Tata Steel has received a notice from the District Mining Office, Ramgarh, Jharkhand, demanding Rs 1,755 crore for excessive coal mining. As per an exchange disclosure by the company, the District Mining Office alleged that Tata Steel extracted 1.62 crore metric ton coal beyond the permissible limit.
The District Mining Office alleged that Tata Steel extracted excessive coal during the period from fiscal year 2000-01 to fiscal year 2006-07 at its West Bokaro Colliery.
Basis of demand notice
Tata Steel said that the demand notice has been issued by the District Mining Office based on grounds similar to those noted by the Supreme Court in the Common Cause vs. Union of India case.
In its landmark 2017 judgment, the apex court gave a broader interpretation of Section 21(5) of the Mines and Minerals Act, 1957, curbing illegal and excessive mining by companies. The Supreme Court ruled that any excessive mining beyond what is prescribed in the Mining Plan, Environment Clearance, and Forest Clearance documents, even in the lawful lease area, will constitute to illegal mining.
The court ruled that if the mining companies are found in violation and carrying out excessive mining, they must pay the full price for the excessive minerals extracted as a penalty.
On the basis of this Supreme Court ruling, Jharkhand’s District Mining Office has demanded Rs 1,755 crore from Tata Steel for the alleged 1.62 crore metric ton of excessive coal mining.
What next for Tata Steel
Tata Steel has maintained that the Rs 1,755 crore penalty order issued by the District Mining Office lacks justification and will appeal against it.
“The Management believes that the demand lacks justification and substantive basis. Accordingly, the Company will pursue suitable legal remedies before the appropriate judicial or quasi-judicial forum(s).” Tata Steel said in the exchange filing.
Tata Steel share price
Tata Steel’s stock closed at Rs 193.50 on Friday, 0.57% lower in the intra-day trade. In the last 5 trading sessions, the company’s share price has declined by 0.74%.
Amid the market-wide slowdown in the last month due to the Iran War, Tata Steel’s share price has also corrected by 1.64% in the last one month period.