State will have to deposit 75% of guaranteed loan taken by a sugar unit
The Debt Recovery Appellate Tribunal (DRAT) as well as the Mumbai High Court on Monday directed the Maharashtra government to deposit 75 per cent of a state guaranteed loan taken the Sindhkheda Co-operative Sugar Factory (SCSF) from the Industrial Development Bank of India (IDBI) and IFCI. SCSF had defaulted on the loan.
The DRAT had earlier directed the state government to deposit Rs 28 crore with it before March 17, only after which it said that it would take up the hearing on the appeal filed by the state against the order of the DRT (II), Mumbai.
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The deadline ended on Monday and the DRAT dismissed the state government appeal filed before it for non-fulfillment of its directive on the deposit amount.
The state government moved the Mumbai High Court on a chamber motion and was in for a second shock when asked by the court to deposit Rs 10 crore with it by March 24, before a hearing would be held on April 3 on the appeal.
The court directive is in consonance with the DRAT order where the state was asked to deposit Rs 28 crore (being 75 per cent of the outstanding amount owed to IDBI and IFCI by SCSF.
Effectively, the cash-strapped Maharashtra government has failed in its bid to seek an exemption from having to deposit a portion of the outstanding amount owed to financial institutions and would be hard pressed to deposit the sum.
According to media reports, it was compelled to dip into its contingency fund (to be used only in emergencies) to make a final settlement to the ICICI on December 31, 2002, on the outstandings of several co-operatives for which it stood guarantor.
The recovery officer of the DRT II in Mumbai had authorised IFCI and IDBI to attach the offices of the secretaries for co-operatives as well as textiles located in Mantralaya to recover Rs 50.69 crore in outstandings owed by SCSF to IFCI, IDBI and ICICI.
Of this amount, Rs 12 crore owed to ICICI has already been cleared through a final settlement made by the state government.
The DRT had also asked the state government to explain why a similar application filed by these financial institutions for attaching the Maharashtra government