2008 (12) TMI 205 - HC - Customs

Import of Betul Nut Restriction constitutional validity Notification no. 25 (Re-2007)/2004-2009 dated 29-8-2007 - Article 14, 226 of the constitution of India - held that object of restriction Notification falls within the four corners of the Foreign Trade Policy 2004-2009 and the Act. The object of the Act would surely be achieved by allowing import only through the Mangalore Port. Thus, having a overall view of the entire scenario, I find that the impugned notification squarely falls within the constitutional norms - For restricting the smuggling activities, restriction of import only through a single port cannot be justified. In the cases cited supra, the Calcutta High Court and this court have discountenanced the said reason and have struck down the Notification. So, I do not approve the said reason. However, on this ground, the notification cannot be struck down - The Impugned Notification is intra vires the Constitution of India which does not require any interference.

Issues Involved:
1. Constitutionality of the Notification restricting import of betel-nuts through Mangalore Port.
2. Alleged violation of Articles 14, 19(1)(g), and 301 of the Constitution of India.
3. Judicial review of government policy decisions.
4. Impact on domestic producers and traders of betel-nuts.

Detailed Analysis:

1. Constitutionality of the Notification:
The petitioners challenged the Notification No. 25 (Re-2007)/2004-2009 dated 29-8-2007, which restricted the import of betel-nuts only through Mangalore Port. They argued that this restriction was unreasonable, arbitrary, and unconstitutional. The government defended the Notification as a policy decision aimed at protecting domestic betel-nut farmers in Karnataka and Kerala and preventing illegal imports from Nepal. The court held that the Notification was a valid policy decision within the purview of the Foreign Trade (Development and Regulation) Act, 1992, and the Foreign Trade Policy 2004-09. The court emphasized that the government has the authority to regulate imports to protect domestic industries and ensure economic stability.

2. Alleged Violation of Constitutional Rights:
The petitioners contended that the Notification violated their rights under Articles 14 (equality before the law), 19(1)(g) (right to practice any profession or to carry on any occupation, trade, or business), and 301 (freedom of trade, commerce, and intercourse) of the Constitution of India. The court rejected these arguments, stating that the restriction was reasonable and served a legitimate public interest. The court noted that the government must balance the interests of traders and domestic producers and that the restriction aimed to prevent market disruption and protect domestic farmers from unfair competition.

3. Judicial Review of Government Policy Decisions:
The court discussed the scope of judicial review of government policy decisions, citing several Supreme Court judgments. It reiterated that courts should not interfere with policy decisions unless they are arbitrary, unreasonable, or made in bad faith. The court referred to the Balco Employees' Union case, which emphasized that economic policies are within the domain of the government and not subject to judicial review unless they violate statutory provisions or constitutional principles. The court concluded that the impugned Notification was a bona fide policy decision aimed at protecting domestic interests and did not warrant judicial interference.

4. Impact on Domestic Producers and Traders:
The court acknowledged the government's argument that unrestricted imports of low-priced betel-nuts would harm domestic producers and lead to economic instability. The restriction through Mangalore Port was intended to neutralize the freight cost advantage of imported betel-nuts and ensure fair competition with domestic products. The court emphasized that the government's duty is to protect domestic industries and workers, and the Notification served this purpose. The court also noted that similar restrictions had been upheld by other High Courts in cases involving natural rubber and palm oil imports, reinforcing the validity of such policy measures.

Conclusion:
The court dismissed the writ petitions, upholding the constitutionality and validity of the Notification restricting the import of betel-nuts through Mangalore Port. The court found that the restriction was a reasonable policy decision aimed at protecting domestic farmers and ensuring economic stability, and did not violate the petitioners' constitutional rights. The court emphasized the limited scope of judicial review in matters of economic policy and the government's authority to regulate imports in the public interest.

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