Allahabad High Court
Ayurveda Sewashram Kalyan Samiti Thru ... vs Union Of India Thru Secy. And 3 Others on 29 November, 2013
Author: Dilip Gupta
Bench: Dilip Gupta
HIGH COURT OF JUDICATURE AT ALLAHABAD A.F.R. Chief Justice's Court Case :- PUBLIC INTEREST LITIGATION (PIL) No. - 22067 of 2013 Petitioner:- Ayurveda Sewashram Kalyan Samiti Thru Secretary Allahabad. Respondent :- Union Of India Thru Secy. And 3 Others Counsel for Petitioner :- Ms. Meenakshi Arora, Senior Advocate, Mr. Yashwant Verma, Senior Advocate, Mr. Shishir Prakash, Mr. Shad Khan and Mr. Ajit Kumar Singh. Counsel for Respondent :- Mr. R.B. Singhal, Sr. Advocate & A.S.G.I. assisted by Mr. Sanjay Kumar Om, Mr. B.K.Singh Raghuvanshi, Mr. Rahul Sripat, Mr. Gaurav Barathi, Mr. Jayant Mehta, Mr. Arvind Srivastava, Mr. K. Chandrashekhar, Mr. Krishna Anand, Mr. Saurabh Srivastava, Mr. Piyush Kumar, Mr. Gopal Verma and Ms. Shiksha Sapara. ***** Hon'ble Dr. Dhananjaya Yeshwant Chandrachud,Chief Justice Hon'ble Dilip Gupta,J.
The import of khas khas or poppy seeds, which is governed by the EXIM policy of the day forms the subject matter of these proceedings in public interest. The petition has been brought before the Court by a body which is described as Ayurveda Sewashram Kalyan Samiti, Allahabad. The petitioner seeks (i) a mandamus commanding the respondents to strictly adhere to the conditions enunciated in a notification dated 5 October 2012; (ii) a writ restraining the respondents from allowing import of khas khas from any country not specified in the notification; (iii) a mandamus to lay down a procedure by which first preference should be given to Indian farmers for selling their produce in the Indian market between the harvesting season and September; and (iv) a mandamus directing the respondents not to register any contract for import of khas khas and, if the contracts have already been registered, they should be cancelled and further, not to allow any import under licences or permissions until a procedure is framed in the interest of Indian farmers.
2. Poppy seeds or khas khas are a by-product of poppy. Poppy seeds do not constitute a narcotic substance. However, since they emanate from the poppy plant, which has narcotic properties, they are the subject matter of regulation under the EXIM policy. Chapter 12 of the Import Policy contains heading 1207, which applies among other things to poppy seeds. The poppy seeds are governed by heading 1207 91 00. The policy contemplates free import of poppy seeds subject to certain conditions, which have been specified. Condition-3, as it was originally framed, provided the following stipulations for the import of poppy seeds:
"(3) Import of Poppy Seeds (Exim Code No.1207 91 00) shall be allowed subject to the following conditions:
(a) Import permitted only from Australia, Austria, France, China, Hungary, the Netherlands, Poland, Slovenia, Spain, Turkey and Czech Republic;
(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 as per requirements of International Narcotics Control Bureau (website:http://www.incb.org); and
(c) All import contracts for this item shall compulsory be registered with the Narcotics Commissioner, Central Bureau of Narcotics, Gwalior (website: http://cbn.nic.in) prior to import."
3. An amendment to the aforesaid condition was brought into force by a notification dated 5 October, 2012. As originally framed, condition-3 contained three stipulations; (i) import of poppy seeds was permitted only from eleven countries specifically named; (ii) the importer was required to produce an appropriate certificate from the competent authority of the exporting country that opium poppy has been grown licitly/legally in that country; and (iii) all import contracts are required to be compulsory registered with the Narcotics Commissioner, Central Bureau of Narcotics, Gwalior. By the amended notification, the number of countries from where the import of poppy seeds may be made has been increased to seventeen. The second condition has been modified to provide that the importer shall produce an appropriate certificate from the competent authority of the exporting country that the opium poppy has been grown licitly/legally in that country. The third requirement is as before.
4.On behalf of the petitioner, it has been submitted that this petition has been instituted with a view to seek strict enforcement of the conditions contained in the Import Policy governing the export of poppy seeds.
5. India is a signatory to the Single Convention on Narcotic Drugs, 1961. The National Policy on Narcotic Drugs and Psychotropic Substances notes that Narcotic Drugs and Psychotropic Substances have several medical and scientific uses, but they can be and are also abused and trafficked. India's approach towards Narcotic Drugs and Psychotropic Substances is enshrined in Article 47 of the Constitution. The principle of preventing use of drugs except for medicinal use was also adopted in the three international conventions on drug related matters, viz., Single Convention on Narcotic Drugs, 1961, Convention on Psychotropic Substances, 1971 and the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, 1988.
6. In this background, 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 has been urged that (i) poppy seeds, being a by-product of a narcotic produce must be regulated with caution and this is also a part of 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 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. CBN, it is alleged, has registered contracts of between 1.5 to 2.00 lac metric tonnes, whereas the authorized quantity of production is between 50,000 to 80,000 metric tonnes.
7. These submissions were sought to be buttressed with reference to the import of poppy seeds from Turkey. The petitioners have produced before the Court a statement drawn from a website of the Department of Commerce regarding an export-import data bank showing that for 2011-12, poppy seeds were imported from as many as thirty two countries of which twenty one are not in the list of permitted countries in the conditions described in the Import Policy. The Director General of Foreign Trade (DGFT) in an Office Memorandum dated 14 December 2012 addressed to the Central Board of Excise and Customs and the Department of Revenue stated that the import of poppy seeds was allowed from eleven countries originally, while six additional countries were allowed by a notification dated 5 October 2012. However, it has been observed from import data that import has taken place from thirty one countries in place of a designated seventeen countries. A report was, therefore, summoned. According to the petitioner, the import from Turkey constitutes between 95% to 97% of the total imports into India, whereas only a small portion of imports originates in China. Moreover, it has been submitted that according to news reports in the international media, Turkey is the transit point for import of poppy seeds from countries such as Afghanistan and Pakistan. This, it is alleged, would act as a funnel to fund terrorist activities.
8. At the outset, before we deal with the merits of the grievance of the petitioner, it would be necessary to deal with the preliminary objection, which has been raised on behalf of the respondents to the maintainability of these proceedings. It has been stated that in 2013, a company by the name of Agson Global Pvt Ltd imported a high quantity of poppy seeds in 142 containers from Turkey, the total quantity of imported poppy seeds being 2556 metric tonnes. This Company, it is alleged, is owned and controlled by one Apresh Garg. On 1 April, 2013, a petition was filed in the Delhi High Court (Writ Petition (Civil) No.2267 of 2013), seeking an order of restraint against the grant of any licence for import of poppy seeds between April and September 2013 and for suspension of imports of poppy seeds when the crop is available in the domestic market. On 10 April 2013, the Delhi High Court disposed of the petition by directing the Union Government and the DGFT to consider the representation of the petitioners and take a decision thereon within six weeks. Thereafter on 14 April 2013, a body by the name of Association of Agro Importers through Apresh Garg filed another petition before the Delhi High Court (Writ Petition (Civil) No.2465 of 2013), seeking (i) a mandamus for strict adherence to the notification dated 5 October 2012; (ii) an order of restraint from allowing import of khas khas from a country not provided in the notification; and (iii) a mandamus directing the Union Government to re-frame the policy and lay down a procedure to curb illegal import of khas khas in the Indian market. On 17 April 2013, the Delhi High Court, by an interim order, called upon the petitioner to disclose the names of the members of its Association and observed that in the meantime, the Government shall ensure that imports are carried out in accordance with the notification dated 5 October 2012.
9. On 18 April 2013, the present public interest litigation was filed purportedly on behalf of certain farmers seeking similar reliefs, commanding strict adherence to the notification dated 5 October 2012; restraining import of poppy seeds from a country not specified in the notification and other consequential relief. The petition which was filed before this Court, it is an admitted position, contains a verbatim reproduction of the pleadings before the Delhi High Court in the second petition noted above. Of the sixty four farmers whose names are set out in an Annexure to the present proceedings, nine are shown from the State of Uttar Pradesh. The names of the remaining farmers who hail from the States of Madhya Pradesh and Rajasthan were also appended to the petition which was filed before the Delhi High Court.
10. On 18 April 2013, an interim direction was issued by a Division Bench of this Court that the import of poppy seeds shall not be made from countries which are not notified or permitted by the Government of India or by any other competent authority. On 22 April 2013, an application for modification was filed by the petitioner, seeking an order of restraint against registration of any contract for import of poppy seeds. On 24 April 2013, a Division Bench of this Court, in addition to the earlier directions, ordered that import of poppy seeds shall be made strictly in terms of the Import Policy read with the notification dated 5 October 2012.
11. An affidavit was filed on behalf of the petitioner on 24 April 2013, alleging that the Union Government had allowed import of more than two lac metric tonnes of white poppy seeds (khas khas) from Turkey itself, which was alleged to be in excess of the total production of white poppy seeds in Turkey. It was alleged that between April and October 2011, 2,61,754 metric tonnes of white poppy seeds were imported into India, whereas during April 2012 to March 2013, there was a total import of 5,23,252 metric tonnes.
12. On 16 May 2013, a Division Bench of this Court, on the basis of these representations, issued an interim direction not to allow any import of white poppy seeds from Turkey till the next date of listing, notwithstanding any licence or registration of any import sale contract. This order has since been modified by the Division Bench on 8 August 2013, so as to allow the clearance of imports from Turkey of such importers whose consignments of white poppy seeds were loaded for import to India on completion of all legal formalities, on or before 16 May 2013.
13. The sequence of events, which has been referred to above, would reveal that two petitions were filed before the Delhi High Court. The first petition was disposed of with a direction to the Union Government to consider the representation, whereupon the second petition was filed for enforcement of the notification of the Union Government dated 5 October 2012. The Delhi High Court called for a disclosure of the names of the members of the Association, who had filed the second petition, on 17 April 2013. Immediately on the next day, the present public interest litigation came to be filed before this Court. The averments in the present public interest litigation are substantially similar and in fact, according to the respondents, there is a verbatim reproduction of the averments made in the petition filed before the Delhi High Court. That apart, it is also evident that out of the sixty four farmers on whose behalf the case has been instituted, fifty five are shown from the States of Madhya Pradesh and Rajasthan, whereas nine are said to be from the State of Uttar Pradesh. The group of fifty five is drawn from the petition in the Delhi High Court. Apart from these circumstances, we are constrained to observe that in the affidavit filed in support of the application for modification of the first interim order, which was passed by the Division Bench on 18 April 2013, it was stated that the Union Government had allowed imports from Turkey of 2.00 lac metric tonnes of white poppy seeds, which was alleged to be in excess of the total production in Turkey. Moreover, it was stated that between April and October 2011, the import of white poppy seeds from Turkey was 2,61,754 metric tonnes, whereas from April 2012 to March 2013, the figure had increased to 5, 23,252 metric tonnes. This is sought to be explained by stating that the annexures to the affidavit contain details of the contracts which were registered and not of actual imports. Be that as it may, it is evident that the basis on which a general interim direction was issued by the Division Bench of this Court restraining all imports from Turkey on 16 May 2013 was an apprehension that the total quantum of imports from Turkey into India was in excess of the total domestic production in Turkey itself from which an inference was drawn by the petitioners that the balance was sourced illegally from a third country. This submission is now dispelled in the affidavit in reply, which has been filed by CBN. It has been stated that while it is true that the total registered quantity of imports under various contracts was between 1.5 to 2.00 lac metric tonnes, the actual quantity of imports is not more than 10%-15% of the registered quantity. The total quantity of imported poppy seeds is 17,496 metric tonnes for 2010-2011, 23,578 metric tonnes for 2011-2012 and 3954 metric tonnes for 2012-2013 (the last figure was required to be increased as the exact figures were still to be compiled). Hence, there was no cogent basis in the apprehension of the petitioner on the basis of which an interim order of restraint was issued for restraining imports sourced from Turkey. These facts and circumstances are sufficient, in our opinion, to cast doubt on the bona fides of the petitioner in moving these proceedings under Article 226 of the Constitution of India.
14. However, we are equally of the view that the issue which has been highlighted before the Court in these proceedings has a significant element of public interest so as to require the intervention of the Court to clarify some of the issues which arise from the information which has been brought to the attention of the Court. We must, however, deal with caution and circumspection, and not allow the proceedings to be misused to protect a business or commercial interest which the petitioners may seek to espouse. The exercise of jurisdiction must be carefully structured to ensure that the paramount sovereign interest of the nation is secured and that the veil of a PIL does not become an instrument of promoting a private business interest. We may refer, at this stage, to a judgment of the Supreme Court in Ayaaubkhan Noorkhan Pathan Vs. State of Maharashtra, (2013) 4 SCC 465, wherein it has been observed that in exceptional situations, the Court may, even if the bona fides of the petitioner are doubted, proceed suo motu to deal with the grievance raised, if the issue requires consideration of the Court. The issue, which has been raised in these proceedings, is undoubtedly a matter of national interest. This is clear from the affidavit of CBN, Gwalior, which emphasises the rationale for regulation of the international trade in poppy seeds, as follows:-
"That the control over international trade in poppy seed was introduced to implement the Action Plan on International Co-operation on the Eradication of Illicit Drug Crops which was part of resolution S20/4 E adopted by the 20 Special Session of UN General Assembly on 10 June 1998 followed by the resolution 1999/32 adopted by the Economic & Social Council of the UN, as a preventive measure to check the growing illicit poppy cultivation which has been a cause of concern for international community as it indirectly promotes the illicit cultivation of opium poppy and also produces opium for illicit manufacture of heroin posing serious economic, social and political challenges."
15. The Policy governing the import of poppy seeds prescribes three conditions subject to which such imports would be allowed. Hence, while the policy allows free import of poppy seeds, such import is subject to those conditions which have been prescribed. The first condition is that such import must originate only from seventeen countries which are stipulated in the Import Policy as amended on 5 October 2012; the second condition is that the importer must produce a certificate from the competent authority of the exporting country that the opium poppy has been grown licitly/legally in that country; and the third condition is that all import contracts have to be compulsorily registered with the Narcotics Commissioner, Central Bureau of Narcotics, Gwalior. In the affidavit filed by CBN, it has been clarified that the import of poppy seeds is covered under the open general licence, whereby any one can import poppy seeds from any exporter from one of the designated countries. However, the Narcotics Commissioner only registers import contracts for import of poppy seeds from the designated countries. In order to ensure that the import should not take place from countries other than those which are notified, a clear instruction is provided in the registration certificate to the importer as well as to the customs authorities that the poppy seeds imported are accompanied with the 'Country of Origin' certificate so as to comply with condition (A) in the notification dated 5 October 2012. CBN has stated and clarified that no registration certificate has been issued for import of poppy seeds from those countries, which are not designated by the notification. CBN has further stated that while it is true that the total registered quantity of import is 1.5 to 2.00 lac metric tonnes per year, the actual quantity of import is not more than 10%-15% of the registered quantity. In a further affidavit, CBN has stated before the Court 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 un-utilized registration certificate against which import has not been effected is required to be surrendered back. In order to deal with the allegation in regard to the quantum of export from Turkey, it has been stated that the total quantum of export from Turkey to India was 10,946 metric tonnes in 2009, 12,019 metric tonnes in 2010, 20,751 metric tonnes in 2011 and 13,206 metric tonnes in 2012.
16. The affidavit which has been filed on behalf of the DGFT states that registration of import contracts is the responsibility of CBN. However, Customs field formations at the port 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 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 5 October 2012.
17. DGFT has stated that based on the data on import of poppy seeds as available in December 2012, it was noticed that imports were taking place from some non-designated countries, consequent upon which the matter was brought to the notice of the Central Board of Excise & Customs on 14 December 2012. In August 2013, the data of the last 5 years (2008-09 to 2012-13) was verified which indicated that six transactions of import of poppy seeds between May 2011 and March 2012 had taken place from non-designated countries. It was stated initially that the aforesaid data was not conclusive since it was subject to verification by the Department of Revenue and a final report was awaited. A subsequent affidavit has been filed in which it has been stated that a scrutiny of transactions in respect of the import data for 2012-13 was carried out and it was found that some inconsistencies occurred due to technical errors in an intermediate level Electronic Data Interchange (EDI) Data Uploading Programme (Customs Data to Oracle Data Base). This has been sought to be explained in an affidavit dated 8 October 2013 and it has been stated that for 2011-12, import of poppy seeds has taken place only from Turkey and China.
18. 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 of not 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 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, namely CBN. The role and function of CBN as a registering body are clarified in a Manual which prescribes the norms for the discharge of its functions. This Manual is not disputed nor is its applicability contested on behalf of the respondents during the course of the hearing. The Manual specifies the following functions of CBN in the matter of registration of import contracts for the import of poppy seeds under the notification issued by DGFT:-
"5. Registration of import contract for import of poppy seeds under the provision of DGFT notification:-
The Registration of import contracts with the Narcotics Commissioner for import of poppy seeds is provided for in the Ministry of Commerce and Industry, Department of Commerce, Notification No.27 (RE-2000)/1997-2000 dated 1.8.2000, which reads as follows:-
(i) Import permitted only from Australia, Austria, France, China, Hungry, the Netherlands, Poland, Slovenia, Spain, Turkey and Czech Republic.
(ii) 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 as per requirements of International Narcotics Control Board (INCB) and
(iii) All import contracts for this item shall compulsory be registered with the Narcotics Commissioner, Gwalior prior to import.
Additionally, the registration of import contract involves verification of legitimacy of the transaction and genuineness of the importer. Other Government Agencies or any International Organization are consulted as and when required."
(emphasis supplied)
19. The second document to which a reference would be necessary, at this stage, is the National Policy on Narcotic Drugs and Psychotropic Substances. Paragraph 17 of the Policy specifically adverts to the role of the Narcotics Commissioner before registering contracts, in the following terms:-
"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 authorised 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. 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."
(emphasis supplied)
20. Both these policy documents emanate from the Union Government and it would be far-fetched for CBN as a regulatory authority, to contend that it is not bound by the policy documents, which the Union Government has prescribed for the discharge of its functions. The National Policy states that it has been prepared in consultation with Ministries, Organizations and State Governments and aims to:-
"(a) Spell out the policy of India towards narcotic drugs and psychotropic substances;
(b) Serve as a guide to various Ministries and organisations in the Government of India and to the State Governments as well as International Organisations, NGOs, etc.; and
(c) Re-assert India's commitment to combat the drug menace in a holistic manner."
21. Consequently, both the Manual, to which a reference has been made above, and paragraph 17 of the National Policy must furnish useful guides to the Narcotics Commissioner for the discharge of his functions. Undoubtedly, neither the Manual nor the National Policy can override a document such as the Import Policy which has statutory 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 Manual specifies that the registering of import contracts involves verification of the legitimacy of the transaction and of the genuineness of the importer and that other government agencies or international organisations are consulted as and when required. The National Policy emphasises 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 public policy for the Union Government in its stated object to combat the international trade in narcotic drugs and psychotropic substances. CBN cannot denude itself of the obligation and function which has been cast upon the Narcotics Commissioner. The discharge of the functions by the Narcotics Commissioner must be consistent with the purpose of implementing the important stipulations, which have made in the Import Policy for protecting the nation against the serious consequences of an illegal trade in poppy seeds.
22. Insofar as the petition is concerned, the first prayer seeks strict adherence to the conditions contained in the Union Government's Notification dated 5 October, 2012. There can be no gainsaying the fact that each of the conditions contained in the notification must be scrupulously enforced. Insofar as the second prayer is concerned, there is no manner of dispute in the submissions urged before the Court by either of the parties that import of poppy seeds is permissible only from a designated country and no import can be effected from a country, which is not designated in the notification. The third prayer has not been pressed during the course of the arguments and no submission has been urged to the effect that first preference should be given to the domestic market before imports from overseas are permitted. Insofar as the last prayer is concerned, there is no material before the Court on the basis of which a general direction for cancellation of the registrations which have been granted by the Narcotics Commissioner can be entertained.
23. Before concluding, we clarify that this judgment shall not, in any manner be regarded as a restraint of any nature whatsoever on the statutory powers which are available to the diverse agencies of the Union of India for ensuring that any illegal trade in poppy seeds is checked and regulated in accordance with law. The authorities are sufficiently vested with wide powers to ensure that the law is duly observed. We may further observe that the regulation of the trade in narcotics including of those ancillaries is a matter of continuous vigil. Hence, if facts are brought to the notice of the Narcotics Commissioner or information is received even after registration of a contract which would indicate that registration has been improperly procured or is obtained on the basis of misrepresentation, fraud or illegality, the Narcotics Commissioner would be duty bound to take recourse to his powers in accordance with law.
24. We dispose of the petition with the aforesaid observations.
25. In consequence, all interim orders shall now stand vacated.
Order Date :- 29.11.2013 RKK/-
(Dr. D.Y. Chandrachud, CJ) (Dilip Gupta, J)