Plea admitted against Uttar Pradesh sugar mills' privatisation

The Supreme Court Friday admitted a petition challenging the Uttar Pradesh government's decision to privatise 11 state-run sugar mills by off-loading its entire stake in them.

A vacation bench of the Supreme Court headed by Justice G.S. Singhvi and comprising Justice C.K. Prasad declined to stay the opening of the bids slated for June 3.

However, the court said all actions of the state government relating to privatisation of the 11 sugar mills would be subject to the final outcome of the case.

The court admitted the petition after senior counsel Amarinder Saran contended that the state government could not sell off its entire stake and that of the U.P. State Sugar Corporation Ltd in the mills by amending the UP (Uttar Pradesh) Sugar Undertaking (Acquisition) Act, 1971.

The petition is in the form of an appeal challenging a Allahabad High Court verdict in which it upheld the amended provisions of the act that empower the state government to sell off its entire stake in the sugar mills.

The senior counsel said that since the sugar industry was covered under the Industries (Development and Regulation) Act, 1951, the amended UP Sugar Undertaking (Acquisition) Act, 2009 was beyond the legislative competence of the state legislature.

At the outset, on the objections by the state government, the court asked Saran to satisfy it on the locus standi of the petitioner Rajiv Kumar Mishra who had described himself as a journalist.

The court asked for the revenue records and documentary proofs when it was told that the petitioner was also an agriculturist and grows sugar cane that is supplied to sugar mills.

At this Justice Singhvi said: 'If you are an agriculturist then there would be no qualms about your locus (standi).'

The state government told the court that out of 17,000 workers in the mills about 16,000 of them have already accepted a voluntary retirement scheme and there was no question of their future being jeopardized due to privatization.

However, Saran pleaded that the interest of the workers should be guarded. At this Justice Singhvi said: 'We will certainly see legal protection was available to them.'

The state government told the court that the petitioner should be made to pay Rs.500 crore for additional losses it had suffered on account of running the loss-making mills during the course of litigation in the high court that lasted over two years.

The court was told that total losses of the 11 sugar mills stood at Rs.1,500 crore.

The Uttar Pradesh government was represented by senior counsel Satish Mishra and additional advocate general Shail Dwivedi.

source: sify