Country's leading sugar producer Bajaj Hindusthan today approached the Supreme Court to challenge the validity of an act mandating that the Centre will not take into account the price fixed by states for paying farmers while determining the price of levy sugar.
Bajaj Hindusthan requested the apex court to quash the Essential Commodities (Amendment and Validation) Act, 2009, which states that the government would not consider the state advised price (SAP), on the basis of which producers pay cane growers.
Admitting the petition, a Bench comprising Justice V S Sirpurkar and Justice Cyriac Joseph issued a notice to the government and directed it to file a reply.
In the petition filed through advocate S S H Rizvi, the Shishir Bajaj-controlled firm said that sugar producers have to pay the farmers on the basis of the SAP fixed by state governments.
The sugar producer submitted that the act, which said "the price of levy sugar fixed by the Central Government will not be subject to judicial review and cannot be challenged in any court of law" was unconstitutional.
Bajaj Hindusthan also challenged another order issued on January 7, 2010, through which the Centre had deleted a provision of the Sugarcane Control Order, 1966, which stated that the state government concerned would have to pay the difference to the sugar growers if the SAP was higher than the price fixed by it.
"...Has been deleted under pressure of farmer's agitation and not on any relevant or genuine reasons," the company said, adding that the burden now falls on the sugar producers.
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The Central government fixes the Standard Minimum Price (SMP) for levy sugar, which is sold through the Public Distribution System, and pays the producers accordingly.
Bajaj Hindusthan further said that "the impugned act and the order are arbitrary, confiscatory, illegal", and grossly violates the law.
They were devised by the government just to nullify an order passed by the apex court in the Mahalaxmi case, which was decided on March 2008, it added.
The price of levy sugar has always remained a subject of litigation between producers and successive governments. In the Mahalaxmi case, the apex court had directed the Central Government to take SAP into consideration while fixing the levy sugar price.
The court had said that as SAP was the actual price paid to farmers by sugar producers, it should be taken into consideration by the Centre while taking levy sugar prices into account.