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M/s. Green Globe Trading Company Versus The Union of India And Others, M/s. Bora Agri Tech, All India Spieces Importers Exporters & Distributors Association, M/s. Radhey Shyam Ratanlal

2016 (4) TMI 790 - MADRAS HIGH COURT

Whether the fourth respondent is empowered to issue the public notice by imposing certain conditions over and above the three conditions stipulated in Chapter 12 of Exim Code 1207 91 00 relating to import of poppy seeds from China into India - Held that:- the petitioner company has obtained Certificate of Importer-Exporter Code (IEC) issued by the Additional Director General of Foreign Trade for the purpose of commencing import of spices, poppy seeds and other items. It is clearly stated that du .....

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business. - Therefore, the petitioner has a right to question the impugned public notice issued by the fourth respondent especially when it violates the fundamental rights guaranteed to the petitioner as enshrined under Article 14 and 19 (1) (g) of The Constitution of India to carry on his legitimate business of import of poppy seeds and other goods. In the absence of any amendment to Import-Export policy framed by Central Government by publishing a notification in the official gazzette, it .....

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or the Respondents : Mr. G. Rajagopalan, Additional Solicitor General for Mr. B. Rabu Manohar ORDER The challenge in this writ petition is to the public notice dated 27.01.2016 issued by the fourth respondent wherein and by which the fourth respondent has imposed certain conditions while inviting applications for registration of sales contract for import of poppy seeds from China into India. 2. Brief facts which are essential for determination of the disputes involved in this writ petition are a .....

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itted in terms of the Foreign Trade Policy in force from time to time. The condition prescribed in this regard is that the import contract for specified quantities has to be submitted to the fourth respondent, who would register the contract pursuant to which imports will be permitted in respect of the quantity mentioned in the contract. (ii) The petitioner would submit that hitherto, the issue relating to import of poppy seeds was agitated before the Allahabad High Court in PIL No. 22067 of 201 .....

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h respondent. On the basis of the guidelines indicated in the communication dated Nil.February 2014, the first respondent issued a public notice approving extension of validity of contracts which were initially valid till 30.05.2015 and extending it from 31.05.2015 to 30.06.2015. In this regard, the first respondent also issued another communication dated 08.07.2014 to the fourth respondent relating to registration of import contracts for import of poppy seeds into India. In terms of the said co .....

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r 10 container loads. In the affidavit filed in support of the writ petition, reference was made to various similar public notices issued by the fourth respondent in violation of the Article 14 and 19 (1) (g) of The Constitution of India. In similar fashion, according to the petiitoner, the impugned public notice dated 27.01.2016 was issued relating to import of poppy seeds from China in clear violation of Article 14 and 19 (1) (g) of The Constitution of India. 3. Mr. Vijay Narayan, learned seni .....

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thin the jurisdiction of the Ministry of Commerce and Director General of Foreign Trade and it is totally out of scope of the fourth respondent. In this context, reliance was placed on the Order passed by the Allahabad High Court in PIL No. 22067 of 2013 filed by Ayurveda Sevashram Kalyan Samiti, Allahabad in which an order dated 29.11.2013 was passed observing that the official respondents therein must ensure that poppy seeds illegally grown should not be allowed to be imported into India. A fu .....

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e governed by the provisions of Foreign Trade (Development and Regulation) Act, 1992, particularly Sections 3, 5 and 6. As per the said Act, the power to formulate an export and import policy is exclusively vested with the Central Government. Even the power to amend the policy is vested with the Central Government. Such power is a legislative power in the nature of subordinate legislation and such powers cannot be delegated to any authority including the Director General of Foreign Trade or the .....

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mporter has a certificate from the competent authority of the exporting country to the effect that opium poppy seeds has been legally grown in that country as per the requirements of International Narcotic Control Burean and (iii) whether the import contract is registered with him prior to import. According to the learned Senior counsel for the petitioner, except the above three conditions, the fourth respondent has no right, power or jurisdiction to impose any other conditions contrary to the p .....

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o impose any other conditions. In other words, the fourth respondent has to confine himself with the above three functions that are entrusted with him. The fourth respondent has to merely register the contract and he cannot act as a controlling authority to impose conditions for import of goods. In any event, the action of the fourth respondent in exercising jurisdiction as an executing authority is clearly illegal. The fourth respondent has to only exercise administrative and clerical powers in .....

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freely importable subject to registration of the import contract with the office of the fourth respondent, however, by imposing the conditions for registration of import contracts more particularly from China is clearly out of the jurisdiction of the fourth respondent. As regards public notices relating to import of poppy seeds from Turkey, they are preceded by communications/notices clearly specifying the total availability of harvested crop in Turkey, quantity used for local consumption, quant .....

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and they will be considered for allocation of import of poppy seeds from China in the order of priority list drawn at the time of allocation of country cap to registered sales contract. (iv) The learned senior counsel for the petitioner has drawn the attention of this Court to para No.9 and 10 of the impugned public notice wherein it is indicated that the applicant, after registration of sales contract, may surrender part or full of registered quantity by communicating in writing and received by .....

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respondent and for imposing such condition, the fourth respondent has no source or power. Similarly, in para No. 3 (iii), the fourth respondent prescribed a maximum quantity of 90 MTs for import and by virtue of imposing such condition, the fourth respondent amended the policy of Central Government on his own. Further, the procedure relating to adopting drawal of lots and the requirement that each importer can submit only one application and if more than one is submitted such applications will b .....

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nly vested with the Central Government and the fourth respondent has no right, power or authority to impose conditions in contravention of the policies of the Central Government. 4. In support of his contentions, the learned senior counsel for the petitioner relied on the order passed by the Division Bench of the Bombay High Court in (Narendra Udesh vs. Union of India) 2003 (1) Mh.LJ 155 to contend that the Export-Import Policy announced by the Central Government in exercise of power under Secti .....

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red as bad in law. The learned senior counsel for the petitoiner also brought to the notice of this Court that the order of the Division Bench of the Bombay High Court mentioned above has been upheld by the Honourable Supreme Court in the decision reported in (2003) 158 ELT A275 (SC) in (Union of India vs. Narendra Udesh). 5. The learned Senior Counsel for the petitioner also placed reliance on the decision of the Honourable Supreme Court in the case of (Atul Commodities Pvt Ltd vs. Commissioner .....

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er also relied the decision of the Honourable Supreme Court in (Director General of Foreign Trade and another vs. Kanak Exports and another) 2015 SCC 123 to contend that the public notice issued by the fourth respondent is without jurisdiction and contrary to Section 5 of the Foreign Trade (Development and Regulation) Act, 1992. As per Section 5, the Central Government alone can formulate and announce the Exim Policy and resort to amend it from time to time. 7. Countering the submissions of the .....

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aring for the respondents 1 to 4, since the number of applicants for poppy seeds were likely to increase manifold, it was decided by the first respondent to allow each eligible applicant to register their sale contract for 90 metric tonnes. The idea was to ensure that either all or maximum number of applicants should get an opportunity to import poppy seed from China. This was only to avoid the possibility of cartelization and hoarding of poppy seeds. It is no doubt that the policy for registrat .....

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If any of the successful applicant subsequently surrender a part or full registered quantity, then the quantity so surrendered will be re-allocated to unsuccessful applicants so that the shortage of poppy seeds can be avoided. The public notice impugned in the writ petition is aimed to ensure that the importer does not frivolously get contracts registered in their favour to reduce the chance of registration by other applicants. In other words, the conditions incorporated in the public notice is .....

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hout surrendering within the prescribed period will be debarred. Thus, the quantity surrendered by one importer can be re-allocated to another importer who is willing to import and thereby the shortage of poppy seeds can be avoided. This, according to the learned Additional Solicitor General appearing for the respondents 1 to 4, will not in any way violate the constitutional guarantees made under Article 14 or 19 (1) (g) of the Constitution of India. 9. The learned Additional Solicitor General a .....

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e restriction is placed on the total quantity of imports permissible from designated countries. Therefore, the conditions imposed in the public notice, which is impugned in this writ petition, are in accordance with the observations made by the Allahabad High Court in the order dated 29.11.2013 and it cannot be said that it had unreasonably imposed restriction on import of poppy seeds. 10. The learned Additional Solicitor General appearing for the respondents 1 to 4 further submitted that it is .....

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importer as A and B category on the basis of the quantity of import of goods. In the present notice which is impugned in this writ petition, there is no such categorisation and therefore the order dated 05.02.2016 passed by this Court in WP No. 29806 of 2015 cannot be relied on by the petitioner in this case. 11. As regards the source and power of the fourth respondent to impose certain conditions, which are challenged in this writ petition, the learned Additional Solicitor General relied on a .....

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impugned in this writ petition. 12. The learned Additional Solicitor General appearing for the respondents 1 to 4 in order to substantiate his contentions, relied on Article 39 (2) of the Constitution of India and contend that in order to effectively implement the policies of the Government, the fourth respondent is empowered to exercise certaom powers to have control over the material resources of the Country and to ensure that they are equally distributed to subserve the common good. Therefore .....

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ional Solicitor General appearing for the respondents 1 to 4 would further contend that in response to the public notice, which is impugned in this writ petition, 35 applications involving quantity of 2769 MT of white poppy seeds and 3 applications for 255 MT of yellow poppy seeds have been received, however, there is no application received for import of blue poppy seeds from China. Since the quantity available for allocation to all the applicants is not sufficient, the method of drawal of lots .....

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dismissal of this writ petition. 14. Mr. P.S. Raman, learned senior counsel appearing for the respondents 5 to 7, who were subsequently impleaded in this writ petition, would contend that the respondents 5 to 7 are regularly importing White poppy seeds from China which are non-narcotic in nature. The respondents 5 to 7 are private entities engaged in the business of facilitating import and export of spices, including poppy seeds into India interalia remain as an interface between Government and .....

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the import of white poppy seeds into India has come to a grinding halt and it had a wider ramification in the trade. As regards the petitioner is concerned, the learned senior counsel appearing for the respondents 5 to 7 would contend that the petitoiner has no locus standi to file this writ petition. The petitioner is not an aggrieved person because at no point of time, he had imported poppy seeds. Even in response to the present public notice, he has not made any application to register a sale .....

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authority of the fourth respondent to impose the conditions in the public notice, which are questioned in this writ petition, the learned Senior counsel for the respondents 5 to 7 would contend that the role of the fourth respondent is to ensure effective implementation of the policies of the Central Government. By placing reliance on Section 5 of the Narcotic Drugs and Psychotrophic Substances Act, 1985, in short NDPS Act, the learned Senior counsel would contend that Section 5 (ii) of NDPS Act .....

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gulatory authority, to impose the conditions in the public notice for effective implementation of the policies of the Government and it needs no interference by this Court. 15. The learned senior counsel for the respondents 5 to 7 would further contend that the earlier public notice No.7 of 2015 issued by the fourth respondent was subjected to challenge in WP No. 29806 of 2015 and it was quashed by this Court only on the ground that the classification of importers under category A and B was not .....

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to more number of applicants and it would boost the import trade. It is further stated that such conditions would only ensure transparency and remove discrimination among the importers. According to the learned senior counsel for the respondents 5 to 7, already import of poppy seeds from Turkey has been stopped by reason of the order dated 14.09.2015 quashing the public notice No.7 of 2015 issued by the fourth respondent. By virtue of such order, the import of poppy seeds has completely come to .....

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g for the respondents 1 to 4 as well as the learned senior counsel for the respondents 5 to 7. I had gone through the entire materials placed on record. 17. On consideration of the rival submissions of the counsel on either side, the primary question that arise for consideration in this writ petition is whether the fourth respondent is empowered to issue the public notice dated 27.01.2016 by imposing certain conditions over and above the three conditions stipulated in Chapter 12 of Exim Code 120 .....

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that country as per requirement of International Narcotics Control Board, Vienna; and (iii) All import contracts for this item shall compulsorily be registered with the Narcotics Commissioner, Gwalior prior to import. 18. It is the main contention adduced on behalf of the petitioner that except the above three conditions, the fourth respondent has no jurisdiction or right or authority to impose any other conditions relating to import of poppy seeds and therefore the other conditions imposed in .....

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ts. (ii) The Central Government may also, by order published in the official gazzette, make provision for prohibiting, restricting or otherwise regulating, in all cases or in specified classes of cases and subject to such exceptions, if any, as may be made by or under the Order, the import or export of goods. (iii) All goods to which any order under sub-section (2) applies shall be deemed to be goods the import of export of which has been prohibited under Section 11 of the Customs Act, 1962 and .....

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ll be responsible for carrying out that policy (iii) The Central Government may, by order published in the official gazzette, direct that any power exercisable by it under this Act (other than the powers under Section 3, 5, 15, 16 and 19) may also be exercised, in such cases and subject to such condition, by the Director General or such other officer subordinate to the Director General, as may be prescribed in the order." 19. On a reading of Section 3, 5 and 6 mentioned above, it is evident .....

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ndent to exercise such power as are necessary for prohibiting, restricting or otherwise regulating the import of poppy seeds in compliance with Section 5 of the Foreign Trade (Development and Regulation) Act, 1952. Therefore, I hold that the fourth respondent has to confine the exercise of his power only in relation to the duties and responsibilities spelt out in Chapter 12 of Exim Code 1207 91 00 relating to import of poppy seeds and they are (i) whether the import of the poppy seeds is from on .....

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icies framed by the Central Government under the EXIM Code. It is needless to mention that the fourth respondent has overstepped and exceeded his jurisdiction in imposing the conditions over and above the conditions which are stipulated in Chapter 12 of Exim Code 1207 91 00 mentioned above, in the impugned public notice relating to drawal of lots, restricting the quantity of import, prescribing time frame for receipt of applications etc., and such conditions would only amount to varying, modifyi .....

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r formulating a policy or for making amendment to the existing policy. In the absence of any such notification published in the official gazzette, the imposition of conditions by the fourth respondent in the impugned public notice is clearly without jurisdiction and it amount to amending the Exim Policy. Therefore, the contentions urged on behalf of the petitioner that the fourth respondent has no jurisdiction to impose the conditions relating to drawal of lots, restricting the import quantity a .....

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licitor General placed reliance on a letter dated 22.01.2016 issued by the Government of India, Department of Revenue enclosing a copy of the revised guidelines approved by the competent authority for registration of sales contracts for import of poppy seeds from China and Czech Republic. By placing reliance on the above letter dated 22.01.2016, the learned Additional Solicitor General traces the power of the fourth respondent to impose the conditions in the public notice, which is impugned in t .....

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Government. While so, without making any amendment to the Export-Import Policy framed by the Central Government, even the Central Government cannot delegate power to the fourth respondent to exercise such powers which are not available in the Export-Import Policy. In such circumstances, the letter dated 22.01.2016 relied on by the learned Additional Solicitor General will not confer any power on the fourth respondent to impose the conditions in the impugned public notice. 22. The learned Additi .....

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e under Section 5 (3) of the NDPS Act cannot be extended to or stretched to exercise powers under the Exim Code. The object with which NDPS Act has been framed is to have a statutory control over narcotic drugs through out India and to prohibit and/or regulate the trafficking of illicit drug and drug abuse at national and international level. As per the provisions of NDPS Act, even a mere possession of narcotic drugs or psychotropic substance would attract stringent punishment and as a Officer a .....

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rol of the goods to be imported from other foreign Countries. While so, in my considered opinion, the powers conferred on the fourth respondent under NDPS Act and the Import and Export policy framed by the Central Government operates on different fields and it cannot be said that the fourth respondent can exercise his statutory power conferred under Section 5 of NDPS Act for the purpose of restricting or regulating the import of opium seeds traceable under Exim Code. 23. In the decisions relied .....

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referred to decisions squarely applicable to the facts and circumstances of this case. 24. Similarly, in the decision of the Honourable Supreme Court in (Director General of Foreign Trade and another vs. Kanak Exports and another) 2015 SCC 123 relied on by the learned Senior Counsel for the petitioner, in an identical case, it was clearly held that the public notice issued by the fourth respondent is without jurisdiction and as per Section 5 of the Foreign Trade (Development and Regulation) Act .....

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mport of spices, poppy seeds and other items. It is clearly stated in paragraph No.4 of the affidavit filed in support of the writ petition that the petitioner, during the course of his business, sought to import poppy seeds from China. However, according to the learned senior counsel for the petitioner, the petitioner could not submit the necessary application for registration of the import contract in view of the multiple conditions imposed by the fourth respondent in the impugned public notic .....

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19 (1) (g) of The Constitution of India to carry on his legitimate business of import of poppy seeds and other goods. 26. The learned Senior counsel for petitioner has drawn the attention of this Court to the order dated 29.11.2013 passed by the Allahabad High Court in PIL No.22067/2013 wherein an identical public notice issued by the fourth respondent was subjected to challenge. The writ petition was filed by Ayurveda Sewashram Kalyan Samithi through its Secretary against the Government of Ind .....

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