Section 23 in The Sugar Development Fund Rules, 1983
23.
(1)Any sugar factory of a sugar 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 of bagasse-based cogeneration of power by installing the required plant and machinery shall be eligible to apply for a loan from the Fund under this rule for implementing the project provided that the project envisages marketable surplus of co-generated power and provided further that at least ten per cent of the cost of the project is being met by the sugar factory of a sugar undertaking from its own internal generation of funds as part of the promoters contribution required by the Financial Institution or the Scheduled Bank.(2)A sugar factory of a sugar undertaking that has availed of a loan under this rule shall not be eligible to apply for a loan during the period in which that loan along with interest thereon has not been fully repaid.(3)A sugar factory of a sugar undertaking, which is in default of payment that has become due in respect of the Fund and the Levy Sugar Price Equalisation Fund, [in respect of any of the sugar factories or units thereof] [Inserted vide GSR 599 dated 30.07.2012.] shall not be eligible to apply for a loan under this rule.(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 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.](5)The Committee may, with the previous approval of the Central Government, make any class or classes of sugar factory of a sugar undertaking ineligible to apply for loan under this rule:Provided that where the Committee decides that an applicant is not eligible, the reasons therefore shall be recorded in writing.(6)An eligible sugar factory of a sugar undertaking under this rule, shall make an application to the Committee in Form VIII 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)The Committee shall after taking into account the recommendations of the sub-committee, and after considering the information or report obtained by the Committee under sub-rule (8), if any, and all relevant aspects, make its recommendations to the Central Government as to the amount of loan that may be made to the sugar factory of a sugar undertaking.(10)The Central Government may, after consideration of the recommendations of the Committee and any other relevant factor with a view to improving the viability of the sugar factory, authorise payment to a sugar factory, 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 factory of a sugar undertaking as promoters' contribution, as may be determined by the Central Government.(11)The amount of loan authorised under sub-rule (10) shall be disbursed by the Central Government to the sugar factory of a sugar undertaking or paid by it to the Financial Institution or the Scheduled Bank, as the case may be, for disbursement to the sugar factory of a sugar undertaking, either in lump sum or in two or more instalments, as may be considered necessary by the Central Government.(12)The Financial Institution or the Scheduled Bank, as the case may be, shall treat the amount paid to it under sub-rule (11) as the promoters' contribution or as part thereof required to be raised by the sugar factory of a sugar undertaking for availing of the loan under the relevant scheme of the Financial Institution or the Scheduled Bank for bagasse-based cogeneration power projects.(13)[ - Omitted] [Omitted vide GSR 388(E) dated 19.5.08 'The loan from the Fund under this rule shall carry a rate of simple interest of [two percent below the bank rate] substituted vide GSR 687(E) dated 21.10.04 for six per cent annum, which may be revised by the Central Government from time to time.]'](14)(a)The repayment of the loan shall commence after the expiry of three years reckoned from the date of each disbursement of the loan and shall be repaid in half yearly instalments not exceeding ten in number.(b)The interest on the said loan shall be paid [half yearly] [Substituted vide GSR 599 dated 30.07.2012.] for the first three years from the date of each disbursement of the loan after which it shall be paid half yearly along with the instalment of the repayment of the principal.(15)[ - Omitted] [[Deleted vide GSR 188(E) dated 9.3.07'(a) The disbursement of the loan authorised by the Central Government under sub-rule (11) shall be preceded by a tripartite agreement between the Central Government, the sugar factory and the Financial Institution or the Scheduled Bank, as the case may be.(b)The agreement referred to in clause (a) above, shall contain the terms and conditions with regard to the utilization 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.]']](15)[ (a) The disbursement of the loan authorised by the Central Government under sub-rule (1) shall be preceded by a tripartite agreement between the Central Government, the sugar factory and the Financial Institution or the Scheduled Bank, as the case may be.(b)The agreement referred to in clause (a) shall contain the terms and conditions with regard to the utilisation of the loan including monitoring 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, and before the disbursement of the loan under sub-rule (u), 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 in sub-rule (14) 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.]']](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 for 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 and additional interest thereon from the security furnished under sub-rule (16) or any claim of the sugar factory against the Central Government.]']][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 bagasse based cogeneration power project for which raw material is supplied by the said sugar factory in accordance with the norms specified by the Standing Committee in this behalf.] [Substituted vide GSR 599 dated 30.07.2012.][Chapter XIII] [Inserted vide GSR 451(E) dated 4.7.05.] Special provision relating to calculation of rate of interest in certain cases
