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NCLT orders resumption of mining by OMML – Sharma and Sharma Legal

NCLT orders resumption of mining by OMML


The Kolkata bench of the National Company Law Tribunal (NCLT) on Thursday said the director of mines’ order of stoppage of mining operations during the moratorium period for the firm was ‘illegal’ and ‘inoperative’.

Even as the insolvent Orissa Manganese & Minerals (OMML) is facing a crisis due to stoppage of mining operations at its Patmunda mines in Odisha, the Kolkata bench of the National Company Law Tribunal (NCLT) on Thursday said the director of mines’ order of stoppage of mining operations during the moratorium period for the firm was ‘illegal’ and ‘inoperative’. The tribunal has asked the director of mines, Odisha, to lift the order of stoppage of mining immediately. On Tuesday, Sumit Binani, the resolution professional (RP) of OMML, appealed before the Kolkata bench of the NCLT for lifting the order of stoppage of mining work at Patmunda manganese mines situated at Odisha’s Sundargarh district. Appearing before the tribunal, on behalf of the RP, Sidhartha Sharma and Ratnanko Banerjee stated, “During moratorium period, under Sections 14 and 238 of the IBC, no coercive steps can be taken against the company. So, any demand raised by the director of mines on the company for government levy cannot be proceeded, and mining operations should be started immediately.”

OMML, a 100% subsidiary of Adhunik Metaliks, is a mining lease holder of Patmunda mines. This mine engaged about 1,000 workers and labourers for its mining operations. The deputy director of mines, Koira circle, Sundargarh district, had issued a notice on January 1 for stoppage of mining operations over non-payment of compensation in pursuance of a Supreme Court judgment in August last year. Passing the order on Thursday, Justice Jinan KR said the stoppage of Patmunda manganese ore mines operations during the moratorium period for OMML was ‘illegal’ and ‘inoperative’. “…the application filed by the resolution professional is liable to be allowed,” he said. Justice Jinan further said, “The notice issued by the second respondent (deputy director of mines) is hereby declared as inoperative till the time moratorium is in force.” He directed the director of mines and the deputy director of mines to lift the order of stoppage of mining immediately.

In its order last year, the apex court had directed the Odisha government to extract the cost of excess production from the defaulting miners as compensation for illegally extracted iron and manganese ore between 2000-01 and 2010-11. “OMML could not give the penalty as it is a stressed company. As mining operation has been stopped, production has been severely affected,” a source close to the development told FE. OMML is engaged in the business of exploration, development, mining and processing of mineral assets. The company has six manganese ore mines in Orissa and one iron ore mine in Jharkhand. Bankruptcy proceedings against Adhunik Metaliks, the flagship firm of the Adhunik Group, subsidiary Orissa Manganese & Minerals, Zion Steel, a promoter group company, and Adhunik Alloys & Power Limited, also a part of the group, were approved by the Kolkata bench of the NCLT in August last year. The insolvency petitions had been filed by State Bank of India (SBI).

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