MP tribunal for loan recovery

As a way out of the situation concerning the complicated legal process and to recover dues from various corporate houses, the Madhya Pradesh government today decided to set up a special court for this.

In the light of court instructions regarding recoveries of loans and interests from the corporation, the state government might be forced to spare the amount meant for development schemes to repay these loans.

Considering the situation, the state government will set up a special court for recoveries of loans from the industries so that the loans taken by the corporation could be repaid and the funds meant for development are spent on development.

"The interest on the principal amount has now increased to Rs 532 crore. The department of law will take necessary action for setting up a special court," a chief minister secretariat senior official told Business Standard.

The MP State Industrial Development Corporation has borrowed from the cooperative institutions of Maharashtra, the IDBI Bank and through bonds to distribute loans to units. The corporation had even mortgaged its building in Bhopal to seek loans.

The cooperative institutions of Maharashtra have filed cases in courts to recover loans from the corporation. In addition, separate cases have also been filed against the corporation because some of the cheques it issued to repay the loans to the lending institutions have bounced.

The following are some of the defaulters: the Enbee Group (Rs 66.50 crore); Alpine Group (Rs 28.85 crore); Ruia Group (Rs 43 crore); Essar Group (Rs 15.70 crore), Geekay Exim (Rs 24 crore); AEC Group (Rs 11.60 crore); Bhanu Iron Ltd (Rs 14.40 crore); Rajinder Steels Ltd (Rs 8.55 crore); Sidartha Tubes (Rs 4.50 crore); Titspin Synthetics (Rs 11 crore); Archana Airways (Rs 3 crore); Jamna Autho Industries (Rs 4 crore).

The firms that have reached an agreement with the corporation for repaying loans include Steel Tube of India, the Som Group, the Garha group, Western Tobacco, STL Exports, Itarsi Oil and Flour, and S Kumar's Group.

Of them, some industrialists are not repaying loans as promised under the conditions of agreement. Cases against the firms which have repaid the entire amount will be quashed.

"The case of sanctioning loans by the Corporation to industries without guarantee was handed over the State Economic Offences Wing about a year back, but there is no noticeable progress yet in recovery of loans. The Bureau is also investigating the authorities, which sanctioned loans. Action would be initiated to cease the passports of concerning industrialists," a government statement said.

When contacted the State Economic Offense wing officials said director general of the wing is out of country.