Fortified Rice Manufacturers Move Punjab and Haryana HC Over Alleged Arbitrary Policy Changes
In a significant legal development impacting Punjab's fortified rice distribution programme, a consortium of empanelled Fortified Rice Kernel (FRK) manufacturers has approached the Punjab and Haryana High Court. The manufacturers have filed a civil writ petition under Article 226 of the Constitution, challenging what they term as "arbitrary, unconstitutional, and midstream alterations" implemented by the state's procurement authorities.
Allegations of Post-Tender Modifications
The petitioners, all Punjab-based FRK manufacturers empanelled for the Kharif Marketing Season (KMS) 2025–26, seek the quashing of two official letters dated December 15, 2025, and January 13, 2026. These communications were issued by the Punjab procurement department and PUNGRAIN, one of the state's grain procurement agencies. According to the manufacturers, these letters fundamentally disrupt the supply chain, allocation mechanism, and payment structure that were explicitly outlined in the original Request for Proposal (RFP) released on August 5, 2025.
The RFP was designed to empanel FRK manufacturers to supply fortified rice kernels—enriched with iron, folic acid, and vitamin B12—to rice mills across Punjab. These kernels are blended with custom-milled rice intended for delivery to the Food Corporation of India (FCI) under the Central Pool, aligning with the Government of India's nutrition security initiatives. For KMS 2025–26, the central government has established a target of 124 lakh metric tonnes of fortified rice, with Punjab hosting approximately 125 FRK manufacturers and suppliers.
Violation of Tender Conditions and Constitutional Rights
The petitioners argue that the RFP, following a comprehensive technical and financial evaluation, resulted in empanelment at a uniform L1 rate of Rs 3,948 per quintal. Under Clauses 9 to 12 of the RFP, rice mills were mandated to:
- Directly place supply orders on empanelled FRK manufacturers
- Make payments directly to these manufacturers
- Adhere to a clearly defined delivery schedule
However, the manufacturers allege that the December 15, 2025, letter instructed FRK suppliers to operate on a "first come, first serve" basis—a provision not included in the original tender document. This was reportedly followed by the January 13, 2026, letter, which introduced a new system of departmental "release orders," effectively taking over allocation responsibilities and modifying the agreed payment framework.
Describing these actions as a classic "change of rules of the game after award of contracts," the petitioners contend that the post-tender modifications violate Articles 14 and 19(1)(g) of the Constitution. They assert that these changes undermine transparency and fairness in public procurement, citing Supreme Court jurisprudence, including the case of K. Manjusree vs State of Andhra Pradesh, to emphasize that authorities must adhere to tender conditions once the process has commenced and concluded.
Operational Disruptions and Financial Distress
The manufacturers further claim that the new system has led to:
- Arbitrary exclusion of empanelled units
- Disruption of production planning
- Significant financial distress
Many manufacturers have invested crores of rupees in establishing compliant manufacturing units, packaging infrastructure, and quality-testing facilities, strictly adhering to FSSAI, BIS, and ISO standards mandated under the RFP. The petition notes that a joint representation highlighting these concerns was submitted to the department, but no corrective action was taken. With the paddy milling season already underway, the manufacturers warn that any further delay could result in irreversible losses and jeopardize the timely supply of fortified rice to the central pool.
Industry Reactions and Broader Implications
Prem Goel of the Akhil Bharatiya (All India) Rice Sheller Sangh, a major body representing rice millers, expressed strong dissatisfaction with the letters issued by the Department of Food and Civil Supply. He highlighted:
- A perceived lack of transparency
- Inconsistent decision-making
- Procedural delays disrupting operations
According to millers, the current working mechanism is causing unnecessary uncertainty and financial stress within the rice milling sector. They also raised concerns about the pricing disparity, noting that FRK rates in Punjab are approximately Rs 3,980 per quintal, significantly lower than the all-India rates ranging between Rs 5,800 and Rs 6,200 per quintal. This discrepancy, they argue, affects supply dynamics in Punjab, as FRK manufacturers have previously alleged that manufacturing costs exceed the selling rate.
Goel advocated for a "one nation, one policy" approach, particularly since the Government of India procures fortified rice for the central pool. He also pointed out that while Punjab requires 1.05 lakh tonnes of FRK, the state government department has accepted double the required supply to expedite fortified rice milling. This could lead to losses for FRK manufacturers if they produce more than needed, though Goel added that manufacturers are aware of the demand and will exercise caution in production.
Official Response and Proposed Solutions
Lal Chand Kataruchal, Minister for the Punjab Food and Civil Supplies Department, could not be reached for comment. However, a senior department official, speaking on condition of anonymity, stated:
"As per the latest position, all FRK release orders already issued manually will be honoured first and allowed to be lifted. Thereafter, the department is proposing a transparent, portal-based priority system under which each rice mill will be permitted to book only one stag at a time, clearly indicating the designated FRK supplier."
The official further explained that a date-wise and supplier-wise first-in and first-out (FIFO) queue will be generated on the portal, providing live visibility of each mill's position, including FRK already cleared, those under process, and pending movements. This system is currently under active consideration by the department to ensure transparency, fairness, and orderly lifting.
The case is expected to be closely monitored, given its potential ramifications for Punjab's procurement operations and the national fortified rice programme aimed at addressing micronutrient deficiencies across India.
