Section 25(5) in The Sugar Development Fund Rules, 1983
(5)The security shall cover the amount of loan and interest thereon for the full period of repayment as provided in the Rules and further additional interest on the amount of default as provided in sub-rule (3) above, 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 factory on pari passu first charge basis failing which on the basis of an exclusive second charge:Provided that [in case of short term loans under Rules 16A and 17A, any sugar undertaking and] [Inserted vide GSR 508(E) dated 7.7.09.] in case of sugarcane development loan under Rules 17 and 21, a cooperative sugar undertaking can furnish the security in the form of State Government Guarantee.
