The Hindu Business Line : HC issues interim order on sugar mills’ plea over UP cane price

Chennai, April 1 The Allahabad High Court has, in an interim order, asked Bajaj Hindusthan Ltd and Basti Sugar Mills to pay sugarcane growers in Uttar Pradesh the statutory minimum price (SMP) price fixed by the Centre and execute bank guarantees towards the difference between SMP and the State Advisory Price (SAP) fixed by the Mayawati Government.

In the interim order passed on Monday, a division bench comprising Mr Justice A. Kumar and Mr Justice Rakesh Sharma, told Bajaj and Basti to execute the guarantees in favour of the Uttar Pradesh Cane Commissioner. The case has been posted for further hearing without any date being specified.

The Centre has fixed the SMP at Rs 81 a quintal of sugarcane, whereas the Uttar Pradesh Government had kept the SAP at Rs 125 a quintal of normal variety for the 2007-08 season to October. The SAP is unchanged from the 2006-07 season.

Bajaj Hindusthan Ltd and Basti Sugar Mills had moved the Allahabad High Court against the SAP fixed for 2007-08.

The High Court, in passing the interim order, has modified its earlier ruling for 2006-07 passed on January 17, wherein it asked the State Government to rework SAP.

Monday’s interim order came after the case was reserved on March 4.

Bajaj and Basti, which functions under the former, have challenged the SAP on the grounds that the fixation of cane price by the State is unguided and arbitrary.

Mr Ravindra Singh, representing the UP Co-operative Cane Union Federation Ltd, argued that the SAP was justified besides being remunerative, whereas the SMP was based on the outdated reports/ recommendation of the CACP. Moreover, he said SMP is linked to the recovery and does not take into consideration the earnings of mills from the by-products such cogeneration, alcohol, ethanol etc.

Mr Singh also pointed out to the court that there was already a direction from the Lucknow Bench of the High Court asking the UP Sugar Mills Association to pay Rs 110 a quintal and the Bajaj group was one of the parties in the case.

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