The Hindu Business Line : HC asks sugar mills to clear cane arrears in 3 weeks

New Delhi, Sept. 25 In a further tightening of the screws on the sugar industry, the Allahabad High Court has issued a mandamus directing the Uttar Pradesh Government to ensure full payment of cane arrears owed to growers by mills “within the next three weeks”.

A two-judge Lucknow bench of the Court, comprising Mr Justice Sanjay Mishra and Mr Justice Rajeev Sharma, said in its order on Tuesday that in the event of payments not being discharged within the stipulated three weeks period, the State Government should have to initiate recovery proceedings against all the defaulting mills. The court’s ruling came in response to a write petition filed on August 10 by Mr V.M. Singh of the Kisan Mazdoor Sangathan.

Further, the UP Government has been asked to file an affidavit of compliance within a week after the stipulated time, to coincide with the next date of hearing on October 23. The order applies to both private as well as Government/cooperative mills.

Mills in UP have accumulated cane arrears totalling almost Rs 1,700 crore against payments for the current 2006-07 season (October-September). With sugar realisations dipping and crushing for the 2007-08 season set to start in November, mills are in the midst of an unprecedented liquidity crisis.

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