Gauhati High Court
Page No.# 1/64 vs Union Of India And 5 Ors on 17 March, 2025
Page No.# 1/64
GAHC010305152019
2025:GAU-AS:2797
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/9219/2019
CENTURY PLYBOARDS (I) LTD. AND ANR.
A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, HAVING
ITS REGISTERED OFFICE AT 6, LYONS RANGE, KOLKATA-700001 AND
FACTORY AT, INTER ALIA, VILL. KOKRAJHAR, PALASHBARI, DIST.
KAMRUP ASSAM
2: CENT PLY
A DIVISION OF THE PETITIONER NO. 1 COMPANY HAVING ITS FACTORY
AT VILL. KOKRAJHAR
MIRJA PALASHBARI ROAD
P.O. PALASHBARI
DIST. KAMRUP ASSAM. BOTH THE PETITIONERS ARE BEING REP. BY MR.
NARENDRA PRATAP SINGH
AUTHORISED SIGNATORY OF PETITIONER NO. 1 AND
VERSUS
UNION OF INDIA AND 5 ORS.
THROUGH THE SECRETARY DEPTT. OF CHEMICALS AND
PETROCHEMICALS HAVING ITS OFFICE AT SHASTRI BHAWAN, NEW
DELHI-110001
2:THE SECRETARY
DEPTT. OF CHEMICALS AND PETROCHEMICALS
SHASTRI BHAWAN
NEW DELHI-110001
3:THE JOINT SECRETARY IN THE DEPTT. OF CHEMICALS AND
PETROCHEMICALS
SHASTRI BHAWAN
NEW DELHI-110001
4:THE DIRECTOR GENERAL IN THE BUREAU OF INDIAN STANDARDS
MANAK BHAWAN
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BAHADUR SHAH ZAFAR MARG
NEW DELHI-110001
5:THE SECRETARY IN THE MINISTRY OF COMMERCE
UDOG BHAWAN
NEW DELHI-110001
6:THE SECRETARY DEPTT. OF INDUSTRIAL POLICY AND PROMOTION
MINISTRY OF COMMERCE AND INDUSTRIES
UDYOG BHAVAN
NEW DELHI-110001
7:DEEPAK PHENOLICS LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE
COMPANIES ACT
1956
REGISTERED OFFICE AT 1ST FLOOR
AADITYA -II
CHHANI ROAD
VADODARA - 390024
GUJARAT
INDI
Advocate for the Petitioner : DR. A SARAF, MR. Z ISLAM,MR. P BARUAH,MR. N N
DUTTA,MR. P DAS
Advocate for the Respondent : ASSTT.S.G.I., MR. R K D CHOUDHURY,MR. A DEKA(R-7),MS. G
KAUR (R-7),MR. N CHOUDHURY(R-7),MR. M DAS(R-7),MR. B D DEKA(R-7),MR. R
THADANI,MR. B C PATHAK,MR. B PATHAK
BEFORE
HONOURABLE MR. JUSTICE KAUSHIK GOSWAMI
Dates of hearing : 09.05.2024, 21.05.2024, 12.06.2024,
24.06.2024, 27.08.2024.
Date of Judgment : 17.03.2025
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JUDGMENT & ORDER (CAV)
Heard Dr. A. Saraf, learned Senior Counsel assisted by Mr. P. Baruah
and Mr. P.K Bora, learned counsel for the petitioners. Also heard Mr. R.K.D
Choudhury, learned Deputy Solicitor General of India, Mr. P.P. Sharma, learned
Senior Counsel assisted by Mr. N. Choudhury, learned counsel for respondent
No. 7, Mr. K. Gogoi, learned CGC for respondent Nos. 1, 2, 3, 5, 6 and Mr. B.
Pathak, learned counsel for respondent No. 4.
2. By way of this petition under Article 226 of the Constitution of
India, the petitioners are challenging, inter-alia, the validity and legality of the
recommendation of the respondent No. 1 taken during the course of Expert
Committee Meeting held on 22.04.2019, whereby the two raw materials
namely 'phenol' and 'melamine' listed at Serial No. 10 in the Annexure-B and
Serial No. 12 in Annexure-C respectively were proposed to be brought under
the mandatory BIS marking scheme under the Bureau of Indian Standards Act,
2016 (hereinafter referred to as the BIS Act, 2016).
3. It is the specific case of the petitioners that respondent No. 1 in
gross abuse of powers conferred on Central Government under the BIS Act,
2016 recommended mandatory BIS marking of the two subject raw materials.
It is the further case of the petitioners that while the Union of India as a
sovereign State is within its competence to frame the law and regulation as it
considers appropriate to give effect to the obligations under the treaty on
Technical Barriers to Trade (hereinafter referred to as TBT), it cannot extend
the application of its municipal law outside the territory of India to bind the
exporters to comply with the mandatory BIS registration and certification
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unless it demonstrates that the external content in such municipal laws or
regulations are consistent with obligations and prohibitions under the TBT
Agreement. Accordingly, the present writ petition has been filed seeking the
following reliefs from this Court which are reproduced hereunder for ready
reference:-
"I. A writ of and/or order and/or direction in the nature of mandamus
commanding the Respondents to terminate and or withdraw its
recommendation or any notification giving effect to mandatory BIS
marking on these two industrial raw-materials.
II. A writ of and/or order and/or direction in the nature of prohibition
commanding to the Respondents to cease and desist from taking
any further or other actions in the matter of invoking Section 16 and
17 of BIS Act in respect of such items as are not consumer items or
are industrial inputs without any consumer interface and outside the
mandate in BIS Act.
III. A writ of and/or order and/or direction in the nature of certiorari
commanding the Respondents to certify and transmit entire
case records on proceeding or decision making or notifying these two
raw-materials subjecting to mandatory BIS marks and in particular
the records of assessment of risks pertaining to "public health and
safety, environment, unfair trade practices and national security".
IV. Injunction restraining the Respondents from taking any further or
other steps /or actions in the matter of mandatory BIS mark on Phenol
and Melamine imported by the petitioner during the pendency of the
instant writ petition on the dispute or without a reference and
approval by this Hon'ble Court.
V. An ad-interim order and or direction commanding the Respondent
No. 3 to conduct random tests on properties of the imported Phenol &
Melamine from several sources and several countries and/or
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producers from places such as ports of entry in India as well as from
the premises of Industrial users including the petitioner and other
market places in sufficient numbers and determine the properties of
the imported Phenol and Melamine including its conformity
or otherwise with the upgraded BIS standard whether published or
under consideration and submit the report to this Court within such
time as may seem appropriate to this Hon'ble Court.
VI. An ad-interim order or direction commanding the Respondent
No.3 to study and examine each of the submissions made by the
petitioner in Annexure 4A to 4C and those by the Associations in 3B,
3C and 3D and submit its comments under an Affidavit to this Hon'ble
Court."
4. Dr. A. Saraf, learned Senior counsel for the petitioners submits that
the impugned recommendation of respondent No. 1 taken during the course of
Expert Committee Meeting held on 22.4.2019 is in gross abuse of power
conferred on Central Government under Sections 15 to 17 of the BIS Act,
2016.
5. He further submits that the impugned action of the respondents
also falls in the mischief of the Competition Law in India having strong
potential of price fixation to the detriment of the writ petitioners and similar
other industrial consumers numbering more than 3000 such Industries in
India.
6. He further submits that the impugned recommendation of the
Union of India to bring the two subject raw materials within the purview of the
BIS Act, 2016, despite both the generic chemicals not being the products of
human consumption and only industrial inputs without any consumer interface
is amongst others perverse, without satisfying the pre-requisites of the BIS
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Act, 2016, and the same violates the TBT Agreement and with the sole motive
to benefit the interest of the domestic producers by creating unnecessary
restrictions on its importation solely to modify the conditions of competition
and to cut imports as a profit booster to domestic players, under the
instructions of Cabinet Secretariat since 2017.
7. He further submits that the scope and coverage of the provisions of
GATT, 1994 has been fully clarified and have been given a firm legal basis by
incorporation into a full-fledged international treaty, accepted by Governments
and ratified by national Parliaments of the member Nations by enacting the
municipal law to give effect to rights and obligations, permissions &
prohibitions under the Treaty Agreement on TBT Agreement.
8. He further submits that the TBT Agreement distinguishes between
legitimate and protectionist motivations for TBT measures. He further submits
that the disciplines of the TBT Agreement are intended to help governments to
achieve a balance between upholding legitimate regulatory policy objectives
and respecting the key disciplines of multilateral trade under WTO Rules,
including avoiding and/or eliminating the creation of unnecessary and
collateral obstacles to international trade in the guise of bogus human, animal
and plant health and environment under exceptions in Article XX of GATT,
1994.
9. He further submits that Quantitative import restrictions are also
permitted under GATT, 1994 in Article XI of under specified conditions therein.
He further submits that though the petitioners do not question or challenge
such powers vested in respondents and measures that is compliant under
conditions specified in Article XI of GATT, 1994, but the petitioner strongly
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opposes non-sustainable, surreptitious, predatory and obnoxious or vexatious
TBT import restrictions in disguise with sole motive to cause shortages in
supplies by creating and authorizing such conditions in abuse of the power of
State that takes away the free competition and access to raw-materials,
violating the objectivity in the Treaty thereby seriously impairing the survival of
downstream consumer industries and their investments on considerations that
is collateral.
10. He further submits that in the context of present dispute, WTO
agreements are the legal foundations for global trade. Essentially, they are
contracts, guaranteeing WTO member countries and their citizen's important
trade rights. They also bind governments to keep their trade policies
transparent and predictable which is to everybody's benefit. The agreements
provide a stable and transparent framework to help producers of goods and
services, exporters and importers to conduct their business. Through these
agreements, WTO members operate a non-discriminatory trading system that
spells out their rights and obligations. Each member receives guarantees that
its imports and exports will be treated fairly and consistently in other
members' markets. Each promises to do the same for imports into its own
market. The system also gives developing economies some flexibility in
implementing their commitments.
11. He accordingly submits that the WTO treaty on TBT has been
transposed into municipal laws by enacting BIS Act, 2016 which is required to
be read and interpreted in consonance and harmony with the TBT treaty. In
the event of any conflicts and inconsistencies, the TBT remains supreme and
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would prevail for all practical purposes. In support of the aforesaid, he relies
upon the decision of the Apex Court in the case of Commissioner of
Customs, Bangalore Vs. M/s GM Exports & Ors. reported in (2016) 1
SCC 91.
12. He further submits that it is thus, WTO member countries including
UOI as a contracting party who is authorized to impose technical barriers to
trade under Article XX of GATT, 1994 in conformity with the TBT Agreement
under specified conditions to mitigate, inter-alia, the risks to human and plant
health and curb deceptive trade practices.
13. He further submits that the term "Unfair trade practice" in addition
to words "for the protection of human, animal or plant health, safety of the
environment finds a place in Section 16 of the BIS Act, 2016 as one of the
underlying considerations to the exercise of powers under the BIS Act, 2016.
The term "Unfair trade practice" in the context of the BIS Act, 2016 can only
refer, in short, to sub-standard products competing with standard products and
injuring the consumers of standard products. The WTO agreement on TBT,
however, uses the term "deceptive practice" in the same context in TBT Article
2.2 of the agreement to achieve, inter-alia, national security requirements,
prevention of deceptive practices, protection of human health or safety, animal
or plant life or health, or the environment. The two sets of people namely the
consumers and other stakeholders probably are the persons related to or
incidental sought to be protected revolve around the "standard product" and
"Consumers" in furtherance of the common objective as stated in the TBT as
well as BIS, there being no disharmony between the two.
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14. He further submits that the right to formulate a measure consistent
with the TBT under the BIS Act, 2016 is pursuant to a purpose on premises as
set out in the TBT and the BIS Act, 2016. The permission to apply a measure
is to further the interest of consumers vis-a-vis human health & safety and the
consideration of environmental impact, and to curb the deceptive trade
practices in TBT or unfair trade practice in the municipal law in particular in the
context of consumer interest.
15. He further submits that the appropriate Central Government for the
purpose of BIS/TBT is Secretary, Ministry of Commerce, who is also
respondent No.5 in the present petition. He further submits that respondent
nos. 1 to 3 have admitted in the Affidavit-In-Opposition that Department of
Commerce is the 'NODAL AGENCY' in Government of India to deal with issues
on TBT.
16. He further submits that in the conspectus of above facts and
disclosures in OM, the whole of the directions of respondent No.3 to
respondent No.4 (BIS) is bad in law and exercise of powers that did not vest in
respondent No.3 and thus vexatious. The actions of the respondent No.3 are
not statutory but merely recommendatory to enforce which respondent no. 3
lacks any lawful authority to invoke Sections 16 and 17 of the BIS Act, 2016 in
the first place.
17. He further submits that from the reply to the application to the RTI
as in Annexure - 2D, 2E, 2F, 2G, 2-I and 2J, it would be clear that there was no
study or report in the matter of public health, safety and environment by the
respondents nor was there any information available with them. Furthermore,
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the Writ Petitioner is not a consumer within the meaning of the BIS Act, 2016,
but an Industrial user of the goods sought to be mandated. The powers under
Section 25(2) and (3) of the BIS Act, 2016 are powers conferred upon the
Central Government in the matter of policies under the Act. Such powers
however do not empower the respondents to destroy the very structure of the
rule of law and obligations under the very BIS Act, 2016. The permission to
exercise the exceptions by way of technical regulations under the GATT or TBT
is intertwined with prohibitions not to act inconsistent with the pre-requisites.
The writ petitioners by its letters and representations dated 15-07-2019, 16-
08-2019 and 23-09-2019 (Annexure 4A to 4C) apprised the respondents of the
illegality in their actions vis- à-vis the outrageous fallacy and mischief in the
claims and suggestions of the domestic producers. The respondents, however,
without considering the objections raised by the petitioners proceeded with the
decision to impose mandatory BIS mark on industrial inputs.
18. He further submits that the respondents have not verified at all the
physical properties in the imported Phenol and did not carry out any objective
comparison between the requirements in the respective Indian BIS standards
vis-a-vis the imported goods to arrive at any reasonable conclusion in the
matter of conformity or otherwise of imported goods with the requirements in
the corresponding BIS standards. Yet, the respondent Nos. 1 and 2 have
proceeded to implement its recommendation and decisions without any
scientific evidences or compliance with the pre-requisites solely with a view to
benefit the private vested interests.
19. He further submits that the purported decision of the Expert
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Committee is based on no legitimate or acceptable materials or evidence or
test results which support the misconceived allegation that phenol and/or
melamine of industrial grade can be used or are used for pharmaceutical or
medicinal or human consumption purposes. The medicinal grade phenol is a
drug included in the Indian Pharmacopoeia and is therefore covered by Sl. No.
5(a) of the Second Schedule of the Drugs and Cosmetics Act, 1940. The use of
phenol in products for human consumption is regulated by the Drugs and
Cosmetics Act, 1940 and not under the BIS Act, 2016 or by BIS. Drugs come
under the domain of the Central Drugs Standard Control Organization under
the Directorate General of Health Services, Ministry of Health and Family
Welfare, Government of India, who is also a regulatory authority on drugs. In
the premises, both drugs and pharmaceuticals have not been allocated under
the Allocation of Business Rules to Department of Chemicals & Petrochemicals
and therefore what remains under the jurisdiction, oversight and supervisory
role of Department of Chemicals & Petro Chemicals is phenol for industrial
uses only, in respect of which the provisions of the BIS Act, 2016 have no
manner of application.
20. He further submits that the justification of national security is
absurd. Firstly because the goods in question are not prohibited under the
foreign trade policy of the Government of India and secondly the items are not
such that would have had any military or armaments usage or poses any risk
of war or threat to security of India.
21. He further submits that the minutes of the meeting held by the
Joint Secretary acting as Chairman of the Expert Committee on 01.10.2019
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demonstrates that the demand of mandatory BIS mark was to support
investment of 1200 crore, by restricting/stopping the imports. It was stated in
the said meeting that the factory of the domestic manufacturer has to be shut
down since July, 2019 because of unfair trade practices by Thailand in
resorting to exports at cheap prices in India.
22. He further submits that first of all, the said ground cannot be a
ground of demanding imposition of the BIS mark as per the provisions of the
BIS Act, 2016 and secondly there was no shut down of the factory of the
manufacturing company. This was a bogus and false written assertion made by
the respondent No. 7/intervener before respondent No.3.
23. He further submits that it is settled law that a writ of mandamus can
be issued where authority has failed to exercise the discretion vested in it or has
exercised such discretion mala-fide or on irrelevant consideration.
24. He further submits that the petitioners respectfully submits that the
impugned action of Respondent Authorities proceeding to make mandatory the
BIS marking on import of Phenol & Melamine is a mere device for serving
another collateral purpose other than the purposes envisaged under the BIS
Act, 2016 as well as GATT and thereby the same is a fraud on the Constitution
and is invalid.
25. He further submits that impugned action of the Respondent
Authorities in making BIS standards mandatory on import of Phenol & Melamine
is being absolutely illegal and without jurisdiction and contrary to the provisions
of the BIS Act, 2016 as well as GATT.
26. He further submits that the intervener has contended that there was
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only a recommendation and the same was not an order. It is submitted that as a
respondent No.7/intervener cannot be allowed to make any submissions of its
own.
27. He further submits that the assertion of the respondent
No.7/intervener that the proposed measure is merely a recommendation only
and need not be interfered is patently false, misleading statement to divert the
attention and examination for determination of the real dispute. There is no
term in the BIS Act, 2016 or in TBT Agreement that contemplates any
recommendation throughout the process.
28. He further submits that the decision to enforce BIS mark was, inter-
alia, taken on 22.04.2019, and reaffirmed on 01.10.2019, 09.10.2019, and
finally on 31.10.2019 by respondent No. 3 as evident in his OM dated
24.01.2020 and formally notified by Gazette WTO notifications dated 03.02.2020
and 10.02.2020.
29. He further submits that so far, the interference with the policy
matters is concerned, it is a settled law that the Court would not refuse to
adjudicate upon the policy matters, if the policy decision are arbitrary, capricious
and mala-fide.
30. In support of the aforesaid submissions, he further relies upon the
following decisions: -
i. Commissioner of Customs, Bangalore vs. M/S. G.M. Exports
& others, reported in (2016) 1 SCC 91.
ii. Lekhraj Santhramdas Lavani vs. N.M. Shah, reported in AIR
1966 SC 334.
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iii. Comptroller of Auditor General of India vs.
K.S. Jagannathan, reported in (1986) 2 SCC 679.
iv. Union of India Vs. Bharat Forge Ltd, reported in(2022) SCC
Online SC 1018.
v. Vasu Dev Singh vs. Union of India, reported in (2006) 12 SCC
753.
vi. Satyanarayana and Ors vs. S. Purushotham and Ors.,
reported in (2008) 5 SCC 416.
vii. R.S.Joshi, Sales Tax Officer, Gujarat & Ors. Vs. Ajit Mills Ltd.,
reported in(1977) 4 SCC 98.
viii. Ashok Kumar Alias Golu Vs. Union of India & Others.,
reported in(1991) 3 SCC 498.
ix. Sonapur Tea Co. Ltd. v. Mst. Mazirunnessa reported in
[(1962) 1 SCR 724: AIR 1962 SC 137].
x. Welfare Association, A.R.P., Maharashtra &Anr. Vs. Ranjit P.
Gohil & Anr., reported in (2003) 9 SCC 358.
xi. Asif Hameed v. State of J&K, reported in [1989 Supp (2) SCC
364].
xii. Brij Mohan Lal Vs. Union of India, reported in (2012) 6 SCC
502.
xiii. Railway Officers Assn v. Union of India, reported in (2003) 4
SCC 289.
xiv. State of Madhya Pradesh & Ors vs. Mala Banerjee, reported in
(2015) 7 SCC 698.
31. Per contra, Mr. K. Gogoi, learned CGC submits that Technical
Regulation as stipulated under the TBT Agreement cannot be more trade
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restricted than necessary to achieve a legitimate objective and cannot create
unnecessary obstacles to International Trade as per the TBT Agreement. He
accordingly submits that in the present case all requirements as stipulated are
met before making the recommendation. He further submits that standards of
phenol and melamine are proposed to be made mandatory under Section 16,
which does not violate the agreement on TBT. He further submits that the
objective of making standards as mandatory is not to give benefit to domestic
producers but to make available chemical of quality confirming to higher
standards and also prevent unfair trade practices.
32. He further submits that the Department of Chemicals and
Petrochemicals conducted Stakeholder Consultation before proposing and
proceeding to make the subject standards mandatory, wherein the association
of which the petitioners are members was present. He further submits that the
objective of the proposed use of mandatory BIS on phenol and melamine is to
regulate chemical to ensure quality products in the consumer market. He
further submits that the Department of Chemical and Petrochemicals have a
mandate to make certain standards mandatory under the BIS Act, 2016 to
protect human, animal or plants health, safety of the environment on
prevention of unfair trade practices or national security.
33. He further submits that upon consideration, in the Meeting held on
01.10.2019 of the stakeholders, that high level of purity of phenol will ensure
the harmful impurities are minimized to the maximum extent possible, the
proposal for making BIS standards mandatory for phenol was initiated.
34. He further submits that in so far as proposal for making standard
for melamine as mandatory, it was expressed in the stakeholders consultation
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meeting on 11.10.2019 that melamine resins are used in thermosetting plastic
and also used in high pressure decorative laminates such as Formica,
melamine, dinnerware and dry erase boards. In addition, he submits that it
was further expressed that melamine foam is used as insulation, sound
proofing material and in polymeric cleaning products, such as magic eraser. He
further submits that melamine sometimes illegally added to food products in
order to increase the apparent protein content and accordingly keeping in view
of the health and safety of environment, it was proposed to make the BIS
standards mandatory for melamine.
35. Mr. P. Sharma, learned Senior Counsel for respondent
No.7/intervener submits that the recommendations challenged are
inconformity with the TBT Agreement. He further submits that the writ petition
is pre-mature as it has only challenged the recommendations of the
Department of Chemicals and Petrochemicals. He further submits that phenol
is a hazardous product and the petitioners cannot object for implementation of
a higher standard in India. He further submits that the recommendation of
making standard mandatory for BIS marking in respect of the two subject raw
materials being a policy decision, the same falls outside the expertise and
domain knowledge of the writ Court. He accordingly, submits that the said
policy decision warrants no interference from this Court under Article 226 of
the Constitution of India. In support of the aforesaid submission, he relies
upon the following cases:-
(i) Islamic Academy of Education & Another Vs. State of
Karnataka & Others, reported in (2003) 6 SCC 697.
(ii) Federation of Railway Officers Association & Others Vs.
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Union of India, reported in (2003) 4 SCC 289.
(iii) Silppi Constructions Contractors Vs. Union of India
&Another, reported in (2020) 16 SCC 489.
(iv) Global Excess Vs. Union of India, reported in (2014) SCC
Online Guj 15977. (Gujarat High Court)
(v) All India HDPE/PP Woven Fabrics Manufactures Association
Vs. The Secretary, Government of India in WP(C) No. 287 of
2024 (Karnataka High Court)
36. Mr. B. Pathak, learned counsel for respondent No. 4 submits that
the writ petition is not maintainable as it is not open for the petitioners to
challenge a policy decision adopted by the Government based on scientific and
technical recommendation of experts. He further relies upon the following
decisions:-
(i) Ekta Shakti Foundation Vs. Government of NCT of Delhi,
reported in (2006)10 SCC 337.
(ii) Parisons Agrotech (P) Ltd. Vs. Union of India, reported in
(2015) 9 SCC 657.
(iii) Premium Granites Vs. State of Tamil Nadu, reported in (1994)
2 SCC 691.
(iv) M.P. Oil Extraction Vs. State of M.P, reported in (1997) 7 SCC
592.
(v) BALCO Employees' Union (Regd.) Vs. Union of India &
Others, reported in (2002) 2 SCC 333.
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37. I have given my prudent consideration to the arguments advanced
by the learned counsels appearing for all the contending parties and have
perused the material available on record. I have as well considered all the case
laws cited at the bar.
38. The issues that has arisen for determination in the instant writ
petition are as follows: -
(i) The right of the respondent No.7/intervener to address the Court in the
writ proceeding, and;
(ii) The validity and legality of the recommendation of the respondent No.1 for
proposing to bring phenol and melamine under the mandatory BIS marking
under the BIS Act, 2016 and the consequent orders passed thereof.
39. As regards the scope and ambit of the right of the respondent
No.7/intervener to address the Court is concerned, the same is well settled.
The respondent No.7/intervener is entitled to address arguments in support of
either side but is not himself entitled to relief in the intervention application. In
other words, the intervener has a right of audience alone. In the present case,
the respondent No.7/intervener has supported the case of the respondents
and to that extent has submitted both written and oral arguments. It appears
that the respondent No.7/intervener has not raised contention which is not
urged by the respondents. In-fact, the respondent No.7/intervener has made
submissions in support of the contention urged by the respondents. That being
so, the submissions made by the respondent No.7/intervener in support of the
contention urged by the respondents is taken into consideration. The issue
pertaining to the rights of the intervener to address the Court is accordingly
decided.
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40. Turning now to the second issue as regards the validity and legality
of the recommendation of the respondent No.1 for proposing to bring the two
chemicals in question under the mandatory BIS marking and the consequent
orders passed thereof, apt to refer to the relevant provisions of the BIS Act,
2016 before adverting to the merit of the said issue.
41. The BIS Act, 2016 positions BIS as the National Standards Body for
the harmonious development of the activities of standardization and to
establish, publish, review and promote Indian Standards. The object of the BIS
Act, 2016 is to provide for the establishment of a national standards body for
the harmonious development of the activities of standardization, conformity
assessment and quality assurance of goods, articles, processes, systems and
services and for matters connected therewith or incidental thereto.
42. It appears that the Act was introduced with two main goals: (i) To
safeguard consumers from substandard products and enhance the Indian
Standards Institution, and (ii) To promote standardization and quality control in
both domestic and export markets, thereby preventing the distribution of
inferior goods. Thus, the BIS Act, 2016 was promulgated mainly for the purpose
to develop and enforce higher quality standards.
43. "Bureau" under sub-section (3) of section 2 of the BIS Act, 2016,
means the Bureau of Indian Standards established under section 3. "Consumer"
under sub-section (9) of section 2 means a person as defined in the Consumer
Protection Act, 1986. Sub-section (17) of section 2 of the BIS Act, 2016, defines
"Indian Standard" as hereunder:-
"(17) 'Indian Standard' means the standard including any tentative or
provisional standard established and published by the Bureau, in relation
to any goods, article, process, system or service, indicative of the quality
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and specification of such goods, article, process, system or service and
includes-
(i) any standard adopted by the Bureau under sub-section (2) of section
10; and
(ii) any standard established and published, or recognised, by the
Bureau of Indian Standards established under the Bureau of Indian
Standard Act, 1986 (63 of 1986), which was in force immediately
before the commencement of this Act."
44. Sub-section (40) of section 2 of the BIS Act, 2016, defines "standard
mark" as the Bureau of Indian Standard certification mark specified by the
Bureau to represent a particular Indian Standard.
45. The powers and duties of the Bureau are provided under Section 9
of the BIS Act, 2016, is reproduced hereunder for ready reference: -
"9.Powers and functions of Bureau-(1) The powers and duties as may
be assigned to the Bureau under this Act shall be exercised and
performed by the Governing Council and, in particular, such powers may
include the power to-
(a) establish branches, offices or agencies in India or outside;
(b) recognise, on reciprocal basis or otherwise, with the prior
approval of the Central Government, the mark of any international
body or institution, on such terms and conditions as may be
mutually agreed upon by the Bureau in relation to any goods, article,
process, system or service at par with the Standard Mark for such
goods, article, process, system or service;
(c) seek recognition of the Bureau and of the Indian Standards
outside India on such terms and conditions as may be mutually
agreed upon by the Bureau with any corresponding institution or
organisation in any country or with any international organisation;
(d) enter into and search places, premises or vehicles, and inspect
and seize goods or articles and documents to enforce the provisions
of this Act;
(e) provide services to manufacturers and consumers of goods or
articles or processes for compliances of standards on such terms and
Page No.# 21/64
conditions as may be mutually agreed upon;
(f) provide training services in relation to quality management,
standards, conformity assessment,laboratory testing and calibration,
and any other related areas;
(g) publish Indian Standards and sell such publications and
publications of international bodies;
(h) authorise agencies in India or outside India for carrying out any
or all activities of the Bureauand such other purposes as may be
necessary on such terms and conditions as it deems fit;
(i) obtain membership in regional, international and foreign bodies
having objects similar to that of the Bureau and participate in
international standards setting process;
(j) undertake testing of samples for purposes other than for
conformity assessment; and
(k) undertake activities relating to legal metrology.
(2) The Bureau shall take all necessary steps for promotion, monitoring
and management of the quality of goods, articles, processes, systems and
services, as may be necessary, to protect the interests of consumers and
various other stake holders which may include the following namely: -
(a) carrying out market surveillance or survey of any goods, article,
process, system or service to monitor their quality and publish
findings of such surveillance or surveys;
(b) promotion of quality in connection with any goods, article,
process, system or service by creating awareness among the
consumers and the industry and educate them about quality and
standards in connection with any goods, article, process, system
and service;
(c) promotion of safety in connection with any goods, article, process,
system or service;
(d) identification of any goods, articles, process, system or service for
which there is a need to establish a new Indian Standard, or to
revise an existing Indian Standard;
(e) promoting the use of Indian Standards;
(f) recognising or accrediting any institution in India or outside which
is engaged in conformity certification and inspection of any goods,
article, process, system or service or of testing laboratories;
Page No.# 22/64
(g) coordination and promotion of activities of any association of
manufacturers or consumers or any other body in relation to
improvement in the quality or in the implementation of any quality
assurance activities in relation to any goods, article, process, system
or service; and
(h) such other functions as may be necessary for promotion,
monitoring and management of the quality of goods, articles,
processes, systems and services and to protect the interests of
consumers and other stake holders.
(3) The Bureau shall perform its functions under this section through the
Governing Council in accordance with the direction and subject to such
rules as may be made by the Central Government."
46. The standardization activities of BIS are carried out under the
provisions of Sections 10 and 11 of the BIS Act, 2016.
47. Section 10 of the BIS Act 2016 is reproduced hereunder for ready
reference: -
"10. Indian Standards-(1) The standards established by the Bureau
shall be the Indian Standards.
(2) The Bureau may-
(a) establish, publish, review and promote the Indian Standard, in
relation to any goods, article, process, system or service in such
manner as may be prescribed;
(b) adopt as Indian Standard, any standard, established by any
other Institution in India or elsewhere, in relation to any goods,
article, process, system or service in such manner as may be
prescribed;
(c) recognise or accredit any institution in India or outside which is
engaged in standardisation;
(d) undertake, support and promote such research as may be
necessary for formulation of Indian Standards.
(3) The Bureau, for the purpose of this section, shall constitute, as and
when considered necessary, such number of technical committees of
experts for the formulation of standards in respect of goods, articles,
processes, systems or services, as may be necessary.
Page No.# 23/64
(4) The Indian Standard shall be notified and remain valid till withdrawn
by the Bureau.
(5) Notwithstanding anything contained in any other law, the copyright in
an Indian Standard or any other publication of the Bureau shall vest in
the Bureau.
48. Section 11 of the BIS Act 2016 is reproduced hereunder for ready
reference:-
"11.Prohibition to publish, reproduce or record without
authorisation by Bureau-(1) No individual shall, without the
authorisation of the Bureau, in any manner or form, publish, reproduce or
record any Indian Standard or part thereof, or any other publication of the
Bureau.
(2) No person shall issue a document that creates, or may create the
impression that it is or contains an Indian Standard, as contemplated in
this Act:
Provided that nothing in this sub-section shall prevent any individual
from making a copy of Indian Standard for his personal use."
49. Section 16 of the BIS Act 2016 empowers the Central Government to
direct compulsory use of standard mark, is reproduced hereunder for ready
reference: -
"16.Central Government to direct compulsory use of Standard
Mark-(1) If the Central Government is of the opinion that it is necessary
or expedient so to do in the public interest or for the protection of human,
animal or plant health, safety of the environment, or prevention of unfair
trade practices, or national security, it may, after consulting the Bureau,
by an order published in the Official Gazette, notify-
(a) goods or article of any scheduled industry, process, system or
service; or
(b) essential requirements to which such goods, article, process,
system or service,which shall conform to a standard and direct the
use of the Standard Mark under a licence or certificate ofconformity as
compulsory on such goods, article, process, system or service.
Explanation-For the purpose of this sub-section-
(i) the expression "scheduled industry" shall have the meaning
assigned to it in the Industries (Development and Regulation) Act,
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1951 (65 of 1951);
(ii) it is hereby clarified that essential requirements are requirements,
expressed in terms of theparameters to be achieved or requirements
of standard in technical terms that effectively ensure thatany goods,
article, process, system or service meet the objective of health, safety
and environment.
(2) The Central Government may, by an order authorise Bureau or any
other agency having necessary accreditation or recognition and valid
approval to certify and enforce conformity to the relevant standard or
prescribed essential requirements under sub-section (1)."
50. Section 17 of the BIS Act 2016 prohibits selling, manufacturing,
importing etc. goods without standard mark, which is reproduced hereunder for
ready reference:-
"17. Prohibition to manufacture, sell, etc., certain goods without
Standard Mark. -(1) No person shall manufacture, import, distribute,
sell, hire, lease, store or exhibit for sale any such goods, article, process,
system or service under sub-section (1) of section 16-
(a) without a Standard Mark, except under a valid licence; or"
51. Reading of the aforesaid, it is apparent that if the Central
Government is of the opinion that it is necessary or expedite in the public
interest or for the protection of human, animal or plant health, safety of the
environment or prevention of unfair trade practices or national security, it may
after consulting the Bureau notify, inter-alia, goods or articles to confirm to a
standard and direct the use of the standard mark as compulsory on such goods
or articles.
52. Section 25 of the BIS Act 2016 is reproduced hereunder for ready
reference: -
"25. Power of Central Government to issue directions.-(1) Without
prejudice to the foregoing provisions of this Act, the Bureau shall, in the
exercise of its powers or the performance of its functions under this Act,
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be bound by such directions on questions of policy as the Central
Government may give in writing to it from time to time:
Provided that the Bureau shall, as far as practicable, be given an
opportunity to express its views before any direction is given under this
sub-section.
(2) The decision of the Central Government whether a question is one of
policy or not shall be final.
(3) The Central Government may take such other action as may be
necessary for the promotion, monitoring and management of quality of
goods, articles, processes, systems and services and to protect the
interests of consumers and various other stakeholders and notify any
other goods, articles, processes, systems and services for the purpose of
sub-section (1) of section 16."
53. Reading of the above, it is further apparent that the Central
Government is empowered to issue directions on questions of policy which the
Bureau is bound to follow. However, the Bureau, as far as practicable, be given
an opportunity to express its views before the Central Government issues any
directions.
54. Apt to also refer to Rules 22 to 30 of the Bureau of Indian Standards
Rules, 2018 (herein referred to as BIS Rules, 2018), which provides the
procedure for establishment and standardization of the Indian Standard, which
is reproduced hereunder for ready reference: -
"22. Procedure for establishment of Indian Standards- (1) Any
person, being a Ministry of the Central Government, State Government,
Union territory administration, consumer organisation, industrial unit,
industry-association, professional body, member of the Governing
Council, member of a technical committee or any individual who proposes
for establishment of an Indian Standard or for amending or for revising or
withdrawing an established Indian Standard may submit the proposal to
the Bureau in writing for the purpose.
(2) On receipt of the proposal under sub-rule (1), the Bureau shall assign
the proposal to the concerned Division Council.
(3) The Division Council, on being satisfied as a result of its own
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deliberations or on investigation and consultation with concerned
interests that the necessity for standardisation has been established,
shall assign the task of formulating the standard to a sectional committee
constituted for the purpose:
Provided that if the proposal for establishing an Indian Standard has not
been accepted after its due consideration, the proposer shall be informed
of the decision.
(4) The Indian Standard prepared by the sectional committee shall be
issued in draft form and widely circulated for a period of not less than
one month amongst the various interests concerned for critical review and
suggestions for improvement:
Provided that the wide circulation may be waived of, if the Sectional
Committee is satisfied that the matter is urgent or non-controversial.
(5) The draft Indian Standards issued under sub-rule (4) shall be finalised
by the concerned sectional committee after giving due consideration to the
comments that may be received and the draft so finalised shall be
submitted to the Chairperson of the concerned Division Council for
adoption of the Standard.
(6) The standard so adopted under sub-rule (5) shall be notified by the
Bureau.
23. Review of Indian standards. -The Bureau shall review,
periodically, atleast once in five years, all established Indian standards
to determine the need for revision, amendment, reaffirmation or
withdrawal of such standards, in accordancewith the provisions of these
rules:
Provided that the need for withdrawal of the established Indian standard
shall be decided upon by the respective Division Council on the
recommendations ofthe sectional committee concerned:
Provided further that proposals relating to minor amendments or
amendments in the nature of correction of errors or omissions in
established Indian Standards may be notified by the Bureau without
reference to the concerned Sectional Committee:
Provided also that the Bureau shall have the power to provisionally
amend, by notification, such of the provisions of an Indian Standard as in
its view are necessary for expeditious fulfilment of any of the objectives of
the Act and the amendments so made shall be regularised without
further notification if the sectional committee concerned has on
examination, approved the standards as so amended, within a period of
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six months from the date of the notification.
24. Indian Standards to be binding in certain cases. -(1) Save
asotherwise provided in sub-rule (2), the Indian Standards are voluntary
and theirimplementation depends on adoption by concerned parties.
(2) An Indian Standard shall be binding if it is stipulated in a contract or
referred to in a legislation or made mandatory by specific orders of the
Government.
25. Publication. -The Indian Standards established by the Bureau, their
revisions and amendments shall be published and copies thereof, in any
form as may be determined by the Bureau, shall be made available for
sale at such prices as may be determined by the Bureau.
26. Standards promotion. -The Bureau may promote adoption of
Indian Standards by consumers, commerce, industry, Government and
other interests, in such manner as it may consider necessary.
27. Procedure for establishment of provisional Indian Standards.-
(1) Where a proposal relates to a new technology in respect of which its
technical accuracy cannot be established, the Bureau may cause the
Division Council to prepare a provisional Indian standards in accordance
with the procedure laid downunder Rule 22.
(2) The provisional Indian Standard so prepared under this rule shall be
notified as a provisional Indian Standard without wide circulation, after
its adoption by Chairperson of Division Council concerned.
(3) The Foreward of the provisional Indian Standard shall specify the
following, namely-
(i) need for preparing the provisional Indian Standard;
(ii) scope of its application; and
(iii) period of its validity:
Provided that the provisional Indian standards so notified under sub-rule
(2)shall be valid for a period upto two years, as may be determined by
the Bureauon the recommendations of the sectional committee, and may
be extended by notmore than two years.
(4) The provisional Indian Standard shall not be used for Standard Mark.
(5) The provisional Indian Standards so notified under sub-rule (2) shall,
before the expiry of the validity period, be examined by the concerned
sectional committee and establish it as a regular Indian Standard:
Provided that if the sectional committee is of the opinion that such
Page No.# 28/64
standards should not be established, with or without modification, as a
regular Indian Standard, then the provisional Indian Standard so notified
shall lapse after its validity period.
28. Concurrent Running of Indian Standards. -(1) The Director
General may allow concurrent running of two versions of an Indian
Standard and may also decide the period of such concurrent running.
(2) The Director General may allow concurrent running of an Indian
Standard and any of its amendments and may also decide the period of
such concurrent running.
29. Adoption of other Standards as Indian Standards. -(1) The
Bureau may, in relation to any goods, article, process, system or service,
adopt any standard established by any other institution in India or
outside India as an Indian Standard with necessary modifications, in
accordance with the procedure laid down in Rule 22:
Provided that any Indian Standard adopted by the erstwhile Indian
Standards Institution and the Bureau of Indian Standards established
under Bureau of Indian Standards Act, 1986 (63 of 1986) shall be
deemed to have been adopted under the provisions of the Act or under
these rules or the regulations made under Section 39 of the Act.
(2) Standards so adopted as Indian Standards shall be notified by the
Bureau in the Official Gazette.
30. Recognition or accreditation of Institutions engaged in
standardisation. -The terms and conditions for recognition or
accreditation of any institution in India or outside India, engaged in
standardisation, shall be as decided by Executive Committee."
55. Reading of the aforesaid provision of the Rules, it is apparent that
upon the Central Government proposing to confirm Indian Standard of any
goods or articles, the Bureau shall assign the proposal to the concerned Division
Council who after deliberation and consultation shall assign the task of
formulating the standard to a sectional committee. Upon the Indian Standard be
prepared by the sectional committee, the draft form of the said standard shall
be widely circulated for critical review and suggestions and the same shall be
finalized by the concerned sectional committee after giving due consideration to
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the comments, if any. It is after such process that the standard so adopted by
the Bureau shall be notified.
56. Returning back to the facts of the instant case, it appears that the
petitioner No. 1 is a Company incorporated under the Companies Act, 1956 and
carries on the business of, inter alia, manufacture of plywood, ply boards,
laminated boards and other such Plywood products.
57.In the manufacture of the aforesaid products, two of the raw materials
consumed by the petitioners are Phenol and Melamine. It appears that the
petitioners are claiming that a large part of their requirement of phenol and
melamine is imported from the European Union, South Africa, US and Japan as
well as China, amongst other countries.
58.It appears that The Director, Government of India, Ministry of Chemicals &
Fertilizers, Department of Chemicals & Petrochemicals issued a notice convening
a meeting of the Expert Committee for making BIS standards mandatory in
respect of chemicals and petrochemicals products proposed to be mandated for
BIS marking. Accordingly, a notice dated 8.04.2019 was issued to all the
concerned industry association along with the proposed list of chemicals and
petrochemicals whose standards are required to be made mandatory. The said
meeting was called on 22.04.2019. A copy of the said notice is reproduced
hereunder for ready reference: -
"No. C-II-18012/21/2017-CHEM.II
Government of India
Ministry of Chemicals& Fertilizers
Department of Chemicals & Petrochemicals
Shastri Bhawan, New Delhi
Dated the 8thApril, 2019
Page No.# 30/64
MEETING NOTICE
Subject: Meeting of the Expert Committee for making BIS standard as
mandatory to be held on 22.04.2019 at 2.30 P.M.
The undersigned is directed to say that DCPC has arranged a meeting for
making BIS standard as mandatory and scheduled on 22.04.2019 at
2.30 PM in Conference Room No. 220, A-wing, Shastri Bhawan, New
Delhi under the Chairmanship of Secretary (C&PC). The list of chemicals
& petrochemicals proposed to be discussed, for making them mandatory,
is enclosed at annexure "B' and 'C' respectively
2. You are kindly requested to make it convenient to attend the above
meeting with the relevant data regarding Production, Installed Capacity,
Consumption. Import, Export etc. A line in confirmation will be highly
appreciated.
(D.K.Mada)
Director
[email protected]
To,
1. Sh. Ajay Yadav, Deputy Secretary, Department of
Commerce
2. Sh. B. Venkateshwara Rao, ICT, Hyderabad
3. Sh. U. K. Das BIS
4. Sh Kumara Anil, Advisor, FSSAI
5. Sh. T. S. Vishwanath, Principal Advisor, TBT
6. Dr. A. K. Bhattacharya, Sr. Scientist, NCL, Pune
7. Sh. Anupam Kaul, CII
8. Dr. Ram Upender Das, Head, Centre for Regional
Trade,Department of Commerce, email: [email protected]
9. Sh Anil Johr, CEO, National Accreditation Board for
Certification Bodies (NABCB) e-mail:[email protected]
10.Industry Associations (annexure 'A' enclosed)"
Page No.# 31/64
59. Reading of the aforesaid notice, it is apparent that the Central
Government proposed to make BIS standards mandatory in respect of the List
of Chemicals enclosed as Annexure-B and list of petrochemicals enclosed as
Annexure-C to the said notice. It appears that at serial no. 10 of the list of
chemical contains the raw material "phenol" (carbolic acid) and at serial no.12
of the list of petrochemicals contains the raw material "melamine", which are
used by the petitioners' company for manufacturing of plywood etc. It further
appears that the said notice of meeting was given to the Principal Advisor, TBT
and other stakeholders concerned.
60. Thereafter, the meeting was held on 22.04.2019 under the
Chairmanship of Secretary (C&PC), Government of India, wherein discussion for
making the BIS standards mandatory for the listed chemicals & petrochemicals
goods/articles/raw materials were discussed. Apt to refer to the minutes of the
said meeting, which is reproduced hereunder for ready reference: -
"Minutes of the meeting held on 22-4-2019 under the Chairmanship of
Secretary (C&PC) to make standards of Chemicals & Petrochemicals as
mandatory
The list of participants is enclosed.
Welcoming the participants, Secretary (C&PC) mentioned that the present
meeting has been convened to consider making BIS standards of certain
Chemicals & Petrochemicals as mandatory, which are presently
voluntary in nature. The Department proposes to initiate action under
section 16 of the BIS Act 2016 which empowers the Central Government
to make BIS standard mandatory in the public interest for:
(i) Protection of human, animal or plant health
(ii) Safety of the environment
(iii) Prevention of unfair trade practices
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(iv) Protection of National Security
These measures shall facilitate import and manufacturing of quality
chemicals & petrochemicals without compromising on health, environment
and national security aspects
2.The Chairman added that after making the standard mandatory, the
manufacturers and exporters from abroad, shall use BIS Standard Mark
on their sale consignments under a licence to be obtained from the
Bureau. The manufacturers and exporters shall ensure conformity
assessment of the characteristics of the standards. This will result in
improvement of quality of the chemicals manufactured and imported into
the country.
3. The Chairman also emphasized on the need to protect the interests of
the consumers. Manufacturing and foreign exporting entities shall be
given sufficient time to adhere to the provisions of Quality Control Orders.
The enforcement of the order will come into force after lapse of six months
from date of notification, which may amount to about a year from now.
The Chairman requested Joint Secretary (Chemicals) and Joint Secretary
(Petrochemicals) to take up the respective list of items for discussion, as
per the list enclosed (Annexure 1).
4. Taking-up the discussion forward, it was explained about the
chemicals and Petrochemicals listed in the agenda along with import-
export data and applicable standards Both manufacturers of the
chemicals, petrochemicals and consumers have been invited to give their
suggestions in the matter. The members expressed their opinion that risk
factors need to be specified in the standards, which are not presently
indicated. The present standards of some chemicals and petrochemicals
are old. In view of the fast technological improvements taking place in the
sector, the existing standards need to be revised by BIS first, before
making them mandatory by incorporating the impurity profile, heavy
metal content (max in ppm), toxicity, volatile content, filling and
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reinforcement matters etc. and relevant testing methods.
5. On clarification sought by the Chairman, the representative of BIS
mentioned that they have enforcement machinery to oversee
implementation of Quality Control Orders and to carryout market
surveillance. He mentioned that the procedure for grant of licence is very
simple. The Bureau grants a licence based on successful assessment of
the manufacturing facility, production process and quality control and
testing capabilities of a manufacturer after a visit to its manufacturing
premises. Conformity of the product to the relevant standard(s) is also
established through third party laboratory testing. After the application is
submitted to the BIS, normally licence is granted within 45-90 days.
6. The CEO of The National Accreditation Board for Certification Bodies
(NABCB) stated that since BIS standards are presently voluntary in
nature, they are not subjected to rigorous scrutiny, as compared to when
they are made mandatory. In case, there is problem in mandating all
parameters of BIS standard, there is a provision in the BIS Act to
mandate only a few selected parameters, for example lead content in
paints. He mentioned that BIS needs to consider conformity assessment
procedure based on risk involved. Also the services of third party can be
utilized to conduct the assessment during certification process to augment
BIS resources,as allowed under the Act.
7. The representatives from Industry Associations mentioned that some
raw materials of paint and polymer industries which are essential but the
country is heavily dependent on imports. Any restrictions put up for
importing these materials could disrupt the downstream industries and
could result into significant inflation in the cost of the product and
adversely impact the working of the industries and employment. The
exporters/ manufacturers located abroad may find India as a small
market, in reference to their total business and may not be willing to
apply for BIS licence in which case, there will be huge supply disruptions.
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8. The need of BIS team visiting the factories of several players could be a
concern as it could possibly lead to delays in getting the licence. The
Chairman advised the industry associations to send their concerns to the
office of BIS with a copy to the Department urgently, preferably within a
week.
9. Concluding the discussion, the Chairman advised the industry to send
their suggestions/views to the office of BIS, under intimation to the
Department of Chemicals and Petrochemicals (DCPC), for reviewing the
existing standards of the Chemicals & Petrochemicals to make them
mandatory. For review of existing petrochemicals/ polymers standards,
the industry may send their concerns/suggestions to Director General,
CIPET Chennai with a copy to DCPC. The office of BIS was advised to
consider the suggestions received from Industry Associations in an
expeditious manner, so that further action for their mandation could be
initiated by DCPC.
The meeting ended with a vote of thanks to be chair."
61. Reading of the aforesaid minutes, it appears that the Central
Government proposed to initiate action under Section 16 of BIS 2016 for making
BIS standards mark compulsory in respect of raw materials, inter-alia, Phenol
and Melamine. It further appears that the object of making the BIS standards
mandatory in respect of the said raw materials is to facilitate import of
manufacturing of quality chemicals and petrochemicals without compromising
health and natural security aspect. It further appears that the chairman
explained in the meeting to the participants that after making the BIS standards
mandatory, the manufacturers and exporters shall use BIS standards mark on
the sale consignment under a license to be obtained from the Bureau and shall
ensure conformity assessment of the characteristics of the standards. The
Chairman emphasized that this will result in improvement of quality of the
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chemicals manufactured and imported into the country. It further appears that
the chairman also emphasized on the need to protect the interests of the
consumers. It was also clarified that manufacturing and foreign exporting
entities shall be given sufficient time to adhere to the provision of the quality
control orders and the enforcement of the order will come into force after lapse
of 6 months from the date of notification. Accordingly, the Joint Secretary
(Chemicals) and Joint Secretary (Petrochemicals) took up the respective list of
items for discussion. It further appears that in the said meeting both
manufacturers of the chemicals and petrochemicals and consumers have been
invited to give their suggestion in the matter. It further appears that there was
substantial deliberation in the matter where the participants were also given
opportunity to express the opinion.
62. Thereafter, an Office Memorandum was issued on 06.09.2019 by the
Under Secretary to the Government of India, Ministry of Commerce & Industry,
whereby the Department of Chemicals and Petrochemicals was requested to
consider the grievances raised against the mandatory BIS marking of the raw
materials in question. Pertinent that the member exporter had supported the
complainant and was of the opinion that the industry would support the move if
the objective of making BIS standards mandatory was to protect human health,
environment and national security, but would not be in favour, if it was initiated
by the domestic producers, influencing the trade bodies/associations, without
scientific merit and with an objective to provide undue protection to the
particular industry at the cost of other, under the guise of consumer interest.
63. It appears that the petitioners thereafter vide representation dated
23.09.2019, inter-alia, submitted that the proposed changes in the two
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chemicals in question were sought without firstly knowing and comparing the
actual quality, purity level etc. in imported phenol and then assuming that the
same is sub-standard and hazardous compared to its own product, detrimentally
affecting the public health, safety and environment in the course of deceptive
trade without any tangible evidence.
64. Thereafter, another Expert Committee Meeting was held on
1.10.2019 for making BIS standards for measure chemicals as mandatory
wherein representatives of, inter-alia, All India Plywood Manufacturers'
Association (hereinafter referred to as "FIPPI") of which the petitioners are
members were present. Relevant portion of the minutes of the Expert
Committee Meeting dated 1.10.19 reads as hereunder:-
"Phenol (IS 538:2000)
The committee discussed the issue of making BIS standard of Phenol as
mandatory. It finds industrial applications such as Phenol Formaldehyde
resins, poly carbonates, epoxides, phonexy herbicides and numerous
pharmaceutical drugs.
The representative of Federation of Indian Plywood and Panel Industry
stated that WTO TBT agreement states that the technical regulations
should not be formulated to create obstacles to international trade. Before
formulating technical regulations. risk assessment, regarding impurities
present in the Phenol, scientific and technical Information may be
collected and taken into consideration. Without risk assessment, powers
under section 16 of BIS Act need not to be exercised by the Government.
Further, he mentioned that domestic industry of Phenol is already
protected from other countries by way of levy of Anti-Dumping Duty. If
further restrictions are imposed on Phenol, their members may start
importing Phenolic resin directly or substitute the material with PU resin.
The representative of Indian Laminate Manufacturer Association informed
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that laminate industry is a major consumer of Phenol Since availability of
Phenol is limited, their industry has to depend on imports. The Indian
standards are very old and need to be revised to match the international
practices.
The representative of Deepak Phenolics Ltd. informed the committee that
to promote "Make in India' and to encourage import substitution, they
have installed Phenol plant of annual capacity 2 lakh MTs at an
investment of Rs. 1600 crore. Since other countries including Thailand are
exporting Phenol in India at huge quantities at cheaper prices, they have
to shut down their operations. He requested the committee to make BIS
standards of Phenol as mandatory.
The Chairman stated that high level of purity ensures that the harmful
impurities are minimized to the maximum extent possible. If we can
ensure high purity, then there may not be any need for risk assessment
of impurity which will be present in very very low proportions. Also,
standards can be made mandatory for controlling unfair trade practices
as well as for protecting national security.
The representative of BIS informed that they are in the process of
reviewing/updating the existing standard of Phenol. Chairman advised
BIS to take immediate steps to update/review the existing standards of
Phenol. In the meantime, the process for making the standard mandatory
may be initiated.
65. Reading of the aforesaid Expert Committee minutes, it appears that
the Expert Committee approved making BIS standards mandatory in respect of,
inter-alia, phenol. It further appears that the views of the FIPPI were also
recorded in the said Expert Committee Meeting. It further appears that the
petitioners are seeking setting aside of the said recommendation of the Central
Government, inter-alia, making BIS standards mandatory in respect of the said
raw material. It further appears that in the said minutes it was noted that the
Page No.# 38/64
said meeting was conveyed to consider making BIS standards mandatory and
for that the Department proposed to initiate action under Section 16 of the BIS
Act, 2016 for making the BIS standards mandatory for the public interest, for
protection of human, animal or plant health, safety of the environment,
prevention of unfair trade practices and protection of National Security. It
further appears that the representative of BIS informed that they were in the
process of reviewing/updating the existing standard of Phenol. It further
appears that the Chairman advised BIS to take immediate steps to
update/review the existing standards of Phenol. It further appears that it was
decided in the said meeting that in the meantime, the process for making the
standard mandatory may be initiated in respect of phenol.
66. It further appears that various representations have also been filed
by the petitioners' company opposing the said proposal to make BIS standards
mandatory in respect of phenol and melamine.
67. Thereafter, a meeting was called by the Department of Chemicals &
Petrochemicals vide Notice dated 09.10.2019 on the subject 'Reduction of
excessive dependence on imports of chemicals & petrochemical sector'. From
the said notice, it appears that there was another minutes, wherein, it was
decided to make the BIS standards mandatory, inter-alia, on Phenol with subject
objective of reduction of excessive dependence on imports of chemical and
petrochemical sector. In the said meeting, it was mentioned that the Committee
had decided that the BIS in respect of the items mentioned in the list was
mandatory which included the raw material Phenol.
68. Apt at this juncture to refer to the Affidavit-In-Opposition filed on
behalf of the respondent Nos.1,2 & 3 on 14.12.2023, wherein it has been
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categorically averred that there is sufficient evidence available indicating the
hazardous impact of the two raw materials in question having higher impurities
than the permissible level.
69. Relevant paragraphs of the said Affidavit-In-Opposition are
reproduced hereunder for ready reference: -
"11. That with reference to the statements made in paragraph No.10,
the deponent begs to deny the correctness of the same. It is submitted
that TBT Agreement does not contain a distinction between 'legitimate'
and protectionist motivations for TBT measures. The TBT Agreement only
mentions a non-exhaustive list of 'legitimate' objectives in paragraph 2.2.
Paragraph 2.2 of the TBT Agreement is extracted below -
'2.2 Members shall ensure that technical regulations are not prepared,
adopted or applied with a view to or with the effect of creating
unnecessary obstacles to international trade. For this purpose, technical
regulations shall not be more trade- restrictive than necessary to fulfil a
legitimate objective, taking account of the risks non-fulfillment would
create. Such legitimate objectives are, inter alia: national security
requirements; the prevention of deceptive practices; protection of
human health or safety, animal or plant life or health, or the environment.
In assessing such risks, relevant elements of consideration are, inter alia:
available scientific and technical information, related processing
technology or intended end-uses of products.'
Thus, a technical regulation cannot be more-trade restrictive than
necessary to achieve a legitimate objective, and cannot create
unnecessary obstacles to international trade as per the WTO TBT
Agreement. All requirements are being met in the present case.
26. That with reference to the statements made in paragraph No.30,
the deponent begs to state that the Department of Chemicals and
Petrochemicals by itself has not conducted any study in the matter of
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Public, health, Safety and environment with regard to use of Phenol and
Melamine. But there is sufficient evidence available indicating the
hazardous impact of these chemicals having higher impurities than the
permissible level.
27. That with reference to the statements made in paragraph No.31,
the deponent begs state that BIS standards are made mandatory under
Section 16 of BIS Act after conducting stake holder consultations. Member
countries of WTO are also given an opportunity to raise their legitimate
objections against making the standards mandatory. It is stated that no
member country has filed any objection. The entire exercise is within the
stipulated Rules, Regulations of Indian statutes and WTO.
30. That with reference to the statements made in paragraph No. 34,
the deponent begs to deny the correctness thereof. It is submitted that the
measures adopted for phenol and melamine have been put in place
keeping in view the health, safety, environment and prevention of
deceptive practices.
41. That with reference to the statements made in paragraph No.45,
the deponent begs to submit that the contents thereof are not correct. It is
stated that the test certificates for standards in exporting country have
been mandated by the exporting country or are part of buyer-seller
requirements. The importing country is not obliged to accept the testing
certificates compliant to ISO standards and is permitted under the TBT
Agreement to specify its own requirements which each
importer/manufacturer will have to abide.
Para 5.4 of the TBT Agreement lays down that -
'5.4 In cases where a positive assurance is required that products
conform with technical regulations or standards, and relevant guides
or recommendations issued by international standardizing bodies
exist or their completion is imminent, Members shall ensure that
central government bodies use them, or the relevant parts of them,
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as a basis for their conformity assessment procedures, except
where, as duly explained upon request, such guides or
recommendations or relevant parts are inappropriate for the
Members concerned, for, inter alia, such reasons as: national
security requirements; the prevention of deceptive practices;
protection of human health or safety, animal or plant life or health,
or the environment; fundamental climatic or other geographical
factors; fundamental technological or infrastructural problems.'
Hence, the Respondents are well within their statutory limit to
specify testing procedures in deviation from ISO practices.
49. That with reference to the statements made in paragraph No.54, it
is submitted that Phenol is consumed in the manufacture of Pharma
products, cosmetics, mouth wash preparation etc. The impurities, if
present above the permissible limit, in Phenol can enter the human chain,
deteriorating the health.
50. That with reference to the statements made in paragraph No.55, it
is stated that the proposed measure passes the 'necessity' test as
required under GATT Article XX required for securing the compliance with
the objective being pursued, i.e., to protect human, animal or plant life or
health. This is one of the grounds for permissible deviation from
GATT commitments under Article XX(b) of GATT 1994."
70. Apt also to refer to paragraph Nos. 3 & 4 of the Additional Affidavit
filed on 28.06.2022 on behalf of the respondent Nos. 1, 2 & 3 in pursuance of
the order passed by this Court on 31.05.2022, which is reproduced hereunder
for ready reference: -
"3. That the deponent begs to state that the Department of Chemicals
& Petrochemicals has a mandate to make certain standards mandatory
under the BIS Act, 2016 to protect human, animal or plant health, safety
of the environment, or prevention of unfair trade practices, or national
security. In so far as proposal for making standard for Phenol as
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mandatory is concerned, the Department had stakeholder consultation
meeting on 01.10.2019, whereby views/comments of all stakeholders
including Federation of Indian Plywood and Panel Industry (FIPPI) were
considered and it was expressed in the meeting that high level of purity
of Phenol will ensure that harmful impurities are minimized to the
maximum extent possible. It was, therefore, decided to initiate the
process for making standard mandatory for Phenol. Simultaneously,
Bureau of Indian Standards (BIS) was requested to update/revise the
existing standard of Phenol as per the views expressed in the meeting.
Further to this, another meeting was held on 11.10.2019, and after
detailed deliberation, it was decided to make BIS standard as mandatory
for few chemicals including Phenol.
After stakeholder consultation meetings, after four months, a
vetted Draft Quality Control Order (QCO) was notified on WTO TBT
website on 10.02.2020, for seeking the comments of Member States of
WTO within stipulated 60 days. In the meantime, the petitioner i.e.
Century Plyboard Ltd had filed present writ petition.
After expiry of stipulated time 60 days for comments from Members
States of WTO, the QCO, in general is notified in Gazette of India after
settling all the concerns received from the Members States of
WTO/Stakeholders.
In view of the above, it is submitted that the all the stakeholders
were given adequate opportunity to represent their views/comments
during the stakeholder consultation meetings within the Department and
during the stipulated time of 60 days after uploading the Draft QCO on
WTO, TBT website. It is pertinent to mention that the Federation of Indian
Plywood and Panel Industry (FIPPI), was heard during the stakeholder
consultation meeting in the Department dated 01.10.2019.
4. That the deponent begs to state that in so far as proposal for
making standard for Melamine as mandatory is concerned, comments of
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stakeholders were sought vide letter dated 9th April, 2018 and were
considered for making standard mandatory for Melamine. It was
expressed that Melamine resins are used in thermosetting plastic and
also used in high pressure decorative laminates such as Formica,
melamine dinnerware and dry erase boards. Melamine foam is used as
insulation, soundproofing material and in polymeric cleaning products,
such as Magic Eraser. Melamine is sometimes illegally added to food
products in order to increase the apparent protein content. In this regard
stakeholder consultation meeting was held on 11.10.2019 and it was
decided to initiate the process for making standard mandatory for
Melamine. Keeping in view of the health, safety and environment also for
prevention of deceptive practices, specifically the National safety
and security, it was proposed to make the standard mandatory for
Melamine (IS 15623:2005).
The draft Quality Control Order (QCO) was notified on WTO TBT
website on 03.02.2020, for seeking the comments of Member States of
WTO within the stipulated time of 60 days. In the meantime, the
petitioner has filed instant writ petition.
After expiry of stipulated time of 60 days for comments from the
Members States of WTO, the QCO, in general is notified in Gazette of
India, after settling all the concerns received from the Member States of
WTO/Stakeholders.
In view of the above, it is submitted that the all the stakeholders
were given adequate opportunity to represent their views/comments
during the stakeholder consultation meetings within the Department and
during the stipulated time of 60 days after uploading the Draft QCO on
WTO, TBT website."
71. What transpires from the reading of the above averments as set out
in the Affidavit-In-Opposition as well as the Additional Affidavit filed on behalf of
the respondent nos.1, 2 and 3 is that paragraph 2.2 of the TBT Agreement
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permits in exceptional cases for making regulation trade restrictive in order to
fulfill a legitimate objective. It further appears that there are sufficient evidence
available with the Respondent Authorities indicating the hazardous impact of
these raw materials having higher impurities than the permissible level. It
further appears in view of the fact that phenol is consumed in the manufacture
of pharma products, cosmetic, mouth wash preparation etc. wherein impurities
is found to be present above the permissible limit, if the same enters into the
human chain, there would be serious deterioration of health. It appears that this
is one of the grounds for permissible deviation from GATT commitments under
Article XX (b) of GATT, 1994. Therefore, the proposed measures for making BIS
marking mandatory for phenol passes the necessity test as required under
Article XX of GATT, 1994, i.e., to protect human, animal or plant health safety of
the environment or prevention of unfair practices or national security. It further
appears that under BIS Act, 2016, it is imperative for the department of
chemicals and petrochemicals to make certain standards mandatory to protect
human, animal or plant health, safety of the environment or prevention of unfair
practices or national security. It further appears that the department held
stakeholders consultation meeting on 1.10.2019, whereby views/comments of
all stakeholders including FIPPI were considered and it was expressed in the
meeting that high level of purity of phenol will ensure that harmful impurities
are minimized to the maximum extent possible. It further appears that it was on
this very ground it was decided to initiate the process for making BIS standards
mandatory for phenol. It further appears that the BIS standards was requested
to update/revise the existing standard of phenol as per the views expressed in
the meeting. It further appears that another meeting was held on 11.10.19 and
after detailed deliberation, it was decided to make BIS standards mandatory for
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few chemicals including phenols. It further appears that after 4 months from the
stakeholders consultation meetings, a vetted draft Quality Control Order was
notified on WTO TBT website on 10.02.2020 for seeking the comments of
member states of WTO within stipulated 60 days. It appears that after the
expiry of the stipulated 60 days for comments of the member states of the WTO
the quality control order in general is notified in the Gazette of India after
settling all the concerns received from the Member States of the
WTO/stakeholders.
72. It further appears that in so far as proposal for making standard for
melamine as mandatory is concerned, comments of stakeholders were called for
by letter dated 9.4.2018 and were considered for making BIS standards
mandatory for melamine. It appears that melamine resins are used in
thermosetting plastic and also used in high pressure decorative laminates such
as Formica, melamine, dinnerware and dry erase boards. It further appears that
Melamine foam is used as insulation, soundproofing material and in polymeric
cleaning products, such as Magic Eraser and that Melamine is sometimes
illegally added to food products in order to increase the apparent protein
content. In this regard stakeholder consultation meeting was held on
11.10.2019 and it was decided to initiate the process for making standard
mandatory for Melamine. It appears that keeping in view of the health, safety
and environment also for prevention of deceptive practices, specifically the
National safety and security, it was proposed to make the standard
mandatory for Melamine (IS 15623:2005).
73. It further appears that the draft Quality Control Order in respect of
melamine was notified on WTO TBT website on 03.02.2020, for seeking the
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comments of Member States of WTO within the stipulated time of 60 days. It
further appears that after expiry of stipulated time of 60 days for comments
from the Members States of WTO, the Quality Control Order, in general is
notified in the Gazette of India, after settling all the concerns received from the
Member States of WTO/Stakeholders. Pertinent that the said two Quality
Control Orders have not been acted upon in view of the interim order passed by
this Court.
74. Therefore, it is apparent that all the stakeholders were given
adequate opportunity to represent their views/comments during the stakeholder
consultation meetings within the Department and during the stipulated time of
60 days after uploading the Draft Quality Control Orders on WTO, TBT website
in respect of both the raw materials in question.
75. It is crystal clear that the said decision of the Central Government in
recommending and the subsequent approval thereof for making BIS standards
mandatory for phenol and melamine is essentially a policy decision. It is a
settled law that Court cannot usurp the jurisdiction of decision makers in the
garb of judicial review. Making policies and executing them comes within the
sphere of activities of the executive. The Constitutional Court does not have the
expertise and domain knowledge to make policies or to amend them. On the
other hand, the executive has experts, professionals, administrators, advisor
etc. in a given field and has the expertise to make policies after taking into
consideration all aspects of the matter. Therefore, it is not the decision which
can be looked into by this Court, but the manner in which the decision has been
taken. It is only if the policy decision of the State is found to be grossly arbitrary
or irrational, the same can be judicially interfered with. In other words, the
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Constitutional Court does not act as Appellate Authorities examining the
correctness, suitability and appropriateness of a policy nor can be advisors to
the executive on matters of policy which the executive is entitled to formulate.
76. Reference is made to the decision of the Apex Court in the case of
Federation of Railway Officers Association Vs. Union of India reported
in 2003 4 SCC 289. Paragraph 12 of the said judgment and order is
reproduced hereunder for ready reference: -
"12. In examining a question of this nature where a policy is evolved by
the Government judicial review thereof is limited. When policy according to
which or the purpose for which discretion is to be exercised is clearly
expressed in the statute, it cannot be said to be an unrestricted discretion.
On matters affecting policy and requiring technical expertise the court
would leave the matter for decision of those who are qualified to address
the issues. Unless the policy or action is inconsistent with the Constitution
and the laws or arbitrary or irrational or abuse of power, the court will not
interfere with such matters."
77. Apparent thus, that in relation to policy matters, requiring in
technical expertise, the Constitutional Court ought to leave such matters to the
decision of the experts unless the policy is arbitrary or irrational.
78. Reference is also made to the decision of the Apex Court in Film
Festivals &Ors. Vs. Gaurav Ashwin Jain & Ors. reported in (2007) 4 SCC
737. Paragraph 16 of the aforesaid judgment is reproduced hereunder for ready
reference: -
"16. The scope of judicial review of governmental policy is now well
defined. Courts do not and cannot act as Appellate Authorities examining
the correctness, suitability and appropriateness of a policy, nor are
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courts advisors to the executive on matters of policy which the executive
is entitled to formulate. The scope of judicial review when examining a
policy of the Government is to check whether it violates the fundamental
rights of the citizens or is opposed to the provisions of the Constitution, or
opposed to any statutory provision or manifestly arbitrary. Courts cannot
interfere with policy either on the ground that it is erroneous or on the
ground that a better, fairer or wiser alternative is available. Legality of
the policy, and not the wisdom or soundness of the policy, is the subject
of judicial review (vide Asif Hameed v. State of J&K 4, Sitaram Sugar Co.
Ltd. v. Union of India5, Khoday Distilleries Ltd. v. State of Karnataka6,
BALCO Employees' Union v. Union of India 7, State of Orissa v. Gopinath
Dash8 and Akhil Bharat Goseva Sangh (3) v. State of A.P. 9)"
79. Reference is also made to the decision of the Apex Court in the case
of Silppi Constructions Contractors v. Union of India and Ors. reported
in 2020 16 SCC4 89. Paragraphs 19 and 20 of the aforesaid judgment are
reproduced hereunder for ready reference:-
"19. This Court being the guardian of fundamental rights is duty-bound to
interfere when there is arbitrariness, irrationality, mala fides and bias.
However, this Court in all the aforesaid decisions has cautioned time and
again that courts should exercise a lot of restraint while exercising their
powers of judicial review in contractual or commercial matters. This Court
is normally loathe to interfere in contractual matters unless a clear-cut
case of arbitrariness or mala fides or bias or irrationality is made out.
One must remember that today many public sector undertakings compete
with the private industry. The contracts entered into between private
parties are not subject to scrutiny under writ jurisdiction. No doubt, the
bodies which are State within the meaning of Article 12 of the
Constitution are bound to act fairly and are amenable to the writ
jurisdiction of superior courts but this discretionary power must be
exercised with a great deal of restraint and caution. The courts must
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realise their limitations and the havoc which needless interference in
commercial matters, can cause. In contracts involving technical issues the
courts should be even more reluctant because most of us in Judges' robes
do not have the necessary expertise to adjudicate upon technical issues
beyond our domain. As laid down in the judgments cited above the courts
should not use a magnifying glass while scanning the tenders and make
every small mistake appear like a big blunder. In fact, the courts must
give "fair play in the joints" to the government and public sector
undertakings in matters of contract. Courts must also not interfere where
such interference will cause unnecessary loss to the public exchequer.
20. The essence of the law laid down in the judgments referred to above
is the exercise of restraint and caution; the need for overwhelming public
interest to justify judicial intervention in matters of contract involving the
State instrumentalities; the courts should give way to the opinion of the
experts unless the decision is totally arbitrary or unreasonable; the court
does not sit like a court of appeal over the appropriate authority; the court
must realise that the authority floating the tender is the best judge of its
requirements and, therefore, the court's interference should be minimal.
The authority which floats the contract or tender, and has authored the
tender documents is the best judge as to how the documents have to be
interpreted. If two interpretations are possible then the interpretation of
the author must be accepted. The courts will only interfere to prevent
arbitrariness, irrationality, bias, mala fides or perversity. With this
approach in mind we shall deal with the present case."
80. Apt to refer to the decision of the Division Bench of Gujarat High
Court in Global Excess V. Union of India reported in2014 SCC Online Guj
15977, which is in the context of similar facts and circumstances. Paragraphs
28 to 35 of the aforesaid judgment are reproduced hereunder for ready
reference: -
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"28. In our opinion, the notification restricting the sale from 3rd July,
2013 onwards of the products which are not registered with the BIS
department is in the interest of the people at large because if something
goes wrong then nobody would be held responsible for the same and in
the process, the innocent consumer will suffer. We are also not impressed
by the submission that the second-hand computers are sold only after
due testing, upgrading, re-working and refurbishing which amounts to
manufacturing activities according to Section 2(f) of the Central Excise
Act, 1944. The order impugned mandates that such testing should be by
laboratories authorized by the respondent No. 2 -Bureau of Indian
Standards.
29. This is not a case where the parallel imports are completely stopped
or banned but are permitted subject to certain restrictions like submitting
the products for testing to the BIS recognized labs to comply with the
Order, 2012.
30. A lot many suggestions have been given by the petitioner in this
regard but we are afraid of it is not for this Court to consider such
suggestions and then direct the Government to look into the same. This
Court is not an expert in the field of electronics and information
technology and, therefore, should not ordinarily interfere with such
decisions taken by the Government.
31. The duty of the Court is to confine itself to the question of legality. Its
concern should be (i) whether the decision-making authority exceeds its
powers, (ii) committed an error of law, (iii) committed a breach of the
Rules of natural justice, (iv) reached a decision which no reasonable
person would have reached, or (v) abused its powers
32. Article 19 (1)(g) read with Article 19(6) of the Constitution of India
spells out fundamental rights given to the citizens to practice any
profession or carrying on any Occupation, trade or business so long as it
is not prevented or is within the framework of the regulation, if any. There
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cannot be any dispute that certain professions, occupations, trade or
business which are not in the interest of general public may be completely
prohibited while other may be permitted with reasonable restrictions. The
restrictions permitted to be imposed by clauses (2) to (6) of Article 19 must
be read as a whole, each throwing light on the scope of the other and that
the common thread running through these several provisions was the
ground of public policy understood in a comprehensive sense. The public
policy thus enforced might be founded on the principles of the common
law: vide for instance Egerton v. Eart Brownlow, (1853) 4 HLC 1 at p. 256
(G), where the House of Lords said:-
'No subject can lawfully do that which has a tendency to be
injurious to the public, or against the public good.'
33. Another instance which can be afforded is through, a leading case of
Nordenfelt v. Maxim Nordenfelt Guns & Ammunition Co., 1894 AC 535
(H), where the House of Lords had to deal with the scope of the common
law prohibition against improper restraint of trade. This principle of public
policy was not confined to that which the common law recognized or
enforced, and it extended equally to the public policy involved in the
enforcement of statutes.
34. Every public statute was enacted in the public interest and, therefore,
both public policy and public interest demanded its enforcement. The
public interest justifying the restrictions might, therefore, arise from the
very provisions of the enactment and might be grounded on the necessity
to prevent its evasion.
35. Having bestowed our thoughtful consideration to the matter, we have
reached to the conclusion that the view pressed upon by the learned
counsel appearing for the petitioner, that the public interest to justify
restrictions of the rights conferred by Article 19(1)(g) must arise from the
inherent nature of the particular trade, involves an unduly narrow
interpretation of the words employed in Article 19, Clause (6) and ought
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to be rejected. We see considerable force in the argument of the learned
counsel appearing for the respondents that, the restrictions permitted by
clauses (2) to (6) of Article 19 follow a pattern i.e. they are imposed by the
Legislature for the reasons of public policy. The aspect of public policy
involved in the facts of each of the several fundamental rights conferred
by the several sub-clauses of Article 19(1) might defer but one underlined
principle, requirement of public policy, runs through various clauses of
restrictions and pervades the scheme."
81. Reading of the aforesaid decision, it appears that the Gujarat High
Court in the context of a challenge being made, inter-alia, to the Electronics and
Information Technology goods (requirements for compulsory registration) Order
2012, dated 07.09.2012 and the notification issued pursuant thereto by the
Central Government under Section 10(1)(p) of the Bureau of Indian Standards
Act, 1986 read with Clause (fa) of the Bureau of Indian Standards Rules, 1987,
whereby sale of the products in question which are not registered with the BIS
Department was sought to be restricted, has held, inter-alia, that the Writ Court
is not an expert in the field of Electronics and Information Technology and
therefore should not ordinarily interfere with such decision taken by the
Government and that the duty of the Court is to confine itself to the question of
legality alone. Accordingly, the Gujarat High Court has dismissed the said writ
petition.
82. Reference in this regard is also made to the decision of the Division
Bench of Karnataka High Court in the Case of All India HDPE/PP Woven
Fabrics Manufactures Association vs. The Secretary. Government of
India in Writ Petition No. 287 of 2024, wherein the Karnataka High Court
has held that issuing a notification to impose certain quality standard under BIS
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Act, 2016 is an exercise of policy making power of the Government and this
Court would be "loathe" to interfere with such a policy decision of the
Government particularly of economic and quality standards. Paragraphs No.18
to 26 of the aforesaid judgment is reproduced hereunder for ready reference: -
"18. The Notification impugned, seeks to achieve a seal of Bureau of
Indian Standard ('BIS seal') in every raw material that is brought in, to
the manufacture of a final product. The Bureau of Indian Standards, as
observed hereinabove, is a national standards body which permits the
development, standardization and quality certification of goods and the
certification will be through BIS standard mark. If this is sought to be
achieved by the Union of India, through the Notification as a policy
decision, this Court exercising its jurisdiction under Article 226 of the
Constitution of India would be loathe to interfere with such a policy
decision of Government, particularly of economic and quality standards.
This Court does to sit over the decision of Government of India, to assess
the quality and direct that such steps should not be taken.
19. It is trite law that policies which are in the realm of regulatory,
economic and quality when questioned before the Court seeking judicial
review, the Court exercising its jurisdiction under Article 226 of the
Constitution would not interfere by sitting in the arm chair of experts, as
the authority statutory or otherwise is entitled to choose the course of
action, that it thinks fit or necessary and expedient in public interest. The
Courts have always exercised judicial restraint and circumspection over
the wisdom of policies of the Government or statutory authorities, save in
certain circumstances, where the policy is palpably or demonstrably in
flying foul of the tenets of Article 14 of the Constitution of India. This is
the only parameter that would permit the constitutional Courts to tinker
with any policy, more particularly a policy of the kind that is impugned in
the case at hand.
20. Reference being made to the judgment of Frankfurter J. of the U.S.
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Supreme Court in the case of TROP v. DULLES 1, becomes apposite.The
learned Judge, in his dissenting opinion, has observed as follows:
'57. ......All power is, in Madison's phrase, 'of an
encroaching nature'. Judicial Power is not immune against
this human weakness. It also must be on guard against
encroaching beyond its proper bounds, and not the less so
since the only restraint upon it is self-restraint..........
58. Rigorous observance of the difference between limits of power and
wide exercise of power -between questions of authority and questions of
prudence -requires the most alert appreciation of this decisive but subtle
relationship of two concepts that too easily coalesce. No less does it
require a disciplined will to adhere to the difference. It is not easy to
stand aloof and allow want of wisdom to prevail to disregard
one's own strongly held view of what is wise in the conduct of
affairs. But it is not the business of this Court to pronounce
policy. It must observe a fastidious regard for limitations on its
own power, and this precludes the Court's giving effect to its own
notions of what is wise or politic. That self-restraint is of the
essence in the observance of the judicial oath, for the Constitution
has not authorized the judges to sit in judgment on the wisdom of
what Congress and the executive Branch do'.
21.In yet another view Lord Justice Lawton in LAKER AIRWAYS v.
DEPARTMENT of TRADE has held as follows:
'In the United Kingdom aviation policy is determined by ministers
within the legal framework set out by Parliament. Judges have
nothing to do with either policy-making or the carrying out of
policy. Their function is to decide whether a minister has acted
within the powers given to him by statute or the common law. If
he is declared by a Court, after due process of law, to have acted
outside his powers, he must stop doing what he has done until
such time as parliament gives him the powers he wants. In a
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case such as this I regard myself, as a referee. I can blow
my judicial whistle when the ball goes out of play; but
when the game restarts Imust neither take part in it nor
tell the players how to play'.
22. The afore-quoted judgments are relied on in plethora of cases by the
Apex Court when faced with identical circumstances of judicial review of
a policy, be it administrative, economic or pricing.
23. A three Judge Bench of the Apex Court in the case of RAJEEV SURI V.
DELHI DEVELOPMENT AUTHORITY3 has held as follows:
'188. We may usefully borrow the dictum of Frankfurter, J. in
Morey v. Doud [Morey v. Doud, 1957 SCC OnLine US SC 105: 1
L.Ed. 2d 1485 :354 US 457 (1957)], noted with approval by this
Court in R.K. Garg [R.K. Garg v. Union of India, (1981) 4 SCC 675,
para 8: 1982 SCC (Tax) 30] (at SCC p. 691, para 8):
'that the Courts have only the power to destroy, not to
reconstruct. When these are added to the complexity of
economic regulation, the uncertainty, the liability to error,
the bewildering conflict of the experts, and the number of
times the Judges have been overruled by events self-
limitation can be seen to be the path to judicial wisdom and
institutional prestige and stability.'
In Premium Granites [Premium Granites v. State of T.N., (1994) 2
SCC 691, para 54], even this Court restated that it is not the
domain of the Courts to embark upon unchartered ocean of
public policy in an exercise to consider as to whether a
particular public policy is wise or a better public policy can
be evolved. Such exercise must be left to the discretion of
the executive and legislative authorities, as the case may
be. The Court may interfere only when the case involves
infringement of fundamental rights guaranteed by the
Page No.# 56/64
Constitution or any other statutory right.
189. A priori, the prescription of procedure to be deployed by the
administration in taking their decisions in the ordinary course of
their business is not for the Court to decide. More particularly, in
cases where decisions are taken in tune with a duly enacted
statutory scheme, it is not open to a court of law to disregard the
same on the specious reasoning that the governing statutory
scheme is deficient for the nature of or significance of the project.
Even if a Court finds it debatable, that can be no ground for the
Court to quash an action taken strictly in accord with the
prescribed procedure.
.........
202. A policy decision goes through multiple stages and factors in diverse indicators including socio-economic and political justice, before its final culmination. As per the nature of the project, the Government executes the project by taking certain steps legislative, administrative, etc. and it is this which comes under the radar of the Court. The increasing transparency in Government functioning by means of traditional and modern media is reducing the gap between citizens and Government and Government actions are met with a higher level of scrutiny on a real-time basis.
203. In a democracy, the electors repose their faith in the elected Government which is accountable to the legislature and expect it to adopt the best possible course of action in public interest. Thus, an elected Government is the repository of public faith in matters of development. Some section of the public/citizens may have another view point if not complete disagreement with the course of action perceived by the elected Government, but then, the dispensation of judicial review cannot be resorted to by the aggrieved/dissenting section for vindication of their point of view Page No.# 57/64 until and unless it is demonstrated that the proposed action is in breach of procedure established by law or in a given case, colourable exercise of powers of the Government. Therefore, it is important for the Courts to remain alive to all the attending circumstances and not interfere merely because another option as in the perception of the aggrieved/dissenting section of public would have been a better option.
204. As noted earlier, the Courts do not sit in appeal over the decisions of the Government to do merit review of the subjective decision as such. In Natural Resources Allocation [Natural Resources Allocation, In re, Special Reference No. 1 of 2012, (2012) 10 SCC 1, paras 149 and 184], this Court noted that Government decisions concerning public resources have an "intricate economic value" attached with them and to elevate the standard of review on the basis of a subjective understanding of the subject-matter being extraordinary would be dehors the review jurisdiction.
205. In Narmada Bachao Andolan v. Union of India [Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664], this Court observed that: (SCC p. 762, para 229) '229. It is now well settled that the courts, in the exercise of their jurisdiction, will not transgress into the field of policy decision. Whether to have an infrastructural project or not and what is the type of project to be undertaken and how it has to be executed, are part of policy-making process and the courts are ill- equipped to adjudicate on a policy decision so undertaken. The court, no doubt, has a duty to see that in the undertaking of a decision, no law is violated and people's fundamental rights are not transgressed upon except to the extent permissible under the Constitution. Even then any challenge to such a policy decision must be before the execution of the project is undertaken. Any Page No.# 58/64 delay in the execution of the project means overrun in costs and the decision to undertake a project, if challenged after its execution has commenced, should be thrown out at the very threshold on the ground of laches if the petitioner had the knowledge of such a decision and could have approached the court at that time. Just because a petition is termed as a PIL does not mean that ordinary principles applicable to litigation will not apply. Laches is one of them.'
206. The Government may examine advantages or disadvantages of a policy at its own end, it may or may not achieve the desired objective. The Government is entitled to commit errors or achieve successes in policy matters as long as constitutional principles are not violated in the process. It is not the Court's concern to enquire into the priorities of an elected Government. Judicial review is never meant to venture into the mind of the Government and thereby examine validity of a decision.
207. In Shimnit Utsch India [Shimnit Utsch India (P) Ltd. v. W.B. Transport Infrastructure Development Corpn. Ltd., (2010) 6 SCC 303], this Court, in para 52, observed thus: (SCC p. 325) '52.... The courts have repeatedly held that the government policy can be changed with changing circumstances and only on the ground of change, such policy will not be vitiated. The Government has a discretion to adopt a different policy or alter or change its policy calculated to serve public interest and make it more effective. Choice in the balancing of the pros and cons relevant to the change in policy lies with the authority. But like any discretion exercisable by the Government or public authority, change in policy must be in conformity with Wednesbury [Associated Provincial Picture Houses Ltd. v. WednesburyCorpn., [1948] 1 Κ.Β. 223: [1947] 2 All ER 680 (CA)] reasonableness and Page No.# 59/64 free from arbitrariness, irrationality, bias and malice.'
208. In State of M.P. v. Narmada Bachao Andolan [State of M.P. v. Narmada Bachao Andolan, (2011) 7 SCC 639, paras 36: (2011) 3 SCC (Civ) 875], the Court was dealing with an issue of rehabilitation of persons displaced due to the construction of the dam. It went on to observe that judicial interference in a policy matter is circumscribed, in the following words: (SCC pp. 670-71, paras 36-37) '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. (See Ram Singh Vijay Pal Singh v. Stateof U.P. [Ram Singh Vijay Pal Singh v. State of U.P., (2007) 6 SCC 44], VillianurIyarkkaiPadukappuMaiyam v. Union of India [VillianurIyarkkaiPadukappuMaiyam v. Union of India, (2009) 7 SCC 561] and State of Kerala v. Peoples Union for Civil Liberties [State of Kerala v. Peoples Union for Civil Liberties, (2009) 8 SCC 46].)
37. Thus, it emerges to be a settled legal proposition that the Government has the power and competence to change the policy on the basis of ground realities. A public policy cannot be challenged through PIL where the State Government is competent to frame the policy and there is no need for anyone to raise any grievance even if the policy is changed. The public policy can only be challenged where it offends some constitutional or statutory provisions.'
209. In Tisco [Tisco Ltd. v. Union of India, (1996) 9 SCC 709, para Page No.# 60/64 68], in para 68, the Court noted that whenever the issues brought before the Court are intertwined with those involving determination of policy and a plethora of technical issues, the Courts are very wary and must exercise restraint and not trespass into policy-making. Similarly, in Narmada Bachao Andolan v. Union of India [Narmada Bachao Andolan v. Union of India, (2000) 10 SCC 664, paras 226 to 235], in para 228, the Court noted that a project may be executed departmentally or by an outside agency as per the choice of the Government, whilst ensuring that it is done according to some procedure or set manner. Further, the Court should be loath to assume that the authorities will not function properly and that the Court should have no role to play.
210. Later in 2007, the Court restated the position in Directorate of Film Festivals [Directorate of Film Festivals v. Gaurav Ashwin Jain, (2007) 4 SCC 737, para 16], as follows: (SCC p. 746, para
16) '16. The scope of judicial review of governmental policy is now well defined. Courts do not and cannot act as appellate authorities examining the correctness, suitability and appropriateness of a policy, nor are courts advisors to the executive on matters of policy which the executive is entitled to formulate. The scope of judicial review when examining a policy of the Government is to check whether it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution, or opposed to any statutory provision or manifestly arbitrary. Courts cannot interfere with policy either on the ground that it is erroneous or on the ground that a better, fairer or wiser alternative is available. Legality of the policy, and not the wisdom or soundness of the policy, is the subject of judicial Page No.# 61/64 review[vide Asif Hameed v. State of J&K [Asif Hameed v. State of J&K, 1989 Supp (2) SCC 364: 1 SCEC 358], Shri. Sitaram Sugar Co. Ltd. v. Union of India [Shri Sitaram Sugar Co. Ltd. v. Union of India, (1990) 3 SCC 223), Khoday Distilleries Ltd. v. State of Karnataka [Khoday Distilleries Ltd. v. State of Karnataka, (1996) 10 SCC 304], Balco Employees' Union v. Union of India [Balco Employees' Union v. Union of India, (2002) 2 SCC 333), State of Orissa v. Gopinath Dash [State of Orissa v. Gopinath Dash, (2005) 13 SCC 495: 2006 SCC (L&S) 1225] and Akhil Bharat Goseva Sangh (3) v. State of A.P. [Akhil Bharat Goseva Sangh (3) v. State of A.P., (2006) 4 SCC 162]].
24. In terms of what is laid down in the afore-quoted judgments, what would unmistakably emerge is, for a Judge in terms of his inputs, cannot assume the role of a supreme adviser to the administration on policies governing innumerable activities of the State, particularly in today's context of over-expanding horizons which come into the ken of such policy making.
25. In the light of what is held hereinabove and the reason for which quality standard is insisted at the stage of raw material, it becomes unmistakably clear that this Court in exercise of its jurisdiction under Article 226 of the Constitution of India would not tinker with a Notification which wants to bring in quality usage, by necessitating a seal of the BIS at the stage raw material itself. The submission made to the contrary by the learned counsel for the petitioner is de hors merit. Even the communication by the Plastics Export Promotion Council, to the 3 rd respondent would not be of any avail, as it is not the opinion of the Government, as the Plastics Export Promotion Council is not the wing of the Government. It is at best created to promote plastic export, in the nation.
26. Therefore, if the quality emerges right from the word go, till the Page No.# 62/64 finished product, under the 'Make in India programme' it is only thenthat the country would be able to compete with others. A step towards that will not be interfered with by this Court except, that if the step towards that, depicts palpable and demonstrable arbitrariness, which is neither pleaded nor present. Except contending cartelization and nexus, there is no other submission made. These submissions are held to be untenable. Quality control in plastic manufacturing always refers to process of monitoring and inspecting various stages of manufacturing process to ensure that the final plastic products meet certain standards of quality. Therefore, every raw material now that is sought to be brought under BIS is only to make it a quality final plastic product, for it would not become hazardous to the environment and be of use to the general public and meet health and safety standards including food conduct regulations, as they are widely used in every walk of human life. If the product under the programme "Make in India" is sought to be exported under the tag "Made in India" quality insistence from the threshold would ensure that the final product would meet all the necessary global standards."
83. Reading of the aforesaid two decisions, what transpires is that both the Gujarat High Court and Karnataka High Court has held that decision relating to BIS, is a purely "policy decision" of the Government and the same being in the realm of regulatory, economic and quality, the writ Court would not ordinarily interfere by sitting in the arm chairs of experts as the authority, statutory or otherwise is entitled to choose the course of action, that it thinks fit or necessary in larger public interest. As such, when such policies are challenged before this Court under Article 226 of the Constitution of India, this Court ought to exercise judicial restraint and circumspection over the wisdom of the policies of the Government or statutory authorities except where the policy is palpably or demonstrably unreasonable or arbitrary and/or where the decision Page No.# 63/64 making authorities has exceeded or abused its powers.
84. Viewed from the above angle, it can be safely held that setting a basic level of quality standard for certain products irrespective of manufacturer's nationality by no stretch of imagination can be said to be violative of Article 14 and 19 (1)(g) of the Constitution of India. In-fact, the same is in larger public interest. That being so, the impugned recommendation and action for making BIS standards mandatory for the two materials in question are not inconsistent with the TBT Agreement. Hence, the arguments of Dr. A. Saraf, learned Senior Counsel appearing for the petitioners as regards the impugned recommendation being contrary to the TBT Agreement cannot be accepted.
85. Further, the arguments of Dr. Saraf, learned Senior Counsel as regards misuse of power so as to benefit the private interests of domestic producers is totally fallacious inasmuch as the subject standards will apply to both domestically manufactured or imported subject raw materials. Furthermore, the arguments of the learned Senior Counsel as regards the respondent No.3 not being the lawful competent authority to invoke section 16 and 17 of the BIS Act, 2016 is concerned, the respondent no.3 being the Joint Secretary to the Government of India, Ministry of Chemicals & Fertilizers, Department of Chemicals and Petrochemicals is competent for directing compulsory use of standard mark.
86. In the aforesaid backdrop of facts and circumstances of the case, it is apparent that in view of the high impurities present in the two chemicals in question, the Central Government has proposed to make BIS Standards mandatory in respect to the said two chemicals amongst others and after following the procedure mandated in the BIS Rules, the draft notifications have been published. It is further apparent that all stakeholders have been consulted Page No.# 64/64 by giving due opportunity of hearing and after consideration of their grievances etc. the notification for making BIS mandatory in respect of the two chemicals has been notified. The purpose of setting higher standard on the two subject raw materials is to protect the human health and overall eco system.
87. Thus, I am of the considered opinion that the impugned recommendation and directions thereof for use of standard mark in relation to the two raw materials in question is made in the larger public interest. That being so, this Court cannot interfere with the soundness and wisdom of a policy taken by the expert body of the Government in the larger public interest. That apart, this Court cannot decide on Technical and Scientific issues under Article 226 & 227 of the Constitution of India.
88. Accordingly, this Court finds no illegality, irrationality or arbitrariness in the decision-making process for making BIS standard mandatory in relation to the two raw materials in question and hence, the writ petition is devoid of any merit whatsoever.
89. Resultantly, the writ petition stands dismissed.
90. Interim order, if any, passed earlier stands vacated.
91. No order as to cost.
JUDGE Comparing Assistant