Section 26 in The Sugar Development Fund Rules, 1983
26. [Restructuring of loans of potentially viable sick sugar undertaking.] [Inserted by Notification No. G.S.R. 885(E), dated 17.9.2018 (w.e.f. 27.9.1983).]
(1)Notwithstanding anything contained in the rules 16, 17, 21, 22, [22A] [Inserted by Notification No. G.S.R. 847(E), dated 9.11.2015 (w.e.f. 27.9.1983).] 23, 24 and 25, the Central Government may, after taking into consideration the scheme of rehabilitation circulated by the Board for Industrial and Financial Reconstruction or the scheme recommended by the Committee for rehabilitation, as the case may be, and any other relevant factor, restructure the loan, interest or additional interest on account of default thereof of a potentially viable sick sugar undertaking,[Provided that while so restructuring, no portion of the outstanding principal or simple interest at applicable rates at the relevant time shall be waived off:Provided further that the Central Government may, at its discretion, waive additional interest in full or in part, for reasons to be recorded in writing.] [Inserted vide GSR 599 dated 30.07.2012.](2)A potentially viable sick sugar undertaking shall be eligible to apply for restructuring of loan, interest or additional interest on account of default thereof.Provided that the restructuring has been recommended in the Draft Rehabilitation Scheme circulated by the Board for Industrial and Financial Reconstruction, or recommended by the Committee for Rehabilitation in the scheme for rehabilitation for sugar undertakings, as the case may be :Provided further that the sugar undertaking shall, during such period till such restructured loans are fully repaid, be eligible for loans only if it is a part of the rehabilitation scheme under rule 21 for modernization or rehabilitation and cane development schemes only:Provided also that no undertaking shall be eligible for reliefs and concessions more than once.(3)Any eligible sugar undertaking referred to in sub-rule (2) shall make an application for restructuring to the Committee in [Form XI] [Substituted vide GSR 115(E) dated 28.2.08 for Form IX.](4)The Member-Secretary of the Committee shall soon after receipt of the recommendations of Board for Industrial and Financial Reconstruction or Committee for Rehabilitation, as the case may be, place the same before the said Committee alongwith his comments if any, for the Committee's consideration:(5)The Committee, before making a final decision on the recommendations satisfies itself that adequate reliefs or concessions from the other lenders namely, banks, financial institutions, State Governments and other agencies if any, have been provided in the restructuring package and such reliefs or concessions have been accepted by the concerned agencies to be provided to the sugar undertaking.(6)The Committee shall, before making a final decision on an application made to it for the purpose of rule 26,(a)call for any further information from the sugar undertaking or the recommending agency referred to in sub-rule (1).(b)appoint a sub-committee or expert to make an investigation and report on any aspect relating to the recommendations of the Board for Industrial and Financial Reconstruction or the Committee for rehabilitation.(7)The Committee shall submit its recommendations to the Central Government.(8)The Central Government may, after consideration of the recommendation of the Committee and any other relevant facts, authorise restructuring subject to such terms and conditions as the Central Government may decide and communicate to the sugar undertaking for acceptance of the same by the sugar undertaking in writing.(9)(a)The restructured loan under this rule shall carry a rate of simple interest equivalent to the prevailing Reserve Bank of India bank rate, from the date of implementation of the rehabilitation package.(b)In case of any default in repayment of the amount of loan or payment of any instalment thereof or interest thereon on the restructured loan, an additional interest at the rate of [six percent per annum on the amount of default or at such rate as may be decided by the Central Government shall be] [Substituted vide GSR 599 dated 30.07.2012.] payable by the sugar undertaking.(10)The rehabilitation scheme shall be implemented after a bipartite agreement is entered into between the Central Government and the sugar undertaking:Provided that in the case of cooperative or public sugar undertaking, if there are any reliefs and concessions required from the State Government, the scheme shall be implemented after a tripartite agreement is executed amongst the Central Government, the sugar undertaking and the Government of the State in which the sugar undertaking is situated.(11)(a)The sugar undertaking shall after execution of the agreement, referred to in sub-rule (10), furnish security for the restructured loan to the satisfaction of the Central Government.(b)The security shall cover the amount of loan and interest for the full period of repayment as provided for in the rehabilitation scheme as accepted by the Central Government and additional interest on account of default as referred to in clause (b) of rule 9 and shall be furnished in any of the following manners, namely:(i)bank guarantee from a Scheduled Bank; or(ii)a mortgage on all immovable and movable properties of the sugar undertaking on pari passu first charge basis.(12)The rehabilitation scheme shall become effective after the agreement referred to in sub-rule (10) is entered into and the security as provided in sub-rule (11) is furnished by the sugar undertaking.(13)(a)A monitoring agency, nominated by the Central Government, shall, carry out periodic reviews of the operation and financial performance, including its cash flow, and progress of the undertaking regarding implementation of the rehabilitation scheme.(b)The monitoring agency shall, from time to time, with the approval of the Central Government, advise the undertaking to take corrective steps to' ensure that projected parameters of the scheme are met.(14)In Case of more than two consecutive defaults in repayment of the loan or instalment thereof, the Central Government shall realize the entire loan, interest along with additional interest thereon from the bank guarantee furnished under sub-rule (11) or any claim of the [any sugar factory under the sugar undertaking] [Substituted vide GSR 599 dated 30.07.2012.] against the Central Government or any other security provided for the loan.
