Patanjali Foods Withdraws Plea Against Telangana HC Order Upholding Cancellation Of Suryapet Oil Palm Factory Zone

The Supreme Court on Thursday allowed Patanjali Foods to withdraw its Special Leave Petition challenging the Telangana High Court Division Bench judgment upholding the Telangana Government's cancellation of its Suryapet oil palm factory zone.

The Supreme Court was hearing Patanjali Foods' challenge to the Telangana High Court Division Bench judgment, which had dismissed the company's writ appeal against the single judge's order and upheld the cancellation of Patanjali's Suryapet oil palm factory zone by the Telangana Government.

The High Court had held that Clauses 5(b), 6 and 13 of the Memorandum of Agreement read together, imposed a binding obligation on Patanjali to establish a processing unit within the stipulated period and permitted cancellation of the factory zone for continued non compliance.

A Division Bench of Justices J.B. Pardiwala and K. Vinod Chandran permitted Patanjali Foods to withdraw the SLP after hearing Senior Advocate Aryama Sundaram, appearing for Patanjali, pressed for withdrawal and raise all the contentions before the appropriate authority.

Sundaram argued that the High Court had proceeded on the erroneous assumption that Patanjali had not started the process of establishing the processing unit. He submitted that documents on record showed that the company had already purchased land for the unit.

“They ignored, there is on record, the letter by which we purchased the lands.”, he submitted.

He further submitted that the land had been purchased even before the cancellation of the allotment, and contended that this aspect had not been properly appreciated by the High Court.

Sundaram also referred to a document from January 2025 concerning the land purchased by Patanjali. He then drew the Court's attention to a government meeting concerning the establishment of oil palm processing mills and the timelines prescribed for companies to establish their mills.

“Kindly see establishment of oil palm processing mills, all companies to complete the mill establishment by the time the plantations reach productive stage in their factory, following are the timelines.”

However, the Court was not inclined to interfere with High Court order and ultimately allowed Patanjali to withdraw its petition.

Background

Patanjali Foods Ltd has been engaged in oil-palm cultivation in Telangana since 2009. It was allotted factory zones in various districts and, under a Memorandum of Agreement (MOA) dated March 15, 2017, was required to establish an oil palm processing unit within 24 months, besides fulfilling plantation and procurement obligations.

The State alleged that Patanjali failed to meet the prescribed plantation targets and did not establish the processing mill within the stipulated period. Several show-cause notices were issued from December 2022 onwards.

Patanjali attributed the delay to shortage of planting material, drought conditions and other difficulties, and later claimed that it had taken steps to acquire land for the proposed mill.

On March 15, 2025, the Telangana Government cancelled Patanjali's Suryapet factory zone allotment and re-allotted it to Telangana Cooperative Oil Seeds Growers Federation Ltd through. Patanjali challenged the decision but the Single Judge dismissed its writ petition on January 8, 2026, holding that the MOA imposed a mandatory obligation to establish the processing mill and that non compliance could result in cancellation.

The Division Bench of the Telangana High Court dismissed Patanjali's writ appeal and affirmed the Single Judge's order. The Court found the cancellation neither arbitrary nor disproportionate, noting Patanjali's repeated defaults, unsatisfactory plantation performance and the opportunities given through successive notices and a personal hearing.