Bajaj Hindusthan Sugar Updates

Bajaj Hindusthan Sugar & Industries Ltd has informed that vide an Order passed on December 19, 2007, a Division Bench of the Hon'ble High Court of judicature at Allahabad has disposed off writ petitions pertaining to the impugned SAP (State Advised Price) of Rs 125 per quintal of sugarcane, fixed by the State Government of Uttar Pradesh for the last crushing season 2006-07.

The above Order will have long term impact on the operations of entire sugar industry in Uttar Pradesh. The gist of relevant operative portion of the Order is summarised below: -

1. Relevant for last Crushing Season 2006-07:

The SAP for 2006-07 stands quashed and the U.P. Government has been directed to reassess the same in consultation with the respective representatives of the cane growers, sugar producing factories, appropriate executives of the union and the state inclusive of representative of Cost accounting Branch of the Union and the State, Commission of Agricultural Costs and Prices, National Sugar Institute, Kanpur, any other person or institute required for the purpose.

The entire exercise of fixing SAP for 2006-07 be completed within a period of three months and shall have a binding effect upon all the parties. The Court has also prohibited the State to take any coercive action for any cane arrears, till the fixing of reassessed SAP for 2006-07.

The Court has also further directed that no part of the payment already made by the sugar mills to the cane growers as per fixation of price by the State will be refundable by these cane growers. However, after fixing of revised SAP and communication thereof by the State Government, appropriate adjustment / recoveries for the over payments and/or payment of shortfall shall be given effect to in due course.

2. Relevant for future Crushing Seasons (i.e., 2007-08 onwards):

The Court has further sought to provide a long term solution to the chronic dispute of the impugned fixing of SAP und resultant delays in payment of scheduled price to the cane growers by further directing the State Government to frame suitable norms, criteria or guidelines by appropriate amendments in the relevant legislation. For this purpose the U.P. Government can form a committee of experts and affected persons to make a report to work upon it under the chairmanship of a retired High Court or Supreme Court judge to maintain absolute independence. The fixing of SAPs in the future years shall be hacked by reasons giving adequate outline of the norms/ criteria/ guidelines as may be framed in this regard. Pending such framing of legislation for fixation of SAP for future years, the sugar mills could pay to the farmers based on SMP (Statutory Minimum Price).