New Delhi: The Supreme Court of India has set aside an order of the Karnataka High Court that had granted a higher ethanol allocation to Vinp Distilleries and Sugars Pvt Ltd, a move that restores the standard procurement process followed by oil marketing companies, according to the Indian Sugar & Bio-energy Manufacturers Association (ISMA), Business Standard reported.
The dispute began when Vinp Distilleries, which operates a dedicated ethanol plant, approached the High Court seeking a larger allocation in the oil marketing companiesโ tender for the 2025โ26 ethanol supply year. The company argued that its long-term offtake agreement entitled it to receive ethanol supplies beyond the quantity specified annually.
However, the tender system used by oil marketing companies does not allow extra allocation beyond the agreed quantity. Despite this, both a single judge and later a division bench of the Karnataka High Court directed the companies to revise the allocation in favour of Vinp, effectively allowing a private agreement to take precedence over the national tender process.
The Supreme Court later set aside these orders, stating that decisions related to ethanol procurement โ including the quantity to be purchased, the type of raw material used and the terms of supply โ fall within the scope of government policy and courts should avoid interfering in such matters.
ISMA said the ruling brings clarity to the ethanol procurement system. The industry body added that if the High Courtโs order had remained in force, other dedicated ethanol plants might have sought similar preferential allocations, which could have affected the competitive bidding process used for ethanol procurement.
