English: Wordmark of Essar. Trademarked by Essar.


English: Wordmark of Tata Motors

English: Wordmark of Tata Motors (Photo credit: Wikipedia)


S Reporter  |  Mumbai/ Ahmedabad  April 26, 2013 Last Updated at 20:30 IST

Alleges that the companies received favours from state govt; asks them to file replies on affidavit


Gujarat High Court on Friday issued notices to Tata Motors Ltd, Essar Steel Ltd, Larsen & Tubro (L&T) and Gujarat International Finance Tech (GIFT) City Company Limited while hearing separate public interest litigations (PILs) alleging that the companies received favours from state government.

A division bench of Chief Justice Bhaskar Bhattacharya and Justice J B Pardiwala while issuing notices have asked them to file replies on affidavit and have scheduled further hearing in June after the court vacation.

The PIL against Tata Motor Ltd (TML) alleges state government had violated policy by giving tax and financial reliefs against the VAT payable by the company. It has further claimed that government had wrongly disbursed over Rs 300 crore loan at 0.1 per cent payable after 20 years of TML’s Nano car plant operations. It said that state government’s move “is a deliberate action against the interest of public at large which is also beyond the purview of state government and also dehors the law.”

PIL has demanded cancellation of the loan given by state government to TML. It has further alleged that the company was “misusing and abusing the condition of the tax relief granted” to get soft loans from the state government. “Total sales of the NANO car are shown to have been made to a wholly owned subsidiary company of TML in state of Gujarat and later on cars are indirectly sold all over the country and other states of India by that wholly owned subsidiary company,” the PIL said, adding that the company manipulated sales figures to get more loan from government.

Meanwhile other PILs against L&T, Essar Steel Ltd and Gift City have claimed that the land allotment to the entities was done without following proper procedures, resulting in private companies getting undue benefits from the state government.

They have further claimed that government land was allotted to the companies at throw away prices without competitive bidding process, causing a loss crores of rupees to the state exchequer. The PILs have cited the latest report of the Comptroller and Auditor General (CAG) of India where these issues have been raised.