KARACHI: The Sindh High Court on Thursday sought replies of 12 different federal and provincial authorities in a petition challenging the sugar factories control law that gives powers to the provincial government to unilaterally fix a minimum price of sugar cane.

A division bench, headed by Chief Justice Maqbool Baqar, also issued notices to the federal and provincial law officers in the petition filed by refined sugar manufacturers and adjourned the matter to Nov 7.

As many as 20 sugar mills, represented by Advocates Abdul Hafeez Pirzada, Abdul Sattar Pirzada, Rana Ikramullah, Syed Ghulam Shabbir Shah and Mamoon N. Chaudhry, moved the court questioning legality of Section 16 of the Sugar Factories Control Act, 1950 that gives the provincial government powers to unilaterally fix a minimum price of sugar cane.

The petitioners cited the chief secretary, provincial secretaries of food, agriculture and industries, Sindh sugar cane control board, cane commissioner (Sindh), federal secretary of the national food security and research, federal secretary of industries and production, and federal secretaries of law, finance, commerce and cabinet division as respondents.

The counsel stated that the impugned section of the act conferred uncontrolled and unguided powers and discretion on the provincial government to unilaterally decide sugar cane price.

Advocate Hafeez Pirzada said that provisions of the act imposed an unreasonable restriction on the petitioners to sell sugar as the provincial government fixed minimum price of sugar cane arbitrarily and in that respect there was no reasonable protection against misuse of power and no provision for check by way of the appeal or otherwise.

He said the entire purchase of the sugar cane by the refined sugar manufactures from growers, its pricing and sale was controlled by the provincial government till 1980. He said that with the purchase of entire sugar produced by a particular mill at a fixed price, reasonable profit margin was to be ensured as the entire manufactured product was guaranteed to be sold. Subsequently, he said, the provincial government departed with the practice of fixing price of refined sugar, but the power to notify minimum price of sugar cane remained intact with the provincial government.

The counsel said it was categorically envisaged in the prevailing national sugar policy that price of refined sugar shall be determined by free market and therefore in prevailing circumstances, the impugned provision had become anachronistic, discriminatory and redundant and same is therefore apt to be struck down.

He informed the judges that the adverse impact of a notification put out under the impugned provision was that many sugar mills owners were being forced to supply and sell refined sugar at below its cost.

The counsel said the notified minimum price for crushing season 2012-13 and 2013-14 was Rs172 per 40kgs.

He said the SHC had on May 28 passed an order in another petition on a related matter and directed the formation of a committee headed by federal industries secretary and comprising the chief secretaries of the four provinces and representatives of Pakistan Sugar Mills Association of Sindh, Punjab and Khyber-Pakhtunkhwa zones as its members.

The counsel said that the committee arbitrarily increased the sugar cane price to Rs180 per 40kgs. He asked the court to restrain the authorities from issuing a notification in respect of minimum price of sugar cane.

He said the increase would inexorably and inevitably lead to collapse of the entire sugar manufacturing industry.The court was also requested to declare that the impugned provision violates the fundamental rights of petitioners and is ultra vires of the constitution.

Published in Dawn, October 30th, 2014