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2020 (2) TMI 856 - HC - CustomsImport of Poppy Seeds - prohibited goods or not - validity of guidelines dated 13th September 2019 for the registration of the sales contract for the import of the poppy seeds from Turkey to India issued vide Public Notice No.PS-11-2019 - HELD THAT - We take notice of the fact that the guidelines dated 25th June 2019 issued by the Central Bureau of Narcotics to regulate the import into India of the poppy seeds was the subject matter of challenge before the Bombay High Court in the case of Chailbihari Trading Private Limited and another v. Union of India and another 2019 (8) TMI 1387 - BOMBAY HIGH COURT - the Bombay High Court took the view that there is a power to regulate and a power to impose quantitative restrictions, and in the absence of challenge to the exercise of such power, the guidelines in the form of policy cannot be declared as ultra vires the provisions of the Constitution of India. The Bombay High took the view that the guidelines are a step towards implementing a policy that had been in place past couple of years but, was in furtherance of a policy to promote the larger public interest. Although we are not inclined to strike down the guidelines in the form of a policy as ultra vires the provisions of the Constitution of India, yet we remind the Union of India of the observations made by the Delhi High Court in DEVKI GLOBAL CAPITAL PVT. LTD. AND ANR. VERSUS UNION OF INDIA AND ORS. 2019 (9) TMI 1321 - DELHI HIGH COURT . After the decision of the Bombay High Court referred to above, the policy came to be amended with effect from 13th September 2019. We have already given a fair idea as regards the fine points of distinction between the old policy and the new policy. There has been a remarkable shift in the new policy, however, what is hurting the writ-applicant is the policy of 'first-come-first-serve'. This, according to the writ-applicant, is violative of Article 14 of the Constitution of India. Needless to mention at this stage that it is the prerogative of the respondents to frame a policy. However, such policy must be transparent, fair and reasonable. We suggest that the Union should consider framing a policy which provides for a fair chance to every applicant in procuring the importable quantity irrespective of the date of their application. Such process must be transparent and fair. The process can be made more transparent if the list of successful candidates is uploaded on the website of the respondent no.2 as was being done before the policy dated 25th June 2019. Adopting a methodology of first-come-first-serve has inherent flaws and anybody having access to the power corridor at some level is likely to secure unfair advantage at the cost of the other applicants who may not have similar access. In such circumstances, it is suggested that the respondents should device a better mechanism/policy for the allotment of quota so as to make the process much more competitive, transparent, fair and reasonable. Application disposed off.
Issues Involved:
1. Legality and fairness of the amended policy dated 25.06.2019 and 13.09.2019 for the import of poppy seeds from Turkey. 2. The validity of the 'first-come-first-serve' basis for the distribution of import quotas. 3. Allegations of favoritism and discrimination against first-time importers. Detailed Analysis: Issue 1: Legality and Fairness of the Amended Policy The writ-applicant, a proprietary firm, challenged the guidelines dated 13.09.2019 for the registration of sales contracts for importing poppy seeds from Turkey, arguing that the amended policy dated 25.06.2019, substituted by the policy dated 13.09.2019, is "manifestly unjust and handmade for the purpose of favouring few big players." The petitioner contended that the new policy lacked transparency and was arbitrary, favoring large importers by increasing the maximum importable quantity from 90 MTS to 450 MTS and allowing multiple applications within a crop year. The respondents defended the guidelines, asserting that they were in consonance with Article 14 of the Constitution of India and aimed at regulating the import of poppy seeds to prevent misuse and ensure compliance with international conventions. The guidelines required registration with the Turkish Grain Board (TMO) and provisional registration with the Narcotics Commissioner, including a condition for advance payment or an irrevocable letter of credit to prevent speculative trade. Issue 2: Validity of the 'First-Come-First-Serve' Basis The petitioner argued that the 'first-come-first-serve' basis for distributing import quotas was violative of Article 14 of the Constitution of India, citing the Supreme Court's decision in Centre for Public Interest Litigation v. Union of India, which held that such a policy involves an element of pure chance and can be misused by those with access to inside information. The petitioner suggested that a transparent and fair method, such as an auction, should be adopted for the distribution of import quotas. The respondents countered that the guidelines were a policy decision aimed at ensuring fair distribution and preventing cartelization. They argued that the policy was not arbitrary and was designed to filter out non-genuine importers. The Bombay High Court, in a related case, upheld the guidelines, stating that there is no fundamental right to import and that the guidelines were a step towards implementing a policy promoting larger public interest. Issue 3: Allegations of Favoritism and Discrimination Against First-Time Importers The petitioner alleged that the new policy favored a few large players and discriminated against first-time importers by subjecting them to physical verification of documents. The respondents argued that the physical verification was necessary to ensure the genuineness of first-time importers and prevent misuse. The court acknowledged the petitioner's concerns but noted that the guidelines were framed to ensure compliance with international conventions and prevent the import of poppy seeds from illicit cultivation. The court suggested that the respondents consider framing a policy that provides a fair chance to every applicant, irrespective of the date of their application, and ensures transparency by publishing the list of successful candidates on the website. Conclusion: The court did not strike down the guidelines but suggested that the Union of India consider adopting a more transparent and fair policy for the allotment of import quotas. The court emphasized the need for a policy that provides a fair chance to all applicants and prevents misuse by those with access to inside information. The writ-application was disposed of with these observations.
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