The high court, however, has allowed VAL to make a fresh bid to obtain environmental clearance from the Union Ministry of Environment and Forests (MoEF) for expansion of its existing units.
The court said: “The process for environmental clearance for any expansion attempt by the company has to be started de novo.”
VAL said the company would take its next step after it had studied the full text of the judgment.
The company is now left with two options-either to challenge the decision of the High Court in Supreme Court or to furnish a fresh proposal to obtain environmental clearance.
VAL applied for expansion of its refinery capacity in August 2007 from 1Mt to 6Mt/y and its captive power plant from 75MW to 300MW.
The company subsequently went ahead with construction work for refinery expansion without environmental clearances.
While expansion work was in progress, the national government ordered the company to maintain status quo at the plant site and directed the Orissa Government to take legal action against the company for violating the environmental laws.