What's in a name? A lot, if it is a name of a corporate entity; more so, if it represented change in control. It took the apex court years to untangle complex legal knots created by the change of name of a company.

Bhushan Ltd signed an MoU with the Government of Orissa, now Odisha, for setting up a 4-million-tonne steel plant in two phases. The State committed iron ore reserves in Keonjhar and Sundargarh districts and recommended allocation of coal blocks and facilitated a captive power plant in the State.

In February 2006, Bhushan Ltd altered its name to Bhushan Power & Steel Ltd (BPSL). The State Government rejected its claim for mining lease on the basis of MoU with Bhushan Ltd.

The Supreme Court in a judgment on March 14 (Bhushan Power & Steel Ltd & Ors vs State of Orissa) directed the State Government to stand by the MoU and ensure raw material security for BPSL. The State has allotted the agreement-specific reserve to some other firms.

The apex court noted that “trouble began to brew” in 2003.

“A decision had been taken to merge Bhushan Ltd with Bhushan Steel and Strips Ltd (BSSL) which had an identity that was separate from that of Bhushan Ltd, though treated to be a family concern under the Bhusan family umbrella,” the judgment recorded. But on February 21, 2003, Mr Brij Bhusan Singhal, Chairman of the Group, said Bhushan Ltd would not be merging with BSSL.

On March 17, 2003, BSSL also wrote to the Chief Minister, informing him that two companies had decided not to merge, with retrospective effect from April 1, 2002, as had been decided earlier.

On May 5, 2003, BSSL informed it was unable to process the setting up of the steel plant and “in order to minimise the friction” between the two family groups, BSSL had decided to set up a separate plant at a different location in Dhankanal district.

> jayanta_mallick@thehindu.co.in

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