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SAIL legal action against defaulters

Our Bureau

NEW DELHI, June 4

THE Steel Authority of India Ltd (SAIL) has initiated legal proceedings against a number of its defaulting customers. It has also filed criminal suits against the directors of these defaulting companies.

According to official sources, although the defaulters account for a small percentage of SAIL's customer base, the move to file such petitions stems from the need to check the trend of non-payment of dues.

SAIL has filed a petition in the Madhya Pradesh High Court (Indore bench) for winding up Steel Tubes of India (STI) in Dewas to recover the dues amounting to Rs. 13 crores.

An MoU customer, STI had purchased HR/CR coils from SAIL on unsecured credit in 1998-99. The company failed to honour its commitment to pay in time, followed by dishonour of its cheque issued later.

SAIL has also urged the Madhya Pradesh Government to use its good offices to clear the dues as it is learnt that STI is in the process of finalising arrangements for securitisation of its future earnings with Unit Trust of India.

The sources said SAIL had also filed a petition under the Companies Act in the Madras High Court to wind up Essar Projects Ltd, which failed to pay the Rs. 6.6 crores against supply of steel materials.

In the case of another defaulter, Gujarat Steel Tubes, which was declared sick and referred to the BIFR, SAIL has sought BIFR's permission to proceed with its case against the company for the recovery of Rs. 5.96 crores.

Legal proceedings are continuing against Atma Steel Ltd, Ghaziabad, Atma Tube Products Ltd, Chandigarh, BDS Steel, Jalandhar, Kalashpati Steel Industries Ltd, Ghaziabad, and Jain Tubes, Delhi.