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Union of India - Section

Section 16 in The Sugar Development Fund Rules, 1983

16.

(1)[A sugar undertaking shall ordinarily be eligible for a loan under this rule] [Inserted vide GSR 27(E) dated 12.1.96.]. -
(a)if it is approved by a financial institution or a scheduled bank for financial assistance for the purpose of rehabilitation or modernization of plant and machinery of its sugar factory or any of its sugar factories; and
(b)the rehabilitation or modernization project has been duly appraised by a financial institution or a scheduled bank [omitted] [The words or sponsored by the Technology Information, Forecasting and Assessment Council in respect of the Scheme Mission Mode Project on Sugar Production Technologies of the Department of Science and Technology shall normally be eligible for a loan under this rule omitted vide GSR 599 dated 30.07.2012.]
[Provided that a sugar undertaking that has availed of a loan in respect of a sugar factory under this rule shall not be eligible for any further loan under this rule during the period in which the previous loan under this rule or a loan under sub-rule (1) of rule 21 in respect of that factory, along with interest thereon, has not been fully repaid] [Substituted vide GSR 599 dated 30.07.2012.]Provided that Committee may, with the previous approval of the Central Government make any class or classes of sugar factories or sugar undertaking ineligible for such assistance.Provided further that where the Committee decides that an applicant is not eligible, reasons therefor shall be recorded in writing.
(1A)[ A sugar undertaking shall not be eligible to apply for a loan under this rule for one or more of the following reasons or purposes, namely:-
(a)a second hand project, equipment or machinery:
Provided that a sugar undertaking shall be eligible to apply for a loan for a project where second hand equipment or machinery has been used or is proposed to be used, subject to the following conditions, namely:-
(i)use of such second hand machinery or equipment shall not change the overall character of the project, which shall essentially consist of new plant, machinery and equipment;
(ii)it shall technically be certified that the use of the second hand machinery or equipment shall not affect the overall efficiency and life of the project;
(iii)the useful life of the second hand machinery or equipment so used shall not be less than the term of repayment of sugar development fund loan;
(iv)subject to fulfilment of conditions specified in clauses (i) to (iii), the estimated or actual cost of machinery or equipment which are not new shall be deducted from the estimated or actual cost of the project before arriving at the eligible project cost for the purpose of sugar development fund loan;
(b)refinancing;
Explanation. - For the purpose of this clause, the term 'refinancing' includes availing of loan for repayment of loan taken from any financial institution or scheduled bank before applying to a financial institution or bank for appraisal in which Sugar Development Fund component is proposed, but shall not include a 'bridge loan' taken in lieu of Sugar Development Fund component after submitting an application to the Standing Committee on Sugar Development Fund.
(c)financing of cost over run;
(d)project commissioned prior to the date of application under these rules;
(e)if such sugar undertaking is a defaulter in respect of repayment of loan availed under Sugar Development Fund or in payment of any dues under the Levy Sugar Price Equalisation Fund in respect of any of its sugar factories.]
(2)Any eligible sugar undertaking under sub-rule (1); may make an application to the Committee in, Form-II, along with [two] [Substituted vide GSR 599 dated 30.07.2012.] certified copies thereof.
(3)The Member-Secretary of the Committee shall, as soon as may be, after the receipt of an application referred to in sub-rule (2), place the application before the Committee along with his comments, if any, for the Committee's consideration.
(4)It shall be open to the Committee before taking a final decision on an application to,
(a)call for, any further information from the applicant; or
(b)appoint a sub-committee or expert to make an investigation and report on any aspect relating to the application.
[* * *] [Omitted '(5) The final decision of the committee on any application shall be submitted to the Central Government in the form of a recommendation' by Notification No. G.S.R. 23 (E), dated 13.1.2016 (w.e.f. 27.9.1983).]
(6)[ The Central Government may, after taking into consideration recommendations made by the Committee or any other relevant factor, authorise payment to a sugar undertaking of such amount of loan, not exceeding the amount required by the financial institution or a scheduled bank, as the case may be, to be contributed by such sugar undertaking as promoter's contribution, as may be determined by the Central Government:Provided that the loan from the Fund shall be granted if the sugar undertaking contributes a minimum of ten percent of the loan applied for from its own resources as promoter's contribution:Provided further that the Central Government shall authorise payment of the said loan under this sub-rule only to such sugar undertaking who have fully repaid all the sums which have become due in respect of Sugar Development Fund and Levy Sugar Price Equalisation Fund.] [Substituted vide GSR 599 dated 30.07.2012.]
(7)The amount of loan authorised under sub-rule (6) shall be disbursed by the Central Government to the sugar undertakings or paid by it to the [financial institution or a scheduled bank, as the case may be] [Substituted vide GSR(E) dated 15.9.06 for 'financial institution'.] for disbursement, to the sugar undertaking, either in lump sum or in two or-more instalments as may be considered necessary by the Central Government.
(8)The [financial institution or a scheduled bank, as the case may be] [Substituted vide GSR 558(E) dated 15.9.06 for 'financial institution'.] shall treat the amount paid to it under sub-rule (7) as the promoter's contribution or as part thereof, required to be raised by the sugar undertaking for availing of the loan under its relevant scheme for modernisation and rehabilitation,
(9)
(i)Every disbursement of a loan referred to in sub-rule (7) shall be preceded by a bilateral agreement between the Central Government and the sugar undertaking concerned or, as the case may be, by a tripartite agreement between the Central Government, the sugar undertaking concerned and the [nodal agency so appointed by the Central Government on its behalf] [Substituted vide GSR 599 dated 30.07.2012.]
(ii)The bilateral agreement, or as the case may be, the tripartite agreement referred to in sub-clause (1) shall contain the terms and conditions with regard to the period of repayment including the number and amount of instalments, payment of interest, the manner of such repayment/payment and any other matter incidental to the loan. [omitted] [The words [and shall, as far as possible, be identical to the terms and conditions of the agreement relating to the relevant scheme for modernisation and rehabilitation of the financial institution and all other terms and conditions including rate of interest and the form of agreement for grant of loans shall, as far as possible be on the lines of the terms and conditions of the agreement relating to the said scheme] omitted vide GSR 838(E) dated 14.11.85.]
[(ii-A) and (iii)] Omitted[Inserted vide GSR 599 dated 30.07.2012.]
Deleted vide GSR188(E) dated 9.3.07"The sugar undertaking shall, after the execution of the agreement referred to ill clause (i) above, and before the disbursement of the loan under sub-rule (7), furnish security for the loan to the satisfaction of the Central Government.]"(b) The security shall cover the amount of loan and interest thereon for the full period of repayment as provided ill clause (iv), and shall be furnished in any of the following manners, namely :(1) Bank Guarantee from a Scheduled Bank, or(2) A mortgage or all immovable and movable properties of the sugar undertaking on pari passu charge basis failing which on the basis of an exclusive second charge.]inserted vide GSR 953(E) dated 17.12.03(iii) [ The loan from the Sugar Development Fund will carry a concessional rate of simple interest of [two per cent below the bank rate]substituted vide GSR 687(E) dated 21.10.04for [9 per cent]substituted vide GSR 235(E) dated 24.4.91for "6 per cent" per annum [in respect of the projects approved by a [financial institution or a scheduled bank, as the case may be]substituted vide GSR 558(E) dated 15.9.06for "financial institution" and for the projects sponsored by the Technology Information, Forecasting and Assessment Council [two per cent below the bank rate]inserted vide GSR 687(E) dated 21.10.04for six per cent per annum]inserted vide GSR 27(E) dated 12.1.96In case of any default in repayment of the amount of loan, or payment of any instalment thereof or interest thereon, an additional interest at the rate of two and half percent per annum on the amount of default shall be payable by the sugar undertaking.]deleted vide GSR 188(E) dated 9.3.07.
(iv)[The repayment of loan under this rule together with interest thereon shall commence after the expiry of one year from the date of repayment/ payment of institutional loan and interest thereon in full or on the expiry of [a period of five years reckoned from the date of disbursement of fund loan, whichever is earlier, and loan from the fund along with interest due thereon shall be recoverable in half yearly instalments not exceeding ten.] [Inserted vide GSR 599 dated 30.07.2012.]
[Proviso - omitted] [Omitted vide GSR 599 dated 30.07.2012.]
(10)[Omitted] [[[Repayment of the loan granted under this rule and payment of interest thereon shall, if the terms and conditions of the agreement so provide, be made by the sugar undertaking through the financial institution and such repayment and payment shall run concurrently with the repayment and payment to the financial institution of the loan paid by that institution under its relevant scheme for modernisation and rehabilitation:Provided that the amount of each instalment of repayment of the loan under this rule shall bear the same proportion to the corresponding instalment payable to the financial institution as the amount of loan granted from the Fund has to the amount of the loan granted under the relevant scheme of that institution for modernisation and rehabilitation.]]]
(11)[Omitted] [Omitted vide GSR 559 dated 30.07.2012.]