Maha: Coop Sugar Mills directors to be held responsible for loan repayment failure

Mumbai, Aug 26 (IANS) To deal with rising instances of default, the Maharashtra Cabinet during a meeting chaired by Chief Minister Eknath Shinde on Sunday decided to hold the entire board of directors of the cooperative sugar mills responsible for the repayment of the loans drawn from the cooperative banks.  

As per the Cabinet decision, the respective directors will have to submit a bond before disbursal of the loan. In the event of the death or disqualification of the person holding the position of director in the board, the newly appointed director will have to give a bond letter in this regard within 10 days of assuming office. 

The bond is to be issued within 30 days from the date of assumption of office by the elected directors till the loan is fully repaid.

Earlier, it was a condition that this debt should be encumbered by fulfilling legal matters on personal property. Instead, individual and collective responsibility has been placed.

Further, the state Cabinet also decided to cancel the condition of taking the NOC (no-objection certificate) by the cooperative sugar mills from the lender banks while drawing a loan for the second time. 

The state Finance Department objected to the concession to the co-operative sugar mills by cancelling the provision of NOC from the lender banks. 

"In the absence of NOC by the lender bank, if the co-operative sugar mill fails to repay the loan taken previously, then the state government will have to bear the burden as it has given guarantees to these loans," the department said. 

Meanwhile, the state Cabinet also took a decision to approach the Bombay High Court seeking a stay on its orders restraining the government from disbursement of funds under the Marginal Money Loan scheme to the cooperative sugar factories. 

The high court has put a temporary stay on a petition filed by the Raosaheb Dada Pawar Ghodganga cooperative sugar factory associated with NCP-SP legislator Ashok Pawar for the disbursement of funds to over 17 cooperative sugar mills. 

The petitioner had pleaded that they were denied funds under the scheme despite being eligible for the same.

The high court in another ruling had also given a similar stay on a petition filed by the Raigad cooperative sugar mill linked to the Congress legislator Sangram Thopte. 

--IANS

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