The Hindu Business Line : UP cane price issue: HC order likely next week

Sugar woes
The federation is seeking vacation of interim order; payment of SAP as announced by UP.
The Allahabad HC will hear a petition challenging the privatisation of the Majola Cooperative Sugar Mill
on March 26.

M.R. Subramani

Chennai, March 13 The Allahabad High Court has listed for next week its order on a petition filed against the State advised price (SAP) for sugarcane fixed for by the Uttar Pradesh Government for the 2007-08 season beginning October. The court also did not stay its interim order, asking sugar mills in the State to pay the statutory minimum price (SMP) fixed by the Centre for procurement of sugarcane from farmers.

“The court did not stay the interim order of January 17 and, therefore, the order of mills having to pay the SMP of Rs 80 a quintal remains in force,” said Mr Ravindra Singh, the counsel for the UP Co-operati Cane Unions Federation. The federation is seeking vacation of the interim order and payment of SAP as announced by the Mayawati Government on October 30 for the current season.

On October 30, the Uttar Pradesh Government said SAP for 2007-08 would be the same as during 2006-07. While sugar mills will have to pay Rs 125 a quintal for common variety sugarcane, Rs 130 for early variety and Rs 122.50 per quintal for rejected variety to the growers.

“The January 17 order of the High Court was reiterated on February 20,” Mr Singh said. The Allahabad High Court had on March 4 reserved its order on the petition filed by Bajaj Hindusthan Ltd and Basti Sugar Mills against the SAP.

Pending PILS

The case is attracting attention of all those concerned with the sugar industry, especially after the Supreme Court passed an interim order on February 27 asking the mills to pay growers Rs 118 a quintal for normal sugarcane variety. However, this order pertains to the 2006-07 season.

For the 2006-07 season, the Lucknow Bench of the Allahabad High Court on November 15 asked the mills to pay farmers Rs 110 a quintal for the sugarcane they deliver. At least half a dozen public interest litigations have been filed against this order and these pleas are pending before the Supreme Court. The apex court has listed these petitions for hearing during the last week of March. But it has refused to pass any interim order, wanting the High Court pass the final order.

The Supreme Court interim order on February 27 came following an appeal against the December 19 Allabahad High Court order, quashing the SAP for 2006-07 and asking the Uttar Pradesh Government to revise it. This implied that it would be enough for the sugar mills to pay the statutory minimum price fixed by the Centre at Rs 80 a quintal. Earlier on January 17, the Supreme Court had stayed the High Court order..

The Allahabad High Court on Thursday also listed for March 26 a hearing on a petition challenging the privatisation of the Majola Cooperative Sugar Mill in Philbhit district of Uttar Pradesh.

Sale of mills

The mill is among the 28 that the State Government plans to sell, but the move has now given way for a stand-off between the State and Centre.

The petition has been filed by Mr Malkiyat Singh, a minority share holder. The petitioner has contended that the State Government had not taken the shareholders into confidence on the sale of the mills.

The State Government contends that it can sell the mills following an amendment to Section 125 A of the cooperative rules, which permits the State to sell off any mill in which it has over 50 per cent stake. In this mill, the State’s share is 94 per cent.

However, the Centre is opposed to the sale saying the cooperative mill falls under the multi-cooperative body and it has to approve the privatisation. The Central Registrar, Cooperatives, has contended that this is a multi-cooperative as its area of operation also falls under Uttaranchal State.

The Uttar Pradesh Cooperative Sugar Mills Federation, represented by Mr Ravindra Singh, has contended that the State Government has the right to privatise the mills.

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