Mills with waiver forms from farmers won’t have to pay penalty interest

Gaikwad, who was hearing a bunch of petitions filed by Shiv Sena’s farmer leader Prahlad Ingole, has relied on Supreme Court rulings to decide on the pending petitions. Back in 2014-15, sugar mills in Maharashtra had defaulted in payment of FRP due to the liquidity crunch faced by them. Ingole had then approached the Aurangabad bench of the Bombay High Court to ask for payment of 15 per cent interest on late payment of FRP.

The Sugarcane Control Act, 1966, mandates payment of FRP within 14 days of cane purchased, failing which 15 per cent interest has to be paid. Till date, not a single mill in the country has paid the penalty interest amount.

The High Court had asked the Sugar Commissioner to decide the matter, following which Gaikwad held individual hearings of each and every mill to decide the matter. During the hearing for the Purna Cooperative Sugar Mill of Hingoli, the mill had submitted waiver forms signed by 7,456 of the 8,073 farmers who had supplied cane to the mill during the 2014-15 season.

The remaining 617 farmers had not signed the form. Gaikwad relied upon two rulings by the Supreme Court, in 2004 and 1979, while deciding the cases. In its judgment of 2004, the apex court had observed, “A right can be waived off by the party for whose benefit certain requirements or conditions have been provided for by a statute subject to the condition that no public interest is involved there in.”

Gaikwad observed that the penalty payment for the 7,456 farmers who have signed the forms would be waived off. However, for the 617 farmers who have not signed the forms, the mill has been asked to calculate interest at 15 per cent interest and pay it to the farmers within 15 days.