Allahabad HC to rule on UP cane arrears case tomorrow

Rashtriya Kisan Mazdoor Sangathan petitioned the court last year for ealrly settlement of cane arrears

In the backdrop of Uttar Pradesh private sugar mills defaulting on sugarcane arrears of Rs 337 crore pertaining to 2013-14 crushing season, Allahabad High Court today heard the case filed by a farmers' advocacy body in the matter.

Last year, a petition was filed by Rashtriya Kisan Mazdoor Sangathan convener V M Singh praying for early settlement of cane arrears.

On September 5, 2014, the HC had directed UP private millers to liquidate their sugar stock by October 31 and settle arrears. At that time, the private mills were carrying dues of about 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 expressed displeasure over arrears despite its orders even as it directed for strict action against the defaulting mills by the respective district magistrates.

Mawana Group, which owns three mills in western UP, is the major defaulter with arrears of almost Rs 200 crore. About six mills are burdened with arrears for the last crushing season.

Now, the HC is likely to pass an order in the case tomorrow.

"We pleaded before the HC that the mills have been deliberately defaulting on the payments and issuing threats of closing down mills if pressurised any further," Singh told Business Standard.

Meanwhile, the UP mills have accumulated arrears of over Rs 5,268 crore for the current 2014-15 crushing season underway. The bulk of dues are on private mills, which account for 94 units of the total 118 mills that participated in crushing this season.

With the cane crop getting exhausted, the mills are slowly started to close down for the season and most of the units are likely to close by mid April.

UP sugar production in the current season has breached 6 million tonnes (MT) mark.