SALEM: The Central Government undertaking SAIL Refractory Company Ltd (SRCL) was given an interim stay (order to the State government to maintain status quo till June 14, 2017) on Salem Collector’s recovery proceedings for mining lease penalty of Rs 1,152 crore. The district administration carried out recovery proceedings on February 8, 2017, in response to government’s order to recover dues across the State under the Revenue Recovery Act 1864.
SRCL was formed as a Subsidiary of the Steel Authority of India Ltd (SAIL) on December 16, 2011, by merging the Burn Standard Company Ltd (BSCL). BSCL was a leader in the manufacture of burnt magnesite bricks, a vital input in iron and steel making. While the SRCL is a subsidiary company of SAIL which is under the Steel Ministry, BSCL was a Public Sector Enterprise under the Ministry of Heavy Industries. Thus, SRCL is yet to come out of post-merger hiccups as questions about who will absorb which financial liability, remains unsettled.
On August 14, 2010, the Revenue Department issued a notice to the then BSCL to pay `458.61 crore ground rent for its three mines as part of mining lease, invoking two GOs issued in 1985 and 1997. As a colonial era British firm, BSCL had never paid any ground rent but only royalty for the minerals mined. The recovery claim was for the period of 1943-2009. BSCL did not respond to the notice and the district administration did not follow up on the matter. It was thus assumed that the above Revenue Department proceedings had lapsed.
In March this year, when Collector V Sampath carried out a fresh recovery proceeding, it included a penalty of `34 lakhs per day (24 per cent interest) from August 14, 2010 to January 17, 2017. While the original rent recovery was `458.61 crore, the penalty alone works out to `694.48 crore. SRCL filed a writ petition in the Madras HC challenging the penalty. P S Raman, senior counsel appearing for the petitioner said, “It was not justified to make demand of compensation on government poromboke lands, especially when such demand of compensation contemplated under Rule 72 of the Mines and Minerals Concession Rules,1960, is referable to the private patta lands, that too, for making such compensation to the land owners and not to the Government.”
He further pointed out that when the initial demand was made on August 14, 2010, against the company, the respondents have not taken any further steps and therefore, the petitioner was under the impression that they have dropped the proceedings. Special Government Pleader C Jagdish has sought time to file a counter from respondents. Hence, the State government has been asked to maintain status quo till June 14, 2017.