Disposed

News Item Published in the Hindu Dated 14.03.2021 Titled "Safety Lapses Led to Reactor Blast at Pharma Unit" v. .

NGT31 Aug 2021Original Application No. 79/2021

Case brief

AI extract

What is this about?

National Green Tribunal accepted the report of a five-member joint committee investigating the 2021 reactor blast at Tyche Industries, Andhra Pradesh. The Tribunal determined adequacy of compensation for deceased and injured employees and awarded environmental compensation for the incident.

What did the court decide?

Awarded environmental compensation of Rs. 63,36,400 to CPCB and directed payment of additional compensation to injured employees within one month. Unit to comply with safety measures.

News Item Published in the Hindu Dated… — Constitutional and Fundamental Rights | NGT (2021)

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Item No. 06

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(Court No.1)

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BEFORE THE NATIONAL GREEN TRIBUNAL PRINCIPAL BENCH, NEW DELHI

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(By Video Conferencing)

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Original Application No. 79/2021

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(With report dated 10.06.2021)

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In re: News item published in The Hindu dated 14.03.2021 titled “Safety lapses led to reactor blast at pharma unit”

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Date of hearing: 31.08.2021

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CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL, CHAIRPERSON HON’BLE MR. JUSTICE SUDHIR AGARWAL, JUDICIAL MEMBER HON’BLE MR. JUSTICE BRIJESH SETHI, JUDICIAL MEMBER HON’BLE DR. NAGIN NANDA, EXPERT MEMBER

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Respondent(s): Mr. Atif Suhrawardy, Advocate for CPCB Mr. Matrugupta Mishra, Advocate for M/s Tyche Industries Ltd. (R-6)

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ORDER

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Proceedings in this matter were initiated Suo Motu in light of the media report titled ‘ Safety lapses led to reactor blast at pharma unit’¹ . The report mentions the incident of explosion of 3,000 kg reactor at the production wing of Tyche Industries Limited, on the outskirts of Kakinada, Andhra Pradesh (AP), on March 11, 2021, due to lack of

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safety mechanism and risk assessment failure. Two supervisors were

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killed and four workers severely injured who are still battling for life at a private hospital. Deputy Inspector of Factories, Kakinada, Mr. V. Suresh said there were several safety lapses at the pharma unit. Inadequate calculation of the capacity of the reactor is also a prime reason behind its explosion, due to heavy pressure beyond its capacity. The size of the safety system installed in the unit is much lower than the actual requirement. Staff dealing with the reactor operations failed to

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1 Dated 11.03.2021, The Hindu: https://www.thehindu.com/news/national/andhra- pradesh/safety-lapses-led-to-reactor-blast-at-pharma-unit/article34063916.ece

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calculate the scale of risk. The Tyche management has been directed to shut down the unit until further orders from the Directorate of Factories. The State Government is preparing to order a technical probe into the incident soon. A case has been registered against the Tyche Industries Limited management under Section 304 A on the grounds of causing death by negligence.

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Vide order dated 16.03.2021, the Tribunal found that there was prima-facie violations of statutory norms which required compensation to the victims as well as for restoration of environment and measures to prevent such incidents in future. The Tribunal noted the course of action adopted in case of other such incidents recently. The Tribunal constituted five-member joint committee comprising MoEF&CC, CPCB, AP State PCB, Directorate of Factories, AP and the District Magistrate, Kakinada, AP to ascertain facts about the cause of the incident, liability to pay compensation and remedial measures required to prevent recurrence of such incidents in future. The operative part of the order is reproduced below:-

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“ 1.xxx………………………………….xxx……………………………xxx

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2. From the media reports, subject to further verification, there appears to be non-compliance of statutory safeguards under the provisions of the Manufacture, Storage and Import of Hazardous Chemical Rules, 1989 (“the 1989 Rules”), the Hazardous and other Waste (Management and Transboundary Movement) Rules, 2016 and the Plastic Waste Management Rules, 2016 which give rise to substantial questions of environment, which need to be determined and directions issued for compensating the victims and restoration of environment, apart from measures to prevent such incidents in future.

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3. As per law laid down in M.C Mehta v. UoI & Ors.² , the owner/occupier of the hazardous activity is responsible for compensation to the victims and for restoration of the environment. Before proceeding further, it is necessary to ascertain the cause of the incident, the extent of damage caused, the extent of

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2 (1987) 1 SCC 395

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compensation required to be paid for damage to the environment as well as for loss of lives, causing of injuries and steps required to be taken for preventing any such occurrence in future, on the same pattern as the Tribunal has dealt with such accidents in the recent past³ .

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4. While directing issuance of notice to the CPCB, AP State PCB, Directorate of Factories, AP, the District Magistrate, Kakinada, AP and Tyche Industries Limited, Kakinada, AP by e-mail , we constitute a five-member joint committee comprising MoEF&CC, CPCB, AP State PCB, Directorate of Factories, AP and the District Magistrate, Kakinada, AP . The nodal agency for coordination and compliance will be the CPCB and the State PCB. The joint Committee may visit to the site and give its report about the cause of the incident, the extent of damage caused, the extent of compensation required to be paid for damage to the environment as well as for loss of lives, injuries and steps required to be taken for preventing any such occurrence in future within one month. Except for visit to the site at least once, the Committee will be free to conduct its proceedings online . It will be free to take the

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i. Order dated 01.06.2020, relating to incident of gas leak dated 07.05.2020 in LG Polymers India Pvt. Limited at Vishakhapatnam, resulting in death of 11 persons and injuries to more than 100, apart from other damage (OA No. 73/2020, In re: Gas Leak at LG Polymers Chemical Plant in RR Venkatapuram Village Visakhapatnam in Andhra Pradesh);

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ii. Order dated 03.02.2021, relating to incident dated 03.06.2020 in a chemical factory, Yashyashvi Rasayan Pvt. Ltd . at Dahej, District Bharuch, Gujarat resulting in deaths and injuries and other damage (OA No. 85/2020) (Earlier OA 22/2020) (WZ), Aryavart Foundation through its President vs. Yashyashvi Rasayan Pvt. Ltd. & Anr.);

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iii. Order dated 06.08.2020, in relation to incident of oil well blow out on 27.05.2020 at Baghjan in the Tinsukia District of Assam resulting in deaths, injuries and damage to the environment (OA No. 43/2020(EZ), Bonani Kakkar vs. Oil India Limited & Ors.).

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iv. Orders dated 06.07.2020 and 22.12.2020, relating to incident dated 30.06.2020 on account of gas leakage at Sainor Life Sciences factory at Parawada in industrial area on the outskirts of Vishakhapatnam (OA No. 106/2020, News item published in the local daily “Economic Times” dated 30.06.2020 titled “Another Gas Leakage at Vizag Factory kills two, critically injures four…”);

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v. Orders dated 08.07.2020 and 22.12.2020, dealing with the incident dated 01.07.2020 resulting in death of 6 person and injury to 17 due to blast of boiler in M/s Neyveli Thermal Power Station (NLCIL), Cuddalore (OA No. 108/2020, News item published in the “Indian Express” dated 01.07.2020 titled “Tamil Nadu Neyveli boiler blast: 6 dead, 17 injured”) and;

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vi. Orders dated 23.07.2020 and 22.12.2020, in relation to incident of fire engulfed the chemical plant of Visakha Solvents Ltd , Vizag on 13.07.2020 at Ramky CETP Solvents building in Pharma City resulting in injuries (OA No. 134/2020, News item published on 13.07.2020 in the local daily named “India Today” titled “Massive fire engulf Vizag chemical plant, explosions heard, injuries reported”).

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vii. Order dated 18.12.2020 , in relation to incident of explosion in a plastic recycling factory at Sujapur in Malda on 1.12.2020 resulting in death of six persons, including two minors and serious injuries to four persons (OA No. 272/2020, News item published in the “Times of India” dated 20.11.2020 entitled “Six killed as blast tears through Malda Plastic recycling factory”).

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viii. Order dated 18.12.2020 , in relation to incident of methane gas leak in a sugar factory called Lokenete Bapurao Patil Agro Industries Ltd. in Mohol Taluka of Solapur District, Maharashtra on 21.11.2020 resulting in deaths and injuries and other damage (OA No. 274/2020, News item published in the “Indian Express” dated 23.11.2020 entitled “Maharashtra: Two Killed, eight injured in methane gas leak in sugar factory”).

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ix. Order dated 08.01.2021, in relation to Gas Leak in Agro Company (O.A No. 107/2020, In RE: News item published in the local daily “Indian Express Sunday Express” dated 28.06.2020 titled “Gas Leak in Agro Company Claims life of one”)

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x. Order dated 18.01.2021, in relation to News item published in Navbharat Times dated 24.12.2020 titled “ Gas leaks in IFFCO Plant , 2 Officers dead” (O.A No. 04/2020, In re : News item published in Navbharat Times dated 24.12.2020 titled “Gas leaks in IFFCO Plant, 2 Officers dead”)

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xi. Order dated 11.02.2021 , in relation to accident of toxic gas leak in Rourkela Steel Plant in Orissa ” (O.A. No. 09/2021, In re: News item published in The Indian Express dated 07.01.2021 titled “Four workers dead due to toxic gas leak in Rourkela Steel Plant”)

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xii. Order dated 16.02.2021 , in relation to accident of Virudhunagar firecracker factory blast (O.A. No. 44/2021, In re: News item published in The News Indian Express dated 12.02.2021 titled “At least 19 dead in Virudhunagar firecracker factory blast, more than 30 injured”)

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xiii. Order dated 25.02.2021 in relation to accident of quarry blast in Hirenagavalli, Chikkaballapu, Karnataka (O.A. No. 59/2021, In re: News item published in Times Now News dated 23.02.2021 titled “Karnataka: Six killed in quarry blast in Hirenagavalli, Chikkaballapur”)

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xiv. Order dated 25.02.2021 in relation to accident of fire at UPL plant, Jhagadia, District Bharuch, Gujarat (O.A. No. 60/2021, In re: News item published in The Hindu dated 23.02.2021 titled “Two dead, 5 missing in fire at UPL Plant”)

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xv. Order dated 02.03.2021 in relation to accident of massive fire broke out at an illegal factory at Pratap Nagar, North Delhi (O.A. No. 65/2021, In re: News item published in The Times of India dated 28.02.2021 titled “Delhi: Man charred to death as illegal factory catches fire”)

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assistance from any other expert/organization. The Committee may suitably interact with the stakeholders and, apart from considering the present incident, also consider remedial measures for preventing such incidents in the area or by other establishments, even beyond the said area. The Committee may compile information about existence and working of onsite and offsite plans in terms of 1989 Rules and conducting of mock drills and safety SOPs and compliance status of environment norms. Since in the recent past, the Tribunal has dealt with similar issues of industrial accidents resulting in deaths and injuries and Expert Committees in some of such accidents have given reports to this Tribunal, such reports may also be taken into account by the Committee to the extent relevant. The reports are available on the website of the CPCB. The report may be filed by email at [email protected] preferably in the form of searchable PDF/OCR Support PDF and not in the form of Image PDF. Simultaneously, the report may also be uploaded on the website of the CPCB to enable the concerned stakeholders to access the same and file their response, if any. ”

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In pursuance of above, five-member joint Committee has filed its report dated 10.06.2021 to the CPCB. The Committee visited the site, examined the process of the unit and recorded its observations about the sequence of events, persons responsible for the incident, assessment of damage, liability for compensation and measures to averts such incident in future. Salient observations of the Committee are reproduced below:-

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“V Sequence of Events and Causes of Accident

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V.a . The sequence of events are described as follows:-

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11.03.2021 06:00 hrs	:	Shift-A started, RAP-1 (2-hydroxy pyridine) reaction mixture from stage-I (which was two days old) was charged into reactor 504 at vacuum pressure of 600mm.
11.03.2021 11:50 hrs		Addition of 150 Kgs nitric acid to reactor 504 started through valve control from the charging tank.
11.03.2021	:	Shift-A stopped. Shift-B started. Sri K Srinivasa
14:00 hrs		Rao took charge of Shift-B.

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11.03.2021 14:10 hrs	:	Addition of 150Kgs of nitric acid completed at 14:10 hrs. Post completion of addition of nitric acid, addition of 5 Kg Sulphuric acid was started at 14:10hr. Out of 5Kgs of Sulphuric acid, 2Kgs of Sulphuric acid was added. The reaction is exothermic. Both quantity of Sulphuric acid added and rate of addition is crucial for the reaction. When Nitric acid is added, it has to be ensured that temperature of the reaction mixture is maintained at less than 26⁰C. Also at the time of Sulphuric acid addition, it has to be ensured that the temperature of the reaction mixture is less than 29⁰C. To maintain the requisite reaction temperature, brine is continuously circulated for cooling purpose.
11.03.2021 14:20 hrs to 14:30 hrs	:	The outer cover of Reactor 504 exploded, reactor placed in first floor of production block-5 fell on the ground floor. The hot reaction mixture consisting of 750 Kgs of RAP-1, 150 Kgs of nitric acid and around 2Kgs of Sulphuric acid evaporated.
11.03.2021 14:30 hrs	:	Six employees were present in production block 5 at the time of accident. Soon after the accident, management shifted all six employees to the hospital where the two employees were declared brought dead There was no fire,*the accident happened due* *to sudden shoot-up in temperature and* *pressure. As per the reports out of six* *employees present in production block-5* *where accident occured, two employees* *namely Sri. Kakrla Subrahmanyam and Sri* *Thotakura Venkataramana died on the spot* *and remaining four employees were injured.* Out of the injured four employees, three employees have recovered and had joined to duty at the time of committee inspection while one injured is recovering.

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he possible causes of the accident are as follows:

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1. It is very essential that the reaction temperature is maintained less than 29⁰ C during Sulphuric acid addition. Though thermal sensors are installed in the unit, the employees had to manually record the temperature. There was no interlocking facility to cool the process during high temperature or to stop the feeding to the reactor. There was no alarm system to alert the employees of changes in crucial process parameters. The cooling may not have been effective and temperature may have increased to more than 29⁰ C, but the employees may have continued with the addition of Sulphuric acid. The cooling system was not effectively designed to handle deviations in process parameter.

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2. During interaction with the employees, it was understood that sulphuric acid needs to be added to the reactor slowly (drop-wise). The committee observed that SOP prepared for the manufacture of RAP-2 was not comprehensive in

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nature. During discussion with the unit management it is understood that as per standard procedure 5 Kgs of Sulphuric acid has to be added to the reactor in 1¹ /2 hrs but in this particular incident, within 10 mins 2Kgs of Sulphuric acid was added. (Sulphuric acid day tank was filled with 5Kgs of sulphuric acid before start of reaction and after the accident 3 Kgs of Sulphuric acid was remaining which indicates that 2 Kgs of Sulphuric acid was added into reaction mixture). Fast addition of Sulphuric acid may be the trigger to the accident. The rate of addition of Sulphuric acid had to be regulated manually. The unit had not installed any flow regulator to reactor 504.

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3. As per the report of the Deputy Chief Inspectorate of Factories, the following violations are observed:

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a. The vent size calculations were not done for the exothermic reaction for reactor 504

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b. Rupture disc of inadequate capacity and size was provided to the reactor due to which the excess pressure built-up could not be discharged safely without affecting reactor-504

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c. The studies related to ascertain the maximum heat generation potential in the nitration reaction were not carried out based on which reactor cooling system has to be designed. Due to this, cooling system could not handle the excess heat due to deviation of parameters in the reactor like pressure, temperature beyond safe limits which lead to the reaction becoming runaway.

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d. There was no arrangement of orifice or double valve arrangement, rotameter for flow measurement etc. in reactor 504 and thereby the rate of addition of Nitric acid/Sulphuric acid is prone for being faster than safe which could have rendered the reaction runaway leading to instantaneous pressure built-up.

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e. Nevirapine is being manufactured without getting HAZOP study done in order to identify and evaluate risks by considering the possible deviations during the process.

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f. Hazard Analysis and Risk Assessment (HARA) report was prepared without considering the product of Nevirapine.

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4. During deviations in critical process parameters the feeding of raw material should have been cut-off and reaction should have been terminated by flooding with reaction terminators. But such interlocking facility or flooding of reaction terminators during any abnormal conditions was not provided by the unit.

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5. The reactor may not have been designed to withstand any deviations in the load. It is essential to carry out third party

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assessment verify the safety of the reactors once in two years. The unit has carried out internal check of the reactors (copy of the internal test report is enclosed as Annexure-IV) but safety of the reactor was not ascertained through any certified agency. Further it was reported that the reactor was around around 10 years old. Under such circumstance, the committee opines that it is essential to assess safety of the reactor to withstand deviations in the load.

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6. Lack of training of employees in the manufacture of RAP-2/ RAP-5. The unit had resumed the production of RAP-2/ RAP5 after a gap of six years. The committee interacted with the injured employees and as well as management & shift-1 employees and it was learnt that all six people involved in shift-2 in the production of RAP-2 were having less than 10 days experience in the production of RAP-2 and had no prior experience of manufacturing RAP-2.

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7. Quick addition of Sulphuric acid and not maintaining the desired temperature in absence of effective cooling system has led to a runaway reaction. Since there were no reaction terminators, due to runaway reaction the temperature and pressure has shooted up, the vent size & rupture disc was not adequate to vent out temperature & pressure. Due to which reactor-504 exploded and has fallen from first floor to the ground floor. Only that portion of the civil structure where the reactor was housed has collapsed. The entire reaction mixture containing 600 Kg of RAP-1, 150 Kgs of nitric acid and 2 Kgs of Sulphuric acid spilled outside and evaporated. The adjacent reactors, day tanks are intact.

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8. Lack of automation, Lack of comprehensive standard operating procedure on maintaining the desired reaction temperature & on rate of addition of chemicals, lack of training & experience of employees in manufacture of RAP-2, not checking the safety of the reactor, absence alarm system in the reactor to alert the personnel on not maintaining desired temperature, lack emergency preparedness are all the causes of accident. Immediate trigger is fast addition of Sulphuric acid and not maintaining the desired temperature of less than 290C in the reactor.

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The reactions involved in the process are as follows:

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Stage-1 RAP-1 2-Amino 4-picoline+ NaNO2

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Sulphuric Acid/ 2 2-hydroxy-4-picoline

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Stage-2 RAP-2

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Sulphuric Acid (tempr 26C) 5 Kgs 2-hydroxy-4picoline+HNO3 2-hydroxy-3600 Kgs 150 Kgs^{C.S. lye 210 Kgs/water 1200 Kgs} Nitro 4-picoline

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During the accident 752 Kgs of reaction mixture and 210 Kgs of caustic lye & 1200 Kgs of water (used for cooling) has spilled outside and evaporated.

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V.b . Qualification & experience of deceased/ injured employees: Six employees were present during shift-2 in the production block.

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Table 1: Details of deceased and injured persons due to accident:-

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Sl. No	Name of t deceased	he	Age	Designation	Qualification	Experience the unit
1	Thotakura Venkatarama	na	37	Senior Officer	B.Sc	8 years
2	Kakarla Subrahmanya	m	31	Deputy Officer	B.Sc	7 years
Sl. No	Name of the injured	Age	Designation	Qualification	Experience in the unit	Present condition
3	N. Simhadri Rao	29	Asst Operator	10^th	7 years	Good
4	K. Srinivasa Rao	49	Operator	10^th	17 years	Good
5	R. Rajkumar	35	Operator	10^th	12 years	Good
6	K. Saibaba	55	Deputy Manager	B.Sc	17 years	Good

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V.c. Who is responsible for accident: It is the primary responsibility of the unit to establish infrastructure facilities, to carry out safety check of reactors at regular interval through certified agencies, automation & interlocking for critical process parameters. Equal responsibility also lies with employees to comply with operational procedures stipulated by the unit, careful attitude & dedication towards work. It is the responsibility of the unit to comply with all statutory, regulatory, safety clearances stipulated by various concerned departments. In this particular incident the committee observed that both the unit M/s Tyche industries and its employees, both are responsible for the accident.

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VI Damage Assessment and Calculation of Compensation

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The accident was restricted to only reactor 504 and this particular production block where reactor was housed. The other reactors are intact, no impacts observed outside the production block or outside the unit. The damages that occurred due to accident are as follows:

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VII.a. Loss of life and status of award of compensation: six employees were present in the production during accident, out of which, two employees died in the accident spot and four employees survived. During inspection, the committee interacted with injured employees and families of the deceased.

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VII.a.i Late Sh. Thotukura Venkata Ramana aged 37 years died in the accident spot.

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As per the post mortem report of Sh. Thotukura Venkata Ramana, it is indicated that there is ante-mortem crush injury of head and right shoulder. The post-mortem report has concluded that the cause of death is due to shock as a result of crush injury of head. The death is due to accident in the unit and is liable to be compensated.

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VII.a.ii Late Sh. Kakarla Subrahmanyam aged 31 years died in the accident spot.

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As per the post mortem report of Sh. Kakarla Subrahmanyam, it is indicated that there is ante-mortem fracture of head and multi superficial burns. The postmortem report has concluded that the cause of death is due to shock as a result of polytrauma. The death is due to accident in the unit and is liable to be compensated.

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To ascertain the adequacy of compensation, the committee has calculated compensation by two methods: 1. As per the Judgement dated 16^th August 2019 of Hon’ble Supreme Court of India in civil appeal No. 6339 of 2019 and judgement in the matter of Sunita Tokas vs New India Insurance Co. Ltd. & civil appeal No.3483 of 2008 and as per Employee Compensation Act, 1923 and the highest among two is taken to determine whether compensation of Rs.40.00 lacs paid by the unit to the dependents of the deceased is adequate or not and assessment of calculation is explained in table 2 and table 3. The unit has already paid compensation of Rs. 40,00,000/- (Rupees Forty Lacs only) to the family each deceased.

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Table 2: Assessment of compensation

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Name of the deceased	A^* Amount of compensation in INR as per Hon’ble Supreme Court Judgement in civil appeal No. 6339 of 2019 and civil appeal No.3483 of 2008	OR Whichever is more is considered by the committee to ascertain the adequacy of compensatio	B As per Employee Compensation Act, 1923
Thotakura Venkataramana	Rs. 29,10,720/-	n	Compensation= fifty percent of the monthly wages of the deceased x relevant factor = Rs. 7500/- x 192.14 & _= Rs. 14,41,050/- _
Kakarla Subrahmanyam	Rs. 26,72,160/-		Compensation= fifty percent of the monthly wages of the deceased x relevant factor = Rs. 7500/- x 207.98 & = Rs. 15,59,850

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* A→ calculation is explained in table-3.

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&→ As per EC Act, 1923 the Central Government has specified Rs.15,000/- as monthly wages with effect from 03.01.2020. The relevant factor as per EC Act, 1923 is (the completed years of age on the last birthday of the workman immediately preceding the date on which the compensation fell due).

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Table 3: A→ Amount of compensation in INR as per Hon’ble Supreme Court Judgement in civil appeal No. 6339 of 2019 and civil appeal No. 3483 of 2008.

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Expenses Hon’ble
for Supreme
DOB
shifting Court
& Salary Futur e Loss
less tax if Loss of mortal Judgement in
per Salary Deduction of As per
Age Qualification prospects any as monthly loss of remains civil appeal
month after towards Annual Love Employee
Name at the & for perm (40% of per the deducting persona l income to income future and Loss and No. 6339 of compensation
time Designation the prevailing the income of estate 2019 and civil
anent tax expense s affect Act
tax slabs dependents & funeral appeal
of employee income) ion
expense No.3483 of
death
(app. 2008
cost) Compensation
E T =50% G=F*
A B C D=A+B F=D-E H # =GM I J & L=(FG*H)+I+J
OF D 12
Thotakura B.Sc-
37 2220 8880 31080 15540 15540 186480 2610720 100000 200000 2910720 1441050
Venkataramana Chemistry
Kakarla B.Sc-
31 17650 7060 24710 12355 12355 148260 2372160 100000 200000 2672160 1559850
Subrahmanyam Chemistry

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T Deduction towards personal expenses varies @50% for age of the deceased 20 yrs to 50 yrs.

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# Depending on the age, the factor is fixed. 16 for age group 31-35 years and 17 for age group 26 to 30 years.

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Based on Hon’ble Supreme Court of India in civil appeal No. 6339 of 2019 & civil appeal No.3483 of 2008 and as per Employees Compensation Act, the compensation of Rs. 40,00,000/- paid by the unit to the dependents of each deceased is adequate. The unit has already paid the compensation. In addition Government of A.P has announced compensation of Rs.10.00 lacs each to the family of the deceased and Rs. 1.00 lac each to the injured employees. The payment of compensation by the Govt. of AP is under process. VII.a.iii Sh. N. Simhadri Rao, Sh. K. Srinivasa Rao, Sh. R. Rajkumar and Sh. K. Saibaba These four employees were injured during accident and sustained burns. By the time of committee inspection on 15.04.2021 all the four injured were discharged from hospital, three employees namely Sh. N. Simhadri Rao, Sh. K. Srinivasa Rao, Sh. R. Rajkumar had joined duty and committee personally interacted with these three and interacted with Sh. K. Saibaba over telephone. Sh. K Saibaba informed that he is psychologically affected and he is still recovering from the shock of the accident. Soon after the accident, the unit has shifted the injured to the nearby hospital and expenditure incurred towards their treatment and hospital stay is borne by the unit. All four injured informed to the committee that presently they have fully recovered and are not facing any health issues. Government of A.P has announced compensation of Rs. 1.00 lac each to the injured employees which is under process. The unit has paid the following compensation to the injured employees:

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Table 4: Details of compensation to injured employees:

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*Name of* *the* *injured*	*Type* of *nature* *of injury* *of injury*	*Date* of *admission* to *Hospital*	*Date* of *Discharge*	*Compensation* *amount paid* *by the unit*	*Compensation* *to be paid*	*Remarks*
N. Simhadri Rao	Abrasion, injury at left thigh, laceration of right ear	11.03.2021	14.03.2021	Rs. 3.00 lacs	Rs. 5.00 lacs	Unit shall pay remaining amount of Rs. 2.00 lacs
K. Srinivasa Rao	Small blister and rashes in the back	11.03.2021	14.03.2021	Rs. 3.00 lacs	Rs. 5.00 lacs	Unit shall pay remaining amount of Rs. 2.00 lacs
R. Rajkumar	Abrasion at abdomen wall and swelling	11.03.201	14.03.2021	Rs. 3.00 lacs	Rs. 5.00 lacs	Unit shall pay remaining amount of Rs. 2.00 lacs
K. Saibaba	35% total body surface area burns	11.03.2021	14.04.2021	Rs. 4.00 lacs	Rs. 10.00 lacs	Unit shall pay remaining amount of Rs. 6.00 lacs

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Referring to Uphaar tragedy victims case, MCD Vs. Uphaar Tragedy Victims Association – (2011) 14 SCC, Rs.10 lakhs for persons who have burns from 25 to 50% and Rs.5 lakhs for persons who have injuries between 5 to 25%. Victims who were treated as outpatients

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and who had but minor degree of burns or other forms of simple injuries shall be paid Rs.2 lakhs. The amounts shall be directed to be paid within the time the Tribunal may set and direct a further liability of interest at 12% p.a. for default of payment.

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VII.b. Contribution of Emissions into the atmosphere: 752 Kgs of RAP-2 reaction mixture was evaporated into the atmosphere and it comprised of 600Kgs of RAP-1 mixture, 150Kgs of HNO3 and 2Kgs of H2SO4. Due to high temperature, the entire reaction mixture evaporated within 30mins after the accident. Due to high pressure, the portion of the civil structure where reactor-504 was housed had collapsed. From interaction with employees, it was understood that huge noise was heard when the reactor had exploded. The committee did not observe any other physical damages during the visit. The environmental prices for the material emitted is not available. To account for the damage cost due to the material evaporated the committee has assumed the market price of the material is equal to the opportunistic cost. The committee opines that presently restoration measures or clean-up or remediation is not required but unit may tie up with hospital and monitor the health status of the injured employees for a period of two years (once in six month health monitoring).

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Damage cost = Market price+ opportunistic cost+ treatment cost

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Damage Cost	=	Market price	+	Opportunistic cost	+	Treatment cost
	=	Actual cost of The material lost	+	The essential product which could be beneficially used in treatment of ailments is wasted. The committee has assumed the market price of the product is considered as opportunistic cost	+	Nil The injured employees have recovered and joined duty and all four injured have informed that they are not facing any Health issues. The cost of treatment is already borne by the unit. Hence presently no additional treatment cost is required for injured employees but unit shall carry out health monitoring of injured employees for two years. Since the entire reaction mixture evaporated within 30 minutes, no cleanup is required. Hence treatment cost is taken as Nil.
	=	600 Kgs of RAP-1 reaction	+	600 Kgs of RAP-1 reaction	+	Nil

¶109

¶110

		mixturewhich was under process+150 Kgs of Nitric acid +2 Kgs of Sulphuric acid		mixture which was under process+150 Kgs of Nitric acid +2 Kgs of Sulphuric acid
	=	Rs. 3500/- per Kg+ Rs. 1600/- per Kg+Rs.1600/- per Kg	+	Rs. 3500/- per Kg+ Rs. 1600/- per Kg + Rs.1600/- per Kg	+	Nil
	=	Rs.21,00,000/- +Rs.2,40,000/- _+Rs.3,200/- _	+	Rs.21,00,000/-+ Rs.2,40,000/-+ Rs.3,200/-	+	Nil
		Rs.23,43,200/-	+	Rs. 23,43,200/-
*Total* *damage* *cost*	=	*Rs. 46,86,400/-* *Rs. Forty Six la*	cs	*Eighty Six thousand*	*Fou*	*r Hundred only*

¶111

VII.c. Environmental Compensation on account of non-compliances: From the available records it is found that the unit started the production of RAP-2 from January 15, 2021. Since the unit has not complied with safety requirements during the manufacture of RAP5/RAP-2, it lead to a major accident. Hence the committee has calculated EC as per CPCB formula: EC=PI x N x R x S x LF

¶112

Where,

¶113

EC = Environmental Compensation in INR

¶114

PI = Pollution Index of industrial sector (Red-80)

¶115

N = Number of days of violation took place (start of unit operation to date of

¶116

accident)

¶117

R = A factor in Rupees for EC (Rs. 250/- may be assumed) S = Factor for scale of operation (large -1.5) LF = Location factor (the unit is located in Kakinada and population is less than 10 lakh=1)

¶118

i. Pollution Index of industrial sector (PI): Andhra Pradesh Pollution Control Board has categorized this industry into red category of industries and accordingly the Combined consent & Authorisation have been granted. For red category of industries, average pollution index is 80.

¶119

ii. Number of days of violation (N): The number of days for which violation took place is considered as the period between the day of violation observed and day of compliance verified by the CPCB/ APPCB. From the available records, it is observed that unit has resumed the production of RAP-5/ RAP-2 on January 15, 2021. Based on the criteria, 55 days (from 15-01-2021 to 11-03-2021) is considered for calculation of period of violation for estimating EC.

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iii. Scale of operation (S): The industry is considered as Large. Thus, scale of operation (S) for EC estimation is considered as 1.5. iv. Location factor (LF): The industry is located in Kakinada and the total population within municipal boundary and up to 10 km distance from the municipal boundary of the city is less than 1 million. Thus location factor (LF) is considered as 1 for EC estimation.

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v. Factor in Rupees (R) (Rs): As per the environmental compensation estimation guidelines, factor of rupees may be minimum of Rs 100/- and maximum of Rs 500/-. The factor of rupees is considered as Rs. 250/- for estimating environmental compensation for this industry, considering its pollution potential.

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S.N	Period of non- compliance	PI	S	LF	R (Rs)	N (days)	Environmental compensation (Rs)
1	15.01.2021 to 11.03.2021	80	1.5	1	250/-	55	16,50,000/-
	Total	EC fo	r violati	ng		55	16,50,000/-

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Rupees Sixteen lacs fifty thousand Only

¶125

VII.d. Total Compensation M/s Tyche Industries Ltd liable to Pay

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a. The unit has already paid Rs. 40.00 lacs to the family of each deceased. (Total Rs.80.00 lacs paid towards Compensation to the deceased persons).

¶127

b. Referring to Uphaar tragedy victims case, MCD Vs. Uphaar Tragedy Victims Association – (2011) 14 SCC and reports submitted to Hon’ble NGT in other accident matters Total compensation to be paid to the four injured employees is Rs.25.00 lacs @ of Rs.5.00 lacs to three employees and Rs.10.00 lacs to one employee out of which unit has already paid Rs.13.00 lacs and remaining 12.00 lacs to be paid to injured employees. The unit has paid Rs.3.00 lacs each to three injured employees and Rs. 4.00 lac to one injured employee which is not adequate. The unit shall pay additional compensation of Rs.2.00 lacs each to three injured employees namely Sh. N. Simhadri Rao, Sh. K. Srinivasa Rao and Sh. R. Rajkumar respectively and Rs 6.00 lacs to Sh. K. Saibaba.

¶128

c. The unit shall pay Environmental Compensation to CPCB on account of contribution of emissions into environment)Rs. 46,86,400/-.

¶129

d. The unit shall pay Environmental Compensation to CPCB for operating the unit violating SOP’s) Rs 16,50,000/-. The unit shall pay total compensation of Rs.63,36,400/(Rupees Sixty Three lacs Thirty Six Thousand and four hundred only) to CPCB.

¶130

VII.e. Current Status of the Unit: After the accident, Deputy Chief Inspector of Factories vide order dated 13.03.2021 issued “Prohibitory Orders” which states as “prohibiting the usage of all reactors and other reaction vessels in all production blocks in the factory which work at a pressure above the atmospheric pressure”. Copy of the Prohibitory orders is placed as Annexure-V. When the accident occurred reactions were in progress in other reactors which were abruptly stopped. Hence, the unit was permitted to safely shutdown its operations. During the safe shutdown period from 26.03.2021 to 05.04.2021, the ongoing batches were either completed or brought into safe mode but no fresh batches were started. East Godavari district off site emergency plan was prepared in the year 2018 by DNV-GL Mumbai. Latest onsite emergency plan

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of Tyche Industry was prepared in 2019. The unit had conducted onsite emergency mock drills on 12.07.2019, 19.01.2020, 02.08.2020 and 21.02.2021 .

¶133

The accident occurred on		11.03.2021
Deputy Chief Inspector of Factories, Kakinada issued Prohibitory orders to the unit on	`➡`	13.03.2021
Deputy Chief Inspector of Factories, Kakinada issued Show cause to the unit on Copy enclosed as Annexure-VI	`➡`	22.03.2021
Deputy Chief Inspector of Factories, Kakinada issued Permission for safe shutdown of the unit on	`➡`	26.03.2021
Unit safely shutdown on	`➡`	05.04.2021
Committee inspected the unit on	`➡`	15.04.2021
Unit addressed letter to Director of Factories to grant permission for manufacturing of three products	`➡`	17.04.2021
Deputy Chief Inspector of Factories Kakinada granted permission to manufacture two products (Soliefinacin succinate and Tenofovir disoproxil fumarate) on (copy placed as Annexure-VII)	`➡`	22.04.2021

¶134

On the day of committee inspection, the unit was under shutdown and revamping and upgradation works were under progress. During safe shutdown period, few reactions were completed and reactors were cleaned but few reactions were brought to a safe mode and reaction mixture was still present in few reactors during committee visit. Deputy Chief Inspector of Factories Kakinada relaxed the prohibitory orders and granted permission to the to manufacture two essential drugs. As on date of committee inspection, reactor-504 which exploded was lying in the unit premises and is yet to be disposed off.

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VIII View Points of Stakeholders The committee interacted with industry personnel, injured employees and media persons.

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VIII.a. View point of the Management of the unit and as well as injured employees

¶137

The unit management comprising of U.Satya Srinivas (Vice President Operations), M.Narayana Rao (Vice President R&D), K.Nagendra Varma (Vice President Techinal), M.Buchiraju (DGM Productions) and T. Madhusudhan Reddy (Manager – EHS) informed that the employees were experienced and working in production blocks since more than 5 years. On 11.03.2021 at around 14:15 hrs during shift change temperature readings were noted and it was found to be less than 29⁰ C. Till that time the reaction was progressing normally. Suddenly within ten minutes after starting addition of Sulphuric acid the reactor exploded. The four injured employees were in state of

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¶139

shock & panic. It is not clearly known as who was adding Sulphuric acid into the reactor-504. When the committee interacted with injured employees, all four of them were fully aware about the production process of RAP-2 and as well as safety measures to be taken. Though the management admitted that there were safety lapses in reactor-504 and in the unit & but informed that the main cause of accident was manual error of not maintaining required flow conditions during addition of Sulphuric acid which led to explosion. Overall the unit was on a positive note and assured the committee to comply with all safety requirements and to impart more training to employees. The unit further added that it shall stop production of RAP-5/ RAP2

¶140

The injured employees and the family of the deceased informed the committee that it was unfortunate that accident occurred and there is no fault of employees or the unit and suddenly an explosion happened.

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Other employees present in the unit during accident only heard blasting sound and are not aware about how the accident occurred.

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VIII.b Representation made by media persons

¶143

During the visit, media persons informed that the unit is discharging effluent outside the unit premises but during the committee visit the unit was not in operation. The ETP was under upgradation. Small portion of Effluent previously generated from the unit is re-circulated in the biological treatment systems to keep the bacteria (& other microorganisms) alive. No by-pass channels/ drains were found in the unit premises to discharge the effluents outside the unit. It was reported by the committee member from APPCB who is Regional Officer, Kakinada that previously no complaints were received against the unit regarding discharge of effluent. Reported that the effluent generated is reused within the unit premises for gardening. Housekeeping in ETP section has to be improved. Plastic bottles & carry bags were floating in the guard pond used for storing final treated effluent and there was no proper dedicated shed for storing hazardous waste. The existing ETP was very old and presently the unit is revamping the ETP. However, the APPCB may re-inspect the unit during full-fledged operation to verify whether effluent is discharged outside the unit premises.

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IX Suggested remedies to avert such accidents in future:

¶145

The committee suggests following remedial measures

¶146

1. The units shall manufacture only those products specified in the EC and Consent. If the unit intends to manufacture any additional products or intermediates or restart manufacturing of a consented product after a long gap the unit shall impart adequate training to its employees.

¶147

2. To prepare comprehensive SOP for all consented products and to impart training to all employees on SOP’s, product process, safety aspects. The employees shall be given hands on experience with the product process under the supervision of senior employees. The units only after ensuring that adequate training is imparted to its employees will engage the employees for independent works. Overall the industries should be

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¶149

prepared for emergency response readiness & effectiveness in terms of major accidents.

¶150

3. The units shall carry Hazard Analysis and Risk Assessment (HARA) considering all products, byeproducts, intermediates or any other manufactured in the unit.

¶151

4. The units shall carry out HAZOP study (Hazard and Operability) for all products, bye-products, intermediates and others manufactured etc in order to identify and evaluate risks by considering the possible deviations during the reaction, storage, handling, transfer etc.

¶152

5. The units shall carry out third party assessment through any certified agency or Competent person on safety & suitability of the reactors.

¶153

6. The units shall provide interlocking facility for critical parameters with raw material feeding and with reaction terminators. For instance if temperaure or pressure increases, coolant may be flooded to reduce temperature or if a runaway reaction is taking place then reaction terminators can be added into reactor.

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7. There should be auto alarm system or siren system to alert the employees in case of any deviations noticed in desired range of process parameters.

¶155

8. The units shall provide proper arrangement such as orifice, double valve, rotameter to regulate the flow of raw materials thereby preventing any runaway reactions which may lead to instantaneous temperature and pressure build-up.

¶156

9. All the reactors shall be provided with suitable rupture disc and safety valve of adequate capacity and size to prevent the pressure being built up in the reaction vessel beyond safe limit based on vent size calculations

¶157

10. The cooling system of all reactors shall be designed properly based on the evaluation of heat of reactions scientifically in order to withstand the possible deviations of parameters beyond operational limits.

¶158

11. The reactors shall be properly labelled indicating the crucial details such as status of reaction, product being manufactured etc. Since the unit is operating in different shifts, proper labelling and written communication will avoid confusion. During shift change, the shift in charge of closing shift shall record the essential details in a register or on reactor labels etc and upcoming shift in charge will read it and acknowledge it by signing to avoid confusion during shift change.

¶159

X Concluding remarks

¶160

1. Major accident occurred on 11.03.2021 at M/s Tyche Industries Ltd due to explosion of reactor 504 during the production of RAP-2. The immediate trigger to the accident is ineffective cooling and deviation in the rate of addition of Sulphuric acid into reactor-504 which contained 600 Kgs of RAP-1 mixture and 150 Kgs of nitric acid. The unit had valid EC from MoEFCC and CFO from APPCB for manufacture of

¶161

¶162

RAP-5 (the manufacture involves 5 stages and during second stage-RAP-2 accident occurred).

¶163

2. Lack of automation, Lack of comprehensive standard operating procedure on maintaining the desired reaction temperature & on rate of addition of chemicals, lack of training & experience of employees in manufacture of RAP-2, not checking the safety of the reactor, absence of alarm system in the reactor to alert the personnel on not maintaining desired temperature, absence of vent size calculations for reactor-504, use of rupture disc of inadequate capacity & size, no arrangement of orifice or double valve arrangement, lack of emergency preparedness are all the causes of accident. Immediate trigger is fast addition of Sulphuric acid and not maintaining the desired temperature of less than 29⁰ C in the reactor.Both the unit M/s Tyche Industries Ltd and its employees are responsible for the accident.

¶164

3. Six employees were present in the production block during accident out of which two employees died on spot and four were injured. The injured employees have recovered and have joined duty.

¶165

4. To ascertain the adequacy of compensation the committee has calculated compensation using two methods. As per Hon’ble Supreme Court Judgement in civil appeal No. 6339 of 2019 and civil appeal No.3483 of 2008 the Compensation to the deceased Late Sh. Thotakura Venkataramana and Late Sh. Subrahmanyam will be Rs. 29.10 lacs & Rs.26.72 lacs respectively. As per Employee Compensation Act the Compensation to the deceased Late Sh. Thotakura Venkataramana and Late Sh. Subrahmanyam will be will be Rs. 14.41 lacs and Rs.15.5 lacs. The unit has paid the compensation of Rs.40.00 lacs each to the dependents of the deceased (totally the unit has paid Rs. 80.00 lacs towards compensation to the family of the deceased). Based on Hon’ble Supreme Court of India in civil appeal No. 6339 of 2019 & civil appeal No.3483 of 2008 and as per Employees Compensation Act, the compensation of Rs. 40,00,000/- paid by the unit to the dependents of each deceased is adequate.

¶166

5. Referring to Uphaar tragedy victims case, MCD Vs. Uphaar Tragedy Victims Association – (2011) 14 SCC and reports submitted to Hon’ble NGT in other accident matters Total compensation to be paid to the four injured employees is Rs.25.00 lacs @ of Rs.5.00 lacs to three employees and Rs.10.00 lacs to one employee out of which unit has already paid Rs.13.00 lacs and remaining 12.00 lacs to be paid to injured employees. The unit has paid Rs.3.00 lacs each to three injured employees and Rs. 4.00 lac to one injured employee which is not adequate. The unit shall pay additional compensation of Rs.2.00 lacs each to three injured employees namely Sh. N. Simhadri Rao, Sh. K. Srinivasa Rao and Sh. R. Rajkumar respectively and Rs 6.00 lacs to Sh. K. Saibaba. In addition, Govt. of AP has announced compensation of Rs. 10.00 lacs each to family of the deceased and Rs. 1.00 lac

¶167

¶168

each to the injured employees and payment of the same is under process.

¶169

6. The committee did not observe any damage to the surrounding environment and the accident and impacts were confined only to production block-5. The entire reaction mixture has evaporated within 30mins. Immediate restoration or remediation is not required in this incident case but however the health of the injured employees shall be monitored for a period of 2 years. The unit may tie up with hospitals for health monitoring. The unit started the production of RAP-5 on 15.01.2021 without taking adequate safety measures leading to a major accident. For violations and the damage caused (contribution of reaction mixture into atmosphere) the unit shall pay Environmental compensation of Rs. 63,36,400/-(Rupees Sixty Three lacs Thirty Six Thousand Four Hundred Only) to CPCB.

¶170

7. East Godavari district off site emergency plan was prepared in the year 2018 by DNV-GL Mumbai. Latest onsite emergency plan of Tyche Industry was prepared in 2019. The unit had conducted onsite emergency mock drills on 12.07.2019, 1 9.01.2020, 02.08.2020 and 21.02.2021.

¶171

8. Post accident the unit was safely shutdown during 26.03.2021 to 05.04.2021. During the committee visit on 15.04.2021 the unit was in shutdown and revamping works were in progress. The biological effluent treatment systems was kept active by recirculating the effluent. Deputy Chief Inspector of Factories, Kakinada vide order dated 22.04.2021 has granted permission to the unit to manufacture two products.The committee suggests that APPCB and Chief Inspector of Factories shall verify the compliance of the unit and safety of installations

¶172

9. The committee humbly submits that the industries have to ensure self-compliance and the industry and its personnel are solely responsible for this negligent act which resulted in the accident. The committee humbly submits that the action taken against the industry and levying of EC from the unit will strengthen “Polluter Pay Principle” and all industries have to ensure self-monitoring, self-compliance and comply with statutory guidelines, safety measures, MOEFCC, CPCB, APPCB, Directorate of Factories etc .”

¶173

We have heard the learned counsel for the CPCB and Project Proponent (PP) who have entered appearance. Since there is no objection to the report, we accept the report and dispose of the matter in terms of the recommendations. The compensation to the deceased has been paid partly and learned counsel for PP states that whatever remains to be paid

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in terms of the report will be paid within one month. It is made clear that if there is any default, the statutory authorities may take coercive measures for recovery, including closure of the unit. The PP may adopt measures necessary to prevent such incidents in future, as recommended by the Committee and the concerned Authorities may also maintain vigil in the matter to ensure preventing such incidents and observance of safety measures by the present as well as other similar units. It is made clear that above order is without prejudice to liability under any other law, including criminal law.

¶176

We place on record our appreciation for the outstanding work of the Committee which may be conveyed to the Members of the Committee by the CPCB. A copy of the report be placed on the website of the CPCB for reference atleast for a period of six months.

¶177

The application is disposed of.

¶178

A copy of this order be forwarded to the MoEF&CC, CPCB, AP State PCB, Directorate of Factories, AP and the District Magistrate, Kakinada, AP by e-mail for compliance.

¶179

Adarsh Kumar Goel, CP

Sudhir Agarwal, JM

Brijesh Sethi, JM

Dr. Nagin Nanda, EM

August 31, 2021 Original Application No. 79/2021 A

¶184

News Item Published in the Hindu Dated 14.03.2021 Titled "Safety Lapses Led to Reactor Blast at Pharma Unit" v. .

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News Item Published in the Hindu Dated 14.03.2021 Titled "Safety Lapses Led to Reactor Blast at Pharma Unit" v. .

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