Oil Palm Developers And Processors Association vs. The State Of Ap

The present Writ Petition is filed challenging G.O.Rt.No.72 dated 04.02.2026 and the consequential monthly orders issued pursuant thereto, whereby the Government of Andhra Pradesh fixed the formula for pricing Fresh Fruit Bunches (FFBs)1 of oil palm for the Oil Year 2025–26 by adopting an Oil Extraction Ratio (OER)2 of 20.01%. The Petitioners seek issuance of a Writ of Certiorari or any other appropriate writ, order or direction calling for the records leading to the issuance of the said G.O. and the consequential orders and quashing the same. The Petitioners further seek a direction to Respondent Nos.1 to 3 to notify a fresh FFB pricing formula for the Oil Year 2025–26 in accordance with law, particularly by ensuring that the OER is determined with reference to the actual oil content extracted by the processing industry in Andhra Pradesh during the relevant preceding oil year. Background to filing of the Petition

Palm oil is the largest source of vegetable oil in the world and India is one of the major producers and consumers of vegetable oils. Despite production of over 31 million Metric Tons of oilseeds during

The Commission for Agricultural Costs and Prices (CACP)3, which is a wing of the Ministry of Agriculture, Government of India, undertook a study during 2011–12 concerning the pricing of FFBs in Andhra Pradesh, Karnataka and Tamil Nadu. The CACP examined the then prevailing pricing formula and recommended a formula for pricing FFBs. Pending establishment of testing centres for each oil palm processing industry for determining the actual oil content, the CACP recommended taking an OER of 18% as the basis for the pricing formula. The Government of India communicated the CACP report to the State Government. The erstwhile combined State of Andhra Pradesh accepted the said formula and communicated to the Ministry of 3Hereinafter referred to as CACP Agriculture, Government of India, that the formula was balanced and acceptable. The relevant portion of the communication reads as follows: “Sub:- Formula for pricing of Fresh Fruit Bunches of Oil Palm. The formula for pricing of Fresh Fruit Bunches (FFBs) of Oil Palm is recommended at 13.54 percent of net Crude Palm Oil (CPO) weighted average price, based upon 18% Oil Extraction Ratio (OER), plus 75.25 percent on 9% recovery of palm kernel nuts weighted average price. Any variation in OER would result in change in the pricing formula in respect of percent of net CPO weighted average price to be paid to the oil palm growers as per enclosed table at Annexure. The OER would be determined as per actual oil content extracted in the past by the processing industry, as established by the State Governments concerned.”

Thus, the relevant pricing principle contemplated that the OER would be determined with reference to the actual oil content extracted in the past by the processing industry, as established by the concerned State Government. The determination of OER is consequently a material component of the FFB pricing formula, since any variation in OER results in a corresponding variation in the percentage of the net CPO weighted average price payable to oil palm growers. The OER adopted by the Government of Andhra Pradesh from year to year after adoption of the CACP formula may be set out chronologically as follows: Oil Year Details of G.O. Adopted OER 2013–14 G.O. Ms No.110 dated 13.12.2013 17.38% 2014–15 G.O. Ms No.2 dated 18.02.2015 17.55% Based on oil extracted at Aswaraopet, Telangana 2015–16 G.O. Ms No.6 dated 19.01.2016 17.31% Actual OER obtained at Pedavegi, Andhra Pradesh 2016–17 G.O. Ms No.17 dated 10.03.2017 17.06% Actual OER obtained at Pedavegi, Andhra Pradesh 2017–18 G.O.Ms.No.41 Dated 16.04.2018

40% Actual OER obtained at Pedavegi, additional 1% sanctioned from State budget 2018–19 G.O.Rt.No.565 Dated 04.09.2019

22% Actual OER obtained at Pedavegi, Andhra Pradesh, additional 1.72% sanctioned from State budget 2019–20 G.O.Rt.No.36 Dated 01.02.2021

72% Actual data at Pedavegi, Andhra Pradesh 2020–21 G.O.Rt.No.22 Dated 19.01.2021

68% Derived from Aswaraopet, Telangana 2021–22 G.O.Rt.No.423 dated 01.07.2022 19.22% Same as the OER fixed by Telangana 2022–23 G.O.Rt.No.110 dated 10.02.2023 19.32% Same as the OER fixed by Telangana 2023–24 G.O.Rt.No.614 dated 21.07.2025 19.17% Same as the OER fixed by Telangana 2024–25 G.O.Rt.No.614 dated 21.07.2025 19.42% Same as the OER fixed by Telangana 2025–26 G.O.Rt.No.72 dated 04.02.2026 20.01% Adopted by following the pricing formula of Telangana under G.O.Rt.No.594 dated 18.12.2025

The above chronology assumes significance in the context of the bifurcation of the composite State of Andhra Pradesh. After bifurcation, the A.P. Oil Fed unit at Aswaraopet fell within the State of Telangana, while the Pedavegi unit remained within the State of Andhra Pradesh.

For the year 2014–15, the Government of Andhra Pradesh fixed the OER at 17.55% based on the oil extracted at Aswaraopet in Telangana. This determination was challenged in W.P.No.9376 of 2015. The writ petition was allowed and G.O.No.2 was declared violative of Article 14. In the circumstances of that case, a learned Single Judge of the then Composite High Court held that the State ought to have adopted the OER from oil actually extracted within the State of Andhra Pradesh, consistent with the CACP recommendation. The plea relating to estoppel was also rejected in the said proceedings. Thereafter, the State Government issued G.O.No.20 sanctioning a further 0.45% from its own budget.

For the subsequent years 2015–16 to 2019–20, the OER was determined on the basis of the actual OER obtained at the Pedavegi unit in Andhra Pradesh. The OER was 17.31% for 2015–16, 17.06% for 2016–17, 16.40% for 2017–18, 17.22% for 2018–19 and 16.72% for 2019–20. In respect of 2017–18, the State Government issued G.O.Ms.No.93 sanctioning an additional OER of 1% from its own budget as an incentive to farmers. For 2018–19, the State Government sanctioned an additional incentive of 1.72% from its own budget over the actual OER of 17.22%.

For the Oil Year 2020–21, an OER of 18.68% was adopted, which was derived from the Aswaraopet unit in Telangana. The said determination was challenged in this Court, vide W.P.No.2043 of 2021. Initially, the relevant G.O. was suspended by an interim order. During this period, vide letter dated 02.03.2021, the Government of India informed the Government of Andhra Pradesh that it had only recommended the CACP formula and that the States were free either to follow the said formula or to frame their own formula. A Coordinate Bench of this Court subsequently dismissed W.P.No.2043 of 2021, vide an order dated 23.04.2021 on the ground that, subsequent to the order in W.P.No.9376 of 2015, the parties had discussed the issue at length to find a solution and had consented to their fruit being processed at the Aswaraopet Telangana unit and Pedavegi unit. However, the learned Single Judge noted that since processing was only possible at Aswaraopeta and not in Pedavegi, it cannot be called as irrational. The Petitioners thereafter preferred W.A.No.2043 of 2021, which is stated to be pending and no interim order of stay has been obtained in the said appeal.

For the period from 2021–22 to 2024–25, the OER adopted by the State Government was 19.22%, 19.32%, 19.17% and 19.42%, respectively. The Petitioners contend that these figures correspond exactly to the OER fixed by the State of Telangana. It is relevant that G.O.Rt.No.423 dated 01.07.2022 fixed the OER for 2021–22 at 19.22%, G.O.Rt.No.110 dated 10.02.2023 fixed the OER for 2022–23 at 19.32%, and G.O.Rt.No.614 dated 21.07.2025 fixed the OER for 2023–24 at 19.17%. The OER for 2024–25 was fixed at 19.42%. According to the Petitioners, the aforesaid orders do not disclose the basis or source from which the OER was derived, and in particular do not disclose whether the OER was determined with reference to the oil actually extracted at Pedavegi processing unit in Andhra Pradesh or at Aswaraopet processing unit in Telangana. The absence of such disclosure assumes significance because the CACP recommendation refers to the actual oil content extracted in the past by the processing industry, as established by the concerned State Government.

The present Oil Year commenced on 01.11.2025 and extends up to 31.10.2026. For the Oil Year 2025–26, Respondent No.1 issued G.O.Rt.No.72 dated 04.02.2026 fixing the formula for pricing Oil Palm FFBs by adopting an OER of 20.01%. The said OER was adopted by following the pricing formula prescribed by the State of Telangana under G.O.Rt.No.594 dated 18.12.2025. 13. The Petitioners, comprising Petitioner No.1, an Association of Oil Palm Developers and Processors and its remaining members, who are Companies registered under the Companies Act, 1956, have challenged G.O.Rt.No.72 dated 04.02.2026 as arbitrary and violative of Articles 14 and 19(1)(g) of the Constitution of India. Their principal grievance is that the impugned determination of OER does not disclose that the figure of 20.01% was arrived at on the basis of the actual oil content extracted by the processing industry in Andhra Pradesh during the relevant preceding period.

It is not in dispute that the CACP report identifies several factors which influence the OER. These include climatic parameters, the source of planting material, plantation-management practices, harvesting standards, methods of FFB procurement, care and maintenance of machinery, mechanisms for recovering oil from waste streams, control of spillage, proper stream supply and maintenance of the prescribed temperature in the processing lines, among other factors. The CACP report therefore recognizes that OER is influenced both by the conditions and management of the plantation and by the efficiency and operational conditions of the processing mill. The actual OER obtained by a processing industry may consequently be affected not merely by the agricultural conditions in which the oil palm is cultivated but also by the condition, maintenance, technology and operational efficiency of the particular processing unit.

The statutory framework governing the subject is provided in the Andhra Pradesh Oil Palm (Regulation of Production and Processing)

Section 13 of the Act is the specific provision relating to fixation of the minimum price of Oil Palm FFBs. Section 13(1) empowers the State Government to fix the minimum price of Oil Palm FFBs or, in the alternative, to authorize the Oil Palm Commissioner to fix such price,

On the other hand, the Respondent No.2, in its counter- affidavit, principally contended that the writ petition is misconceived and devoid of merit and that G.O.Rt.No.72 dated 04.02.2026 was issued by the competent authority in exercise of the statutory powers conferred under the Act 1993. According to Respondent No.2, the Petitioners are Oil Palm Processing Companies operating within notified factory zones under the statutory zoning mechanism and, since Oil Palm FFBs are highly perishable and cannot ordinarily be sold in an open market, growers are required to supply their produce to the designated processors. It is contended that the Government is required to protect the interests of the growers and ensure that they receive a fair and remunerative price. Respondent No.2 relied upon Sections 11 and 13 of the 1993 Act to contend that the Government possesses the statutory power to declare factory zones, regulate procurement of FFBs and fix the minimum price payable to Oil Palm growers. The competence of the Government to fix the FFB price and determine the OER is therefore stated to be beyond dispute. The challenge, according to the Respondent, is essentially directed against a decision taken in exercise of such statutory power. As regards the fixation of OER at 20.01% for the Oil Year 2025–26, Respondent No.2 contended that the figure was neither arbitrary nor without basis. It is stated that the Government considered historical OER data, technical assessments, processing efficiency, comparative studies, stakeholder consultations and the realisable extraction potential of Oil Palm FFBs. The Respondent further stated that the Government took into consideration the recommendations of the CACP and the guidelines of the Government of India, while recognizing that OER depends not merely upon the quality of FFBs but also upon factors such as plantation age, variety, agronomic practices, harvesting methods and processing efficiency.

Respondent No.2 specifically disputed the Petitioners' reliance upon the comparatively lower OER recorded by AP Oil Fed at Pedavegi. It is contended that the OER recorded at that unit cannot, by itself, be treated as representative of the true oil-bearing potential of FFBs produced in Andhra Pradesh, particularly where technical assessments indicated deficiencies in processing efficiency. In support of this contention, the Respondent referred to technical assessments under which, in 2018, Andhra Pradesh FFBs processed at TG Oil Fed, Apparaopeta, yielded an OER of 18.55%, as against 16.26% at AP Oil Fed, and that, in April 2025, a technical audit recorded 19.36% at TG Oil Fed, as against 17.11% at AP Oil Fed. According to Respondent No.2, these assessments demonstrated that processing efficiency and operational parameters materially affect OER. It is therefore contended that the Government was justified in considering the OER achieved at an efficient Government processing unit, under substantially similar agro- climatic and cultivation conditions, as a technical benchmark. The Respondent further contended that the CACP/Government of India recommendations does not divest the State Government of its statutory powers under Section 13 of the 1993 Act and that the State Government is competent to determine the methodology for fixing OER and FFB prices having regard to local conditions, technical data and the interests of growers.

Respondent No.2 also disputed the contention that the Government was required to adopt the OER actually reported by the Petitioners' processing units. According to the Respondent, self-reported OER figures of private processors require independent verification and cannot automatically be accepted as the benchmark for determining the statutory minimum price payable to captive farmers. It is stated that, during the stakeholder meeting held on 29.01.2026, the relevant technical and historical data were considered and, in the absence of an independent real-time mechanism for verification of the OER reported by private processors, the Government adopted an OER of 20.01% based upon the actual OER achieved by TG Oil Fed and other relevant technical material. Respondent No.2 further contended that the Petitioners had operated under similar pricing mechanisms during earlier Oil Years and had procured FFBs and made payments in accordance with the Government's price-fixation orders and that their subsequent challenge is based principally upon the increased commercial liability arising from the revised OER and does not establish arbitrariness or illegality.

With regard to the earlier litigation, Respondent No.2 contended that W.P.No.2043 of 2021 does not assist the Petitioners, as the Hon’ble High Court had upheld the Government's action concerning fixation of OER for the Oil Year 2020–21. It is further contended that the proceedings concerning the Oil Year 2014–15 arose in the factual circumstances prevailing during that particular year and do not invalidate the statutory power of the Government to determine OER for subsequent years. The allegation of an excessive financial burden or an alleged loss of approximately Rs.300 crores is characterized as speculative and unsupported by independent technical material. According to the Respondent, the Petitioners cannot seek a lower statutory price merely by relying upon their own processing efficiency or financial calculations.

Respondent No.2 also relied upon the interests of the Oil Palm growers, stating that approximately 1.42 lakh growers are captive suppliers having no alternative market for their FFBs. It is contended that any reduction in the statutory price would cause immediate financial prejudice to the farmers and adversely affect the Oil Palm Development Programme/NMEO-OP. The Respondent further stated that the Government has on earlier occasions, extended substantial financial support to Oil Palm growers to ensure remunerative returns and parity with growers in Telangana. Such measures, according to the Respondent, were policy measures intended to protect the farming community and do not create any vested right in favour of the Petitioners to insist upon a particular OER or pricing formula.

Respondent No.2 accordingly characterized the challenge to the impugned G.O. as an attempt to seek judicial interference with a technical and economic policy decision. It is contended that, in the absence of proof of manifest arbitrariness, mala fides, perversity, or violation of statutory provisions or constitutional rights, the limited scope of judicial review under Article 226 of the Constitution of India does not warrant interference. The Respondent also contended that the Petitioners have failed to establish any violation of Article 14 or any other statutory or constitutional right and that G.O.Rt.No.72 dated 04.02.2026 has a rational basis, is founded upon relevant material and advances the legitimate object of securing fair and remunerative prices for Oil Palm growers. On that basis, Respondent No.2 submitted that the fixation of OER at 20.01% for the Oil Year 2025–26 is lawful, reasonable and supported by statutory, technical and policy considerations. Version of Respondent No.3

Respondent No.3, in its counter, substantially contested the Petitioners' challenge to G.O.Rt.No.72 and consequential price-fixation orders. It contended that the CACP recommendations concerning OER are directory and do not fetter the statutory or administrative power of the Government to determine the appropriate OER having regard to prevailing circumstances, cultivation practices, harvesting methods, processing efficiency and the interests of farmers. Respondent No.3 further contended that the CACP formula recommending an OER of 18% as the base for pricing FFBs was formulated in the circumstances prevailing at the relevant time and cannot be treated as a permanent or immutable formula. Subsequent developments in cultivation, including drip irrigation and use of fertilizers and harvesting tools, as well as developments in processing technology and machinery, have improved the quality and oil content of FFBs and reduced processing costs. The Government was therefore stated to be justified in taking such subsequent developments into consideration while fixing the OER for 2025–26. 24. Respondent No.3 relied upon the relevant Government of India guidelines and contends that, since the OER may be determined with reference to the actual oil content extracted by processing units as established by the concerned State Governments, reliance upon the Aswaraopet processing unit cannot, by itself, be regarded as illegal or arbitrary. It is specifically contended that the Aswaraopet unit formed part of the erstwhile composite State of Andhra Pradesh when the relevant Government of India communication dated 13.08.2013 was issued.

It is further contended by Respondent No.3 that actual extraction from an individual processing unit cannot, by itself, constitute the uniform basis for fixing OER, since extraction depends upon the efficiency, machinery, crushing capacity and operational conditions of the particular processing unit. It is also contended that reliance solely upon the actual extraction of one unit may result in varying OERs and may not provide a uniform or reliable basis for the State as a whole. Respondent No.3 also referred to the Oil Year 2024–25 during which, according to the Respondent, the Petitioners themselves referred to an actual OER of 18.43%, whereas the Government had fixed the OER at 19.42%, without the Petitioners challenging the said fixation at that time.

In relation to the investments and commercial operations of the Petitioners, Respondent No.3 contended that the substantial investments allegedly made by them in nurseries, extension services and FFB collection infrastructure are, to a considerable extent, supported or reimbursed under the NMEO-OP scheme. The Respondent further stated that the Petitioners are established commercial entities which continue to expand their processing activities and derive profits from the business. Reliance is also placed upon the experience of Respondent No.3's own processing unit at Pedavegi, which operates with comparatively old machinery, nevertheless pays farmers at the same rates as private processors and remains profitable. On this basis, the assertion that the revised OER necessarily imposes an unsustainable burden upon the Petitioners is disputed. It therefore contended that no arbitrariness, illegality, discrimination or violation of the Petitioners' rights has been established.

Version of Respondent No.5

Respondent No.5, in its counter, principally relied upon the clarification issued by the Government of India on 02.03.2021, which, according to the Respondent, was already brought on record in W.A.No.313 of 2021. The said clarification is stated to make it clear that the Government of India had only recommended a formula based on the CACP recommendations and that the State Government is competent to adopt its own formula for fixation of the price of FFBs.

Respondent No.5 contended that the impugned G.O. was issued by the State Government in exercise of its powers under the 1993 Act after consultation with stakeholders at the meeting held on 29.01.2026. The fixation of the pricing formula and OER is characterized as a policy decision involving economic and technical considerations and, therefore, one which, according to the Respondent, warrants limited judicial interference unless shown to be arbitrary, irrational or contrary to the statute. It is further contended that the CACP recommendations are advisory in nature and cannot be treated as binding upon the State Government. According to the Respondent, the earlier acceptance of the CACP recommendations by the State Government does not amount to acceptance of the subsequent Government of India communication dated 13.08.2013 as a binding formula. The State Government remains competent to modify the OER from time to time in view of changed circumstances and developments in cultivation and processing.

Respondent No.5 also disputed the proposition that the OER obtained by a State-owned processing unit necessarily represents the actual potential OER of FFBs. According to the Respondent, extraction depends upon the efficiency and capability of the processing machinery and, consequently, the FFBs produced by farmers may have the potential to yield a higher OER than that reflected in the extraction figures of an individual processing unit. On this basis, it is contended that the State Government was justified in considering the maximum OER obtained under similar agro-climatic conditions rather than merely relying upon the extraction efficiency of an individual processor.

Respondent No.5 further relied upon the participation of the Petitioners and other private processors in open auctions conducted by Respondent No.3 for surplus FFBs. It is stated that the Petitioners had in such auctions, offered prices substantially higher than the Government- fixed price, in some instances by as much as ₹3,500 per metric tonne plus GST. According to the Respondent, such conduct contradicts the Petitioners' contention that the impugned OER fixation necessarily causes them unsustainable losses. As regards the earlier proceedings, Respondent No.5 contended that W.P.No.9376 of 2015 and W.P.No.2043 of 2021 do not invalidate the present Government Order. It is contended that the judgment in W.P.No.2043 of 2021 is binding and covers the controversy involved in the present writ petition, whereas the proceedings in W.P.No.9376 of 2015 were disposed of in circumstances that do not constitute a binding precedent against the present decision- making process.

Respondent No.5 further contended that the fact that the Government had on earlier occasions released additional amounts to farmers does not confer any vested right upon the Petitioners to insist upon continuation of the earlier formula. It is stated that the Government has been fixing the OER from time to time after taking into consideration prevailing market conditions and the maximum OER obtained in the two States, and that the processing industries had accepted such fixation without challenge during the preceding years. It is submitted that the farmers are entitled to receive a price reflecting the maximum value reasonably obtainable from their produce and should not suffer on account of the inefficiency of individual processors. The Respondent therefore submits that fixation of OER at 20.01% for the Oil Year 2025– 26 is neither arbitrary nor illegal, but constitutes a policy decision taken after stakeholder consultation and consideration of relevant factors. Rejoinder by the Petitioners

In reply to the respective counter-averments, the Petitioners reiterate that their challenge is not to the statutory power of the State Government to fix the price of FFBs, but to the manner in which that power has been exercised in fixing the OER at 20.01% for the Oil Year 2025–26. The Petitioners contended that, even assuming that the CACP recommendations are advisory, the State Government adopted and followed the CACP-based pricing formula for several years and cannot depart from the accepted standard without a rational and disclosed basis. According to the Petitioners, the Government of India letter dated 02.03.2021 merely clarifies that the State is free to adopt its own formula and does not, by itself, furnish a basis for an arbitrary departure from the formula consistently followed by the State.

The Petitioners reiterated that the OER ought to be determined with reference to the oil actually extracted from FFBs within Andhra Pradesh and contend that reliance upon the recovery achieved by processing units situated in Telangana is impermissible, particularly having regard to the judgment in W.P.No.9376 of 2015, which, according to the Petitioners, attained finality on 03.01.2025. The Petitioners rely upon the State's own data for the Oil Year 2024–25, which, according to them, shows an aggregate OER of 18.42% for the mills in Andhra Pradesh, with no individual mill achieving an OER of 20.01%. On that basis, it is contended that the impugned OER exceeds the actual recovery of every processing unit in the State and is unsupported by the material on record.

The Petitioners further relied upon the Monthly Progress Reports submitted under the NMEO-OP Scheme and contend that the Respondents, having accepted such data for several years, cannot subsequently disregard the same without undertaking independent verification. The plea of estoppel founded upon participation in open auctions is denied on the ground that such auctions concern surplus FFBs and constitute voluntary transactions, whereas procurement within notified factory zones is statutorily compulsory under Section 11 of the 1993 Act. The Petitioners also contended that their compliance with Government-fixed prices in earlier years does not amount to acquiescence or estoppel.

The Petitioners disputed the reliance placed upon W.P.No.2043 of 2021, contending that the said proceedings arose in different factual circumstances, including consent for cross-processing at a Telangana unit, which, according to the Petitioners, is absent in the present case. They further maintain that the profitability or investments of the processors are not relevant to the legality of the OER fixation.

The Petitioners accordingly contended that the fixation of OER at 20.01% is arbitrary, unsupported by the actual recovery in Andhra Pradesh and liable to be interfered with in exercise of judicial review. Arguments Advanced at the Bar

Heard Sri S. Sriram, learned Senior Counsel appearing on behalf of CKR Associates for the Petitioners, Sri Dammalapati Srinivas, learned Advocate General for Respondent Nos.1 and 2; Sri M.P.V.N.V. Sastry, learned counsel for Respondent No.3 Sri T. Niranjan, learned Deputy Solicitor General for Respondent No.4; Sri M.S. Prasad, learned Senior Counsel, assisted by Sri K. Giridhar, learned counsel for Respondent No.5; and Sri Kambhampati Ramesh Babu, learned counsel for Respondent No.

Submissions on behalf of the Petitioners

Sri S. Sriram, learned Senior Counsel appearing for the Petitioners, contended that the CACP formula has been consistently adopted by the State Government and that the Government of Andhra Pradesh accepted the said formula as reasonable and from 2013 onwards, fixed the FFB prices year after year on that basis, the only variable being the OER. According to the learned Senior Counsel, the Government, having adopted the CACP-based formula, cannot depart from the basis on which the formula was consistently implemented without a rational and disclosed basis. Learned Senior Counsel submitted that the OER is required to be determined on the basis of the actual oil content extracted by the processing industry in Andhra Pradesh. Reliance is placed upon the Government of India's letter dated 13.08.2013, which specifically provides that the OER shall be determined on the basis of the actual oil content extracted by the processing industry, as established by the State Government concerned. It is contended that the impugned OER of 20.01% has no corresponding factual basis in Andhra Pradesh. During the Oil Year 2024–25, according to the Petitioners, the weighted-average OER of all mills processing Andhra Pradesh FFBs was only 18.43%, comprising 18.49% in private mills and 17.11% at AP Oilfed, and no processing unit in Andhra Pradesh achieved an OER of 20.01%.

Learned Senior Counsel further contended that the State has impermissibly borrowed the OER from Telangana and that the impugned figure of 20.01% is admittedly based upon the Apparaopeta unit in Telangana. Such adoption, according to the Petitioners, is contrary to the basis upon which OER is required to be determined, namely, the actual recovery from Andhra Pradesh produce. It is further submitted that even within the Telangana data, the State has selectively adopted the higher figure, whereas other units recorded lower OERs, including 19.36% at Aswaraopeta and 16% at Siddipet, and there is no rational explanation for selecting the highest figure of 20.01%.

Learned Senior Counsel also challenged the reliance upon the 862 MT sample. It is submitted that the State relies upon only 862 MT of Andhra Pradesh FFBs processed at Aswaraopeta, yielding an OER of 19.36%, which represents approximately 0.04% of the total production of Andhra Pradesh and, in any event, does not support an OER of 20.01%. According to the Petitioners, the concept of “recovery potential” cannot substitute actual recovery. The CACP formula contemplates actual oil extracted, and the State cannot introduce a concept of notional or potential recovery so as to inflate the OER.

Learned Senior Counsel relied upon the judgment in W.P.No.9376 of 2015 and submitted that this Court had held that the OER should be determined from oil actually extracted in Andhra Pradesh and not from Telangana, and that the said judgment has attained finality. It is further contended that there can be no estoppel against the application of Article 14 and that, even if similar figures were adopted in earlier years, each annual price fixation constitutes a fresh cause of action.

Learned Senior Counsel submitted that price fixation must be based upon relevant material and rational considerations and that the adoption of an OER of 20.01% without corresponding Andhra Pradesh data is arbitrary and unreasonable and contrary to Articles 14 and 19(1)(g) of the Constitution of India. Reliance is placed upon the principles laid down in Shri Sitaram Sugar Co. Ltd. v. Union of India5 and Union of India v. Cynamide India Ltd.6 It is further contended that the artificial increase from the actual Andhra Pradesh

Per contra, Sri Dammalapati Srinivas, learned Advocate General contended that the statutory scheme itself requires the interests of the Oil Palm growers to be protected. Under Section 11 of the Act 1993, farmers are required to sell their FFBs only to the processor allotted to their respective factory zone, while the processor is 7 (1979) 3 SCC 489 8 (2008) 4 SCC 144 9 AIR 1961 SC 1731 10 (1985) 3 SCC 545 11 (1996) 11 SCC 39 12 (1978) 1 SCC 405 13 2025 INSC 531 14 AIR 1951 SC 41 correspondingly bound to purchase the FFBs offered by such farmers. The farmers are therefore captive suppliers and the Government has a corresponding obligation to ensure a fair and remunerative price

It is submitted that Section 13 of the 1993 Act expressly empowers the Government to fix the price of Oil Palm FFBs and prescribe the methodology for such fixation. The fixation of OER at 20.01% under G.O.Rt.No.72 dated 04.02.2026 is therefore stated to be within the statutory competence of the Government. It is further contended that OER depends not merely upon the quality of FFBs but also upon plantation age, variety, agronomic practices, harvesting methods and, importantly, processing efficiency. The higher OER obtained from Telangana Oil Fed processing units, according to the Respondents, demonstrates that the lower OER recorded by AP Oilfed cannot necessarily be attributed to the farmers' produce. In support of this submission, reliance is placed upon the fact that the same or similar FFBs yielded an OER of 18.55% at TG Oil Fed as against 16.26% at AP Oilfed in 2018, and 19.36% as against 17.11% during 2024–25. According to the Respondents, the variation demonstrates that processing efficiency and technology materially affect OER. On that basis, it is contended that the Government was justified in adopting the OER achieved by technically efficient Telangana Oil Fed units as a benchmark, so that the farmers are not made to bear the consequences of inefficiencies in processing units. Learned Advocate General submits that the Government has followed the Telangana-based OER methodology since 2020–21, adopting OERs of 18.68%, 19.22%, 19.32%, 19.17% and 19.42%, respectively, and that the Petitioners accepted this methodology for several years and cannot now challenge the same basis.

Learned Advocate General further submitted that fixation of OER involves technical, economic and agricultural considerations and is essentially a policy decision. It is contended that this Court upheld the fixation of OER at 18.682% and recognized the policy nature of OER fixation. The subsequent interim orders in W.A.No.313 of 2021 are also relied upon, as having protected payments to farmers while preserving the processors' right to adjustment if they ultimately succeeded.

It is further submitted that the impugned G.O. was issued after consideration of the CACP recommendations, historical OER data, technical studies and stakeholder views, including the meeting held on 29.01.2026. According to the Respondents, the decision-making process was therefore neither arbitrary nor mechanical. Learned Deputy Solicitor General emphasizes the interests of approximately 2.28 lakh Oil Palm growers and submits that any reduction in OER would immediately reduce the income of the farmers, whereas payments made pursuant to the impugned G.O. remain subject to the final outcome of the writ petition. It is therefore contended that the balance of convenience lies in protecting the interests of the farmers. Since the Court has not suspended the operation of G.O.Rt.No.72 and has only directed that payments remain subject to the result of the writ petition, it is submitted that there is no justification for presently interfering with the Government Order. Submissions on behalf of Respondent No.3

Sri M.P.V.N.V. Sastry, learned counsel for Respondent No.3, submits that under the NMEO-OP Operational Guidelines, where the State Government fixes the FFB price through its statutory mechanism, the industry is bound to pay the State-mandated price. The CACP had recommended establishment of testing centres for determining the actual OER of each consignment and, until such facilities were established, suggested an OER of 18% as the base formula for FFB pricing. According to the learned counsel, neither the CACP recommendations nor the NMEO-OP Guidelines require alteration of the OER during an oil year.

Learned counsel pointed out that the Petitioners themselves did not accept the 18% OER recommended by the CACP until 2019, despite presently relying upon the CACP recommendations. It is further contended that variation in OER substantially depends upon the efficiency of the processing units and that farmers cannot be deprived of the proper price for their FFBs merely because processors use inefficient machinery or adopt inefficient processing methods.

It is submitted that the Petitioners have neither pleaded nor established that the FFBs supplied by Andhra Pradesh farmers are inferior in quality or contain less oil. Nor, according to the Respondent, have they established any material difference in agro-climatic or harvesting conditions between Andhra Pradesh and Telangana sufficient to justify a lower OER.

Learned counsel further submitted that consultation with processors is only for the purpose of ascertaining their views on pricing formula and does not bind the Government to adopt the OER or price formula proposed by the industry. It is also contended that expenditure incurred by processing units towards planting material, seedlings, fertilizers and other components is substantially supported or reimbursed under the NMEO-OP scheme and cannot be relied upon to justify reduction of the FFB price payable to farmers.

Learned counsel relied upon the experience of the Pedavegi Federation unit, which, according to the Respondent, operates with old machinery and consequently obtains a lower OER, whereas FFBs processed through more efficient private units yield better extraction. The lower OER of the Federation unit, therefore, cannot be treated as representative of the actual oil-bearing capacity of the farmers' FFBs. It is further submitted that, despite its lower OER and old machinery, the Federation continues to pay farmers the same price as private processors and earns profits. Consequently, the contention that a higher OER would necessarily impose an unbearable financial burden upon processors has no basis.

Learned counsel further submitted that owing to inadequate processing capacity, the Federation has diverted FFBs to private processors, including some of the Petitioners, and that such processors themselves offered to purchase FFBs at the Government-fixed monthly price while additionally bearing freight and incidental charges of approximately ₹1,550 per MT. According to the Respondent, this demonstrates that the processors have the capacity to procure FFBs at the Government-mandated price.

The learned Deputy Solicitor General appearing for Respondent No.4 sailed with the arguments advanced by the learned Advocate General. Submissions on behalf of Respondent No.5

Sri M.S. Prasad, learned Senior Counsel appearing for Respondent No.5, strenuously contended that the issue is substantially covered by the judgment in W.P.No.3024 of 2021 dated 23.04.2021 and that the same association and several of the present Petitioners were parties to those proceedings. It is submitted that though the said judgment is presently under challenge in W.A.No.313 of 2021, no interim order has been granted. According to the learned Senior Counsel, the Petitioners cannot circumvent the pending appellate proceedings by instituting a fresh writ petition raising substantially the same grievance.

Learned Senior Counsel submitted that there is no want or excess of juri iction, violation of natural justice or error apparent on the face of the record. The dispute concerning OER involves appreciation of technical and commercial data and cannot constitute an apparent error warranting issuance of a writ of certiorari. It is further contended that Section 13 of the 1993 Act confers the power of price fixation upon the State Government and that the Petitioners have established neither an enforceable legal right to a particular pricing formula nor a corresponding statutory duty requiring the Government to adopt the formula suggested by them.

Learned Senior Counsel submitted that a meeting was held on 29.01.2026 at which the stakeholders, including the Petitioners, were heard, following which the Government exercised its statutory discretion and fixed the OER. Mere dissatisfaction with the ultimate decision, according to the Respondent, does not amount to violation of natural justice. The Petitioners have no vested right to dictate the OER or preserve a particular profit margin, and their grievance is essentially commercial. It is further contended that fixation of the minimum FFB price is a legislative or policy exercise and that judicial review does not permit substitution of the Court's economic assessment for that of the competent Government. Reliance is also placed upon the Petitioners' participation in open auctions in which surplus FFBs were purchased at prices substantially higher than the Government-fixed rate, in some cases by approximately ₹3,500 per MT plus GST. According to the Respondent, such conduct demonstrates that the notified price cannot be characterized as commercially unsustainable.

Learned Senior Counsel also contended that the Petitioners suppressed the material Government of India clarification dated 02.03.2021 which clarified that CACP formula was only recommendatory and that States were at liberty to evolve their own pricing formula. It is contended that such suppression disentitles the Petitioners to discretionary relief under Article 226.It is further submitted that subsequent developments, including the Government of India clarification and subsequent technical and stakeholder exercises, materially distinguish the present case from the circumstances considered in 2015. The judgment in W.P.No.9376/2015 relied upon by the Petitioners are therefore stated to be inapplicable. Ultimately, it is contended that the controversy involves disputed questions of fact relating to actual oil content, OER, processing efficiency and plant- specific factors, which cannot appropriately be adjudicated in summary writ juri iction.

Sri Kambhampati Ramesh Babu, learned counsel appearing for Respondent No.6, submits that G.O.Rt.No.72 dated 04.02.2026 was issued after due consideration of all relevant material, including the recommendations of the Oil Palm FFB Price Fixation Committee and the Director of Horticulture & Sericulture. It is therefore contended that the decision-making process was neither arbitrary nor procedurally irregular.

Learned counsel submitted that fixation of FFB prices under Section 13 of the 1993 Act is a policy or legislative function and that a Court exercising judicial review cannot substitute its own assessment of OER or economic considerations for that of the Government, except where the decision is wholly arbitrary, unsupported by material or based upon extraneous considerations. It is further contended that the lower OER recorded by AP Oilfed was attributable to the age and outdated nature of the machinery at its processing unit and not to any deficiency in the quality of FFBs or cultivation practices of Andhra Pradesh farmers. The higher OER achieved by TG Oilfed is relied upon as demonstrating a rational basis for the Government's decision.

Learned counsel also relied upon the Petitioners' conduct in open tenders conducted by AP Oilfed, where the Petitioners and other processors themselves quoted prices substantially higher than the Government-fixed price. According to the Respondent, having voluntarily offered such higher prices, the Petitioners cannot contend that the Government-fixed price is commercially unsustainable. It is further submitted that the Petitioners have no vested right to insist upon a particular OER formula. Their investments in processing infrastructure were made for commercial purposes, while several expenditures relating to cultivation support and infrastructure were supported through Government schemes. The statutory right to purchase FFBs within allotted factory zones, according to the Respondent, does not confer a corresponding right to dictate the price formula.

Learned counsel submitted that reliance upon W.P.No.9376 of 2015 is misplaced, particularly in view of the subsequent Government of India clarification dated 02.03.2021 stating that the CACP formula is recommendatory and that States are free to evolve their own formula. It is further contended that the factual circumstances and material considered in the present year are materially different. Reliance is also placed upon W.P.No.2043 of 2021 in support of the Government's stand and the limited scope of judicial review over price fixation under Section 13. It is also contended that the Petitioners' challenge cannot succeed merely because they disagree with the OER adopted by the Government. It is further contended that the Petitioners failed to disclose the Government of India clarification dated 02.03.2021, which is stated to be directly relevant to the challenge and that such alleged suppression disentitles them to equitable and discretionary relief under Article 226. 63. Perused the material on record.

Before dealing with the merits, it is necessary to set out the limited scope within which this Court can examine the impugned fixation. Fixation of the price of Oil Palm FFBs under Section 13 of the Act is by its nature a legislative rather than an adjudicatory act. It does not therefore, attract the principles of natural justice and this Court does not sit in appeal over the wi om of the figure so chosen. That much is not in dispute between the parties and by the settled law. However, this does not shut away the judicial scrutiny of the fixation completely. In Shri Sitaram Sugar Co. Ltd. (referred supra), the Constitution Bench of the Hon’ble Supreme Court held as follows; “45. Price fixation is in the nature of a legislative action even when it is based on objective criteria founded on relevant material. No rule of natural justice is applicable to any such order. It is nevertheless imperative that the action of the authority should be inspired by reason : Saraswati Industrial Syndicate Ltd. [(1974) 2 SCC 630, 633 : (1975) 1 SCR 956, 959] [at SCR pp. 961, 962; SCC p. 636, para 13]. The government cannot fix any arbitrary price. It cannot fix prices on extraneous considerations : Renusagar [(1908) 1 KB 441 : 77 LJ KB 236].

Any arbitrary action, whether in the nature of a legislative or administrative or quasi-judicial exercise of power, is liable to attract the prohibition of Article 14 of the Constitution. As stated in E.P. Royappa v. State of Tamil Nadu [(1974) 4 SCC 3 : 1974 SCC (L&S) 165 : (1974) 2 SCR 348] “equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whim and caprice of an absolute monarch”. Unguided and unrestricted power is affected by the vice of discrimination : Maneka Gandhi v. Union of India [(1978) 1 SCC 248, 293-94 : AIR 1978 SC 597] . The principle of equality enshrined in Article 14 must guide every State action, whether it be legislative, executive, or quasi-judicial : Ramana Dayaram Shettyv. International Airport Authority of India [(1979) 3 SCC 489, 511-12 : (1979) 3 SCR 1014, 1042] ; Ajay Hasia v. Khalid Mujib Sehravardi [(1981) 1 SCC 722 : 1981 SCC (L&S) 258] and D.S. Nakara v. Union of India [(1983) 1 SCC 305 : 1983 SCC (L&S) 145] .

Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted, and on relevant consideration of material facts. All his decisions, whether characterised as legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws of the land. They must be “reasonably related to the purposes of the enabling legislation”. See Leila Mourning v. Family Publications Service [411 US 356 : 36 L ed 2d 318] . If they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, court might well say, “Parliament never intended to give authority to make such rules; they are unreasonable and ultra vires” : per Lord Russel of Killowen, C.J. in Kruse v. Johnson [(1898) 2 QB 91, 99 : 78 LT 647] . ****

The true position, therefore, is that any act of the repository of power, whether legislative or administrative or quasi-judicial, is open to challenge if it is in conflict with the Constitution or the governing Act or the general principles of the law of the land or it is so arbitrary or unreasonable that no fair minded authority could ever have made it [ See the observation of Lord Russel in Kruse v. Johnson, (1898) 2 QB 91 and that of Lord Greene, M.R. in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation, (1948) 1 KB 223. See also Chertsey UDC v. Mixnam Properties Ltd., (1965) AC 735; Commissioners of Customs and Excise v. Cure and Deeley Ltd., (1962) 1 QB 340; McEldowney v. Forde, (1971) AC 632 (HL); Carltona Ltd. v. Commissioners of Works, (1943) 2 All ER 560, 564; Point of Ayr. Collieries Ltd. v. Lloyd George, (1943) 2 All ER 546; Scott v. Glasgow Corporation, (1899) AC 470, 492; Robert Baird Ltd. v. Corporation of City of Glasgow, (1936) AC 32, 42; Manhattan General Equipment Co. v. Commissioner of Internal Revenue, (1935) 297 US 129, 134; Yates (Arthur) & Co. Pty. Ltd. v. Vegetable Seeds Committee, (1945-46) 72 CLR 37; Bailey v. Conole, (1931) 34 WALR 18; Boyd Builders Ltd. v. City of Ottawa, (1964) 45 DLR (2d) 211; Re Burns and Township of Haldimand, (1966) 52 DLR (2d) 1014 and Lynch v. Tilden Produce Co., 265 US 315, 320-22] .” (emphasis supplied)

Thus, it is a settled principle of law that the scope of judicial review in matters of economic policy is limited. The Court does not substitute its own assessment for that of the competent authority in matters falling within the latter’s domain nor does it supplant the considered view of the experts by its own opinion. However, such restraint does not exclude judicial review altogether. Any exercise of power, whether legislative, administrative or quasi-judicial, remains subject to the Constitution, the governing statute and the general principles of law. Consequently, where the decision is shown to be contrary to the governing law, based on irrelevant considerations, unsupported by relevant material or so arbitrary or unreasonable that no fair-minded authority acting within the bounds of law could have arrived at it, the decision is amenable to judicial review. Thus the enquiry is confined to whether the competent authority in determining the price, has had due regard to the considerations mandated by the governing statute and has excluded extraneous considerations from the determination.

First of all, the argument that the Government was bound to follow the formula recommended by the CACP holds no water. The Government of India's own communication dated 02.03.2021 clarifies that the CACP recommendation is directory, and that a State Government is free to evolve its own methodology. This answers the contention that the State was bound as a matter of law to the 2013 CACP-based formula to some extent. It does not, however dispose of the writ petition, since the grievance that survives is not that the CACP formula was departed from but that whatever formula the State applied was not shown to have been rationally applied.

Section 3(2) of the Act prescribes composition of the Andhra Pradesh Oil Palm Advisory Committee, which consists of the following members; a) The Minister in-charge of Horticulture who shall be the Chairman; b) Three members of the Legislative Assembly of the State to be nominated by the Government; c) Secretaries to Government incharge of Agriculture, Industries and Finance; d) Heads of Departments of Agriculture, Horticulture and Industries; e) the Vice-Chancellor of Andhra Pradesh Agricultural University f) the Director, Regional Research Laboratory, Trivandrum; g) a representative of the Government of India, in the Ministry of Agriculture;

However, the minutes of the meeting held on 29.01.2026 record nine attendees i.e., the Minister for Agriculture (Chairman), the Special Chief Secretary, the Director of Horticulture & Sericulture, the Vice-Chairman & MD, APOILFED, one representative each of two processing companies, the President and one Member of the Farmers' Welfare Association and two NMEO-OP officials. On the face of the composition provided in Section 3(2), the members under clauses (b), (e), (f) and (g) i.e., three MLAs, Vice-Chancellor of AP Agricultural University, Director, Regional Research Laboratory and Government of India representative did not attend and no notification constituting the present Committee has been shown to be on record. It is of common agreement between the parties on either side that OER is a function of agronomic and climatic conditions as much as of processing efficiency, the members whose absence is recorded are precisely those whose presence would supply that kind of dimension to the enquiry. However, their absence does not by itself establish that the figure adopted is wrong, but it does mean that the decision-making process cannot be presumed to have had before it the full range of consideration that Section 3 contemplates. This view is reinforced further by the structure of the Act itself. Section 11 renders the oil palm grower a captive supplier within the notified factory zone and Section 5 correspondingly renders the processor a captive purchaser, obliged to buy what is offered. Neither party to this relationship has an ordinary market exit. It is precisely because of this mutual setup that the Legislature thought it necessary to include expert voices in the price-fixing process and this safeguard was absent from the meeting of 29.01.2026. 69. The crux of the determination rests on whether there was a rational examination of the data for fixing the OER at 20.01%. To address this issue, it is essential to turn to the material placed on record. It is the contention of the Respondent no. 1 that they have examined the FFBs of Andhra Pradesh at Telangana. APOILFED reported to the Director of Horticulture that, on instructions following a call from the Chief Minister's Office, (i) it had TGOILFED's experts audit the Pedavegi plant on 26.03.2025 to 27.03.2025 and record specific defects viz., inadequate boiler steam flow, excess oil losses in bi-products and inadequate operator skill and (ii) processed 862.210 MT of APOILFED- zone FFBs at the TGOILFED Aswaraopet plant from 02.04.2025 to 04.04.2025, yielding an OER of 19.36%.The said technical audit, videLr.No. P&P/Technical Audit.2025 dated 17.04.2025 is placed on record. The letter states in terms that this exercise was "purely with an intent to assess the APOILFED factory zone FFB quality" i.e., it is APOILFED's own account of the actual oil-bearing capacity of Andhra Pradesh FFBs when processed on efficient machinery.

Pertinently, the data of oil year wise OER% reported by oil palm companies is placed on record. For better understanding, it is extracted hereunder;

The material placed before the Committee as per the minutes shows that for 2024–25, APOILFED recorded an OER of 17.11%. Against this, the OER of Siddipet of Telangana as 16% and an OER of 20.01% was recorded at Apparaopet, Telangana.

The minutes further disclose that, while a request was made on behalf of the Farmers’ Association to adopt an OER of 20.01% on par with Telangana, the Chairman suggested that the highest OER recorded in a private processing unit in Andhra Pradesh, or the average OER of the oil palm processing units in the State, be examined. The Chairman also suggested, alternatively, examining the feasibility of adopting the OER of processing units owned by neighbouring State Governments. These suggestions indicate that the OER prevailing in Andhra Pradesh and the OER of neighbouring State-owned processing units were themselves identified as relevant matters for examination. In this context, the observation of the Special Chief Secretary that private processing units in Andhra Pradesh were not achieving comparable OER requires consideration in the light of the material placed, which shows that M/s. Navabharat, a private processing unit in Andhra Pradesh, had recorded an OER of 19.34% for the Oil Year 2024–25. While 19.34% is not 20.01%, it was a relevant datum for examining the OER prevailing in Andhra Pradesh. The record, however, does not disclose any examination of the alternatives suggested by the Chairman, nor does it disclose how, upon consideration of the available Andhra Pradesh data, the figure of 20.01% recorded at Apparaopet was selected as the OER for the State.

The record further shows that while the Special Chief Secretary observed that private processing units in Andhra Pradesh were not achieving an OER comparable to 20.01%, he also observed that the data furnished by private units required verification. No material showing that such verification was undertaken has been placed before the Court. The record also discloses that, in 2018, a decision was taken to process FFBs from Pedavegi at Aswaraopeta and vice versa for assessment of OER, apart from undertaking bunch analysis and regulating grading and harvesting practices. The material placed before the Court does not disclose the extent to which these proposed measures were subsequently carried out. The record also refers to the need for a scientific mechanism for determining OER. These circumstances are relevant because the question before the Court is not whether an OER obtained in a neighbouring State can, as a matter of principle, ever be considered. The question is whether the particular figure of 20.01% adopted for Andhra Pradesh has been shown, on the material available to the Government, to have a rational connection with the OER of Andhra Pradesh-origin FFBs.

On the material placed before the Court, 19.36% is the OER obtained from Andhra Pradesh-origin FFBs processed at Aswaraopet, while 19.34% is recorded for M/s. Navabharat in Andhra Pradesh. The 20.01% figure, however, relates to Apparaopet, Telangana, and the record does not disclose that the FFBs yielding that figure were Andhra Pradesh-origin FFBs. Nor does the record disclose the methodology by which that figure was treated as representative for Andhra Pradesh. The Court is therefore not holding that 19.36% is required to be adopted or that an OER obtained outside Andhra Pradesh can never be considered. The finding is confined to the fact that the material placed before the Court does not demonstrate the basis connecting the particular figure of 20.01% with Andhra Pradesh-origin FFBs. In the absence of such material, the rational basis for adopting 20.01% for the relevant Oil Year cannot be said to have been demonstrated.

It is relevant to mention that the minutes dated 21.03.2018 record decisions to undertake bunch analysis through IIOPR at Pedavegi, to process FFBs from the AP Oilfed unit at Pedavegi at the TS Oilfed unit at Aswaraopeta, and vice versa, for assessment of OERand to take measures relating to grading and harvesting of ripe FFBs. The minutes also record a request to the Oil Palm Farmers' Association to submit a DPR for establishment of an Oil Palm Processing Unit. No material has been placed before the Court showing follow-up action pursuant to the proposal for establishment of an Oil Palm Processing Unit. The record also does not disclose that a dedicated scientific mechanism or testing facility for determining OER within Andhra Pradesh was subsequently established. This is relevant because the absence of such a mechanism had already been noticed in W.P.No.2043 of 2021concerning OER fixation.

Further, the material relied upon by the respondents does provide a basis for not mechanically adopting APOILFED's own recovery figures. The technical audit records deficiencies at the Pedavegi unit. Thus, the distinction between recovery attributable to processing efficiency and recovery attributable to the quality of FFBs cannot by itself, be regarded as irrational. The question, however, is whether that consideration provides a rational basis for the particular figure of 20.01% adopted by the Government. The record does not disclose the calculation or other methodology by which 20.01% was derived. The actual processing of Andhra Pradesh-origin FFBs at Aswaraopeta yielded 19.36%. The material therefore establishes a tested figure on Andhra Pradesh-origin fruit, but does not disclose the basis for adopting the higher figure of 20.01% in its place. A request made at the meeting to adopt 20.01% on par with Telangana cannot by itself, supply that missing basis.

The two earlier judgments require consideration at this juncture. In W.P.No.9376 of 2015, the then Composite High Court held on the facts then before it, that the OER prevalent within the geographical boundaries of the State was relevant for fixation of the price of FFBs grown in that State and found the reliance upon the Telangana figure to be an irrelevant consideration in circumstances of that case and that it was also against the CACP recommendation.

In W.P.No.2043 of 2021, the learned Single Judge of this Court upheld the methodology adopted for Oil Year 2020–21 because Andhra Pradesh-origin FFBs had actually been processed at Aswaraopeta and yielded an OER of 18.55%, which formed the basis of the fixation. The Court found the method adopted on that factual record to be reasonable and based upon tangible reasons. The observation in that judgment regarding the absence of testing centres and the CACP's 18% recommendation was also made in that factual context.

The two decisions discussed supra therefore, do not establish any absolute prohibition against considering an OER obtained at a processing unit outside Andhra Pradesh. They establish on the respective factual points, the importance of a demonstrable connection between the OER adopted and Andhra Pradesh-origin FFBs. In the present case, such a connection is demonstrated in respect of the 19.36% figure obtained by processing Andhra Pradesh-origin FFBs at Aswaraopeta unit. No corresponding material has been placed before the Court to demonstrate that the 20.01% recorded at Apparaopet was obtained from Andhra Pradesh-origin FFBs or to explain the methodology by which that figure was adopted for the State. Accordingly, the distinction between the present case and that of W.P.No.2043 of 2021 lies not in the use of an outside-State processing unit as such, but in the absence on the present record of a demonstrated factual and methodological connection between the particular figure of 20.01% and Andhra Pradesh-origin FFBs.

It is stated that W.A.No.313 of 2021, along with W.A.No.462 of 2021, is pending against the judgment in W.P.No.2043 of 2021. The record shows that, by interim order dated 06.07.2021, payment was directed on the basis of the OER of 18.682%, subject to adjustment in the event of the appeals succeeding. The pendency of those appeals does not, however, determine the validity of the present fixation which must be examined on the material relating to Oil Year 2025–26. 81. Three further contentions raised on behalf of the Respondents require consideration, though none affects the finding arrived above. It was submitted that the Petitioners’ purchase of surplus FFBs at open auction, at prices above the notified rate, is inconsistent with their present grievance. That submission does not address the issue arising for consideration. An auction purchase is a commercial transaction and does not establish the scientific or statutory basis on which the impugned OER was fixed. The circumstances in which surplus FFBs may have been purchased therefore do not bear upon whether the fixation of 20.01% rests on relevant material. Per contra to this submission, the Petitioners relied upon the decision of the Hon’ble Supreme Court in Barla Ram Reddy (referred supra), to press the proposition that auction prices may not provide a reliable indication of true market value, having regard to the elements of competition, ego and speculation which may enter into an auction sale. That principle however does not determine the basis on which the statutory OER was required to be fixed. The prices at which surplus FFBs were purchased in auction

It was next submitted that the Petitioners suppressed the Government of India’s clarification dated 02.03.2021. Even assuming this to be so, the clarification is material only to the question whether the CACP recommendation was binding, it does not answer the question whether the adoption of 20.01% was supported by material connecting that figure with Andhra Pradesh-origin FFBs. Nor does the record disclose unbroken acquiescence in earlier Telangana-referenced figures, since the fixations for 2014–15 and 2020–21 were themselves challenged before this Court as seen in the W.P.Nos.9376 of 2015 and 2043 of 2021. The earlier challenges are relevant because they demonstrate that the question of the appropriate basis for determining OER has remained subject to judicial scrutiny.

In the written arguments, it has been raised by Respondent No.5 that the present writ petition is not maintainable in the absence of circumstances warranting issuance of a writ of certiorari. Reliance has been placed on the decisions in Hari Vishnu Kamath v. Syed Ahmad Ishaque15, Central Council for Research in Ayurvedic Sciences v. Bikartan Das16, and Vadiyala Prabhakar Rao v. Government of Andhra Pradesh17. The principles governing the exercise of writ juri iction under Article 226 cannot however be understood as excluding judicial review of a decision merely because it concerns price fixation. The question in the present case is whether the impugned exercise of statutory power is legally sustainable, having regard to the governing Act and the material on which the particular OER was fixed. The petition does not require this Court to undertake the exercise of fixing the OER itself. The objection therefore does not by itself render the challenge to the impugned fixation non-maintainable.

Respondent No.5 has also objected to the grant of a writ of mandamus, relying upon Dr. Rai Shivendra Bahadur v. Governing Body of the Nalanda College,18 Lekhraj Sathramdas Lalvani v. N.M. Shah, Deputy Custodian,19and The Bihar Eastern Gangetic Fishermen Co-operative Society Ltd. v. Sipahi Singh.20 The relief sought in the present proceedings however, does not require this Court

The objection as to locus standi has also been raised on the strength of Vinoy Kumar v. State of U.P.21, JasbhaiMotibhai Desai v. Roshan Kumar22, Mithilesh Garg v. Union of India23, Ravi Yashwant Bhoir v. District Collector, Raigad24 and Utkal University v. Dr. Nrusinga Charan Sarangi25. Those decisions concern the principles governing standing and the circumstances in which a person may invoke writ juri iction. In the present case, the petitioners challenge the statutory fixation of the price of FFBs and the consequential obligations arising therefrom. The challenge is therefore to an exercise of statutory power having a direct bearing upon the petitioners. The objection that the petitioners have no locus to question the impugned fixation cannot, on that basis, be accepted. The objection also cannot be considered in 21(2001) 4 SCC 734 22(1976) 1 SCC 671 23(1992) 1 SCC 168 24(2012) 4 SCC 407 25(1999) 2 SCC 193 isolation from the earlier rounds of litigation concerning fixation of OER and the price of Oil Palm FFBs. The record itself shows that the issue has previously been subjected to judicial consideration, including in W.P.No.9376 of 2015 and W.P.No.2043 of 2021, with the latter also giving rise to pending appeals. The present proceedings arise from a subsequent fixation for the Oil Year 2025–26. The objection as to locus, therefore, does not bar consideration of the present challenge.

For the foregoing reasons, this Court is not substituting its own OER for that fixed by the Government. The record contains a technical audit dated 17.04.2025, pursuant to which TGOILFED experts examined the Pedavegi unit and recorded deficiencies relating to boiler steam flow, oil losses in by-products and operator skills, in same exercise, 862.210 MT of FFBs from the APOILFED zone were processed at the TGOILFED Aswaraopet plant between 02.04.2025 and 04.04.2025, yielding an OER of 19.36%. However, the minutes of the meeting dated 29.01.2026, as placed before the Court, make no reference to this Aswaraopet result and instead record an OER of 20.01% at Apparaopet and 16% at Siddipet, both in Telangana. The record does not disclose that the 20.01% recorded at Apparaopet was obtained from Andhra Pradesh-origin FFBs, nor does it disclose any calculation or methodology connecting that figure with the Andhra Pradesh-origin FFB data. The record further contains an OER of 19.34% relating to M/s Navabharat, a private Andhra Pradesh processor. In these circumstances, while the Government was entitled to evolve its own methodology and to take processing efficiency into consideration, independent of the CACP formula, the particular figure of 20.01% has not been shown, on the material placed before the Court, to rest upon a rational examination of the relevant data concerning Andhra Pradesh- origin FFBs. On this limited ground, the impugned fixation cannot be sustained.

Accordingly, the Writ Petition is partly allowed, in the following terms: i. G.O.Rt.No.72 dated 04.02.2026, insofar as it fixes the OER at 20.01% for the Oil Year 2025–26, together with the consequential monthly orders issued thereunder, is quashed. ii. The competent authority shall undertake a fresh fixation of the OER and the consequential price of Oil Palm FFBs for the Oil Year 2025–26, in accordance with law, within eight (8) weeks from the date of receipt of a copy of this order.