Karnataka High Court
M/S Om Traders vs The Union Of India on 9 February, 2018
Author: B.Veerappa
Bench: B. Veerappa
1
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 9TH DAY OF FEBRUARY, 2018
BEFORE
THE HON' BLE MR. JUSTICE B. VEERAPPA
WRIT PETITION Nos.58197-58198/2016
C/W
W.P. Nos.42295-42297/2016, 65486-65487/2016,
22952-22955/2017 (GM-RES)
IN W.P. Nos..58197-198/2016
BETWEEN:
M/S OM TRADERS,
SHOP NO.S-1, NO.49, OLD NO.298,
2ND FLOOR, OLD THARAGUPET,
BENGALURU-560053.
REPRESENTED BY ITS PROPRIETOR,
SRI.PUTTA SWAMY,
S/O MALLIKARJUNAIAH,
AGED ABOUT 42 YEARS ... PETITIONER
(BY SRI D.L.N. RAO, SENIOR COUNSEL FOR
SRI RAJESWARA P. N., ADVOCATE)
AND:
1. THE UNION OF INDIA,
REP. BY SECRETARY TO GOVERNMENT,
MINISTRY OF COMMERCE AND INDUSTRY,
DEPARTMENT OF COMMERCE,
NEW DELHI-110001.
2. THE UNION OF INDIA,
REP. BY SECRETARY TO GOVERNMENT,
2
MINISTRY OF FINANCE, DEPARTMENT OF
REVENUE, GOVERNMENT OF INDIA,
NORTH BLOCK, NEW DELHI-110 001.
3. THE DIRECTOR,
DIRECTORATE GENERAL OF
FOREIGN TRADE (DGFT) UDYOG BHAWAN,
H-WING, GATE NO.02,
MAULANA AZAD ROAD,
NEW DELHI-110011.
4. THE NARCOTICS COMMISSIONER,
CENTRAL BUREAU OF NARCOTICS,
19, THE MALL, MORAR,
GWALIOR-474006.
5. M/S. KANHAIYALAL & CO.,
A PARTNERSHIP FIRM,
REPRESENTED BY
MR. R. C. BORA,
HAVING OFFICE AT GATE NO.272,
JAWAJI BUWACHI WADI,
KASURDI, TALUK DAUND,
PUNE DISTRICT,
MAHARASTRA-412214. ... RESPONDENTS
(BY SRI PRABHULING K NAVADGI, ASG ALONGWITH
SRI SANJAY NAIR, CGC FOR R1 TO R4;
SRI DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI AJAY J. NANDALIKE, ADVOCATE FOR R5)
...
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO CALLING FOR THE RECORDS OF THE R-2
DATED 3.11.2016 LEADING TO ISSUANCE OF GUIDELINES
FOR REGISTRATION OF SALE CONTRACTS FOR IMPORT
OF POPPY SEEDS FROM CHINA [ANNEXURE-X] AND
QUASH THE SAME.
3
IN W.P. Nos.42295-42297/2016
BETWEEN:
M/S OM TRADERS,
SHOP NO.S-1, NO.49, OLD NO.298,
2ND FLOOR, OLD THARAGUPET,
BENGALURU-560053.
REPRESENTED BY ITS PROPRIETOR,
SRI.PUTTA SWAMY,
S/O MALLIKARJUNAIAH,
AGED ABOUT 42 YEARS ... PETITIONER
(BY SRI D.L.N. RAO, SENIOR COUNSEL FOR
SRI RAJESWARA P. N., ADVOCATE)
AND:
1. THE UNION OF INDIA,
REP. BY SECRETARY TO GOVERNMENT,
MINISTRY OF COMMERCE AND INDUSTRY,
DEPARTMENT OF COMMERCE,
NEW DELHI-110001.
2. THE UNION OF INDIA,
REP. BY SECRETARY TO GOVERNMENT,
MINISTRY OF FINANCE,
DEPARTMENT OF REVENUE,
GOVERNMENT OF INDIA,
NORTH BLOCK,
NEW DELHI-110 001.
3. THE DIRECTOR,
DIRECTORATE GENERAL OF
FOREIGN TRADE (DGFT),
UDYOG BHAWAN,
H-WING, GATE NO.02,
MAULANA AZAD ROAD,
NEW DELHI-110011.
4
4. THE NARCOTICS COMMISSIONER,
CENTRAL BUREAU OF NARCOTICS,
19, THE MALL, MORAR,
GWALIOR-474006.
5. M/S. KANHAIYALAL & CO.,
A PARTNERSHIP FIRM,
REPRESENTED BY
MR. AJIT BORA,
HAVING OFFICE AT GATE NO.272,
JAWAJI BUWACHI WADI,
KASURDI, TALUK DAUND,
PUNE DISTRICT,
MAHARASTRA-412214.
6. M/S. SACHIN SPICES
A PROPRIETORSHIP FIRM,
REPRESENTED BY ITS PROPRIETOR
SACHIN BORA,
HAVING OFFICE AT SURVEY NO.50,
JAWAJI BUWACHI WADI,
NARHE GAON, PUNE,
MAHARASHTRA-411037.
7. M/S RADHEY SHYAM RATANLAL,
A PARTNERSHIP FIRM,
HAVING OFFICE AT NO.6658,
GADODIA MARKET, KHARI BAOLI,
DELHI 110016.
8. SACHEE AGRO TRADING PVT. LTD.,
BARDANA MARKET, NEHRU PUTLA
ITWARI, NAGPUR-440002.
REPRESENTED BY ITS DIRECTOR,
MR. VAIBHAV CHAURASIA.
9. VANYA AGRO INTERNATIONAL PVT. LTD.,
C.33/45-D-1, K. CHANDUA,
CHITTUPUR, SIGRA,
5
VARANASI-200002.
REPRESENTED BY ITS DIRECTOR,
MR. VINEET KUMAR CHAURASIYA.
10. SARA INTERNATIONAL,
HOUSE NO.375, 2ND FLOOR,
BHAMTIPURA, ANAJ BAZAR,
ITWARI, NAGPUR-440002,
REPRESENTED BY ITS PROPRIOETOR,
MR. MANISH PRASAD ... RESPONDENTS
(BY SRI PRABHULING K NAVADGI, ASG ALONGWITH
SRI SANJAY NAIR, CGC FOR R1 TO R4;
SRI DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI AJAY J. NANDALIKE, ADVOCATE FOR R5 TO R7
SRI MADHUKAR DESHPANDE, ADVOCATE FOR R8 TO R10)
...
THESE WRIT PETITIONS ARE FILED UNDER ARTICLE
226 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE IMPUGNED NOTIFICATION DATED 29.7.2016
VIDE ANNEXURE T ISSUED BY R3 ETC.,
IN W.P. Nos.65486-65487/2016
BETWEEN:
M/S OM TRADERS,
SHOP NO.S-1, NO.49, OLD NO.298,
2ND FLOOR, OLD THARAGUPET,
BENGALURU-560053.
REPRESENTED BY ITS PROPRIETOR,
SRI.PUTTA SWAMY,
S/O MALLIKARJUNAIAH,
AGED ABOUT 42 YEARS ... PETITIONER
(BY SRI D.L.N. RAO, SENIOR COUNSEL FOR
SRI RAJESWARA P. N., ADVOCATE)
6
AND:
1. THE UNION OF INDIA,
REP. BY SECRETARY,
DEPARTMENT OF COMMERCE & INDUSTRY,
MINISTRY OF COMMERCE AND INDUSTRY,
NORTH BLOCK, NEW DELHI-110001.
2. THE UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE, NORTH BLOCK,
NEW DELHI-110 001.
3. THE DIRECTOR,
DIRECTORATE GENERAL OF
FOREIGN TRADE (DGFT) UDYOG BHAWAN,
H-WING, GATE NO.02, MAULANA AZAD ROAD,
NEW DELHI-110011.
4. THE NARCOTICS COMMISSIONER,
CENTRAL BUREAU OF NARCOTICS,
19, THE MALL, MORAR,
GWALIOR-474006.
5. M/S SHANUGA SPICES PVT. LTD.,
BUILDING A/20, AISHWARYA APARTMENT,
983/B, SHUKRAVEERPETH,
PUNE-411002.
6. M/S SUN ORGANIC INDUSTRIES PVT. LTD.,
A COMPANY INCORPORATED
UNDER THE PROVISIONS OF THE
COMPANIES ACT, 1956 HAVING
ITS REGISTERED OFFICE AT
NO.414, OSIAN BUILDING, 12,
NEHRU PALACE,
NEW DELHI-110019.
7
7. SACHEE AGRO TRADING PVT. LTD.,
BARDANA MARKET, NEHRU PUTLA
ITWARI, NAGPUR-440002.
REPRESENTED BY ITS DIRECTOR,
MR. VAIBHAV CHAURASIA.
8. VANYA AGRO INTERNATIONAL PVT. LTD.,
C.33/45-D-1, K. CHANDUA,
CHITTUPUR, SIGRA,
VARANASI-200002.
REPRESENTED BY ITS DIRECTOR,
MR. VINEET KUMAR CHAURASIYA.
9. M.R. IMPLEX,
NO.7, KALMATTU STREET,
NAGAPATTINAM DISTRICT,
NAGORE,
TAMILNADE-611002,
REPRESENTED BY ITS PROPRIETOR,
MR. BHAVA BAGURUDEEN SAHIB
10. SARA INTERNATIONAL,
HOUSE NO.375, 2ND FLOOR,
BHAMTIPURA, ANJA BAZAR,
ITWARI,
NAGPUR-440002,
REPRESENTED BY ITS PROPRIOETOR,
MR. MANISH PRASAD,
11. ASTRA MANAGEMENT SERVICES PVT. LTD.,
NO. C-15, QUTAB INTITUTIONAL AREA,
NEW DELHI-110016.
REPRESENTED BY ITS DIRECTOR,
12. SHREE ASSOCIATES,
THE PROPRIETORY CONCERN,
HAVING ITS OFFICE AT
SHOP NO.S-10, 2ND FLOOR, NO.49,
(OLD NO.226) OLD THARAGUPET,
REP. BY ITS PROPRIETOR,
8
LATE SRI K. SHANKAR RAO,
S/O K. GOPAL RAO,
AGED ABOUT 38 YEARS,
13. THUNGA TRADING CO.,
SHOP NO.S-5, NO.49, OLD NO.298,
OLD THARAGU PET ROAD,
BANGALORE-560053.
REP. BY ITS PROPRIETOR,
MR. MURTHY,
S/O SIDDAIDH,
AGED ABOUT 50 YEARS ... RESPONDENTS
(BY SRI PRABHULING K NAVADGI, ASG ALONGWITH
SRI SANJAY NAIR, CGC FOR R1 TO R4;
SRI G. SHIVADAS AND SRI HARI PRASAD M.S., ADVs. FOR
R5;
SRI VIKAS MAHENDRA, ADVOCATE FOR
SRI ARUN SRI KUMAR, ADVOCATE FOR R6;
SRI MADHUKAR DESHPANDE, ADVOCATE FOR R7 TO R11;
SRI S. VIVEKANANDA, ADVOCATE FOR R12;
SRI K.G. RAGHAVAN, SENIOR COUNSEL FOR
SRI B.S. VENKATA NARAYANA, ADVOCATE FOR R12)
....
THESE WRIT PETITIONS ARE FILED UNDER ARTICLE
226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH
THE IMPUGNED GUIDELINES FOR REGISTRATION OF
SALE CONTRACT FOR IMPORT OF POPPY SEEDS FROM
TURKEY DATED 28.11.2016 AND THE IMPUGNED PUBLIC
NOTICE DATED 5.12.2016 FOR IMPORT OF POPPY SEEDS
FROM TURKEY [ANENXURE-AK AND AL] ISSUED BY R-2 &
4 AND THUS RENDER JUSTICE.
IN W.P. Nos. 22952-22955/2017
BETWEEN:
M/S THUNGA TRADING CO.,
SHOP NO.S-5, NO.49, OLD NO.298,
9
OLD THARAGUPET,
BANGALORE-560 053.
REPRESENTED BY ITS PROPRIETOR,
MR MURTHY,
S/O SIDDAIAH,
AGED ABOUT 50 YEARS. ... PETITIONER
(BY SRI K.G. RAGHAVAN, SENIOR COUNSEL FOR
SRI B. S. VENKATANARAYANA, ADVOCATE)
AND:
1. THE UNION OF INDIA,
REPRESENTED BY SECRETARY,
DEPARTMENT OF COMMERCE & INDUSTRY
MINISTRY OF COMMERCE AND INDUSTRY
NORTH BLOCK,
NEW DELHI-110 001.
2. THE UNION OF INDIA,
REPRESENTED BY ITS SECRETARY,
DEPARTMENT OF REVENUE,
MINISTRY OF FINANCE, NORTH BLOCK,
NEW DELHI-110 001.
3. THE DIRECTOR
DIRECTORATE GENERAL OF
FOREIGN TRADE (DGFT)
UDYOG BHAWAN,
H-WING, GATE NO.02,
MAULANA AZAD ROAD,
NEW DELHI-110 011.
4. THE NARCOTICS COMMISSIONER
CENTRAL BUREAU OF NARCOTICS
19, THE MALL, MORAR,
GWALIOR-474 006.
5. M/S BORA AGRO FOODS,
SAMRAT HOUSE, 1ST FLOOR,
10
39D, 2/6, SHANKARSHETH ROAD,
PUNE-411037,
REPRESENTED BY ITS PARTNER
MR. RATILAL C. BORA ... RESPONDENTS
(BY SRI PRABHULING K NAVADGI, ASG ALONGWITH
SRI SANJAY NAIR, CGC FOR R1 TO R4;
SRI DHYAN CHINNAPPA, SENIOR COUNSEL FOR
SRI AJAY J. NANDALIKE, ADVOCATE FOR R5)
...
THESE WRIT PETITIONS ARE FILED UNDER
ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA
PRAYING TO QUASH THE NOTIFICATION DATED 29.7.2016
ISSUED BY THE R-3 (ANNEXURE-A) AND QUASH THE
IMPUGNED GUIDELINES FOR REGISTRATION OF SALE
CONTRACT FOR IMPORT OF POPPY SEEDS FROM TURKEY
VIDE DATED 28.11.2016 ISSUED BY THE R-3 (ANNEXURE-
B)
THESE WRIT PETITIONS HAVING BEEN HEARD AND
RESERVED FOR ORDERS, COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT
MADE THE FOLLOWING:
ORDER
In W.P. No.58197-58198/2016, the petitioner - M/s Om Traders has sought for the following reliefs:
i) Writ of Certiorari calling for the records of the 2nd Respondent in File No.N.22012/06/2015-NC-1 dated 03.11.2016, leading to issuance of 11 guidelines for Registration of Sale Contracts for Import of Poppy Seeds from China (Annexure-X) and quash the same.
ii) Writ of Certiorari calling for the records of the 4th Respondent in File No.XVI/13/22/N /PS/CC/2016 dated 04.11.2016, leading to issuance of Public Notice No.PS-11/2016 (Annexure- W) and quash the same.
2. In W.P. Nos.42295-42297/2016, the petitioner
- M/s Om Traders has sought for the following reliefs:
i) A writ in the nature of certiorari quashing the Impugned Notification bearing No.17/2016-20 dated 29.07.2016 (Annexure-T);
ii) Hence it is prayed that this Hon'ble Court may be pleased to stay all further proceedings on the file of the Respondents pursuant to Impugned Notification No.17/2016-20 dated 12 29.07.2016, pending disposal of the writ petition and thus render justice.
iii) Hence, it is prayed that this Hon'ble Court may be pleased to grant an order of Ad-Interim Injunction restraining the 4th Respondent herein from in any way acting with respect to import of Poppy Seeds pursuant to the entrustment of powers flowing from the Impugned Notification dated 29.07.2016 in Notification No.17/2015-20 pending disposal of the above writ petition and thus render justice.
iv) Hence, it is therefore prayed that this Hon'ble Court may be pleased to issue an order of writ or direction, more particularly a Writ of Certiorari calling for the records relating to the order of the 1st Respondent in Notification No.17/2015-20 dated 29.07.2016 (Annexure-T), quash the same and pass such other and further orders as may be deemed fit and proper and thus render justice.
13
3. In W.P. No.65486-65487/2016, the petitioner - M/s Om Traders has sought for the following reliefs:
a) Issue a writ or an order in the nature of a writ of certiorari, calling of the records of the Respondents, more particularly the 4th respondent and quashing the impugned Guidelines for registration of sale contract for import of poppy seeds from Turkey vide F.No.N99014/31/2012/NC-1 dated 28.11.2016 and the impugned public Notice No.PS-15/2016 dated 05.12.2016, for import of Poppy Seeds from Turkey (Annexures-AK and AL) issued by Respondents No. 2 and 4 and thus render justice.
4. Petitioner in W.P. Nos.58197-58198/2016, 42295-42297/2016 and 65486-65487/2016 is one and the same. The facts in all these writ petitions are similar. For the sake of convenience, facts are referred to as in Writ Petition Nos.58197-58198/2017. 14
I FACTS OF THE CASE
5. Petitioner is a registered dealer under Karnataka Value Added Tax Act, 2003 under the TIN bearing No.29941208697. He has also been issued an Importer and Exporter Code ('IEC' for short) by the office of the Joint Director General of Foreign Trade and his IEC No.07140211843. He is a dealer in spices, pepper, food, drinks, dry fruits and other cashew items. He obtained the IEC number for the purpose of commencing import of the aforesaid commodities.
6. It is further contended that in the course of its business, he sought to import poppy seeds from China and Turkey. Under the letter dated 9.5.2016, the petitioner applied to the 3rd respondent for registration of import contract for importing 540 Metric tonnes of poppy seeds from Turkey. It is further case of the petitioner that import of poppy seeds from China and 15 Turkey was being permitted in terms of the Foreign trade Policy in force from time to time, which envisaged submission of import contracts for specified quantities to the office of the 4th respondent who on receipt of the same would register the said contract, pursuant to which imports were permitted, in respect of the quantity mentioned in the said contracts.
7. The petitioner further contended that the precursor to the issue in respect of import of poppy seeds was the subject matter of Writ Petition No.22067/2013 (PIL) filed by Ayurveda Sevashram Kalyan Samithi before the Allahabad High Court and the Allahabad High Court by its order dated 29.11.2013 had made certain observations to be considered in respect of import of poppy seeds into India. In pursuance of the order passed by the Allahabad High Court, the Department of Revenue, Ministry of Finance, Government of India vide communication in No.F.No.N- 16 22012/3/2013-NC-I dated February-2014 addressed to the Narcotics Commissioner, Central Bureau of Narcotics, Gwalior has stated as under:
"2. The competent authority has approved the following guidelines for registering of import contracts by the Narcotics Commissioner:
i) For the current financial year (2013-
14), in which there are less than 2 months left, imports may be permitted on the basis of valid import contracts, subject to country caps. The caps for the countries may be determined by the Narcotics Commissioner after ascertaining the production and stocks of the respective countries. No imports would be allowed from a particular country, once the cap for the said country is reached.
To implement this decision, Narcotics Commissioner will have to be in regular touch with the Customs authorities of 17 the ports of import about the quantum of imports of poppy seeds already made in the year. He will also need to inform the ports when the cap for any particular country is reached so that no further imports from the said country take place from any port.
ii) For the FY 2014-15 onwards, the following steps will be taken by the Narcotics Commissioner:
(a) He will determine the exportable surplus of the exporting countries of poppy seeds so as to arrive at the country caps.
(b) Poppy seeds import contracts will be registered on first come first served basis, till the caps for the respective countries is reached.
(c) The import contracts will be valid for only 3 months. If the quantity mentioned in the contract is not imported in this period, or only partly 18 imported, the said quantity or the balance quantity will be released and can be allotted to other importers, again on first come first serve basis.
(d) The Narcotics Commissioner will seek the country of origin certificate, even at the time of registering of import contracts.
3. Receipt of this communication may please be acknowledged."
8. It is further case of the petitioner that in pursuance of the above, the public notice dated 29.5.2014 in F.No.XVI/4/93/N/PS/CC/2014 was issued by Respondent No.2 approving extension of validity for contracts (already registered with CBN) which were initially valid till 31.05.2015 to 30.06.2015, and the validity of such contracts were extended till 30.06.2015, as per Annexure-C. 19
9. It is further contended that on 8.7.2014, the Ministry of Finance, Department of Revenue, Government of India, New Delhi, once again issued detailed guidelines addressed to Respondent No.4 with regard to the registration of import contracts for import of poppy seeds into India, as per Annexure-D. In terms of the said communication, the provisional country caps were fixed in respect of import of poppy seeds from Turkey, China and Czech Republic. It was further mentioned that the same would be apportioned to various applicants by the Respondent No.4 on first- come-first-serve basis till the quantity of the country caps is reached provided that maximum quantity to be registered in respect of any particular applicant in the first instance would be 180 metric tons or 10 container loads. However, the said restriction of quantity for registration of import contract was not made applicable in respect of imports from China Czech Republic. 20
10. It is further case of the petitioner that vide public notice No.F.No.XVI/4/93/N/PS/CC/2014 dated 17.11.2014 the 4th respondent furnished the details of quantity of white poppy seeds available in Turkey for export to India as on 30.09.2014 and further informed that final country caps were to be determined by a committee comprising of the representatives of Respondent Nos.2,3 & 4. The petitioner further contended that vide communication dated 26.12.2014 the Director (NC) representing the Ministry of Finance, Department of Revenue, Government of India informed the Respondent No.4 for finalizing the country caps for import of poppy seeds from Turkey for the financial year 2014-15 and other guidelines relating thereto.
11. It is further case of the petitioner that vide two public notices issued by the Central Bureau of Narcotics, inviting applications from importers for registration of sale contracts for import of poppy seeds 21 into India for the year 2015-16, all importers were requested to furnish details of the poppy seeds imported by them duly endorsed by the Customs authorities.
12. The petitioner further contended that the details of total quantity of poppy seeds imported by 20.5.2015 and the details of imports alongwith the documents duly endorsed by the customs authorities were to be sent within 15 days to the e.mail address specified in the said public notice, failing which it was informed that their request for registration for import of poppy seeds during the year 2015-16 would not be considered and that they may be blacklisted for the future and vide public notice, all concerned with the import of poppy seeds were informed that no application for registration of import contracts would be received/accepted by hand or by post, before the dates specified for the receipt of the application for registration of sale contracts for import of poppy seeds. 22 It is further stated in the said public notice that the period for receipt of applications would be notified in the website of Respondent No.4 and that applications otherwise would be returned to the parties concerned and shall not be placed on record.
13. It is further case of the petitioner that the Respondent No.4 issued public notice No.PS/1 dated 4.6.2015 calling upon 24 importers and despite reminders including the petitioner herein had not submitted the required details alongwith the documents duly endorsed by the customs authorities and the said importers were called upon to furnish the details of the total quantity of the poppy seeds imported duly endorsed by the customs authorities latest by 10.06.2015 through e.mail.
14. It is also contended that the 4th respondent in pursuance of the public notice NO.PS/4/2015 calling for applications for registration of sale contracts for 23 import of poppy seeds from Turkey, informed that the applications would be accepted up to a limit of 18594 metric tons (25% more than the provisional cap) as fixed. It was stated that no application beyond the above limit would be accepted. It is further stated that all applications received after the above limit would be returned to the concerned applicants and would not be taken on record. It was further clarified in the said public notice that registration of import of poppy seeds would be issued only for import of 14875 metric tons i.e, provisional cap fixed for the financial year 2015-16. The said public notice was uploaded on the website of the Respondent NO.4 after office hours on 10.8.2015.
15. The petitioner further contended that as certain irregularities were noticed in respect of public notices PS-4/2015 dated 10.8.2015 and PS-5/2015 dated 18.8.2015, the same were challenged before the Madras High Court by another similarly placed importer 24 in W.P. No.27008/2015 and the Madras High Court granted an order of interim stay restraining the 4th respondent from processing the applications received in connection with the said public notices in any manner. It is the case of the petitioner that no further action should be taken on the applications received pursuant to public notices dated 10.8.2015 and 18.8.2015 stated supra.
16. It is further case of the petitioner that the 4th respondent in pursuance to guidelines issued by the 2nd respondent viz., Ministry of Finance had issued public notice No.PS-7/2015 dated 14.9.2015 in respect of registration of import contract for import of poppy seeds from Turkey. The said public notice was challenged before the Madras High Court by a similarly placed importer for being violative of Article 14 and Article 19(1)(g) of the Constitution of India in W.P. No.29806/2015 and the Madras High Court vide its 25 order dated 5.2.2016 quashed public notice as being opposed to constitutional guarantees and violative of Article 14 and Article 19(1)(g) of the Constitution of India.
17. It is further case of the petitioner that the Madras High Court in Writ Petition No.5019/2016 has categorically held that the 4th respondent has no authority either to formulate the policy or ration or allocate specific quantities to importers of poppy seeds, as was being done in the past and it was in such context that the public notices attributable to the 4th respondent in respect of the import of poppy seeds from China, Turkey, Czech Republic and other designated countries were struck down.
18. It is further case of the petitioner that aggrieved by the notification amending the import policy in respect of poppy seeds, contrary to statutory provisions and judicial pronouncements, Writ Petition 26 No.42295-97/2016 is filed challenging the jurisdiction of the 3rd respondent to issue the said notification as well the authority under which the powers were delegated to the 4th respondent.
19. It is further case of the petitioner that the impugned public notice and the guidelines are contrary to the binding judgments of this Court and the Madras High Court and the petitioner has no other alternative except to approach this Court under Articles 226 & 227 of the Constitution of India for the reliefs sought for.
20. In W.P. Nos.22952-22955/2017, the petitioner - M/s Thunga Trading Company has sought for the following reliefs:
(a) Issue a writ of certiorari or any other writ or order quashing the Notification bearing No.17/2015-20 dated 29.7.2016 issued by the 3rd respondent (Annexure-A).27
(b) Issue a writ of certiorari or any other writ or order quashing the impugned guidelines for registration of sale contract for import of poppy seeds from Turkey vide F.No.N99014/31/ 2012/NC-1 dated 28.11.2016 issued by the 3rd respondent (Annexure-B);
(c) Issue a writ of certiorari or any other writ or order quashing the public notice No.PS-15/2016 dated 5.12.2016, for import of poppy seeds from Turkey (Annexure-AE);
(d) Issue a writ of certiorari or any other writ or order quashing the draw of lots held on 27.4.2017 as evidenced by the public notice PS-3/2017, dated 27.4.2017 (Annexure-AN).
21. It is the case of the petitioner in W.P. No.22952-22955/2017 that he is a registered dealer doing business exclusively in poppy seeds registered under Karnataka Value Aided Tax Act, 2003 and he has applied for and obtained certificate of Importer and 28 Exporter Code (IEC) issued by the office of the Joint Director General of Foreign Trade, Bangalore for the purposes of commencing import of the aforesaid commodities and his IEC number is 0714011851. It is further case of the petitioner that in the course of its business, he sought to import 180 metric tons of poppy seeds from Turkey on the basis of a contract entered into with overseas suppliers and actually imported 90 MTs as per the import contract registered on 23.1.2015. It is further case of the petitioner that the final country cap fixed for import of poppy seeds from Turkey is 18558 MT and reading it alongwith Clause 4 of the public notice dated (Annexure-AE) all applicants are entitled to get registration for a maximum of 90 MT. Going by the country cap fixed and quota fixed for each applicant, only first 206 applicants in the priority list at Annexure-AN would be entitled for registration of the import contracts. The petitioner who is at serial No.292 is beyond the first 206 and it would therefore 29 not be entitled to get its contract registered. Therefore petitioner will not be able to do business in poppy seeds this year in the absence of import and if the registration of import contract is left to draw of lots in future also the petitioner does not have even a remote chance to continue his business. Hence W.P. Nos.22952- 22955/2017 are filed for the reliefs sought for.
II OBJECTIONS FILED BY THE CENTRAL GOVERNMENT
22. The Central Government filed objections to all these writ petitions contending that the 4th respondent issued notification dated 10.8.2015 wherein it had called for registration of contracts for import of poppy seeds from Turkey and consequentially issued another notification dated 18.8.2015 wherein it had detailed the list of applicants eligible for registration as per 1st respondent's letter dated 5.8.2015. It is contended that W.P. No.36202/2015 filed by M/s Unik Traders 30 challenging the notification dated 10.8.2015 was disposed of by this Court as having become infructuous.
23. It is also contended that a new public notice was issued by the 4th respondent, which provided for selection of applicants on the basis of draw of lots. As per the terms of the said new policy, the public notice dated 14.9.2015 was issued by the 3rd respondent and the same was subject matter of W.P. No.29806/2015 before the Madras High Court. The Madras High Court allowed the said writ petition only insofar as the classification of importers of A & B was concerned and the remaining notification was not disturbed. The said notification was also challenged by the petitioner before this Court in W.P. No.42816/2015. This Court rejected the said writ petition, against which Writ Appeal No.132/2016 was filed, wherein the petitioner was allowed to participate in the import process and the above notification was not disturbed based on the 31 decision of the Government to repeal such categorization of importers.
24. The respondent Nos.1 to 4 further contended that the impugned guidelines/public notice makes reference of application filed based on public notice dated 27.1.2016 and places reliance and accommodates such application, wherein the public notice was quashed by the Madras High Court. It is further contended that the petitioners have not applied for registration of import contracts with respect to import of poppy seeds from China under the previous public notice No.PS-1/2016. It is also contended that the respondents do not have any impediment to carry out the policy as no stay is in operation either in W.P. No.42295-97/2016 pending before this Court or in any other writ petitions. The allegations made by the petitioners cannot be considered and is liable to be rejected. Further the allegations of the petitioners that 32 the respondents have curtailed the free import of poppy seeds are completely false and baseless and all other grounds raised by the petitioners do not reveal that the public notice impugned is contrary to law or opposed to public policy and the constitutional guarantees.
25. It is further contended that upon perusal of the petitions, it is quite clear that the petitioners want to create an artificial demand for poppy seeds in the market by stalling the import of poppy seeds on false and frivolous grounds, as failure to import or non- import of poppy seeds in time would increase the demand of poppy seeds and due to shortage of the same, there would be consequential raise in prices and hence the market would suffer. The prayers sought by the petitioners seem to be with a motive to create demand and thereby lead to raise in prices. It is also stated that the petitioners are stalling the process of import of poppy seeds on one or the other pretext by 33 filing false and frivolous writ petitions and are in fact coming in way of functioning of respondents, which cannot be allowed to legally sustain and sought for dismissal of the writ petitions.
III RIVAL CONTENTIONS OF THE PARTIES
26. I have heard the learned counsel for the parties to the lis.
27. Sri D.L.N.Rao, learned Senior Counsel for the petitioner in W.P.Nos. 58197-58198/2016 c/w 42295- 42297/ 2016, WP Nos.65486-65487/2016, contended that, the power of the Central Government to make provisions relating to imports and exports, under Section 3(1) of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as the 'Foreign Trade Act'). Section 5 of the said Act pertains to Foreign Trade Policy and Section 6 pertains to Appointment of Director General and his functions. While reading the provisions of Sections 3 and 4, 34 learned Senior Counsel, contended that the Central Government, may, by the order published in the official gazette, make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. The Central Government formulated and announced the notification in the official gazette. The Foreign Trade policy may also in like manner amend that policy. He would further contend that, in view of the provisions of Sections 3 and 6 of the Foreign Trade Act, the Central Government may appoint any person to be the Director-General of Foreign Trade for the purpose of the Act. The Central Government may, by order published in the official gazette, direct that any power exercisable by it under the Act may also be exercised, in such cases and subject to such conditions, by the Director-General or such other officer subordinate to the Director General, as may be specified in the Order. He would further contended that, as per notification dated 29.07.2016 amending import policy 35 condition No.3 of Chapter 12 of ITC (HS), 2012 Schedule I (Import Policy) condition 3(c) imposes quantitative restriction, if any, per importer or any other relevant provisions as deemed necessary for implementation of National Policy on Narcotic Drugs and Psychotropic Substances, the Central Government has no power to restrict when the trade is free with regard to quantity restriction.
28. He further contended that Chapter IIIA of the Foreign Trade Act deals with power of the Central Government to impose quantitative restrictions. If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose such quantitative 36 restrictions on the import of such goods as it may deem fit.
29. While reading the provisions of Section 9A(4)(b) of the Foreign Trade Act, the definition of 'domestic industry', the learned counsel contended that under the provisions of Section 9, the Central Government has no power to impose restrictions. The very guidelines issued by the Under Secretary as per Annexure-AR, Government of India (Finance Ministry of Revenue) indicates that he has no power to restrict any importer.
30. He would further contend that there is no obligation on the authorities concerned with regard to the provisions of Section 3(4) read with Section 9A(4)(b) of the Foreign Trade Act and it is not the case of the Central Government that in order to protect the interest of Domestic Industry, restriction is made. While reading the provisions of Section 5 and 6 of the 37 Act, he would contend that under Section 6(3) of the Act, the power of the Central Government to proceed with the provisions of Section 3 and 5 is excluded. The impugned notification dated 29.07.2016 is issued under Section 3 of the Act for a period of 5 years and before conclusion of 5 years, the impugned amendment came to be issued within one year. Condition No.3(c) imposing quantitative restriction, if any, for importer is not permissible.
31. The learned Senior Counsel further contended that para 4 of the notification dated 29.07.2016 as to the effect of the notification issued by the Director General of Foreign Trade delegating the power to Revenue Department to frame the guidelines regarding alternative contracts with Narcotic Commission, Gwalior for import of poppy seeds is totally without jurisdiction and the Act does not empower such power. As per Annexure-AC1, Schedule-I, Import Policy under 38 Chapter-12 Exim Code 1207-91 whereunder poppy seeds restricted was free subject to condition 3 import policy. He would further contend that with regard to earlier import policy, the guidelines of restriction for import policy of poppy seeds from Turkey on 28.11.2016 issued by the Under Secretary, Government of India under Chapter III, Allocation of Provisional Country Cap III (i)(a), applicant shall be allowed to register sales contracts for the quantity applied for, or ninety (90) MT whichever is less. However, if the quantity available for allocation to the applicants is insufficient to allocate to all the applicants in the manner provided in III(i)(a) of the guidelines stated supra, selection of applicants shall be in accordance with the 'draw of lots', as contemplated under the guidelines III(i)(a) and the same is contrary to law.
32. He further contended that the Allahabad High Court, in the case of Ayurveda Sewashram Kalyan 39 Samiti Through Secretary, Allahabad vs Union of India through Secretary and 3 others in W.P. No.22067/2013 (PIL) dated 29.11.2013, recorded a finding at paragraph 6 and 16 regarding the affidavit filed by the Central Bureau of Narcotics (CBN) and affidavit filed by the Director General of Foreign Trade (DGFT) to the effect that the grievance of the petitioner is that the provisions of the Import Policy have not been scrupulously enforced, as a result of which there is an apprehension that poppy seeds, which are imported into India may have originated in countries where the opium poppy is not licitly or lawfully cultivated. Hence, it is urged that- (i) poppy seeds, being a byproduct of Narcotic produce must be regulated with caution and this is also part of the India's obligations under the Single Convention on Narcotic Drugs, 1961, and (ii) the Central Bureau of Narcotics (CBN) merely registers contracts for import without ascertaining the origin of poppy seeds. Before it registers a contract, CBN is 40 under an obligation to scrutinize as to whether (i) the country of origin has an available stock of poppy seeds for export, which is permitted under the Single Convention; and (ii) the country of origin is capable of exporting poppy seeds. It is also urged that CBN does not verify the certificate of origin prior to import. The CBN has registered contracts of between 1.5 to 2.00 lac metric tones, whereas the authorized quantity of production is between 50,000 to 80,000 metric tones.
33. The learned Senior counsel further contended that the affidavit which has been filed by DGFT states that registration of import contracts is the responsibility of CBN. However, Customs field formation at the point of entry are responsible for implementing the import policy and policy conditions which are prescribed. Customs Authorities are responsible for verifying the certificate from the competent authority of the exporting country which is required to be produced by the 41 importer at the time of import of poppy seeds. The importer is required to file a copy of such certificate along with other documents seeking clearance of the goods. Customs field formations are also responsible to ensure that poppy seeds are not imported from any country other than those designated in the notification dated 05.10.2012.
34. He further contended that the Registered Certificate dated 30.03.2016, Thunga Trading Company at Sl. No.5 and 6 wherein it is stated that the importer will have to submit Certificate of Origin issued by the Competent Authority of exporting country that opium poppy have been grown legally in that country as per the requirement of International Narcotics Control Board along with other requisite documents to the Custom Authorities before the clearance of the imported consignment. Thus, after clearance of every consignment of poppy seeds under the registration, the 42 importer within a week will send the details of poppy seed imported along with copies of Bill of Lading, Bill of Entry, Invoices, Certificate of Origin to the CBN, Gwalior, within a week of clearance. He further contended that Certificate of Origin issued by the competent authority and certificate issued by the Director General of Poppy and Alkaloid Affairs Department, Government of Turkey, to the effect that opium poppy was grown under licence in Turkey. The Bill of Entry for Home Consumption and passed out (02 x 20) loaded container as per Bill of Entry. Therefore, he contended that the impugned order passed by the respondent is totally without jurisdiction and they cannot impose the quantitative restriction per importer.
35. The learned Senior Counsel for the petitioners further contended that the Notification dated 30th March, 2016 issued by the Government of India, Ministry of Finance, Central Bureau of Narcotics, the 43 maximum quantity permitted to import by an importer shall be 90 metric tons of white poppy seeds and the validity was only up to 30th June, 2016. He also contended that that in the said notification, it is stated that in case of non-utilisation, the documents shall be returned to the Office within seven days after the date of expiry of the registration. There is no nexus between the fixation and the time fixed and it does not amount to free-trade as contemplated under the provisions of Section 3(4) of the Foreign Trade Act. He further contended that by reading of the provisions of Section 5 of the Foreign Trade Act, the Central Government may, from time to time, formulate and announce (policy) the export and import policy by notification in the Official Gazette. Under Section 3(1) of the said Act, the Central Government may, by the Order published in the Official Gazette, make provisions for the development and regulation of foreign trade by facilitating imports and increasing exports. He would further contend that the 44 Sub-clause (2) of Section 3 of the said Act has to be interpreted that the Central Government may also, by Order published in the Official Gazette, make provisions for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any.
36. The learned Senior Counsel for petitioners would further contend that the provisions of Section 3 (2) and 3(3) of the said Act refers only to goods referred under Sub-Section (2) deemed to be import or export. Sub-clause (4) of Section 3 of the said Act was inserted with effect from 27.8.2010 wherein it also refers that, no permit or licence shall be necessary for import or export of any goods. It was further contended that any order passed under Section 3 (2) of the said Act by the Central Government should necessarily follow the provisions of Section 19(3) of the Act and it would not apply to the notification issued by the Central Government under 45 Section 5 of the said Act. He stressed the words specified under Section 3(2), 3(3) and 3(4) of the said Act i.e., import and export of goods especially the goods of poppy seeds. The provisions of Section 3(2), 3(3) and 3(4) of the said Act apply only to goods and not for individual importer as contemplated in the amended conditions No.3(c) of the Policy.
37. The learned Senior Counsel further contended that the provisions of Section 11 of the Customs Act, 1962 provides for power to prohibit importation of goods; Clause (d) of Sub-section (2) of Section 11 of the said Act provides for prevention of shortage of goods of any description; and Clause (f) of Sub-section (2) of Section 11 of the said Act provides the prevention of injury to the economy of the Country by the uncontrolled import and export of gold or silver. He further contended that in view of the provisions of Sub- section (3) of Section 6 of the Foreign Trade Act, the 46 Central Government may by Order published in the Official Gazette, direct that any power exercisable by it under this Act (other than the powers under Sections 3, 5, 15, 16 and 19). Therefore, in the present case while issuing notification under Section 3 of the Act, the Central Government cannot delegate powers to the Revenue Department. The notification issued by the Government of India, Ministry of Commerce and Industries, Department of Commerce is without jurisdiction.
38. The learned Senior Counsel further contended that the provisions of Section 9A of the Foreign Trade Act prescribes quantitative restrictions. It refers again to importer of goods and not to any individual. Therefore the learned Senior Counsel submits that the notification dated 29.7.2016 bearing No.17/2015 issued by the Government of India, Ministry of Commerce and Industry, Department of Commerce delegating power to 47 Revenue Department under Section 3 of the Foreign Trade Act fixing Country Cap imposing quantitative restriction, if any, per importer or any other relevant provision as deemed necessary for the implementation of policy in Narcotics Drugs and Psychotropic Substances is contrary to the provisions of Sections 2, 3, 4 and 6(3), 11, 11(3) of the Foreign Trade Act. Therefore, as per condition No.4 of the Notification, the Department of Revenue has delegated the power to frame the detailed guidelines regarding registration of contracts with Narcotic Commissioner for importing of poppy seeds, which is impermissible in view of the provisions of Section 3(1), 3(2) and 3(3) of the Foreign Trade Act.
39. Sri D.L.N. Rao, learned Senior Counsel further submitted that the Notification dated 29.7.2016
- Annexure-AC issued by the Central Government of India, Ministry of Commerce and Industry, Department 48 of Commerce, under condition No.3(c) delegated to the Revenue Department which is totally barred under the provisions of Section 6(3) of the Foreign Trade Act. He would further contend that while registering the application, the Narcotic Commissioner, Gwalior, never insisted the applicants licitly/legally grown certificate of the Officer of the Turkey and he cannot insist the applicant while importing the poppy seeds. He would further contend that the impugned notification dated 29.7.2016 is issued in utter violation of the provisions of Sections 3(4) and 6(3) of the Foreign Trade Act. He would further contend that under Clause 17 of the National Policy on Narcotic Drugs and Psychotropic Substances, all contracts for import of poppy seeds shall be compulsorily registered with the Narcotic Commissioner. Before registering such contracts, the Narcotic Commissioner shall satisfy the Country from which the poppy seeds are proposed to be imported legally cultivates opium poppy and can produce the 49 quantity of seeds which are sought to be imported. Therefore, an individual application shall not be beyond the Country Cap fixed by Exporting Authority and not total of all the applicants. He would further contend that the notification dated 30.3.2016 states that the registration of the documents has to be made, but condition No.5 of the said notification stipulates that the importer will have to submit certificate of origin issued by the competent authority of exporting country that opium have been grown licitly/legally in that Country as per the requirements of the International Narcotic Control Board along with other requisite documents to the Custom Authorities before clearance of imported consignment.
40. The learned Senior Counsel, for the petitioners further contended that in the decision of the Allahabad High Court in the case of Ayurveda Sewashram Kalyan Samiti Thru Secretary -vs- Union of India, through 50 Secretary and three others in the PIL No.22067/2013 (PIL) dated 29.11.2013 the Central Bureau of Narcotics (CBN) has stated that while it is true that total registered quantity of import is not more than 1.5 to 2 lakhs metric tones per year and the actual quantity of import is not more than 10% to 15% of the registered quantity. In the affidavit, the CBN has further stated that, "at the time of registration, importers get themselves registered merely on the basis of an estimate of likely imports. However, at the time of actual import, an importer is required to furnish a certificate of proof of licitly grown poppy seeds from the competent authority of the exporting country which is verified by the customs authorities and the unutilized registration certificate against which import has not been effected is required to be surrendered back". The learned Senior Counsel while replying to the arguments advanced by the learned Additional Solicitor General in respect of the judgment in the case of M.R.F. Limited -vs- Inspector 51 Kerala Government and Others reported in (1998) 8 SCC 227 invited attention of the Court to para-13 of the said judgment wherein restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. There must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will naturally arise. If the two principles laid down not acceding, then Article 19(1)(g) of the Constitution of India attracts.
41. In support of his arguments, he invited the attention of the Court to the dictum of the Hon'ble Supreme Court in the case of Union of India -vs- Asian Food Industries reported in (2006) 13 SCC 542 at para- 26 holding that a citizen of India has a fundamental 52 right to carry out the business of export, subject, of course to the reasonable restrictions which may be imposed by law. Such a reasonable restriction was imposed in terms of the 1992 Act. At para-29 of the said judgment it has been held that undisputably, the power under Section 3 of the 1992 Act is required to be exercised in the manner provided for under Section 5 of the 1992 Act. The Central Government in exercise of the said power announced its Foreign Trade Policy for the years 2004-2009. It also exercised its power of amendment by issuing the Notification dated 27.6.2006. Export of all commodities which were not earlier prohibited, therefore, was permissible till the said date. He also invited attention of the Court to the law declared by the Hon'ble Supreme Court in the case of Parisons Agrotech Private Limited and Another -vs- Union of India and Others reported in (2015) 9 SCC 657 especially para-26 and contended that the said dictum was prior to the amendment and the said judgment is 53 not applicable to the facts and circumstances of the present case. Therefore, he sought to quash the impugned Notification, Guidelines, Public Notices by allowing the writ petitions.
42. Sri K.G. Raghavan, learned Senior Counsel appearing for the petitioners in W.P.Nos 22952- 22955/2017 while reiterating the prayers sought in the writ petitions with regard to Annexures-A, B, AE and AN contended that in the notification dated 5.12.2016 at para 3(iv) of Annexure-AE, it is stated that all applicants shall be allowed to register sales contracts for the quantity applied for, or ninety metric tonnes (90 MT) whichever is less. However, if quantity available for allocation to the applicants is insufficient to allocate to all the applicants, selection of application shall be done through 'draw of lots'. Draw of lots, if required will be held at 11 a.m. on 27.12.2016 in the Office of the Narcotic Commissioner, Gwalior and interested 54 applicants may remain present themselves during the proceeding of drawing of lots. A 'priority list' shall be made which shall be in accordance with the 'draw of lots' is totally without jurisdiction. He further contended that Annexure-AL is the Public Notice No.PS- 16/2016 dated 27.2.2016 and the list of applications received for registration of sales contract for import of poppy seeds from Turkey is in pursuance of public notice No.P.S.15/2016 dated 15.12.2016 where the name of the petitioner -Thunga Trading Company is found at Serial No.51 and in pursuance of the Public Notice No.PS -3/2017 dated 27th April, 2017 and the Minutes of draw of lots held on 27.4.2017 for drawing priority list of applicants, who had applied for registration of sales contract for import of poppy seeds from Turkey, the priority list was prepared mentioning the 'priority number' and 'serial number of slip picked' (name of the importer allotted under draw of lots) in the tabular columns and the petitioner's name was found at 55 No.292. Therefore he would contend that the competent country has fixed final Country Cap of 18,558 metric tones for import of white poppy seeds from Turkey. As per Clause 3(iv) of the Public Notice, dated 5.12.2016 (Annexure-AE), all the applicants are allowed to register sale contracts for the quantity applied for or 90 metric tones, whichever is less. Hence going by the country cap fixed and quota fixed for each applicant, only first 206 applicants in the priority list dated 27.4.2017 will be entitled for registration of the import contracts out of 471 applicants.
43. The learned Senior Counsel further contended that the subject of quantitative restrictions is dealt in Chapter IIIA of the Foreign Trade Act and the foreign trade policy as contemplated under Section 5 of the Act should be in consonance with the provisions of Section 9A of the Act. The provisions of Chapters II and IIIA should go together and the Government cannot choose 56 only Chapter-II ignoring Chapter-IIIA. Chapter-IIIA was inserted by Act No.25/2010 w.e.f. 27.8.2010 and that Chapter-II is the mother of Chapter-IIIA of the Act. The learned Senior Counsel further contended that the Central Government has not exercised the powers under Section 9A of the Foreign Trade Act while passing the impugned order. The power under Section 3 or 5 of the said Act cannot be exercised ignoring the provisions of Section 9A of the Act. The powers exercised by the Central Government restricting 90 metric tones per importer without following the procedure as contemplated under Section 9A of the Act cannot be sustained and there is no provision in the entire Act restricting 90 metric tones per importer. Therefore, he sought to allow the writ petitions.
44. Sri Dhyan Chinnappa, learned senior counsel appearing for Respondent no.5 in W.P. Nos.22952- 22955/2017 would contend that as per the Notification 57 dated 29th July 2016 issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce, amended Policy Condition No.3(c) imposing quantitative restriction, if any, per importer or any other relevant provisions as deemed necessary for implementation of National Policy on Narcotic Drugs and Psychotropic Substances, is without any basis and the said restriction is not contained in the National Policy on Narcotic Drugs and Psychotropic Substances issued by the Central Government. He would further contend that paragraph-17 of the National Policy on Narcotic Drugs and Psychotropic Substances clearly indicates that import of poppy seeds will continue till self-sufficiency is achieved. The policy is to allow import of poppy seeds from any country provided it has originated in any of the countries authorized internationally to grow opium poppy for export and that it has been legitimately cultivated. No import will be allowed from countries where opium poppy is not 58 legitimately cultivated. Therefore he would contend that the National Policy or the provisions of the Foreign Trade Act does not contain imposing of quantitative restrictions. The amendment of policy condition no.3 as per Notification dated 29.7.2016 is contrary to the provisions of Section 9A of the Foreign Trade Act. He would further contend that drawing of lots not contained either in the National Policy or under the provisions of the Foreign Trade Act. The restriction imposed in Annexure-A and guidelines of drawing of lots is in utter violation of Article 19(1)(g) of the Constitution of India. He would further contend that Article 19(6) of the Constitution of India prescribes that nothing in sub- clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and in particular, nothing in the said sub-clause shall 59 affect the operation of any existing law in so far as it relates to, or prevent the State from making any law.
45. In support of his contentions with regard to statutory interpretation, learned senior counsel invited the attention of the Court to the dictum of the Hon'ble Supreme Court in the case of UNION OF INDIA .vs. SHIV DAYAL SOIN & SONS (P) LIMITED reported in (2003)4 SCC 695 wherein the Hon'ble Supreme Court held as under:
6 .... ... As a canon of statutory interpretation, expressio unius est exclusio alterius, what is expressly mentioned in one place but not in another must be taken to have been deliberately omitted. The argument raised by the learned counsel for the appellant proceeds on assumption that a house by its meaning and definition is capable of being used exclusively for residential purposes and not for non-60
residential purposes which is not a correct interpretation."
46. Therefore he would contend that when the original national policy or the provisions of the Foreign Trade Act does not contain any quantitative restriction, the same cannot be imposed by way of amendment which is erroneous and contrary to the material on record and it is in violation of Article 19(1)(g) of the Constitution of India. The learned senior counsel for R5 further contended that the quantitative restriction made in terms of the guidelines not published in the official gazette and therefore, there is no order passed under Section 3(2) of the Act. Therefore he would contend that the entire arguments advanced by the learned counsel for the respondent - Central Government cannot be considered. Therefore he supports the case of the petitioners to allow the writ petitions. 61
47. Sri B.S. Venkatanarayana, learned counsel for the petitioner in W.P. No.22952-955/2017 adopts the arguments of the Sri D.L.N. Rao, learned senior counsel appearing for the petitioner in some of the writ petitions.
48. The learned Counsel for the petitioners also filed notes of submissions on behalf of the petitioners reiterating the arguments advanced by them. The same are placed on record.
49. Per contra, Sri Prabhulinga Navadgi, Additional Solicitor General of India contended that the provisions of National Policy on Narcotic Drugs and Psychotropic Stanstances particularly paragraphs-13 to 17 deals with cultivation of Opium Poppy, Cultivation of Opium Poppy for production of poppy seeds and import of poppy seeds and no import will be allowed from the countries where opium is not legitimately cultivated. All contracts for import of poppy seeds shall be 62 compulsorily registered with the Narcotics Commissioner, before registering such contracts, the Narcotics Commissioner shall satisfy that the country from which the poppy seeds are proposed to be imported legally cultivates opium poppy and can produce the quantity of seeds which are sought to be imported. He would further contend that the import of said product is an essential, condition to be fulfilled that it has to be legitimately cultivated and compulsorily registered country cap and the country cap will be determined every year.
50. The learned Additional Solicitor General sought attention to the definition of 'poppy straw' under the provisions of Section 2(18) as well as of the ND & PS Act and contended that the reference to the provisions of Section 18-A of the Foreign Trade Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. With regard to 63 Annexure-A produced in W.P.No.58197/2016, he submitted that the said W.P.No.22067/2013 is a public interest litigation filed before the Allahabad High Court and an interim order was granted on 29.12.2013. The Allahabad High Court at para-21 while referring to Manual and paragraph-17 of the National Policy has held that undoubtedly neither the Manual nor the National Policy can override a document such as the Import Policy which has statutorily force but, at the same time, the Narcotics Commissioner in the discharge of his functions must be guided by the role, which has been ascribed to him by both the aforesaid documents. The National Policy emphasizes that before registering such contracts, the Narcotics Commissioner must satisfy himself that the Country from which the poppy seeds are proposed to be imported (i) legally cultivates opium poppy; and (ii) can produce the quantity of seeds which are sought to be imported. The statements in both these policy documents constitute a matter of high 64 public policy for the Union Government in its stated object to combat the international trade in narcotic drugs and psychotropic substances. Central Bureau of Narcotics cannot denude itself of the obligation and function which has been cast upon the Narcotics Commissioner. He further contended that the Notification dated 5.10.2012 was for the financial year 2013-14 that is the policy introduced by the Ministry of Central Government for a period of five years. In the said notification, no quantitative restriction was imposed. He would further contend that Annexure-B, the notification dated 14.2.2014 was issued by the Government of India, Ministry of Finance, Department of Revenue in pursuance of Annexure-A. At para-2 of the notification it was mentioned in Sub-clause (ii) clause 2 that it was for the financial year 2014-15 and the steps to be taken by the Narcotics Commissioner under Sub-clause (ii) (a) to (d) to Clause 2 of the notification.
65
51. The learned Additional Solicitor General further submitted that to Annexure-D dated 8th July, 2014 and the Public Notice dated 14.9.2015 which were subject matter of W.P.No.42816/2015 as per Annexures-S and U and the final order came to be passed on 5.1.2016 dismissing the writ petition. The challenge made in respect of public notice dated 14.9.2015 was the subject matter in W.A.No. 132/2016. During the pendency of the appeal, the policy and guidelines dated 14.9.2015 were withdrawn and ultimately, the appeal came to be disposed of as having become infructuous. He would further contend that the Central Government has issued another public notice dated 27.1.2016 as per Annexure-R which was the subject matter of Writ Petition No.5019/2016 and the said notice was quashed. Now a reference is made to the notification dated 29.7.2016 wherein the petitioner has taken a specific contention that the concerned 66 Ministry has not approved or not signed the proceedings of the original record. Therefore, he sought to produce the original records showing that the concerned Ministry has approved the note at page 584 in the original records.
52. The learned Additional Solicitor General of India contended that in view of the provisions of Section 3(2) of the Foreign Trade Act, the Central Government is the authority to prohibit, restrict or otherwise regulate, the impugned Order passed by the Central Government in exercise of powers under the said Section. He also relied upon the definition of 'restrict' as mentioned in the Black Dictionary which means 'to a limited extent'. He further contended that under the provisions of Section 9A of the Foreign Trade Act, if the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are imported into India in such increased quantities and under such conditions as 67 to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose such quantitative restrictions on the import of such goods as it may deem fit. Admittedly, the Central Government has exercised powers under Section 3(2) and not under Section 9A of the said Act. Therefore, the threat to domestic industry would not arise. It was also contended that Sub-section (3) of Section 3 of the Foreign Trade Act stipulate that all goods to which any Order un sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under Section 11 of the Customs Act, 1962 and all the provisions of that Act shall have effect accordingly.
53. He further contended that clause 17 of the National Policy on Narcotic Drugs and Psychotropic Substances allows import of poppy seeds from any country provided it has originated in any of the countries authorized internationally to grow opium 68 poppy for export and that it has been legitimately cultivated. No import will be allowed from countries where opium poppy is not legitimately cultivates. All contract for import of poppy seeds shall be compulsorily registered with the Narcotics Commissioner. Before registering such contracts, the Narcotics Commissioner shall satisfy that the Country from where the poppy seeds are proposed to be imported, legally cultivates opium poppy and can produce the quantity of seeds which are sought to be imported. Therefore, he contended that from the beginning, the petitioners or the others, whatever the policy the Central Government has introduced, the Narcotics Commissioner shall implement the first policy of the Central Government i.e., first come first serve basis which was subject matter before this Court as well as other High Courts which were withdrawn. Therefore, the second policy was with regard to importer, serious importer and non serious importer. That was also not challenged. 69 Therefore, the Central Government after following the procedure under Section 3(2) of the Foreign Trade Act, 1992 has now issued impugned notification amending import policy condition No.3(c) and the same is accordance with law.
54. He further contended that in exercise of powers under Section 3(2) of the Act, the Central Government has issued the impugned notification independently. Section 3(2) of the Act has nothing to do with Section 9A of the Act which deals with serious injury to the domestic industry on account of increased quantity of import of any product. He also submitted that Section 9A of the Act came to be introduced by the Central Government with effect from 27.8.2010 and earlier there was a General Agreement on Tariffs and Trade (GATT) - an international treaty signed in the year 1947 which initially had 23 countries including India as its signatory. It was also agreed upon to promote 70 international trade by reducing and eliminating trade barriers and free trade between developed and developing countries. He further contended that in the year 1992, the GATT was replaced by the World Trade Organization by which time the participating Countries had increased from 22 to 123. Under the GATT, Article IX and XVIII provides for General Elimination of Quantitative Restrictions and Governmental Assistance to Economic Development. Somewhere in the year 1993, India placed quantitative restrictions on import of certain agricultural and industrial products to which the United States of America took exception and in the year 1997 a dispute (Consultation) was raised in the WTO against India complaining about the Quantitative Restrictions so imposed, but India justified the action that the balance of payment obligation demanded such qualitative restrictions and the Central Government introduced Chapter III-A (Section 9-A) to the Foreign 71 Trade Act with effect from 27.8.2010 in order to fulfill the international obligation in India.
55. The learned Additional Solicitor General further submitted that an analysis of Section 9-A of the Foreign Trade Act would indicate that the Central Government can impose Qualitative Restrictions:
i) only after a thorough study and enquiry of the serious injury that is to be caused to the domestic industry, on account of increased quantity of import of any product;
ii) That the Quantitative Restriction can be imposed for a period of four years with such extensions as the Central Government deems fit, which in no case can extend beyond a period of ten years from which date the restriction was first imposed;
iii) The Quantitative Restriction can be imposed only on a developed Country.72
Therefore, he would contend that the impugned order passed by the Central Government is only in exercise of powers under 3(2) and not under Section 9-A of the said Act.
56. Sri Prabhuling K. Navadagi, the learned Additional Solicitor General of India also contended that the guidelines are issued for determination of Country Cap prescribing public notice intimating the provisional Country cap to invite applications for registration of sales contracts for import of puppy seeds, allocation of provisional country cap. He invited attention of the Court that the guidelines for registration of contracts for the import of poppy seeds from Turkey and also to the guidelines dated 28.11.2016 regarding:
Clause-I of the for Determination of Country Cap.
Clause-II Application for Registration of Sale Contract;73
(i) Narcotics Commissioner shall issue public notice intimating the provisional country cap to invite applications for registration of sales contracts for import of poppy seeds.
(iv) Each importer with a specific Importer Exporter Code (IEC) shall submit only one (1) application and shall clearly indicate in his application the total quantity of poppy seeds sales contract they wish to register.
(v) Narcotic Commissioner shall register sales contract based on final country cap directly, in case such final country cap is available at the time of calling applications for registration of sales contract. In such case, allocation of quantity available under final country cap shall be made as per the allocation process in para III (i) to (iv) below.
In that case, surrendered quantity shall be allocated in the manner described in para IV
(ii).
III. Allocation of Provisional Country Cap: 74
(i)Narcotic Commissioner shall apportion the provisional cap between the applicant in the following manner:
(a) Applicants shall be allowed to register sales contracts for the quantity applied for, or ninety(90) MT, whichever is less.
(b) However, if the quantity available for allocation to the applicants is insufficient to allocate to all the applicants in the manner provided in III(i)(a) above, selection of applicants shall be done through 'draw of lots'. A 'priority list' shall be made which shall be in accordance with the 'draw of lots'.
(iv) Quantity available for allocation to applicants shall be allocated in the manner provided in III(i) above as per the priority list prepared through 'draw of lots' till the available quantity is exhausted.
75
(v) Those applicants who do not receive any allocation due to the provisional country cap getting exhausted shall be put on 'waitlist' for consideration after final country cap is determined.
IV. Allocation after Final Country Cap:
(ii) The differential quantity between the quantity registered after allocation of the provisional country cap less the quantity surrendered by the applicants, if any, and final country cap shall be allocated in the following manner:
(a) Applicants who were put on 'waitlist' due to the provisional country cap getting exhausted shall be allowed, in the order of the priority list drawn at the time of the allocation of provisional country cap, to register sales contracts for the quantity applied for, or ninety (90) MT, whichever is less.76
(b) Quantity still available for allocation, after allocation to the applicants in waitlist as specified at IV (ii)(a) above, shall be allocated to those applicants who had applied for registration of more quantity but were allowed registration for less quantity. Such applicants shall be allowed, in the order of the priority list drawn at the time of the allocation of provisional country cap, to register sales contracts for the quantity applied for (after deducting the quantity allocated for registration earlier), or ninety (90) MT, whichever is less. The process shall be repeated in the same manner till the quantity available for allocation is exhausted.
57. The learned Additional Solicitor General further contended that in view of Article 19(1)(a) of the Constitution of India, the claim is subject to Article 19(6) of the Constitution of India. He would further contend that Article 19(1)(g) is also subject to Section 3(4) of the Foreign Trade Act and hence the Narcotic 77 Commissioner cannot register more than the Country Cap fixed by the Country original (Turkey). He further contended that Clause-17 of the National Policy on Narcotic Drugs and Psychotropic Substances, and stressed his arguments with regard to three important conditions to be fulfilled:
(i) To grow opium poppy for export and that has been legitimately cultivated;
(ii) No import will be allowed from the
countries where opium poppy is
illegitimately cultivated.
(iii) All contracts of import of poppy seeds will be compulsorily registered with Narcotic Commissioner.
Therefore, he further contended that after fulfillment of all the three conditions, the Narcotic Commissioner shall satisfy that the country from which the poppy seeds are proposed to be imported, legally 78 cultivates opium poppy and can produce the quantity of seeds which are sought to be imported.
58. The Addl. Solicitor General of India further contended that the Central Government is the authority to fix the quantity of metric tons, exercising powers under Section 3(2) of the Foreign Trade Act. In support of his contention, he relied upon the dictum of the Hon'ble Supreme Court in the case of M/s Andhra Industrial Works vs. Chief Controller of Imports and others reported in (1974)2 SCC 348, with regard to restrictions made under Article 19(1)(g) and paragraph 11, to the effect that, the Policy Statement is the sheet-anchor of the petitioners' claim. Such a Policy Statement, as distinguished from an Import or Export Control Order issued under Section 3 of the said Act, is not a statutory document. No person can merely on the basis of such a Statement claim a right to the grant of an import licence, enforceable at law. Moreover, such a 79 Policy can be changed, rescinded or altered by mere administrative orders on executive instructions issued at any time. The Hon'ble Supreme Court further held that, be that as it may, on the basis of an Import Trade Policy an applicant has no absolute right, much less a fundamental right, to the grant of an import licence.
59. He also contended that any Policy matter, the Court should not interfere. In support of his contentions, he relied upon the judgment of the Hon'ble Supreme Court in the case of Sher Singh and others vs. Union of India and others reported in (1995)6 SCC 515 paragraph 7, to the effect that, the Court should be slow in interfering with matters of government policy except where it is shown that the decision is unfair, malafide or contrary to any statutory directions. There will be no justification for the Court to interfere with the policy of the Government merely on the ground of change in the policy. He further relied on 80 the judgment of the Hon'ble Supreme Court in the case of Union of India and another vs. International Trading Company and another reported in (2003)5 SCC 437, paragraph 22 and 23, to the effect, If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly.
81
60. He also invited attention of the Court to the judgment of the Hon'ble Supreme Court in the case of Michigan Rubber (India) Limited vs. State of Karnataka and others reported in (2012)8 SCC 216 with regard to Alternate Policy, paragraph 35; Bajaj Hindustan Ltd. vs.Sir Shadi Lal Enterprises Limited and another reported in (2011)1 SCC 640, paragraphs 40 to 47; and Parisons Agrotech (P) Lted. Vs. Union of India reported in (2015)9 SCC 657, paragraphs 25, 26, 27, 29 to 32. Sri Prabhuling K.Navadgi, learned Addl. Solicitor General, contended that reasonable restrictions can be imposed by the Central Government and relied upon the judgment of the Hon'ble Supreme Court in the case of MRF Ltd vs. Inspector Kerala Govt. and others reported in (1998)8 SCC 227, paragraph 13, and contended that the draw of lots is not a lottery. The Central Government, taking into consideration the entire surrounding circumstances and in the interest of large traders, business people and in the interest of 82 large participants has fixed the maximum quantity permitted to be imported at 90 metric tons. Such a policy of the Central Government should not be interfered by this Court and therefore, sought for dismissal of the writ petitions.
61. Sri Sanjay Nair, learned Central Government Advocate, filed Memo dated 13.12.2017 along with certified copy of the original file paper in relation to the notification dated 29.07.2016 with respect to the modification of the import policy for import of poppy seeds which has been signed by the Minister for Commerce and Industry on 29.07.2016. The same is placed on record.
62. Learned Addl. Solicitor General of India also filed written submission, reiterating the arguments advanced by him. The same is placed on record.
63. Sri Arun Sri Kumar, learned counsel appearing for respondent No.5 in W.P.No.65486- 83 65487/2016, while supporting the arguments advanced by the learned Addl. Solicitor General, would contend that the notification dated 29.07.2016 issued by the Central Government in exercise of powers under Section 3(2) of the Foreign Trade Act. He would further contend that earlier, petitioner filed W.P.No.36718/2016 for a writ of mandamus to form a clear cut policy. When the State Government has formed clear cut policy, the petitioner has no grievance at all. He further contended that out of 471 applicants, only 4 applicants have challenged the validity and they are habitual litigants. Out of 471 applicants, 326 applicants are permitted to import poppy seeds. Therefore, he sought to dismiss the writ petitions.
IV - POINTS FOR DETERMINATION
64. In view of the aforesaid rival contentions urged by the learned Counsel for the parties, the points that arise for consideration in these writ petitions are: 84
i) Whether the Central Government is justified in amending the condition No.3(c) of the import policy, imposing quantitative restriction, if any per importer under the provisions of Section 3 of the Foreign Trade (Development and Regulation) Act, 1992?
ii) Whether the issuance of guidelines for registration of sale
contracts for import of poppy seeds from Turkey and China Governments restricting the applicants to register sale contracts for the quantity applied for, or ninety metric tons, whichever is less and selection of applicants through 'draw of lots' are violative of fundamental rights guaranteed to the petitioners under Article 19(1)(g) of the Constitution of India?
iii) Whether the petitioners have made out a case to quash the public notices dated 4.11.2016 and 5.12.2016 issued by the Narcotics Commissioner, 85 Government of India, Ministry of Finance, Central Bureau of Narcotics in compliance of the guidelines issued by the Government of India, Ministry of Finance, fixing the final country cap for import of poppy seeds from Turkey and China Governments?
iv) Whether the petitioners have
made out a case to interfere with
condition No.3(c) of the amended
import policy issued by the Central Government, exercising powers under Articles 226 and 227 of the Constitution of India?
V - CONSIDERATION
65. I have given my anxious consideration to the arguments advanced by the learned Counsel for the parties and perused the entire material on record carefully.
86
66. The object of the Foreign Trade Act is that it is the driving force of economic activity. Technology, investment and production are becoming increasingly interdependent upon each other and foreign trade brings these elements together and spurs economic growth. The imports and exports (Control) Act, 1947 was made in different circumstances. Although it has been amended from time to time, the Act does not provide an adequate legal frame work for the development and promotion of India's foreign trade. Besides, in July, 1991 and August, 1991, major changes in trade policy were by the Government of India. The goals of the new trade policy are to increase productivity and competitiveness and to achieve a strong export performance. The Exports and Imports is a vital part of trade policy. The basic law governing 87 foreign trade must serve as an instrument to create an environment that will provide a strong impetus to exports, facilitate imports and render export activity more profitable. It has, therefore, been considered necessary to enact a new law repealing the existing law. The Act intends to achieve these objectives.
67. The Foreign Trade Act (22 of 1992) came into force with effect from 7.8.1992. An Act to provide for the development and regulation of foreign trade by facilitating imports into, and augmenting exports from, India and for matters connected therewith or incidental thereto. Chapter-II of the Foreign Trade Act deals with the powers of Central Government to make order and announce (Foreign Trade Policy). Under the said Chapter, Section 3 deals with powers to make provisions relating to imports and exports; Section 4 deals with continuance of existing orders; Section 5 deals with Foreign Trade Policy and Section 6 deals with 88 appointment of Director General and his functions. Chapter-IIIA is in respect of quantitative restrictions whereunder Section 9A deals with power of Central Government to impose quantitative restrictions. Under Chapter V, Section 15 deals with the provisions of appeal; Section 16 deals with Review and Section 17 deals with powers of Adjudicating and other Authorities. Under Chapter VI, Section 18 deals with protection of action taken in good faith; Section 18A deals with application of other laws not barred and Section 19 deals with power to make rules by the Central Government.
68. Keeping in view the object and the powers of the Central Government on various provisions of the Foreign Trade Act stated supra, the Central Government has issued guidelines for registration of import contract of poppy seeds by the Central Government on 8.7.2014 represented by Ministry of 89 Finance, Department of Revenue providing for determining country cap of legally grown poppy seeds by September, 2014 and apportionment of the same to various applicants on the basis of first come first serve at 180 metric tones per applicant and a second round for those who sought less than 180 metric tones, again on first come first serve basis. The final country cap was to be determined and contracts were registered only after 31.10.2014 and the same was published in the Notification dated 10.8.2015 which was the subject matter of the writ petition before this Court in W.P.No. 36202/2015 and also in W.P.No.27008/2015 before the High Court of Judicature and Madras. Subsequently, the said writ petitions were disposed of as having become infructuous, since the Central Government withdrew the said notifications.
69. After withdrawal of the earlier notification, the Central Government again issued public notice 90 bearing No.PS-7/2015 dated 14.09.2015, Annexure-Q, inviting the applications for registration of contract for import of white poppy seeds from Turkey wherein it was specified that applications shall be submitted by post/courier only. No application sent by hand will be accepted by the office and whereby categorization of imports was made into category 'A' and 'B'. That was the subject matter of writ petition before this Court in W.P.No. 42816/2015. This Court after hearing both the parties, by an order dated 05.01.2016 dismissed the writ petition holding that "this would only require the limited questions of whether the policy now sought to be adopted by the respondents of categorization of importers lacks a rational basis. As has been demonstrated by the respondents in relation to the actual figures as to the number of applicants and the quantity available for allocation, it cannot be said that it leads to any imbalance or is arbitrary. It may not be best policy that could have been adopted by the 91 respondents, but it cannot be characterized as illegal or arbitrary. The explanation offered by the respondents as to the reason and rationale in adopting a prescription of a provisional cap and a country cap, insofar as imports from Turkey is concerned is also acceptable. Hence the petition lacks merit and is hereby dismissed. However, the options suggested by the petitioner do not appear to be implausible of adoption, which the respondents should also take into consideration for future application and implementation in regulating trade".
70. It is also relevant to state that the very public notice dated 14.09.2015 was also subject matter of W.P.No.29806/2015 before the High Court of Judicature at Madras. The learned single Judge of the Madras High Court, after hearing both the parties, by the order dated 05.02.2016, allowed the writ petition. The impugned notice dated 14.09.2015, in so far 92 categorization as A and B category was set-aside and reserved liberty to the Narcotic Commissioner, Central Bureau of Narcotics, Gwalior, to issue fresh notice as per law. In the meanwhile, very present petitioner-M/s Om Traders, being aggrieved by the order of dismissal of W.P.No.42816/2015 dated 05.01.2016 filed W.A.No. 132/2016. On the statement made by the learned Addl. Solicitor General that, the notification categorizing the importers in two categories, i.e., A and B was withdrawn by the Government and Government has decided to treat all the applicants in one category, the appeal came to be disposed of on 10.03.2016.
71. The attempts made by the Central Government imposing guidelines on first cum first serve basis and public notice for categorization of imports into categories i.e., A and B, was unsuccessful and subsequently, prompted the Central Government to withdraw both the notifications at the instance of orders 93 passed by the Courts. Therefore, the Central Government thought fit to amend the import policy. Accordingly, the Ministry of Commerce and Industries, Department of Commerce, issued notification dated 29.07.2016 made in No.17/2015 to amend condition No.3(c) and on the basis of the said notification, the Narcotic Commissioner issued guidelines dated 28.11.2016 for registration of sale contracts for import of poppy seeds from Turkey and China Governments and the public notice issued by the 4th respondent/ Narcotic Commissioner dated 04.11.2016 and 05.12.2016 are the subject matter of present writ petitions.
72. The import of poppy seeds, is governed by EXIM (Imports and Exports) Policy. Chapter 12 of Import Policy heading 1207 applies, among other things, to poppy seeds. The poppy seeds is governed by Exim Code heading 1207 91 00. The policy 94 contemplates import of poppy seeds subject to certain conditions which have been specified. Condition No.3, as it was originally provided the following stipulations for import of poppy seeds.
"2. (3)Import of Poppy Seeds (HS Code:
120791 00) shall be allowed subject to the following conditions:
(a) Import permitted only from
Australia, Austria, France, China,
Hungary, the Netherlands, Poland, Slovakia, Spain, Turkey and Czech Republic, United Kingdom, Democratic People's Republic of Korea, Macedonia, Germany and Ukraine;
(b) The importer shall produce an appropriate certificate from the competent authority of the exporting country that Opium Poppy have been grown licitly/ legally in that country;
and 95
(c) All import contracts for this item shall compulsorily be registered with the Narcotics Commissioner, Gwalior prior to import."
73. The amendment to the aforesaid condition was brought into force, by notification dated 26.07.2016. As originally framed condition No.3 contained three stipulations, by amended notification, condition Nos.(a) and (b) are not altered. Condition No.3(c) as amended, in addition to existing one is, "All import contracts for this item shall compulsorily be registered with the Narcotic Commissioner, Gwalior, prior to import in accordance with the guidelines issued by the Department of Revenue, which may, inter-alia, include fixing of country caps, imposing quantitative restrictions, if any, per importer, or any other relevant provisions as deemed necessary for implementation of National Policy on Narcotic Drugs and Psychotropic 96 Substances". That is challenged in the present writ petitions.
VI. CONSTITUTIONAL PROVISION
74. It is also undisputed fact that India is a signatory to Single Convention on Narcotic Drugs, 1961. The National Policy on Narcotic Drugs and Psychotropic Substances notes that narcotic drugs and psychotropic substances have several medicinal and scientific reasons, but they can be and are also abused and trafficked. India's approach towards narcotic drugs and psychotropic substances is enriched in Article 47 of the Constitution of India, which reads as under:
Article 47- Duty of the State to raise the level of nutrition and the standard of living and to improve public health: The State shall regard the raising of the level of nutrition and the standard of living of its people and the improvement of public health as among its primary duties and, in 97 particular, the State shall endeavour to bring about prohibition of the consumption except for medicinal purposes of intoxicating drinks and of drugs which are injurious to health.
75. The principle of preventing use of drugs except for medicinal use was also adopted in three international conventions on drug related matters, viz.,
(a) The Single Convention on Narcotic Drugs Act, 1961,
(b) The Convention on Psychotropic Substances of 1971,
(c) The United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988.
Therefore, we must, however, deal with caution and circumspection, and not allow the proceedings to be misused to protect a business or commercial interest taking into consideration the paramount sovereign 98 interest of the nation is secured and not promoting a private business interest. The amended policy governing the import of poppy seeds prescribe three conditions subject to which special imports would be allowed. Hence, while policy allows free import of poppy seeds, such import is subject to those conditions which have been prescribed.
76. The import policy casts upon the Central Bureau of Narcotics (CBN) which is a specialized body, the duty of registering contracts. The obligation which has been cast upon CBN of registering contracts is with a stated public purpose of protecting the due implementation of the policy of the Government of India in permitting import of poppy seeds from non- designated countries. It is in pursuance of that policy that the conditions of the notification require a certificate that the poppy seeds originate in a country where opium poppy is grown licitly or legally. The 99 import policy is a statutory document enacted in pursuance of the Import and Export Control Act, 1947. The policy entrusts the duty of registering contracts upon a specialized regulatory body viz., CBN.
77. Clause 17 of The National Policy on Narcotic Drugs and Psychotropic Substances, specifically adverts the role of Narcotic Commissioner before registering the contracts, as under:
"17. Import of poppy seeds will continue till self-sufficiency is achieved. The policy is to allow import of poppy seeds from any country provided it has originated in any of the countries authorized internationally to grow opium poppy for export and that it has been legitimately cultivated. No import will be allowed from countries where opium poppy is not legitimately cultivated. All contracts fro import of poppy seeds will be compulsorily registered with the Narcotic Commissioner. Before registering such contracts, the Narcotics 100 Commissioner shall satisfy that the country from which the poppy seeds are proposed to be imported legally cultivates opium poppy and can produce the quantity of seed which are sought to be imported."
78. The National Policy emphasizes that before registering such contracts, the Narcotics Commissioner must satisfy himself that the country from which the poppy seeds are proposed to be imported (i) legally cultivates opium poppy, (ii) can produce the quantity of seeds which are sought to be imported. The policy constitutes a matter of high public policy for the Union Government in its stated object to combat the international trade in narcotic drugs and psychotropic substances.
79. The substance of the case of the petitioners in the present writ petitions is that the impugned amended notification issued by the Central Government imposing 101 quantitative restriction of 90 MT of white poppy seeds per importer is totally without jurisdiction and there is no nexus between the fixation and the time fixed. It does not amount to free trade as contemplated under Section 3(4) of the Foreign Trade Act and further contended that in view of the provisions of Section 5 of the Foreign Trade Act, the Central Government may, from time to time, formulate and announce policy to export and import by notification in the official gazette. Under Section 3(1) of the Act, the Central Government makes provision for the development and regulation of Foreign Trade. Sub clause (2) of Section 3 of the Act has to be interpreted that the Central Government may also, by order published in the official gazette, make provisions for prohibiting, restricting or otherwise regulating, in all cases or specific classes of cases and subject to such exceptions, if any. The provisions of Section 3(2) and 3(3) of the Act refers only to goods referred under subsection (2) deemed to be import or 102 export. Sub clause (4) of Section 3 of the Act was inserted with effect from 27.08.2010 which also refers that no permit or licence shall be necessary for import or export of any goods. It was further contended that the order passed by the Central Government under Section 3(2) of the Act should necessarily follow Section 19(3) of the Act and it would not apply to the notification issued by the Central Government under Section 5 of the Act. It was further contended that it is not the case of the Central Government that in order to protect the interest of domestic nature, restriction is made. If the Central Government wants to protect domestic industry, then the Central Government can issue notification under Section 9A of the Foreign Trade Act, which prescribes quantitative restrictions. It refers to importer of goods and not any individual and the impugned notification issued on 29.07.2016 delegating the power to revenue department under Section 3 of the Foreign Trade Act fixing the country cap imposing 103 quantitative restrictions, if any, per importer or any other relevant provisions as deemed necessary for implementation of the policy of Narcotic Drugs and Psychotropic Substances is contrary to the provisions of Sections 2, 3, 4, 6(3), 11 and 11(3) of Foreign Trade Act. As per condition 4 of the notification, the revenue department has been delegated with the power to frame detailed guidelines with regard to registration of contracts with Narcotics Commissioner, Gwalior, for importing poppy seeds which is impermissible in view of the provisions of Sections 3(1), 3(2) and 3(3) of the Foreign Trade Act. It was further contended that imposing 90 MT quantitative restrictions is in utter violation of Article 19(1)(g) of the Constitution of India.
80. The substance of the case of the respondents and the contesting respondents i.e., Government of India is that, all contracts of import of poppy seeds shall be compulsorily registered with the Narcotics 104 Commissioner. Before registering such contracts, the Narcotics Commissioner shall satisfy that country from which the poppy seeds are proposed to be imported, legally cultivates opium poppy and can produce quantity of seeds which are sought to be imported. It is contended that for the import of said product, the essential condition to be fulfilled is that, it has to be legitimately cultivated and compulsorily registered and country cap will be determined every year. It is however, contention of the Central Government that under Section 3(2) of the Foreign Trade Act, the Central Government is the only authority to prohibit, restrict or otherwise regulate the import or export of goods or services or technology. According to the Central Government, the definition of the word 'restriction' as mentioned in Black Dictionary is, 'to a limited extent'. Section 9(A) of the Foreign Trade Act stipulates that, if the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are imported 105 into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the official gazette, impose such quantitative restrictions on the import of such goods as it may deem fit. The Central Government, while issuing the impugned notification exercised powers under provisions of Section 3(2) of the Act and not under Section 9(A) of the Act. Therefore, the question of threat to the domestic industry would not arise. It was further contended that Section 3(3) of the Foreign Trade Act stipulates that, All goods to which any Order under sub Section (2) applies shall be deemed to be goods the import or export of which has been prohibited under Section 11 of the Customs Act, 1992 and all the provisions of that Act shall have effect accordingly.
106
81. It is further contended that clause 17 of the National Policy on Narcotic Drugs and Psychotropic Substances, allows import of poppy seeds from any country provided it has originated in any of the countries authorized internationally to grow opium poppy for export and that it has been legitimately cultivated. No import will be allowed from countries where opium poppy is not legitimately cultivated. All contracts for import of poppy seeds will be compulsorily registered with the Narcotics Commissioner and before registering such contracts, the Narcotics Commissioner shall satisfy that the country from which poppy seeds are proposed to be imported legally cultivates opium poppy and can produce the quantity of seeds which are sought to be imported. Therefore, it was contended that the prayer made in the writ petition has to be dismissed.
107VII. RELEVANT PROVISIONS OF THE FOREIGN TRADE (DEVELOPMENT AND REGULATION) ACT, 1992.
82. In view of the aforesaid contentions and the arguments advanced, it is worthwhile to consider the provisions of Sections 3, 5 and 9A of the Act, which reads as under:
3. Powers to make provisions relating to imports and exports.--(1) The Central Government may, by Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports.
(2) The Central Government may also, by Order published in the Official Gazette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the 1[import or export of goods or services or technology]: 108
[Provided that the provisions of this sub- section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefits under the foreign trade policy or is dealing with specified services or specified technologies.] (3) All goods to which any Order under sub-section (2) applies shall be deemed to be goods the import or export of which has been prohibited under section 11 of the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.
[(4) Without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export of any goods, nor any goods shall be prohibited for import or export except, as may be required under this Act, or rules or orders made thereunder.] 109
5. Foreign Trade Policy.--The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy:
Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette.
9A. Power of Central Government to impose quantitative restrictions.-- (1) If the Central Government, after conducting such enquiry as it deems fit, is satisfied that any goods are imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, it may, by notification in the Official Gazette, impose such 110 quantitative restrictions on the import of such goods as it may deem fit: Provided that no such quantitative restrictions shall be imposed on any goods originating from a developing country so long as the share of imports of such goods from that country does not exceed three per cent. or where such goods originate from more than one developing country, then, so long as the aggregate of the imports from all such countries taken together does not exceed nine per cent. of the total imports of such goods into India.
(2) The quantitative restrictions imposed under this section shall, unless revoked earlier, cease to have effect on the expiry of four years from the date of such imposition: Provided that if the Central Government is of the opinion that the domestic industry has taken measures to adjust to such injury or threat thereof and it is necessary that the quantitative restrictions should continue to be imposed to prevent such injury or threat 111 and to facilitate the adjustments, it may extend the said period beyond four years:
Provided further that in no case the quantitative restrictions shall continue to be imposed beyond a period of ten years from the date on which such restrictions were first imposed.
(3) The Central Government may, by rules provide for the manner in which goods, the import of which shall be subject to quantitative restrictions under this section, may be identified and the manner in which the causes of serious injury or causes of threat of serious injury in relation to such goods may be determined.
(4) For the purposes of this section--
(a) "developing country" means a country notified by the Central Government in the Official Gazette, in this regard;112
(b) "domestic industry" means the producers of goods (including producers of agricultural goods)--
(i) as a whole of the like goods or directly competitive goods in India;
or
(ii) whose collective output of the like goods or directly competitive goods in India constitutes a major share of the total production of the said goods in India;
(c) "serious injury" means an injury causing significant overall impairment in the position of a domestic industry;
(d) "threat of serious injury" means a clear and imminent danger of serious injury. VIII INTERPRETATION OF THE PROVISIONS OF THE ACT
83. On careful perusal of the provisions of Section 3 of the Foreign Trade Act, it makes it clear that the 113 power conferred under Section 3(1) of the Act is not restricted merely to prohibiting or restricting imports at the point of entry but extends also to controlling the subsequent disposal of the goods imported. It is for the appropriate authority to consider the policy, which must depend on diverse considerations, to be adopted in regard to the control of import of goods. The import of goods can be controlled in several ways. If it is desired that goods of a particular kind should not enter the country at all, the import of those goods can be totally prohibited. In case total prohibition is not desired, the goods could be allowed to come into the country in limited quantities. That would necessitate empowering persons to import under licences certain fixed quantities of the goods. The quantity of goods to be imported will have to be determined on consideration of the necessity for having those goods in the country and that again, would depend on the use to be made of those goods. It follows therefore that the persons licensed to import 114 goods up to a certain quantity should be amenable to the orders of the licensing authority with respect to the way in which those goods are to be utilised.
84. If the licensing authority has no such power its control over the import cannot be effective. It may have considered it necessary to have goods imported for a particular purpose. If it cannot control their utilisation for that purpose, the imported goods, after import, can be diverted to different uses, defeating thereby the very purpose for which the import was allowed and power had been conferred on the Central Government to control imports. It is therefore not possible to restrict the scope of the provision about the control of import to the stage of importing of the goods at the frontiers of the country. Their content is much wider and extends to every stage at which the Government feels it necessary to see that the imported goods are properly utilised for 115 the purpose for which their import was considered necessary in the interests of the country.
85. The proviso to sub-section (2) as well as sub- section (4) were inserted by Act 25/2010 w.e.f. 27.08.2010. This Court is primarily concerned with the interpretation of sub-sections (1) and (2) of Section 3 as far as present case is concerned. Sub-section (1) empowers the Central Government to make provision for the development as well as regulation of foreign trade by facilitating imports and increasing exports. Thus, the Government is empowered to make provision insofar as they relate to the development of foreign trade and it has also empowered to regulate the foreign trade. The two key words in the sub-clause are 'development' and 'regulation'. It is also important to note that such development and regulation is aimed at facilitating imports as well as increasing exports. Sub-section (2) of Section 3 further empowers the Central Government to 116 make provision for: (i) prohibiting; (ii) restricting; or (iii) otherwise regulating 'the import or export of goods or services or technology'. It can be done in all cases or in specified classes of cases. The words used in sub- section (2) of Section-3 prohibiting, restricting or otherwise regulating are to be made in respect of import or export of goods or services or technology which essentially were customs based.
86. The definition of 'import' and 'export' contained in Section 2(e) of the Act which, in relation to goods, means bringing into, or taking out of, India any goods by land, sea or air. Therefore import of goods is only meant bringing the said goods into India. That is by crossing the customs barrier, to bring the same in the territory of India. Therefore, sub-section (2) is with reference to goods and not with place. The expression 'otherwise regulating' referred to licence etc. by which 117 the import could be regulated and had nothing to do with the 'place'.
87. A reading of the provisions of Section-5 of the Foreign Trade Act, makes it clear that the Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy. The proviso which is added in the new Section-5 of the Foreign Trade Act came into force w.e.f. 27.8.2010.
88. The impugned notification issued by the Central Government has to be considered with reference to Section 3(2) of the Foreign Trade Act not in isolation, but on a harmonious construction of the same with reference to the Statement of Objects and Reasons to the Act along with Sections 2(e), 3(3) and 5 of the Act and Sections 7 and 11 of the Customs Act, 1962. 118
89. By reading of the provisions of Section 9A {Chapter IIIA} of the Foreign Trade Act, it clearly indicates that if the Central government, after conducting enquiry as it deems fit, is satisfied that any goods are imported into India in such increased quantities and under such conditions as to cause or threaten to cause serious injury to domestic industry, the Central Government may impose such quantitative restrictions on the import of such goods as it deems fit by notification in the Official Gazette. In the present case, the Central Government has not issued the impugned amended notification under Section 9A, but issued under Section 3 of the Foreign Trade Act. As already stated supra, in view of earlier history in respect of issue of notification pertaining to import of poppy seeds, the Central Government thought it fit to amend condition No.3(c) of the policy by imposing quantitative restriction of 90 metric tons per importer, since the competent authority has fixed country cap to import 119 poppy seeds to India from Turkey at 18,558 metric tons and also fixed country cap at 3094 metric tons for import of white poppy seeds and 391 metric tons for import of yellow poppy seeds from China. Therefore it is not a free trade. The restriction is made by the Central Government fixing 90 metric tons per importer on the basis of the country cap, in order to facilitate all the traders in the field of poppy seeds business and to control the monopoly of the poppy seeds business to a particular importer and in the interest of the consumers in India at large.
90. By the impugned notification, imposing quantitative restriction of 90 metric tons by amending policy condition No.3(c) is reasonable restriction and it is Directive Principle of State policy and not an arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public. Further, there is a direct and proximate nexus or a 120 reasonable connection between the restrictions imposed and the object of the Act. Hence the same is in accordance with law and not violative of the fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India and the said restrictions are within the provisions of Article 19(6) of the Constitution of India.
91. It is not in dispute that in view of the notification dated 29.7.2016 made in No.17/2015-20, the Central Government has permitted to import poppy seeds from the countries as mentioned in condition No.3(a) of the notification i.e., from Australia, Austria, France, China, Hungary, the Netherlands, Poland, Slovakia, Spain, Turkey and Czech Republic, United Kingdom, Democratic People's Republic of Korea, Macedonia, Germany and Ukraine. If the competent authority fixes the country cap to import poppy seeds from the exporting countries mentioned supra, every 121 importer/applicant like the petitioners would get 90 metric tons on the basis of the priority list in accordance with the draw of lots and there would not be any discrimination among the applicants/traders and it is the policy of the Central Government and the same is in accordance with law. In view of the above, point No.1 raised in the present writ petitions has to be answered in the affirmative holding that the Central Government is justified in amending condition No.3(c) of the import policy imposing quantitative restrictions, if any per importer under the provisions of Section 3 of the Foreign Trade Act.
92. The notification dated 29.7.2016 with respect to modification of the import policy for import of poppy seeds has been issued by the Government of India, Ministry of Commerce & Industry, Department of Commerce and the same was published in the extraordinary gazette. The learned Central Government 122 Advocate for the respondents filed memo dated 13.12.2017 along with certified copy of the original file paper in relation to the notification dated 29.7.2016 and which has been signed by the Hon'ble Minister for Commerce and Industry on 29.7.2016 approving the said notification (original file note at page 584).
93. Government of India, Ministry of Finance, Department of Revenue has framed guidelines in F.No. N.99014/31/2012-NC-I dated 28th November 2016 and same was communicated by the Under Secretary to the Government of India to the Narcotics Commissioner, Central Bureau of Narcotics. Clause-I of the Guidelines deals with determination of Country Cap; Clause-III deals with allocation of provisional Country Cap and Clause-IV deals with allocation after final Country Cap. Clauses I, III and IV of the Guidelines read as under:
123
I. Determination of Country Cap:
i) As per the competent authority of Turkey, poppy seeds produced in a particular crop season are available for export starting from 1st July. For example, poppy seeds produced from the crop season 2015-16 are available for export from 1st July, 2016.
ii) Narcotics Commissioner shall determine a provisional country cap based on the following information received from the competent Turkish authority:
a) carried over stock of poppy seeds produced from previous crop year after discounting for the domestic consumption, export to other countries, re-sowing and wastage; and
b) 50% of the fresh harvest in the current crop year.
iii) Thereafter, once the actual production figures are available from the competent Turkish authority, the final country cap will be 124 determined by a Committee comprising the Narcotics Commissioner, one representative of Directorate General of Foreign Trade (DGFT) and one representative of Department of Revenue. The committee shall consider the information provided by the Turkish authorities as well as such other data on world trade available on UN websites, as deemed fit.
III. Allocation of Provisional Country Cap:
i) Narcotics Commissioner shall apportion the provisional cap between the applicant in the following manner:
a) Applicants shall be allowed to register sales contracts for the quantity applied for, or ninety(90) MT whichever is less.
b) However, if the quantity available for allocation to the applicants is insufficient to allocate to all the applicants in the manner provided in III(i)(a) above, selection of applicants shall be done through 'draw of lots'. A 'priority list' shall be made which shall be in accordance with the 'draw of lots'.125
ii) Narcotics Commissioner shall inform the date for 'draw of lots' in the public notice issued for inviting the application for registration of sales contracts for import of poppy seeds so that interested applicants may be present during 'draw of lots'.
iii) Draw of lots shall be carried out in a transparent manner in the presence of the applicants at the stipulated time and date.
iv) Quantity available for allocation to applicants shall be allocated in the manner provided in III(i) above as per the priority list prepared through 'draw of lots' till the available quantity is exhausted.
v) Those applicants who do not receive any allocation due to provisional country cap getting exhausted shall be put on 'waitlist' for consideration after final country cap is determined.
IV. Allocation after Final Country Cap:
i) After the final country cap is determined by the Committee as aforesaid, Narcotics 126 Commissioner shall issue a public notice communicating the final country cap. However, no fresh application shall be invited for registration of sale contracts.
ii) The differential quantity between the quantity registered after allocation of the provisional country cap less the quantity surrendered by the applicants, if any, and final country cap shall be allocated in the following manner.
a) Applicants who were put on 'waitlist' due to provisional country cap getting exhausted shall be allowed, in the order of the priority list drawn at the time of the allocation of provisional country cap, to register sales contracts for the quantity applied for, or ninety (90) MT, whichever is less.
b) Quantity still available for allocation, after allocation to the applicants in waitlist as specified at IV (ii) (a) above, shall be allocated to those applicants who had applied for registration of more quantity but were allowed registration for less quantity.
Such applicants shall be allowed, in the 127 order of the priority list drawn at the time of the allocation of provisional country cap, to register sales contracts for the quantity applied for (after deducting the quantity allocated for registration earlier), or ninety (90) MT, whichever is less. The process shall be repeated in the same manner till the quantity available for allocation is exhausted.
94. The aforesaid guidelines clearly indicate that the Central Government has restricted import of poppy seeds to 90 metric tons per importer only to give an importer a chance to import poppy seeds which would be commercially viable. Apart from this, it could also be seen that the imposition of restriction is not by the Central Government on its own, but is because of the competent authority has fixed Country Cap from the reciprocal countries - Turkey & China and again that is not an absolute restriction. A careful reading of the guidelines issued clearly depicts that 90 metric tons is on provisional fixation of country cap. As and when the 128 quantity is increased by the reciprocal country, effort will be made to give all the goods to applicants and thereafter, any excess product still available will be given to persons with more quantity requirements. Therefore the contention of the learned counsel for the petitioners that the Central Government delegated powers to the revenue department cannot be accepted. Though the notification is signed by Director General of Foreign Trade (DGFT), who is the only communicating authority, the preamble would show that the Central Government has exercised its powers under Section 3(2) of the Foreign Trade Act.
95. It is also not in dispute that in compliance of the guidelines communicated by the Ministry's letter F.No.N.99014/31/2012-NC-1 dated 28.11.2016, the competent authority has fixed the final country cap to import poppy seeds to India from Turkey at 18,558 metric tons and also fixed country cap at 3094 metric 129 tons for import of white poppy seeds and 391 metric tons for import of yellow poppy seeds from China Accordingly, the Narcotics Commissioner by a public notice dated 5.12.2016 invited applications from the desirous applicants for registration of sales contracts for import of white poppy seeds from Turkey & China into India. It is stated in the notice that any company/applicant desirous to import poppy seeds from Turkey & China shall apply in the prescribed proforma to register their sales contracts with the Narcotics Commissioner, Gwalior, prior to import and they are required to submit following documents in support of their request for registration of sales contract for import of poppy seeds.
i) Application in the prescribed format: The application is required to be signed by the proprietor/any of the partners in case of proprietorship/partnership. In case of company, the application should be signed by any of the Executive Director or 130 authorized person duly empowered by Board of Directors. (In such a case, Board Resolution in original/certified copy is to be submitted).
ii) Sales contract in original duly signed by the importer as well by the exporter.
iii) Attested copy of PAN card.
iv) Attested copy of import Export Code (IEC) issued by DGFT.
v) Demand Draft worth Rs.1,000/- in favor of Drawing and Disbursing Officer, Central Bureau of Narcotics, Gwalior.
vi) Address of Jurisdictional Commissionerate of Central Excise under which firm is situated. In case applicant is registered with Central Excise, the copy of Central Excise Registration Certificate be also submitted.
vii) Copy of import related documents viz., invoice, certificate of origin, bill of entry, bill of lading etc., for import of white poppy seeds from Turkey imported against the contract registered in the month of March/April 2016, if not submitted.
131
96. It is also not in dispute that in pursuance of the minutes of draw of lots conducted on 27th April 2017 for drawing the priority list of applicants who have applied for registration of sales contract for import of poppy seeds from Turkey was taken into consideration. In order to maintain transparency and install confidence about the genuineness of drawal of priority list, it was decided to resort to manual draw of priority list with the consent of all the participants present. Accordingly, computerized slips indicating serial numbers and name of the applicants were prepared. Opportunity was given to each participant to come and verify the serial number on slips, and put it in the bucket. One of the participants present there read out the name and serial number printed on the slip and other participants present verified it with the list of the applicants. After this, slips were folded and were put in a bucket. One of the participants mixed all the slips in the bucket. After this, opportunity was given to each 132 participant to take out twenty slips one by one and priority list was prepared accordingly. Once first 20 slips were taken out by a participant, a page containing serial number of slip picked up in their order of picking up was got signed by a few participants present. The process was repeated till the priority list of 471 applicants was made and got singed. Each participant in this way picked up minimum 20 slips and some picked more than that. The total serial numbers in the list uploaded on 23.12.2016 vide public notice PS- 16/2016 were 482, out of which 10 were vacant serial numbers as indicated in the said public notice itself. Serial number 420 and 442 were allotted to the same application and therefore, serial number 442 was not made a part of draw of lot. Therefore draw of lots was limited to 471 slips.
133
97. The petitioners have participated in draw of lots. The priority number and name of the importer/serial number of slip picked reads as under:
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
1 299 18 471
2 386 19 90
3 402 20 250
4 75 21 22
5 195 22 5
6 425 23 161
7 50 24 429
8 475 25 302
9 374 26 212
10 74 27 322
11 245 28 272
12 162 29 33
13 149 30 218
14 319 31 252
15 147 32 61
16 199 33 243
17 255 34 43
134
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
35 262 57 240
36 464 58 436
37 181 59 446
38 214 60 482
39 356 61 360
40 241 62 347
41 229 63 479
42 48 64 225
43 142 65 186
44 41 66 320
45 400 67 124
46 399 68 271
47 14 69 288
48 141 70 381
49 372 71 208
50 52 72 370
51 122 73 242
52 278 74 220
53 20 75 448
54 248 76 131
55 298 77 146
56 325 78 414
135
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
79 204 101 397
80 335 102 78
81 37 103 215
82 3 104 12
83 305 105 34
84 265 106 287
85 244 107 224
86 422 108 473
87 318 109 246
88 284 110 392
89 371 111 38
90 209 112 154
91 441 113 221
92 324 114 457
93 344 115 456
94 227 116 127
95 192 117 175
96 415 118 455
97 291 119 172
98 28 120 267
99 84 121 416
100 210 122 46
136
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
123 266 145 355
124 58 146 453
125 430 147 380
126 25 148 151
127 407 149 93
128 206 150 274
129 253 151 23
130 234 152 97
131 472 153 293
132 83 154 300
133 150 155 438
134 393 156 443
135 420 157 375
136 330 158 343
137 431 159 423
138 449 160 76
139 395 161 64
140 157 162 18
141 164 163 348
142 306 164 314
143 231 165 59
144 435 166 390
137
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
167 129 189 17
168 47 190 470
169 315 191 4
170 427 192 29
171 367 193 89
172 60 194 289
173 2 195 7
174 196 196 26
175 109 197 268
176 55 198 105
177 439 199 258
178 440 200 418
179 165 201 66
180 361 202 368
181 145 203 126
182 108 204 233
183 121 205 143
184 468 206 117
185 341 207 72
186 100 208 282
187 270 209 56
188 203 210 352
138
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
211 467 233 247
212 384 234 336
213 125 235 102
214 171 236 283
215 405 237 68
216 173 238 338
217 273 239 113
218 134 240 474
219 481 241 57
220 235 242 216
221 454 243 328
222 198 244 201
223 290 245 257
224 85 246 169
225 35 247 148
226 21 248 317
227 421 249 269
228 82 250 275
229 369 251 8
230 36 252 426
231 16 253 466
232 478 254 382
139
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
255 98 277 281
256 197 278 389
257 92 279 71
258 158 280 294
259 465 281 101
260 160 282 111
261 303 283 226
262 190 284 480
263 264 285 135
264 301 286 228
265 11 287 477
266 69 288 280
267 295 289 87
268 413 290 119
269 304 291 130
270 428 292 51
271 365 293 116
272 237 294 334
273 447 295 419
274 353 296 296
275 194 297 63
276 337 298 65
140
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
299 30 321 104
300 249 322 254
301 279 323 323
302 340 324 1
303 331 325 387
304 286 326 406
305 112 327 107
306 49 328 95
307 128 329 260
308 379 330 73
309 42 331 31
310 376 332 170
311 144 333 211
312 391 334 383
313 307 335 96
314 166 336 326
315 13 337 115
316 239 338 394
317 261 339 155
318 70 340 67
319 469 341 88
320 44 342 137
141
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
343 39 365 191
344 238 366 120
345 106 367 184
346 396 368 417
347 388 369 174
348 19 370 444
349 6 371 217
350 40 372 86
351 363 373 176
352 462 374 461
353 350 375 153
354 385 376 411
355 139 377 80
356 94 378 10
357 45 379 183
358 349 380 159
359 345 381 99
360 451 382 53
361 364 383 263
362 193 384 321
363 152 385 222
364 458 386 189
142
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
387 156 411 459
388 114 412 136
389 236 413 81
390 452 414 163
391 366 415 180
392 450 416 433
393 476 417 377
394 401 418 313
395 445 419 292
396 357 420 354
397 359 421 342
398 230 422 32
399 434 423 259
400 285 424 329
401 332 425 185
402 110 426 77
403 460 427 409
404 91 428 54
405 398 429 277
406 309 430 297
407 200 431 339
408 256 432 213
409 410 433 351
410 138 434 463
143
Serial Serial
number number
Priority of slip Priority of slip
number picked number picked
435 310 454 312
436 167 455 202
437 140 456 373
438 207 457 311
439 27 458 404
440 251 459 178
441 276 460 333
442 9 461 187
443 168 462 182
444 205 463 362
445 132 464 403
446 412 465 133
447 179 466 177
448 316 467 408
449 15 468 123
450 118 469 432
451 223 470 219
452 437 471 358
453 232
98. The notice also depicts that applications along with requisite documents received between 9.30 a.m. of 14.12.2016 to 6 p.m. of 21.12.2016 either by way of e.mail/post would be accepted. Any application 144 received before 14.12.2016 and after 21.12.2016 will not be accepted at any cost and will be returned to the applicant and will not be taken on record. The notice further depicts that all applicants shall be allowed to register sales contracts for the quantity applied for, or ninety metric tons (90 MT) whichever is less. However, if quantity available for allocation to the applicants is insufficient to allocate to all the applicants, selection of applications shall be done through 'draw of lots' in the office of the Narcotics Commissioner, Gwalior and interested applicants may remain present themselves during the proceeding of drawing of lots. A 'priority list' shall be made which shall be in accordance with the 'draw of lots'. Those applicants who do not receive any allocation due to the country cap getting exhausted shall be put on 'wait list'. The quantity available for allocation to the applicants shall be allocated as per priority list through 'draw of lots' till the available quantity is exhausted. The notice also depicts that 145 applicants who were put on 'wait list' due to exhaust of the country cap shall be allowed, in the order of the priority list drawn at the time of the allocation of country cap, to register sales contract for the quantity applied, or ninety (90 MT), whichever is less, subject to the quantity available by way of surrender. If an importer fails to import a minimum of 50% of the quantity registered for import, less the quantity surrendered, he shall be debarred from registration of sales contract for a period of two years.
99. The notice also depicts that the quantity still available for allocation, after allocation to the applicants in wait list, shall be allocated to those applicants who had applied for registration of more quantity, but were allowed registration for less quantity. Such applicants shall be allowed, in the order of the priority list drawn at the time of allocation of country cap to register sales contract for the quantity applied for (after deducting the 146 quantity allocated for registration earlier) or ninety (90 MT) whichever is less. The process shall be repeated in the same manner till the quantity available for allocation is exhausted. The notice also depicts that the Country of Origin Certificate will have to be produced before Customs Authority at the time of import. Therefore the respondent - Central Government has taken all precautions to distribute poppy seeds among the traders restricting 90 metric tons per importer and drawing of lots as stated supra is only at the interest of public/consumers at large. Therefore there is no violation of fundamental rights of the petitioner guaranteed under Article 19(1)(g) of the Constitution of India. The restriction made by the Central Government is reasonable restriction imposed by the Central Government as a policy decision and same is in accordance with the provisions of Article 19(6) of the Constitution of India.
147
IX ESTOPPEL
100. It is also not in dispute that the impugned import policy condition No.3(c) came to be amended on 29.7.2016. On the basis of the said amendment of the policy, the Government of India, Ministry of Finance, Department of Revenue issued guidelines for registration of sale contracts for import of poppy seeds from China and Turkey on 3.11.2016 and 28.11.2016 respectively. Thereafter public notices came to be issued on 4.11.2016 and 5.12.2016. It is also not in dispute that the petitioners have participated in the proceedings of minutes of draw of lots conducted on 27.4.2017 in pursuance of the public notices, and it was only upon being unsuccessful, they have filed the present writ petitions on 29.5.2017, 2.8.2016, 10.11.2016 and 21.12.2016 challenging the very amended import policy, guidelines and public notices. Therefore the present writ petitions are liable to be dismissed on the ground of law of estoppel. The 148 majority of the applicants got allotment. Out of the aggrieved applicants, only two petitioners are before this Court. The import policy amending condition No.3(c) came to be issued exercising the powers under the provisions of Section 3 of the Foreign Trade Act in order to facilitate all the applicants/traders in the field of poppy seeds business and to control the monopoly of poppy seeds business to a particular importer, in the interest of the general public in India at large. Therefore the interest of the country prevails at large, but not individual. On that ground also, the writ petitions are liable to be dismissed. X. THE JUDGMENTS OF THE HON'BLE SUPREME COURT RELIED UPON FOR DETERMINATION
101. The Hon'ble Supreme Court while considering the selection process/procedure in the case of ASHOK KUMAR v. STATE OF BIHAR reported in (2017)4 SCC 357 held that person who consciously 149 takes part in selection process cannot thereafter turn around and challenge method of selection and its outcome. The Hon'ble Supreme Court at paragraphs 11 to 18 held as under:
11. The basic issue that was addressed by the Division Bench was that the appellants having participated in the fresh round of selection could not be permitted to assail the process once they were declared unsuccessful. On this aspect, a brief recapitulation of the facts would be in order. In the original process of selection, following the issuance of General order No. 204 of 2003 by the District and Sessions Judge, Muzaffarpur on 2 December 2003, a written examination was held on 20 April 2004 consisting of eighty five marks followed by an interview on 7 July 2004 consisting of fifteen marks.
The High Court declined to approve of the selection list and issued through its Registrar (Administration), a 150 communication dated 19 August 2004 requiring the holding of a fresh written examination carrying ninety marks in which the qualifying marks would be regarded as forty five in terms of its General letter No.1 of 1995. Pursuant thereto, a circular was issued in the form of a new General order bearing No. 171 of 2004 on 8 October 2004 which stipulated that in terms of the directions issued by the High Court on 19 August 2004, a fresh written examination would be held carrying ninety marks (with qualifying marks as forty five) followed by an interview of ten marks. Candidates who had applied earlier were not required to apply afresh.
12. The appellants participated in the fresh process of selection. If the appellants were aggrieved by the decision to hold a fresh process, they did not espouse their remedy. Instead, they participated in the fresh process of selection and it was only upon being 151 unsuccessful that they challenged the result in the writ petition. This was clearly not open to the appellants. The principle of estoppel would operate.
13. The law on the subject has been crystalized in several decisions of this Court. In Chandra Prakash Tiwari v.
Shakuntala Shukla {(2002)6 SCC 127}, this Court laid down the principle that when a candidate appears at an examination without objection and is subsequently found to be not successful, a challenge to the process is precluded. The question of entertaining a petition challenging an examination would not arise where a candidate has appeared and participated. He or she cannot subsequently turn around and contend that the process was unfair or that there was a lacuna therein, merely because the result is not palatable. In Union of India v. S. Vinodh Kumar {(2007)8 SCC 100},, this Court held that:[ SCC p.107, para 18] 152 "18. It is also well settled that those candidates who had taken part in the selection process knowing fully well the procedure laid down therein were not entitled to question the same...
[See also Munindra Kumar v.
Rajiv Govil {(1991) 3 SCC 368} and Rashmi Mishra v. M.P. Public Service Commission {(2006)12 SCC 74]."
14. The same view was reiterated in Amlan Jyoti Borroah v. State of Assam {(2009)3 SCC 227} wherein it was held to be well settled that candidates who have taken part in a selection process knowing fully well the procedure laid down therein are not entitled to question it upon being declared to be unsuccessful.
15. In Manish Kumar Shah v. State of Bihar {(2010)12 SCC 576},, the same principle was reiterated in the following observations :
153 "16. We also agree with the High Court that after having taken part in the process of selection knowing fully well that more than 19% marks have been earmarked for viva voce test, the Petitioner is not entitled to challenge the criteria or process of selection.
Surely, if the Petitioner's name had appeared in the merit list, he would not have even dreamed of challenging the selection. The Petitioner invoked jurisdiction of the High Court under Article 226 of the Constitution of India only after he found that his name does not figure in the merit list prepared by the Commission. This conduct of the Petitioner clearly disentitles him from questioning the selection and the High Court did not commit any error by refusing to entertain the writ petition. Reference in this connection may be made to the 154 Judgments in MadanLal v. State of J & K. {(1995) 3 SCC 486}, Marripati Nagaraja v. STATE OF A.P. {(2007) 11 SCC 522}, Dhananjay Malik and Ors. v.
State of Uttaranchal and Ors.
{(2008) 4 SCC 171}, Amlan Jyot iBorooah v. State of Assam {(2009) 3 SCC 227} and K.A. Nagamani v. Indian Airlines and Ors. {(2009)5 SCC 515}."
16. In Vijendra Kumar Verma v. Public Service Commission {(2011)1 SCC 150}, candidates who had participated in the selection process were aware that they were required to possess certain specific qualifications in computer operations. The appellants had appeared in the selection process and after participating in the interview sought to challenge the selection process as being without jurisdiction. This was held to be impermissible.
155
17. In Ramesh Chandra Shah v. Anil Joshi {(2013)11 SCC 309}, candidates who were competing for the post of Physiotherapist in the State of Uttrakhand participated in a written examination held in pursuance of an advertisement. This Court held that if they had cleared the test, the respondents would not have raised any objection to the selection process or to the methodology adopted. Having taken a chance of selection, it was held that the respondents were disentitled to seek relief under Article 226 and would be deemed to have waived their right to challenge the advertisement or the procedure of selection. This Court held that :
"18. It is settled law that a person who consciously takes part in the process of selection cannot, thereafter, turn around and question the method of selection and its outcome."
156
18. In Chandigarh Administration v.
Jasmine Kaur {(2014)10 SCC 521}, it was held that a candidate who takes a calculated risk or chance by subjecting himself or herself to the selection process cannot turn around and complain that the process of selection was unfair after knowing of his or her non-selection. In Pradeep Kumar Rai v. Dinesh Kumar Pandey {(2015) 11 SCC 493}, this Court held that:
17. "Moreover, we would concur with the Division Bench on one more point that the appellants had participated in the process of interview and not challenged it till the results were declared. There was a gap of almost four months between the interview and declaration of result. However, the appellants did not challenge it at that time. Thus, it appears 157 that only when the appellants found themselves to be unsuccessful, they challenged the interview. This cannot be allowed. The candidates cannot approbate and reprobate at the same time.
Either the candidates should not have participated in the interview and challenged the procedure or they should have challenged immediately after the interviews were conducted."
This principle has been reiterated in a recent judgment in Madras Institute of Development v. S.K. Shiva Subaramanyam {(2016)1 SCC 454}.
102. In view of the conduct of the petitioners stated supra and the dictum of the Hon'ble Supreme Court, the petitioners who consciously took part in the process of draw of lots knowing full well the amended 158 policy, guidelines, public notices issued and the procedure laid down, are not entitled to question it upon being unsuccessful to get the allotment and on that ground alone the writ petitions are liable to be dismissed. In view of the above, point No.2 raised in the present writ petitions has to be answered in the negative holding that the guidelines for registration of sale contracts for import of poppy seeds from Turkey and China Governments restricting the applicants to register sale contracts for the quantity applied for, or ninety metric tons, whichever is less, and selection of applicants through 'draw of lots', are in accordance with law and also in accordance with the provisions of Article 19(6) of the Constitution of India and not violative of fundamental rights guaranteed under Article 19(1)(g) of the Constitution of India.
103. The Central Government, the competent authority under the provisions of the Foreign Trade Act, 159 taking into consideration the past history, thought it fit to amend condition No.3(c) and framed guidelines and it was communicated by the Government of India, Ministry of Finance, Department of Revenue to the Narcotics Commissioner. The said notification dated 29.7.2016 issued by the Central Government was duly approved by the concerned Minister for Commerce & Industry and the same was published in the extraordinary gazette of India. In pursuance of the amended policy and guidelines issued, the Narcotics Commissioner issued public notices on 4.11.2016 and 5.12.2016 fixing the final country cap at 18,558 metric tons for import of poppy seeds from Turkey Government based on the information from the reciprocal country. It is also relevant to state at this stage that the parties to the lis (writ petitions) were heard at length and reserved for orders. In the mean time, the Narcotics Commissioner issued public notice dated 10.1.2018 for registration of sales contracts for import of white/yellow 160 poppy seeds from China into India. Therefore the petitioners in W.P. No.58197-58198/2016 and 22952- 22955/2017 filed I.A. No.1/2018 for a direction to the Narcotics Commissioner not to finalize registration of contracts for import of poppy seeds till disposal of the writ petitions. After hearing the learned counsel for the parties to the lis, this Court by an order dated 1.2.2018 directed the 4th respondent - Narcotics Commissioner not to precipitate the matter further in pursuance of the public notice dated 10.1.2018 till further orders from this Court with liberty to the respondent - Government to comply the direction issued by the learned Single Judge of the High Court of Judicature at Madras in pending Writ Petition No.1398/2018. In view of the aforesaid reasons, the Point No.3 raised in the present writ petitions has to be answered in the negative holding that the petitioners have not made out any ground to quash the public notices dated 4.11.2016 and 5.12.2016 and also the latest public notice dated 161 10.1.2018 (prayer not amended to quash the said notice) issued by the Narcotics Commissioner, Government of India, Ministry of Finance, Central Bureau of Narcotics in compliance of the guidelines issued by the Government of India, Ministry of Finance, fixing the final country cap for import of poppy seeds from Turkey and China.
104. Sri D.L.N. Rao, learned Senior Counsel appearing for the petitioners draw attention of the Court to para-13 of the judgment in the case of MRF Limited - vs- Inspector Kerala Government reported in 1998(8) SCC 227 though relied upon by the respondents and contended that the restrictions must not be arbitrary or of excessive nature so as to go beyond the requirement of the interest of the general public and there must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the 162 restrictions, and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will arise. If two principles laid down are not existing, then Article 19(1)(g) of the Constitution of India attracts. But in the present case, in view of the past history/experience meted out by the Central Government on failure of two earlier policies, the Government thought it fit to amend policy-condition No.3(c) imposing quantitative restrictions if any per importer taking into consideration the larger interest of the public. The restriction imposed is only to facilitate all the traders, and to control the price of the poppy seeds in India and it is the policy of the Central Government that no person merely on the basis of licence can claim a right for grant of import and the applicant has no right much less a fundamental right to grant an import licence according to his wish. Therefore the Central Government thought fit to amend policy condition No.3(c) keeping in view just balance between 163 restrictions imposed and social control envisaged under clause (6) of Article 19 of the Constitution of India with an intention to protect prevailing social values as also social needs. Therefore, the restriction is reasonable which is directive principle of State Policy. Therefore, the contention of the learned Counsel for the petitioners cannot be accepted.
105. The judgment relied upon by the learned Counsel for the petitioners in the case of Union of India
-vs- Asian Food Industries reported in (2006) 13 SCC 542 at para-26 to contend that a citizen of India has a fundamental right to carry out the business of export, subject, of course to the reasonable restrictions which may be imposed by law, such a reasonable restriction was imposed in terms of the 1992 Act and the power under Section 3 of the 1992 Act is required to be exercised in the manner provided for under Section 5 of 1992 Act and therefore, the impugned amendment is 164 impermissible in law, cannot be accepted. The judgment relied upon by the learned Counsel for the petitioners is prior to the amendment of both Sections 3(2) and 5 of the Foreign Trade Act. The Hon'ble Supreme Court while considering amended provisions of proviso to Sub-Section (2) as well as Sub-Section (4) and Section 5 of the Foreign Trade Act with effect from 27.8.2010 in the case of Parisons Agrotech (P) Ltd. -vs- Union of India reported in (2015) 9 SCC 657 held that the Central Government has got power to restrict, prohibit or regulate imports at the point of entry following the very judgment relied upon by the learned Counsel for the petitioners in Asian Food Industries stated supra. Therefore, the said judgment was prior to the amendment and hence, cannot be accepted in view of the latest judgment stated supra.
106. Though the learned Senior Counsel for the petitioners submits that the Parisons Agrotech Private 165 Limited case was made prior to amendment of the policy and hence is not applicable, cannot be accepted since policy condition No.3(c) or impugned notification was amended exercising the powers under Section 3(2) of the Amended Act. Therefore, the judgment in the case of Parisons Agrotech Pvt. Ltd., is applicable to the facts of the present writ petitions in all force.
107. In so far as the judgment relied upon by the learned Senior Counsel for respondent No.5 in support of his contentions in the case of Union of India -vs- Shiv Dayal Soin & Sons (P) Ltd., reported in (2003)4 SCC 695 to the effect that what is expressly mentioned in one place but not in another must be taken to have been deliberately omitted, cannot be accepted since the said judgment was laid down considering the provisions of Section 40 of the Displaced Persons (Compensation and Rehabilitation) Act, 1954 for grant of lease of land to predecessor-in-interest of respondent - State 166 Government. The facts of the said case are entirely different from the facts of the present writ petitions and hence, the said judgment has no application to the instant writ petitions.
108. The history has painstakingly made it abundantly clear that the earlier experience was categorized on the basis of 'first come first serve' and the subsequent policy made by the Central Government did not succeed and therefore, the Central Government thought fit that the regulation is imperative. How the policy has to be implemented or adopted or restructured is for the Central Government and not for the judiciary. All the rights under Article 19(1) of the Constitution are absolute as is clarified by the respective clauses (2) to (6) of the said Article that a citizen can have a right to deal with any trade including poppy seeds and is always subject to reasonable restrictions in the public interest. Article 14 of the Constitution of India prohibits 'class 167 legislation' and not 'classification for the purpose of legislation'. If the legislature reasonably classifies persons for legislative purposes so as to bring them under a well-defined class, it is not open to challenge on the ground of denial of equal treatment that the law does not apply to other persons. The test of permissible classification is two fold: (i) that the classification must be founded on intelligible differentia which distinguishes persons grouped together from others who are left out of the group, and (ii) that differentia must have a rational connection to the object sought to be achieved. Article 14 does not insist upon classification, which is scientifically perfect or logically complete. A classification would be justified unless it is patently arbitrary. If there is equality and uniformity in each group, the law will not become discriminatory, though due to some fortuitous circumstance arising out of peculiar situation some included in a class get an advantage over others so long as they are not singled 168 out for special treatment. In substance, the differentia required is that it must be real and substantial, bearing some just and reasonable relation to the object of the legislation. In view of the above provisions, the impugned notification amending policy condition No.3(c) is a reasonable restriction within the meaning of Article 19(6) of the Constitution of India. Therefore, the petitioners are not entitled to any relief before this Court.
109. The Hon'ble Supreme Court while considering the provisions of Article 19(1)(g) of the Constitution of India in the case of M/s ANDHRA INDUSTRIAL WORKS .vs. CHIEF CONTROLLER OF IMPORTS AND OTHERS reported in (1974)2 SCC 348 held at paragraphs 14 and 15 as under:
14. Be that as it may, on the basis of an Import Trade Policy an applicant has no absolute right, much less a fundamental right, to the grant of an 169 import licence. The nature of such a claim came up for consideration before this Court in Deputy Assistant Iron and Steel Controller and anr. v. L. Maneckchand, Proprietor, Katrella Metal Corpn., Madras {(1972)3 SCC 324}
15. That was an appeal by special leave against the judgment of the High Court rendered in exercise of writ jurisdiction under Art. 226.The writ-petitioner asked for the issue of a Mandamus requiring the authorities to consider his application for licence to import stainless steel in terms of 1968-69 Policy and not in accordance with 1970-71 Policy when the application was made. This Court held that in view of section 3(1)(a) of the Imports and Exports Control Act, 1947 and clause 6 (1) (a) of the Imports (Control) Order, 1955, an applicant has no vested right to an import licence in terms of the policy in force at the time of the application. No case for the Mandamus prayed had been made out, 170 particularly when the delay in disposing of the application for licence was not due to the fault of the Licensing Authority.
110. The Hon'ble Supreme Court while considering the provisions of Section 3(6) of the Essential Commodities Act in the case of M/s ATLAS CYCLE INDUSTRIES LIMITED AND OTHERS .vs. STATE OF HARYANA reported in AIR 1979 SC 1149 held that notification not placed before the House of Parliament is not void and laying before House of Parliament under Section 3(6) is directory. In the said decision at paragraphs 19, 26 and 32 it is held as under:
19. Though sub-section (6) of section 3 of the Act provides that every order made by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, the important point to be considered in the absence of 171 analogous statutes like the Statutory Instruments Act, 1946 and the Laying of Documents before Parliament (Interpretation) Act, 1948 prescribing the conditions, the period and the legal effect of the laying of order before the Parliament is whether the provision is directory or mandatory. It is well to remember at the outset that the use of the word `shall' is not conclusive and decisive of the matter and the Court has to ascertain the true intention of the legislature, which is the determining factor, and that must be done by looking carefully to the whole scope, nature and design of the statute. Reference in this connection may be made to the decision of this Court in State of U.P. v. Manbodhan Lal Srivastava {AIR 1957 SC 912}.
Reference in this behalf may also be made with advantage to another decision of this Court in The State of Uttar Pradesh & Ors. v. Babu Ram Upadhya (AIR 1961 SC 751) where 172 Subba Rao, J. (as he then was) after quoting with approval the passage occurring at page 516 in Crawford "On the Construction of Statutes" as well as the passage occurring at page 242 in `Craies on Statute Law', 5th Edition, observed as follows :-
"The relevant rules of interpretation may be briefly stated thus: When a statute uses the word "shall", prima facie, it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole scope of the statute. For ascertaining the real intention of the Legislature, the Court may consider, inter alia, the nature and the design of the statute, and the consequences which would follow from construing it one way or the other, the impact of other provisions whereby the necessity of complying with the provisions in question is avoided, the circumstances, namely, that the statute provides for a 173 contingency of the non-compliance with the provisions, the fact that the non-compliance with the provisions is or is not visited by some penalty, the serious or trivial consequences that flow therefrom, and, above all, whether the object of the legislation will be defeated or furthered."
26. In State v. Karna (1973 Crl.LJ 1871) where the very question with which we are concerned in the present case cropped up in connection with the Rajasthan Foodgrains (Restrictions on Border Movement) Order, 1959, a bench of Rajasthan High Court said as follows at page 1872:-
"It is important to note that laying the Order before both the Houses of Parliament is not a condition precedent for bringing into force the Order. All that sub-section (6) provides is that every Order made under sec. 3 of the Essential Commodities Act by 174 the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament as soon as after it is made. It is significant that the Order is valid and effective from the date it is duly promulgated. Even the limit or period within which it must be placed before the Parliament has not been specified. It is, therefore, not possible to hold that sub-sec. (6) of sec. 3 of the Essential Commodities Act is mandatory. If the legislature intended that in order to provide an adequate safeguard it was necessary to make the said provision mandatory it could have done so in express words. We are, therefore, of the opinion that the order cannot be considered as invalid merely because the State was not able to put on record proof of the fact that the Order was laid before both the Houses of Parliament."175
32. From the foregoing discussion, it inevitably follows that the Legislature never intended that non-compliance with the requirement of laying as envisaged by sub-section (6) of section 3 of the Act should render the order void. Consequently non-laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification.
Accordingly, we answer the aforesaid question in the negative. In view of this answer, it is not necessary to deal with the other contention raised by the respondent to the effect that the aforesaid notification being of a subsidiary character, it was not necessary to lay it before both Houses of Parliament to make it valid.
111. The Hon'ble Supreme Court while considering the provisions of Article 19(1) of the 176 Constitution of India in the case of M.R.F. LIMITED .vs. INSPECTOR KERALA GOVERNMENT AND OTHERS reported in (1998)8 SCC 27 held at paragraph-13 as under:
13. On a conspectus of various decisions of this Court, the following principles are clearly discernibly:
(1) While considering the reasonableness of the restrictions, the Court has to keep in mind the Directive Principles of State Policy.
(2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public.
(3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same 177 will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances.
(4) A just balance has to be
struck between the restrictions
imposed and the social control
envisaged by Clause (6) of Article 19.
(5) Prevailing social values as also social needs which are intended to be satisfied by restrictions have to be borne in mind. (See: State of U.P. vs. Kaushailiya, (1964) 4 SCR 1002 = AIR 1964 SC 416) (6) There must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions, and the object of the Act, then a strong presumption 178 in favour of the constitutionality of the Act will naturally arise. (See:
Kavalappara Kottarathil Kochuni @ Moopli Nayar vs States of Madras and Kerala. (1960) 3 SCR 887 = AIR 1960 SC 1080: O.K. Ghosh vs. E.X. Joseph.
(1963) Supp. (1) SCR 789 = AIR 1963 SC 812)
112. The Hon'ble Supreme Court while considering the provisions of Sections 5 & 3(2) of the Foreign Trade Act with regard to 'restriction' and 'regulation' in the case of UNION OF INDIA AND OTHERS .vs. ASIAN FOOD INDUSTIRES reported in (2006)13 SCC 542 held at paragraphs 25, 26 and 27 as under.
25. Would the terms 'restriction' and 'regulation' used in Clause 1.5 of the Foreign Trade Policy include prohibition also, is one of the principal questions involved herein.
179
26. A citizen of India has a fundamental right to carry out the business of export, subject, of course to the reasonable restrictions which may be imposed by law. Such a reasonable restriction was imposed in terms of the 1992 Act.
27. The purport and object for which the 1992 Act was enacted was to make provision for the development and regulation of foreign trade inter alia by augmenting exports from India. While laying down a policy therefor, the Central Government, however, had been empowered to make provision for prohibiting, restricting or otherwise regulating export of goods.
113. The Hon'ble Supreme Court while considering the provisions of Sections 3 and 5 of the Foreign Trade Act and Articles 14, 32 and 226 of the Constitution of India with regard to policy decision and scope of judicial review, in the case of PARISONS 180 AGROTECH PRIVATE LIMITED .vs. UNION OF INDIA reported in (2015)9 SCC 657 held at paragraphs 14 to 23, 26, 27, 29 & 32 as under:
14. No doubt, the writ court has adequate power of judicial review in respect of such decisions. However, once it is found that there is sufficient material for taking a particular policy decision, bringing it within the four corners of Article 14 of the Constitution, power of judicial review would not extend to determine the correctness of such a policy decision or to indulge into the exercise of finding out whether there could be more appropriate or better alternatives. Once we find that parameters of Article 14 are satisfied; there was due application of mind in arriving at the decision which is backed by cogent material; the decision is not arbitrary or irrational and; it is taken in public interest, the Court has to respect such a decision of the Executive as the policy making is the domain of the 181 Executive and the decision in question has passed the test of the judicial review.
15. In Union of India v. Dinesh Engineering Corporation {(2001) 8 SCC 491}, this Court delineated the aforesaid principle of judicial review in the following manner:
"12. there is no doubt that this Court has held in more than one case that where the decision of the authority is in regard to the policy matter, this Court will not ordinarily interfere since these policy matters are taken based on expert knowledge of the persons concerned and courts are normally not equipped to question the correctness of a policy decision. But then this does not mean that the courts have to abdicate their right to scrutinise whether the policy in question is formulated keeping in mind all the relevant facts and the said policy can be held to be beyond 182 the pale of discrimination or unreasonableness, bearing in mind the material on record. Any decision be it a simple administrative decision or policy decision, if taken without considering the relevant facts, can only be termed as an arbitrary decision. If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution."
16. The power of the Court under writ jurisdiction has been discussed in Asif Hameed and Others. v. State of Jammu and Kashmir and Others {1989 suppl. (2) SCC 364} in paras 17 and 19, which read as under:
"17. Before adverting to the controversy directly involved in these appeals we may have a fresh look on the inter se functioning of the three organs of democracy under our Constitution.
Although the doctrine of separation of 183 powers has not been recognised under the Constitution in its absolute rigidity but the Constitution makers have meticulously defined the functions of various organs of the State.
Legislature, executive and judiciary have to function within their own spheres demarcated under the
Constitution. No organ can usurp the functions assigned to another. The Constitution trusts to the judgment of these organs to function and exercise their discretion by strictly following the procedure prescribed therein. The functioning of democracy depends upon the strength and independence of each of its organs. Legislature and executive, the two facets of people's will, they have all the powers including that of finance. Judiciary has no power over sword or the purse nonetheless it has power to ensure that the aforesaid two main organs of State function within the constitutional limits. It is the sentinel of democracy. 184 Judicial review is a powerful weapon to restrain unconstitutional exercise of power by the legislature and executive.
The expanding horizon of judicial review has taken in its fold the concept of social and economic justice. While exercise of powers by the legislature and executive is subject to judicial restraint, the only check on our own exercise of power is the self-imposed discipline of judicial restraint.
19. When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions assigned under the Constitution and if not, the court must strike down the action. While doing so the court must remain within its self-imposed limits. The court sits in judgment on the action of a coordinate branch of the government. While exercising power of judicial review of 185 administrative action, the court is not an appellate authority. The Constitution does not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of legislature or executive, provided these authorities do not transgress their constitutional limits or statutory powers."
17. The aforesaid doctrine of separation of power and limited scope of judicial review in policy matters is reiterated in State of Orissa and Others v. Gopinath Dash and Others {(2005)13 SCC 495} :
"5. While exercising the power of judicial review of administrative action, the Court is not the Appellate Authority and the Constitution does not permit the Court to direct or advise the executive in the matter of 186 policy or to sermonise qua any matter which under the Constitution lies within the sphere of the legislature or the executive, provided these authorities do not transgress their constitutional limits or statutory power. (See Asif Hameed v. State of J&K; 1989 Supp (2) SCC 364 and Shri Sitaram Sugar Co. Ltd. v. Union of India; (1990) 3 SCC 223). The scope of judicial enquiry is confined to the question whether the decision taken by the Government is against any statutory provisions or it violates the fundamental rights of the citizens or is opposed to the provisions of the Constitution. Thus, the position is that even if the decision taken by the Government does not appear to be agreeable to the Court, it cannot interfere.
6. The correctness of the reasons which prompted the Government in decision-making taking one course of 187 action instead of another is not a matter of concern in judicial review and the Court is not the appropriate forum for such investigation.
7. The policy decision must be left to the Government as it alone can adopt which policy should be adopted after considering all the points from different angles. In the matter of policy decisions or exercise of discretion by the Government so long as the infringement of fundamental right is not shown the courts will have no occasion to interfere and the Court will not and should not substitute its own judgment for the judgment of the executive in such matters. In assessing the propriety of a decision of the Government the Court cannot interfere even if a second view is possible from that of the Government."188
18. As far as classification based on geographical area is concerned i.e. held to be permissible by this Court in Gopal Narain v. State of Uttar Pradesh nd another {AIR 1964 SC 370} , held as under:
"11. Looking at the policy disclosed by Sections 7 and 8 and Section 128 of the Act and applying the liberal view a law of taxation receives in the application of the doctrine of classification, it is not possible to say that the policy so disclosed infringes the rule of equality. This Court in more than one decision held that equality clause does not forbid geographical classification, provided the difference between the geographical units has a reasonable relation to the object sought to be achieved. This principle has been applied to a taxation law in Khandige Sham Bhat's Case, AIR 1963 SC 591. In that case, this Court also accepted the principle that the legislative power 189 to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable ways. It is indicated in "Willis on Constitutional Law", at p. 590, that a State can make a territory within a city a unit for the purpose of taxation. So, the impugned section in permitting in the matter of taxation geographical classification, which has reasonable relation to the object of the statute, namely, for providing special amenities for a particular unit the peculiar circumstances whereof demand them, does not in any way impinge upon the equality clause."
19. We would also like to refer to the judgment of this Court in the case of Premier Tyres Limited v. Kerala State Road Transport Corporation {1993 Suppl. (2) SCC 146} wherein this Court held that when a policy decision is taken in the public interest, Courts need not tinker with the same.
190
20. The locus classicus allowing freedom to the Executive to take economic decisions is remarkably dealt with by this Court in R.K. Garg v. Union of India {(1981)4 SCC 675}] and the following discussion from the said judgment is again worth quoting:
"8. Another rule of equal importance is that laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom of speech, religion etc. It has been said by no less a person than Holmes, J., that the legislature should be allowed some play in the joints, because it has to deal with complex problems which do not admit of solution through any doctrinaire or strait-jacket formula and this is particularly true in case of legislation dealing with economic matters, where, having regard to the nature of the problems required to 191 be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more inclined to give judicial deference to legislative judgment in the field of economic regulation than in other areas where fundamental human rights are involved. Nowhere has this admonition been more felicitously expressed than in Morey v. Doud, 354 US 457: 1 L Ed 2d 1485 (1957) where Frankfurter, J., said in his inimitable style:
In the utilities, tax and economic regulation cases, there are good reasons for judicial self-restraint if not judicial deference to legislative judgment. The legislature after all has the affirmative responsibility. 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 192 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.
The Court must always remember that "legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex, that many problems are singular and contingent, that laws are not abstract propositions and do not relate to abstract units and are not to be measured by abstract symmetry"; "that exact wisdom and nice adaption of remedy are not always possible" and that "judgment is largely a prophecy based on meagre and uninterpreted experience". Every legislation particularly in economic matters is essentially empiric and it is based on experimentation or what one may call trial and error method and therefore it cannot provide for all possible 193 situations or anticipate all possible abuses. There may be crudities and inequities in complicated experimental economic legislation but on that account alone it cannot be struck down as invalid. The courts cannot, as pointed out by the United States Supreme Court in Secretary of Agriculture v. Central Roig Refining Company, 94 L Ed 381 : 338 US 604 (1950) be converted into tribunals for relief from such crudities and inequities. There may even be possibilities of abuse, but that too cannot of itself be a ground for invalidating the legislation, because it is not possible for any legislature to anticipate as if by some divine prescience, distortions and abuses of its legislation which may be made by those subject to its provisions and to provide against such distortions and abuses. Indeed, howsoever great may be the care bestowed on its framing, it is difficult to conceive of a legislation 194 which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities or inequities or by the possibilities of abuse of any of its provisions. If any crudities, inequities or possibilities of abuse come to light, the legislature can always step in and enact suitable amendatory legislation.
That is the essence of pragmatic approach which must guide and
inspire the legislature in dealing with complex economic issues.
19. It is true that certain immunities and exemptions are granted to persons investing their unaccounted money in purchase of Special Bearer Bonds but that is an inducement which has to be offered for unearthing black money.
Those who have successfully evaded taxation and concealed their income or wealth despite the stringent tax laws 195 and the efforts of the tax department are not likely to disclose their unaccounted money without some inducement by way of immunities and exemptions and it must necessarily be left to the legislature to decide what immunities and exemptions would be sufficient for the purpose. It would be outside the province of the Court to consider if any particular immunity or exemption is necessary or not for the purpose of inducing disclosure of black money. That would depend upon diverse fiscal and economic considerations based on practical necessity and administrative expediency and would also involve a certain amount of experimentation on which the Court would be least fitted to pronounce. The Court would not have the necessary competence and expertise to adjudicate upon such an economic issue. The Court cannot possibly assess or evaluate what would be the impact of a particular immunity 196 or exemption and whether it would serve the purpose in view or not. There are so many imponderables that would enter into the determination that it would be wise for the Court not to hazard an opinion where even economists may differ. The Court must while examining the constitutional validity of a legislation of this kind, "be resilient, not rigid, forward looking, not static, liberal, not verbal" and the Court must always bear in mind the constitutional proposition enunciated by the Supreme Court of the United States in Munn v. Illinois 94 US 13, namely, "that courts do not substitute their social and economic beliefs for the judgment of legislative bodies". The Court must defer to legislative judgment in matters relating to social and economic policies and must not interfere, unless the exercise of legislative judgment appears to be palpably arbitrary. The Court should constantly remind itself of what the 197 Supreme Court of the United States said in Metropolis Theater Company v. City of Chicago, 57 L Ed 730 : 228 US 61 (1912):
'...The problems of government are practical ones and may justify, if they do not require, rough accommodations, illogical it may be, and unscientific. But even such criticism should not be hastily expressed. What is best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere error of government are not subject to our judicial review.' It is true that one or the other of the immunities or exemptions granted under the provisions of the Act may be taken advantage of by resourceful persons by adopting ingenious methods and devices with a view to avoiding or saving tax. But that cannot be helped because human ingenuity is so great when it comes to tax 198 avoidance that it would be almost impossible to frame tax legislation which cannot be abused. Moreover, as already pointed out above, the trial and error method is inherent in every legislative effort to deal with an obstinate social or economic issue and if it is found that any immunity or exemption granted under the Act is being utilised for tax evasion or avoidance not intended by the legislature, the Act can always be amended and the abuse terminated.
We are accordingly of the view that none of the provisions of the Act is violative of Article 14 and its constitutional validity must be upheld."
21. The aforesaid principle is echoed with equal emphasis in Balco Employees' Union (Regd.) v. Union of India and Others {(2002) 2 SCC 333} in the following manner:199
"46. It is evident from the above that it is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular public policy is wise or whether better public policy can be evolved. Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been urged that a different policy would have been fairer or wiser or more scientific or more logical.
47. Process of disinvestment is a policy decision involving complex economic factors. The courts have consistently refrained from interfering with economic decisions as it has been recognised that economic expediencies lack adjudicative disposition and unless the economic decision, based on 200 economic expediencies, is demonstrated to be so violative of constitutional or legal limits on power or so abhorrent to reason, that the courts would decline to interfere. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. There is no case made out by the petitioner that the decision to disinvest in BALCO is in any way capricious, arbitrary, illegal or uninformed. Even though the workers may have interest in the manner in which the Company is conducting its business, inasmuch as its policy decision may have an impact on the workers' rights, nevertheless it is an incidence of service for an employee to accept a decision of the employer which has been 201 honestly taken and which is not contrary to law.
Conclusion:
92. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the court.
93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In 202 other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. For testing the correctness of a policy, the appropriate forum is Parliament and not the courts. Here the policy was tested and the motion defeated in the Lok Sabha on 1-3-2001."
22. Insofar as judgment of Calcutta High Court in Kalindi Woolen Mills (P) Ltd. vs.Union of India {(1994) 74 ELT 827 (Cal.)} is concerned, we have our reservations on the correctness thereof wherein the High Court found that Notification dated 28.04.1989 allowing imports of Woolen rags, Synthetic rags, Shoddy wool through two ports only, namely, Bombay and Delhi ICD. In any case, insofar as argument based on Article 14 is concerned, the said judgment is distinguishable as in that case the Court did not find any 203 intelligible basis which was disclosed before the Court either in the affidavits filed by the Customs Authorities or in the Import Licensing Control Authorities of the Government of India.
Likewise, no rational nexus for imposing the restrictions on
importation of the subject goods only through Delhi ICD and Bombay ports is disclosed. In the absence of such a justification, on the facts of that case, the Court found the Notification to be violative of Article 14 of the Constitution.
23. In contrast, in the present case, as already pointed out above, the respondents have been able to demonstrate intelligible basis for issuing the impugned Notifications having rational nexus with the objectives sought to be achieved. We, thus, reject the arguments based on Article 14 of the Constitution.
204
26. Scope and ambit of the aforesaid provision was considered in Abdul Aziz Aminudin v. State of Maharashtra {AIR 1963 SC 1470}], wherein this Court held as under:
"10. It is clear therefore that the power conferred under Section 3(1) of the Act is not restricted merely to prohibiting or restricting imports at the point of entry but extends also to controlling the subsequent disposal of the goods imported. It is for the appropriate authority and not for the Courts to consider the policy, which must depend on diverse considerations, to be adopted in regard to the control of import of goods. The import of goods can be controlled in several ways. If it is desired that goods of a particular kind should not enter the country at all, the import of those goods can be totally prohibited. In case total prohibition is not desired, 205 the goods could be allowed to come into the country in limited quantities. That would necessitate empowering persons to import under licences certain fixed quantities of the goods. The quantity of goods to be imported will have to be determined on consideration of the necessity for having those goods in the country and that again, would depend on the use to be made of those goods. It follows therefore that the persons licensed to import goods up to a certain quantity should be amenable to the orders of the licensing authority with respect to the way in which those goods are to be utilised. If the licensing authority has no such power, its control over the import cannot be effective. It may have considered it necessary to have goods imported for a particular purpose. If it cannot control their utilisation for that purpose, the imported goods, after import, can be 206 diverted to different uses, defeating thereby the very purpose for which the import was allowed and power had been conferred on the Central Government to control imports. It is therefore not possible to restrict the scope of the provision about the control of import to the stage of importing of the goods at the frontiers of the country. Their content is much wider and extends to every stage at which the Government feels it necessary to see that the imported goods are properly utilised for the purpose for which their import was considered necessary in the interests of the country."
27. We may also point out that proviso to sub-section (2) as well as sub- section (4) were inserted by Act 25/2010 w.e.f.
27.08.2010. In any case, we are primarily concerned with the interpretation of sub- sections (1) and (2) of Section 3 as far as 207 present case is concerned. Sub-section (1) empowers the Central Government to make provision for the development as well as regulation of foreign trade by facilitating imports and increasing exports. Thus, the Government is empowered to make provision insofar as they relate to the development of foreign trade and it has also empowered to regulate the foreign trade. The two key words here are 'development' and 'regulation'. It is also important to note that such development and regulation is aimed at facilitating imports as well as increasing exports. First argument of Mr. Naphade was that regulatory provision has to be for facilitating imports whereas in the present case, it was to curb the imports insofar as ports in Kerala are concerned. Sub-section (2) of Section 3 further empowers the Central Government to make provision for:
(i) prohibiting; (ii) restricting; or (iii) otherwise regulating 'the import or export of goods or services or technology'. It can be done in all cases or in specified classes 208 of cases. The submission of Mr. Naphade was that such provisions prohibiting, restricting or otherwise regulating are to be made in respect of import or export of goods or services or technology which essentially were custom based. He referred to the definition of 'import' and 'export' contained in Section 2(e) of the Act which, in relation to goods, means bringing into, or taking out of, India any goods by land, sea or air. He, thus, submitted that insofar as import of goods is concerned, it only meant bringing the said goods into India.
That is by crossing the custom barrier, to bring the same in the territory of India. Therefore, sub-section (2) is with reference to goods and not with place. He also submitted that the expression 'otherwise regulating' referred to licence etc. by which the import could be regulated and had nothing to do with the 'place'. Section 5 which existed at the relevant time reads as under:
209
"5. Export and import policy. - The Central Government may, from time to time formulate and announce, by notification in the Official Gazette, the export and import policy and may also, in the like manner, amend that policy." This Section is substituted by amended Section 5 w.e.f. 27.08.2010 and the amended Section reads as under:
"5. Foreign Trade Policy. - The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy:
Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and 210 adaptations, as may be specified by it by notification in the Official Gazette."
29. These were countered by Mr. Panda, learned senior counsel for the respondents by arguing that the impugned Notifications may be considered with reference to Section 3(2) of the Act not in isolation, but on a harmonious construction of the same with reference to the statement of objects and reasons to the Act along with Sections 2(e), 3(3) and 5 of the Act along with Sections 7 and 11 of the Customs Act, 1962. The Foreign Trade Policy of 2004-2009, the relevant provisions of which have already been extracted herein before at Para 3 may also be considered. This approach, according to him, would be in consonance with the ratio of the judgment of this Court in Union of India v. Asian Food Industries {(2006)13 SCC 542}:
211
"25. Would the terms 'restriction' and 'regulation' used in Clause 1.5 of the Foreign Trade Policy include prohibition also, is one of the principal questions involved herein.
26. A citizen of India has a fundamental right to carry out the business of export, subject, of course to the reasonable restrictions which may be imposed by law. Such a reasonable restriction was imposed in terms of the 1992 Act.
27. The purport and object for which the 1992 Act was enacted was to make provision for the development and regulation of foreign trade inter alia by augmenting exports from India. While laying down a policy therefor, the Central Government, however, had been empowered to make provision for prohibiting, restricting or otherwise regulating export of goods.212
28. Section 11 of the 1962 Act also provides for prohibition. When an order is issued under sub-section (3) of Section 3 of the 1992 Act, the export of goods would be deemed to be prohibited also under Section 11 of the 1962 Act and in relation thereto the provisions thereof shall also apply.
29. Indisputably, the power under Section 3 of the 1992 Act is required to be exercised in the manner provided for under Section 5 of the 1992 Act. The Central Government in exercise of the said power announced its Foreign Trade Policy for the years 2004-2009.
It also exercised its power of amendment by issuing the Notification dated 27.06.2006. Export of all commodities which were not earlier prohibited, therefore, was permissible till the said date.
43. We are, however, not oblivious of the fact that in certain circumstances 213 regulation may amount to prohibition. But, ordinarily the word "regulate"
would mean to control or to adjust by rule or to subject to governing principles (See U.P. Cooperative Cane Unions Federations v. West U.P. Sugar Mills Association and Others, (2004) 5 SCC 430, whereas the word "prohibit"
would mean to forbid by authority or command. The expressions "regulate" and "prohibit" inhere in them elements of restriction but it varies in degree. The element of restriction is inherent both in regulative measures as well as in prohibitive or preventive measures.
46. The terms, however, indisputably would be construed having regard to the text and context in which they have been used. Section 3(2) of the 1992 Act uses prohibition, restriction and regulation. They are, thus, meant to be applied differently. Section 51 of the 1962 Act also speaks of prohibition.
Thus, in terms of the 1992 Act as also 214 the policy and the procedure laid down thereunder, the terms are required to be applied in different situations where for different orders have to be made or different provisions in the same order are required therefore."
32. In the present case, as already held above, there is a sufficient public good sought to be achieved by laying down the exception banning the imports of crude palm oil through ports in Kerala. That, according to us, provides complete answer to the argument of the learned senior counsel for the appellants. Calcutta High Court in Kalindi Woolen Mills (P) Ltd. (supra) overlooked the aforesaid pertinent aspect which gives sufficient powers to the Central Government to act in the manner it has acted. The argument of Mr. Naphade predicated on the contrast between old and new provisions of Section 5 of the Act, again, would be of no avail in view of 215 our aforesaid discussion holding that sub-section (2) of Section 3 of the Act gives ample power to the Government to issue such Notifications in exceptional cases and present case falls within those parameters. No other argument was addressed. We, therefore, do not find fault with the view taken by the High Court upholding the Notifications in question.
These appeals are accordingly
dismissed.
114. The Hon'ble Supreme Court while
considering the aspects of 'policy decision' and 'judicial review' in the case of SHER SINGH AND OTHERS .vs. UNION OF INDIA AND OTHERS reported in (1995)6 SCC 515 held at paragraph-7 as under:
7. xxx xxx Later, if the Government had taken a policy decision to grant parity again with effect from 1.4.1980 and not with retrospective effect from 1.7.1973 when it was disturbed there 216 could be no legitimate grievance for the same because the Government has the right to change its policy from time to time, according to the administrative exigencies and demands of the relevant time. As a matter of fact the Courts would be slow in interfering with matters of Government Policy except where it is shown that the decision is unfair malafide or contrary to any statutory directions. There will be no justification for the Court to interfere with the policy of the Government merely on the ground of change in the policy. If earlier the Government took a policy decision to grant parity to the library staff with the teaching staff it was the policy of the then Government and if for certain reasons the Government took a different policy decision to withdraw the parity and to enforce it again with effect from a certain date it will again be a matter of policy of the Government and it is not for the Courts to interfere with such 217 policy decisions of the Government.
Normally the Courts will not dictate the decision of the statutory authority in exercise of its discretion and formulation of its policies. The Court will not direct the statutory authority to exercise the discretion in a particular manner not expressly required by law. The Court can only command the statutory authority by a Writ of Mandamus to perform its duty by exercising the discretion according to law. This was also the view expressed by the Court in U.P. State Road Transport Corporation & Anr. Vs. Mohd. Ismail & Ors. [1991 (3) SCC 239]. In the present case we find that there is no judicial or quasi-judicial duty or any obligation imposed on the Government to equate the library staff with the teaching staff, on the basis of which the enforcement thereof could be claimed by the appellants. In such a situation it cannot be said that the Government did not act fairly or acted 218 malafide so as to call for any interference by this Court invoking the power of Judicial Review.
115. The Hon'ble Supreme Court while considering the provisions of Article 14 of the Constitution of India and the aspects of arbitrariness and Government policy in the case of UNION OF INDIA .vs. INTERNATIONAL TRADING CO. reported in (2003)5 SCC 437 held at paragraphs 22 and 23 as under:
22. If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.
23. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of 219 the general public and not from the standpoint of the interest of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalization of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business 220 affects the economy of the country.
(See Parbhani Transport Co-operative Society Ltd. v. The Regional Transport Authority, SC/0248/1960, Shree Meenakshi Mills Ltd. v. Union of India SC/0064/1973, Hari Chand Sarda v.
Mizo District Council SC/0058/1966 and Krishnan Kakkanth v. Government of Kerala (AIR 1997 SC 129).
116. The Hon'ble Supreme Court while considering the aspects of 'judicial review' and 'policy decision of the Government' in the case of MICHIGAN RUBBER (INDIA) LIMITED .vs. STATE OF KARNATAKA reported in (2012)8 SCC 216 held at paragraph-35 as under:
"35. As observed earlier, the Court would not normally interfere with the policy decision and in matters challenging the award of contract by the State or public authorities. In view of the above, the appellant has failed to establish that the same was contrary to 221 public interest and beyond the pale of discrimination or unreasonable. We are satisfied that to have the best of the equipment for the vehicles, which ply on road carrying passengers, the 2nd respondent thought it fit that the criteria for applying for tender for procuring tyres should be at a high standard and thought it fit that only those manufacturers who satisfy the eligibility criteria should be permitted to participate in the tender. As noted in various decisions, the Government and their undertakings must have a free hand in setting terms of the tender and only if it is arbitrary, discriminatory, mala fide or actuated by bias, the Courts would interfere. The Courts cannot interfere with the terms of the tender prescribed by the Government because it feels that some other terms in the tender would have been fair, wiser or logical. In the case on hand, we have already noted that taking into account various aspects including the 222 safety of the passengers and public interest, the CMG consisting of experienced persons, revised the tender conditions. We are satisfied that the said Committee had discussed the subject in detail and for specifying these two conditions regarding pre- qualification criteria and the evaluation criteria. On perusal of all the materials, we are satisfied that the impugned conditions do not, in any way, could be classified as arbitrary, discriminatory or mala fide.
117. The Hon'ble Supreme Court while considering Articles 14, 73 and 162 of the Constitution of India with regard to scope of judicial review and decisions requiring technical, commercial or expert knowledge in the case of BAJAJ HINDUSTAN LTD. .vs. SIR SHADI LAL ENTERPRISES LTD., reported in (2011)11 SCC 640 held that it is well settled that in areas of economics and commerce, far greater latitude 223 available to executive than in other matters and Courts, not being experts in said fields, cannot interfere with wisdom of policy framed by legislature or executive. The Hon'ble Supreme Court in the said decision held at paragraphs 21, 40, 41, 42 to 47 as under:
21. It is settled law that in the areas of economics and commerce, there is far greater latitude available to the executive than in other matters. The Court cannot sit in judgment over the wisdom of the policy of the legislature or the executive. Thus in Balco Employees' Union (Regd.) vs. Union of India and Ors. 2002(2) SCC 333 it was observed (vide paragraph 92 and 93):
"92. In a democracy, it is the prerogative of each elected Government to follow its own policy. Often a change in Government may result in the shift in focus or change in economic policies. Any such change may result in adversely affecting some vested 224 interests. Unless any illegality is committed in the execution of the policy or the same is contrary to law or mala fide, a decision bringing about change cannot per se be interfered with by the court.
93. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. In other words, it is not for the courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved."
In the same decision in paragraph 39 it was observed :
"39. In Premium Granites vs. State of T.N., 1994(2) SCC 691 while considering the Court's powers in interfering with the policy decision, it was observed at page 715 as under: (SCC para 54) 225 '54. It is not the domain of the Court to embark upon the 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.'"
40. Economic and fiscal regulatory measures are a field where Judges should encroach upon very warily as Judges are not experts in these matters. The impugned policy parameters were fixed by experts in the Central Government, and it is not ordinarily open to this Court to sit in appeal over the decisions of these experts. We have not been shown any violation of law in the impugned notification or Press Note.
226
41. The power to lay policy by executive decisions or by legislation includes power to withdraw the same unless it is by mala fide exercise of power, or the decision or action taken is in abuse of power. The doctrine of legitimate expectation plays no role when the appropriate authority is empowered to take a decision by an executive policy or under law. The court leaves the authority to decide its full range of choice within the executive or legislative power. In matters of economic policy, it is settled law that the court gives a large leeway to the executive and the legislature. Granting licences for import or export is an executive or legislative policy. The Government would take diverse factors for formulating the policy in the overall larger interest of the economy of the country. When the Government is satisfied that change in the policy was necessary in the public interest it 227 would be entitled to revise the policy and lay down a new policy.
42. In Prag Ice & Oil Mills vs. Union of India AIR 1978 SC 1296 the Supreme Court observed :
"24. .....We do not think that it is the function of this Court or any Court to sit in judgment over such matters of economic policy as must necessarily be left to the government of the day to decide. Many of them as a measure of price fixation must necessarily, be, are matters of prediction of ultimate results on which even experts can seriously err and doubtlessly differ. Courts can certainly not be expected to decide them without even the aid of experts."228
43. In Shri Sitaram Sugar Co. Ltd. vs. Union of India (1990) 3 SCC 223 the Supreme Court observed :
"57.Judicial review is not concerned with matters of economic policy. The Court does not substitute its judgment for that of the legislature or its agents as to matters within the province of either. The Court does not supplant the 'feel of the expert' by its own views."
It must be remembered that certain matters are by their nature such as best be left to experts in the field. This Court does not have the technical and administrative expertise in this respect.
44. In the words of Chief Justice Neely :
"I have very few illusions about my own limitations as a Judge. I am not an accountant, electrical engineer, financer, banker, stockbroker or 229 system management analyst. It is the height of folly to expect Judges intelligently to review 5000 page record addressing the intricacies of a public utility operation. It is not the function of a Judge to act as a super board, or with the zeal of a pedantic school master substituting its judgment for that of the administrator."
45. In our opinion there should be judicial restraint in fiscal and economic regulatory measures. The State should not be hampered by the Court in such measures unless they are clearly illegal or unconstitutional. All administrative decisions in the economic and social spheres are essentially ad hoc and experimental. Since economic matters are extremely complicated this inevitably entails special treatment for distinct social phenomena. The State must therefore be left with wide latitude in devising ways and means of imposing fiscal regulatory measures, 230 and the Court should not, unless compelled by the statute or by the Constitution, encroach into this field.
46. In our opinion, it will make no difference whether the policy has been framed by the legislature or the executive and in either case there should be judicial restraint. The Court can invalidate an executive policy only when it is clearly violative of some provisions of the Statute or Constitution or is shockingly arbitrary but not otherwise.
47. As held by this Court in Aravali Golf Club & Anr. vs. Chander Hass & Anr. JT (2008) 3 SCC 221, the Court must maintain judicial restraint and not ordinarily encroach in the domain of executive or legislature.
118. The Central Government taking into consideration all the surrounding circumstances and the fact that poppy seeds is a special produce, amended 231 condition No.3(c) of the import policy as a policy decision exercising its legislative domain in order to distribute poppy seeds to all the applicants who aspire for import of poppy seeds and in order to avoid monopoly by any one of the applicants. The petitioners have not pointed out any malafide on the part of the Central Government while amending the condition No.3 of the import policy. Further, there is no violation of fundamental rights of the petitioners guaranteed under Article 19(1)(g) of the Constitution of India. Therefore the reasonable restriction imposed by the Central Government is within the parameters of Article 19(6) of the Constitution of India and in the interest of consumers at large. Therefore Point No.4 has to be answered in the negative holding that the petitioners have not made out any case to interfere with condition No.3(c) of the amended import policy issued by the Central Government exercising the powers under Article 226 and 227 of the Constitution of India. 232
X CONCLUSION
119. In view of the aforesaid reasons, the
impugned notification, guidelines and public notices issued by Respondent Nos.1 to 4 are in accordance with law. The petitioners have not made out any ground to interfere with the same exercising the powers under Articles 226 and 227 of the Constitution of India.
Accordingly, the writ petitions are dismissed.
120. This Court had the privilege and pleasure of hearing the erudite arguments of learned Senior Counsel for the petitioners and learned Additional Solicitor General as well as other Counsel for the parties. The sincere efforts made by them are appreciated and placed on record.
Sd/-
Judge Paras : 35-43; 50-57; 64-68.. nsu 1-25; 44-49; 84-95; 98-end ..gss/-
26-34; 58-63; 69-83; 96-97 .. kcm