Supreme Court Maintains Status Quo on Patanjali Foods Land Allotment in Telangana

On February 9, 2026, the Supreme Court issued a notice on Patanjali Foods' plea against the High Court division bench refusal to stay a single judge order that upheld the cancellation of its factory zone in Suryapet district, as per LivLaw report. 

Supreme Court Issues Notice and Orders Status Quo 

A bench of Justice JB Padriwala and Justice KV Vishwanathan returned the notice within four weeks and directed both parties to maintain status quo pending further hearing. The order follows the division bench decision that declined an interim stay of the single judge judgment. 

Background of Land Allotment under NMEO OP Scheme 

Under the National Mission of Edible Oils Oil Palm scheme the Telangana government allotted Patanjali Foods 7,738 hectares in Nalgonda and 11,300 hectares in Suryapet on December 16, 2020. Four additional mandals were added on June 10, 2021.  

The company signed an affidavit on June 28, 2021, agreeing to cultivate 1,22,595 acres within five years as per the Memorandum of Agreement dated March 15, 2017. 

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Show Cause Notices and Cancellation 

The state issued show cause notices on December 12, 2022; December 19, 2023; and October 5, 2024, alleging failure to procure seed sprouts and to establish the processing mill in the Suryapet zone.  

After a personal hearing on December 30, 2024, the government issued a cancellation order on March 15, 2025, and re‑allotted the land to another entity. 

Court Findings on Contractual Nature 

The single judge held that the matter was contractual and that Patanjali Foods had not demonstrated arbitrariness or mala fide intent.  

The court noted that while targets were met in Nalgonda, the Suryapet performance fell short, allowing the state to assess continuation of the allotment. The judge also rejected the argument that time was not of the essence, citing multiple show cause notices and a government review meeting that set clear timelines. 

Current Status and Next Steps 

With the Supreme Court maintaining status quo, the cancellation remains in effect while the appeal proceeds. The case is listed as SLP(C) No. 5434/2026, titled Patanjali Foods Limited v. Department of Horticulture. 

Conclusion 

The Supreme Court has kept the existing order on the Suryapet land cancellation, emphasizing the contractual framework and the state's discretion to evaluate performance under the NMEO OP scheme. 

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