Section 22 in The Sugar Development Fund Rules, 1983
22.
[(1) Any sugar factory of an undertaking having an installed capacity of 2500 Tonnes Crushed per Day or higher to which financial assistance has been approved by a financial institution or a scheduled bank for it to implement a project for production of anhydrous alcohol or ethanol from alcohol or molasses by installing the required plant and machinery shall be eligible to apply for loan under this rule:Provided that at least ten percent of the project cost is being met by the sugar factory of an undertaking from its own internal generation of fund as part of the promoters contribution required by the financial institution or the scheduled bank.] [Substituted vide GSR 599 dated 30.07.2012.](2)[ A sugar undertaking that has availed of a loan in respect of a sugar factory under this rule shall not be eligible for another loan for the same sugar factory during the period in which the previous loan under this rule along with interest thereon has not been fully repaid.] [Substituted vide GSR 599 dated 30.07.2012.](3)[ A sugar undertaking which is in default of payment that has become due in respect of the Sugar Development Fund and the Levy Sugar Price Equalisation Fund relating to any of the sugar factories or units under it shall not be eligible to apply for a loan under this rule.] [Substituted vide GSR 599 dated 30.07.2012.](4)[ 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 purposes of this clause and clause (b) of sub-rule (3) of rule 22A,-(A)"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 Fund component is proposed, but shall not include a `bridge loan' taken in lieu of Fund component after submitting an application to the Standing Committee on Fund;(B)"bridge loan" means a short loan from any Financial Institution in lieu for Fund loan and the same shall be repaid on disbursement of the same.](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.](5)The Committee may, with the previous approval of the Central Government make any class or classes of sugar undertaking ineligible for loan under this rule.Provided that where the Committee decides that an applicant is not eligible, reasons therefore shall be recorded in writing:(6)An eligible sugar undertaking under this rule, shall make an application to the Committee in Form VII in duplicate along with a copy each of its balance sheet and profit and loss account for the last three consecutive years preceding the year in which the application is made.(7)(i)All applications made under sub-rule (6) shall first be placed before the sub-committee constituted by the Committee for this purpose.(ii)The Member Secretary of the Committee, who shall be the convener of the sub-committee, shall call a meeting of the sub-committee at least once in-every month, provided that in a month in which the Committee has received no application, it shall not be necessary to hold the meeting.(iii)The sub-committee shall consider the application and all other relevant factors and give its recommendation for the consideration of the Committee in its next meeting.(8)It shall be open to the Committee and the sub-committee to call for any further information from the applicant or refer the matter to an expert or group of experts to make an investigation and report on any aspect relating to the application before making their recommendations,(9)(a)The Committee shall after taking into account the recommendations of the sub-committee, and after considering the information or report obtained by the Committee tinder sub-rule (8), if any, and all relevant aspects, make its recommendations as to the amount of loan that may be made to the sugar undertaking.(b)The Committee may also, with the previous approval of the Central Government; issue directions to the sub-committee to make a recommendation directly to the Central Government on the amount of loan that may be made to the sugar undertaking.(10)(a)In respect of a sugar undertaking that has applied for a loan, falling [under this rule] [Substituted vide GSR 599 dated 30.07.2012.], the Central Government may after consideration of the recommendation of the Committee and any other relevant factor with view to improving its viability, authorise payment of such amount of loan not exceeding the amount required by the Financial Institution or the scheduled Bank, as the case may be, to be contributed by such sugar undertaking as promoters' contribution as may be determined by the Central Government.(b)[ - omitted] [Omitted vide GSR 599 dated 30.07.2012.](c)[ - omitted] [Omitted vide GSR 599 dated 30.07.2012.](11)[ The amount of loan authorised under sub-rule (10) shall be disbursed by the Central Government to the sugar undertaking or paid by it to the Financial Institution or the Scheduled Bank, as the case may be, for disbursement to the sugar undertaking either in lump sum or in instalments as may be considered necessary by the Central Government.] [Substituted vide GSR 599 dated 30.07.2012.](12)The Financial Institution or the Scheduled Bank, as the case may be, shall treat the amount authorised [omitted] [The words under clause (a) [or clause (c)] of sub-rule (10) omitted vide GSR 599 dated 30.07.2012.] as a part of the promoters' contribution.(13)[ Omitted] [Deleted vide GSR 188(E) dated 9.3.07 'The loan from the Fund under this rule shall carry a rate of simple interest of [two per cent below the bank rate] substituted vide GSR 687(E) dated 21.10.04 for six per cent per annum, which may be revised' by' the Central Government from time to time.'](14)(a)The loan from the Fund along with the interest due thereon shall be recovered in half-yearly instalments not exceeding eight in number.(b)the repayment of the loan with interest thereon shall commence after the expiry of one year reckoned from the date of each disbursement of the loan from the Fund.(15)(a)The disbursement of the loan authorised by the Central Government under sub-rule (10) shall be preceded by a tripartite agreement between the Central Government, the sugar undertaking and the Financial Institution or the Scheduled Bank, or a bilateral agreement between the Central Government and the sugar undertaking, as the case may be.(b)The agreement referred to in clause (a) above, shall contain the terms and conditions with regard to the utilisation of the loan including monitoring of the implementation of the project by an agency designated by the Central Government in this behalf, the period of repayment including the number and amount of instalment, payment of interest, the manner of such repayment or payment, security to be provided for the loan and any other matter incidental to the loan.(16)[ - Omitted] [[Deleted vide GSR 188(E) dated 9.3.07(a)'The sugar factory shall, after the execution of the agreement referred to in sub-rule (15) above, furnish a Bank Guarantee from a Scheduled Bank as security for the loan to the satisfaction of the Central Government. (b) The Bank Guarantee shall cover the amount of loan and the interest thereon for the full period of repayment as provided in sub-rule (14).]']](17)[ - omitted] [Omitted vide GSR 599 dated 30.07.2012.](18)[ - Omitted] [[Deleted vide GSR 188(E) dated 9.3.07 'In case of any default in repayment of the amount of loan, or payment of any instalment thereof, or payment of interest thereon, an additional interest at the rate of two and a half per cent per annum on the amount and the period of default shall be payable by the sugar factory:Provided that in case of two consecutive defaults in repayment of the loan or instalment thereof, the Central Government shall realize the entire amount of loan along with the interest thereon from the Bank Guarantee furnished under sub-rule (16) or any claim of the sugar factory against the Central Government or any other security provided for the loan.]']][Explanation. - For the purpose of this rule, the expression "sugar factory" includes any unit thereof (which may or may not be within the premises of the sugar factory) used for production of anhydrous alcohol or ethanol from alcohol or from molasses for which raw material is supplied by such sugar factory in accordance with the norms specified by the Standing Committee in this behalf.] [Substituted vide GSR 599 dated 30.07.2012.]
