Sucrose recovery from sugarcane: SC rejects pleas filed against SHC judgement

The apex court on Monday held that the grant of 8.7 percent quality premium on sucrose recovery from sugarcane is just, fair and 'based on statutory provision and is legally enforceable.' A three-member bench headed by Chief Justice Mian Saqib Nisar and comprising Justice Faisal Arab and Justice Sajjad Ali Shah dismissed the appeals filed against the Sindh High Court judgment dated 22-03-2003.
The appeals were filed by Army Welfare Sugar Mills, Shahmurad Sugar Mills Ltd, Faran Sugar Mills Ltd, Pangrio Sugar Mills Ltd, Digri Sugar Mills Ltd, Dewan Sugar Mills Ltd, Seri Sugar Mills Ltd, Larr Sugar Mills Ltd, M/S Abbas Sugar Mills, and Mirpurkhas Sugar Mills Ltd against federal and Sindh governments. The mill owners paid quality premium (8.7%) to the growers for 17 years right from the crushing season 1981-82 till 1997-98, but they felt aggrieved when the rate of quality premium for the 1998-99 crushing season was raised from 32 paisas to 50 paisas per maund.
The appellants filed constitution petitions in the Sindh High Court, questioning the vires of clause (v) of Section 16 of the Sugar Factories Control Act, 1950 on grounds that payment of quality premium is unconstitutional being confiscatory in nature. However, the SHC on 22-03-2003 dismissed their constitutional petitions. After that, the appellants moved the Supreme Court on 19.02.2004, urging it to suspend the operation of the judgement.
The apex court judgment authored by Justice Faisal Arab said the Sindh government notification was validly issued, hence these appeals are dismissed. However it said: "In future notification as per past practice for payment of quality premium should be issued along with the notification of fixation of the minimum procurement price of sugarcane and the same shall be paid to the growers not later than two months after the crushing season comes to an end."
The court held that the payment of quality premium on sucrose recovery level which is over and above the base level of 8.7% is not something which can be said to be some kind of benevolence or is bereft of any consideration.
This right to pay quality premium created under Clause (v) of Section 16 of the Act is based upon intelligible criteria and, therefore, cannot be regarded as confiscatory so as to question its vires. In fact its denial would be unfair and confiscatory in nature as it would amount to disregarding the contribution of the growers in achieving a higher level of sucrose content, which directly results in higher sugar production.
The law calling upon the sugar mills to pay quality premium was not only acknowledged by them in their pleadings but duly honored right from the crushing season of 1981-82 till 1997-98 without any reservation or objection. "We find no reason which entitles the sugar mills not to honor the mandate of the law and deny the growers the fruits of their labor to which they on the principle of equity as well as law are duly entitled," the judgment said.