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Bihar Sponge Iron Ltd has received a water bill of Rs. 40.70 Crores (including compound interest) up to May 2025 from the Subernarekha Dam Division No. 2, Chandil. This is part of an existing water charges dispute already before the Jharkhand High Court, Ranchi, where the original demand stood at Rs. 21.32 Crores as of March 2023. A recovery certificate of Rs. 22.71 Crores had earlier been issued by the Executive Engineer, Chandil, which the company is also challenging. The company has only provisioned Rs. 1.39 Crores against this liability based on its own estimate. The appellate authority had earlier directed a fresh assessment of liability based on actual consumption, but the company says this reassessment was not carried out and the new bill was raised without following that order. The matter remains sub judice.
If the High Court rules against the company, the financial hit could be significantly larger than what has been provisioned (Rs. 1.39 Cr vs. a claim of Rs. 40.70 Cr), potentially impacting future earnings and cash flows. Until the court decides, this remains an uncertain, material contingent liability for shareholders.