The Hindu : Tamil Nadu / Chennai News : Sugar mill case posted before another judge

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Friday, Apr 01, 2005

Tamil Nadu

Tamil Nadu - Chennai

Sugar mill case posted before another judge

By Our Staff Reporter

CHENNAI, MARCH 31. A single judge of the Madras High Court, who had permitted Indian Bank to invite tenders for the sale of the Pondicherry-based New Horizons Sugar Mills Limited but restrained it from confirming the sale, today posted the matter before another judge.

Passing orders on March 23 on a writ petition filed by the Puduvai Pradesa Sarakarai Aalai Thozhilalar Sangam, Justice K.P. Sivasubramaniam had stipulated that the sale should not be confirmed without the court's permission.

Accordingly, the Bank approached the court stating that a corporate concern had quoted Rs. 50 crores for the factory. When senior counsel for the Sangam indicated that they needed to advance arguments in detail, the Judge posted it before another Judge.

The matter pertains to the only sugar mill in Pondicherry, which was taken possession of by the Indian Bank under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002 in lieu of over Rs. 27 crores owed by the mill to the bank by way of secured credit.

`Sale will hit workers'

Pointing out that the total dues were more than 63 crores, the petitioner-Sangam said the mill's net worth was more than 70 crores and that it was a growing concern with enormous goodwill in the market. Its arbitrary sale would affect 600 workers, of whom 400 are regular workmen.The workmen were also secured creditors and their dues were to an extent of Rs. 6 crores. The sale would affect their right to livelihood and the bank's action lacked "transparency and fairness," the petitioner said.

"The workers will be left in the lurch if the secured creditor is keen only in trying to realise their dues without taking into account the social interests. If the bank is allowed to sell the assets at a throwaway price only to realise its dues, unmindful of the obligations to the workers and the amounts the government and financial institutions have put in, it would be disastrous."

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Tamil Nadu