SC dismisses SLof I spat Industries

By T. Padmanabha Rao

NEW DELHI, APRIL 5. The Supreme Court has dismissed a special leave petition (SLP) from Ispat Industries Limited and another (petitioners) against a Division Bench judgment of the Calcutta High Court which dismissed the petitioner's writ petition seeking to restrain the Union of India and the `Joint Plant Committee' (JPC) from utilisation of the `steel development fund' (SDF) for the sole benefit of SAIL (Steel Authority of India Limited) and TISCO.

Mr. Justice D. P. Wadhwa delivering the judgment of the Bench said ``the petitioner does not have any right to claim any relief in the writ petition pertaining to utilisation of the SDF. It is quite apparent that from the very nature of the creation of the SDF, manner of remittance to the SDF and purpose of its utilisation. It is a fund created ultimately for the utilisation by the member steel producers only''.

The Bench which included Mr. Justice A. P. Misra said that while there was `price control' (in respect of iron and steel) under the `Control Order' during the period 1978-1994 when the remittance to the SDF were made by `main steel producers', the ``petitioner was nowhere in the picture and was not subjected to any price control such as the main steel producers''.

The petitioner and other steel producers were free to produce and sell the iron and steel products in the market on the prevailing prices, the Bench observed and added that it had been pointed that price fixed by the petitioner of its products was much higher than the `control price' which included elements of the SDF.``While the collection and remittance of the SDF has been discontinued with effect from April 1994, the petitioner made its claim for the first time in 1999 which would appear to be rather incongruous,'' the Bench said.

The SAIL had stressed immediate need for restructuring and modernising all the main steel plants and due to recession, it had been passing through severe financial position and had to suffer a loss of Rs. 1,574 crores in 1998-99. It had to further suffer burden of interest to the tune of Rs. 2,017 crores per annum for modernisation, the Bench added.

The SDF was created by notification issued under Clause 17 (B) of the `Control Order' and main steel plants formed the primary units of the JPC and it were only the member steel plants or the main steel plants who were subjected to add an element of their ex-works-price and remit the same towards the SDF, the Bench said.

The SAIL and the TISCO were the member steel plants. The SAIL had four plants at Bhilai, Bokaro, Durgapur and Rourkela. It was the Central Government, which exercised control over the SDF though ``there is no backing of any statutory provision for creation of the SDF'' and the primary object of the SDF was to enable the main steel producers for modernisation, research and development with the object of ensuring the production of iron and steel in the desired categories and grades by the main steel plants, the Bench observed.

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