Jaiprakash Power Ventures (JP Power) has secured a favorable interim order from the Andhra Pradesh High Court, staying the ₹1,334 crore penalty imposed by the Department of Mines & Geology (DMG). The penalty was levied for alleged illegal sand mining operations involving unauthorized extraction, transportation, and selling of sand in Andhra Pradesh. The court determined that the DMG’s actions were beyond its jurisdiction, citing overreach of authority.
The penalty stemmed from claims of non-compliance during the lease period and after the transfer of mining operations to other contractors in 2023. JP Power clarified that the mining activities were completed and handed over by May 2023 and that all contracts were sub-contracted to third parties, who bear liability for operational compliance. The DMG had issued multiple demand notices aggregating to ₹1,334 crore.
In response to writ petitions filed by JP Power, the Andhra Pradesh High Court acknowledged the company’s position and ruled to stay the penalty demands. This decision, supported by multiple court orders, underscored that the penalties lacked jurisdictional backing and overstepped DMG’s regulatory mandate.
Impact on JP Power:
- Financial Implications: JP Power emphasized that the penalty would not materially impact its financial standing, as the responsibility for compliance rested with sub-contractors.
- Operations: No disruptions to ongoing or future projects are anticipated, ensuring business continuity.
JP Power reaffirmed its commitment to legal and operational compliance and continues to monitor the matter while cooperating with authorities for resolution. The company assured stakeholders that the penalties would not affect its financial or operational health.
This development provides significant relief to JP Power, ensuring operational stability while addressing legal challenges proactively.
