INDIA BUSINESS WORLD - JANUARY 16^th - JANUARY 31^st - 2008

SC STAYS ALLAHBAD HIGH COURT ORDER ON SUGARCANE SAP

In a setback to the sugar industry, the Supreme Court has stayed the Allahabad High Court order quashing the Uttar Pradesh government's State Advisory Price (SAP) fixed at Rs 125-130 a quintal for sugarcane to be paid to farmers for the 2006-07 season.

A three-judge bench, comprising Chief Justice K G Balakrishnan, Justices G P Mathur and R V Raveendran, stayed the December 19 order of the Allahabad High Court which said the SAP for 2006-07 was "arbitrary and unreasonable" and the state government should reassess it after giving adequate outlines of norms, criteria or guidelines. Also, the SAP should be decided unilaterally without consulting the stakeholders.

The High Court had also ruled that until the new SAP was fixed, the mills should pay UP cane farmers only Statutory Minimum Price (SMP) fixed by the Central Government at Rs 80-90 per quintal for the 2006-07 season (December-September).

The staying of the High Court verdict means that the sugar factories will have to pay cane arrears accrued to the UP farmers at the SAP rates for 2006-07.

Also, the recovery certificates (RCs) issued by the UP government against those mills which had not cleared the arrears, will automatically get revived. The RCs empowers the district magistrates initiate legal proceedings under the revenue laws against the defaulting sugar mills to recover cane arrears of 2006-07 estimated at Rs 1000 crore in the state.

Leader of Kisan Mazdoor Sangathan and cane growers unions V M Singh, who filed petition against the Allahabad High Court verdict, said the next hearing in the apex court had been fixed for February 12 with the respondents, millers seeking two weeks to file counter affidavits.