ISLAMABAD (March 02 2004): The Supreme Court has agreed to hear arguments for and against part of Sindh Sugar Factories Control Act of 1950 authorising the provincial authorities to impose "quality premium at the end of the crushing season" that will be in proportion to the sucrose recovery of each factory.

A division bench comprising Justice Rana Baghwandas and Justice Hamid Ali Mirza acted on similar appeals made by eleven sugar mills located in Sindh and assailed the order of the Sindh High Court on fourteen constitutional petitions.

The main argument the appellants have raised is that the order of the Sindh High Court was in direct conflict with a judgement of the Lahore High Court on the same question and a higher judicial authority has to hence determine if the amendment to the provincial law was in accordance with the constitution.

A similar power was given to the Punjab government but it was deleted by the Lahore High Court in its judgement on the petition of Fauji Sugar Mills in 1996 and the provincial authorities were deprived of the power to charge such a premium.

Besides ordering that the appeals be listed for final hearing within six months from February last, no "coercive measures shall be taken for recovery of the quality premium" from the mills.

The petitioners are: the Shahmurad Sugar Mills, Faran Sugar Mills, Mehran Sugar Mills, Army Welfare Trust Sugar Mills, Pangrio Sugar Mills, Dewan Sugar Mills, Seri Sugar Mills, Larr Sugar Mills, Al-Abbas Sugar Mills, Digri Sugar Mills and Mirpur Khas Sugar Mills. They have cited the Provincial as well as the Federal governments as respondents.

The vires of the amendment empowering the collection of the premium was challenged on the ground that the concept of demand and recovery of quality premium was "relatable to the amount of profits earned by the mills" for better quality of sugar and growth of sugar industry in Sindh. But for the past many years the sugar mills in the Sindh have sustained losses that could be verified from their annual balance sheets but were compelled to pay "quality premium" to the government.

This situation deterred them from competing with the same industry in the Punjab where the provision of collection had been made invalid by the Lahore High Court and hence stood deleted.

The cases have been assigned to the Fixture branch for assigning a date for regular hearing.

In the preliminary hearing seeking leave to appeal, Fazal-e-Ghani, Anwer Khalid and M Shaiq Usmani instructed by Advocates on Record, M S Khattak and A S K Ghori appeared for the sugar mills while Dr Qazi Khalid Ali, Additional Advocate General of Sindh represented the Sindh Government.

Courtesy Business Recorder