Bengaluru: The Karnataka High Court has upheld the decision of the Karnataka Cooperative Milk Producers’ Federation (KMF), ruling that there is no legal infirmity in allowing the Raichur Milk Federation to expand the distribution of “Nandini” milk and dairy products in Telangana.
A single-judge bench headed by Justice Suraj Govindaraj dismissed petitions filed by SSR Enterprises and Sri Rajeshwari Dairy Products, which had challenged KMF’s decision to extend market operations beyond Hyderabad into other districts of Telangana. The petitioners had claimed exclusive monopoly rights over the entire Telangana market, citing their existing agreement for the Hyderabad region.
The court, however, rejected this contention and clarified that holding rights over the Hyderabad market cannot be interpreted as granting monopoly over the entire state of Telangana. It observed that KMF retains the contractual authority to appoint new agencies and expand its marketing network based on business requirements.
“There is no legal basis in the petitioners’ claim of monopoly over Telangana, and KMF is well within its rights under the agreement to expand its operations and appoint new agencies,” the bench observed, as it upheld the federation’s decision.
The High Court also noted that KMF’s move to authorise the Raichur Milk Union to distribute Nandini products in districts such as Warangal, Adilabad and Nizamabad, along with inviting tenders for co-packing services, was a “reasonable commercial decision taken in public interest” aimed at strengthening market reach and brand expansion.
At the same time, the court directed KMF and associated milk unions to ensure that the existing distribution rights of the petitioners in the Hyderabad metropolitan region are not disturbed or diluted in any manner.
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The bench further observed that the petitioners had not participated in the 2024 tender process floated by KMF and therefore could not later challenge its outcome. It held that “a party that chooses not to participate in a tender process cannot subsequently question its validity before the court.”
The dispute originated from agreements signed in 2015, under which the petitioners were engaged in marketing, warehousing and distribution of KMF products in Hyderabad through arrangements with cooperative unions. In August 2024, KMF approved the expansion of Nandini’s presence in additional districts of Telangana through the Raichur, Ballari and Koppal Milk Union, triggering the legal challenge.
During the hearing, counsel for the petitioners argued that their agreement granted them exclusive rights over Telangana and that KMF could not unilaterally alter market allocations, claiming it amounted to a violation of constitutional provisions.
KMF, however, countered that the petitioners were misinterpreting the “Hyderabad market” clause and attempting to extend it to the entire state. It maintained that the federation had full contractual and commercial authority to restructure distribution and appoint new agencies in line with market strategy.
With the High Court’s ruling, KMF has effectively cleared a major legal hurdle, paving the way for further expansion of the Nandini brand across Telangana.
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