Authority: High Court of Andhra Pradesh at Amaravati (Special Original Jurisdiction)

Order Date: 17 June 2026

Case Overview

  • Petitioners: Kanyaka Traders, a registered partnership firm engaged in the business of rice milling and supply.
  • Respondents: Union of India, Food Corporation of India (FCI) (2nd respondent), Andhra Pradesh State Civil Supplies Corporation Limited (APSCSC) (3rd respondent).
  • Counsel for Petitioners: T.V.P. Sai Vihari.
  • Counsel for Respondents: Deputy Solicitor General of India, O. Udaya Kumar, MD. Saleem (standing counsel for APSCSC).
  • Writ Petitions Covered: A common order disposing 48 writ petitions numbered 26620/2024, 26520/2024, 26521/2024, 26522/2024, 26525/2024, 26526/2024, 26527/2024, 26533/2024, 26534/2024, 26535/2024, 26543/2024, 26549/2024, 26550/2024, 26551/2024, 26619/2024, 26621/2024, 237/2025, 239/2025, 242/2025, 259/2025, 270/2025, 277/2025, 280/2025, 286/2025, 287/2025, 289/2025, 292/2025, 297/2025, 306/2025, 308/2025, 316/2025, 319/2025, 320/2025, 339/2025, 342/2025, 345/2025, 347/2025, 348/2025, 349/2025, 351/2025, 354/2025, 356/2025, 359/2025, 360/2025, 364/2025, 367/2025, 386/2025 & 474/2025.
  • Core Dispute: Petitioners alleged that letters dated 02.09.2024 (FCI Regional Office to Divisional Office), 24.04.2024, 22.10.2024, 15.10.2024, and 16.10.2024 directing replacement of stocks supplied for the KMS 2022‑23 crop season were illegal, arbitrary, and that the respondents unlawfully withheld payment of bills from FY 2016‑17 to FY 2023‑24.
  • Background Facts:
  • Petitioners supplied Custom Milled Rice (CMR) blended with Fortified Rice Kernels (FRK) at a 1:100 ratio as per guidelines issued by the 1st respondent (Union of India) to improve nutritional quality for the Public Distribution System (PDS).
  • The 3rd respondent (APSCSC) procured paddy and FRK, supplied FRK to petitioners, who blended and delivered CMR to the 2nd respondent (FCI). Payments were to be released by the 3rd respondent.
  • On 04.05.2023, FCI issued proceedings (Lr. No. QC 2(2)/FRK/KMS 2022‑2023/LAB) stating that micronutrient tests (folic acid, vitamin B12, iron) on samples taken from the petitioners’ FRK rice were not within FSSAI limits, directing replacement of the stocks.
  • Petitioners contended that the samples were taken without their presence, that FRK quality was the responsibility of the 3rd respondent, and that subsequent retesting on 15.04.2024 showed compliance.
  • Despite the retest report, the 2nd respondent continued to prohibit supply of FRK rice and did not release pending bills.
  • Respondents’ Position:
  • The 2nd respondent argued that its actions were fully compliant with the Standard Operating Procedure (SOP) dated 15.03.2022 for Quality Management of FRK, the SOP dated 16.07.2021 for monitoring quality of food grains, the Operational Guidelines dated 13.12.2022, and the Procedure for Appeal dated 15.03.2023.
  • They maintained that the micronutrient levels were Beyond Rejection Limit (BRL) in the primary test, the appeal and review samples also failed, and that the DFPD’s letter dated 10.06.2024 declared the review results final and unchallengeable.
  • The 3rd respondent affirmed that its FRK batches consistently met standards, but the responsibility to cross‑check FRK quality lay with the rice millers under Clause II(f) of the Operational Guidelines.
  • Legal Submissions:
  • Petitioners argued violation of natural justice, lack of contractual relationship between FCI and millers, and that the stocks were later diverted for ethanol production, rendering micronutrient deficiencies irrelevant.
  • Respondents relied on statutory provisions, SOPs, and precedents (e.g., Chandigarh Administration v. Jagjit Singh and Nalgonda District Rice Millers Association v. Union of India) to assert that the procedure was lawful and that the court could not compel repetition of an illegal order.
  • Court’s Reasoning:
  • The Court examined the SOPs, Operational Guidelines, and the Procedure for Appeal, finding that the surprise inspection, sample collection, testing, and subsequent directives were in strict accordance with the prescribed procedures.
  • It noted that the 2nd respondent had no contractual obligation to the petitioners; the contractual nexus existed between the petitioners and the 3rd respondent.
  • The Court held that the DFPD’s communication that review‑sample results are final is binding, and that the FCI Headquarters’ later “adhoc” approval was expressly subject to the final decision of the DFPD.
  • No infirmity in the procedure was identified, and the petitioners’ claim of violation of natural justice was rejected because the SOP expressly allows surprise inspections without prior notice.

Final Outcome

  • The Court dismissed all the writ petitions, finding them devoid of merit.
  • No costs were awarded against the petitioners.
  • All miscellaneous pending petitions, if any, were ordered to stand closed.

Topics: Food Fortification, Public Distribution System, Regulatory Compliance