Calcutta High Court has admitted a writ petition filed by Tata Steel challenging the rejection of prayer for waiver of loan taken by the steelmaker from Steel Development Fund (SDF).
The total amount of loan taken by Tata Steel stood at Rs 2,751.17 crore, including principal and interest, according to the last audited balance sheet. Tata Steel had sought waiver of the loan taken from SDF in accordance with the direction of the high court passed in an order dated August 3, 2022 and January 3, 2023.
The Union ministry of steel rejected the appeal seeking waiver of loans availed by it from SDF and refund of the balance amount lying in the Fund, by a letter on December 29, 2023. The rejection has been challenged in a writ petition and the first hearing took place on Tuesday.
Court records reviewed by this newspaper revealed that the Steel Development Fund was created in 1978 with the object of modernising and upgrading the iron steel industry in India. The then steel producers imposed a steel development surcharge on per tonne of steel and deposited the money towards building a corpus for SDF.
The Joint Plant Committee (JPC), under the aegis of the steel ministry, was entrusted to manage the SDF on behalf of the central government. Tata Steel continued to contribute to SDF till 1994 and in total it contributed a sum of Rs 1,007.78 crore to the fund.
Tata Steel also took loans from SDF between 1981 and 2000. Other contributors to SDF were either refunded their contribution or the loan taken by them were written off. For instance, public sector steel maker SAIL secured a loan waiver amounting to Rs 5323.71 crore, court records show.
Tata Steel went to court hearing that the Centre plans to appropriate the fund left in SDF to the Consolidated Fund of India in 2005.
Justice Aniruddha Roy on August 3, 2002 ruled that Tata Steel with other main steel producers has a clear right over the said SDF and it is for utilisation of steel producers. The order further stated that in the event the first petitioner (Tata Steel) will apply for receiving any assistance of whatsoever nature, from the corpus of the said SDF, the same shall be considered by the appropriate authority of the central government.