Sc Flays Idbi Over Ashok Mills Revival

The Supreme Court has severely criticised the Industrial Development Bank of India (IDBI) for scuttling the revival scheme for Ashok Paper Mills, framed by the central government and approved by the court.

A three-judge bench directed that all persons and institutions concerned should participate in the implementation of the scheme. The finance secretary was directed to ensure that the legal conditions were fulfilled, the mill was rehabilitated and both phases of the scheme were given effect to.

IDBI had raised certain technical difficulties in the implementation of the scheme, though there was consensus earlier. Commenting on this, the court observed, "We think that the attitude of IDBI is reprehensible. The financial institution, when it is called upon to build up India as an industrial country, is under a duty to ensure industrial growth."

 

The scheme was approved by the court in July 1996 in a writ petition filed by the Ashok Paper Mills employees' union five years ago. However, the court noted that some hurdles were raised to discourage restarting of the factory.

When technicalities were raised the court had asked the cabinet secretary to look into the matter.

He reported that IDBI was backing out of the scheme and declining to grant the loans.