Mines directorate to probe lessee-contractor nexus

Concerned over the cases of a large number of lessees allegedly entering into raising contracts with other parties in violation of Mineral Concession (MC) Rules-1960, the state steel & mines department has asked the Directorate of Mines to expedite enquiry into all such cases.

Directions have also been issued to the mines directorate to instruct all the deputy director of mines and mining officers to issue notices to lessees under Section 27(1) (i) of MC Rules-1960 to furnish all relevant documents within a month.

The documents that need to be submitted by the lessees relate to all financial transactions between the lessee and contractor, transportation charges, payments made to the employees, details of profits or losses as well as income tax returns of the lessees and contractors.

The department has suggested that a team of chartered accountants, who have been empanelled by the Comptroller & Auditor General (CAG), may be engaged, depending on the work load for each circle with specific instructions to study all the financial instructions of the lessees and raising contractors within two months to verify if there is any violation of MC Rules-1960.

If there is prima facie evidence of violation, the facts along with all the details should be brought to the notice of the government for taking necessary action.

In the first phase, the steel & mines department is of the view that the enquiry may be carried out for iron ore, manganese ore and chromite leases.

It may be noted that the mines directorate has been sitting over the issue even though the secretary (steel & mines) has called for submission of a consolidated report in December last year on cases of violation of Rule 37 of MC Rules-1960.

"It has come to the notice of the government that large number of lesses have entered into raising contracts with other parties. These raising contracts could be in violation of Rule 37 of MC Rules-1960. In the letter dated December 21 last year, it was clearly mentioned that a comprehensive enquiry should be carried out to establish whether there has been a violation of the statutes, and an illustrative list of records to be examined and cross verified was also indicated. As on date, a detailed reply has not been received in the department”, Manoj Ahuja, secretary (steel & mines) has said in a recent letter to Director (Mines).

The enquiry will help verify whether the actual mining is carried out by the lessee himself or through a contractor or any other agency. Besides, it also needs to known through the enquiry, as to whether the lessee has entered into any agreement with any agency for the purpose of mining, financing or sharing of profits.

According to Section 37 (1) of MC Rules-1960, no lessee can assign, sub-let, mortgage or in any other manner transfer the mining lease without the prior written consent of the state government.