Andhra Pradesh High Court - Amravati

M/S Oil Palm Developers And ... vs State Of Andhra Pradesh, on 28 January, 2021

Bench: R Raghunandan Rao

[ 3206 ]

(Special Original Jurisdiction) iss
THURSDAY, THE TWENTY EIGHTH DAY OF JANUARY, (ce
TWO THOUSAND AND TWENTY ONE vee

: PRESENT: Nae

WRIT PETITION NO: 2043 OF 2021
Between:

1. M/s Oil Palm Developers and Processors Association, Having its office at 1 st
Floor 6-3-569/2,Rockdale,Somajiguda,Hyderabad 5000082 Represented by its
Executive Director,Mr.A.Ndrasimha Rao

2. 3F Oil Palm Agrotech' Pvt. Ltd, J#Floor, 6-3-569/2, Rockdale, Somajiguda,
Hyderabad-5000082, Represented by its DGM, Agriculture, Mr. P. Vijay Prasad.

3. Ruchi Soya Industries Ltd, 614, Tulasi Chambers, Nariman Point, Mumbai-
40002, Represented by its Unit Head, Mr. K.J. Prabhakara Rao.

4. Godrej Agrovet Limited, Godrej One, 3rd Floor,Pirojshanagar, Eastern Express
Highway, Vikhroli (East), Mumbai-400 079. Represented by its Business Head,
Oil Palm Plantations, Mr. Souganta Niyogi.

5. Radhika Vegetable Oils (Pvt) Limited, Having its Registered Office at Shreeram
Nagar, Vizianagaram, represented by its Head Plantations, Mr. D.G.S. Rayapa
Raju

6. Lakshmi Balaji Oils (P) Ltd, Having its factory at Sy.No.24/3, Tekara Khandi
Village, Kurupam Mandal, Vizianagaram represented by its Authorized signatory,
Mr.D.G.S. Rayapu Raju

7. Shanti Oil Palm Industries Pvt Limited, Level 5, Mittal Chambers, 10-113/2,
Asilimetta, Visakhapatnam, represented by its Authorized Signatory, N. Srinivasa
Rao.

...Petitioners
AND

1. State of Andhra Pradesh, Rep by its Principal Secretary to GOAP, Agriculture

and Cooperation (Horti and Seri) Department, Secretariat Buildings ,Velagapudi

Amaravathi.

The Commissioner of Horticulture, State of Andhra Pradesh, Amaravathi.

Andhra Pradesh Cooperative Oil Seeds, Growers Federation Limited (AP Oil

Fed.), represented by its Vice-Chairman and Managing Director

4. Union of India, Represented by its Addl. Secretary, Ministry of Agriculture, Dept.
of Agriculture and Cooperation, Krishi Bhavan, New Delhi-110001.

, ...Respondents

Petition under Article 226 of the Constitution of India praying that in the
circumstances stated in the affidavit filed therewith, the High Court may be pleased to
issue a writ or order or direction more particularly one in the nature of Writ of Mandamus
or any other appropriate Writ declaring the G.O.RT.No.22 dated 19.01.2021 issued by
the 1* Respondent fixing the formula for the pricing of Oil Palm Fresh Fruit Bunches
(FFBs) as arbitrary, illegal, void and contrary to the Judgment passed in W.P.No.9376
of 2015 by the Hon'ble High Court dated 15.12.2015 and the provisions of Andhra
Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993 (hereinafter
referred to the Act) and rules there under besides violating the petitioners rights
guaranteed under Articles 14 and 19(1)(g) of the Constitution of India and consequently
direct the 1st Respondent to re-fix the FFBs pricing formula for the period November,
2020 to October, 2021 (oil year) by taking OER of 16.08 % (Pedavegi) in terms of
CACP Report.

IA NO: 1 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated in the
affidavit filed in support of the writ petition, the High Court may be pleased to direct the
Respondents 1 and 2 to re-fix the FFBs price for the period November, 2020 to October,

2021 (oil year) payable by the members of the association including petitioners 2 to 7 by
taking OER of 16.08% (Pedavegi) in terms of CACP Report, pending disposal of WP
2043 of 2021, on the file of the High Court.

IA NO: 2 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated in the
affidavit filed in support of the writ petition, the High Court may be pleased to suspend
the operation of the letter No.NFSM-Op/12/2020 dated 21.01.2021 issued by the 2"
Respondent, pending disposal of WP 2043 of 2021, on the file of the High Court.

IA NO: 3 OF 2021

Petition under Section 151 CPC praying that in the circumstances stated in the
affidavit filed in support of the writ petition, the High Court may be pleased to suspend
the operation of the G.O.RT.No.22 dated 19.01.2021, Agricultural & Cooperation (Horti
& Seri.) Department issued by the 1% Respondent, pending disposal of WP 2043 of
2021, on the file of the High Court.

The petition coming on for hearing, upon perusing the Petition and the affidavit
filed in support thereof and upon hearing the arguments of M/s Challa Gunaranjan,
Advocate for the Petitioners, GP for Agriculture for the Respondent No.1 & 2 and Sri N
Harinath, Standing Counsel for Respondent No.4, the Court made the following.
ORDER

"Petitioner Nos.2 to 7 are Oil Palm Developers and Processors in the State of Andhra Pradesh and petitioner No.1 is the Association of such Oil Palm Developers and Processors. The petitioners are in the business of manufacturing Palm Oil from Oil Palm Fresh Fruit Bunches. The entire process of growing Oil Palm Fresh Fruit Bunches and the sale of such Fresh Fruit Bunches and subsequent manufacture of Palm Oil is controlled and regulated by the Andhra Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993. As a part of this regulation, the price payable by the Palm Oil Manufacturers to the farmers supplying fresh fruit bunches is also controlled and regulated by the Act. In fact, the price payable is fixed by the State.

The price is fixed by way of applying a price fixation formula for every year. Under this price formula one of the key figures taken into account is what is called the Oil Extraction Ratio Percentage (OER percentage). This figure is the percentage of oil that is extracted from the fresh fruit bunches. For the purposes of fixing this figure, the OER Percentage of one palm oil manufacturing unit is taken. Earlier in the erstwhile united state of Andhra Pradesh, the OER percentage of the State unit in Khammam District was used as the benchmark. Even after the bifurcation, this benchmark continued and the OER of the said unit at Khammam was being applied in the price formula. Aggrieved by the same, the Palm Oil Manufactories had moved the Hon'ble High Court at Hyderabad for the States of Telangana and Andhra Pradesh by way of W.P.No.9376 of 2015. This writ petition was disposed of by a learned single judge on 15.12.2015 holding that the OER figure should be taken from the State Unit from the State of Andhra Pradesh being the unit at Pedavegi West Godavari District and not the unit in Khammam. .

The State of Andhra Pradesh had subsequently taken the OER figures of the APOILFED Pedavegi Unit till the year 2019-2020.

For the period November, 2020 to October, 2021, the State had issued G.O.Rt.No.22, Agriculture & Cooperation (HORT! & SERI) Department, dated 49.01.2021, fixing the OER Percentage as 48.682% for the year 2020-21. This ratio is said to have been fixed to avoid loss to the farmers as well as to stop cross purchase of Fresh Fruit Bunches by Oil Processing Unit in the State.

The petitioners have now approached this court being aggrieved by the fixation of the 48.682% as the OER Percentage. Sri B.Adinarayana Rao, learned senior counsel appearing for the petitioners, submits that when the GO itself shows the OER Percentage for Pedavegi Unit as 46.08% for the years 2019-20, the respondent State could not have fixed the OER percentage at 18.682% for the current year 2020-21 commencing from November, 2020 to October, 2021.

itis submitted that no rationale is given for fixing 18.682% as the OER to be applied in the price formula. |

Learned Government Pleader for Agriculture submits that this figure has been arrived at after an elaborate exercise and after taking into account the representations made by various farmer organizations and after taking into account the fact that the Oil Processing Units are purchasing fresh fruit bunches from areas which fall outside their zones.

A perusal of G.O.Rt.No.22, Agriculture & Cooperation (HORT! & SERI) Department, dated 19.01.2021, simply states that the OER for the Pedavegi Unit was fixed at 16.08% for the year 2019-20 and that the OER for the year 2020-21 was being fixed at 48.682%. No reason is given for varying the OER Percentage except stating that the variation is being made for the benefit of the farmers and to stop gross purchase by Oil Processing Units.

In the absence of any reasons given for the variation and in view of the fact that the State continues to bench mark the OER percentage to the actual OER, attained by the Pedavegi Unit of OILFED, the fixation of OER at 18.682%, is prima facie arbitrary.

Learned Government Pleader seeks further time to obtain instructions in the matter.

Sri K.Chidambaram, learned counsel, also submits that various farmer organizations propose to implead themselves in this case and seeks time.

in the circumstances, there shall be an interim suspension of G.O.Rt.No.22, Agriculture & Cooperation (HORTI & SERI) Department, dated 19.01.2021, for a period of three weeks.

Post on 03.02.2021 in the motion list." /L- ="

Sd/-K.TataRao L ASSISTANT REGISTRAR

ITRUE COPY!! _ SECTION OFFICER

To,

_ The Principal Secretary to GOAP, Agriculture and Cooperation (Horti and Seri)

Department, State of Andhra Pradesh, Secretariat Buildings , Velagapudi

Amaravathi.

2. The Commissioner of Horticulture, State of Andhra Pradesh, Amaravathi.

3. Andhra Pradesh Cooperative Oil Seeds, Growers Federation Limited (AP Oil

Fed.), represented by its Vice-Chairman and Managing Director

_ Addl. Secretary, Union of India, Ministry of Agriculture, Dept. of Agriculture and

Cooperation, Krishi Bhavan, New Delhi-110001.(1 to 4 by RPAD)