L&T Fined ₹2.15 Cr for Illegally Mining ‘Diamond’ Gravel in MP

Bhopal: The Madhya Pradesh government has fined Larsen & Toubro (L&T) Rs 2.15 crore for digging out gravel containing diamonds and boulders from Runj River, in the Panna district, where the company is constructing a dam. 

The Rs 270-crore 1,182 metre-long dam across Runj, a tributary of Bhaigan that ultimately joins the Yamuna, has been under construction in Ajaigarh tehsil since 2017-18.

It is not the first time that L&T has been fined for exploiting natural resources. On November 6, 2020, the state mining department fined the company Rs 50 lakh for stealing the royalty of 25,000 cubic metre roadstone used in the dam construction.

Clubbing both cases, the department slapped a penalty of around Rs 2.15 crore—but L&T neither paid the fine nor replied to the show-cause notices, an official told Newsclick.

The district mining office took action on a tip-off that the company was illegally excavating gravel by setting up a plant near the construction site. On February 15, 2021, a mining official raided the site and found 85,000 cubic metres of gravel and a huge quantity of boulders and soil missing.

Three days later, L&T was served a show-cause notice asking for an explanation for the missing gravel containing diamonds and boulders within a week. 

A copy of the notice with Newsclick, reads: “In regards to the previous fine of ₹50 lakh for not paying the royalty of 25,000 cubic metres Gitti (roadstone) which was illegally excavated, neither the company replied to the show-cause notice nor paid the fine. During an inspection of Runj Dam on February 15, 2021, the mining officials found 85,000 cubic metres of gravel (containing diamonds) missing apart from boulders, soil and others.”

A mining official said that the fine was imposed for “stealing” gravel and other natural resources one week after L&T didn’t respond to the notice.

According to the standard assessment by officials, 3-4 cubic metres of gravel near Runj contain a carat of diamond. Officials found a plant to dig out gravel, 10-12 feet deep pits to soak them and plain fields alongside the pits to clean the gravel and find diamonds. 

The site’s photos also indicate that the plant was designed to excavate diamonds from the gravel, commonly found in the district. “The fine is based on the inspection and assessment of missing gravel and boulders,” a senior official said.

The mining department confirmed the fine in a written reply to a question asked by Congress MLA Harsh Vijay Gehlot during the Budget Session in the Assembly in March: “On February 15, 2021, a team of mining officials found illegal excavation of 85,000 cubic metres of gravel to construct Runj dam. And the matter is pending in the Court of the district collector.”

Panna collector Sanjay Mishra, however, told Newsclick that he is “unaware” of the case or the penalty. “The district mining officer is on leave. Only he can comment after seeing the files,” he said.

According to official sources, L&T has demanded a no-objection certificate (NOC).

“According to mining rules, construction firms must pay 2%-3 % royalty to the department against the project’s total cost. The firm recently paid Rs 1.65-crore royalty to the water resource development, which had issued the dam tender. Besides, Rs 29 lakh was paid by an individual named Gyanendra Singh without naming the firm. Combining both the amounts, the company claims to have paid the imposed penalty and is demanding a NOC,” the senior official said.  

“The amount paid to the water resource department has nothing to do with the penalty. Besides, when a penalty is imposed on a firm, the amount can’t be recovered from an individual,” he added.  

Officials said that L&T’s non-compliance to the notices, orders or emails shows its disregard towards the government and the law. 

Repeated calls and an email sent to L&T’s Madhya Pradesh and its communication team in India by Newsclick last month for a response went unanswered.

Besides not paying the penalty, the company has not allegedly paid compensation for the land acquired to construct the dam to hundreds of farmers—more than 90% tribals—in Bishramganj village, and small settlements such as Pande Purva, Banglan and Majhpurva in the tehsil.

Last November, the farmers marched for 15 km from the dam site to Panna district headquarters to gherao district collector Sanjay Kumar Mishra’s office and handed over a memorandum of demands. They alleged that authorities have been prevaricating for the past five years.

Mragendra Singh, a Congress leader from Panna who has been raising the issue of illegal sand mining, tweeted: “On one hand, L&T is building Ram Temple in Ayodhya to create an image of an upright and honest firm. On the other hand, it’s not only illegally excavating natural resources, including diamonds, but also not paying the compensation to the tribals whose lands were acquired for the dam project.” 

“The firm is also adamant not to comply with the government notices and orders,” he added.

(With inputs from Panna-based journalist Nadeem Ulla Khan.)