Allahabad HC orders UP sugar mills to clear arrears by Apr 20

Mawana, Modi groups among major defaulters

Allahabad High Court on Wednesday directed the defaulting private sugar mills in Uttar Pradesh to settle their cane arrears by April 20.

These dues, which currently stand at about Rs 334 crore, pertain to the last sugarcane crushing season 2013-14. The court has posted the matter for next hearing on April 21.

Mawana, which operates three sugar mills in western UP, is the biggest defaulter with at least Rs 194 crore as dues. Modi Group with two units in the state is the other major defaulter carrying Rs 125 crore arrears. The Simbhaoli Group is also burdened with arrears for the last crushing season. The court asked these mills to clear their dues, while turning down the proposal of the Mawana group to pay only a part of their arrears before the next hearing date. This case was filed by Rashtriya Kisan Mazdoor Sangathan convener V M Singh last year for early settlement of cane arrears. On September 5, 2014, the court had directed UP mills to liquidate their sugar stock by October 31 and settle arrears. At that point, the private mills were carrying dues of Rs 4,600 crore for 2013-14.

However, the stipulated timeline was not met and later Singh filed a contempt petition. On February 25, 2015, the HC had directed for strict action against the defaulting mills by the respective district magistrates. Meanwhile, Singh on Wednesday argued before the court that the current crushing season was still on, yet some private mills had started to shut operations even as the farmers’ crop was still standing in the field. He claimed 29 mills of the total 118 mills had closed down in UP so far. The HC observed the mills should not stop crushing unless all the cane in their respective area had been exhausted.

A senior sugar department official told Business Standard no mill in the current crushing season had closed down without their allocated cane area getting exhausted.