AP High Court Upholds FCI's Fortified Rice Stock Replacement Directions Against Rice Millers
Forty-seven rice millers challenged replacement orders for KMS 2022-23 fortified rice stocks; the Andhra Pradesh High Court dismissed all writ petitions, finding the three-tier testing and appeal process fully compliant with applicable SOPs.
The High Court of Andhra Pradesh at Amaravati has dismissed a batch of forty-seven writ petitions filed by rice millers who had supplied Fortified Rice Kernels (FRK) blended rice for the Kharif Marketing Season (KMS) 2022–23 under the Public Distribution System. Justice K. Sreenivasa Reddy, sitting singly, passed a common order on 17 June 2026, holding that the directions issued by the Food Corporation of India (FCI) and the Department of Food and Public Distribution (DFPD) requiring the millers to replace non-conforming stocks were entirely in accordance with the Standard Operating Procedures and Operational Guidelines governing quality control of fortified rice. The court found no infringement of any fundamental or statutory right that could attract the extraordinary jurisdiction under Article 226 of the Constitution of India.
The Dispute Before the Court
The petitioners are registered partnership firms engaged in rice milling. They had entered into agreements with Respondent 3, the Andhra Pradesh State Civil Supplies Corporation Limited (APSCSC Limited), for custom milling of paddy and supply of fortified rice to Respondent 2, the FCI. Under the scheme, the APSCSC supplied Fortified Rice Kernels to the millers, who blended FRK with Custom Milled Rice at a 1:100 ratio using automatic blending machines and delivered the stock to FCI.
On 4 May 2023, FCI issued proceedings stating that samples of FRK rice supplied by the millers had been sent to the Ministry for retesting of micronutrients—Folic Acid, Vitamin B12, and iron—and were found not in conformity with FSSAI limits. Millers were directed to replace the stocks. On 8 August 2023, FCI directed APSCSC to take up replacement with the millers and stop further deliveries from them.
The millers approached FCI authorities collectively, contending that they had no control over the micronutrient content of FRK supplied to them by APSCSC, and that the samples for initial testing had been drawn in their absence, violating principles of natural justice. A meeting was held at which it was agreed that concerns of the millers would be forwarded to appropriate authorities, that sampling procedures would comply with established guidelines including millers' presence, and that deliveries would be put on hold pending retesting.
Samples were subsequently drawn on 9 April 2024 in the presence of millers, and laboratory results dated 15 April 2024 showed those samples to be within prescribed norms. FCI's Regional Office issued a letter dated 24 April 2024 giving adhoc approval to the Divisional Office, Vijayawada, to accept CMR from millers whose retested results were within prescribed limits, pending further instructions from headquarters.
Despite this, authorities of FCI and APSCSC did not permit the millers to supply FRK rice for the current season, and pending bills from Financial Year 2016–17 onwards remained unpaid. Subsequently, letters dated 2 September 2024, 13 November 2024, 15 October 2024, 16 October 2024, and 22 October 2024 were issued by FCI at various levels, directing millers to replace stocks at their own risk and cost. The millers in Writ Petition No. 349 of 2025 alone had overdue bills aggregating Rs. 84,24,605 for FY 2016–17 to FY 2023–24.
The millers challenged all these directions as illegal and arbitrary. They also sought directions to release their withheld bills with interest. The writ petitions were filed in two groups during 2024 and 2025, and were heard together on a common record.
The Regulatory Framework in Dispute
The court identified four instruments as the operative regulatory framework:
The SOP dated 16 July 2021 (F.No. 40-4/2020-QCC) governs monitoring of quality of food grain stocks under the Decentralised Procurement Scheme. It provides for two types of inspections by a joint Ministry-FCI-State team: periodic and surprise. Surprise inspections may be conducted at any time without prior notice to State Government authorities.
The SOP dated 15 March 2022 (F.No. 36-5/2018-QCC Part) establishes Quality Management Protocols for FRK and Fortified Rice. Under Level 3.3, a minimum of 10 per cent of samples may be referred to FSSAI-approved NABL-accredited laboratories monthly by FCI before distribution. It defines responsibilities of all stakeholders including rice millers.
The Operational Guidelines dated 13 December 2022 (F.No. 36-5/2018-QCC Part) elaborate quality control requirements during production of fortified rice at rice mills. Annexure 2 specifically requires rice millers, after receipt of FRK from the manufacturer or supplier, to cross-check the sanctity of the FRK by testing a sample at an FSSAI-Notified NABL-Accredited Laboratory on a random basis.
The Procedure for Appeal dated 15 March 2023 (F.No. 35-13/2023-S&I/204-242) sets out a three-tier process for contesting rejection of fortified rice stocks. Three sealed samples are jointly drawn; FCI retains two and the State Agency retains one as a review sample. On initial rejection, an appeal lies to the Ministry within 48 hours; the Ministry tests the second sample at a referral or appellate laboratory within 15 days. On rejection in appeal, the State Agency may request a review, providing the third sample to the Ministry. Under Clause 9 of this procedure, results of the review sample tested at referral or appellate laboratories of the Ministry are final and cannot be challenged by any agency or stakeholder. Clause 10 requires the rice miller or State Agency to lift rejected stock within 24 hours.
How the Court Reasoned
Justice Sreenivasa Reddy examined each of the four contentions raised on behalf of the millers in turn.
Sampling in the absence of millers. The court held that the SOP dated 16 July 2021 expressly authorises surprise inspections at any time without prior notice. The joint team from the Ministry and FCI had conducted mandatory inspections in accordance with this procedure. No malafides were attributed to any official. The millers had not pointed to any provision requiring their presence during surprise inspections, sample drawing, or laboratory analysis. The court observed that millers' presence at inspections cannot be permitted because the authorities must maintain confidentiality of the process and avoid undue influence on inspecting officers. The SOP dated 13 December 2022 clarifies that a remedy of appeal is provided only at the time of acceptance of fortified rice and not at subsequent inspection stages. The natural justice objection was therefore rejected.
Responsibility for micronutrient content. Millers argued that they only mechanically blended FRK supplied by APSCSC in the prescribed 1:100 ratio and had no control over its micronutrient composition. The court found this argument unsustainable. Annexure 2 of the Operational Guidelines dated 13 December 2022 places a specific obligation on rice millers to cross-check the sanctity of FRK supplied to them by testing samples at FSSAI-Notified NABL-Accredited Laboratories on a random basis before blending. No material was placed before the court to show that any petitioner had discharged this obligation. In that situation, millers could not be permitted to contend that they bore no responsibility for micronutrient levels.
The adhoc approval letter and retested results. The petitioners relied heavily on the FCI Regional Office letter dated 24 April 2024, which gave adhoc approval to accept CMR from four rice millers whose retested samples were within limits, and on the FCI HQ letter dated 12 January 2024 directing retesting of stocks through FSSAI-notified labs. The court held that the 24 April 2024 letter was, by its own terms, subject to the final decision of FCI Headquarters on the retested stocks. It conferred no enforceable right on the millers. Subsequently, DFPD, by its letter dated 10 June 2024, informed FCI HQ that Clause 9 of the Procedure for Appeal rendered the Ministry's review results final and unchallengeable, and that no change in the SOP was under consideration. FCI HQ, by letter dated 23 August 2024, directed the Regional Office to act on the DFPD letter. The court held that the SOP does not contemplate any further resampling or retesting after the three-tier process is exhausted, and the adhoc letter therefore “does not hold any value” once the Ministry's position was made clear.
On the four millers whose stocks fell under the 10 per cent mandatory inspection (WP Nos. 26533, 26520, 26534, and 26619 of 2024), the court found additional material. Testing at the primary level, on first appeal, and on review all confirmed that the stocks were Beyond Rejection Limit (BRL) in micronutrients. Affidavit material filed by the Vice Chairman and Managing Director of APSCSC on 3 March 2026 raised questions about inconsistencies in test results and the non-disclosure of Certificate of Analysis details by DFPD. The court acknowledged this material but did not allow it to override the finality prescribed by Clause 9 of the Procedure for Appeal. The Procedure for Appeal was not under challenge before the court.
Privity of contract and the FRK supply scheme. The court recorded that there was no privity of contract between FCI and the rice millers; the agreement for custom milling for KMS 2022–23 was between APSCSC and the millers. FCI's contractual obligations ran to APSCSC, not to the individual millers. The court also noted that the scheme for supply of FRK rice to FCI had since been withdrawn.
The learned Additional Solicitor General, Sri Challa Dhanunjaya, appearing for Respondents 1 and 2, relied on two precedents: the Supreme Court decision in Chandigarh Administration v. Jagjit Singh, (1995) 1 SCC 745, for the proposition that a writ court cannot direct repetition of an illegality merely because a similar order was passed in another's case; and the Telangana High Court decision in Nalgonda District Rice Millers Association v. Union of India, MANU/TL/0405/2025, which had upheld surprise inspections and sample analysis without millers' presence in an analogous FRK quality control context, holding that confidentiality of the process precluded millers' presence. The court found the reasoning in both decisions applicable.
Outcome
Justice K. Sreenivasa Reddy dismissed all forty-seven writ petitions. The court held that the procedure adopted by the respondents was strictly in accordance with the SOP dated 16 July 2021, the SOP dated 15 March 2022, the Operational Guidelines dated 13 December 2022, and the Procedure for Appeal dated 15 March 2023, and that there was no infirmity warranting interference under Article 226. The respondents had not rejected the stocks outright but had directed replacement of defective stocks in terms of the applicable SOP. No costs were awarded. All miscellaneous petitions pending in the writ petitions were also closed.