TN yet to collect Rs 11.9 crore dead rent from ONGC

CHENNAI: Tamil Nadu government is yet to collect dead rent worth Rs 11.96 crore for leasing out land for exploration of major minerals by Oil and Natural Gas Corporation, according to a Comptroller and Auditor General of India report. While going through lease files pertaining to three of the 14 district offices, it was found that dead rent of Rs 2.31 crore for 2017-18 and differential dead rent of Rs 9.65 crore from 2013-14 to 2017-18 was not collected.

According to Section 9A of Mines and Minerals (development and Regulation) Act 1959, the royalty on the mineral removed or dead rent as agreed in their lease deed, whichever is higher shall be payable by the lessee. Similarly, under Petroleum and Natural Gas Rules, the lessee has to pay the dead rent or the royalty whichever is higher. He will pay dead rent in advance for every year from the grant of Petroleum Mining Lease.

The report urged the state to collect interest payable at bank rate on belated payment from ONGC. Meanwhile, the report pointed out that ONGC has not renewed its Petroleum Mining Lease in Nagapattinam and Ramanathapuram districts after it expired. 

As per the rules, a Petroleum Exploration License and Petroleum Mining Lease for onshore exploration and mining has to be issued by the state with prior approval from the Centre. The Ministry of Mines and Fuel directed that a fresh deed may be executed after every renewal irrespective whether the original and renewal terms and conditions were identical or not. But this was not followed by ONGC.

According to the report, in all these leases, the lessee had started commercial production. The non registration of lease deeds in these five cases resulted in inadequate safeguard of government’s right to enforce contractual obligation besides incidental loss of stamp duty of Rs 8.09 crore. The report said that despite the issue being raised every now and then through state government, it has remained unresolved for last 14 to 16 years.