Jaiswal asks to J'khand CM to recall Rs 25,000 cr notice to CIL

Coal Minister Sriprakash Jaiswal in a letter to Jharkhand Chief Minister Hemant Soren has dismissed the state's Rs 25,000 crore claim from CIL saying the "question of payment of any surface rent or land rent does not arise".

Asking the state to withdraw directions given to coal companies, including CCL (a CIL arm) immediately, he has said: "Coal mines vest absolutely with the central government and thereafter the rights of the central government in relation to lands, coal mines or coking coal mines, as the case may be, are made exercisable by a government company."

The Jharkhand government has slapped notices for recovery of land rent to the tune of Rs 25,000 crore to Coal India Ltd (CIL) for coal mining in the state, including an initial claim of Rs 3,100 crore from Central Coalfields Ltd (CCL).

Jharkhand Chief Secretary R S Sharma had said that Coal India owed "thousands of crores of rupees" to the state for excavating coal, as per preliminary assessments.

Jharkhand's Revenue and Land Reforms Secretary J B Tubid had also said: "The report is being finalised on the basis of assessments from District Collectors and preliminary assessment indicates (due of) Rs 25,000 crore."

The officials had said CIL can't take the land for mining "free of cost" as it is state's property.

Jaiswal has said that he has got the issue "examined" in context of Acts, including Coal Bearing Area (Acquisition and Development) Act 1957 and Coal Mines (Nationalisation) Act, 1973 and the rights or owners in respect to mines "vest absolutely with Central Government free of all encumbrances".

"Since neither the Central Government nor a government company, in which the rights of the Central Government are so vested, are tenants of the state government and the question of payment of surface rent or land rent of any kind on such land does not arise," the letter by the Union minister said.

Besides, the coal companies are paying royalty to state, Jaiswal said. He has also said the issue was raised in 1999 when Jharkhand was a part of Bihar and in 2002 and 2007 and the Centre had made its stance clear then.

Last week, Coal Secretary S K Srivastava had also said that as per law there is no such provision requiring CIL to pay any amount to the state government for mining coal.

The claim may erod cash reserves of the world's largest miner, which has announced an interim dividend of Rs 16,485.71 crore to the Centre for its 90 per cent stake in the Maharatna company and Rs 3,113 crore through dividend distribution tax.

CIL, which accounts for over 80 per cent of the domestic production is sitting on a cash reserve of Rs 62,236 crore. It produced 452 million tonnes (MT )coal last fiscal.

For the current fiscal it is unlikely to meet the production target of 492 MT.