Case Note & Summary
The petitioner, Tata Communications Ltd., a provider of dedicated bandwidth services to foreign carriers through undersea optic fibre cables, challenged a Circular dated 15 July 2010 issued by the Directorate General of Foreign Trade. The Circular implemented decisions of the Policy Interpretation Committee (PIC) meeting dated 5 July 2010, which sought to revoke or modify benefits under the Served From India Scheme (SFIS) formulated under the Foreign Trade Policy 2004-09. The petitioner had earlier obtained SFIS benefits for its services. The companion petition (Vodafone Essar Ltd. v. Union of India) had already been decided on 17 June 2011, quashing the Circular in respect of PIC decisions at serial nos. 1, 2(a), and 2(b). In the present petition, the challenge was confined to PIC decisions at serial nos. 4(ii) and 4(iii). The court noted that the parties agreed that the challenge to serial nos. 1 and 2(b) was governed by the earlier judgment. The surviving issue was whether the PIC decisions at serial nos. 4(ii) and 4(iii) were ultra vires the Foreign Trade Policy. The court held that these decisions were not sustainable as they sought to impose conditions not contemplated by the policy, and quashed the Circular to that extent. The judgment was delivered by Dr. D.Y. Chandrachud and Anoop V. Mohta, JJ., on 5-6 July 2011.
Headnote
A) Foreign Trade Policy - Served From India Scheme - Eligibility Criteria - PIC Decisions - The Policy Interpretation Committee's decisions at serial nos. 4(ii) and 4(iii) regarding eligibility for SFIS benefits were challenged as ultra vires the Foreign Trade Policy 2004-09. The court held that these decisions were not sustainable as they sought to impose conditions not contemplated by the policy, and quashed the Circular to that extent. (Paras 1-4) B) Constitutional Law - Article 226 - Judicial Review - Policy Interpretation - The court exercised its writ jurisdiction to review the validity of administrative decisions that were contrary to the express terms of the Foreign Trade Policy. Held that the PIC could not override the policy framework. (Paras 1-4)
Issue of Consideration
Whether the decisions of the Policy Interpretation Committee (PIC) at serial nos. 4(ii) and 4(iii) of its meeting dated 5 July 2010, as implemented by Circular dated 15 July 2010, are ultra vires the Foreign Trade Policy 2004-09 and liable to be quashed.
Final Decision
The impugned Circular dated 15 July 2010, in so far as it directs implementation of the decisions taken at serial nos. 1 and 2(b) in the PIC meeting dated 5 July 2010, is held to be ultra vires the Foreign Trade Policy 2004-09. The surviving challenge to serial nos. 4(ii) and 4(iii) is also allowed, and the Circular is quashed to that extent. Rule made absolute.
Law Points
- Foreign Trade Policy interpretation
- Served From India Scheme
- Policy Interpretation Committee
- ultra vires
- Article 226
- promissory estoppel
- legitimate expectation
