In a recent development, Vrajiron and Steel Limited has received a formal letter from the Sub Divisional Officer (SDO), Water Resources, Sub Division, Bilaspur, Chhattisgarh, demanding a payment of ₹27,28,166. This amount has been raised as a charge for withdrawal of groundwater for industrial purposes without the execution of a valid agreement.

Details of the Action Initiated

According to the company’s disclosure on April 30, 2025, this letter from the SDO was received on April 29, 2025. The letter cites a contravention related to the company's groundwater withdrawal activities, indicating that Vrajiron and Steel has allegedly drawn water for industrial usage without entering into a formal agreement with the water authority.

This kind of violation is generally taken seriously under regulatory frameworks governing water resource management in India, especially in states like Chhattisgarh, where industrial water use is closely monitored due to environmental and ecological sensitivities.

Allegation of Violation

The core issue highlighted in the letter is the unauthorised use of groundwater for industrial purposes. According to the SDO’s letter, Vrajiron and Steel Ltd has been using water without having signed a formal agreement, which is a standard legal requirement for such withdrawals.

Under current norms, industrial entities are expected to enter into contracts with state water authorities and pay applicable water usage charges. The absence of such an agreement has prompted the SDO to raise a financial demand.

Company’s Response and Impact Analysis

In its official communication, Vrajiron and Steel Ltd has asserted that the said demand is not payable. The company maintains that there has been no material impact on its financial, operational, or other business activities due to this notice.

This stance indicates that the company either disagrees with the allegations made by the water resource authority or may have plans to contest the notice legally or administratively.

Importantly, Vrajiron’s management believes that the matter does not require provisioning in their books at this stage, implying confidence in their interpretation of the legal or contractual obligations related to groundwater use.

Groundwater Usage Compliance and Legal Framework

In India, groundwater extraction for industrial purposes is governed by the Central Ground Water Authority (CGWA) and respective state water resource departments. Companies are required to obtain prior approvals and pay relevant fees, failing which penalties and recovery notices may be issued.

The Chhattisgarh government, like other state governments, has been increasingly strict with industrial usage of groundwater, especially in water-stressed zones like Bilaspur. This may be part of a broader enforcement initiative to regulate and monitor water resource usage more stringently.

Vrajiron's Industrial Presence in Chhattisgarh

Vrajiron and Steel Ltd has a notable industrial footprint in Chhattisgarh, contributing significantly to regional employment and manufacturing output. With rising scrutiny on environmental and sustainability practices, such notices can often attract public and regulatory attention even if their financial impact is limited.

No Material Financial Impact Claimed

Despite the monetary size of the notice—₹27.28 lakh—the company has clarified that there is no quantifiable financial burden that could materially affect its operations. This suggests that the company either disputes the notice outright or believes it will be able to resolve it without significant financial exposure.

Next Steps and Possible Outcomes

The matter is currently in the early stages, with the company having just received the letter. Typically, companies may choose to:

• Respond to the authority with clarifications or evidence disputing the charge

• Seek legal opinion on the validity of the demand

• Negotiate for waiver or reduction if any previous approval or misunderstanding can be shown

• Comply and pay the amount if found liable after legal or internal review

Given that the company has made its position public through the stock exchange disclosure, investors and stakeholders will closely watch how the matter progresses.

Investor Outlook and Corporate Transparency

It is notable that Vrajiron and Steel Ltd has shown transparency in disclosing this letter through the appropriate regulatory channels, in compliance with listing obligations. While the current impact is stated to be non-material, investors and analysts may still track this development to assess any future risk or escalation.

Companies in the industrial segment are increasingly under the lens for environmental compliance, and such issues—no matter how small financially—can affect corporate reputation and ESG (Environmental, Social, Governance) scores.

Conclusion

To sum up, Vrajiron and Steel Ltd’s receipt of a ₹27.28 lakh water usage charge from the Bilaspur Sub Divisional Officer marks a noteworthy development in its operational timeline. The allegation of unauthorized groundwater withdrawal without a formal agreement places the spotlight on regulatory compliance, especially in water usage.

However, with the company asserting that there is no material impact and that the demand is not payable, the issue may resolve without financial or reputational strain, pending further developments. Stakeholders are advised to stay updated as the company proceeds with its response.

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