UP private sugar mills deposit Rs 700 cr with District Magistrates

Mills had been directed to liquidate 15% of their stock within three weeks to pay their dues

Uttar Pradesh private sugar mills have deposited nearly Rs 700 crore with the respective district magistrates (DM) after selling their sugar stock as per the Allahabad High Court order.

On August 13, the HC hearing a case on sugarcane arrears had directed mills to liquidate their stock for clearing dues.

The mills had been directed to liquidate 15 percent of their respective stock within three weeks and fixing September 3 for next hearing. The court had fixed Rs 3,100/quintal as floor price for the sale.

The mills were asked to deposit the realisations with the DMs, of which 30 percent would go towards clearing dues, while the status of the remaining 70 percent would be decided later by the HC.

UP Sugar Mills Association (UPSMA) today informed court 65 mills had sold nearly 2,35,862 tonnes of sugar till August 31 and collectively deposited over Rs 701 crore with the DMs.

The DMs are mandated to transfer this money to the respective cane societies for ultimate payment to farmers.

The stock in hand of these 65 mills had stood at over 2.248 million tonnes on August 13 and 15 percent stock would have meant liquidating about 3,37,235 tonnes of the sweetener.

Meanwhile, hearing remained inconclusive and would continue tomorrow.

The HC is hearing a petition filed by Rashtriya Kisan Mazdoor Sangathan convener V M Singh over arrears, which currently stand at almost Rs 5,000 crore on private mills.

UP sugar sector is estimated at Rs 30,000 crore and represents the largest organised industry.

State Bank of India (SBI), Punjab National Bank (PNB) and UP Cooperative Bank had already staked preferential right on the liquidation proceeds of sugar stock, contending the mills had taken working capital loans based on the stock.