Adani defending key India projects against environmental challenges

MUMBAI/NEW DELHI (Reuters) - Indian billionaire Gautam Adani's group is battling allegations in court this month that its planned multibillion-dollar power plant and a luxury housing complex breach environment laws, adding to its many legal headaches.

Such allegations have often troubled Adani projects in India and abroad. In Australia, the group battled a seven-year activist campaign against its Carmichael coal mine, and construction at its seaport in south India was halted for months in 2022 due to protests over coast erosion.

Now, Adani Group is defending itself against allegations made in India's National Green Tribunal that it started work on a $2 billion power plant without waiting for environmental clearance. This case is set for a hearing on Friday.

The lawsuit by an activist says the site for the plant is within a forest in the Mirzapur district of Uttar Pradesh. The suit seeks to halt the project saying it would devastate the area and impact wildlife, court papers show.

Adani denied in a March 6 filing that any of its activities at the site are environmentally damaging. "The project land is not a forest land," Adani also said in the filing.

State pollution control official Reetesh Kumar Tewari told Reuters that Adani stopped work at the site after it was sent a November warning notice about the construction.

Adani Group did not respond to an e-mail seeking comment. Debadityo Sinha, the activist who filed the lawsuit, declined comment citing ongoing legal proceedings.

Legal cases in India can drag on for years, and environment-related challenges often emerge as a sticking point for big companies.

The latest legal tussles come just as India's government has asked a local court to deliver a summons from the U.S Securities and Exchange Commission to group founder Gautam Adani over his alleged role in a $265 million bribery scheme. Adani has denied those allegations and said they are baseless.

LUXURY PLANS AND SLUM REDEVELOPMENT

Adani is pursuing two big projects in Mumbai, one of world's most expensive real estate markets, and both are being challenged over environmental issues.

Its luxury residential project in the coastal suburb of Bandra is being challenged by another activist, Zoru Bhathena, and a residents group who are trying to halt the project.

They are arguing in a case at the high court in Mumbai that the land Adani plans to use for the project has been reclaimed from the sea and remains a legally protected coastal region where no construction is allowed.

India's environment ministry and the Adani Group disagree, telling the court in February the land is no longer classified as a protected area following a rule change in 2019, non-public court filings reviewed by Reuters show.

The court has described the Bandra case as involving a "vital issue relating to environment protection". The next hearing on the matter is set for March 27.

Adani's other high-profile project in Mumbai is the redevelopment of Dharavi slum, one of the group's most ambitious undertakings. It started work there after winning a $619 million redevelopment bid two years ago.

Dharavi, about three-quarters the size of New York's Central Park and where 1 million people need to be rehoused, was featured in the 2008 Oscar-winning movie "Slumdog Millionaire". Its open sewers and shared toilets, close to Mumbai's international airport, stand in contrast to India's development boom across residential, commercial and infrastructure sectors.

The Adani-led Dharavi redevelopment company, now called Navbharat Mega Developers, was allotted 256 acres (104 hectares) of salt-pan lands in September to build rental housing for Dharavi residents as part of the project.

But activist lawyer Sagar Devre has filed a public interest litigation in the Mumbai high court against Prime Minister Narendra Modi's government, alleging it changed rules in August 2024 to allow residential development on salt-pan lands - ecologically sensitive areas that help in flood protection.

The court has not yet heard the case, but the rule change has been a topic of political wrangling, with India's Congress Party saying it is an example of Modi changing policy to help Adani - allegations of impropriety both have repeatedly denied.

Spokespersons for Modi's federal government did not respond to a request for comment on the salt-pan land issue.

(Reporting by Dhwani Pandya in Mumbai and Arpan Chaturvedi in New Delhi; Additional reporting by Saurabh Sharma; Editing by Aditya Kalra and Tom Hogue)