SME Times News Bureau | 28 May, 2010
The Supreme Court will hear Friday a petition challenging the Uttar Pradesh government's decision to privatise 11 operating sugar mills under the control of the Uttar Pradesh State Sugar Corporation Limited. The mills' disinvestment is slated for June 3.

The vacation bench of Justice G.S. Singhvi and Justice C.K. Prasad will hear the petition filed by journalist Rajiv Kumar Mishra challenging the insertion of Section 3-A and 3-B by the U.P. (Uttar Pradesh) Sugar Undertakings (Acquisition) (Amendment) Act, 2009, empowering the state government and the sugar corporation to disinvest their stakes in the sugar mills.

Besides these two, the state government had affected three more amendments by way of section 3-C, 3-D and 3-E. Section 3-C empowers the state government to change land use of the land belonging to the sugar mills.

The second provides for the validation of government order of June 4, 2007, to privatise and sell the sugar mills. It also provides for the confirmation of all orders and notifications issued subsequent to June 4, 2007, decision to privatise the sugar mills.

Section 3-E empowers the state government to take steps to remove difficulties that may arise in the course of the privatisation of sugar mills.

The Allahabad High Court, by its judgment April 1 this year, upheld the state government's power to disinvest its stakes and that of the corporation. However, it held that it was not in the legislative competence of the state legislature to enact provision 3-C and 3-D whose automatic consequences were the closure of the sugar mills.

Mishra's petition challenges that part of the Allahabad High Court verdict that upholds the right of the state government to disinvest its stakes in the state-owned sugar mills.

The petition was listed for hearing twice earlier but was adjourned both times.