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M/S. Sree Rice Industries vs. The State Of Andhra Pradesh

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WP/221/2026HC Andhra PradeshGSTCNR APHC01071565202507 January 2026Bench: V.SUJATHA8 pages
For Petitioner: RAJU GUBBALAFor Respondent: GP FOR CIVIL SUPPLIES
AI SummaryPartly Allowed

Facts

The petitioner, a rice mill, applied to participate in the Custom Milling of Paddy (CMR) scheme after fulfilling statutory requirements and obtaining a bank guarantee. The inspection report found the mill suitable, but the respondent authorities failed to allot paddy.

Held

The Court directed the petitioner to approach the respondent authorities within one week to finalize agreements and obtain the necessary e-BG. Upon compliance, the respondents are to allot custom milled rice as per the petitioner's entitlement.

Key Issues

Whether the respondent authorities illegally refused to allot Custom Milled Rice (CMR) paddy to the petitioner despite fulfilling all requirements. The issue also involves the procedural requirements for allotment, including agreements and bank guarantees.

Sections Cited

Not Applicable

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
APHC010715652025 IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction) [3333] THURSDAY,THE EIGHTH DAY OF JANUARY TWO THOUSAND AND TWENTY SIX PRESENT THE HONOURABLE SMT JUSTICE V.SUJATHA WRIT PETITION NO: 221/2026 Between: 1. M/S. SREE RICE INDUSTRIES,, REP., ITS MANAGING PARTNER SMT. GONDU CHANDINI, W/O. MURALI, NEELAMPETA VILLAGE, KOTABOMMALI MANDAL, SRIKAKULAM DISTRICT ...PETITIONER AND 1. THE STATE OF ANDHRA PRADESH, REPRESENTED BY ITS PRINCIPAL SECRETARY, TO GOVERNMENT, CIVIL SUPPLIES DEPARTMENT AT SECRETARIAT, VELAGAPUDI AMARAVATI, GUNTUR DISTRICT-522238 2. ANDHRA PRADESH STATE CIVIL SUPPLIES CORPORATION LIMITED, D.NO.10152/1, SRI SAI TOWERS, BANDAR ROAD, KANURU, VIJAYAWADA- 520007 REP BY ITS VICE CHAIRMAN AND MANAGING DIRECTOR 3. THE COLLECTOR, SRIKAKULAM, SRIKAKULAM DISTRICT-532001 4. THE JOINT COLLECTORCS AND EXOFFICIO EXECUTIVE DIRECTOR OF APSCSL, SRIKAKULAM, 2 VS,J W.P.NO.221 OF 2026 SRIKAKULAM DISTRICT-532001 5. THE DISTRICT SUPPLIES OFFICER, SRIKAKULAM, SRIKAKULAM DISTRICT-532001 6. THE DISTRICT MANAGER, A P STATE CIVIL SUPPLIES CORPORATION LTD, SRIKAKULAM, SRIKAKULAM DISTRICT-532001 ...RESPONDENT(S): 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 topleased to issue an appropriate Writ, Order or Direction, more particularly a Writ of Mandamus, declaring the action of the respondents, especially the 6th respondent - District Manager, APSCSC Limited, Srikakulam, ins not allotting Custom Milled Rice (CMR) paddy to the petitioner's rice mill, namely M/s. Sree Rice Industries, despite the petitioner having fulfilled all statutory requirements, obtained all requisite permissions, furnished Bank Guarantee, and having been found eligible and suitable pursuant to favourable inspection reports and proceedings issued by the competent authorities, as illegal, arbitrary, unreasonable, violative of the principles of natural justice, unsustainable in law, and violative of Articles 14 and 19(1)(g) of the Constitution of India,and consequently, direct the 6th respondent to forthwith allot Custom Milled Rice (CMR) paddy to the petitioner's rice mill, namely M/s. Sree Rice Industries, situated at Neelampeta Village, Kotabommali Mandal, Srikakulam District, for the relevant Kharif Marketing Season, in accordance with law, IA NO: 1 OF 2026 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased pleased to direct the 6th respondent to provisionally allot Custom Milled Rice (CMR) paddy to the petitioner's rice mill, namely M/s. Sree Rice 3 VS,J W.P.NO.221 OF 2026 Industries, and permit the petitioner to participate in the Custom Milling operations for the relevant Kharif Marketing Season, Counsel for the Petitioner: 1. RAJU GUBBALA Counsel for the Respondent(S): 1. GP FOR CIVIL SUPPLIES The Court made the following: 4 VS,J W.P.NO.221 OF 2026

O R D E R: The present Writ Petition came to be filed under Article 226 of the Constitution of India seeking the following relief:- “…to issue an appropriate Writ, Order or Direction, more particularly a Writ of Mandamus, declaring the action of the respondents, especially the 6th respondent - District Manager, APSCSC Limited, Srikakulam, in not allotting Custom Milled Rice (CMR) paddy to the petitioner's rice mill, namely M/s. Sree Rice Industries, despite the petitioner having fulfilled all statutory requirements, obtained all requisite permissions, furnished Bank Guarantee, and having been found eligible and suitable pursuant to favourable inspection reports and proceedings issued by the competent authorities, as illegal, arbitrary, unreasonable, violative of the principles of natural justice, unsustainable in law, and violative of Articles 14 and 19(1)(g) of the Constitution of India, and consequently, direct the 6th respondent to forthwith allot Custom Milled Rice (CMR) paddy to the petitioner's rice mill, namely M/s. Sree Rice Industries, situated at Neelampeta Village, Kotabommali Mandal, Srikakulam District, for the relevant Kharif Marketing Season, in accordance with law.….”

2.

The petitioner-rice mill established in the name and style of “Sree Rice Industries”, situated at Neelampeta village, Kotabommali Mandal, Srikakulam District, having duly registered as a Micro Enterprise under the UDYAM Registration Scheme, bearing Registration No.UDYAM-AP-09-0056934 and obtained GST Registration bearing Registration No.37AFSFS1222F1ZX. In compliance with the requirements prescribed for participation in the Custom Milling of Paddy (CMR) scheme, the petitioner has W.P.NO.221 OF 2026

furnished a Bank Guarantee for a sum of Rs.20,00,000/-(Rupees Twenty Lakhs only) obtained from Indian Bank, Kotabommali Branch in favour of Andhra Pradesh State Civil Supplies Corporation Limited (APSCSC), Srikakulam, vide Bank Guarantee dated 10.12.2025. Having complied with all statutory requirements and having established the rice mill with requisite infrastructure and machinery, the petitioner made an application on 11.12.2025 to the 4th respondent seeking permission to participate in Custom Milling of Paddy (CMR) for Kharif Marketing Season (KMS) 2025-26. 3. Pursuant thereto, the District Supply Officer, issued a memo vide Rc.No.144/2025/S4, dated 11.12.2025, directing the Deputy Tahsildar(Civil Supplies), Kotabommali to inspect the petitioner’s rice mill and to conduct a detailed enquiry into the contents of the application. On the basis of the said memo, the Deputy Tahsildar(Civil Supplies), Kotobommali, conducted a detailed inspection, verified and found that the Fortified Rice Kernel(FRK) blending machinery and Sortex machinery were duly installed, available and suitable for effective operation at M/s.Sree Rice Industries. Further the petitioner-rice mill has found to be technically and operationally suitable for undertaking processing W.P.NO.221 OF 2026

of paddy under the procurement process and accordingly recommended permission to the petitioner for participating in the CMR operations and submitted a detailed report with prescribed check list. In spite of a detailed report submitted by the Deputy Tahsildar and in spite of the petitioner approaching the 6th respondent, the 6th respondent neither considered the representation nor allowed the petitioner to participate in the CMR paddy operation. Aggrieved by the same, the present writ petition came to be filed.

4.

Heard learned counsel for the petitioner and Mr.M.D.Saleem, learned Standing counsel for respondent No.6. 5. Today, when the matter came up for hearing, Mr.M.D.Saleem, learned Standing Counsel representing for respondent No.6, furnished a copy of instructions received from the District Civil Supplies Manager, Srikakulam, vide File No.P.Admin.(1)/WP Instructions/2026, dated 07.01.2026, wherein it is stated that:-

“..as per the procurement operation SOP as communicated in the reference 1st cited, the following are the important points to be fulfilled for allotting CMR Paddy to any mill. During the procurement year:- W.P.NO.221 OF 2026

1.

Point No.78.5 (xxiii): Allocation of Paddy targets to Rice Mills duly consulting with District Rice Millers Association and communicate the same to Head Office for Fixation.

2.

Point No.78.6 (i): The APSCSCL has enabled the e- BG concept. The Rice Miller/Agent shall submit e-BG in the ration of 1:2 (BG value: Paddy Cost)

3.

Point No.78.6 (v): E-Bank Guarantee for lease Mills shall submit in the ration of 1:1;5(Paddy: Guaranteed Amount) duly submitting the lease document covering the agreement period. If the Miller is not willing to submit BG in that ratio, cluster agreement may be allowed duly taking the signatures of 2 other millers as co-guarantors with counter signature of President/Secretary/Are President of the Rice Millers Association.

As submitted above, any Miller participating in the Procurement Operation for KMS 25-26 has to submit the above three documents.

In this connection it is submitted that, the agreement and cluster agreement as mention at point no.03 is the pre requisite for allowing any mill in the district into procurement operation. Once the agreement and cluster agreement is given, then the mill concern will submit, it e-BG (electronic Bank Guarantee) worth three times the paddy that would be allotted to the said miller by the District Association.

In the present case, the miller has already taken e- BG for Rs.20,00,000/- on 10.12.2025. However, the same could not given effect to as the agreement and cluster agreement has not been submitted.

Further, it is submitted that the e-BG date has to be subsequent to allowing the mill into procurement operation. Mere obtaining and submitting e-BG will not entered the mill to participate in procurement.

I submit that there is no problem from the 3rd to 6th respondent herein to allow the petitioner mill to this procurement season, subject to receipt of the agreements, latest e-BG as mentioned above, then after the paddy will be allocated in consultation with District Rice Millers Association.”

W.P.NO.221 OF 2026

6.

Learned counsel for the petitioner has also admitted that, as on date, the petitioner has not entered into any agreement with the respondent-corporation and he is willing and ready to enter into an agreement with the respondent corporation as stated by the respondent authority.

7.

In view of the above, instead of keeping the writ petition pending, this Court is of the view that it would suffice to direct the petitioner to approach the respondent authorities i.e., respondent No.3 to 6 within a period of one (01) week from the date of receipt of a copy of this order. Thereafter, the respondents are directed to allot the custom milled rice to the petitioner’s rice mill as per his entitlement.

8.

Accordingly, the writ petition is disposed of. No costs.

Consequently, Miscellaneous Petitions, if any, pending stand closed. ____________________ JUSTICE V.SUJATHA Note:Issue C.C by 08.01.2026 B/o Date :08.01.2026 LSP

Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.