According to the `rate contract system', which was introduced by the Shiv Sena-BJP Government in May 1997, the 120 sugar co-operatives in the State were forced to buy the various machineries and spare parts required by them from the State government's panel of suppliers, at the rates mentioned thereon.

The decision was stiffly contested by the Maharashtra State Sugar Co-operatives Federation, that had 120 sugar co-operatives as members, claimed it was undemocratic in the first place and a violation of their rights. Besides,they challenged the State Government's stand that the move had been taken to ``reduce the corruption in the co-operatives''.

In fact, during one of the hearings, the bench of Justice A V Sawant and Justice R J Kochar had asked the State Advocate General C J Sawant if the State was keen on removing corruption or ``only shifting the centre of corruption''.

In the court on Thursday though, Sawant put up a spirited defence of the State Government policy. ``If it is public money that is being used by the State sugar co-operatives, then the government has a right to know how the money is being spent,'' the Advocate General argued hotly. Advocate Ashutosh Kumbhakoni, counsel for the petitioners retorted that the State did not have the wherewithal to monitor the working of all the 120 sugar co-operatives. ``One hundred and twenty sugar co-operatives..2200 items, and only four officials. Will the State Government be able to clear the permissions sought?'' he asked. To this Sawant answered that if he was able tocollect the exhaustive data on the sugar co-operatives, the State would be able to handle the permissions as well. ``The State will be able to dispose off the permissions sought within a week,'' he stated.

Accordingly, the division bench modified the minutes of the order presented by the two parties whereby the sugar co-operatives will be allowed to source their machineries from the open market. If it is of a price lower than that of the rates empanelled by the State, but of the same quality and specifications, the co-operative will have to intimate the Commissioner of Sugar. The Commissioner will be expected to dispose off the applications in a week, if there is no answer within the said period, it will be deemed to have been approved.

If the rates are higher, a prior written permission will have to be obtained from the Commissioner of Sugar.