The Steel Development Fund benefits are limited to member steel producers, and individual plants cannot claim ownership or waiver as a matter of right, especially without demonstrating financial distress.

JUDGMENT :

SABYASACHI BHATTACHARYYA, J.

1. The petitioner no. 1, Tata Steel Limited (TSL) was originally incorporated on August 26, 1907 as Tata Iron and Steel Company Limited (TISCO). Its name was changed to Tata Steel Limited on August 12, 2005 and a fresh certification of incorporation, consequent upon change of name, was issued by the Office of the Registrar of Companies, Maharashtra.

2. The present dispute centers around the competing claims of petitioner no. 1 and the Steel Authority of India Limited (SAIL), a public sector undertaking, to a fund known as the “Steel Development Fund” (for short “SDF”). TSL claimed waiver of its loans taken against the Steel Development Fund (SDF) which was refused by the respondent-Authorities, leading to the present writ petition. The arguments of the petitioners revolve around the respective rights of TSL, SAIL and the Government of India to the SDF. The parties rely on three important judgments and the interpretation thereof to advance their arguments.

3. The first such judgment is Ispat Industries Ltd. & Anr. Vs. Union of India & Ors. (2000) 4 SCC 137 (hereinafter referred to as “the Ispat Judgment”), the second Tata Iron & Steel Co. Ltd. vs. Collector of Central Excise, Jamshedpur , (2002) 8 SCC 338 (for short “the TISCO Judgment”) and the third a judgment rendered by a learned Single Judge of this Court in WPO No. 70 of 2006 [Tata Steel Ltd. & Anr. Vs. Union of India & Ors.].

4. The Ispat Judgment was rendered by the Supreme Court while hearing a Special Leave Petition (SLP) preferred by Ispat Industries Limited, a private sector company operating in the iron and steel industry, claiming benefits from the SDF. Although the Supreme Court ultimately refused to entertain the SLP, a detailed judgment was passed while doing so.

5. The petitioners contend that the Division Bench judgment, from which the SLP was preferred, merged into the Supreme Court judgment despite the SLP not having been entertained. Thus, the findings rendered by the Division Bench were rendered academic by the observations of the Supreme Court.

6. The Union of India controverts such submission and argues that in view of the refusal of the SLP, it is the Division Bench judgment which still holds the field, as the doctrine of merger is not applicable.

7. It is argued by learned senior counsel appearing for the petitioners that in the Ispat Judgment, the Supreme Court held that the SDF has no statutory backing, having been created by administrative orders, and recognized that contributions were made to the said fund by SAIL and TISCO. It was further held that the funds had not passed into the hands of the Government and were for utilization by the member steel plants only, that is the main steel plants, which contributed to the said fund.

8. It is argued that the primary issues were answered by the Supreme Court in the Ispat Judgment, thereby rendering nugatory the observations of the Division Bench that the main steel plant owners were not the owners of the SDF but were mere collectors of fund and that Ispat could apply for financial help from SDF if the Central Government decided to formulate a policy to extend SDF to private sector industries. Also, the distinction drawn between the private and public sector by the Division Bench was turned down by the Supreme Court.

9. In the TISCO Judgment, it is argued that the Supreme Court held that the corpus constituting the SDF was created from an element of the price charged by the main steel producers, who were the only legitimate beneficiaries of such funds.

10. The petitioners also rely on the observations of the Learned Single Judge in WPO 70 of 2006 where it was held that the corpus of the SDF is earma