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

SUPREME COURT STAYS HIGH COURT ORDER ON UP CANE SAP

In a major setback to the sugar industry in Uttar Pradesh, the Supreme Court stayed the Allahabad High Court's order quashing the State Advised Price (SAP) of Rs 125-130 per quintal fixed by the state for 2006-07. The state government had filed an SLP before the apex court challenging the December 19 HC order.

Sugar mill owners owe about Rs 871 crore to the cane farmers in the state for the crushing season of 2006-07, said the principal secretary (sugar) Net Ram. After the High Court order, sugar mill owners said they would have to clear their dues at the Statutory Minimum Price (SMP) rates fixed by the centre, which is much lower than the SAP fixed by the UP government. The apex court order, said mill owners, had come as a blow to the industry. They further feared that the state would now take coercive measures to ensure that the arrears are cleared immediately. Cane commissioner Kamran Rizvi said: "With the SC granting a stay and directing the mill owners to clear their dues of 2006-07, the state government can now take punitive action if they do not comply."

Simbhaoli Sugar Mills director Ram Sharma said that with the sugar industry already going through a downslide, the stay granted by the SC would mean that the SAP of Rs 125 would now prevail for crushing season of 2006-07.