In September 2006, a 1,320-megawatt (MW) thermal power plant was proposed to be set up in Dhenkanal district in east-central Odisha by the Hyderabad-based Lanco Group. The proposal followed a memorandum of understanding (MoU) signed the same month with the then Biju Janata Dal (BJD) government of Odisha, headed by Chief Minister Naveen Patnaik. A subsidiary of the Lanco Group, Lanco Babandh Power Limited (LBPL), was allotted 887 acres of land in Dhenkanal district by Patnaik’s government.

Lanco Infratech, once a major player in power, construction and real estate, went downhill in 2014. Its founder, Lagadapati Rajagopal, a former Lok Sabha MP from Vijayawada in Andhra Pradesh, resigned from Parliament in February that year owing to differences with the leadership of the Indian National Congress over the enactment of the Telangana Bill.

In August 2018, the National Company Law Tribunal (NCLT), India’s principal quasi-judicial authority for corporate disputes and insolvency, ordered the liquidation of Lanco Infratech. It had as many as five operational power plants at the time of its liquidation, while at least half a dozen other projects, including the one being undertaken in Dhenkanal through LBPL, were in different stages of completion.

The company was dragged into insolvency proceedings just days after the NCLT ordered the liquidation of its parent, Lanco Infratech. In August 2021, LBPL sold the land in its possession for approximately ₹92 crore to Saffron Resources Private Limited, a private firm with no turnover. In July 2025, JSW Steel acquired Saffron Resources, a firm with no business interests beyond the 887 acres it held—then valued at ₹679.34 crore. Local communities, whose land was acquired by the Naveen Patnaik government for the thermal power project, have demanded that their land be returned. They have also called on the Securities and Exchange Board of India (SEBI) to investigate what they describe as a “sham corporate takeover”.

>> Aggrieved Project, Affected People

The machinery for the power plant has been dismantled and taken away from the project site, allegedly by a third party, our sources have informed us. The 265-metre-high chimney of the power plant was the last to go – it was dismantled successfully on December 19, 2022, following two rounds of unsuccessful attempts. The land is spread over Kharagprasad and Kurunti villages in Odapada tehsil (an administrative unit) of Dhenkanal. In a letter dated January 21, 2026, a forum of local farming communities affected by the land takeover—Anchalika Silpanchala Khyatigrashta Prajasangha (which translates from Odia as “Regional Industrial Area Affected Citizens’ Forum”)—raised concerns about the transaction. It has asked SEBI to examine whether there has been misrepresentation, regulatory arbitrage, fraud or investor deception.

The forum has alleged that the land was acquired between 2008 and 2010 at a paltry ₹3-6 lakh per acre by the Odisha Industrial Development Corporation Limited (IDCO), the state government’s nodal agency for facilitating industrial infrastructure. The land was acquired under the colonial Land Acquisition Act, 1894, since replaced by the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR), which governs land acquisition, is supposed to ensure fair compensation, and mandates rehabilitation and resettlement for those displaced by infrastructure projects.

The forum’s letter states: “… poor farmers surrendered their land, which was their sole means of livelihood. Construction activities had begun, and several villagers earned temporary incomes by supplying construction materials and essential services. However, despite partial construction, the project never became operational, and the hopes of employment and development were completely shattered and villagers who became contractors, raw material suppliers and transporters are now owed massive amounts by Lanco.”

At the time Lanco Infratech claimed bankruptcy, it had already invested nearly ₹7,500 crore in the project. The “super-critical” thermal power project received environmental clearance in February 2010 from the then Congress-led United Progressive Alliance (UPA) government to set up two units of 660 MW each. Land requirement for the project, as per the environmental clearance letter dated February 17, 2010, was 1,168.81 acres.

In March 2015, the Narendra Modi-led National Democratic Alliance (NDA) government extended the clearance by two years. In January 2017, the Modi government extended this clearance further for a period of two years, taking note of the fact that the project had “achieved significant progress (nearly 60 per cent) and that an amount of ₹7,454 crore had been spent by Lanco up to December 2016, out of a total estimated project cost of ₹10,430 crore.”

While extending the project’s environmental clearance, the Union government took cognisance of the factors that had delayed the commissioning of the project and arrived at the conclusion that these were beyond the control of LBPL.

Apart from its construction expenditure, LBPL also spent approximately ₹9.10 crore on corporate social responsibility (CSR) activities. Earlier, it had planned to construct an ash pond, a facility with embankments for the collection, in slurry form, of toxic fly ash generated after combustion of coal in a thermal power project, within the periphery of the power plant. This component of the project was modified in August 2014 to transfer the slurry through a pipeline for collection in a pond proposed to be constructed across the Brahmani River that flows near the site. The project was also reportedly marred by delays owing to lenders not releasing funds on time to keep pace with construction activities. In addition, there were delays in acquiring land for the new ash pond, the ash-pipe corridor and for rail connectivity.

>> Bankrupt Promoter

The NCLT began corporate insolvency resolution proceedings against LBPL, based on a petition filed by the company’s principal lender, ICICI Bank, within a week after a liquidation order was issued against Lanco Infratech.

As per the NCLT, the bankrupt LBPL conducted an e-auction of the land in its possession, that is, 887 acres, on August 27, 2021, in which Saffron Resources Private Limited, a private company incorporated in September 2014, emerged as the highest bidder.

Subsequently, it came to light that an area of land measuring 15.265 acres had been inadvertently registered in favour of Saffron Resources. It was also identified that 21.12 acres, registered in the name of LBPL, was unintentionally excluded from the liquidation estate’s assets. This incongruity was brought to the notice of the stakeholders’ consultation committee appointed for the liquidation, which allowed the compensation of the deficient 15.265 acres from the additional 21.21 acres of land identified later. The NCLT allowed the liquidator to sell the remaining 5.85 acres, which were scattered in small patches across the entire land parcel, at a reserve price of ₹60 lakh through a private sale to Saffron Resources.

The forum of project-affected persons has claimed that the entire sale process was executed at a “grossly undervalued rate of approximately ₹10 lakh per acre”. It states in its letter that land rates were at least eight to ten times higher when the transaction took place: “This valuation is shockingly low and raises serious questions, as industrial land in the same region during the same period was transacted at rates between ₹80 lakh and ₹1 crore per acre. At no stage were the affected villagers, IDCO or the Odisha state government taken into confidence, nor was any transparent benchmarking or independent valuation exercise conducted. This process has caused deep resentment and a strong sense of betrayal among the villagers, who believe that the entire transaction was engineered to deprive them of their lawful rights.”

In a financial disclosure made to the SEBI in July 2025, JSW Steel claimed to have acquired Saffron Resources at an “enterprise value” of ₹679.34 crore. At the time of acquisition, Saffron Resources had not recorded any business turnover in the previous three financial years. The documents further indicate that, at the time, Saffron Resources had no business operations apart from holding the 887 acres of land. The entity appears to exhibit the hallmarks of a shell company, with negligible capital and land as its sole asset.

>> An Unusual ‘Shell’ Company

Saffron Resources was incorporated with the Registrar of Companies in Cuttack (Odisha) in December 2014 with a paid-up capital of just ₹1,00,000. The company registered a loss of ₹16,60,423 as per its balance sheet for the financial year ending March 2024. It has two shareholders, Sourav Agarwal and Amit Singhal, with the former holding 90 per cent of the company’s equity capital.

The forum has claimed that JSW’s takeover of Saffron Resources has not only resulted in financial loss to the landowners but has also caused enormous loss to the state exchequer.

“The Odisha state government has allegedly lost approximately ₹56 crore in stamp duty, while the central government has suffered an estimated short-term capital gains tax loss of nearly ₹200 crore through merger and valuation manipulation. In addition, local contractors, workers and suppliers are owed approximately ₹250 crore, which remains unpaid since the Lanco project collapsed,” its letter states.

But the Odisha government, documents establish, nevertheless, took cognisance of the sale of the 887 acres of land by LBPL. In a letter issued in December 2022, IDCO approved the sale of 299.29 acres, which is the leasehold component of the total land parcel of 887 acres, to Saffron Resources. Through a separate letter in December 2022, it also approved the transfer of an additional parcel of forest land measuring 18.38 acres in favour of Saffron Resources.

This parcel of forest land is also spread across Kharagprasad and Kurunti villages in Dhenkanal district, where the Lanco Group had proposed that the thermal project be set up. Following JSW Steel’s acquisition of Saffron Resources, Odisha’s IDCO executed a lease deed with the company, approving the transfer of 18.38 acres of land for a premium of ₹40.43 lakh and an annual rent of ₹3.36 lakh. The lease agreement dated March 13, 2023, a copy of which has been seen by the authors of this article, indicates the land parcel was allotted to Saffron Resources for industrial development, that is, for setting up an integrated steel plant project.

A questionnaire was emailed to the chairperson and the managing director of IDCO,  Usha Padhee and D. Prasanth Kumar Reddy, respectively, on April 3, asking the organisation to disclose the minutes of the meeting, if any, in which its board of directors approved the leasing of 18.38 acres of forest land to Saffron Resources for setting up an “integrated steel project”. A supplementary questionnaire was emailed to them three days later. We also emailed a questionnaire to Sajjan Jindal, who heads the JSW Group. This article will be updated as and when responses are received.

Saffron Resources was incorporated with a paid-up capital of Rs 1 lakh and an authorised capital of ₹1 crore. Far from having any expertise in the steel industry, it had no business operations at all except for ownership of 887 acres of land.

Further, the lease agreement had set out a condition that Saffron Resources could utilise the land parcel for no other end except for the purpose, that is, industrial development, for which the allotment was made.

“If construction work is not started within six (6) months (as per the condition of allotment), the lease will be deemed to have been cancelled at the end of the six months (as per the condition of allotment). Further, if the land or any part of it is not utilised fully for the purpose for which it is sanctioned/allotted within a period of 3 (three) years, the same shall revert to IDCO free from all encumbrances,” states the lease agreement.

We also requested IDCO to furnish documents to establish the reversal of the land parcel to it, since no construction work whatsoever has been undertaken to date on it.

>> Villagers Seek Justice

In January this year, the Bharatiya Janata Party (BJP) government, headed by Chief Minister Mohan Charan Majhi, cleared the establishment of a 6 million tonnes per annum (MTPA) greenfield steel project in Dhenkanal by Saffron Resources. The estimated cost of the project is ₹35,000 crore and is among seven major industrial projects cleared by the incumbent Majhi government. It has been claimed that the Dhenkanal steel project will generate as many as 8,000 employment opportunities.

Meanwhile, in response to a writ petition filed in the Odisha High Court, the District Magistrate (Collector) of Dhenkanal has been directed to carry out hearings of those who had lost their land for the thermal power project and take an informed decision in the matter within a period of one month. The petition had been filed by a group of landowners from whom IDCO had acquired the land for the Lanco project.

Disposing of the petition, the high court stated in its order dated January 28, 2026: “The petitioners claim to have given up their land in favour of IDCO on the strength of the MoU signed with a private company for establishing a plant. It is their grievance that the concerned company has since retracted from its commitment made in the MoU. As such, the petitioners have submitted a representation to the Collector with a prayer to resume the land on the ground of violation of the MoU.”

The proposed site for JSW Steel’s greenfield project has been termed as contentious from an environmental point of view owing to its proximity to the River Brahmani, a major river of eastern India that is formed by a confluence of two separate rivers, that is, the Sankha and the South Koel, originating in the Chhotanagpur Plateau. As per the environmental impact assessment report prepared by LBPL for obtaining environmental clearance for its now-abandoned thermal power plant, the Brahmani River, the second largest river in Odisha after the Mahanadi, is “at a distance of less than 1 km from [LBPL] project facilities”. In May 2012, the Odisha government had also allowed LBPL to draw 40 cusecs of water for the thermal project. It was in the context of preventing possible environmental contamination of the river waters that LBPL had proposed to set up its ash pond across the Brahmani by pumping fly ash in slurry form through a pipeline.

In view of the changed socio-environmental conditions in the project site area in 2026, the landowners’ forum, as well as local communities, have raised fresh objections to the setting up of a greenfield steel complex near the Brahmani River since the thermal project was given environmental clearance more than 16 years ago.

The project site is also located less than 1 km away from National Highway (NH) 55, as per documents that had been submitted by LBPL to the government of India. A proposal has been lying idle with the Odisha state government for the past several years to construct an approach road, connecting a new bridge across the River Brahmani, with NH 55 through the land that had once been allotted to LBPL for the power plant. The Odisha government had mulled over using LBPL’s land for the approach road, given the fact that local communities had rejected the alternative proposal to allow its passage through numerous settlements and at least five educational institutions in the area.

Meanwhile, the saga continues, and the grievances of local villagers who surrendered their land remain unaddressed.

(The authors are independent journalists)

GFX 1: THE DEAL TIMELINE

  • 2006: 887 acres of land in Dhenkanal allotted to Lanco Infratech for setting up a 1,320 MW power plant
  • 2018: Company pushed into liquidation by NCLT
  • 2021: Land sold via e-auction to Saffron Resources for ₹92 cr
  • 2025: JSW Steel acquires Saffron Resources
  • 2026: Odisha govt clears ₹35,000 cr steel project on same land

GFX 2: THE BONE OF CONTENTION

COLUMN 1  (left-hand side)

Massive Valuation Gap

  • Sale price (2021): ~₹10 lakh per acre
  • Market rate (then): ₹80 lakh-₹1 cr per acre
  • JSW acquisition value (2025): ₹679.34 cr
  • Value escalation without fresh development

‘Shell Company’ Question

  • Saffron Resources:
    • Paid-up capital: ₹1 lakh
    • No turnover for 3 years
    • Sole asset: 887 acres of land
    • Alleged ‘land-holding shell entity’

Project That Never Happened

  • ₹7,500+ crore already invested
  • 60% construction completed
  • Environmental clearance extended twice
  • Plant never operational
  • The result: stranded infrastructure, dismantled machinery

COLUMN 2

Procedural Red Flags

  • No transparent benchmarking of land value
  • Stakeholders (villagers, govt agencies) allegedly not consulted
  • Land parcel discrepancies:
    • 15.265 acres excess transferred
    • 21.12 acres excluded, later adjusted
  • Additional 5.85 acres sold separately

Policy & Legal Context

  • Land acquired under Land Acquisition Act 1894
  • Replaced by Right to Fair Compensation and Transparency in Land Acquisition Act 2013
  • Raises questions on fair compensation & rehabilitation

Villagers’ Allegations

  • “Forced surrender” of livelihood land
  • Fraud, misrepresentation, regulatory arbitrage
  • No jobs, no rehabilitation
  • Demand for:
    • Land return
    • Probe by Securities and Exchange Board of India

GFX 3: WHO GAINED, WHO LOST

Gainers:

  • Saffron Resources (no prior business operations)
  • JSW Group (strategic land acquisition)

Losers:

  • Farmers (land acquired at ₹3-6 lakh per acre)
  • Local contractors (₹250 crore unpaid dues)
  • State & Centre (₹250+ crore estimated tax/stamp duty losses)