SUPPLY OF RAW MATERIAL ON CREDIT TO RATE CONTRACT HOLDER UNITS

In order to meet the credit requirements of the Rate contract holder units associated with MSSIDC, the Corporation has evolved a scheme for supply of raw material required by these units on credit without BG/LC. The salient features of the scheme are as under:-

1.        ELIGIBILITY:

The units who have been awarded the Rate contract by MSSIDC are only eligible to avail the facility.

2.        RAW MATERIAL ITEMS:-

Under the scheme, unit is entitled to purchase the raw material relating to the item covered under the RC, such as Iron & Steel, Pig Iron, Cement, Polymer Products – PVC Resin, LDPE, etc

3.        INDENT AND MARGIN MONEY:

Unit shall place written undertaking with MSSIDC in the prescribed format for each transaction alongwith margin money equivalent to 20% of the cost of the material indented at any given time

4.        SUPPLY OF ARRANGEMENT

a)       Source of supply shall be located by the RC holder units in consultation with MSSIDC. While the units are free to negotiate the rates, terms & conditions of the supply with the conserned Producer, same shall be subject to final negotiation/acceptance by MSSIDC

b)      Supply of raw material shall be arranged on direct delivery basis for a minimum quantity of truck/wagon –load of material by endorsement of documents. However,delivery of the material from the Corporation’s godown shall also be considered subject to prior approval from the Corporation.

c)       Rate Contract holder unit shall placeindent for each transaction with MSSIDC in the prescribed format from time to time during the currency of the contract.

Alternatively

Rate contract holder unit can also plan its raw material requirements on monthly/quarterly basis so as to derive the benefit of price and commercial terms. In such cases, RC holder unit will have to give written undertaking committing to purchase the committed quantity of raw material from the approved source through MSSIDC in suitable installments within stipulated period. However, for each transaction, RC holder units will have to give separate indent alongwith margin of 20% of the cost of the material indented. Since, MSSIDC has also to commit itself with the Producer to purchase the quantity, it shall be binding on the unit to honour its commitment accordingly

d)      The material purchased shall be cleared and transported from the Producer’s plant/godown by the RC holder unit at its own risk and cost

e)       Weight of the material as indicated in the producer’s invoice and/or railway receipt/lorry receipt shall be taken on record as the quantity purchased and received by the unit. Transit/handling shortage, losses,breakages, etc. if any shall be borne by the units. However, where shortage is abnormal and noticeable (not due to weighment difference), unit shall make necessary claim on the producer/transporter/railway authorities, etc. as the case may be. No claim on this account shall be against the MSSIDC regardless of the realization from the above agencies.

f)        For each indent/transaction, sale letter shall be issued to the RC hold units by MSSIDC. RC holder units are required to confirm the acceptance of the same in writing in the prescribed format.

g)      On receipt of indent alongwith margin money and acceptance of the sale letter by the RC holder units, MSSIDC shall purchase the requisite raw material from the approved source at the mutually agreed rate & terms inclusive of MSSIDC’s normal service charges.

h)      The payment towards the cost of raw material indented by the RC hold units shall be made by MSSIDC directly to the producer and sale bill will be raised on the RC holder units by MSSIDC accordingly

5.        CREDIT PERIOD & INTEREST

The credit period and rate of interest shall be as under

Interest at the applicable rate shall be levied on 80% cost of the material indented/to be delivered at any given time

6.        Security

a)       Post Dated Cheque-

The RC holder units shall furnish post dated Cheque for the amount equivalent to full cost of raw material to be delivered at any given time alongwith interest at the applicable rate for 60 days.

b)      Personnel Guarantee and Firm ? Company Guarantee

The proprietor/Partners/Directors of the firm shall furnish Personnel Guarantee and Firm/Company Guarantee in the prescribed format committing to make the payment to MSSIDC in the event of RC holder unit’s failure to repay the outstanding amount on due date

7.        Written Undertaking

Rate Contract holder units shall furnish written undertaking in the prescribed format to repay the outstanding amount on due date and confirm the acceptance of the terms & conditions of the scheme.

8.        Clearance of payment

While MSSIDC shall be free to recover/adjust the outstanding amount from any other amount payable to the RC holder unit, it shall be binding on the unit to make the payment of outstanding amount two working days in advance of the due date through local Cheque or on due date in case of payment by DD or Pay Order

9.     Discharge Of Liability

On clearance of the dues together with interest, post dated cheques furnished by the RC holder unit shall be returned/released duly discharged.

10.     Continuity of the Facility

The credit facility under the scheme shall be available on continuous basis subject to the condition that RC holder units shall repay the outstanding amount within the extended credit period against past delivery

11.     Withdrawal of the facility

The RC holder units who fail to repay the outstanding amount against past deliveries even within the extended credit period, such RC holder units shall be reregistered under the scheme and credit facility shall be withdrawn forthwith. RC holder units shall also be liable for other action as specified in the scheme

12.     Advance Against Marketing Order

Since under the scheme Raw Material is being made available to the Rate Contract holder units on credit, such units are not entitled to also advance from the corporation under its Marketing Assistance Scheme. If, however, Rate Contract holder units desire to also avail the advance under marketing assistance scheme for certain valid reasons to be recorded in writing by the units, same shall be granted after due verification and the advance amount shall be released to sum units after adjustment /  recovery of raw material dues alongwith interest. In other words, Rate contract holder units shall not be entitled to procure raw material or credit and simultaneously take full advance from the Corporation under its Marketing Assistance Scheme.

13.     Pre-Condition:

It is clearly understood and agreed that as per the terms of the rate contract, Rate Contract Holder Unit shall be solely responsible to procure the raw material on its own accord and there is no binding on MSSIDC or any other Govt agency to make available the requisite raw material to the Rate Contract holder unit. As such, material shall be delivered to the units subject to availability on credit against specific written commitment by the unit to make the payment on due date. Delivery of the material to the unit under this scheme and or receipt of payment from the Govt Consignee against the stores delivered shall not, therefore, be a pre-condition for timely execution of the order and or for making payment on due date to MSSIDC against raw material supplied.

14.     DEFAULT

a)       Having committed to purchase the material through the corporation, if RC holder unit fails to purchase the agreed quantity of material from the approved source through MSSIDC, such RC holder unit shall be deregistered under the scheme and debarred for placement of order against respective Rate contracts

b)      In case units fail to repay the outstanding amount within 9o days from the date of delivery of raw material, such units shall be deregistered under the scheme and also debarred for placement of orders till clearance of dues. The security deposits furnished by such units against the Rate contract shall be forfeited and units shall be liable to be prosecuted for criminal offence under section 138 of the Negotiable instrument act as amended and legal action for recovery of dues from the proprietor/partners/directors shall be taken by enforcing the personnel guarantees furnished by them.

15.     Rights Reserved

MSSIDC reserves the right to alter / modify /suspend / cancel the scheme without assigning any reason.

N.B. For Applicable Credit Period & Present Rate of Interest beneficing units may please contact the nearest MSSIDC Office / Division Office / Head Office