Bajaj Hindusthan clarifies on news items
With reference to the news item appearing in a leading financial daily dated February 23, 2008, Bajaj Hindusthan Ltd has clarified as under:
“Sugar mills in UP are required to procure sugarcane at the State Advised Price (SAP) which is announced by the State Government during each sugar season.
The UP government had for the sugar season 2006-07 fixed a price of Rs 125 / Qtl. which had been challenged before the Hon’ble Allahabad High Court by way of a Writ Petition, inter alia, on the ground that while the constitutionality of power to fix SAP itself is yet to be clearly settled, its fixation without norms, criteria and guidelines is fully arbitrary and invalid.
After detailed hearing based on submission of facts & by summoning for the records of the State Government related to fixation and announcement of SAP, Hon’ble Allahabad High Court found that in fact there was no record showing fixation of SAP in a proper manner and there was no basis adopted for such fixation. Hence, vide its judgment dated December 19, 2007 the Hon’ble Court quashed the SAP of Rs 125 / Qtl. fixed for 2006-07, and, inter-alia, advised the State Government to form a Committee represented by all the stakeholders within a period of three months and formulate a scientific and transparent cane pricing policy and refix the SAP for the year 2006-07. Till such time the Committee’s recommendations are finalised and appropriate amendments in the Acts / Rules are made, the mills were directed to pay Statutory Minimum Price (SMP) announced by the Central Government which is substantially lower (Rs 81.18 / Qtl. for 9% recovery) than the SAP. The Allahabad High Court had also prohibited the State Government from taking any coercive action against the sugar mills until the SAP is refixed.
The judgment passed by the Hon’ble Allahabad High Court was challenged before the Supreme Court. The Hon’ble Supreme Court vide its order dated January 18, 2008 stayed the judgment till February 12, 2008 and fixed the matter for detailed hearing. On February 12, 2008 the Stay was not extended but the matter was posted to a new Bench for hearing on February 15, 2008, when the stay was extended only upto February 21, 2008.
On February 21, 2008 the Hon’ble Supreme Court has not extended the said stay granted earlier on January 18, 2008 and posted the matter for hearing on February 27, 2008. The Hon’ble Supreme Court has also directed that no coercive action shall be taken till the next hearing.
In view of the above, it may kindly be appreciated that the issue does not relate simply to non-payment of cane dues. In fact cane liability for the sugar season 2006-07 is sub-judice and a final adjudication is not yet made. The settlement of cane dues, thus, would take place based on the final decision given by the Hon’ble Supreme Court. BHL has paid nearly Rs 1400 crore as cane payments for the season 2006-07 and remains committed for the payment of a fair price for cane which is finally determined by the Hon’ble Court(s) in a transparent manner and is not prejudicial to the interests of various stakeholders.
Moreover, the Allahabad High Court vide its order dated February 17, 2008 has also directed that the SAP of Rs 125 / Qtl, announced by the State Government for the Sugar Season 2008 shall remain stayed and the State shall not take any coercive step for enforcement of SAP.
The State Government had issued nearly 70 recovery notices against private sector sugar mills in UP which also include units of BHL. These recovery notices were issued for recovery of cane dues for sugar season 2006-07. Pursuant to the said stay granted by the Supreme Court on January 18, 2008, local authorities at a few units had started acting fast and restrained the mills from selling sugar stored in a few of the godowns at these units. However vide Order dated February 15, 2008 and subsequently vide Order dated February 21, 2008, they are restrained from taking any final decision without leave of the Hon’ble Supreme Court.
It may however, be clarified that the aforesaid actions of local administration had no impact on sales as well as the day to day operations of the Sugar units. Moreover, the orders of the High Court and Supreme Court specifically prohibit the State Government from taking any coercive actions against the mills in this regard. We are taking appropriate steps to get the embargo lifted soon.
As you may be aware, the Sugar prices have only firmed up since the start of the current sugar season. The Company believe that the outlook for the industry is quite positive. BHL with its leadership position in the industry is well poised to benefit from the upturn in the sugar industry.”
Tags: Bajaj Hindusthan