Telangana High Court allows sugar company to sell stock to clear dues

Hyderabad: The Telangana High Court on Friday allowed a private sugar producing factory to sell its stock to clear its dues to sugarcane farmers.

Justice A. Rajashekher Reddy was dealing with a petition filed by Trident Sugars Ltd challenging the Sugar Control Order — which permits them to sell only limited stocks of sugar — as issued by the Union ministry of food and public distribution.

The company informed the court that the Union ministry had imposed restrictions by prohibiting the free sale of sugar under the Essential Commodities Act. They sought the court to direct the Centre to allow it to sell the stock at least to the extent of enabling it to clear their payable to sugarcane farmers.

The company said it had have nearly two lakh quintals of sugar in stock, that the control order allowed it to sell only two per cent of the stock per month. At this rate, it said, it wouldn't manage to sell even 30 per cent of the stock produced during 2018-19 as a result of which, they would fail to clear their dues.

After carefully considering the facts, the judge passed interim directions to the petitioner company, enabling them to sell their stock of sugar, but only to the extent of the dues payable to the farmers.

During the argument, Assistant Solicitor General K. Lakshman explained the Centre’s stand according to which the petitioner company had against its projected production, produced nearly 320 lakh metric tons of sugar during 2017-18. He explained that owing to the increasing competition between the various sugar companies, the price of sugar had dropped to Rs 23 per kg, which is why the Centre imposed the restrictions

Of the 504 sugar factories in the country, only seven — in Maharashtra, Karnataka, and Telangana High Courts — have challenged the Centre’s decision.