The Allahabad High Court has directed the promoters of Mawana Sugars and Modi Industries to make part-payment of the outstanding cane arrears to farmers for 2013-14 within the next fortnight. The court has ruled that if the owners do not abide by its order, they should be ready to face arrest.
According to the court’s direction, Mawana must pay R50 crore by April 15, while Modi Sugars must pay R37 crore for its Modinagar factory and 50% out of the R86.8 crore outstanding for Malakpur factory till April 20. The next date of hearing has been fixed for April 24.
In addition, the court ruled that no sugar mill in UP can close its factory until the entire cane in its reserved area is crushed. In case it does close, it will anyway have to make the payment for the standing crop that it has failed to crush.
At present, as many as 29 sugar factories have already closed down for the season, despite the fact that they have not exhausted the standing crop that still remains standing in the fields.
It may be mentioned that the sugar factories sign an agreement with the cane societies that they would crush the agreed quantity of cane that has been allotted and reserved for them. As a result, the farmers are being forced to sell the remaining cane to kolhus and crushers, who are taking advantage of their condition and purchasing the cane at dirt cheap prices.
The total outstanding cane dues for 2013-14 as on date are still approximately R325 crore.
On September 5, 2014, the high court had asked the mills to liquidate their sugar stocks and clear the arrears for 2013-14, which at that time stood at about R4,600 crore. When the mills failed to clear the dues fully, VM Singh, convener of the Rashtriya Kisan Mazdoor Sangathan, accused the mills of contempt of court and as a result, on February 25, the court directed the district magistrates to take strict action against the mills that had defaulted on the payments to farmers. Three companies — Mawana Sugars, Modi Sugars and Simbhaoli Sugars — still owe farmers about R325 crore, out of which, Simbhaoli has promised to clear the payments in the next fortnight.
Interestingly, the court has taken the non-payment of dues for 2013-14 very seriously, while no one is yet talking of the current season’s dues which have also piled up to over R5,375 crore.
“We realise the precarious condition of the sugar companies, especially in the light of the fact that sugar prices have nosedived and are at an all-time low. That is the reason why we are not even pressurising them yet to make time-bound payments for the current season,” said a senior official of the UP government. “But if some mills are not even paying last season’s dues, that is a serious crime,” he