The Hindu Business Line : HC order to pay 25% dues to farmers by May 29

SUGAR mills in Uttar Pradesh that are yet to pay up their dues to farmers (following the 2002-03 cane arrears issue) are now required to pay at least 25 per cent of their outstanding amount by May 29 in order to escape "coercive action".

Last month, the State Government had started issuing recovery certificates against mills that had not paid up their dues to farmers.

The temporary respite follows an interim order issued by the Allahabad High Court on April 29 that bars the State Government from taking any action against the mills provided they pay up 25 per cent of their outstanding dues within a month (by May 29).

Moreover, the High Court has directed the mills to shell out another 25 per cent by the following six months. As for the payment of balance 50 per cent of the amount, the High Court will decide the next course of action by the final order.

The next hearing is slated for July 25.

The High Court has asked the State Government not to "disallow mills from selling their sugar or freeze the bank accounts of factories," provided the mills adhere to the repayment schedule worked out by the court.

The UP Sugar Mills Association had moved an amendment application challenging the UP Government order by which the State Government had fixed the cane price at Rs 95 per quintal for 2002-03, informed industry sources.

As on May 4, the total outstanding was at Rs 104.7 crore, with amount paid up equalling Rs 359.89 crore. The mills were required to pay up Rs 464.59 crore, which is basically the cane arrears for the 2002-03 crushing season (October-September), arising from the difference between the statutory minimum price (SMP) announced by the Centre and the higher price `advised' by the State Government (SAP).

While the average SMP during 2002-03 worked out to around Rs 80 a quintal, the SAP for the season was fixed at Rs 95-100 a quintal. Mills had refused to pay the SAP, disputing the authority of the State Government to fix cane prices over and above the Centre's SMP.

But in May 2004, the Supreme Court ruled in favour of the State Government.

As on May 4, the 31 mill units out of a total of 52 units involved had paid up their entire arrears. They include Balrampur Chini (Rs 41.65 crore at its Balrampur, Babhnan and Tulsipur units), Bajaj Hindusthan (Rs 37.03 crore at Gola and Palia Kalan), Mawana Sugars (Rs 14.44 crore at Mawana and Titawi), Seksaria Sugar (Rs 8.42 crore at Biswan), DCM Shriram Consolidated (Rs 5.41 crore at Roopapur), Tikaula Sugar Mills (Rs 4.44 crore), Upper Doab Sugar (Rs 4.09 crore at Shamli) and DCM Shriram Industries (Rs 2.21crore at Daurala), K.K. Birla Group (Rs 53.11 crore at Rosa, Hargaon, Aira and Seohara) and Triveni Engineering (Rs 35.17 crore at Khataoli, Deoband and Ramkola). Simbhaoli Sugar (at Simbhaoli and Chilwaria) has paid up Rs 14.7 crore out of the company's total arrears of about Rs 14.758 crore.

On the other hand, Dhampur Sugar has so far paid up only Rs 17.46 crore out of the outstanding arrears of Rs 47.1 crore at its factories in Dhampur, Mansurpur, Rozagaon and Asmouli.

Similarly, Chadha Sugars has paid up Rs 6.53 crore from its total dues of Rs 12.18 crore at Dhanaura unit, Dewan Sugars Ltd (Agwanpur unit) has paid up only Rs 53.3 lakh out of Rs 9.5crore of arrears, Kamlapur Sugar and Industries Ltd (Majhawali Unit) has liquidated Rs 15 lakh only from its Rs 6.22 crore dues, JK Industries (Meerganj mill) has paid up Rs 7 crore from its Rs 9.84 crore dues, United Provinces Sugar Co Ltd (Seorahi unit) has discharged Rs 4.5 crore from its dues of Rs 8.53 crore and Basti Sugar Mill Company Ltd (Walterganj mill) has paid Rs 3.2 crore from its Rs 6.29 crore of arrears.

Sugar mills that have not started paying any of their dues include Kanoria Sugar and General Manufacturing Co Ltd, (Rs 10.5 crore at Captainganj Unit), Neoli Sugar Factory (Rs 6.96 crore at Neoli), Saraya Sugars (Rs 6.37 crore for its Sardarnagar unit), Agauta Sugar & Chemicals Ltd (Rs 7.93 crore for its Agauta unit).

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