Fortified rice manufacturers move Punjab and Haryana HC, allege arbitrary change in Punjab’s supply policy

Alleged violation of tender conditions

The RFP was floated to empanel FRK manufacturers to supply fortified rice kernels—enriched with iron, folic acid, and vitamin B12—to rice mills in Punjab. These fortified kernels are blended with custom-milled rice meant for delivery to the Food Corporation of India (FCI) under the Central Pool, in line with the Government of India’s nutrition security programme. For KMS 2025–26, the Centre has fixed a target of 124 lakh metric tonnes of fortified rice.

In Punjab, there are around 125 FRK manufacturers and suppliers.

The petitioners contend that the RFP, after a detailed technical and financial evaluation, culminated in empanelment at a uniform L1 rate of Rs 3,948 per quintal. Under Clauses 9 to 12 of the RFP, rice mills were required to directly place supply orders on empanelled FRK manufacturers, make payments directly to them, and follow a clearly defined delivery schedule.

However, the manufacturers allege that the December 15, 2025, letter directed FRK suppliers to supply rice mills on a “first come, first serve” basis—an arrangement not envisaged in the tender document. This, they argue, was followed by a second letter dated January 13, 2026, which introduced a new mechanism of departmental “release orders”, thereby taking over allocation and altering the agreed payment structure.

‘Change of rules of the game’

Calling the impugned actions a classic “change of rules of the game after award of contracts”, the petitioners argue that the post-tender modifications violate Articles 14 and 19(1)(g) of the Constitution, besides undermining transparency and fairness in public procurement. They have relied upon Supreme Court jurisprudence, including K. Manjusree vs State of Andhra Pradesh, to assert that authorities are bound by tender conditions once the process has commenced and concluded.

The manufacturers further claim that the new system has led to the arbitrary exclusion of empanelled units, disruption of production planning, and financial distress. Many, they say, have invested crores of rupees in setting up compliant manufacturing units, packaging infrastructure and quality-testing facilities in strict adherence to FSSAI, BIS and ISO standards mandated under the RFP.

Representation ignored, court intervention sought

The petition notes that a joint representation highlighting these concerns was submitted to the department, but no action was taken. With the paddy milling season already underway, the manufacturers argue that any further delay could cause irreversible losses and derail the timely supply of fortified rice to the central pool.

Seeking urgent relief, the petitioners have prayed for quashing of both impugned letters, a direction to the authorities to strictly implement Clauses 9, 10, 11 and 12 of the RFP “in true letter and spirit”, and any other appropriate orders deemed fit by the court.

The case is expected to be closely watched, given its potential impact on Punjab’s procurement operations and the national fortified rice programme aimed at combating micronutrient deficiencies.

Prem Goel, Akhil Bharatiya (All India) Rice Sheller Sangh, a major body of rice millers, said that “rice millers across the state have expressed strong dissatisfaction with the letters issued by the office of the Department of Food and Civil Supply.

He alleges a lack of transparency, inconsistent decision-making, and procedural delays that have disrupted operations and eroded confidence in the system. According to millers, the present working mechanism is causing avoidable uncertainty and financial stress within the rice milling sector.

The millers also raised the question of why, in Punjab, the rate of FRK is the lowest as compared to the all-India level, where the rates per quintal of FRK are between Rs 5,800 and Rs 6,200, against Rs 3,980 per quintal in Punjab. This disparity, they said, is also affecting supply in Punjab, as FRK manufacturers had earlier alleged that manufacturing costs are higher than the selling rate.

Goel said there should be a “one nation, one policy” for this, especially since the Government of India is to procure fortified rice for the central pool. He also highlighted that while Pinjab needs 1.05 lakh tonnes of frk, the Punjab government department has already accepted double the required supply to speed up the milling of the fortified rice, but this will lead to losses for FRK manufacturers if they manufacture more FRK than required. But thankfully, the manufacturers are aware of the demand for FRK in Punjab and will exercise caution in manufacturing it, added Goel.

The minister for the Punjab Food and Civil Supplies Department, Lal Chand Kataruchal, could not be contacted. But a senior official in the department said on the condition of anonymity, “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.”

“A date-wise and supplier-wise first-in and first-out (FIFO) queue will be generated on the portal, with live visibility of each mill’s position, including FRK already cleared, those under process, and pending movement. This system is currently under active consideration by the department to ensure transparency, fairness and orderly lifting.”