Andhra Pradesh High Court - Amravati
Communist Party Of India And Another vs The State Of Andhra Pradesh And Others on 17 December, 2025
APHC010069292025
IN THE HIGH COURT OF ANDHRA PRADESH Bench Sr.No:-18
[3552]
AT AMARAVATI
WP(PIL) NO: 27 of 2025
Communist Party Of India and another ...Petitioner(s)
Vs.
The State Of Andhra Pradesh and Others ...Respondent(s)
**********
Advocate for Petitioners: Mr. Y. Nagi Reddy appearing vice Mr. Gajjala Mallikarjuna Reddy Advocate(s) for Respondent(s): The Advocate General, Mr. C. V. Mohan Reddy, Senior Counsel, appearing vice Mr.C. Sumon CORAM : THE CHIEF JUSTICE DHIRAJ SINGH THAKUR SRI JUSTICE CHALLA GUNARANJAN DATE : 17th December 2025 Per DHIRAJ SINGH THAKUR, CJ:
The present petition has been filed challenging the tender notice, dated 24.01.2025, inviting eligible bidders to submit their bids for bulk sale of C + D + W Grade Barytes on an ex-Mangampet Mine/Stockyard basis.
As per the Notification Inviting Tender, the Andhra Pradesh Mineral Development Corporation Limited (APMDCL) expressed its intention to sell 60 lakh MTs of C + D + W Grade Barytes for buyers registered in India for a 2 HCJ & CGR, J W.P(PIL). No:27 of 2025 period of five years (12 lakh MTs annually) and the bidders could quote for an annual minimum quantity (Annual Reserve Quantity) of ten lakh Metric Tonnes of the said quantity of Barytes. The reserve price of the said quantity of Barytes was fixed at Rs.1,188 per MT.
2. According to the terms and conditions with regard to payment, it was notified that the successful bidder had to deposit 100% of sale value of the Barytes for the first year in advance within 30 days of the issuance of Letter of Acceptance of the Corporation and from the second year onwards, the successful bidder was to pay 100% upfront payment before commencement of subsequent annual agreement period.
The aforementioned tender conditions to some extent were amended by virtue of corrigendum, dated 29.01.2025. The changes were made in the eligibility criteria prescribed under clauses 4.1(iii), 4.1(iv) and 6.35(vi) to stipulate that the bidders should have exported at least five lakh MTs of Barytes in at least one of the last five years ending on 31.03.2024. Further that average annual turnover of the bidder in export of Barytes only during the last three years ending 31.03.2024 should be at least Rs.300 crores and thirdly that the bidders could submit bid quantity with reserve quantity or reserve quantity plus any amount in multiples of 10,000 MTs for the aforementioned grade of Barytes.
3
HCJ & CGR, J W.P(PIL). No:27 of 2025
3. The crux of the grievance of the petitioners is that the reserve price fixed at Rs.1188/- for C + D + W Grade Barytes was fixed with a view to favour large exporters which would affect domestic supply. It was urged by learned counsel for the petitioners that in the tender notice issued in the year 2023, the reserve price for sale of Barytes for C + D + W Grade Barytes was at Rs.1617 per MT whereas in the tender notice under challenge, there was a price reduction of approximately 29% and therefore, the potential loss to the Government was clearly manifested by underpricing the natural resources.
It is in that backdrop that the learned counsel for the petitioners states that the tender notice impugned violates the Public Trust Doctrine upheld by the Apex Court in M.C.Mehta v. Kamal Nath1 which held that the State holds natural resources as a trustee for the public. The tender conditions, it was urged, contravene the principles of reasonableness enshrined under Article 14 of the Constitution and impose conditions of eligibility which are disproportionate, such as high turnover threshold and mandatory export history, which effectively disqualify many domestic buyers.
4. It was urged that the tender conditions have preferential treatment to exporters at the cost of local industries, which also use the said mineral, but also prevent the domestic consumption which has industrial use in different industries not only within but outside the State. It was also urged that the bulk 1 (1997) 1 SCC 388 4 HCJ & CGR, J W.P(PIL). No:27 of 2025 sale of 60 lakh MTs in one consolidated transaction would pose existential threat to the nation's mineral resources and also affect the domestic industrial fabric of the country.
A depletion of the said ore, it was urged, would cripple scores of small and medium scale enterprises leading to substantial job losses. It was also urged that in issuing the impugned tender notice, the respondents had violated the National Mineral Policy of 2019, which prescribes sustainable mining, scientific exploration and transparent allocation of mineral resources besides value addition and maximization of public benefit.
5. The stand of the respondents is that over the past decade, unsold stocks of C + D + W Grade Barytes have increased sharply from 44.3 lakh MTs in 2013-14 to 77.4 lakh MTs in 2023-24. It was urged that the prevailing accumulation rate was approximately 5 lakh MTs per annum and that the inventory was projected to exceed 100 lakh MTs within the next 4-5 years posing a serious concern for mines safety, working capital management and operational efficiency.
It is in that backdrop that the 2nd respondent claimed that it had introduced bulk sale of 60 lakh MTs at a reserve price of Rs.1188 per MT with a view to overcome the challenges of marketing such large volumes. The stand taken is that there is a commercial practice of offering discounted rates 5 HCJ & CGR, J W.P(PIL). No:27 of 2025 for high volume, long term commitments to incentivize participation, secure advance payments and ensure offtake stability.
6. The pricing difference, it is stated, is based on objective factors such as scale of sale, advance payment requirements and fixed price commitment over the contract term. The decision to go in for bulk sale, it was urged, was not taken without any basis but was based on a report submitted by an independent agency i.e., CRISIL Limited, and that the policy decision by the Corporation was transparent and not arbitrary.
7. It is stated that a separate annual sales tender for smaller quantities is floated to cater to the requirement of domestic industries including local manufacturers and small and medium enterprises ensuring continuous and unhindered access to Barytes at competitively discovered, market linked prices. The dual tender approach, it is stated, ensures that the operational necessity of clearing surplus low grade stocks is met without compromising the availability of Barytes to domestic consumers, thereby safeguarding the legitimate business interests of all stakeholders in a transparent and policy compliant manner.
We have heard learned counsel for the parties.
8. It can be seen from the record that two distinct tender notices were floated by the 2nd respondent: one for bulk exports and another for annual 6 HCJ & CGR, J W.P(PIL). No:27 of 2025 sales for smaller quantities, both dated 26.12.2024. The annual sales tender notice for smaller quantities was cancelled. It is further the case of the respondents that issuance of a fresh tender has already met the approval of the Board by way of a resolution and that a fresh annual tender would be issued in that regard.
The Government of Andhra Pradesh, by virtue of G.O.Rt.No.262, dated 24.08.2017, issued guidelines envisaging appointment of a "reputed third party consulting agency" for determining various aspects of Barytes sales tender in line with the international market, tender timing and duration, allocation percentage for export and domestic market etc. The Government entrusted the Board with the responsibility of reviewing the recommendations of the appointed consulting agencies and to take final decisions on all the above mentioned aspects accordingly.
9. Apart from the above, G.O.Rt.No.262, authorized the APMDCL to review the Barytes contract price after every six months with liberty to increase or decrease the price in line with the prevailing international market conditions. The tender duration for sale of Barytes would be fixed by the APMDCL based on prevailing market conditions. Apart from this, in order to promote higher sales, APMDCL was permitted to offer quantity incentives to the buyers depending on their Barytes offtake quantities. 7
HCJ & CGR, J W.P(PIL). No:27 of 2025
10. For facility of reference, clause 5 of G.O.Rt.No.262 is reproduced hereunder, as it is relevant for the just disposal of the present case.
"Keeping in view of the importance and demand of the Barytes mineral and changed market environment, Government after careful examination of the proposal and in supersession of the orders issued in G.O. Rt.No.22, G.O.Rt.No.163, Industries & Commerce (M.III) Department, Dt.27.01.2015 as amended in Industries & Commerce MI) Department, Dt.04.05.2015, hereby issue the following orders directing the VC&MD, M/s. APMDC Ltd to act on the following issues forthwith;
(i) With the approval of the Board of M/s. Andhra Pradesh Mineral Development Corporation Ltd., the Vice Chairman & Managing Director, M/s. Andhra Pradesh Mineral Development Corporation Ltd. shall appoint a reputed Third Party Consulting Agency after following due procedure for determining various aspects of Barytes Sales Tender such as the base price of Barytes in line with international market, tender timing and duration, allocation percentage for export and domestic market, etc. The Board of APMDC shall review the recommendations of the appointed Consulting Agency and take final decisions on all the above mentioned aspects accordingly.
(ii) Depending on the market conditions and if need be, M/S.Andhra Pradesh Mineral Development Corporation Ltd. shall review the Barytes contract price after every 6 months period, even during a prescribed tender duration, and may accordingly increase or decrease the price in line with the prevailing international market conditions. The basis for price review shall be the trends in important market parameters related to the Barytes industry. These parameters, examples indicated below, shall be finalized and reviewed by the Board from time to time:
1. Crude Oil Prices.
2. Global Rig Count Data.
3. Exchange Rate fluctuations (USD - INR).
4. Barytes FOB prices of other countries obtained through market research
5. Barytes Market & Price analysis reports from a reputed Third Party Consulting Agency.
6. Discussion with Barytes Buyers.
The Board of APMDC shall review the trends in aforementioned parameters including the report of the Third Party Consulting Agency and issue price revisions accordingly. The decision of the Board of APMDC shall be final in regard to the price revision. 8
HCJ & CGR, J W.P(PIL). No:27 of 2025
(iii) M/S. Andhra Pradesh Mineral Development Corporation Ltd. shall determine the Base price for a specific quality of the material (for e.g. specific gravity of 4.10, 4.25 and which will depend and vary based on availability at mine and market requirement from time to time) and subsequently apply premium / discount for every 0.01 unit increase/decrease in specific gravity. The premium / discount shall be finalized and reviewed by the Board of APMDC from time to time. However, the premium / discount shall not be less than 0.25% per 0.01 unit increase/decrease in Specific Gravity.
(iv) Tender duration for sale of Barytes shall be fixed by the Board of APMDC based on the prevailing market conditions.
(v) In order to promote higher sales, AMDC can offer quantity incentives to the buyers depending on their Barytes off-take quantities. Quantity incentive refers to providing higher quantity for exceeding certain level of material off-take. The Structure of such quantity incentives shall be finalized and reviewed by the Board of APMDC from time to time."
11. In line with the conditions prescribed in the G.O. supra, APMDCL engaged M/s CRISIL Limited, which, the learned Advocate General appearing for the State states, is a body which has expertise in making recommendations on such subject and is also consulted by other public sector companies in India.
12. According to the study conducted by CRISIL, the graph of sales has fluctuated over the years indicating a cyclic nature with notable peaks in Financial Year 2020. The share of sales of C + D + W grade of Barytes are with notable peaks in FY 2020 at 17%, FY 2023 at 16% and FY 2024 at 19%.
Sales percentages, according to the report, show relatively low trend in the early years, such as 11% in FY 2012 and 4% in FY 2016 indicating limited 9 HCJ & CGR, J W.P(PIL). No:27 of 2025 sales of CDW grade. The base price, as per the report, was highest in FY 2016 at Rs.2500/- where the liquidation was the lowest at 4%.
The report further suggests that post FY 2016, the prices remained around Rs.1600/- to 1700/- maintaining relative stability but increased overall sales in absolute terms. Most importantly, the report suggested that the sale of CDW Grade Barytes with respect to earlier sales, had been increasing but was not enough to offset the new mined Barytes and overall inventory was on the rise.
13. The report also suggests that efforts of APMDCL for beneficiation and long term sale of CDW incentives did not attract buyers at the incentive price of Rs.1200/- with 50% upfront payment. In this regard, reference was made to the tender floated in 2022 requiring a five year commitment at a regular price of Rs.1860/- per MT, which price was on par with the regular price. This attempt is stated to have failed to attract the interest of the bidders. A second attempt is stated to have been made in the year 2024 when APMDCL offered price incentive to bulk customers of CDW Grade Barytes with minimum offtake requirement for a period of five years requiring a pre-determined quantity of 10 lakh tonnes.
This too is stated to have witnessed either NIL or limited participation at an incentive price of Rs.1200/- per Tonne. The subdued response from the 10 HCJ & CGR, J W.P(PIL). No:27 of 2025 bidders, as per the report, required a more effective liquidation strategy with attractive incentives. The incentives for attracting buyers for bulk liquidation across five years suggested by CRISIL were in the following terms:
Incentives or Terms for attracting buyers for bulk liquidation across five years Price discovered in the bulk tender will be frozen for the Reserve Price entire duration of five years May opt for 100% upfront payment of annual contractual quantity instead of 50% upfront payment Payment on total contracted quantity over 5 years. Further, terms successful bidders may be provided an option of two installments or payment mechanisms for part payment Successful bidders to be provided with a dedicated Dedicated loading point and infrastructure for ensuring timely Offtake lifting of material. If the infrastructure is developed by the Infrastructure bidder himself, the loading charges shall be waived off.
As the CDW grade ore may have a wastage of ~25% to Dumping of 30%, the buyer may be allowed to dump wastage in waste mine reclamation site as directed by the mining officer at free of cost, resulting in reduced transportation cost.
Bank guarantee may be set to ensure no arbitrage or Bank differential price between regular and incentivized Guarantee price be maintained as per APMDC practice and norms for ensuring offtake commitment.
Additional incentive of 5% be may provided if the buyer High is lifting over and above the minimum annual contracted Performance quantity. Additional invective only for only additional Reward quantity
14. The report further proposed the reserve price collected in three different scenarios by using different approaches i.e., a) price incentive b) export parity with Mexico c) cost plus strategy, which was as under: 11
HCJ & CGR, J W.P(PIL). No:27 of 2025 Price Incentive Export Parity with Mexico Cost Plus Model Reserve Price = Reserve Price = [(FOB Mexico + Reserve Price = (Mining (Annual Price - Interest Freight Mexico-USA - Freight cost + profit margin) Incentive on upfront India-USA)* ER] - PC - LC -
payment - discount on Taxes - ExM
per ton basis)
Parameter
(INR/ Parameter (INR/tonne) Parameter (INR/tonne)
tonne)
Annual Mining 950
1680 FOB Mexico (USD) 35
Price(P) Cost
Interest
Profit
incentive on Freight Mexico- 25%
12.5% 13 Margin
upfront USA (USD)
(PM)
payment (I)
Incentive for
Freight India-USA Reserve 1188
enhanced 20% 16.8
(USD) Price
offtake (B)
Reserve
price
ER (INR)
(P*(1-I)*(1- 1176 83
B))
PC (INR) 300
LC (INR) 800
Taxes (INR) 440
ExM (INR) 250
Reserve Price
(INR) 800
15. The report further suggests revenue benefit from further liquidation. The final recommendations made by the report were as under:
"a) payment terms may be relaxed from 50% upfront payment on 5-year bulk quantity offtake to 100% upfront payment on 1-year minimum quantity with provision for one or two installments.
b) APMDC may consider to restrict tender to those who had lifted 1-year minimum quantity of tender across the past three fiscal years.
c) It is recommended to proceed with reserve price in the following range INR 1176-1188 per tonne i.e., below the last tender price of INR 1200 per tonne.12
HCJ & CGR, J W.P(PIL). No:27 of 2025
d) The reserve price will be frozen for contractual bidders for a period of 5 years.
e) The volumes for liquidation may be from 60% of the existing inventory and yearly production of CDW grade, rest may be allotted to domestic mills and chemical units.
f) For enabling bulk off-take, APMDC can consider to provide dedicated loading infrastructure for bulk buyers with the option of having buyers infrastructure. In case of buyers own loading at dedicated point, the buyer shall not pay any loading charges on such material.
g) Bulk buyers of CDW grade may be provided with the provision for dumping waste from purchased ore at the mine reclamation site as directed by the chief mining officer of the mine."
16. In regard to the regular tenders for domestic industries, it was suggested that APMDCL could offer quantity incentives to the buyers depending upon their offtake quantities, which quantity incentives could be finalized and reviewed by the Board of APMDCL from time to time.
The recommendations of CRISIL are stated to have been accepted by the Board of APMDCL and are also stated to have been approved by the Government, as can be seen vide memo, dated 24.12.2024.
17. It does appear as was sought to be stated by the learned Advocate General appearing for the State as also Mr. C. V. Mohan Reddy, Senior Counsel appearing for private respondent No.6 that C + D + W Grade Barytes had limited domestic utility and the inventory had been accumulating in unprecedented volumes from 44.3 lakh MTs in 2013-14 to 77.4 lakh MTs in 2023-24 with a surplus of about 5 lakh MTs on yearly basis. 13
HCJ & CGR, J W.P(PIL). No:27 of 2025 The said surplus is stated to touch approximately 100 lakh MTs in the next 4-5 years, which, according to the respondents, would lead to environmental hazards and pose operational and safety risks. Apart from this, the rising inventory of the aforementioned grade of Barytes was also affecting the revenue generation of the APMDCL and consequently the State.
18. The minimum turnover requirement and export performance benchmarks, as per the stand taken by the respondents, also appear to have a direct nexus with the object to ensuring stringent advance payment obligations and volume offtake commitments with a view to ensure timely lifting of committed quantities, which certainly would be in the operational interest of the Corporation and the State. The entire tendering process also seems to have been entirely conducted through MSTC Limited on an online platform.
19. Learned Advocate General appearing for the State would submit that the advantages in ensuring bulk offtake were immense inasmuch as, as per the conditions now incorporated in the tender notice, which is impugned in the present petition, the entire amount for the quantity supposed to be lifted in one year was to be paid in advance.
20. In the instant case, Mr. C. V. Mohan Reddy, appearing for respondent No.6 would submit that an amount of approximately Rs.120 crores was paid 14 HCJ & CGR, J W.P(PIL). No:27 of 2025 for the current year in advance to the Corporation, thus enabling the effective utilization of the resources, which comes early in the hands of the Corporation for the benefit of the exchequer.
According to learned counsel for the respondents, approximately 3.3 lakh MTs of C+D+W Grade Barytes could be sold in 2020-21. In the year 2021-22, the dispatched quantity was 7.41 lakh MTs. However, in the year 2022-23, the quantity which could be disposed of was 12.23 lakh MTs. In 2023-24, approximately 15.62 lakh MTs were sold out of which a majority was picked up by four exporters, which contributed almost 11 lakh MTs out of 15.62 lakh MTs leaving only 4.53 lakh MTs offtake by domestic consumers and industries. In the year 2024-25, as against 14.86 lakh MTs sold, 6.10 lakh MTs was picked up by the exporters and 6.7 lakh MTs was picked up by domestic industries and users.
21. The aforementioned trends clearly suggest that while there is variation in offtake patterns, the exporters do form a bulk of the purchase of C + D + W Grade Barytes. It does appear to us that the decision to issue the tender notice with the conditions prescribed therein were genuinely incorporated with a view to ensure a sustained flow of revenue as also controlled liquidation of surplus stock of the APMDCL.
15
HCJ & CGR, J W.P(PIL). No:27 of 2025 According to the recommendations and report of CRISIL, volumes of liquidation were recommended to be 60% of the existing inventory and yearly production of C + D + W Grade Barytes, while the rest was recommended to be allotted to domestic units.
22. As we have already noticed, the stand of the Corporation certainly is that another notification would be issued for sale of the said grade of Barytes which has already met the approval of the Board.
23. In State of M.P. v. Narmada Bachao Andolan2, the Apex Court held that the judiciary cannot engage in an exercise of comparative analysis over the fairness, logical or scientific basis, or wisdom of a policy. It held:
"36. The Court cannot strike down a policy decision taken by the Government merely because it feels that another decision would have been fairer or more scientific or logical or wiser. The wisdom and advisability of the policies are ordinarily not amenable to judicial review unless the policies are contrary to statutory or constitutional provisions or arbitrary or irrational or an abuse of power."
24. In the instant case, the policy to deal with the natural resources of Barytes is declared by G.O.Rt.No.262, which did envisage the involvement of a third independent entity for determining various aspects dealing with the sale of Barytes, base price of Barytes, tender timings and duration allocation percentage for export and domestic market etc. An expert consulting agency having made recommendations and the same having been found approval of 2 (2011) 7 SCC 639 16 HCJ & CGR, J W.P(PIL). No:27 of 2025 the Corporation and the Government, in our opinion, calls for no interference, more so, when we find no perversity either in the decision making process or the decision itself, which is found on logic, which on the face of it, cannot be termed as arbitrary or perverse or one which could be questioned on the Wednesbury principle.
Be that as it may, we find no merit in the present petition which is, accordingly, dismissed. No costs.
Pending miscellaneous applications, if any, shall stand closed.
DHIRAJ SINGH THAKUR, CJ CHALLA GUNARANJAN, J akn 17 155 HCJ & CGR, J W.P(PIL). No:27 of 2025 HON'BLE MR.JUSTICE DHIRAJ SINGH THAKUR, CHIEF JUSTICE & HON'BLE MR. JUSTICE CHALLA GUNARANJAN Writ Petition (PIL) No:27 of 2025 DATE : 17.10.2025 AKN