1 WP-5601-2023+2.odt

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

NAGPUR BENCH, NAGPUR.

WRIT PETITION NO.5601 OF 2023

PETITIONER : M/s Shriram Food Industry Ltd.

A Company incorporated under

the Companies Act, 1956,

having its Corporate Office at

Plot No.16-17-18, Mahadev

Galaxy, First Floor, Near Harihar

Mandir, Nagpur. Through its

Authorized Director Shri Anup

S/o Ramavtar Goyal

Factory At : M/s Shriram Food

Industry Ltd.,

A Company incorporated under

the Companies Act, 1956 and

having its Factory at Survey

No.81/2, 182/1A, 182/2,

Mouza-Marodi, Tahsil-Mouda,

Distt. Nagpur441104 (M.S.).

..VERSUS..

RESPONDENTS :1.Union of India, Through the

Secretary Ministry of Commerce

and Industry New Delhi-110001.

2.The Director General of Foreign

Trade, Udyog Bhavan, New

Delhi-110001.

3.The Commissioner of Customs

and Central Excise, Seminary

Hills, Nagpur-440006. 2024:BHC-NAG:5728-DB

2 WP-5601-2023+2.odt

4.The Chief Commissioner of

Customs and Central Tax,

Vishakhapatanam Zone, GST

Bhawan, Post Area,

Vishakhapatanam-530 035.

5.The Chief Commissioner of

Customs, Having its Office at :

Jawaharlal Nehru Customs

House, Taluran, District-Raigarh-

400707 (Maharashtra).

6.The Additional Commissioner of

Customs Kakinada Customs

House, Port Road, Kakinada-

533007, East Godavari District

(Andhra Pradesh)

7.The Commissioner of Customs,

Custom House, Mundra, 5B, Port

User Building, Mundra Port,

Mundra, Gujrat-370421.

8.The Chief Commissioner of

Customs, Office of the Chief

Commissioner of Customs,

Custom House, 15/1, Stand

Road, Kolkata-700001.

9.The Commissioner of Customs

Office of the Commissioner of

Customs, Custom House, Near

Balaji Temple, Kandla Gujrat-

370210.

10.The Commissioner, Customs

(Preventive) Commissionerate,

55-17-3, C-14, 2

nd

Floor,

3 WP-5601-2023+2.odt

Industrial Estate, Autonagar,

Vijayawada-500 007.

WITH

WRIT PETITION NO.6539 OF 2023

PETITIONER : M/s Bharti Foods, Having its

office at M/s Bharti Foods Kh

No.53, village Bhowari Tahsil-

Kamptee, Distt. Nagpur-441104

(M.S.) Through its authorized

representative Mr. Bharatlal

Mate.

..VERSUS..

RESPONDENTS :1.Union of India, Through the

Secretary Ministry of Commerce

and Industry New Delhi-110001.

2.The Director General of Foreign

Trade, Udyog Bhavan, New

Delhi-110001.

3.The Commissioner of Customs

and Central Excise, Seminary

Hills, Nagpur-440006.

4.The Chief Commissioner of

Customs and Central Tax,

Vishakhapatanam Zone, GST

Bhawan, Post Area,

Vishakhapatanam-530 035.

5.The Chief Commissioner of

Customs, Having its Office at :

Jawaharlal Nehru Customs

4 WP-5601-2023+2.odt

House, Taluran, District-Raigarh-

400707 (Maharashtra).

6.The Additional Commissioner of

Customs Kakinada Customs

House, Port Road, Kakinada-

533007, East Godavari District

(A. P.).

7.The Commissioner of Customs,

Custom House, Mundra, 5B, Port

User Building, Mundra Port,

Mundra, Gujrat-370421.

8.The Chief Commissioner of

Customs, Office of the Chief

Commissioner of Customs,

Custom House, 15/1, Stand

Road, Kolkata-700001.

9.The Commissioner of Customs

Office of the Commissioner of

Customs, Custom House, Near

Balaji Temple, Kandla Gujrat-

370210.

10.The Commissioner, Customs

(Preventive) Commissionerate,

55-17-3, C-14, 2

nd

Floor,

Industrial Estate, Autonagar,

Vijayawada-500 007.

WITH

WRIT PETITION NO.6986 OF 2023

PETITIONER : M/s Pagariya Export Private

Limited, Having its office at Plot

5 WP-5601-2023+2.odt

No.19, House No.1256/U1,

Great Nag Road, Rambagh,

Nagpur-440 018.

Through its authorized

representative Mr. Sudip

Madhusudan Kothari

..VERSUS..

RESPONDENTS :1.Union of India

Through the Secretary Ministry

of Commerce and Industry New

Delhi-110001.

2.The Director General of Foreign

Trade, Udyog Bhavan, New

Delhi-110001.

3.The Commissioner of Customs

and Central Excise, Seminary

Hills, Nagpur-440006.

4.The Commissioner of Customs,

Custom House, Mundra, 5B, Port

User Building, Mundra Port,

Mundra, Gujrat-370421.

5.The Commissioner of Customs,

The office of Commissioner of

Customs, Customs House, Near

Balaji Temple, Kandla Gujrat-

370210.

6.The Commissioner, Customs

(Preventive) Commissionerate,

55-17-3, C-14, 2

nd

Floor,

Industrial Estate, Autonagar,

Vijayawada.

6 WP-5601-2023+2.odt

----------------------------------------------------------------------------------

Shri M. G. Bhangde, Senior Advocate i/b Shri S. Dewani,

Adv., Ms S. Sarda, Adv. and Ms A. Bangde, Adv. for the

Petitioners in all .

Shri N. S. Deshpande, Deputy Solicitor General of India for

Respondent Nos.1 and 2 in all.

Mr S. N. Bhattad, Advocate for Respondent Nos.3 to 7, 9

and 10 in WP No.5601 and 6539 of 2023 and for

Respondent Nos.3 to 5 in WP No.6986 of 2023.

-----------------------------------------------------------------------------------

CORAM :AVINASH G. GHAROTE AND

SMT. M. S. JAWALKAR, JJ.

RESERVED ON :21

ST

FEBRUARY, 2024.

PRONOUNCED ON :9

TH

MAY , 2024.

JUDGMENT (PER : SMT. M. S. JAWALKAR)

1. Heard.

2. Rule. Heard finally with the consent of the learned counsel

appearing for the parties.

3. The petitioners are the companies incorporated under the

Companies Act, 1956, and are dealing in the business of rice and rice

related products. The petitioners company claim to be one of the

companies of the group by name “Greta Group”, which has various

kinds of business activities, namely rice milling, power generation

and trading of metal scraps in India and overseas market. The

petitioners companies have its corporate office in Nagpur and also in

other parts of the world.

7 WP-5601-2023+2.odt

4. The respondent No.1 is the Union of India. The

respondent No.2, the Director General of Foreign Trade is a statutory

Authority regulating and controlling foreign trade in India.

Respondent No.3 is the Head of Central Excise and Customs

Department. The respondent Nos.4 to 10 are the Heads of respective

Divisions of the Custom Department working under the directives of

the respondent No.3 and implement the policies framed by the

respondent Nos.1 and 2. As the facts in all these petitions are

identical, the facts in Writ Petition No.5601 of 2023 are considered

here.

5. The petitioners, by these petitions, raise challenge to the

action on the part of the respondent No.1 in issuing Notification

dated 20.07.2023 in exercise of powers conferred under Section 3

read with Section 5 of the Foreign Trade (Development and

Regulation) Act, 1992 (for short, “the Act of 1992”). By this

Notification, the export policy was amended and export of Non-

Basmati Rice against ITC (HS) code 1006 30 90 was declared as

“prohibited”. Prior to such amendment, export of the said Commodity

was “free”. The said Notification No.20/2023 is ordered to be

brought into force with immediate effect. By this notification, the

respondent No.1 has permitted four conditions under which the

consignments of “Non-Basmati Rice” will be allowed to be exported.

8 WP-5601-2023+2.odt

The said Notification further came to be clarified by respondent No.1

on 18.08.2023 vide Trade Notice No.23/2023 dated 18.08.2023

clarifying that the conditions which were stipulated vide Notification

No.20/2023 dated 20.07.2023, were independent of each other and

export is allowed in case of completion of any of the conditions of

Para 2 of Notification dated 20.07.2023 by the exporter. The said

notification is challenged mainly on the ground that before taking

such decision, the Government ought to have considered the

concluded contracts which are partly performed. A challenge is also

raised that the notification cannot be by retrospective effect so as to

divest and adversely effect the concluded contracts which have

already been entered into by the petitioners with their Foreign

buyers.

6. The petitioners have placed a summary of details of

various sales contracts entered into with various customers by the

petitioners. It is contended that the petitioners are obligated to

comply with each and every of such contract. These contracts were

entered into before the issuance of impugned Notification when the

policy of export was free, as such these contracts are saved from

prohibition contained in the impugned Notification. The details of

sales contract entered into by the petitioners are reproduced below :

9 WP-5601-2023+2.odt

Sales

Contract

Date

Sales

Contract No.

Buyer QualityQuantity

in M.T.

13.01.2023SE22Y-00513Glometz

International

Indian White

Rice

50,000

10.07.2023SE23Y-

0005814023

637

Aditya Birla

Global Trading

Indian Long

Grain White

Rice 25 PCT

Broken

1,50,000

13.07.2023SE23Y-00067Glometz

International

DMCC

IR64White

Rice 5%

Broken

2,500

13.07.2023SE23Y-00066Roop

International

General Trading

Indian White

Rice

11,750

Total (in

M.T.)

79,250

7. In order to fulfill its obligation for exporting the products

in pursuance to the aforesaid sale contracts, the petitioners are

claimed to have entered into various purchase contracts for the

purchase of sale of Non-Basmati Rice and accordingly, advance has

been paid and received under the said contracts. It is submitted that

respondent Authorities are well aware of practice of advance sale and

purchase contracts prevailing in the trade. It is also contended that

the provision is arbitrary, hasty and illogical decision was taken

without having regard to this fact. Huge stakes are involved which

has not been looked into, while the said Notification was brought into

force. In view of the Foreign Trade Policy issued by the Central

Government under Section 5 of the Act of 1992, the amendments

10 WP-5601-2023+2.odt

carried out therein shall only have a prospective effect and not

retrospective effect. The Foreign Trade Policy provides for protection

to those who were holders of letter of credit and the retrospective

effect could not have been given to the Notification in respect of any

such transactions. It is submitted that similar issue was involved in

Writ Petition No.22444 of 2007, before the High Court of Andhra

Pradesh at Hyderabad and the petitioners therein were granted

interim relief, wherein Notification dated 15.10.2007 was made

effective retrospectively from 09.10.2007. It is submitted that the law,

pertaining to the prospective or retrospective effect of the

Notification pertaining to any prohibition relating to import or export

any good, is well settled.

8. After hearing the learned Senior Counsel Shri M.G.

Bhangde, for the petitioners, his arguments focus primarily on

following contentions that :

8.1. Before issuing notification, no notice was given nor any

suggestion, objections were called nor there was any consultation

with exporters. Thus, the respondents Authorities violated the

principles of natural justice.

8.2. The notification is unreasonable and violates fundamental

right under Articles 14 and 19(1)(g).

11 WP-5601-2023+2.odt

8.3. The impugned notification contains no reasons to justify

the prohibition. Thus, it amounts to non application of mind or

arbitrary exercise of power by the respondents.

8.4. The notification has not taken into consideration the

concluded contracts which were based on the existing FTP.

8.5. It was legitimately expected from respondents to take into

consideration the contracts executed up to the date of issuance of the

notification, as it may lead to litigation, losses and adverse affect on

the reputation of the exporters. It is expected of respondents

statutory Authorities to be fair and reasonable in their approach so

also they should be unbiased and follow the principles of fairness and

justice. There is no data available to take such decisions which not

only affect the petitioners but also to the Countries who depends on

our Nation for rice.

8.6. The petitioners have legitimate expectation that they will

be able to honour the concluded contracts and accordingly export the

Non-basmati Rice. However, respondent Nos.1 and 2 have not taken

this into consideration which renders the impugned notification

arbitrary and violation of Article 14 of the Constitution of India.

12 WP-5601-2023+2.odt

8.7. The respondents/Statutory Authorities deliberately

suppressed martial and relevant particulars. The respondent Nos.1

and 2 were required to state the details of : i) “Sudden spike in global

price of rice”, such as what was the price of rice in global market for

some period. Similarly, for the reason ii) “Food Security was at risk in

India”, the respondent Nos.1 and 2 were required to state the

quantity of rice available as well as quantity of rice required for the

entire country and the quantity of rice to be exported. For the reason

“Price stabilization of food items”, relevant data ought to have been

placed on record. There is no data placed on record in respect of

production and export of Non-basmati rice. All these details have not

been supplied. Therefore, the impugned Notification suffers from

malice in law. As such, there is no justification for impugned

amendment to the export policy.

8.8. It is further argued that paragraph No.1.05 of the Foreign

Trade Policy, 2023 provides for “Transitional arrangement” Clause

(b). Therefore notwithstanding change in the policy, the exporter

who has commitment through Irrevocable Commercial Letter of

Credit (ICLC) before date of imposition of such restriction and was

permitted to export the balance quantity of goods as per value and

period available in the ICLC, for availing which the exporter had to

register ICLC with jurisdictional RA against computerized receipt

13 WP-5601-2023+2.odt

within 15 days of imposition of any such restriction. However, the

impugned Notification in paragraph No.2 states that ‘the provision

under paragraph No.1.05 of FTP, 2023, regarding transitional

arrangement shall not be applicable under the impugned notification

for export of Non-basmati rice’. It is vehemently argued that the

benefit conferred upon an exporter by paragraph No.1.05 of FTP,

cannot be taken away by the respondent Nos.1 or 2. Even if, it is

presumed that such powers are there to take away the benefit, such

power is required to be exercised in a fair and reasonable manner.

There is no justifiable reason or material placed on record to take

away such benefits. Thus, the exercise of power, if any, in the matter

is manifestly arbitrary as it is not backed by any material or reasons

recorded in the file. It is contended by petitioners that it could not

register the ICLC with jurisdictional RA as provisions of paragraph

No.1.05 (b) have been made inapplicable.

8.9. Lastly, it is submitted that power under Sections 3 and 5 of

the Foreign Trade (Development and Regulation) Act, 1992, to

amend and/or formulate the export and import policy is that of

Central Government. The Director General of Foreign Trade has no

such power. The power of Central Government under aforesaid

provisions cannot be delegated to any Officer including the Director

General, Foreign Trade. From the notification, the petitioners

14 WP-5601-2023+2.odt

reasonably believe that the decision to amend the export policy in

respect of Non-basmati rice from “free” to “prohibited’ has been taken

by the Director General, Foreign Trade and not by the Central

Government. No such information is supplied under the Right to

Information Act, 2005. As such, the decision is taken by the Director

General, Foreign Trade and not by Central Government.

8.10. Relying upon para-15 in Union of India and Ors. vs.

Agricas LLP and Ors., (2021) 14 SCC 341, it is contended that Article

77 does not provide for delegation of any power, albeit under sub-

section (3) of Article 77, the President is to make rules for more

convenient transaction of business and allocation of same amongst

Ministers. It is vehemently contended that the notification issued

requires to be presumed, who has been issued by the DGFT as there

is nothing on record to show that it is issued in the name of the

President, authenticated in the manner specified in the Rules made

by the President. If that notification was as per the provisions and

under the Authority of the President that would not have been

challenged but it is already brought on record by the petitioners that

in spite of repeated request, no information is supplied by the

respondent that by which order the powers are delegated to the

DGFT.

15 WP-5601-2023+2.odt

8.11. In support of his contentions, Mr. Bhangde, learned Senior

Counsel for the petitioners relied on the judgments of various High

Courts and the Hon’ble Apex Court as under :

i) Parag Milk and Milk Products Ltd. vs. Union of India,

2007 SCC OnLine Bom 716,

ii) Cellular Operators Association of India and Ors. vs.

Telecom Regulatory Authority of India,2016) 7 SCC 703,

iii) K. S. Paripoornan vs. State of Kerala and Ors.,(1994)

5 SCC 593,

iv) Director General of Foreign Trade and Anr. vs. Kanak

Exports and Anr.,(2016) 2 SCC 226.

v) Food Corporation of India Vs. M/s Kamdhenu Cattle

Feed Industries (1993) 1 SCC 71.

vi) Parisons Agrotech Pvt. Ltd. And Anr. vs. Union of

India and Ors., (2015) 9 SCC 657.

vii) State of Jharkhand vs Brahmaputra, (2023) 10 SCC

634.

9. In reply, the learned Dy. Solicitor General of India, Shri

Nandesh Deshpande, for the respondent Nos.1 and 2, supported the

notification and submitted that there is no violation of any

fundamental right. The Notification is issued as per provisions of law.

16 WP-5601-2023+2.odt

The Notification is under signature of Director General of Foreign

Trade/ respondent No.2 and Union of India is represented through

respondent No.1 in Ministry of Commerce and Industries who are

entrusted with the formulation and enforcement of Foreign Trade

Policy. It is submitted that as per Section 3 of Foreign Trade Act, the

Central Government has the power to formulate and announce the

export/import policy and to amend the policy. It is further submitted

that there has been sudden spike in the global prices of rice and the

food security of India was at risk. Therefore, keeping in view the

domestic food security situation in India and the need for price

stabilization of food item, the respondent No.1/Union of India within

its regulatory role, amended the export policy of Non-basmati Rice. It

was carried out after due consideration with the Nodal Departments.

It is further submitted that in certain conditions, the Non-basmati rice

was allowed to be exported. Those four conditions are mentioned in

the notification, are as follow :

“i) Where loading of non-basmati rice on the ship has

commenced before this Notification;

ii) Where the shipping bill is filed and vessels have already

berthed or arrived and anchored in India ports and their

rotation number has been allocated before this Notification;

the approval of loading in such vessels will be issued only

after confirmation by the concerned Port Authorities

regarding anchoring/berthing of the ship for loading of

non-basmati rice prior to the Notification;

17 WP-5601-2023+2.odt

iii) Where non-basmati rice consignment has been handed

over to the Customs before this Notification and is

registered in their system/where Non-basmati rice

consignment has entered the Customs Station for

exportation before this Notification and is registered in the

electronic systems of the concerned Custodian of the

Customs Station with verifiable evidence of date and time

stamping of these commodities having entered the Customs

Station prior to 20.07.2023. The period of export shall be

upto 31.08.2023.

iv) Export will be allowed on the basis of permission

granted by the Government of India to other countries to

meet their food security needs and based on the request of

their Government.”

9.1. It is submitted that prior intimation was not given as very

purpose of the amendment will be defeated as it has to be

implemented with immediate effect. As such, the notification is

issued in a fair and reasonable manner. The notification was not

issued with retrospective effect. It is issued in public interest which

prevail over the private interest of exporters. It is submitted that the

execution of contract is bound by law and regulation and sovereign

power of Government cannot be circumscribed by entering into a

contract. Thus, the contracts entered into by petitioners cannot be a

bar in a sovereign decisions of Government of India.

9.2. The learned Dy. S. G. I., relied on the following citations:

1) Union of India Vs. International Trading Co. and

another, (2003) 5 SCC 437

18 WP-5601-2023+2.odt

2) Union of India and Ors. vs. Agricas LLP and Ors.,

(2021) 14 SCC 341

10. The question of authority needs to be addressed first, for if

we find that there was no authority to issue the notification, then the

petition must succeed on that count alone.

10.1. A perusal of the notification dated 20/7/2003 (pg.47),

indicates that it has been issued by the Central Government in

exercise of the powers conferred under sec.3 read with sec.5 of the

FT (D & R) Act, 1992 and para 1.02 and 2.01 of the FTA Policy 2023.

What is material is that the notification states that it has been issued

by the Central Government, in exercise of the powers under Sec.3

r/w/ 5 of the F T Act, 1992. It has also been published in the Gazette

of India Extraordinary Part-II, Section-3, Sub-Section (ii). This would

prima facie indicate that the notification has been issued by the

Central Government. The only contention raised for the plea that it is

not so, is the fact that it bears the signature of Mr. Santosh Kumar

Sarangi, Director General Foreign Trade. This however ignores the

position that the above named person, has also acted in his capacity

as Ex-Officio Additional Secretary, to the Government of India. This

would clearly indicate that the notification has been issued by the

Central Government and not by the Director General of Foreign

Trade.

19 WP-5601-2023+2.odt

10.2. Mr. Nandesh Deshpande, learned Dy.SGI, has rightly

placed reliance on Union of India and Ors. vs. Agricas LLP and Ors.,

(supra). This was a case which involved challenge to the validity of

the Notifications dated 29/03/2019 bearing S.O. Nos.1478-E, 1479-

E, 1480-E and 1481-E pending in several writ petitions filed before

different High Courts. The matter also involved connected challenge

to the Trade Notice dated 16/04/2019 issued by the Directorate

General of Foreign Trade on the ground of excessive delegation as not

being in accordance with sub-section (2) to Section 3 read with the

bar under sub-section (3) to Section 6 of the Foreign Trade

(Development and Regulation) Act, 1992. The Hon’ble Apex Court

held as under:

“11. Several traders had thereafter filed Writ Petitions

before different High Courts challenging imposition of

restrictions on import of Peas and pulses and interim orders

were passed staying the notifications which had the effect

of permitting imports without any restriction as to quota or

licence. The primary grounds raised in the writ petitions

before the High Courts were:

11.1. The impugned notifications issued by the DGFT had

the effect of modifying or amending the EXIM policy as the

specified items were withdrawn from the free category and

moved to restricted category. But, DGFT, a statutory

authority under the provisions of FTDR Act, was not

authorised to authenticate/issue an order amending or

modifying the EXIM policy as this power vests with the

Central Government in terms of sub-section (2) to Section

3, read-with sub-section (3) to Section 6 of the FTDR Act,

which states that powers exercisable under Sections 3, 5,

15, 16 and 19 of the FTDR Act cannot be delegated to the

20 WP-5601-2023+2.odt

DGFT or any other officer subordinate to the Director

General.

11.2. Section 19(3) of the FTDR Act provides that every

rule or every order passed by the Central Government shall

be laid, as soon as may be after it is made, before each

House of the Parliament while it is in session or thereafter.

The impugned notifications had not been laid before the

Houses of the Parliament

11.3. The Notifications and trade notices suffer from the

vires and defects mentioned by this Court in DG of Foreign

Trade v. Kanak Exports, (2016) 2 SCC 226.

11.4. The notifications and the trade notices offend the

right to equality and violate Article 14 of the Constitution.

15. At the outset, we must record that the importers, and

in our opinion rightly, have not raised the contention that

DGFT could not have notified the impugned notifications.

The notifications themselves record that they were

published by the Ministry of Commerce and Industry,

Department of Commerce, Directorate General of Foreign

Trade. The first paragraph of the notification states that

they had been issued by the Central Government in

exercise of powers conferred under Article 77 of the

Constitution. Clearly, the notifications were issued by the

Central Government, and not the DGFT that had performed

the ministerial act of publication. The decision to amend

and issue the notification was of the Central Government.

Neither Section 3(2) nor Section 6(3) of the FTDR Act was

violated. This Court in Delhi International Airport Limited

v. International Lease Finance Corporation and others, 9

(2015) 8 SCC 446, had referred to Articles 77 and 166 of

the Constitution and held that the Constitution stipulates

that whenever executive action is taken by way of an order

or instrument it shall be expressed to be taken in the name

of the President and Governor in whose name the executive

power of the Union and the States, respectively, are vested.

Article 77 does not provide for delegation of any power,

albeit under sub-section (3) of Article 77, the President is

to make Rules for more convenient transaction of business

and allocation of same amongst Ministers. Under the

Government of India (Transaction of Business) Rules, 1961,

21 WP-5601-2023+2.odt

the government business is divided [2 (2015) 8 SCC 446]

amongst Ministers and specific functions are allocated to

different Ministries. The Director General of Foreign Trade

is an ex officio Additional Secretary in the Government of

India and is appointed by the Central Government under

sub-section (1) to Section 6 of the FTDR Act to advise the

Central Government in formulation and carrying out the

Foreign Trade Policy. Wherefore, even the website of the

Ministry of Commerce and Industry, Department of

Commerce, states that the DGFT is an agent of the Central

Government and attached office to it. Further, clause (2) of

Article 77 provides that validity of an order or instrument

made or executed in the name of the President,

authenticated in the manner specified in the Rules made by

the President, shall not be called in question on the ground

that it is not an order or an instrument made or executed

by the President. Therefore, the contention of issuance of

the impugned notification sans authority, cannot be

sustained.”

10.3. It would thus be apparent that a similar challenge as the

present one, raised in Union of India and Ors. vs. Agricas LLP and

Ors., (Supra) has been turned down by the Hon’ble Apex Court by

observing that the Director General of Foreign Trade is an Ex-officio

Additional Secretary in the Government of India and thus is an agent

to the Central Government. The argument of Mr. Bhangde, learned

Senior Counsel for the petitioners based upon Article 77 of the

Constitution, has also been addressed and turned down.

10.4. The contention that the notification dated 20/7/2023

(pg.47) was without authority, therefore in view of Union of India

and Ors. vs. Agricas LLP and Ors., (Supra), is not acceptable and is

turned down.

22 WP-5601-2023+2.odt

11. It is not disputed, that prior to the notification No.

20/2023 dated 20.07.2023 (page 40) export of Non-Basmati Rice,

was free thereby indicating that there were no restrictions for

transport of the same. It is for the first time, by virtue of the aforesaid

notification dated 20.7.23 the export of Basmati Rice under the

revised export policy has been brought under the prohibited category.

The notification dated 20.07.2023, does not spell out the reasons for

this, which however, are indicated in the reply of the respondents, to

which we will advert to later on. For the purpose of considering the

challenge, the notification is reproduced as under:

“Government of India

Department of Commerce

Directorate General of Foreign Trade

Vanijya Bhawan, New Delhi

Notification No.20/2023

New Delhi, Dated 26

th

July, 2023

Subject:- Amendment in Export Policy of Non-basmati rice

under HS Code 1006 30 90.

S.O.(E) The Central Government, in exercise of powers

conferred by Section 3 read with section 5 of the Foreign

Trade (Development & Regulation) Act, 1992 (No.22 of

1992), as amended read with Para 1.02 and 2.01 of the

Foreign Trade Poolicy, 2023, hereby amends the Export

Policy of Non-basmati rice against ITC (HS) code 1006 30

90 of Chapter 10 of Schedule 2 of the ITC (HS) Export

Policy, as under:

ITC HS CodesDescription Export

Policy

Revised

Export

Policy

23 WP-5601-2023+2.odt

1006 30 90Non-basmati white rice

(Semi-milled or wholly

milled rice, whether or

not polished or glazed :

Other)

FreeProhibited

2. The Notification will come into immediate effect.

Teh provisions as under Para 1.05 of the Foreign Trade

Policy, 2023 regarding transitional arrangement shall not be

applicable under this Notification for export of Non-basmati

rice. Consignments of Non-basmati rice will be allowed to

be exported under following conditions:

i.where loading of Non-basmati rice on the ship has

commenced before this Notification;

ii.where the shopping bill is filed and vessels have

already berthed or arrived and anchored in Indian

ports and their rotation number has been allocated

before this Notification; the approval of loading in

such vessles will be issued only after confirmation by

the concerned Port Authorities regarding

anchoring/berthing of the ship for loading of Non-

basmati rice prior to the Notification;

iii.where Non-basmati rice consignment has been

handed over to the Customs before this Notification

and is registered in their system / where Non-basmati

rice consignment has entered the Customs Station for

exportation before this Notification and is registered

in the electronic systems of the concerned Custodian

of the Customs Station with verifiable evidence of

date and time stamping of these commodities having

entered the Customs Station prior to 20.07.2023. the

period of export shall be upto 31.08.2023.

iv.Export will be allowed on teh basis of permission

granetd by teh Government of India to other countries

to meet their food security needs and based on the

request of their Government.

3. Export of Organic Non-basmati rice will be

governed in accordance with Notification No.03/2015-

2020 dated 19

th

April, 2017 read with Notification

No.45/2015-2020 dated 29

th

November, 2022.

4. Effect of this Notification:

24 WP-5601-2023+2.odt

Export Policy of Non-basmati white rice (Semi-milled or

wholly milled rice, whether or not polished or glazed:

Other) under HS Code 1006 30 90 is amended from “Free”

to “Prohibited”.

Signed

(Santosh Kumar Sarangi)

Director General of Foreign Trade

Ex-Officio Additional Secretary, Government of India

E-mail: dgft@nic.in”

A perusal of this notification would therefore indicate, that

export of Non-Basmati Rice (Semi milled or Wholly milled Rice, or

whether or not polished or glazed; other) was brought into the

prohibited category. The notification was indicated to come into

immediate effect and it was specially mandated that the provisions of

para 1.05 of the Foreign Trade Policy 23 regarding transitional

arrangements was made inapplicable under the aforesaid notification

for export of Non-Basmati Rice. Consignment for Non-basmati Rice

were allowed to be exported under the conditions No.(i) to (iv) as

indicated above, condition No.(i) providing the loading of Non-

basmati Rice having already commenced before the notification;

condition No.(ii) where the shipping bill was filed and vessels had

already birthed or arrived or anchored in Indian Ports and their

rotation numbers were allocated before the notification; condition

No.(iii), where the Non basmati rice consignments were handed over

to the customs before this notification and was registered in their

25 WP-5601-2023+2.odt

system or where the consignments had entered the custom systems

for exportation before the notification and was registered in the

electronic system of the concerned custodial of the concerned systems

with verifiable evidence of date and time stamping prior to

20.07.2023, the period of export was stated to be 31.08.2023;

condition No.(iv) indicated export was to be allowed on the basis of

permission granted by the Government of India to other Countries to

meet their security needs and based upon the request of such

Government.

12. Before considering the issue further, it would be

necessary to note what is indicated by para 1.05 of the Foreign Trade

Policy 2023 regarding transitional arrangements, which for the sake

of ready reference is quoted as under:

“1.05 Transitional Arrangements

(a)Any License/ Authorisation/ Certificate/ Scrip/

instrument bestowing financial or fiscal benefit issued

before commencement of FTP 2023 shall continue to

be valid for the purpose and duration for which it was

issued, unless otherwise stipulated.

(b)Item wise Import/Export Policy is delineated in the

ITC (HS) Schedule I and Schedule II respectively. The

importability/exportability of a particular item is

governed by the policy as on the date of

import/export. The date of import/export is defined in

para 2.17 of HBP 2023. Bill of Lading and Shipping

Bill are the key documents for deciding the date of

26 WP-5601-2023+2.odt

import and export respectively. In case of change of

policy from ‘free’ to ‘restricted/prohibited/state

trading’ or ‘otherwise regulated’, the import/export

already made before the date of such

regulation/restriction will not be affected. However,

the import through High Sea sales will not be covered

under this facility. Further, the import/export on or

after the date of such regulation/restriction will be

allowed for importer/exporter who has a commitment

through Irrevocable Commercial Letter of Credit

(ICLC) before the date of imposition of such

restriction/ regulation and shall be limited to the

balance quantity, value and period available in the

ICLC. For operational listing of such ICLC, the

applicant shall have to register the ICLC with

jurisdictional RA against computerized receipt within

15 days of imposition of any such

restriction/regulation. Whenever, Government brings

out a policy change of a particular item, the change

will be applicable prospectively (from the date of

Notification) unless otherwise provided for.”

13. The provisions regarding transitional arrangement in the

Foreign Trade Policy 2023 (FTP 2023 for the sake of ready reference),

which came into effect from 01.04.2023 provided amongst other

things, export on or after the date of any regulation/restriction for an

exporter who had a commitment through irrevocable commercial

letter of credit (ICLC) before the date of imposition of such

restriction/regulation and was to be limited to the balance quantity

value and period available in such ICLC , which ICLC was required to

be registered with the jurisdictional registering authority against

27 WP-5601-2023+2.odt

computerised receipt within 15 days of imposition of any such

restriction/regulation. It further clarified, that whenever Government

brings out a policy change of applicable item the change will be

applicable prospectively from the date of notification, unless

otherwise provided for.

14. The purpose of transitional arrangement, is therefore to

assure , that an exporter who has committed contract with a foreign

buyer, which is demonstrated through an irrevocable commercial

letter of credit (ICLC) should be permitted to compete the contract,

as failure to do so, would result in drastic consequences financially

not only to such exporters, but to persons, from whom such exporters

are had procured the goods to be exported. It in fact, created a

limited window, for the exporter to complete the commitment which

he had already with a foreign buyer which in law, he was obligated

and bound to complete.

15. The position that the respondents realised a burden upon

the exporter to complete the obligation of fulfilling a complete

contract is further indicated from conditions i to iv, as appended to

Clause 2 of the impugned notification dated 20.7.23 (page 40),

though in a limited sense, as indicated thereto.

28 WP-5601-2023+2.odt

16. Thus, when FTP 2023, provided for a transitional

arrangement , to enable an exporter to complete its obligation under

the contract, the impugned notification, for not applying the

transitional provisions as contained in para 1.05, of the FTP 2023 ,

does not assign any reasons at all, why the benefit of such a

transitional arrangement, which normally ought to have ben granted

has not been granted in the case of Non-basmati Rice, all other things

remaining the same.

17. Mr. Bhangde, learned Senior Counsel for the petitioner, is

correct, in relying upon the notification No.6/2015-20 dated

13.05.2022 (Page 108-H), which is an amendment in the export

policy of wheat, by which while changing the free export policy in

respect of wheat to be prohibited with effect from 13.05.2022, the

same has vide clause 2 A permitted as a transitional arrangement of

export of wheat in case of shipments where ICLC has been issued on

or before the date of the notification, subject to submission of

documentary evidence as prescribed. In this context, it is also

necessary to note that averments made in petition regarding

concluded contracts and ICLC as detailed in para 12 and 13 of the

petition, which have been supported by the copies of the purchase

contracts at Annexure-K of the petition have not been denied by the

respondent Nos. 3 and 5 in their submissions dated 23.09.2023. It is

29 WP-5601-2023+2.odt

also material to note, that the reply by the respondent Nos. 3 and 5

does not whisper a single word as to why the transitional

arrangement 1.05 in the FTP 2023, has not been made applicable to

the impugned notification, as is the case of the reply of the

respondent No. 3. The respondent No. 2 in his submission also does

not speak anything about the applicability of the aforesaid

transitional arrangements 1.05 in the FTP 2023, except for saying,

that on account of request made by traders seeking clarification on

the transitional arrangement as bulk shipments were stuck at Kandla

Port, the Central Government by vide notification No. 29/2023 d

ated 29.8.23 clarified that where non basmati rice consignment had

been handed over to the customs before 21:57:01 Hours on

20.07.2023 and is registered in customs systems or has entered the

customs station and is registered in the electronic systems with

verifiable evidence of date and time of stamping of these

commodities, the period of export shall be up to 30.10.2023. It is on

this count it is stated that the central government had also taken

necessary steps to minimise the contingencies faced by the traders

and the policy formulation cannot be stretched to cover situations

like opening of letter of credit. The replies of the respondent Nos. 4,

6, 7 and 10, in this regard are also on the same lines as that of the

respondent Nos. 3 and 5.

30 WP-5601-2023+2.odt

18. No doubt, that the framing of a policy, is the absolute

domain of the law makers, however, what is necessary to note, is that

the existence of the transitional policy 1.05 in the FTP 2023, is not

denied by the respondents. That being so, it was equally applicable to

all, including the petitioners. It was therefore, necessary for the

respondents to point out, since the transitional policy exists, the

reasons for denial of the benefits of such a policy to the persons, who

are effected by the impugned notification dated 20.07.2023. Needless

to say, that once the Union frames a policy, it has to be applied in an

even handed manner to one and all and any denial of the policy will

have to be construed as an action, which is arbitrary and

unreasonable unless, acceptable reasons, for such denial are spelt

out, which in the present matter, considering the reply affidavits of

the respondents are absent.

19. Even otherwise when a right to export, which was earlier

free, is sought to be restricted, that would be putting a fetter upon

the right of a citizen guaranteed to him under Article 19(1)(g) of the

Constitution which can only be curtailed, if it is demonstrable that

the fetters being sought to be placed on the exercise of such right

were reasonable, the reasonability, being based upon discernible and

justifiable factors.

31 WP-5601-2023+2.odt

20. In this context, it is necessary to note that the Hon’ble

Apex Court in Cellular Operators Association of India and Ors.

(Supra) , while considering the test of arbitrariness has held that

when viewed from the angle of manifest arbitrariness or reasonable

restriction, sounding in Article 14 and Article 19(1)(g) respectively,

the Regulation must, in order to pass constitutional muster, be as a

result of intelligent care and deliberation, that is, the choice of a

course which reason dictates and any arbitrary invasion of a

fundamental right cannot be said to contain this quality. It also held

that a proper balance between the freedoms guaranteed and the

control permitted under Article 19(6) must be struck in all cases

before the impugned law can be said to be a reasonable restriction in

the public interest.

21. In Food Corporation India vs. M/s Kamdhenu Cattle Feed

Industries, (supra) it has been held as under:

7. I n contractual sphere as in all other State actions, the

State and all its instrumentalities have to conform to

Article 14 of which non-arbitrariness is a significant facet.

There is no unfettered discretion in public law: A public

authority possesses powers only to use them for public

good. This imposes the duty to act fairly and to adopt a

procedure which is ‘fairplay in action’. Due observance of

this obligation as a part of good administration raises a

reasonable or legitimate expectation in every citizen to be

treated fairly in his interaction with the State and its

32 WP-5601-2023+2.odt

instrumentalities, with this element forming a necessary

component of the decision-making process in all State

actions. To satisfy this requirement of non-arbitrariness in a

State action, it is, therefore, necessary to consider and give

due weight to the reasonable or legitimate expectations of

the persons likely to be affected by the decision or else that

unfairness in the exercise of the power may amount to an

abuse or excess of power apart from affecting the bona

fides of the decision in a given case. The decision so made

would be exposed to challenge on the ground of

arbitrariness. Rule of law does not completely eliminate

discretion in the exercise of power, as it is unrealistic, but

provides for control of its exercise by judicial review.

22. In Brahmaputra Metallics Ltd. (supra) the Hon’ble

Apex Court while considering the plea of legitimate expectation, has

held that the doctrine of ‘substantial legitimate expectation’, is one of

the ways in which the guarantee of non-arbitrariness enshrined under

Article 14 of the Constitution, finds concrete expression, thereby

indicating that the doctrine of ‘legitimate expectation’ can be used

when denial of legitimate expectation leads to violation of Article 14

of the Constitution.

23. Regarding the parameters of judicial review, regard

also needs to be had to what has been held in Parisons Agrotech (P)

Ltd. (supra), which hold as under:

14. No doubt, the writ court has adequate power of judicial

review in respect of such decisions. However, once it is

33 WP-5601-2023+2.odt

found that there is sufficient material for taking a particular

policy decision, bringing it within the four corners of Article

14 of the Constitution, power of judicial review would not

extend to determine the correctness of such a policy

decision or to indulge into the exercise of finding out

whether there could be more appropriate or better

alternatives. Once we find that parameters of Article 14 are

satisfied; there was due application of mind in arriving at

the decision which is backed by cogent material; the

decision is not arbitrary or irrational and; it is taken in

public interest, the Court has to respect such a decision of

the executive as the policy making is the domain of the

executive and the decision in question has passed the test

of the judicial review.

24. It would therefore be apparent, that for the purpose

of sustaining a policy, what is necessary to be demonstrated is that

there was due application of mind in arriving at the decision which is

backed by cogent material; the decision is not arbitrary or irrational

and; it is taken in public interest. If these necessary ingredients are

not demonstrable, then the policy makes it open, to be branded as

arbitrary and unreasonable, on the touchstone of Article 14 of the

Constitution and therefore, open to judicial review.

25. The reason for converting the policy for export of

Basmati Rice from free to prohibited as per contention of Mr.

Deshpande, learned DSGI is the domestic food security situation in

India, which as claimed to be at risk and the need for price

stabilization of food items, as is indicated, from para-3 of the reply of

34 WP-5601-2023+2.odt

the respondent No.2 (Pg.138). For this it is contended, that there

was due consultation with the nodal Departments such as

Departments of Agriculture and Farmers Welfare, Department of Food

and Public Distribution and Department of Consumer Affairs and it is

stated that the consultation process had taken into account all data

relating to production and export of non-basmati rice. It is however

material to note that except for a plain statement in this regard which

is contained in Paras-3 and 4 (Pg.138 and 139) of the reply of the

respondent No.2, there is nothing else therein in the nature of what

was the form of consultation, what data was collected and

considered, in spite of the fact, that by amendment to the petition by

inserting ground L (Pg.36-A), a specific plea was raised regarding

absence of any such material, to indicate any food security threat or

any need for price stabilization of food items, so as to demonstrate

the reasonability of the restriction placed by way of the impugned

notification on export of non-basmati rice. When we had asked

Mr.Deshpande, learned DSGI, whether he would be in a position, in

view of the absence of the reasons in the replies, in this regard, to

place on record, the file containing the minutes of the consultation,

and the data which was collected and analysed, upon instructions, he

expressed his inability to do so. This would clearly indicate, that the

very basis, for such a restriction to be imposed, appears to be not

available with the respondents. Having said so, this would actually

35 WP-5601-2023+2.odt

require us to strike down the notification in absence of any

reasonable, verifiable material for its imposition however, that it is

not the relief which is being sought. Even otherwise, if the policy can

be saved by reading down, the same should be a preferred course of

action by the Courts.

26. The relief which is being sought is for enabling the

petitioners to complete the concluded contracts, which they have

with foreign traders for supply of basmati rice. In this context, it

would be material to note, that in case the petitioners establish

concluded contracts, for supply of non-basmati rice, to foreign

traders, for which they have established ICLC and the petitioners

have already procured the goods, this would be an action, relatable

to the Policy prior to the impugned notification, which indicated that

the export was free. If this is the case, then the petitioners, would

have legitimate expectation, of fulfilling of their contracts, which they

had entered into on the basis of the free policy, with foreign traders.

IT is also necessary to note that non-fulfilling the concluded contract

would also make the petitioners open to litigation on account of

breach of contract and consequently damages. Thus, the expectation

of fulfilling an existing concluded contract, on the basis of the

existing policy could be said to be legitimately available to the

petitioners. In this context, it is necessary to note what has been held

36 WP-5601-2023+2.odt

by the Hon’ble Apex Court in Food Corporation of India Vs. M/s

Kamdhenu Cattle Feed Industries (Supra), while dealing with the

relationship between Article 14 and the doctrine of legitimate

expectation, which is as under :

“46. As regards the relationship between Article 14 and

the doctrine of legitimate expectation, a three Judge Bench

of Food Corporation of India vs Kamdhenu Cattle Feed

Feed Industries, (1993) 1 SCC 71, speaking through Justice

J. S. Verma, held thus:

“7. In contractual sphere as in all other State actions, the

State and all its instrumentalities have to conform to

Article 14 of the Constitution of which non-arbitrariness is

a significant facet. There is no unfettered discretion in

public law: A public authority possesses powers only to use

them for public good. This imposes the duty to act fairly

and to adopt a procedure which is ‘fairplay in action’. Due

observance of this obligation as a part of good

administration raises a reasonable or legitimate expectation

in every citizen to be treated fairly in his interaction with

the State and its instrumentalities, with this element

forming a necessary component of the decision- making

process in all State actions. To satisfy this requirement of

non-arbitrariness in a State action, it is, therefore,

necessary to consider and give due weight to the

reasonable or legitimate expectations of the persons likely

to be affected by the decision or else that unfairness in the

exercise of the power may amount to an abuse or excess of

power apart from affecting the bona fides of the decision in

a given case. The decision so made would be exposed to

challenge on the ground of arbitrariness. Rule of law does

not completely eliminate discretion in the exercise of

power, as it is unrealistic, but provides for control of its

exercise by judicial review.

8. The mere reasonable or legitimate expectation of a

citizen, in such a situation, may not by itself be a distinct

enforceable right, but failure to consider and give due

weight to it may render the decision arbitrary, and this is

how the requirement of due consideration of a legitimate

37 WP-5601-2023+2.odt

expectation forms part of the principle of non-arbitrariness,

a necessary concomitant of the rule of law…...”

27. The common principle which emerges is that the mere

reasonable or legitimate expectation of a citizen, in such a situation,

may not by itself be a distinct enforceable right, but failure to

consider and give due weight to it may render the decision arbitrary,

and this is how the requirement of due consideration of a legitimate

expectation forms part of the principle of non-arbitrariness, a

necessary concomitant of the rule of law. Every legitimate expectation

is a relevant factor requiring due consideration in a fair decision-

making process. Whether the expectation of the claimant is

reasonable or legitimate in the context is a question of fact in each

case. Whenever the question arises, it is to be determined not

according to the claimant’s perception but in larger public interest

wherein other more important considerations may outweigh what

would otherwise have been the legitimate expectation of the

claimant. A bona fide decision of the public authority reached in this

manner would satisfy the requirement of non-arbitrariness and

withstand judicial scrutiny. The doctrine of legitimate expectation

gets assimilated in the rule of law and operates in our legal system in

this manner and to this extent. That the petitioners, had legitimate

expectation of exporting basmati rice without any restrictions, is

38 WP-5601-2023+2.odt

further indicated by the mandate of section 3(4) of the FT Act, 1992,

which mandates that without prejudice to anything contained in any

other law, rule, notification, regulation or order, no permit or licence

shall be necessary for import or export of any goods, nor any goods

shall be prohibited for import or export except, as may be required

under this Act, or Rules or Orders made thereunder. Since at the

time of making a concluded contract, the policy of free export, was in

existence, the petitioners can be said to have had a reasonable and

legitimate expectation to complete their obligations under the

concluded contracts which were in existence, when the impugned

notification was brought into force.

28. The right of a trader, to fulfill his obligation under the

concluded contract, on the basis of the policy as was existing on the

date when the contract was concluded, fell for consideration of this

Court in Parag Milk and Milk Products Ltd. (supra). This is what has

been held in that regard by the learned Division Bench of this Court.

“9. In the present case it cannot be disputed that when the

Letters of Intent were issued in favour of the petitioner the

declared policy of the Government did not impose any ban

upon export of SMP and its alike products. The right by

virtue of the contract between the exporter and importer

should settle for them. The expression “export obligation”

as defined in the Foreign Trade Policy has to be given a

cogent meaning on its plain interpretation. It will not be

permissible to attach an unnecessary restricted meaning to

this expression. In the impugned order dated 30th April,

39 WP-5601-2023+2.odt

2007 it has been noticed by the Authority that export

obligation means obligation to export product or products

gathered by authorisation or permission in terms of the

quantity, value or both as may be prescribed or specified by

the regional or competent authority. This has been

understood by the authority that the contractual obligation

against some Letter of Credit would not fall in this category.

We are unable to accept this reasoning of the authority in

as much as once there was no ban or restriction on export

of SMP no permission from any authority would have been

required. It falls within the ambit of free sale and the

necessary documents for shipping or export of SMP and

other milk products would only be by virtue of

contract/export document and nothing more. In the entire

order it has not been stated as to which document the

petitioner has failed to produce or which the Authority

expected it to produce. There are concluded contracts

between the parties and in fact part of them was

implemented as well. Another reason stated by the

petitioner was that Skimmed Milk Products is a product

taken out of normal milk and/or the normal milk products

and there was no ban on export of such items. As such a

ban was not justified and in any case would not be made

effective retrospectively. May be the Court would not go

into such question primarily for the reason that the demand

of skimmed milk and its products may be high in domestic

market and authorities concerned may have taken decision

to ban such export retrospectively but to unsettle the

settled rights or concluded rights of the parties would

hardly be permissible in the garb of such notification. The

decision of the authority does not appear to be in

conformity with the settled canons of law.”

29. Kanishka Trading (supra) relied upon by Mr. Deshande,

learned DSGI, was a case in which it was found that the withdrawal

of the exemption, was not on account of any fraud practiced by the

Government nor any huge loss was caused to the importer as burden

40 WP-5601-2023+2.odt

of customs duty was passed on to the consumer. In International

Trading Company (supra), it was held, that renewal of the permit,

could be refused for outweighing reasons of public interest, which

were found to exist.

30. Testing the impugned notification on the anvil of the

principle of legitimate expectation, vis-à-vis Article 14 of the

Constitution, we find that no reasons are forthcoming from the

respondents, for denial of the benefit of the transitional

arrangements, in the FTP, 2023, to the petitioners, and, though the

same has been granted, in the case of wheat, as indicated above, in a

similar circumstance, denial of the same, in the impugned

notification, is not justified.

31. There is yet another contention, of retrospectivity by

Mr.Bhangde, learned Sr. Advocate for the petitioners contending, that

the impugned notification would not have any retrospective effect. It

is a settled position of law, that any policy, brought in by the Union,

would not have any retrospective effect, unless the policy indicates

so. The impugned notification, dated 20/07/2023 (Pg.40), indicates,

that it has to come into immediate effect. This would indicate, its

applicability, from the date it has been issued. Though it is

contended, that it is retrospective in operation, the notification, does

41 WP-5601-2023+2.odt

not indicate, that is to take effect, from any earlier date. However,

clauses 2(i) to (iv) in their effect, indicate, that past transactions,

which have been entered and concluded, but which are yet to be

performed, are also being taken in its sweep, which position is

substantiated by the fact that clause 2 of the impugned notification

indicates that the transitional arrangement in para-1.05 of the FTP,

2023, which saved concluded contracts, indicated by an irrevocable

ICLC, was not applicable. In this regard, what has been held in

Director General of Foreign Trade and Anr. vs. Kanak Exports and

Anr., (supra) is material, which is as under:

“113. We may, in the first instance, make this legal

position clear that a delegated or subordinate legislation

can only be prospective and not retrospective, unless

rule making authority has been vested with power under

a statute to make rules with retrospective effect……..

27. The reliance placed on the power to regulate

under Section 3 of the Act is equally

misconceived. Section 5 gives express power to

formulate the policy and to amend it. This is

specific power. The power to regulate, therefore,

cannot be read as a power to amend when a

specific power to amend is given. If the power to

regulate does not include the power to amend

retrospectively such a power cannot be read into

Section 3 of the Act.

135. We have already discussed these aspects in

detail. To recapitulate, it is held by us that Section 5

of the Act does not empower the Government to

make amendments with retrospective effect,

thereby taking away the rights which have already

accrued in favour of the exporters under the

Scheme. No doubt, the Government has, otherwise,

power to amend, modify or withdraw a particular

42 WP-5601-2023+2.odt

Scheme which gives benefits to a particular

category of persons under the said Scheme. At the

same time, if some vested right has accrued in

favour of the beneficiaries who achieved the target

stipulated in the Scheme and thereby became

eligible for grant of duty credit entitlement, that

cannot be snatched from such persons/exporters by

making the amendment retrospectively…..”

32. If the policy is to be saved, we do not see any reason, why

the same proposition should not be held to be applicable to the

impugned notification, which is issued by the respondents in exercise

of the powers under section 3 read with section 5 of the FT Act,

1992.

33. Considering the discussion made above, we find that the

restriction imposed vide clause 2 of the impugned notification dated

20/07/2023, denying the benefit of para 1.05 of the Foreign Trade

Policy 2023 regarding transitional arrangement to the petitioners, is

clearly not justified, in absence of any reasons in that regard,

forthcoming from the respondents, specifically in view of the fact,

that it is not disputed that the FTP 2023, is applicable to the

petitioners. We therefore, hold and declare, that the impugned

notification, dated 20/07/2023, insofar as it denies the benefit of the

transitional arrangement as contained in para-1.05 of the FTP 2023,

is bad-in-law and the benefit of this transitional arrangement would

be available to the petitioners, in case the requirements, as indicated

43 WP-5601-2023+2.odt

in clause (b) therein are complied by the petitioners. The petition is

accordingly allowed in the above terms and to the above extent. Rule

is made absolute in the above terms. In the circumstances, there shall

be no order as to costs.

(SMT. M. S. JAWALKAR, J.) (AVINASH G. GHAROTE, J.)

Bhimte/Khunte