The Odisha government has issued a notice demanding Rs 233.11 crore from Vedanta Aluminium Limited for alleged unauthorized water extraction from the Bheden river system, a claim the company strongly denies, asserting full compliance with regulatory requirements.
Key Points:
- The Odisha government has issued a Rs 233.11 crore notice to Vedanta Aluminium Limited for alleged unauthorized water extraction from the Bheden river system.
- The penalty includes base water charges, 2% interest, and a six-time penalty for lifting over 30 lakh cubic metres of water monthly without permission.
- Vedanta Aluminium has denied the charges, stating the penalty is based on incorrect assumptions and that the company operates under valid water drawal agreements.
- Complaints from villagers and field verification by the Water Resources Department led to the imposition of the penalty.
- The notice warns that failure to comply would invite action under the Orissa Irrigation Act and Rules, directing an immediate halt to water-lifting activities.
The Odisha government has served a notice on Vedanta Aluminium Limited in Jharsuguda, demanding payment of Rs 233.11 crore for unauthorized water extraction from the Bheden river system between May 2025 and April 2026.
The demand includes base water charges, a 2% interest rate, and a six-fold penalty for extracting over 30 lakh cubic metres of water each month without authorization.
However, the company has denied the allegations, stating that the penalty is based on incorrect assumptions that do not accurately reflect the factual or regulatory situation.
According to the notice reviewed by Business Standard, the penalty was imposed on Vedanta Aluminium Ltd at Bhurkhamunda in Odisha’s Jharsuguda district following complaints from villagers and findings from a field verification by officials from the Water Resources Department. The company allegedly extracted water without authorization for nearly a year.
In the notice issued by Jishu Krushna Beriha, superintending engineer of the Burla Irrigation Division, the deputy chief operating officer of Vedanta Aluminium has been instructed to deposit Rs 233.11 crore within one month for “illegally lifting water” from Kheruwal Nallah, a distributary linked to the Bheden river, without permission from the Department of Water Resources.
The notice, issued on April 29, states that such unauthorized water extraction is a serious violation of the Orissa Irrigation Act and Rules, 1959 and 1961, as amended, and adversely affects the rights and resources of the local community. It warns that failure to comply with the notice would result in action under the Orissa Irrigation Act and Rules.
The company has been directed to immediately cease all illegal water-lifting activities from the river.
The department stated that complaints first arose in May 2025 when the district administration in Jharsuguda received allegations of unauthorized extraction. The issue was revisited after villagers approached the Collector’s office on February 9 this year, leading to a discussion during the district-level revenue review meeting on April 7, where it was decided to conduct a field inspection.
Subsequent site verification by irrigation authorities allegedly confirmed that the company continued to draw water from the river channel without valid authorization. The departmental calculation sheets attached to the notice indicate that the charges were calculated month-wise using surface water rates, penal dues, interest, and accumulated outstanding amounts, ultimately totaling Rs 233.11 crore.
The company was found to have extracted water ranging from 32,14,080 cubic metres in May 2025 to 30,06,720 cubic metres in April this year. Officials stated that the penalty was imposed after the company was found extracting water without a sanctioned agreement from the Department of Water Resources, and the demand was raised following a proper assessment and calculations as per procedures after the field inspection.
Vedanta Aluminium, however, has strongly contested the demand and denied any wrongdoing. In its response, the company stated that the penalty notice was based on “incorrect assumptions” and did not reflect the factual or regulatory position. The company maintained that it has been operating in compliance with applicable norms and that the computation used by the irrigation authorities was flawed.
“The company operates under valid and existing water drawal agreements with the Department of Water Resources, Government of Odisha, authorizing a total drawal of 112.9 cusecs of water, against which applicable charges are being regularly and duly paid. The actual drawal from the Hirakud reservoir is approximately 80 cusecs, which is well within the approved limits,” Vedanta stated in a holding statement, emphasizing its commitment to full regulatory compliance and transparent engagement with statutory authorities.
