UP to repeal laws on sale, closure of sugar mills

THE DEVELOPMENT CAME IN LESS THAN 24 HOURS AFTER CM ANNOUNCED A ₹25 PER QUINTAL HIKE IN THE PURCHASE PRICES OF SUGARCANE

Just months ahead of the assembly elections in the state, the Uttar Pradesh government on Monday withdrew from the Supreme Court an appeal that was filed in 2010 for reclaiming the state’s authority to shut down its sugar mills and transfer the land for some other purposes.

The appeal was filed during the regime of Bahujan Samaj Party (BSP) supremo Mayawati (2007-2012) after the Allahabad high court held in April 2010 that the state could not have passed a law, assuming the power to close down the sugar mills or change the land use where the sugar factories stood.

A bench, headed by Chief Justice of India NV Ramana, permitted withdrawal of the state’s appeal after it was informed that the state government has taken a decision to repeal all the provisions in the 2009 law that paved way for divestment, sale or closure of the sugar mills owned by the Uttar Pradesh State Sugar Corporation Limited.

The development came in less than 24 hours after chief minister Yogi Adityanath announced a ₹25 per quintal hike in the purchase prices of sugarcane. Addressing a gathering of farmers in Lucknow on

Sunday, the CM had also attacked Mayawati for allegedly selling 21 sugar factories at throwaway prices during the BSP rule.

Adityanath’s statements, ahead of the upcoming polls in 2022, were viewed as an outreach to the farmers’ community, a section of which has been protesting against the three contentious farm laws since November last.

During the hearing, solicitor general Tushar Mehta, representing the state government, submitted that the state does not wish to prosecute its appeal any further since it wants to do away with all the contentious provisions relating to the 2009 amendment in the Uttar Pradesh Sugar Undertakings (Acquisition) Act, 1971.

“As the legality of the high court’s judgment dated April 1,

2010, dealing with constitutional validity of the 2009 Amendment Act, is pending for adjudication before this court in the present matter, the state government is bringing to the court’s notice its decision to repeal the five sub-sections inserted through the amendments,” the S-G told the bench, which also comprised justices Surya Kant and Hima Kohli.

Senior advocate Vivek Tankha, who was appearing for one of the successful bidders in the sale of sugar mills, resisted the state’s move, saying the bidders had trusted the government with prosecuting the case before the apex court.

The bench, however, pointed out that the bidders had not filed any appeal against the high court order independently and therefore, if the state has decided to withdraw its main petition, others cannot oppose. It added that the bidders had also not taken steps to transpose themselves as petitioners in the case.

The bench then allowed the state government’s plea while adding that successful bidders could avail of other remedies available to them in law.

There are 119 sugar factories in Uttar Pradesh. At least half of them are state-run mills. Uttar Pradesh is the leading producer of sugarcane and the second largest producer of sugar in the country.

By inserting sub-sections 3-A, 3-B, 3-C, 3-D and 3-E in the Act in 2009, the Mayawati government had assumed powers to divest, sell off, transfer or otherwise part with the sugar mills run by the corporation, besides changing the land use in relation to the land belonging to the schedule undertakings of the corporation.

After the amendments, 21 sugar mills were sold between 2010 and 2011 during the BSP rule. The controversy began in 2013 when Comptroller and Auditor General (CAG), in a report, said that the sugar mills had been sold at dirt cheap prices and the irregularities led to a loss of Rs 1,179 crore to the public exchequer.

Naseemuddin Siddiqui, once a close aide to Mayawati and a former minister in her government, claimed in 2017 that the “sugar mills were sold on the instructions of then CM Mayawati and BSP general secretary Satish Chandra Mishra”. After his claim, Mayawati said Siddiqui, who was later ousted from the party, alone was to blame for the irregularities.

While the Akhilesh Yadav government (2012-17) did not take any action in the matter despite the CAG’s report in 2013, in April 2018, the Yogi Adityanath-led BJP government in Uttar Pradesh handed over the investigation into the case to the Central Bureau of Investigation (CBI). The UP government asked the CBI to investigate the entire sale proceedings of 21 sugar mills, including use of bogus companies and documents in the purchase of seven closed mills in Deoria, Bareilly, Laxmiganj, Hardoi, Ramkola, Chittauni and Barabanki.

In his address at the farmers’ meet held in Lucknow on Sunday, chief minister Yogi Adityanath had highlighted how his government started reviving the sugar industry in Uttar Pradesh.

“During BSP rule, 21 sugar mills were shut down and 11 were closed during the rule of Samajwadi Party. Sugar factories worth Rs 250 crore to Rs 300 crore were sold out at throwaway prices, anything between Rs 25 crore,” he said.