The Uttar Pradesh government?s prolonged efforts to disinvest 11 profit-making sugar mills of the Uttar Pradesh Sugar Corporation got a shot in the arm on Friday, when the Supreme Court gave its go ahead for the disinvestment process as per schedule, subject to the final decision.
A bench comprising Justice G S Singhvi and Justice C K Prasad said that the UP government can go ahead with the bidding process as per schedule on June 3 but the ?outcome would be subject to final adjudication. Any action taken by the respondent (UP government) shall be subject to the final outcome of the petition.?
The Court?s direction came over a petition filed by Rajiv Kumar Mishra, who had challenged the bidding of 11 operational sugar units in the state.
The decision of the Apex Court comes on the back of an earlier Allahabad High Court decision clearing the sale of all 33 state-run sugar mills of the Uttar Pradesh State Sugar Corporation Limited (UPSSCL). It had, however, put a rider on it by stating that the land use of the mills cannot be changed.
While this decision played spoilsport for the 22 sugar mills which are in various stages of ?sickness?, it had come as as a relief for the 11 mills that were being privatised in the first phase by the government, as they are all operational and whosoever buys them will continue to operate them.
Mishra also challenged the insertion of Section 3-A and 3-B by the UP Sugar Undertakings (Acquisition) (Amendment) Act, 2009, empowering the state government and the sugar corporation to disinvest their stakes in the sugar mills.
The High Court while disposing of a PIL against the privatisation of the mills, had allowed disinvestment, but had restrained the state government from permitting the private investors to change the land use of the mills.
With this, the UP government plans to go ahead with its new time line of disinvesting the sugar mills. All the 10 shortlisted bidders will be submitting financial bids by June 3, after which the government?s core group will meet to take a final call.
A state government official said once the first stage of the disinvestment process is successfully completed, the second stage of selling off the remaining 22 mills will be legally examined.
?The state Cabinet had given us an in-principle approval to go ahead with the investment process of all 33 mills. But since the court has put a rider on the sale of the sick units, we will now have to get the decision legally examined. Since most of the remaining mills are either loss making or obsolete, and many of them have also come within city limits, operating them as mills as they are is virtually impossible. If we do not allow the land use to be changed, they carry with them no value. They are as good as scrap and there would be no takers for them,? he said.
It may be mentioned that the UP government had first initiated the drive to privatise the mills of the Sugar Corporation in 2007, but due to the lukewarm response to the loss-making units, it decided to sell the 11 operational units in the first stage. Just before legal complications jeopardised the government?s disinvestment plans, as many as 10 companies had submitted technical bids for buying the 11 operational mills, including Triveni Engineering, Indian Potash, Patel Engineering.
The 11 mills for which bids were received are Amroha, in JP Nagar, Bijnore district, in Bijnore, Bulandshahr, Chandpur, in Bijnor, Jarwal Road in Bahraich, Khadda, in Kushi Nagar, Mohiuddinpur in Meerut, Rohanakalan in Muzzafarnagar, Saharanpur, Sakhotitanda in Meerut and Siswabazar in Maharajganj.