Kerala High Court
South Indian Green Cardamom Company ... vs M/S. Spices Board Of India on 13 February, 2026
Author: N.Nagaresh
Bench: N.Nagaresh
2026:KER:12494
IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
WP(C) NO. 10104 OF 2024
PETITIONERS:
1 M/S. SPICEMORE TRADING COMPANY
REPRESENTED BY ITS MANAGING PARTNER,
JOHNY VATTATHARA JOSEPH, AGED 57 YEARS,
VATTATHARA HOUSE, KUMILY, IDUKKI DISTRICT,
KERALA, PIN - 685509.
2 M/S.GREEN HOME CARDAMON MARKETING INDIA PVT.LTD.
REPRESENTED BY ITS MANAGER, VARKEY VARGHESE,
AGED 68 YEARS, S/O. VARKEY, CHAMATHARAYIL HOUSE,
KATTAPPANA P.0, IDUKKI DISTRICT, PIN-685515.
[CORRECTED] *
* [NAME OF 2ND PETITIONER IS CORRECTED AS
"M/S.GREENHOUSE CARDAMOM MARKETING INDIA
PVT.LTD.' INSTEAD OF 'M/S.GREEN HOME CARDAMOM
MARKETING INDIA PVT.LTD.' AS PER ORDER DATED
11.11.2024 IN IA NO.1/2024 IN WPC 10104/2024]
3 M/S. SUGANDHAGIRI SPICES PROMOTERS AND TRADERS
PVT. LTD., BUILDING NO. 986, KALKUMDAL VILLAGE,
NEDUMKANDOM P O, IDUKKI,
REPRESENTED ITS
MANAGING DIRECTOR, GIGI SKARIA,
AGED 49 YEARS, S/O. SKARIA, PIN - 685553.
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BY ADVS.
SHRI.P.CHANDRASEKHAR
SHRI.BIJU HARIHARAN
SHRI. ANOOP KRISHNA
SHRI.C.RAMAN
SRI.ANAND SANKAR
SMT.REGIMOL M.K.
SMT.PRATHEEKSHA RAJ
SMT.JENNY THANKAM
RESPONDENTS:
1 M/S. SPICES BOARD OF INDIA
SUGANDABHAVAN, NH BYPASS, PALARIVATTOM,
ERNAKULAM, REPRESENTED BY ITS SECRETARY.,
PIN - 682025.
2 THE SECRETARY
M/S. SPICE BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, ERNAKULAM,
PIN - 682025.
3 THE DIRECTOR (MARKETING),
M/S. SPICE BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, ERNAKULAM,
PIN - 682025.
*ADDL.4 V.P. RAJENDRAN,
AGED 60 YEARS, S/O. PRABHAKARAN NAIR,
VILLOONICKAL HOUSE, CHEMANNAR P.O.,
IDUKKI - 685554.
[ADDITIONAL 4TH RESPONDENT IS IMPLEADED AS
PER ORDER DATED 19.08.2024 IN IA NO.2/2024]
BY ADVS.
SRI.ANTONY MUKKATH
SRI.C.HARIKUMAR
SMT.SANDRA SUNNY
W.P.(C)No.10104 of 2024
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SRI.ARUN KUMAR M.A
SHRI. VIMAL DEV P.V.
SMT.FARAH JYOTHI PRADEEP
SRI.RAJU M.C.
SRI.ANTO VINU YESUDASAN
SRI.S.SANAL KUMAR (SR.)
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09.02.2026, ALONG WITH WP(C).35130/2025 AND
CONNECTED CASES, THE COURT ON 13.02.2026 DELIVERED THE
FOLLOWING:
W.P.(C)No.10104 of 2024
and connected cases
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
WP(C) NO. 14901 OF 2024
PETITIONERS:
1 SOUTH INDIAN GREEN CARDAMOM COMPANY LIMITED
III/505A, 505B, KUMILY-MUNNAR ROAD,
PAMPUMPARA, IDUKKI, KERALA,
REPRESENTED BY ITS MANAGING DIRECTOR
MR. S. JEEVANANDAN, PIN - 685551.
2 SOUTH INDIAN GREEN CARDAMOM ONLINE AUCTION
PRIVATE LIMITED, III/505C, 505D,
KUMILY-KATTAPPANA ROAD, PAMPUMPARA,
IDUKKI, KERALA, REPRESENTED BY ITS
MANAGING DIRECTOR MR. G. VINAYAGAMOORTHY,
PIN - 685551.
BY ADVS.
SHRI.KURIAN ANTONY MATHEW
SRI.ARUN THOMAS
SMT.KARTHIKA MARIA
SMT.VEENA RAVEENDRAN
SRI.ANIL SEBASTIAN PULICKEL
SHRI.SHINTO MATHEW ABRAHAM
SHRI.MATHEW NEVIN THOMAS
SMT.LEAH RACHEL NINAN
SHRI.JOE S. ADHIKARAM
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RESPONDENTS:
1 M/S. SPICES BOARD OF INDIA
SUGANDABHAVAN, NH BYPASS, PALARIVATTOM,
ERNAKULAM, REPRESENTED BY ITS SECRETARY,
PIN - 682025.
2 THE SECRETARY
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, PIN - 682025.
3 THE DIRECTOR (MARKETING)
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, PIN - 682025.
BY ADV. SRI.ANTONY MUKKATH, STANDING COUNSEL
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09.02.2026, ALONG WITH WP(C).35130/2025 AND
CONNECTED CASES, THE COURT ON 13.02.2026 DELIVERED THE
FOLLOWING:
W.P.(C)No.10104 of 2024
and connected cases
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
WP(C) NO. 15286 OF 2024
PETITIONER:
M/S MAS ENTERPRISES LIMITED
REPRESENTED BY ITS EXECUTIVE DIRECTOR,
ANJO T JOSE, S/O T.T JOSE, AGED 45 YEARS,
KUMILY-MUNNAR ROAD, VANDANMETTU,
IDUKKI, PIN - 685551.
BY ADVS.
SRI.MATHEW JOHN (K)
SRI.ABY J AUGUSTINE
RESPONDENTS:
1 M/S. SPICES BOARD OF INDIA
SUGANDABHAVAN, NH BYPASS, PALARIVATTOM,
ERNAKULAM, REPRESENTED BY ITS SECRETARY,
PIN - 682025.
2 THE SECRETARY,
M/S. SPICES BOARD OF INDIA,
SUGANDABHAVAN, NH BYPASS,
W.P.(C)No.10104 of 2024
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PALARIVATTOM,
ERNAKULAM, PIN - 682025.
3 THE DIRECTOR (MARKETING),
M/S. SPICES BOARD OF INDIA,
SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM,
ERNAKULAM,
PIN - 682025.
BY ADV SRI.ANTONY MUKKATH, STANDING COUNSEL
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09.02.2026, ALONG WITH WP(C).35130/2025 AND
CONNECTED CASES, THE COURT ON 13.02.2026 DELIVERED THE
FOLLOWING:
W.P.(C)No.10104 of 2024
and connected cases
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
WP(C) NO. 15997 OF 2024
PETITIONER:
M/S CARDAMOM GROWERSFOREVER PRIVATE LTD
D NO.17A, WARD NO.33 NEW COLONY 2ND STREET,
BODINAYAKANUR, THENI DISTRICT TAMILNADU
REPRESENTED BY ITS MANAGING DIRECTOR,
M ARUMUGAM, AGED 66 YEARS
S/O. A MARUTHAMUTHU, PIN - 625513.
BY ADVS.
SHRI.P.CHANDRASEKHAR
SHRI.C.RAMAN
SHRI. ANOOP KRISHNA
SRI.ANAND SANKAR
SMT.REGIMOL M.K.
SMT.PRATHEEKSHA RAJ
SHRI.BIJU HARIHARAN
SMT.JENNY THANKAM
RESPONDENTS:
1 M/S. SPICES BOARD OF INDIA
SUGANDABHAVAN, NIT BYPASS, PALARIVATTOM,
ERNAKULAM REPRESENTED BY ITS SECRETARY,
PIN - 682025.
W.P.(C)No.10104 of 2024
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2 THE SECRETARY
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, ERNAKULAM,
PIN - 682025.
3 THE DIRECTOR (MARKETING)
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, ERNAKULAM,
PIN - 682025.
BY ADV SRI.ANTONY MUKKATH, STANDING COUNSEL
THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY
HEARD ON 09.02.2026, ALONG WITH WP(C).35130/2025 AND
CONNECTED CASES, THE COURT ON 13.02.2026 DELIVERED THE
FOLLOWING:
W.P.(C)No.10104 of 2024
and connected cases
:10:
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IN THE HIGH COURT OF KERALA AT ERNAKULAM
PRESENT
THE HONOURABLE MR.JUSTICE N.NAGARESH
FRIDAY, THE 13TH DAY OF FEBRUARY 2026 / 24TH MAGHA, 1947
WP(C) NO. 35130 OF 2025
PETITIONER:
SOUTH INDIAN GREEN CARDAMOM COMPANY LIMITED
III/505A, 505B, KUMILYMUNNAR ROAD,
PAMPUMPARA, IDUKKI, KERALA, REPRESENTED BY
ITS MANAGING DIRECTOR MR. S. JEEVANANDAN,,
PIN - 685551.
BY ADVS.
SHRI.SHINTO MATHEW ABRAHAM
SRI.ARUN THOMAS
SMT.VEENA RAVEENDRAN
SMT.KARTHIKA MARIA
SRI.ANIL SEBASTIAN PULICKEL
SMT.LEAH RACHEL NINAN
SHRI.MATHEW NEVIN THOMAS
SHRI.KARTHIK RAJAGOPAL
SHRI.KURIAN ANTONY MATHEW
SMT.APARNNA S.
SHRI.ARUN JOSEPH MATHEW
SHRI.ADEEN NAZAR
SHRI.NOEL NINAN NINAN
SHRI.SANTHOSH MATHEW (SR.)
RESPONDENTS:
1 M/S. SPICES BOARD OF INDIA
SUGANDABHAVAN, NH BYPASS, PALARIVATTOM,
ERNAKULAM, REPRESENTED BY ITS SECRETARY,
PIN - 682025.
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2 THE SECRETARY
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, PIN - 682025.
3 THE DIRECTOR (MARKETING)
M/S. SPICES BOARD OF INDIA, SUGANDABHAVAN,
NH BYPASS, PALARIVATTOM, PIN - 682025.
BY ADVS.
SRI.ANTONY MUKKATH
SRI.REGI MATHEW
SRI.JOSEPH M.L.
SRI.ARUN KUMAR V.
THIS WRIT PETITION (CIVIL) HAVING COME UP FOR
ADMISSION ON 09.02.2026, ALONG WITH WP(C).10104/2024,
14901/2024 AND CONNECTED CASES, THE COURT ON
13.02.2026 DELIVERED THE FOLLOWING:
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CR
JUDGMENT
Dated this the 13th day of February, 2026 [W.P.(C) Nos.10104, 14901, 15286, 15997 of 2024 and 35130 of 2025] The petitioners, who are e-auctioneering licensees under the Spices Board of India, are before this Court aggrieved by the enhancement effected by the Spices Board in the Bank Guarantee / Security Deposit to be provided by them.
2. The petitioners state that they are carrying on the business in cardamom as auctioneers for a considerably long period. The licence issued to them by the Spices Board is being renewed year after year without any break as at present. As per Rule 10 of the Cardamom (Licensing and Marketing) Rules, 1987, the petitioners are W.P.(C)No.10104 of 2024 and connected cases :13: 2026:KER:12494 to provide a Security Deposit in the form of a Bank Guarantee (equivalent to the average auction sale value of cardamom in one auction during the immediate preceding block period of three years) for the block period for which the applicant desires to obtain the auctioneer licence.
3. Even though the statutory rule is so, the respondents issued Ext.P12 order dated 21.02.2024, wherein it is stated that the Spices Board has decided to introduce progressive changes in the existing e-auction system. A Committee was appointed to study the regulations of SEBI and the settlement systems of Commodity Exchanges to safeguard the interest of the stakeholders / farmers from the risk of non-payment, the alternative to Bank Guarantee and submit recommendations to the Board. The Board decided that till the time the recommendations were approved for implementation and modifications are effected in the W.P.(C)No.10104 of 2024 and connected cases :14: 2026:KER:12494 existing software, as an interim measure, the Board approved to collect from the auctioneers, the Bank Guarantee amounts as follows:-
(i) Fixation of BG amount, in case of renewal applicants, equivalent to the average auction sale value in one auction, of that auctioneer during the preceding block period. For new applicants, the BG amount should be equivalent to the average auction sale value in one auction, of all auctioneers during the preceding block period.
(ii) Additionally, the Board should introduce a system whereby an auctioneer would not be allowed to pool / trade beyond a fixed upper limit in an auction (for example, equivalent to BG amount or not more than 125% of the BG amount), as might be fixed by the Board. The Secretary, Spices Board should reassess and modify the BG amount as per requirement to ensure minimising risk and ensuring smooth functioning of the e-auction system.
4. The petitioners submit that on the basis of the said decision, the Spices Board is pressurising the petitioners to enhance the Bank Guarantee provided by the petitioners at disproportionate levels. Such action is highly illegal and arbitrary, contend the petitioners. W.P.(C)No.10104 of 2024 and connected cases :15: 2026:KER:12494
5. The petitioners would submit that the Central Government has framed Cardamom (Licensing and Marketing) Rules, 1987 ('the CLMR, 1987', for short) in exercise of the powers conferred by Section 18 of the Spices Board Act, 1986. Rule 10 of the CLMR, 1987 provides that for e-auctions, the applicant shall provide a Security Deposit in the form of Bank Guarantee (equivalent to the average auction sale value of cardamon in one auction during the immediate preceding block period of three years) for the block period for which the applicant desires to obtain the auctioneer licence.
6. Since the Central Government, who is a superior authority and who is the rule making authority has specifically provided for the quantum of Bank Guarantee required for issuance of e-auction licence, the Spices Board cannot issue orders enhancing the Bank Guarantee required for issuance / renewal of e-auction licence. The W.P.(C)No.10104 of 2024 and connected cases :16: 2026:KER:12494 coercive proceedings against the petitioners are therefore illegal and unsustainable, contend the petitioners.
7. The petitioners state that they have taken huge loan to invest in their cardamom auctioneering business. The petitioners applied for licence on the belief that the Spices Board will adhere to the conditions in the Rules and will insist only Bank Guarantee as per the Rules. The present action of the Spices Board in substantially enhancing the Bank Guarantee will result in huge loss to the petitioners.
8. Standing Counsel entered appearance on behalf of the Spices Board and resisted the writ petition. On behalf of the respondents, it is submitted that the Spices Board in its 93rd Board meeting held on 20.10.2023, approved the issuance of cardamom licence for the block period 2023-2026 to the eligible applicants. The Board suggested to explore the possibility of differentiating Bank W.P.(C)No.10104 of 2024 and connected cases :17: 2026:KER:12494 Guarantee amount for different category of participants within a month. For the said purpose, a Committee was constituted.
9. After detailed deliberations, the Committee recommended the following for fixation of Bank Guarantee for eligible applicants for the new block period 2023-2026 in tune with the CLMR, 1987:-
(a) Fixation of a variable Security Deposit amount in the form of Bank Guarantee to the renewal applicants as per their average auction sale value of cardamom in one auction during the previous block period for the renewal applicants.
(b) In case of fresh applicants, the average sale value of cardamom in an auction conducted by all auctioneers in previous block period (2020- 2023) may be fixed initially and then BG amount may be revised after six months based on review of the average sale value of cardamom in an auction conducted by fresh applicants.
10. The renewal applicants, including the petitioners, submitted Bank Guarantee ranging from 2.60 Crores to 7.96 Crores as per the average auction sale W.P.(C)No.10104 of 2024 and connected cases :18: 2026:KER:12494 value of cardamom in one auction during the immediate preceding block period of three years and fresh applicants submitted Bank Guarantee for ₹5.89 Crores as per the average sale value of cardamom in an auction conducted by all auctioneers of previous block period.
11. Standing Counsel representing the Spices Board submitted that the administration of Spices Board is governed by the Spices Board Act, 1986. The functions of the Board as laid down in Section 7 of the Act, 1986 include ensuring remunerative returns to growers of cardamom, regulating the sale of cardamom and stabilisation of prices of cardamom. The Spices Board, therefore, is statutorily bound to regulate the sale of cardamom and stabilise the prices of cardamom. Therefore, in spite of Section 10, the Spices Board has a right to regulate the sale of cardamom and for that purpose, enhance the Bank Guarantee amounts, in order to protect W.P.(C)No.10104 of 2024 and connected cases :19: 2026:KER:12494 the interest of the cardamom farmers.
12. Standing Counsel further pointed out that the Spices Board has the right to reassess and modify the Bank Guarantee amount as and when deemed fit. As per the licence condition, the auctioneer shall also adhere to the instructions of the Board issued from time to time for smooth and efficient conduct of cardamom auction. Ext.P3 instructions issued by the Spices Board also insist that the auctioneer shall adhere to the instructions of the Board issued from time to time for smooth and efficient conduct of cardamom auction.
13. The respondents relied on Ext.P8 notice inviting applications for award of auctioneer licence dated 16.12.2020. Clause 14 of the said notice provided that the auctioneer shall pay the growers, whose cardamom is pooled, the applicable sale value of the cardamom sold in an auction within ten working days from the date of auction. W.P.(C)No.10104 of 2024 and connected cases :20: 2026:KER:12494 If the auctioneer defaults to make payment as per the terms and conditions of the licence, the Board will be entitled to invoke the Bank Guarantee and use the proceeds for arranging settlement of amount due to growers and to initiate steps for suspension and/or cancellation of the licence.
14. In the 93rd Board meeting of the Spices Board held on 20.10.2023, with regard to enhancement of the Bank Guarantee to be submitted by the applicants of the auctioneer licence (e-auction), it was decided that the Bank Guarantee cannot be discontinued as the Board cannot take the entire risk in case of payment defaults under its auction system. It was suggested to explore the possibility of differentiating Bank Guarantee amount for different categories of participants, which should be examined.
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15. Standing Counsel for the respondents specifically relied on Ext.P17 letter issued to the petitioner in W.P.(C) No.10104 of 2024, wherein the Board has made it clear that the Board has the right to reassess and modify the Bank Guarantee amount as and when deemed fit. All the petitioners have accepted such conditions of licence. They have been intimated about the enhancement of Bank Guarantee also. The challenge against the action taken by the respondents is therefore without any force or merit and it is liable to be dismissed, contended the Standing Counsel appearing for the Spices Board.
16. Standing Counsel relied on a decision of the Madurai Bench of the Hon'ble Madras High Court W.P(MD) No.6717 of 2024, wherein the issue of enhancement of Bank Guarantee was considered. The Madurai Bench of the Hon'ble Madras High Court has repelled the challenge to enhancement of Bank Guarantee W.P.(C)No.10104 of 2024 and connected cases :22: 2026:KER:12494 introduced by the Spices Board. The issue involved in this case is squarely covered by the decision of the Madurai Bench of the Hon'ble Madras High Court, contended the Standing Counsel.
17. I have heard the learned Counsel for the petitioners and the learned Standing Counsel appearing for the Spices Board. I have also heard the learned counsel who appeared for the Cardamom Growers Association.
18. The petitioners are aggrieved by the enhancement of Bank Guarantee / Security Deposit effected by the Spices Board and consequential demand for the enhanced Bank Guarantee / Security Deposit from the e-auctioneering agencies. The petitioners would argue that in view of Rule 10 of the CLMR, 1987, only the Government of India can effect enhancement of Bank Guarantee / Security Deposit, whereas the Spices Board of India would insist that in the light of Section 7 and Section 8 W.P.(C)No.10104 of 2024 and connected cases :23: 2026:KER:12494 of the Spices Board Act, 1986, the Board has a right to regulate the sale of cardamom and stabilisation of prices of cardamom and consequently, the Board has a right to enhance the Bank Guarantee / Security Deposit.
19. The Spices Board Act, 1986 has been enacted for the constitution of a Board for the development of export of spices and for the control of cardamom industry including the control of cultivation of cardamom. Section 38 of the Act, 1986 provides that the Central Government may, by notification in the Official Gazette, make rules to carry out the purposes of the Act.
20. Section 38 of the Spices Board Act, 1986 reads as follows:
38. Power to make rules--
(1) The Central Government may, by notification in the Official Gazette, make rules to carry out the purposes of this Act.
(2) Without prejudice to the generality of the foregoing power such rules may provide for all or any of the following matters, namely:--W.P.(C)No.10104 of 2024
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(a) the number of members of the Board under sub-section (3) of section 3;
(b) the term of office and other conditions of service of the members of the Board under sub-section (5) of section 3;
(c) the powers and duties of the Chairman under sub-section (6) of section 3;
(d) the powers and functions of the Vice-Chairman under sub-section (7) of section 3;
(e) the constitution of committees under section 5;
(f) the terms and conditions for giving licences to manufacturers of spices for export under clause (viii) of sub-section (1) of section 7;
(g) the form and manner in which and the time at which the registered owner may furnish returns to the Board under section 10;
(h) the form of the application and the fees under sub-section (1) of section 12;
(i) the period of limitation for appeal under sub-section (1) of section 14;
(j) the form of appeal and the fees payable under sub-section (3) of section 14;
(k) the procedure for disposal of appeal under sub-section (4) of section 14;
(l) the form in which, and the time at which, the Board shall prepare its budget under section 22 and its annual report under section 23;
(m) the manner in which the accounts of the Board shall be maintained and audited and the date before which the audited copy of the accounts may be furnished to the Central Government under section 24;
(ma) the manner of holding inquiry W.P.(C)No.10104 of 2024 and connected cases :25: 2026:KER:12494 and imposing penalty under sub-section (1) of section 30A;
(mb) the form and manner of preferring appeal under sub-section (2) of section 30A;
(n) the conditions and the restrictions with respect to the exercise of the power to enter under section 37;
(o) any other matter which is to be, or may be, prescribed or in respect of which provision is to be, or may be, made by rules.
21. In exercise of the powers conferred by Section 38 of the Act, 1986, the Central Government has framed the CLMR, 1987. Rule 3 of the Rules, 1987 provides that no person shall carry on business as auctioneer or dealer of cardamom except under and in accordance with the terms and conditions of a licence issued under the Rules and such other instructions as may be issued from time to time by the Board for the development of cardamom industry.
22. Rule 10 of the CLMR, 1987 which provides for the terms and conditions for issue or renewal W.P.(C)No.10104 of 2024 and connected cases :26: 2026:KER:12494 of licences. Rule 10(1)(a) of the CLMR, 1987 reads as follows:-
10. Terms and conditions for issue or renewal of licences-
(1) The terms and conditions for issue or renewal of auctioneer licence shall be as under :-
(a) for e-auction, the applicant shall provide a security deposit in the form of a Bank Guarantee (equivalent to the average auction sale value of cardamom in one auction during the immediate preceding block period of three years) for the block period for which the applicant desires to obtain the auctioneer licence.
23. It is therefore clear that the Central Government under Rule 10(1)(a) has statutorily prescribed the Security Deposit to be provided by auctioneers fixing the same as Bank Guarantee (equivalent to the average auction sale value of cardamom in one auction during the immediate preceding block period of three years) for the block period for which the applicant desires to obtain the auctioneer licence.
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24. The argument of the respondents is that notwithstanding Rule 10 of the Rules, 1987, the petitioners are bound by the conditions of licence issued to them and the licence conditions stipulate that the auctioneer shall adhere to the instructions of the Board issued for smooth and efficient conduct of cardamom auction. In view of the said conditions, the petitioners are bound to honour the demand made by the Spices Board for enhanced Bank Guarantee.
25. Ext.P8 notice inviting application for award of auctioneer licence, in its general terms and conditions provides that the auctioneer shall pay the growers whose cardamom is pooled, the applicable sale value of the cardamom sold in auction within ten working days from the date of auction. If the auctioneer defaults to make payment as per the terms and conditions of the licence, the Board will be entitled to invoke the Bank Guarantee and use the W.P.(C)No.10104 of 2024 and connected cases :28: 2026:KER:12494 proceeds for arranging settlement of amount due to growers and to initiate steps for suspension and/or cancellation of the licence. It is the contention of the Spices Board that enhanced Bank Guarantee demanded by the Spices Board is in order to protect the interest of the cardamom growers. Therefore, the petitioners cannot challenge the enhancement.
26. The pleadings and arguments raised at the Bar do not indicate any instance of non-payment of sale value of the cardamom sold in auction to the cardamom growers, though the Standing Counsel for the Spices Board would assert that there were instances of delay on the part of certain auctioneers in making payment.
27. There is no doubt that interest of the cardamom growers is to be protected and payment due to the farmers are to be ensured. But, such protective mechanism can be enforced by the Spices Board only in W.P.(C)No.10104 of 2024 and connected cases :29: 2026:KER:12494 accordance with the law and the rules prescribed for the same and such mechanism should be within the framework of law. It is true that as per Section 7 of the Spices Board Act, 1986, the Board has the power to ensure remunerative returns to growers of cardamom and to regulate the sale of cardamom and stabilisation of prices of cardamom. But, such power can be exercised only adhering to the provisions of the Act and the Rules.
28. Rule 3 of the CLMR, 1987 provides that no person shall carry on business as auctioneer or dealer of cardamom except and in accordance with the terms and conditions of a licence issued under the rules and such other instructions as may be issued by the Board from time to time. The question arising here is whether the Board can prescribe rules or issue any instructions contrary to the provisions contained in the CLMR, 1987 itself. W.P.(C)No.10104 of 2024 and connected cases :30: 2026:KER:12494
29. Rule 10 of the CLMR, 1987 specifically provides that for e-auction, the applicant shall provide a Security Deposit in the form of a guarantee, (equivalent to the average auction sale value of cardamom in one auction during the immediate preceding block period of three years) for the block period for which the applicant desires to obtain the auctioneer licence. When the Central Government has statutorily incorporated in the Rules the quantum of Bank Guarantee to be provided by the auctioneers, the Board will not be justified in enhancing the same without amending the Rules.
30. It is evident that the present quantum of Security Deposit in the form of Bank Guarantee is revised by the Central Government itself by effecting an amendment to the Rule inserted as per notification GSR 816(E) dated 18.11.2014. It is true that under Section 39(1) of the Act, the Board may, with the previous approval W.P.(C)No.10104 of 2024 and connected cases :31: 2026:KER:12494 of the Central Government, by notification in the Official Gazette, make regulations consistent with the Act and the Rules generally to carry out the purposes of the Act. From Section 39(1), it is clear that such regulations issued by the Board shall be consistent with the Act and the Rules. The enhancement of Security Deposit / Bank Guarantee now being effected by the Spices Board, is inconsistent with Rule 10 of the CLMR, 1987 framed by the Central Government. Due to the afore reasons, I disagree with the judgment of the Madurai Bench of the Hon'ble Madras High Court in W.P.(MD) No.6717/2024.
31. In the facts and circumstances of the case, the petitioners are entitled to succeed. The impugned notices/letters issued by the Spices Board of India to the petitioners seeking enhanced Security Deposit / Bank Guarantee are set aside. The petitioners shall be permitted to conduct e-auction / sale of cardamom without W.P.(C)No.10104 of 2024 and connected cases :32: 2026:KER:12494 insisting for more Bank Guarantee as long as the Cardamom (Licensing and Marketing) Rules, 1987 are not amended accordingly.
The writ petitions are disposed of as above.
Sd/-
N. NAGARESH JUDGE ams / aks W.P.(C)No.10104 of 2024 and connected cases :33: 2026:KER:12494 APPENDIX OF WP(C) NO. 10104 OF 2024 PETITIONERS' EXHIBITS Exhibit P1 TRUE COPY OF THE LICENSE ISSUED TO THE 1ST PETITIONER BY THE 1ST RESPONDENT DATED 15.06.2021 FOR THE PERIOD UP TO 31.08.2023 Exhibit P2 TRUE COPY OF THE LICENSE ISSUED TO THE 1ST PETITIONER AUTHORIZING THEM TO CARRY ON BUSINESS IN CARDAMOM UP TO 31.08.2026 AS AUCTIONEER Exhibit P3 TRUE COPY OF THE LICENSE ISSUED TO THE 2ND PETITIONER BY THE 1ST RESPONDENT DATED 15.06.2021 FOR THE PERIOD UP TO 31.08.2023 Exhibit P4 TRUE COPY OF THE LICENSE ISSUED TO THE 2ND PETITIONER BY THE 1ST RESPONDENT DATED 21.02.2024 TO DO BUSINESS IN CARDAMOM AS AUCTIONEER VALID UP TO 31.08.2023 Exhibit P5 TRUE COPY OF THE EXTRACT OF THE MINUTES OF THE BOARD OF DIRECTORS OF THE 2ND PETITIONER AUTHORIZING VARKEY VARGHESE, MANAGER TO REPRESENT THE 2ND PETITIONER Exhibit P6 A TRUE COPY OF THE LICENSE ISSUED TO THE 3RD PETITIONER BY THE 1ST RESPONDENT DATED 15.06.2021 FOR THE PERIOD UP TO 31.08.2023 Exhibit P7 TRUE COPY OF THE LICENSE ISSUED TO THE 3RD PETITIONER BY THE 1ST RESPONDENT DATED 21.02.2024 FOR THE PERIOD UP TO 31.08.2016 Exhibit P8 TRUE COPY OF THE NOTICE DATED 16.12.2020 ISSUED BY THE 1ST RESPONDENT Exhibit P9 TRUE COPY OF THE BANK GUARANTEE FOR RS.5,85,00,000/- DATED 30.12.2023 SUBMITTED BY THE 1ST PETITIONER TO W.P.(C)No.10104 of 2024 and connected cases :34: 2026:KER:12494 THE 1ST RESPONDENT Exhibit P10 TRUE COPY OF THE BANK GUARANTEE DATED 21.12.2023 FOR RS.3,65,00,000/- IN FAVOUR OF THE 1ST RESPONDENT Exhibit P11 A TRUE COPY OF THE LETTER DATED 20.12.2023 OF FEDERAL BANK, NEDUMKANDOM BRANCH TO THE 1ST RESPONDENT Exhibit P12 TRUE COPY OF THE ORDER DATED 21.02.2024 OF THE 2ND RESPONDENT Exhibit P13 A TRUE COPY OF THE MINUTES OF 93RD BOARD MEETING OF THE 1ST RESPONDENT DATED 20.10.2023 Exhibit P14 TRUE COPY OF THE MINUTES OF 90TH BOARD MEETING DATED 07.05.2021 OF THE 1ST RESPONDENT Exhibit P15 A TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 ISSUED BY THE 3RD RESPONDENT TO THE 1ST PETITIONER Exhibit P16 A TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 ISSUED BY THE 3RD RESPONDENT TO THE 2ND PETITIONER Exhibit P17 TRUE COPY OF THE LETTER NO. MKT-AUC-
NSWS/02/2022 DATED 05.12.2023 ISSUED BY THE 3RD RESPONDENT TO THE 1ST PETITIONER Exhibit P18 TRUE COPY OF THE LETTER NO. MKT-
AUC/NSWS/02/2022 DATED 21.02.2024 ISSUED BY THE 3RD RESPONDENT TO THE 3RD PETITIONER Exhibit P19 A TRUE COPY OF THE CARDAMOM (LICENSING AND MARKETING) RULES 1987 W.P.(C)No.10104 of 2024 and connected cases :35: 2026:KER:12494 APPENDIX OF WP(C) NO. 14901 OF 2024 PETITIONERS' EXHIBITS Exhibit P1 TRUE COPY OF THE LETTER NO. MKT-
AUC/NSWS/02/2022 DATED 15.12.2023 SENT BY THE 1ST RESPONDENT TO THE 1ST PETITIONER DIRECTING THEM TO FURNISH RS. 7.96 CRORES AS BANK GUARANTEE FOR ISSUANCE OF E-AUCTION LICENSE.
Exhibit P2 TRUE COPY OF THE LETTER NO. MKT-
AUC/NSWS/02/2022 DATED 15.12.2023 SENT BY THE 1ST RESPONDENT TO THE 2ND PETITIONER DIRECTING THEM TO FURNISH RS. 5.89 CRORES AS BANK GUARANTEE FOR ISSUANCE OF E-AUCTION LICENSE.
Exhibit P3 TRUE COPY OF THE BANK GUARANTEE BEARING NUMBER 1073LBG142671 DATED 20-12-2023 FOR 7.96 CRORES EXECUTED IN FAVOUR OF THE 1ST RESPONDENT. Exhibit P4 TRUE COPY OF THE EMAIL DATED 21.12.2023 SENT TO THE FEDERAL BANK BY THE 3RD RESPONDENT.
Exhibit P5 TRUE COPY OF THE REPLY DATED 21.12.2023 SENT BY THE FEDERAL BANK TO 3RD RESPONDENT.
Exhibit P6 TRUE COPY OF THE E-AUCTIONEER LICENSE BEARING CERTIFICATE NO. EAUC/CS/S1421/11/2024-25 DATED 21.02.2024 ISSUED TO THE 1ST PETITIONER BY THE 1ST RESPONDENT. Exhibit P7 TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 ISSUED TO THE 1ST PETITIONER BY THE 3RD RESPONDENT.
Exhibit P8 TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 16.03.2024 ISSUED BY THE 3RD RESPONDENT TO THE W.P.(C)No.10104 of 2024 and connected cases :36: 2026:KER:12494 1ST PETITIONER.
Exhibit P9 TRUE COPY OF THE BANK GUARANTEE BEARING NUMBER 1073LBG142668 DATED 20.12.2023 FOR RS. 5.89 CRORES EXECUTED IN FAVOUR OF THE 1ST RESPONDENT.
Exhibit P10 TRUE COPY OF THE EMAIL DATED 22.12.2023 SENT TO THE FEDERAL BANK BY THE 3RD RESPONDENT.
Exhibit P11 TRUE COPY OF THE REPLY EMAIL DATED 22.12.2023 SENT BY THE FEDERAL BANK TO 3RD RESPONDENT.
Exhibit P12 TRUE COPY OF THE E-AUCTIONEER LICENSE BEARING CERTIFICATE NO. EAUC/CS/50014/14/2024-25 DATED 21.02.2024 ISSUED TO THE 2ND PETITIONER BY THE 1ST RESPONDENT. Exhibit P13 TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 ISSUED TO THE 2ND PETITIONER BY THE 3RD RESPONDENT.
Exhibit P14 TRUE COPY OF THE 90TH BOARD MEETING
OF THE 1ST RESPONDENT HELD ON
07.05.2021.
Exhibit P15 TRUE COPY OF THE INTERIM ORDER DATED
20.03.2024 IN W.P.(C) NO. 10104/2024 Exhibit P16 TRUE COPY OF INTERIM ORDER DATED 03.04.2024 IN W.P.(C) 10104/2024 Exhibit P17 TRUE COPY OF RTI REPLY DATED 03.04.2024 SENT BY THE PUBLIC INFORMATION OFFICER (CPIO) OF THE 1ST RESPONDENT TO THE ASSOCIATION OF SPICE FARMERS, ANKKARA W.P.(C)No.10104 of 2024 and connected cases :37: 2026:KER:12494 APPENDIX OF WP(C) NO. 15286 OF 2024 PETITIONER'S EXHIBITS Exhibit P1 TRUE COPY OF THE LICENSE ISSUED BY THE 1ST RESPONDENT TO THE PETITIONER DATED 15.06.2021 Exhibit P2 TRUE COPY OF THE LICENSE ISSUED TO THE PETITIONER TO BE AN AUCTIONEER DATED 21.02.2024 Exhibit P3 TRUE COPY OF THE NOTICE DATED 16.12.2020 ISSUED BY THE 1ST RESPONDENT Exhibit P4 TRUE COPY OF THE BANK GUARANTEE SUBMITTED BY THE PETITIONER DATED 21.12.2023.
Exhibit P5 TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT DATED 09.04.2024 Exhibit P6 TRUE COPY OF THE ADDITIONAL BANK GUARANTEE SUBMITTED BY THE PETITIONER DATED 14.03.2024 Exhibit P7 TRUE COPY OF THE ORDER OF THE 2ND RESPONDENT DATED 21.02.2024 Exhibit P8 TRUE COPY OF THE MINUTES OF THE 90TH BOARD MEETING DATED 07.05.2021 Exhibit P9 TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 Exhibit P10 TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 16.03.2024 Exhibit P11 TRUE COPY OF THE INTERIM ORDER DATED 20.03.2024 IN WP(C) 10104/2024 Exhibit P12 TRUE COPY OF THE JUDGMENT IN W.A 192 OF 2024 DATED 04.03.2024 Exhibit P13 TRUE COPY OF THE LETTER DATED 15.12.2023 W.P.(C)No.10104 of 2024 and connected cases :38: 2026:KER:12494 APPENDIX OF WP(C) NO. 15997 OF 2024 PETITIONER'S EXHIBITS Exhibit P1 A TRUE COPY OF THE LETTER DATED 04.06.2021 OF THE 3RD RESPONDENT AWARDING E- AUCTION LICENSE TO THE PETITIONER FOR THE PERIOD 2020
-2023.
Exhibit P2 A TRUE COPY OF THE LICENSE ISSUED TO THE 1ST PETITIONER AUTHORIZING THEM TO CARRY ON BUSINESS IN CARDAMOM UP TO 31.08.2026 AS AUCTIONEER Exhibit P3 A TRUE COPY OF THE NOTICE DATED 16.12.2020 ISSUED BY THE 1ST RESPONDENT Exhibit P4 A TRUE COPY OF THE LETTER DATED 21.02.2024 OF THE 3RD RESPONDENT TO THE PETITIONER Exhibit P5 A TRUE COPY OF THE ORDER DATED 21.02.2024 OF THE 2ND RESPONDENT Exhibit P6 A TRUE COPY OF THE RELEVANT PAGES OF THE MINUTES OF 93RD BOARD MEETING OF THE 1ST RESPONDENT DATED 20.10.2023 Exhibit P7 A TRUE COPY OF THE MINUTES OF 90TH BOARD MEETING DATED 07.05.2021 OF THE 1ST RESPONDENT Exhibit P8 A TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05.03.2024 ISSUED BY THE 3RD RESPONDENT TO THE 1 ST PETITIONER Exhibit P9 A TRUE COPY OF THE INTERIM ORDER DATED 20.03 .204 IN WP(C) NO.10104 OF 2024 Exhibit P10 A TRUE COPY OF THE INTERIM ORDER DATED 03.04.2024 IN IN WP(C) NO.10104 OF 2024.
Exhibit P11 A TRUE COPY OF THE CARDAMOM (LICENSING AND MARKETING) RULES 1987 W.P.(C)No.10104 of 2024 and connected cases :39: 2026:KER:12494 APPENDIX OF WP(C) NO. 35130 OF 2025 PETITIONER'S EXHIBITS Exhibit P1 A TRUE COPY OF THE LETTER NO. MKT-
AUC/NSWS/02/2022 DATED 15-12-2023 SENT BY THE 1ST RESPONDENT TO THE PETITIONER DIRECTING TO FURNISH RS. 7.96 CRORES AS BANK GUARANTEE FOR ISSUANCE OF E-AUCTION LICENSE. Exhibit P2 A TRUE COPY OF THE BANK GUARANTEE BEARING NUMBER 1073LBG142671 DATED 20-12-2023 FOR RS.7.96 CRORES EXECUTED IN FAVOUR OF THE 1ST RESPONDENT Exhibit P3 A TRUE COPY OF THE E-AUCTIONEER LICENSE BEARING CERTIFICATE NO. EAUC/CS/S1421/11/2024-25 DATED 21- 02-2024 ISSUED TO THE PETITIONER BY THE 1ST RESPONDENT Exhibit P4 A TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 05-03-2024 ISSUED TO THE PETITIONER BY THE 3RD RESPONDENT Exhibit P5 A TRUE COPY OF THE LETTER NO. MKT-
MISC/0010/2017 DATED 16-03-2024 ISSUED BY THE 3RD RESPONDENT TO THE PETITIONER.
Exhibit P6 A TRUE COPY OF THE RELEVANT PAGES OF THE 90TH BOARD MEETING OF THE 1ST RESPONDENT HELD ON 07-05-2021.
Exhibit P7 A TRUE COPY OF THE RTI REPLY DATED
03-04-2024 ISSUED BY THE 1ST
RESPONDENT .
Exhibit P8 A TRUE COPY OF THE INTERIM ORDER
DATED 09-04-2024, OF THIS HON'BLE COURT IN W.P.(C) 14901 OF 2024.
Exhibit P9 A TRUE COPY OF THE LATEST INTERIM ORDER, DATED 06-08-2025, OF THIS W.P.(C)No.10104 of 2024 and connected cases :40: 2026:KER:12494 HON'BLE COURT IN W.P.(C) 14901 OF 2024 Exhibit P10 A TRUE COPY OF THE LEASE AGREEMENT DATED 20-02-2025, FOR THE NEW DEPOT IN KILAKKUCHETTIPATTI.
Exhibit P11 A TRUE COPY OF THE EMAIL DATED 24- 02-2025 SENT BY THE PETITIONER TO THE 3RD RESPONDENT.
Exhibit P12 A TRUE COPY OF THE WRITTEN APPLICATION DATED 24-02-2025, SUBMITTED BY THE PETITIONER TO THE 3RD RESPONDENT.
Exhibit P13 A TRUE COPY OF THE GST CERTIFICATE OF THE PETITIONER, DATED 18-03-2025, REFLECTING THE ADDRESS OF THE PROPOSED DEPOT.
Exhibit P14 A TRUE COPY OF THE EMAIL SENT BY THE PETITIONER TO THE RESPONDENT, DATED 01-04-2025.
Exhibit P15 A TRUE COPY OF THE REPLY EMAIL DATED
01-04-2025, SENT BY THE 1ST
RESPONDENT TO THE PETITIONER.
Exhibit P16 A TRUE COPY OF THE TRADING LICENSE
ISSUED TO THE PETITIONER BY THE
KILAKKUCHETTIPATTI VILLAGE
PANCHAYAT, DATED 11-06-2025.
Exhibit P17 A TRUE COPY OF THE BUILDING TAX
RECEIPT FOR FINANCIAL YEAR 2025- 2026, DATED 21-06-2025, ALONG WITH ITS TRANSLATION Exhibit P18 A TRUE COPY OF THE EMAIL DATED 21- 06-2025 SENT BY THE PETITIONER TO THE 3RD RESPONDENT .
Exhibit P19 A TRUE COPY OF THE REMINDER EMAIL SENT BY THE PETITIONER TO THE 3RD RESPONDENT, DATED 06-09-2025 Exhibit P20 A TRUE COPY OF THE EMAIL REPLY, DATED 08-09-2025, SENT BY THE 3RD RESPONDENT.
Exhibit P21 A TRUE COPY OF THE AMENDMENT OF 2014 W.P.(C)No.10104 of 2024 and connected cases :41: 2026:KER:12494 AS PUBLISHED IN THE OFFICIAL GAZETTE.
RESPONDENT'S EXHIBITS Exhibit R-1(a) A TRUE COPY OF THE LETTER NO. MKT-
AUC/NSWS/02/2022 DATED 21.02.2024 Exhibit R-1(b) A TRUE COPY OF THE MINUTES OF THE94TH BOARD MEETING HELD ON 30-01- 2024 Exhibit R-1(c) A TRUE COPY OF THE ORDER DATED 21-03-2024 IN W.P.(MD)NO.6717 OF 2024 OF THE MADUARI BENCH OF THE HONOURABLE HIGH COURT OF MADRAS Annexure R-1(d) A TRUE COPY OF THE REPORT OF INSPECTION CONDUCTED BY SPICES BOARD ON 13.06.2025 AT THE OFFICE OF THE PETITIONER Annexure R-1(e) A TRUE COPY OF AUCTION DETAILS OF THE PETITIONER