The Mumbai Central District Cooperative Bank served many notices on the factory for recovering an outstanding loan of 177 million rupees.
[2] In 2002 the chief commissioner of central excise and customs, Pune, issued notices on 24 sugar factories including Sant Muktabai Sahakari Sakhar Karkhana to recover 87 million rupees due on account of excise duty evasion.
This led to the collapse of domestic sugar prices and caused major losses to sugarcane farmers besides excise evasion of nearly 800 million rupees.
The Muktabai SSK sugar cooperative factory was one of the companies which figured out the scam.
[4] In 2007, Manohar Lal Sharma, an independent advocate, filed a public interest litigation petition in the Supreme Court alleging that Patil was an undischarged insolvent relating to the Sant Muktabai Sugar Factory and hence disqualified to remain in the office of the presidency.