In a major legal development, JK Agri Genetics Limited, a well-known player in India’s agricultural biotechnology sector, has received an unfavourable court order from the Hon’ble Commercial Court, Jaipur, in a long-standing dispute concerning ₹19.45 crore in unpaid dues from the Rajasthan State Seeds Corporation Ltd. (RSSC). The order, dated 18th June 2025 and received on 27th June 2025, dismisses the company’s petition filed under Section 34 of the Arbitration and Conciliation Act, 1996, which was aimed at challenging a previous arbitration award.

The disclosure was made in compliance with Regulation 30 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as part of the company’s ongoing transparency obligations. The company’s communication also references SEBI Circular No. SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/25 dated 25th February 2025, which mandates disclosure of material litigation-related developments.

Background of the Dispute

The roots of this case go back to 2012, when JK Agri Genetics supplied seeds to RSSC worth ₹24.33 crore. As part of the transaction, the company had also deposited ₹1.21 crore as Security Deposit. In December 2013, RSSC made a partial payment of ₹6.11 crore, while also acknowledging the full liability. However, over the years, no further payment was made by RSSC, resulting in a pending outstanding balance of ₹19.45 crore.

In 2017, in pursuit of its claim, JK Agri Genetics filed an Arbitration Application. Responding to this, the Hon’ble High Court of Rajasthan, Jaipur appointed a former Supreme Court Judge as the Sole Arbitrator to hear the matter. However, in 2021, the Arbitrator rejected the company’s claim, not on the basis of facts or merits, but purely on technical grounds of limitation — a decision that deeply disappointed the company.

Seeking redress, JK Agri Genetics approached the Commercial Court in Jaipur under Section 34 of the Arbitration and Conciliation Act, 1996, to challenge the arbitration award. The court initially admitted the application, and the matter remained under consideration for a prolonged period.

Latest Legal Development

Now, in its order dated 18th June 2025, the Commercial Court has dismissed the company’s Section 34 application, thus upholding the Arbitrator’s rejection. The certified copy of the order was received by the company on 27th June 2025, and it was formally disclosed to the BSE under regulatory compliance guidelines.

JK Agri Genetics has clearly stated in its filing that it intends to challenge the order in a higher court, in line with legal advice from its counsels. The company remains firm in its stance that it has a strong and legitimate claim against RSSC for the unpaid amount, and is prepared to continue its legal recourse.

Expected Financial and Legal Implications

While the order does not impose any penalties, sanctions, or restrictions on the company, the ₹19.45 crore remains unpaid. If realized, it could contribute significantly to the company’s revenue and liquidity position. However, until legal clarity is attained, the amount cannot be recognized in the books.

As per the current position:

• The case pertains to a financial claim made against a government agency.

• The dispute has not yet reached final legal closure, as the company plans to pursue further appeal.

• The matter involves no aberrations or non-compliance on JK Agri’s part as per the court's latest communication.

Company’s Position and Next Steps

JK Agri Genetics has reiterated that it is fully compliant with all applicable legal and regulatory provisions. The company believes that its case has merit and legal substance, particularly since the claim was dismissed purely on technical grounds, without an assessment of the merits or commercial legitimacy of the dues.

As a next step, the company will:

• Seek legal remedy before a higher judicial authority,

• Evaluate if the matter could be revived based on fresh legal interpretations or recent precedents,

• Continue pursuing the claim to secure the ₹19.45 crore balance from RSSC, along with any interest, if legally permitted.

The company has not disclosed any specific financial provision or write-off at this point, indicating that it still considers the amount as recoverable pending legal outcome.

Regulatory and Market Disclosure

The update has been filed with the BSE Listing Centre under the SEBI’s disclosure norms. The company has used the revised ‘Form A’ template, in line with the latest SEBI/HO/CFD/CFD-PoD-2/P/CIR/2025/25 circular, which mandates comprehensive disclosure of any material litigation or regulatory event impacting listed entities.

The declaration is also in accordance with Regulation 30(13) of SEBI’s Listing Obligations, which requires companies to truthfully declare all judicial outcomes affecting material contracts or financial positions.

Conclusion

This case underscores the long legal timelines and procedural complexities involved in commercial arbitration and recovery disputes in India, especially when public sector undertakings like RSSC are involved. For JK Agri Genetics, the ₹19.45 crore claim represents a substantial financial stake, and the company’s proactive approach in challenging legal setbacks highlights its commitment to protecting shareholder value.

With the next phase of litigation expected to commence soon, stakeholders will closely watch the company’s legal strategy and outcome. The resolution of this dispute could also serve as a benchmark for similar cases involving delayed payments to private firms by government entities.

JK Agri Genetics remains confident in the strength of its case, and its next move to appeal reflects its determination to realize its rightful dues through every legal channel available.

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