HC stays privatisation of 33 UP mills

BUSY DAY FOR SUGAR INDUSTRY

PIL says disinvestment is against several central and state laws.

The Allahabad High Court has stayed the privatisation of about 33 Uttar Pradesh Sugar Corporation mills till October 13, 2008.

Hearing a Public Interest Litigation (PIL) filed by Rajeev Kumar Mishra of Maharajganj district, a Division Bench comprising Justices Ashok Bhushan and Vinit Saran ordered that the third party right shall not be created till the next date of hearing on October 13.

The PIL had contended that the disinvestment move of the UP government was against several central and state laws. The petitioner also informed the court about the September 29 ordinance by the state in respect of the sale of the equity share of the sugar mills, which he termed was to legalise the illegal sale.

The petitioner contended that the privatisation move would finish off the sugarcane area in UP. He said agriculture should instead be promoted in the state. The court also allowed Mishra to amend his petition in the meantime to challenge the ordinance.

Further, the bench rejected the state argument that the petitioner had filed a ‘proxy petition’ on behalf of vested interests noting that he had a 100 acre holding and the local villagers had authorised him to file the petition on their behalf. In an earlier hearing on September 12, the court had struck down the name of UP Chief Minister Mayawati from the list of respondents.

The state government wants to private the sugar sector to bring about operational efficiency. Gammon India, Uflex and Chaddha group have submitted their financial bids for the mills, which were opened last evening.

Now, a committee headed but the chief secretary would decide on the fate of the bid. This would entail studying the valuation report of the consultants and taking into consideration other aspects.

“This process will take 3-4 days,” official sources on Wednesday Business Standard. Of the total 33 sugar corporation mills, 22 are in working condition, while only 17 of them had participated in the 2007-08 crushing season.

Besides, four of these sick units are under the purview of Board for Industrial and Financial Reconstruction (BIFR).