Southern States - Andhra Pradesh   

Sugar unit privatisation process vitiated: court

By Our Legal Correspondent

HYDERABAD Feb. 25. A Division Bench of the A.P. High Court on Tuesday partly allowed six writ petitions filed challenging the `sale' of cooperative sugar factories to private parties.

The Bench comprising Justice B. Sudershan Reddy and Justice N.V.Ramana was dealing with writ petitions filed by farmers and members of six cooperative sugar factories. The petitioners challenged the constitutional validity of Section 12-A of A. P. Cooperative Societies Act which allows sale of cooperative sugar factories and spinning mills in which the Government is a majority share holder and when they are found to be sick by the registrar and cannot be revived. Such a decision has to be arrived at by the registrar.

The Bench in its 88-page judgment upheld the constitutional validity of the section but said that before arriving at a decision the registrar ought to have given ample opportunity to the farmers, managing committees of the co- operative sugar factories. The Bench speaking through Justice Sudershan Reddy declared `Entire decision making process to privatise the co-operative sugar factories in question is vitiated. In the result all the advertisements issued calling for tenders are set aside. The bids/offers, if any, received pursuant to such advertisement are declared void''

The Bench did not take kindly to the attitude of the officers and the Government. The Bench said that all concerned had dealt with the matter as if the cooperative sugar factories were owned by the Government. Justice Reddy lamented that "None concerned with the decision-making process was aware of the legal provisions. All acted in ignorance of the statutory provisions and rules.'' The whole process of arriving at the extent of Government holding and calling for tenders by the Implementation Secretariat for six factories was deprecated by the bench.

"It is total mess and chaos created by the respondents each one of them and collectively.''

The Bench noticed that the records revealed that the Government had already taken a decision to privatise and the officer implemented with utter disregard to rule. The six factories are Anakapalle, Nizamabad, Chittoor, Tirupati, Kovur (Nellore district) and Amudalavalasa. The Bench said that from now the registrar had to give notices to the managing committees and invite their objections while deciding whether the Government is a majority shareholder, whether it has become sick an cannot be revived. The Bench said that if there are persons-in-charge then wide publicity has to be given to enable members of general body to make suggestions. The registrar has to pass appropriate orders on these suggestions and objections.

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