Karnataka High Court
M/S Shreeram Agro vs The State Of Karnataka on 6 March, 2026
Author: Suraj Govindaraj
Bench: Suraj Govindaraj
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WA No. 200047 of 2026
HC-KAR
IN THE HIGH COURT OF KARNATAKA
KALABURAGI BENCH
DATED THIS THE 6TH DAY OF MARCH, 2026
PRESENT
THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
AND
THE HON'BLE MR. JUSTICE TYAGARAJA N. INAVALLY
WRIT APPEAL NO.200047 OF 2026 (GM-RES)
BETWEEN:
1. M/S.SREERAM AGRO INDUSTRIES,
M.P.NO.12-7-184/3 MACHALAPUR ROAD,
NEAR RAILWAY GATE, RAICHUR - 584 101.
BY ITS PROPRIETOR
SRI. NARASAPPA,
AGED ABOUT 46 YEARS.
2. M/S. SRI SRINIVASA AGRO FOODS
SURVEY NO.733/2 GADWAL ROAD,
RAICHUR - 584 101.
BY ITS PARTNER
SRI M.R.BHARATH,
Digitally signed by AGED ABOUT 42 YEARS.
VARSHA N
RASALKAR
Location: HIGH 3. M/S. SREE LAKSHMI SRINIVAS PARBOILED
COURT OF
KARNATAKA NO.12-7-254/178/1,
MACHALAPUR ROAD, NEAR RAILWAY GATE,
RAICHUR - 584 101.
BY ITS PARTNER SRI T.RAVINDRA KUMAR
AGED ABOUT 40 YEARS.
4. M/S SRI BALAJI HITECH INDUSTRIES
NO.186/1 MACHANAPUR ROAD,
NEAR RAILWAY GATE,
RAICHUR - 584 101.
BY ITS PARTNER
SRI. SAMPATH KUMAR,
AGED ABOUT 37 YEARS.
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HC-KAR
5. M/S AJAY AGRO INDUSTRIES
SURVEY NO.23/4, PLOT NO.262,
GADWAL ROAD, RAICHUR - 584 101.
BY ITS PARTNER
SRI J.RAVI KUMAR,
AGED ABOUT 44 YEARS.
6. M/S SRI LAKSHMI SRINIVASA INDUSTRIES
SURVEY NO.631 AND 632,
GADWAL ROAD, RAICHUR - 584 101.
BY ITS PARTNER
SRI. T.KRISHNA RAO,
AGED ABOUT 58 YEARS.
7. M/S A.B. AGRO INDUSTRIES
SURVEY NO.6-71 AND 6-72 GADWAL ROAD,
RAICHUR - 584 101.
BY ITS PARTNER
SRI KALLUR PRADEEP,
AGED ABOUT 37 YEARS.
...APPELLANTS
(BY SRI AMEETKUMAR DESHPANDE, SENIOR COUNSEL FOR
SRI ANANTH S.JAHAGIRDAR, ADVOCATE)
AND:
1. THE STATE OF KARNATAKA,
THROUGH ITS PRL. SECRETARY TO
GOVT. DEPARTMENT OF COOPERATION,
M.S. BUILDING, DR. AMBEDKAR VEEDHI,
BENGALURU - 560 001.
2. THE DIRECTOR,
AGRICULTURAL PRODUCE MARKETING DEPARTMENT,
2ND RAJ BHAVAN ROAD,
BENGALURU - 560 001.
3. THE JOINT DIRECTOR,
DISTRICT INDUSTRIAL DEPARTMENT ,
HYDERABAD ROAD, RAICHUR - 584 101.
4. THE SECRETARY,
AGRICULTURE PRODUCE MARKETING COMMITTEE,
BY ITS SECRETARY, RAICHUR - 584 101.
...RESPONDENTS
(BY SMT.MAYA T.R., HCGP FOR R1 TO R3;
SRI KRUPA SAGAR PATIL, ADVOCATE FOR R4)
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WA No. 200047 of 2026
HC-KAR
THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE
KARNATAKA HIGH COURT ACT, PRAYING TO CALL FOR THE
RECORDS AND ALLOW THIS APPEAL BY SETTING ASIDE THE
IMPUGNED JUDGMENT AND ORDER DATED 26.11.2025 PASSED IN
WRIT PETITION NO.201290/2025 BY THE LEARNED SINGLE JUDGE
AND CONSEQUENTLY ALLOW THE WRIT PETITION AS PRAYED FOR
IN THE INTEREST OF JUSTICE AND EQUITY.
THIS APPEAL, COMING ON FOR ADMISSION, THIS DAY,
JUDGMENT WAS DELIVERED THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ
and
HON'BLE MR. JUSTICE TYAGARAJA N. INAVALLY
ORAL JUDGMENT
(PER: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ)
1. The appellants are before this Court seeking for the following reliefs:
"Wherefore, for the facts and circumstances stated above, it is most humbly prayed that this Hon'ble Court may be pleased to call for the records and allow this appeal by setting aside the impugned judgment and order dated 26.11.2025 passed in writ petition No.201290/2025 by the learned Single Judge and consequently allow the writ petition as prayed for in the interest of justice and equity."
2. The appellants had filed W.P. No.201290/2025 seeking issuance of a writ of mandamus directing respondent Nos.2 and 4 not to collect market fee -4- NC: 2026:KHC-K:2154-DB WA No. 200047 of 2026 HC-KAR from them, contending that they had obtained an exemption certificate issued by the Joint Director, District Industries Centre on 08.03.2025.
3. The learned Single Judge, by a detailed order dated 26.11.2025, dismissed the writ petition holding that the exemption claimed by the petitioners under the Karnataka Agri-Business and Food Processing Policy, 2015 could not be granted. The learned Single Judge observed that although the policy initially contemplated exemption from payment of market fee, the said benefit had subsequently been withdrawn by a Circular dated 03.02.2021. Since the appellants had sought exemption only in the year 2025, by which time the exemption itself stood withdrawn, the petitioners were not entitled to claim the benefit under the policy.
4. It is this order that is brought under challenge in the present writ appeal.
5. Sri Amit Kumar Deshpande, learned Senior Counsel appearing for Sri Ananth S. Jahagirdar, learned counsel for the appellants, submits that 5.1. the Karnataka Agri-Business and Food Processing Policy, 2015 was issued with the -5- NC: 2026:KHC-K:2154-DB WA No. 200047 of 2026 HC-KAR object of encouraging establishment of agro- processing industries within the State by providing several incentives and concessions.
5.2. By the said policy, the State Government had promised exemption from payment of market fee for a period of ten years in respect of agricultural produce purchased by newly established processing industries. The appellants established their industrial units in the year 2019, which is well within the operational period of the policy. Therefore, according to him, the appellants would be entitled to claim the benefit promised under the said policy.
5.3. The doctrine of promissory estoppel would squarely apply in the present case. It is contended that when the State Government formulates and announces an industrial policy promising incentives and concessions, such representation is intended to induce entrepreneurs to establish industrial units within the State.
5.4. According to him, the appellants acted upon the promise held out in the policy and invested -6- NC: 2026:KHC-K:2154-DB WA No. 200047 of 2026 HC-KAR substantial resources in establishing their industrial units. Having induced entrepreneurs to set up industries on the strength of such incentives, it would not be open for the State to unilaterally withdraw the benefits, thereby defeating the legitimate expectations of the investors.
5.5. Learned Senior Counsel lastly submits that the policy in question was issued by the State Government through the Directorate of Industries and Commerce (MSME). The subsequent Circular dated 03.02.2021 was issued by the Director, Agricultural Produce Market Committee (APMC). According to him, a circular issued by a subordinate authority cannot override or dilute the benefits promised under a policy decision taken by the State Government.
6. We have carefully considered the submissions made by the learned Senior Counsel appearing for the appellants and have perused the material placed on record.
7. A perusal of Government Order No. AGD/94/AMS/2015 dated 11.12.2015 indicates that -7- NC: 2026:KHC-K:2154-DB WA No. 200047 of 2026 HC-KAR the Government of Karnataka introduced the Karnataka Agri-Business and Food Processing Policy, 2015 with the objective of encouraging value addition in agricultural produce and promoting agro- based industries within the State.
8. Under Clause 11 of the said policy, several incentives were contemplated. One of the incentives provided was exemption from payment of market fee for new agricultural produce processing industries for a period of ten years in respect of purchases of agricultural produce made by such industries.
9. It is this incentive that the appellants seek to invoke in the present proceedings.
10. A perusal of the certificate dated 08.03.2025 issued by the Joint Director, District Industries Centre, Raichur, indicates that the appellants' industrial unit commenced commercial production on 20.11.2019, and the first sale invoice was also issued on the same date.
11. The said certificate also indicates that the enterprise had addressed a letter dated 03.04.2024 seeking issuance of the certificate confirming the commencement of commercial production.
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12. However, the learned Single Judge has taken note of the Circular dated 03.02.2021, whereby the exemption from payment of market fee earlier contemplated under the policy was withdrawn.
13. The crucial aspect which emerges from the record is that the appellants had not sought the benefit of exemption prior to the issuance of the said circular withdrawing the benefits. The appellants approached the authorities seeking exemption only in the year 2025, which was long after the benefit under the policy had been withdrawn.
14. The argument based on promissory estoppel also cannot be accepted in the facts of the present case. The doctrine of promissory estoppel applies when a party has altered its position acting upon a clear and unequivocal promise made by the State, and where denial of such promise would result in injustice.
15. However, it is equally well settled that promissory estoppel cannot be invoked to compel the Government to continue a policy benefit which has been validly withdrawn in accordance with law, particularly when the benefit itself has not crystallized into a vested or accrued right.
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16. In the present case, the appellants had not obtained any specific sanction or exemption order prior to the withdrawal of the benefit under the Circular dated 03.02.2021. The application seeking exemption was made only after the withdrawal of the policy benefit. Therefore, the appellants cannot claim that a vested right had accrued in their favour.
17. The position might have been different if the appellants had submitted their application seeking exemption prior to 03.02.2021, or if the competent authority had already granted the exemption before the issuance of the circular. In such circumstances, it could possibly be argued that the withdrawal of the benefit would not affect the accrued rights of the appellants.
18. However, in the present case, the appellants approached the authorities after the exemption itself had ceased to exist under the policy framework.
19. In that view of the matter, the learned Single Judge was justified in holding that the appellants could not claim the benefit of a policy incentive which had already been withdrawn prior to the filing of the application seeking such benefit.
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20. We, therefore, find no infirmity in the order passed by the learned Single Judge warranting interference in the present writ appeal.
21. Accordingly, the writ appeal fails and is dismissed.
22. However, it is made clear that liberty is reserved to the appellants to challenge the Circular dated 03.02.2021 withdrawing the exemption, in appropriate proceedings if so advised and in accordance with law.
Sd/-
(SURAJ GOVINDARAJ) JUDGE Sd/-
(TYAGARAJA N. INAVALLY) JUDGE VNR/SMP List No.: 1 Sl No.: 6