While the Calcutta High Court has in its recent ruling allowed the Centre to waive the Steel Development Fund (SDF) loan of Rs 5,454 crore to Steel Authority of India Ltd (SAIL), noting that `special treatment or preference to public sector is legitimate and lawful, it also has, in the same ruling, validated the claim the newer private sector steel companies to seek assistance from the SDF.
"When we are of the view that the benefit of the fund after 1992 should be extended to steel industries in private sector, also, the appellant (Ispat Industries) has a legal right that its representation shouldbe considered for financial assistance from the Steel Development Fund along with other industries in private sector.
"If government is considering the financial assistance to any industry in private sector and deny to appellant in that case the jurisdiction under Article 226 of the Constitution can be invoked," the court ruled.
The court has, however, ruled that before considering the representation of the appellant, the government should take a policy decision to the effect that from the amount available in the SDF, how much should be utilised for the industries in private sector.
"The government should also take further decision that inwhat cases and to what extent the financial assistance can be given to the steel plants and industries in the private sector and after that policy decision consider the case of the applicant along with other similarly applicants for financial assistance from the amount available in the fund," the court ruled.
The high court, however, noted that steel plants and industries in private sector cannot be put at par with the steel plants industries in public sector.
The court also said that in the case of public sector industries, the government can waive the interest or even can write off the loan itself.
Ispat has since moved an appeal in the Supreme Court on the high court ruling.
Ispat claims that the Centre should not write off the Steel Development Fund loan to Steel Authority of India, and added that "under no circumstance (it should) waive the outstanding in the case of Tisco."
