IANS | 03 Apr, 2010
Decks have finally been cleared for the sale of 33 state-run sugar mills that turned "sick" many years ago.
"A formal nod for the privatisation of these mills was given by the Allahabad High Court Thursday," Uttar Pradesh Principal Secretary (Sugar Industries) Net Ram told the news agency on Friday .
The court order came on a writ petition move by the employees of the Uttar Pradesh State Sugar Corp who had challenged the government's right to transfer the assets of the corporation under the provisions of the amended Uttar Pradesh Sugar Undertakings (Acquisition) Act.
The legislation was enacted in 1971 for the government takeover of 33 "sick" sugar mills in the private sector. These were then entrusted to the Sugar Corp.
However, despite pumping in tonnes of money, most of these mills could not come out of the red because of outdated technology and failure of the government to modernize the equipment.
The Mayawati government decided to privatize them shortly after assuming power in May 2007.
Legal objections were raised by the employees, who opposed disinvestment tooth and nail. In 2009 the government made an amendment in the act but it was challenged by the employees.
Said state additional advocate general Jaideep Narain Mathur: "The employees' contention that the government had no powers to transfer the assets of the corporation was turned down by the court and the state is now free to privatise the sugar mills."
While 11 of the 33 mills were already put up for sale, the sale of others would follow in due course.
