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Introduction

1. Important questions of law concerning the interpretation of Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter `the Act') and certain notifications issued there under arise for consideration in this writ petition. The cause for this invitation to judicial determination is a cross-border transaction that requires the petitioners before us to export 30,000 metric tonnes (MT) of Chick Peas from this country to her neighbour, Pakistan.

2. For those needing proof that globalisation of trade is not a recent phenomenon one has only to look at the history and the evolution of cuisines around the world. In many countries, the currently popular cuisine is an adaptation of a foreign one. The popularity in our country of Chinese, Italian and recently Lebanese food bears testimony to this growing trend. Indian spices and pulses were among the earliest to be traded at the height of the ancient civilizations of Egypt, Greece and Rome. As much as we relish our chick peas (chana) and the imported Kabuli variety, our `desi' chick peas it seems is equally popular abroad. Chick peas are devoured in many forms: The Arab speaking world relishes its falafel (ground chickpeas shaped into balls and fried) and hummus (a smooth thick mixture of mashed chickpeas with garlic). Global trade in chick peas as in other pulses has indeed grown.

Factual Matrix

7. With the background of the above statutory scheme and Policy, we now turn to examine the factual conspectus of the present writ petition. Petitioner No. 1, a Company having its registered office in Mumbai, is a subsidiary of Petitioner No. 2 (Agrocorp International Pte. Ltd.) which is a company incorporated in Singapore. It is the case of the petitioners that on 12.6.2006, the Trading Corporation of Pakistan (TCP) invited international bids for the supply of 150,000 MT of Chick Peas. Petitioner No. 2 is stated to have submitted its bids some time in the first week of June 2006. On 17.6.2006 it was awarded two contracts for supply of 15,000 MT each of Chick Peas at USD 624 per MT and USD 650 per MT respectively. One of the terms of the contract was that the awardee of the contract was required to submit, by 22.6.2006, a Performance Guarantee equivalent to 5 per cent of the value of the contracted quantity. It is stated that on 20.6.2006 the Petitioner No. 2 furnished a combined Performance Guarantee equivalent to 5 per cent of the value of the contracted quantity under the two contracts, through a bank in Singapore. The petitioners submit that the contract for supply of Chick Peas to TCP in the agreed quantities stood concluded by this date.

8. The petitioners state that from 21.6.2006 they started mobilizing Chick Peas for export and for this purpose engaged the services of Emmsons International Limited located in Delhi, to procure and arrange for the consignments to reach the port at Kandla from where they would be shipped either to the Bin Qasim Port or the Karachi Port.

9. Around this time, the Cabinet Committee on Pricing was engaged in finding means to tackle the seasonal rise in the prices of some essential commodities. The Central Government identified three essential commodities that were driving the prices up - wheat, sugar and pulses. At a Meeting of the Cabinet Committee on Pricing held on 22.6.2006, it was decided that there would be a ban on the export of pulses with a view to augmenting the supply side. It was decided to allow private players to import wheat and to a limited extent, sugar.

24. In rejoinder to the above counter affidavit, the petitioners have maintained that the amendment to the Policy could not have been effected retroactively from a date when the ban on export of Chick Peas was not notified as required by Section 5 of the Act. The petitioners contend that reference by the respondents to the total export of pulses was irrelevant since the petitioners were concerned only with their respective transaction which was less than 0.6 per cent of the total domestic production of Chick Peas. It was stated thus: