The order was passed by a Division Bench comprising Justice Arun Tandon and Justice Dilip Gupta on the writ petition filed by the Western UP Sugar Mills Association.
The state government had fixed the SAP for three different varieties of sugarcane at Rs 140 per quintal to Rs 145 per quintal.
The petitioners had challenged the same, terming it as arbitrary and without giving any consideration to the losses suffered by sugar mill owners.
However, the court rejected the petition, saying, The counsels of the petitioners have failed to produce any substantive evidence to prove that the state government had acted arbitrarily in fixation of price.
Sugar millers in Uttar Pradesh, the countrys largest sugar producing state, have been at loggerheads with the state administration for long over fixation of state advised price (SAP).
While, the millers allege that the arbitrary fixing of sugarcane SAP by the state has badly impacted their profits because of drop in retail price and fall in export market, the state contends that a higher SAP is needed to provide remunerative price to farmers.
Recently, Uttar Pradesh Chief Minister Mayawati increased the SAP of sugarcane to Rs 140 per quintal to Rs 145 per quintal, almost Rs 15 more than last for the sugar season, leading to strong protest from millers. The mills also delayed their crushing despite adequate availability of cane because of the dispute over SAP.
India is expected to produce around 20 million to 21 million tonne of sugar in 2008-09 almost 6 million to 7 million less than last year because of low acreage.