Case Note & Summary
The petitioners, Jindal Drugs Limited and others, filed writ petitions under Article 226 of the Constitution of India challenging a policy circular dated 28.2.2006 issued by the Joint Director General of Foreign Trade. The circular imposed additional conditions for availing export benefits under the Foreign Trade Policy. The petitioners argued that the circular was ultra vires the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade Policy, and that it violated principles of natural justice as it was issued without any prior notice or hearing. The respondents, Union of India and others, defended the circular as a valid exercise of delegated power. The court analyzed the scope of delegated legislation under the Act and found that the circular went beyond the framework of the Act and the Policy. The court held that the circular was ultra vires and also violated the principles of natural justice by affecting the rights of exporters without affording them an opportunity to be heard. The court quashed the circular and allowed the petitions with no order as to costs.
Headnote
A) Constitutional Law - Delegated Legislation - Ultra Vires - Foreign Trade (Development and Regulation) Act, 1992 - Policy circular imposing additional conditions for export benefits held ultra vires as it exceeded the scope of delegated legislation and was not in conformity with the parent Act and the Foreign Trade Policy (Paras 2-10). B) Administrative Law - Natural Justice - Legitimate Expectation - Policy circular issued without prior notice or hearing violates principles of natural justice and defeats legitimate expectation of exporters (Paras 11-15).
Issue of Consideration
Whether the policy circular dated 28.2.2006 issued by the Joint Director General of Foreign Trade is ultra vires the Foreign Trade (Development and Regulation) Act, 1992 and the Foreign Trade Policy, and whether it violates principles of natural justice.
Final Decision
The court quashed the policy circular dated 28.2.2006 and allowed the writ petitions with no order as to costs.
Law Points
- Delegated legislation
- Ultra vires
- Natural justice
- Foreign Trade Policy
- Export promotion
- Legitimate expectation
