Point of Law: Fixation of price by the State for the Oil Palm Fresh Fruit Bunches (FFB) from which palm oil is extracted - price fixation is a purely legislative function and that the Court with its limited technical expertise should leave the decision to the experts.

ORDER :

1. This writ petition is filed for the following reliefs :

“to issue a writ or order or direction more particularly one in the nature of Writ of Mandamus or any other appropriate Writ declaring the G.O.RT.No.22 dated 19.01.2021 issued by the 1st Respondent fixing the formula for the pricing of Oil Palm Fresh Fruit Bunches (FFBs) as arbitrary, illegal, void and contrary to the Judgment passed in W.P.No.9376 of 2015 by the Hon’ble High Court dated 15.12.2015 and the provisions of Andhra Pradesh Oil Palm Regulation of Production and Processing Act, 1993 (hereinafter referred to ‘the Act’) and rules there under besides violating the petitioners rights guaranteed under Articles 14 and 19(1)(g) of the Constitution of India and consequently direct the 1st Respondent to re-fix the FFBs pricing formula for the period November, 2020 to October 2021 (oil year) by taking OER of 16.08% (Pedavegi) in terms of CACP Report and pass….”

2. This Court has heard Sri B.Adinarayana Rao, learned senior counsel for Sri Challa Guna Ranjan, the Government Pleader for Agriculture appearing for respondent Nos.1 and 2, Additional Solicitor General for respondent No.4 and Sri M.S.Prasad, senior counsel for the unofficial respondents.

3. The issue in this case relates to the fixation of price by the State for the Oil Palm Fresh Fruit Bunches (FFB) from which palm oil is extracted. The following facts are not in dispute: (1) The relevant statue applicable to the facts of the case is the Andhra Pradesh Oil Palm (Regulation of Production and Processing) Act, 1993 (for short ‘the Act’). In this Act, section 13 is the important for this case. The two clauses of section 13 of the Act are reproduced hereunder:

Section 13. Power to fix prices

(1) The Government may on their own fix the minimum price of Oil Palm FFBs or may authorize the Oil Palm Commissioner to do so, subject to such guidelines as they may give in that regard from time to time.

(2) Where the Oil Palm Commissioner is authorized to fix the prices of Oil Palm FFBs to be purchased by the factory, he shall declare at such intervals as may be directed by the Government the minimum price at which the Oil Palm FFBs be purchased by the factories.

4. In addition, section 11 of the Act states that the State Government shall have the power to declare a particular area as the factory zone for the purpose of supply of fresh oil palm fruit bunches to the factories. Under section 11(2) of the Act, once a factory zone is established, all the farmers (oil palm growers) of that area shall supply their fruit bunches from their plantations to the factory. The factory is also under an obligation to buy the oil palm fresh fruit bunches. There is no dispute about this position vis a vis the Act.

(2) It is also important to note that there are two State owned units: one in Pedavegi in the State of Andhra Pradesh and the other at Aswaraopet in Telangana.

(3) The Government of India has also clarified by letter dated 07.12.2014 that the State Government is free to determine the price and take its own independent decisions basing on their own formula also. Even after the present writ petition is filed, the Government of India clarified that its formula is purely recommendatory in nature and that the State/Government of Andhra Pradesh must take its own decision whether to follow the recommendations or to evolve their own formula.

5. Apart from this, the law on the subject with regard to price fixation is also very clear. The Hon’ble Supreme Court of India in the case of Shri Sitaram Sugar Co. Ltd., v. Union of India, 1990 (3) SCC 223 held as follows in para 45:

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., MANU/SC/0075/1974: [1975]1SCR956. The Government