UP lodges FIRs against 6 sugar units over arrears

Against the total payable of over Rs 2,400 crore, the state mills could pay only about Rs 450 crore by June 15

Cracking the whip on private sugar mills over non-payment of arrears pertaining to 2014-15 crushing season, Uttar Pradesh government has lodged fresh First Information Report (FIR) against six units.

These units are owned by some reputed names in sugar business viz. Modi, Mawana and Rana Groups.

Hearing a petition on May 27 over arrears, the Allahabad High Court had directed the sugar mills to settle 25 percent of their respective dues by June 15. However, the mills failed to comply with the order.

Against the total payable of over Rs 2,400 crore, the state mills could pay only about Rs 450 crore by the date, which constituted less than 20 percent of the stipulated payment.

The FIRs were lodged today against Mawana (Meerut district), Modi (Modinagar, Ghaziabad), Gadaura (Maharajganj), Karimganj (Rampur), Belari (Moradabad) and Unn (Shamli). The payment percentage of these mills is less than 20 percent, sources claimed.

During 2014-15, about 75 FIRs had already been registered against mills over non-payment of dues pertaining to the previous and current crushing seasons.

A Mawana Group spokesperson, without broaching on the issue of FIR, said that, "there has been a huge mismatch between sugar cane prices and sugar prices with sugar prices significantly low and will fall further as all mills are selling to pay to farmers. Cane price issue is not been addressed which should be priority."

The officials of other groups could not be reached for comments, while a Rana Group official denied the comment till the time of filing the story.

The cane department is believed to have prepared a list of top defaulting sugar mills for taking action against them if they fail to comply with the HC orders. More action could follow in days to come.

The HC had also directed mills to settle 50 percent and 75 percent of their arrears by June 30 and July 15 respectively. In the current circumstances, the order is not likely to be met.

The state mills had already expressed their inability to meet these deadlines in wake of the purported falling sugar prices and high cane price in UP.

Even the announcement of Rs 6,000 crore soft loan to mills had failed to enthuse them since they were unsure of their repayment capacity from the second year of taking the loan.

Meanwhile, the total arrears on UP mills is about Rs 9,500 crore including interest payments. Of this private mills have the liability of over Rs 8,400 crore.

UP sugar output in the current season, which has rounded off, stands at a little over 7.10 million tonnes.