2019 (1) TMI 733 - HC - Customs

Power of the Central Government to regulate marine trade, especially Foreign Trade Policy - export of shark finning - Constitutional validity and legality of Notification S.O. 197(E), dated 6-12-2001 - vires of Ext. P3 Notification, vires the Foreign Trade (Development and Regulation) Act, 1992 - Challenge to subordinate legislation - principles of natural justice - Held that - The impugned Ext. P3 notification is a piece of subordinate legislation - It is a precedentially settled proposition that a piece subordinate legislation does not carry the same immunity as enjoyed by a statute passed by a competent Legislature - An enquiry into the vires of delegated legislation must be confined to the ground on which the plenary legislation may be questioned. Yet subordinate legislation cannot be questioned on the ground of violation of the principle of natural justice on which administrative action may be questioned. Public interest - burden of proof - Has the Government discharged its burden in establishing that there involved public interest, and that it applied its mind to it? - Held that - If a statute confers a benefit of exemption on a person, the Government may, in public interest, curtail or abridge the extent of exemption - But Government, when questioned, must establish the grounds of public interest. We reckon the Government did discharge its burden here. Policy preferences - Judicial interference - Held that - The Court should constantly remind itself that 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 the best is not always discernible, the wisdom of any choice may be disputed or condemned. Mere errors of Government are not subject to our judicial review. Discrimination - Marine Fins consistently contends that Ext. P3 smacks of arbitrariness. According to it, the ban does not apply to domestic consumption - Held that - In Parisons Agrotech (P) Ltd. v. Union of India 2015 (8) TMI 997 - SUPREME COURT , the Supreme Court has held that once the court finds that there is sufficient material for the Government to take a particular policy decision; even by bringing Article 14 of the Constitution into play, courts cannot judicially review and determine the correctness of the policy decision. Backed by cogent material, if the authorities demonstrate that the decision is not arbitrary or irrational, but is taken in public interest, the Court must respect the Executive s decision. A question of fact - Judicial approach - Held that - The Writ Court has to be very careful in accepting what evidence should be received and relied upon if there is a bona fide dispute between the parties about its correctness. Is the Government insensitive to the issue? - Held that - True that the notification does not prohibit hunting of shark for domestic consumption, though it bans export of shark fins. Shark meat, we must acknowledge, is no staple food for Indians. Even among the fish consumers, those that prefer shark meat are minuscule. So, to cater to the needs of such negligible consumers, there cannot be the wholesale killing of sharks. The culprit is finning, and the result is the species thinning, to the extent of disappearing - almost. There is no legal infirmity in the impugned judgment - appeal dismissed.

Issues Involved:
1. Legality and constitutionality of the ban on shark fin export.
2. Ultra vires nature of the notification under the Foreign Trade (Development and Regulation) Act, 1992.
3. Alleged infringement of the fundamental right to trade.
4. Adequacy of government consultation and decision-making process.
5. Judicial review of policy decisions and subordinate legislation.
6. Public interest and ecological considerations.
7. Allegations of discrimination and arbitrariness in the ban.
8. Adjustment of equities regarding accumulated stock of shark fins.

Issue-wise Detailed Analysis:

1. Legality and Constitutionality of the Ban on Shark Fin Export:
The Central Government, through a notification, banned the export of shark fins, citing environmental and ecological concerns. The petitioner, a marine produce exporter, challenged this ban, arguing that it was illegal and unconstitutional. The court examined whether the government's action was sustainable under the relevant statutes.

2. Ultra Vires Nature of the Notification:
The petitioner argued that the notification was ultra vires under Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. The court noted that the government has the power under Section 5 to formulate and amend the foreign trade policy in public interest. The notification was issued by the Director General of Foreign Trade, exercising delegated powers under the Act.

3. Alleged Infringement of the Fundamental Right to Trade:
The petitioner contended that the ban affected its fundamental right to trade. The court acknowledged that while the petitioner had a right to trade, this right could be regulated in public interest. The court found that the ban was a policy decision aimed at protecting marine life and was not arbitrary or discriminatory.

4. Adequacy of Government Consultation and Decision-Making Process:
The petitioner alleged that the Ministry of Environment and Forests was not consulted before issuing the notification, and that the decision was influenced by an NGO and a minister known for her pro-animal stance. The court noted that the decision-making process involved various government departments and experts, and the inclusion of an NGO did not invalidate the decision.

5. Judicial Review of Policy Decisions and Subordinate Legislation:
The court emphasized that policy decisions are generally not subject to judicial interference unless they violate constitutional safeguards or statutory prescriptions. The court held that the notification was a piece of subordinate legislation and was subject to judicial review on grounds of arbitrariness, unreasonableness, or violation of fundamental rights.

6. Public Interest and Ecological Considerations:
The government argued that the ban was in public interest, citing difficulties in distinguishing between prohibited and non-prohibited species of sharks during fishing. The court found that the government had adequately demonstrated that the ban was necessary to protect marine life and ecological balance.

7. Allegations of Discrimination and Arbitrariness in the Ban:
The petitioner claimed that the ban was discriminatory as it applied only to export and not to domestic consumption. The court held that the ban was justified as shark meat was not a staple food in India, and the primary concern was the practice of finning, which led to ecological degradation.

8. Adjustment of Equities Regarding Accumulated Stock of Shark Fins:
The court acknowledged the petitioner's submission that it had accumulated stock of shark fins pending the writ appeal. To adjust equities, the court allowed the petitioner to clear the stock accumulated until 31-12-2017, ensuring that no additional stock would be exported beyond that date.

Conclusion:
The court found no legal infirmity in the impugned judgment and dismissed the writ appeal. The court allowed the petitioner to clear the accumulated stock of shark fins up to a specified date but upheld the ban on future exports. No order was made on costs.

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