The Hindu Business Line : UP sugar mills get respite on cane arrears

Some relief
Mills belonging to the KK Birla Group, Balrampur Chini, Dalmia Cement Bharat and Seksaria Biswan Sugar Factory were similarly given a five-week period for discharging 25 per cent of their arrears by a separate Lucknow bench.

Our Bureau

New Delhi, Oct. 31 Sugar mills in Uttar Pradesh have been granted a major reprieve, with the Allahabad High Court permitting them to discharge 25 per cent of their outstanding cane arrears within 5-6 weeks time.

A two-member bench, comprising Mr Justice Amitava Lala and Mr Justice V.C. Mishra, on October 30 permitted Triveni Engineering, DCM Shriram Industries (Daurala unit), Simbhaoli Sugars, Mawana Sugars, Daya Sugar and Tikaula Sugar Mills to clear 25 per cent cane arrears within six weeks.

Mills belonging to the KK Birla Group, Balrampur Chini, Dalmia Cement Bharat and Seksaria Biswan Sugar Factory were similarly given a five-week period for discharging 25 per cent of their arrears by a separate Lucknow bench under Mr Justice A.N. Varma and Mr Justice S.N. Shukla on October 29. Bajaj Hindusthan Ltd, too, had obtained a separate stay against recovery proceedings on making a lump-sum payment of Rs 20 crore.

The Lucknow bench had on September 25 directed the State Government to ensure full payment of cane arrears by mills within three weeks’ time, failing which to initiate recovery proceedings. Following the order, the State Cane Commissioner issued recovery certificates (RC) against 63-odd mills.

The RCs empower the district magistrate concerned to recover cane dues “as if it were an arrear of land revenue.” In other words, the authorities can simply seize the sugar stocks, plant and machinery and land of the defaulting factory and put them up on auction in order to pay the growers.

But with the Allahabad High Court now allowing mills to pay up only 25 per cent over the next 5-6 weeks, the cash-strapped industry can temporarily breathe easy. The mills – which filed individual petitions seeking stay against implementation of the RCs – have given undertakings that they will make special efforts to discharge the remaining dues.

“They told the Court that once payments in the form of soft loans against excise liability, buffer stock subsidy and various other relief schemes are received, the entire cane arrears can be cleared,” sources said.