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Informist, Tuesday, Aug. 25, 2026

 

--SC notice to Tata Steel on Odisha govt's plea in INR-43-bln demand case 

--CONTEXT: HC quashed Odisha govt's INR-43-bln demand against Tata Steel 

 

NEW DELHI – The Supreme Court on Tuesday issued a notice to Tata Steel Ltd. on petition by the Odisha government, Director of Mines and Geology, Odisha, and Deputy Director of Mines, Jajpur, against a Orissa High Court's order that quashed INR-43.14-billion demand orders against the company. The demand relates to the shortfall in dispatch of minerals and chrome ore from Tata Steel's Sukinda Chromite block. The apex court will hear Odisha government's plea against Tata Steel on Oct. 5.

 

 

In 2020, the state government had issued a letter of intent in favour of Tata Steel for grant of a mining lease over an area exceeding 406 hectares for a period of 50 years. Thereafter, the Indian Bureau of Mines approved the mining plan, wherein the maximum annual production for the financial years 2021 to 2025 were given. 

 

The Centre in 2020 had inserted Rule 12A in the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules, 2016, relating to the minimum production and dispatch requirements for holders of mining leases granted through auction. Rule 12A pertained to ensuring minimum 80% dispatch of minerals of the average of the annual production of two preceding years on a pro-rata basis.

 

The Odisha government issued a demand order in 2025 against Tata Steel for INR 19.03 billion on account of differential royalty, district mineral fund charges and national mineral exploration trust charges, among other charges, for alleged shortfall in dispatch of chromite and appropriation of performance security for the fourth year of their Mine Development and Production Agreement. Another demand notice order was issued against Tata Steel for INR 24.11 billion for the fifth year of the mining lease period, alleging shortfall in dispatch. 

 

Tata Steel had challenged the Rule 12A of the 2016 Rules and the demand orders passed by the Odisha government under it. Tata Steel had said that due to geo-technical challenges involved in the Sukinda valley, open-cast method would not be feasible beyond two to three years and it would be necessary to switch to underground mining in the hard strata lying 300 metres below the ground level. 

 

In April, the high court upheld the validity of Rule 12A of the 2016 Rules. However, it said that Rule 12A does not contemplate any penal consequences, which were brought later under sub-rules (1A) and (1B), therefore, it cannot be construed as mandatory nor can be applied to have been impliedly incorporated in the Mine Development and Production Agreement as a consequential effect. Consequently, the high court quashed the Odisha government's demand orders against Tata Steel.

 

At 1230 IST, shares of Tata Steel Ltd. were down 0.9% at INR 184.65 on the National Stock Exchange.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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