NHAI communications (dated 12 Sep 2023 and 12 Feb 2024) and the Ministry of Power circular dated 22 Feb 2022, alleging they contravene statutory notifications that obligate thermal power plants (TPPs) to supply fly ash/pond ash free of cost and free of transportation to NHAI for national‑highway projects.
• Background: The dispute centres on a series of statutory instruments:

1. Notification dated 14 Sep 1999 (MoEF&CC) under the Environment (Protection) Act, mandating free ash supply for at least ten years.

2. Amendment dated 3 Nov 2009 deleting the ten‑year clause and imposing an unconditional free‑supply duty.

3. Amendment dated 25 Jan 2016 adding a requirement that TPPs bear transportation costs within a 300 km radius.

4. MoRTH Circulars (27 Aug 2018 and 23 Oct 2020) directing NHAI to execute MoUs with TPPs for ash supply.

5. Notification dated 31 Dec 2021 (MoEF&CC) superseding the 1999 Notification, ending the mandatory free‑supply regime but retaining a contingency‑based obligation where a TPP cannot otherwise dispose of ash.

6. Ministry of Power Circular dated 22 Feb 2022 treating ash as a commodity to be auctioned, allowing free supply only as a residual option.

7. Minutes of Meeting (MoM) dated 14 Jun 2023 (MoP) clarifying that the 2022 Circular operates prospectively and that projects with bid due dates between 25 Jan 2016 and 31 Dec 2021 remain eligible for free ash.

8. Office Memoranda dated 26 Jun 2023 and 13 Jul 2023 (NHAI) listing eligible projects, and a MoRTH OM dated 13 Jul 2023 distinguishing “Pre‑Fourth‑Amendment” projects.

9. Notification dated 1 Jan 2024 requiring TPPs to give notice to agencies regarding ash availability.

10. Guidelines dated 15 Mar 2024 (MoP) superseding the 2022 Circular, reaffirming the objective of 100 % ash utilisation with minimal consumer tariff impact.

• Single Judge’s Findings (15 Oct 2025): The obligation was limited to ten years; cost of ash was built into bids; Independent Engineer’s opinion was unchallenged; appellant allegedly suppressed a reply to NHAI.
• Appellants’ Submissions: Argued that the ten‑year phrase is a floor, the 2009 amendment removed the limitation, the 2016 amendment added free‑transport, and that OMs of 2023 expressly saved the entitlement for projects whose bid dates fall within the 25 Jan 2016‑31 Dec 2021 window. They cited NHAI’s own statements in other litigations (Punjab & Haryana High Court and Supreme Court SLP) as admissions binding the authority. They also relied on the Additional Solicitor General’s OM (26 Jun 2023) showing the Pollachi project’s entitlement to 2,320,782 MT of free ash.
• Respondents’ Submissions: NHAI contended lack of maintainability (contractual dispute, arbitration clause, DRB pendency), argued that the projects were designed with borrow earth, that the TPPs had already priced ash into bids, and that granting free ash would cause unjust enrichment. They emphasized the non‑execution of MoUs, the 2021 Notification’s contingency, and the high ash‑utilisation percentages of NTECL (137.79 %, 104.01 %, 108.52 %).

Final Outcome

• Point (i) – Survival of Obligation: The Court held that the phrase “at least ten years” creates a floor, the 2009 amendment eliminated the ten‑year ceiling, and the 2016 amendment added free‑transport. The 2021 Notification superseded the regime but did not retrospectively extinguish eligibility for projects with bid dates between 25 Jan 2016 and 31 Dec 2021, as confirmed by the 2023 MoMs and OMs. The earlier judgment is set aside.
• Point (ii) – Project Eligibility: The Pollachi project (W.A. No.3216) is expressly listed in Entry 28 of the OM dated 26 Jun 2023, entitling it to 2,320,782 MT of free ash from Mettur Thermal Power Station. The Bangalore‑Chennai Expressway project (W.A. No.3215) appears as Serial No.20 in NHAI’s communication dated 04 Feb 2025; its bid date (05 Jan 2021) falls within the saved window, confirming eligibility.
• Point (iii) – Binding Effect of NHAI’s Other Stands: The Court affirmed that NHAI, as a “State” under Article 12, cannot adopt contradictory positions. Admissions made on oath in the Punjab & Haryana High Court and Supreme Court proceedings are binding, rendering NHAI’s contrary stance before this Court untenable.
• Point (iv) – Effect of Non‑Execution of MoU: The statutory obligation arises from subordinate legislation, not from a bilateral MoU. Hence, the absence of a MoU in Tamil Nadu does not extinguish the entitlement.
• Point (v) – Maintainability: While arbitration clauses bar writ jurisdiction for purely contractual disputes, they do not preclude a writ seeking declaration of statutory interpretation or mandamus against a non‑signatory TPP. Therefore, the writ petitions are maintainable for those reliefs; monetary quantification remains within the DRB/Arbitral Tribunal’s domain.
• Point (vi) – Delay & Laches: The Court rejected the delay argument for the Pollachi case, noting the appellant was unaware of the crucial OM until 02 Jul 2026. For the Bangalore‑Chennai case, the delay was deemed reasonable given the circumstances.
• Point (vii) – Unjust Enrichment: The Court found no double‑payment risk; the contractual price for earthwork does not cover the raw material cost of ash, and the concessionaire suffered a real additional expense.
• Point (viii) – Position of NTECL: Because NTECL has achieved >100 % ash utilisation through public auctions, the contingency (inability to dispose of ash) does not arise. Consequently, no unconditional mandamus is issued against NTECL; NHAI must seek notice from NTECL and, if inability is proven, then the obligation would crystallise.
• Point (ix) – Legitimate Expectation & Promissory Estoppel: The consistent administrative representations from 1999 through 2024 created a legitimate expectation that free ash would be available, which the Court upholds.
• Orders:

1. W.A. No.3215/2025 – The order dated 15 Oct 2025 and NHAI letters of 12 Sep 2023 & 12 Feb 2024 are set aside. The appellant’s project is declared eligible for free ash with free transport. The monetary claim of Rs 1,80,16,79,436/- shall be quantified by the DRB (or, failing that, the Arbitral Tribunal) within three months of this judgment.

2. W.A. No.3216/2025 – The order dated 15 Oct 2025 is set aside. The appellant is entitled to 2,320,782 MT of free ash from Mettur Thermal Power Station with free transport. The claim for reimbursement of borrow‑earth costs shall be adjudicated by the DRB/Arbitral Tribunal within three months.

3. The finding that the free‑ash obligation was limited to ten years is overturned.

4. No order as to costs; related miscellaneous petitions are closed.

Topics: Fly Ash Entitlement, Highway Project Procurement, Statutory Interpretation