Case Note & Summary
The petitioner, Siddhi Vinayak, a partnership firm registered under the Indian Partnership Act, 1913, engaged in the import of areca nuts (commonly known as supari), filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court. The petitioner challenged the validity of certain notifications and policy conditions issued by the Directorate General of Foreign Trade (DGFT) that required importers of areca nuts to obtain a 'No Objection Certificate' (NOC) from the Food Safety and Standards Authority of India (FSSAI) as a precondition for import. The petitioner argued that this condition was ultra vires the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) and violative of Articles 14 and 19(1)(g) of the Constitution. The respondents, including the Union of India and customs authorities, defended the condition as a measure to ensure food safety and public health. The court analyzed the scope of delegated legislation under Section 3 of the FTDR Act, which empowers the central government to make provisions for facilitating and controlling imports and exports. The court held that the condition requiring an NOC from FSSAI was not authorized by the FTDR Act and was an unreasonable restriction on the fundamental right to carry on trade under Article 19(1)(g). The court noted that the condition was disproportionate and lacked any statutory backing, as the FSSAI itself had no role in regulating imports under the FTDR Act. The court also found that the sudden change in policy without notice violated the petitioner's legitimate expectation. Consequently, the court quashed the impugned notifications and directed the respondents to allow the import of areca nuts without the requirement of an NOC from FSSAI, subject to compliance with other applicable laws.
Headnote
A) Constitutional Law - Right to Trade - Article 19(1)(g) - Reasonable Restriction - Import of areca nuts - Condition requiring NOC from FSSAI held not a reasonable restriction under Article 19(6) as it is disproportionate and lacks statutory backing - Held that the condition imposes an excessive burden on importers without any nexus to public health or safety (Paras 20-30). B) Delegated Legislation - Ultra Vires - Foreign Trade (Development and Regulation) Act, 1992 - Section 3 - Import policy condition requiring NOC from FSSAI for areca nuts held ultra vires the Act as it goes beyond the scope of delegated power and imposes an additional requirement not contemplated by the Act - Held that the condition is not authorized by the Act and is therefore void (Paras 15-25). C) Administrative Law - Legitimate Expectation - Import Policy - Change in policy requiring NOC from FSSAI for areca nuts - Petitioner had legitimate expectation that imports would be allowed without such condition based on previous practice - Held that the sudden imposition of the condition without notice or opportunity violates principles of natural justice and legitimate expectation (Paras 10-18).
Issue of Consideration
Whether the import policy condition requiring a 'No Objection Certificate' from the Food Safety and Standards Authority of India (FSSAI) for import of areca nuts is ultra vires the Foreign Trade (Development and Regulation) Act, 1992 and violative of Articles 14 and 19(1)(g) of the Constitution of India.
Final Decision
The court allowed the writ petition, quashed the impugned notifications requiring NOC from FSSAI for import of areca nuts, and directed the respondents to permit import of areca nuts without such NOC, subject to compliance with other applicable laws.
Law Points
- Doctrine of proportionality
- Reasonable restriction under Article 19(6)
- Non-delegation of essential legislative function
- Promissory estoppel
- Legitimate expectation
- Ultra vires delegated legislation
