Case Note & Summary
The dispute arose from the rejection of applications by partnership firms engaged in the import-export of diamonds for registration as Export Houses and for Additional Import Licences under the Import and Export Policy of 1978-79. The authorities denied the applications on grounds of failure to diversify exports during the specified period. The petitioners challenged this decision in the Bombay High Court, which ruled in their favor based on a previous Supreme Court decision that eliminated the diversification requirement. However, the petitioners faced issues in making imports under the granted licences until the introduction of a revised Import and Export Policy for 1988-91. This new policy included provisions that rendered holders of Additional Licences issued before April 1, 1988, ineligible for certain import flexibilities. The petitioners contended that this classification was arbitrary and discriminatory, arguing that all Export Houses should be treated as a single class regardless of the date of licence issuance. The respondents countered that the conditions for obtaining licences under the two policies were fundamentally different, justifying the classification. The Supreme Court analyzed the differences in the policies and upheld the validity of the classification, emphasizing that the right to equality under Article 14 does not preclude differential treatment based on rational distinctions. The court concluded that the petitioners could not claim the same benefits as those granted under the newer policy, thus dismissing their petitions.
Headnote
A) Constitutional Law - Right to Equality - Discriminatory Treatment - Article 14 of the Constitution of India, 1950 - The right to equality ensures that persons similarly placed are treated alike, and differential treatment is permissible if based on intelligible differentia. The court held that the classification of Export Houses based on the date of issuance of Additional Licences was valid as it had a rational relation to the object of the policy (Paras 242H-243A). B) Import and Export Policy - Conditions for Grant of Additional Licences - Import and Export Policy, 1988-91, Para 218(10) - The court found that the conditions for granting Additional Licences under the 1978-79 Policy were materially different from those under the 1988-91 Policy, justifying the classification of Export Houses (Paras 243C-245B). C) Import and Export Policy - Eligibility for Flexibilities - Import and Export Policy, 1988-91, Para 215 - The court ruled that the petitioners, who were granted Additional Licences under the 1978-79 Policy, could not claim the same facilities as those granted under the 1988-91 Policy due to differing eligibility criteria (Paras 245E-246A).
Issue of Consideration
Validity of sub-para (10) of para 218 of the Import & Export Policy for the period April 1988 to March 1991.
Final Decision
The Supreme Court dismissed the writ petitions, upholding the validity of sub-para (10) of para 218 of the Import & Export Policy for the period April 1988 to March 1991, ruling that the classification of Export Houses was rational and justified based on differing eligibility criteria.
Law Points
- Article 14
- reasonable classification
- import-export policy
- additional import licences
- equality before law
