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TMI Blog2008 (12) TMI 205X X X X Extracts X X X X X X X X Extracts X X X X ..... TED BY : S/Shri K. Chandrasekaran, Senior Counsel for S.S. Baskaran, for the Petitioner. S/Shri D. Sivaraman, P. Krishnasamy and Arul Vadivel @ Sekar, ASG, for the Respondent. [Order Common]. - A Notification bearing No. 25 (Re-2007)/2004-2009 dated 29-8-2007 issued by the second respondent/Director General of Foreign Trade and ex officio Additional Secretary to the Government of India in exercise of powers conferred by Section 5 of the Foreign Trade (Development and Regulation) Act, 1992 (hereinafter referred to as "the Act") read with Paragraph 2.1 of the Foreign Trade Policy-2004-09 is under challenge in all these writ petitions. All the writ petitions were heard together and they are disposed of by means of this common order. 2. The petitioners in all these writ petitions are either importers or traders of betel-nuts. They claim that they are in the practice of importing betel-nuts in substantial quantities every year from south East Asian countries like Indonesia and Thailand. According to them, they can conveniently import the same through anyone of the ports on the Eastern Cost. But, the respondents issued the impugned Notification, thereby amending the import pol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubjected to judicial review by this Court as the petitioners have not made out any case to bring the same under any of the yardsticks laid down by the Hon'ble Supreme Court time and again. (2) Major portion of import of betel-nut by Nepal was finding its way through smuggling into India through unauthorized routes. Therefore, in order to stop illegal import of betel-nuts of third countries into India from Nepal through Jogbani and Panitanki Land Customs Stations, the Notification had to be issued. (3) The impugned Notification has been issued in public interest to provide protection to the domestic farmers of betel-nut located in the States of Karnataka and Kerala near Mangalore Port. The intention behind this Notification is also to neutralize the domestic freight cost disadvantage suffered by the producers of betel-nut located in Karnataka and Kerala i.e., near Mangalore Port. The import of betel-nut through Mangalore port will neutralize the freight cost advantage enjoyed by the imports made at ports away from domestic producers in the country. (4) Yet another reason for the Notification is to bring the cost of imported betel-nuts close to the price of domestic betel-nuts, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Courts to consider relative merits of different economic policies and consider whether a wiser or better one can be evolved. In matters relating to economic issues, the Government has, while taking a decision, right to "trial and error" as long as both trial and error are bona fide and within limits of authority. For testing the correctness of a policy, the appropriate forum is Parliament and not the Courts. Here the policy was tested and the motion defeated in the Lok Sabha on 1-3-2001." "In the case of a policy decision on economic matters, the Courts should be very circumspect in conducting any enquiry or investigation and must be most reluctant to impugn the judgment of the experts who may have arrived at a conclusion unless the Court is satisfied that there is illegality in the decision itself." 8. In Liberty Oil Mills v. Union of India reported in 1984 (3) SCC 465, while dealing with the Court's interference in respect of Import Policy of the Government, the Court has held as follows :- "The import Policy of any country, particularly a developing country, has necessarily to be tuned to its general economic policy founded upon its constitutional goals, the requireme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held as follows :- ".....In other words, every action of a public authority must be based on utmost good faith, genuine satisfaction and ought to be supported by reason and rationale. It is, therefore, not only the power but the duty of the court to ensure that all authorities exercise their powers properly, lawfully and in good faith. If powers are exercised with oblique motive, bad faith or for extraneous or irrelevant considerations, there is no exercise of power known to law and the action cannot be termed as action in accordance with law....." 12. An analysis of all the above Judgments of the Hon'ble Supreme Court would make it undoubtedly clear that unless a policy decision can be faulted on the grounds of mala fides, unreasonableness, arbitrariness or unfairness etc., the court cannot sit over such policy decision to review the same. It may be true that such a policy decision of the Government may be against the business interest of a party, but that by itself would not justify to invalidate the policy. Keeping in view the above settled position of law, let me now proceed to examine the facts of the case to find whether the impugned Notification is either arbitrary or u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase the domestic production by extending the area of cultivation, so as to reduce the import stage by stage. Steady increase in export and decrease in import would naturally sustain the economy of the country and project the country in the global market as a mighty competitor. Therefore, it is necessary for the Government to keep control over the import of betel-nuts. 15. Needless to say that Sections 3 and 5 of the Act empowers the Central Government to regulate the export as well as import. In the words of the Hon'ble Supreme Court [vide Union of India v. M/s. Asian Food Industries, reported in 2006 (204) E.L.T. 8 (S.C.) = AIR 2007 SC 750]. "the purport and object for which the 1992 Act was enacted was to make provision for the development and regulation of Foreign Trade inter alia by augmenting the exports from India. While laying down policy thereafter, the Central Government; however has been empowered to make provision for prohibiting, restricting or otherwise regulating the export and import of goods, in U.P Co-operative Cane Unions Federation v. West U.P Sugarmills Association and others reported in 2004 5 SCC 430, while interpreting the terms 'regulate' and 'prohibit', t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... near the geographical location where production activities are concentrated. Then only, the imported betel-nuts would be kept for marketing in the same market where the local produce is brought for marketing. For so bringing the imported goods, the importers may have to incur additional expenditure. In the words of the Hon'ble Supreme Court "the mere fact that it would hurt the business interests of a party, does not justify invalidating the policy" [See 2001 (3) SCC 635]. On the other hand, in the instant case, if import is allowed through ports in East Coast, then imported goods would be marketed only near the East Coast at a low cost. Naturally the local traders and the consumers would be attracted only towards East Coast. As a result, the marketing activities in Kerala and Karnataka would be put to peril forcing the producers to transport their produces by incurring additional fright charge to the markets near the East Coast which would not be in the interest of the country's economy. Consequently, there will be two markets, one at West Coast where local products would be kept for marketing at a higher cost, whereas there will be another market at the East Coast with low cost. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal Trading Co. and Another reported in 2003 (5) SCC 437, the Supreme Court held that reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. (See also Harichand Sarda v. Mizo District council (A.I.R. 1967 SC 829); Krishnan Kakkanth v. Government of Kerala (1997 (9) SCC 495). Applying these principles we are unable to hold that the Notifications are arbitrary or unreasonable." "16. In the result, for the forgoing discussion, we find absolutely no merits in the challenge raised by the petitioners to the Notification dated December 12, 2001 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia and her reciprocal countries etc. It would be beyond the bounds of judiciary to step in and issue directions as are sought for in W.P. (C) 35648/2007." 21. I am in respectful agreement with the view taken by the learned Single Judge of the Kerala High Court. In the said Judgment, the learned Single Judge of Kerala High Court had an occasion to deal with the decision of a Division Bench of Calcutta High Court in Kalindi Woollen Mills (P) Ltd. v. Union of India reported in 1994 (74) E.L.T. 827 (CAL.). Before the said Division Bench of Calcutta High Court, a similar Notification restricting import of rags, both Woollen and Synthetic, only through Bombay and Delhi ports came to be challenged. Of course, in the said judgment, the Division Bench has struck down the Notification holding that it is violative of Articles 14 and 19(1)(g) of the Constitution of India. 22. Placing heavy reliance on the said Judgment, the learned counsel for the petitioners would submit that by having a similar view, if the facts involved in the present writ petitions are considered, the Impugned Notification would also face the same fate. But, I am not persuaded to agree with the said argument since t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest of the domestic producers and having regard to the economy of the country, the Government has rightly issued the Notification. Therefore, the view taken by the Division Bench of Calcutta High Court has got no application at all, as the facts are totally distinguishable. 24. When the very same Notification, which was challenged before the Division Bench of Calcutta High Court came to be challenged before the Principal Bench of this Court in B.L. Tandon v. Union of India, a learned Single Judge of this Court in W.P. No. 2167 of 1990, dated 25-4-1990 struck down the Notification. The Division Bench of Calcutta High Court had an occasion to refer to the said Judgment of the Madras High Court while deciding Kalindi Woollen Mill's case, cited supra. I have the benefit of going through the unreported judgment of the learned single Judge of this Court in the above writ petition. The learned Judge has taken the view that the Notification violates Article 14, 19(1)(g) and 301 of the Constitution of India mainly on the ground that the reasons stated for restriction that the ports other than Delhi and Bombay do not have the surveillance was not acceptable. The learned Judge has rightly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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