Union of India and Others vs Agricas LLP and Others etc.

Words & Expressions – ‘direct application’ – Meaning of – Held: It means and mandates that the treaty norms, either wholly or to some extent, are directly treated as norms of domestic law and enjoy the statutory law status by default in the domestic legal system – International Convention/Treaties.

Disposing of the transfer petitions, the Court HELD: 1.1 Discussion on challenge to the role and authority of the Directorate General of Foreign Trade (DGFT) to issue the Notifications and Trade Notice and interpretation of the words “total quantity”

The importers have rightly not raised the contention that the 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 Foreign Trade (Development and Regulation) Act, 1992 (FTDR) Act was violated. 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, the government business is divided 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. [Para 15][396-E-H; 397-A-E] Delhi International Airport Limited v. International Lease Finance Corporation and Others (2015) 8 SCC 446: [2015] 2 SCR 1040 - relied on.

1.2 FTDR Act vide Section 3(2) authorises the Central Government to prohibit, restrict or otherwise regulate the import or export of goods, by an order published in the Official Gazette. FTDR Act vide Section 11(1) prohibits imports or exports of goods in contravention of the FTDR Act, the rules and orders made thereunder and the EXIM Policy. Section 5 of the FTDR Act authorizes the Central Government to formulate and announce the EXIM Policy by notification in the Official Gazette. Under Section 11(2) of the FTDR Act, when a person makes or abets or attempts to make any import or export in contravention of the FTDR Act, any rule or order made thereunder or the EXIM policy, he is liable to pay penalty upto Rs.10,000/- or five times the value of the goods, services or technology, whichever is greater. Section 11 of the Customs Act,1962 provides that the Central Government may by a notification in the Official Gazette prohibit, absolutely or subject to conditions as specified, import or export of any good. The listed purposes are wide and range from conservation of foreign exchange and safeguarding of balance of payments, avoiding shortage of goods, prevention of surplus of any agricultural or fisheries product, prevention of serious injury to domestic production, establishment of any industry and lastly compendiously includes “any other purpose conducive to the interest of the general public”. Under clause (d) to Section 11 of the Customs Act goods imported or exported (or attempted to be imported or exported) contrary to any prohibition are liable to confiscation. [Para 16][397-E-H; 398-A-C]

1.3 The contention raised by some of the importers that the impugned notification is illegal because of vagueness or allows restricted quantity of 1/1.5 lakh MT of Peas (Pisum Sativum) including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas as against a licence, meaning thereby each licensee is allowed to import the maximum quantity specified in the notification is rejected. In other words, the total quantity specified in the notification is per licensee and not for the total imports of the commodity specified in the notification. The submission has no merit as the notification expressly uses the expression ‘total quantity’ of the commodity specified which could be imported. There is no ambiguity or vagueness in the notifications. Even otherwise the expression ‘total quantity’ cannot be construed as quantity per licence issued as the number of licences issued concerning the subject goods could be numerable (as per the Union of India 2248,1016 and 2915 licences were issued in 201920 for import of Tur, Moong and Urad dals against restricted quota of 4,1.5 and 4 lakh MT, respectively). If each licence holder is allowed to import 1/1.5 lakh MT of Peas, the total import would well exceed the total annual consumption after accounting for the production within India. The plea and interpretation of the importers if accepted will not only be contrary to the express language of the notification but would frustrate the intent and object of restricting the imports of the stated goods by prescribing a quota. The legal effect of the notifications was to amend the EXIM policy whereby the specified commodities would henceforth not be ‘free’ (importable without restriction) but would fall in the restricted category. Once the commodities were shifted to the restricted category, the requirement of licence would flow from the mandate of Section 3 of the FTDR Act read with Rule 4 of the Foreign Trade (Regulation) Rules, 1993. Further, the EXIM Policy regulates the restricted goods under Paragraphs 2.04, 2.08 and 2.10 of Policy. [Paras 17, 18][398-C-G; 399-A-C]

1.4 The effect of the Notifications is to bring the specified commodities from free to the restricted category and therefore the imports in question would require a prior authorisation for import. The requirement of licence is nothing but authorisation. Therefore, in terms of paragraph 2.10, the imports of the specified commodities would only be by the ‘actual user’, unless the ‘actual user’ condition was specifically dispensed with or diluted by the DGFT. The Directorate by specifying that the licence would be issued to the miller or refiner has, therefore, just clarified that the ‘actual user’ alone will be permitted to import the restricted goods mentioned in the notification for which a prior authorisation or licence is required. The importers are traders and it is not the case of any of the importers that they are the ‘actual users’. Further, none of the importers have applied for a licence or authorisation for import of the restricted commodities. Violation of clause 9.03 of the EXIM Policy defining the expression ‘Actual User’, is neither alleged nor argued. Paragraph 2.10 consists of two parts. The first part relates to goods which are freely importable without any licence and states that such goods that can be imported by any person. The second part refers to such imports which require authorisation and not the imports which are freely importable without any restriction. ‘Actual user’ condition, therefore, applies by default when imports require an authorisation. However, the DGFT can specifically dispense with or dilute the ‘actual user’ condition. [Paras 19, 20][400-C-F; 401A-C]

2.1 Section 9A of the FTDR Act and it’s interpretation.

(i) General Agreement on Tariff and Trade – 1947 and 1994. Conference at Bretton Woods, New Hampshire in 1944 lead to establishment of the ‘International Monetary Fund’ and the ‘World Bank’, but the attempt to establish ‘International Trade Organisation’ to develop and coordinate international trade faltered and was finally given up in 1950. However, multilateral trade negotiations had continued with the objective to prepare a multilateral treaty containing general principles of international trade and a schedule of tariff reductions. By the end of 1947, the work on the General Agreement on Tariff and Trade (‘GATT’), 1947 and tariff reduction was finalised and agreed upon. On or about 8th July 1947, Government of India became a signatory and ratified GATT-1947. However, GATT-1947 is considered to be a failure or at best had a limited impact. What followed was several years of intense negotiations involving over 100 nations that finally ended in 1994 at Marrakesh, Morocco, with a multilateral international treaty of over 400 pages of basic text with substantive rules and tariff schedules. The final act signed exceeded 26,000 pages. This treaty popularly known as General Agreement on Tariff and Trade (GATT-1994) was signed by 128 countries including India on 1st January 1995. On the same day, the World Trade Organisation (WTO), an institution with a secretariat and staff, replaced GATT and came into existence, as the international organisation for overseeing and regulating functioning of the multilateral trade system. GATT-1994 in nutshell is a rule-oriented package consisting of multilateral trade agreements annexed to a single document and works on the basis of single undertaking approach whereby all agreements annexed become binding on all the members as single body of law. The main agreement consists of the preamble and XVI articles establishing the WTO, four annexures and declarations, decisions and understandings. Article XI prohibits quotas, import or export licences and other non-tariff measures, with some exceptions. Annexure 2 consists of the Understanding on Rules and Procedures Governing Settlement of Disputes, referred to as the Dispute Settlement Understanding, providing mechanism for resolution of trade disputes among WTO members. Annexure 3 establishes the trade policy review mechanism, with procedure for periodic review of compliance with the WTO agreement by each member. Annexure 4 consists of plurilateral trade agreements binding only on the parties that have accepted them. GATT-1994 also has provisions that allow and permit exceptions. Article XIX is an exception and sometimes referred to as the escape clause, that provides emergency action where serious injury is caused or threatens domestic industry. The ‘Marrakesh Agreement’ enacts and incorporates rules-oriented approach regulating the conduct of the WTO members and are designed to ensure that the tariff concessions and the multilateral trade treaty works as intended and not undermined. Articles XXII provides for sympathetic consideration and consultation and satisfactory solution with respect to any matter affecting the operation of GATT-1994. Article XXIII allows GATT contracting party to make a complaint should it consider that another contracting party is directly or indirectly nullifying, impairing the GATT-1994 or otherwise impeding attainment of its objective:

(a) by failure in carrying out its obligations; (b) by measures, even when they are not in conflict with GATT-1994; and (c) in any other situation. These Articles XXII, XXIII emphasise on the need for consultation, withdrawal of conflicting measures and mutual satisfactory solution of the matter by the contracting parties concerned, consistent with the GATT-1994. Albeit on failure to reach a satisfactory adjustment within reasonable time or in case of (c), the matter is to be referred to the Contracting Parties to investigate and make recommendations to the offending party or make a ruling on the matter, as appropriate. The dispute resolution mechanism in Annexure 2 contains 27 Articles totalling about

143 paragraphs and four appendices. The WTO, at the top, consists of Ministerial Conference which meets not less than every two years. Next there are four councils, including the General Council which has an overall supervising authority and to carry out many functions of the Ministerial Conference. In addition, there are Council for Trade Inputs, Council for Trade and Services, and Council for Trade Related Aspects of Intellectual Property Rights. The General Council, as per the WTO Charter, discharges the responsibility of the Dispute Settlement Body (DSB). Thus, the WTO Charter adopts a legalistic and a rule-oriented approach for resolving issues relating to violation of the GATT agreements. The DSB establishes Panel(s) and on adoption of Panel (and the Appellate Body) reports, provides for implementation of the recommendation and rulings, and can authorise action for failure to comply with the recommendation(s) and ruling. The procedure adopted for the dispute resolution mechanism is to facilitate prompt settlement of situations with the objective and purpose that the ‘Marrakesh Agreement’ is preserved and not nullified or impaired. [Paras 21-24][401-C-F, G-H; 402-A-C, F, G-H; 403-A-C, D-E; 404-A-C; 405-A-B, E]

2.2 (ii) Obligations of the contracting party and effect of international treaty, namely, GATT-1994 on the domestic law. Two aspects relevant in the present case are; (i) applicability of the international treaty in domestic law and (ii) ‘invocability’ of the treaty in municipal law and before the municipal courts. Breach of a stipulation in international law cannot be justified by the State by referring to its domestic legal position. This rule of international law is unexceptionable and prosaic, as the contra view would permit the international obligations to be evaded by the simple method of domestic legislation, executive action or judicial decision. Contracting States are under an obligation to act in conformity with the rules of international law and bear responsibility for breaches whether committed by the legislature, executive or even judiciary. In a way, therefore, international treaties are constraint on sovereign activity, albeit voluntarily agreed. For the purpose of GATT-1994, municipal laws are evidences of fact, including evidence of conduct in violation of the norms and objective of the treaty. At the same time, failure to enact an internal domestic law in conformity with the international obligation is not a breach of international law, unless there is such requirement and obligation created by the international treaty. In the absence of any such binding clause, breach arises only when the State concerned fails to observe its obligation on a specific occasion. Various theories have been put forward to explain applicability of international customary and treaty law in domestic law. The dualist position is that the international municipal law operates separately and before any rule or principle of international law can have effect within the domestic jurisdiction, it must be expressly or specifically transformed into municipal law by use of appropriate constitutional machinery. Dualism stresses that international law and municipal law exist separately and cannot have effect on or overrule the other. Consequently, the municipal laws and international laws can operate simultaneously as they regulate different subject matters. International law is between sovereign States, while the municipal law applies within the State and regulates legal relationship between the citizens/subjects inter se and the citizen/subject and the State. Monistic legal systems include international treaties in domestic law. Monism takes the form of assertion of the supremacy of the international law even within the national sphere, with the understanding and belief that an individual is a subject of international law. International norms provide the basic norms for the national legal order, and both are a part of the same systems of norms. Most jurists draw distinction between ‘direct application’ of treaties in domestic law, and national legal systems that mandate and require ‘act of transformation’ for an international treaty to apply and be a part of domestic law. ‘Direct application’ means and mandates that the treaty norms, either wholly or to some extent, are directly treated as norms of domestic law and enjoy the statutory law status by default in the domestic legal system. The term ‘direct application’ will also cover situations in which government or different levels of government utilise treaty norms as part of domestic jurisprudence and is not limited to situations in which private parties can sue on the basis of the treaty norms. There is distinction between direct application and ‘invocability’. ‘Act of transformation’ principle means and implies that an international treaty is not directly applicable in the domestic law system and requires provision in the domestic rules before it is applied. ‘Transformation’ is a word of wide amplitude and does not refer to mere implementation as it includes the right of the country to adopt, amend or modify the treaty language into domestic jurisprudence. The ‘act of transformation’ is different from ‘direct application’ as in the former the treaty is not received and treated as part of domestic jurisprudence until it is published and made part of the domestic jurisdiction in the same manner as other law. There is great diversity of national constitutional systems regarding international treaty application. [Paras 25, 27-30, 32][406-A, D-G; 407-A-H]

2.3 It would be now appropriate to refer to the principle of ‘invocation’. Invocability in simple terms refers to justiciability; admissibility of a claim before the national courts. It is not connected with the defence or merits of the defence. In case where an ‘act of transformation’ is required, treaties may partially or entirely become part of the domestic law. Where the treaty or portion thereof become a part of the domestic law by ‘act of transformation’, it is obvious that only the part incorporated or transformed into domestic law is invocable and justiciable and not the parts that are not codified into domestic law. However, invocability can embrace several ideas which are intertwined and is of specific concern in cases of constitutions allowing direct application. Here ‘invocability’ is a generic term which means to embrace a small inventory of means of judicial control over the use in a particular law suit of the direct applicability of the treaty. As in case of ‘act of transformation’, even in direct application cases, some jurisdictions accept the principle of partial direct application and, therefore, the treaty is directly applicable for some purposes and not others. [Para 33][410-D-G]

Status of Treaties in Domestic Legal System; A Policy Analysis Essay by Professor John H. Jackson – referred to.

In re. Berubari Union (I) AIR 1960 SC 845:[1960] 3 SCR 250; Rai Sahib Ram Jawaya Kapur and Others v. State of Pubjab AIR 1955 SC 549:[1955] 2 SCR 225; Ram Kishore Sen and Others v. Union of India and Others AIR 1966 SC 644: [1966] 1 SCR 430 – referred to.

3. Legal position in India.

The law in India is not very different from other Commonwealth Countries. Article 253 of the Constitution states that notwithstanding anything in the foregoing provisions of this Chapter, the Parliament has the power to make laws for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or decisions made at any international conference, association or body. [Para 34][411-C, E-F]

Maganbhai Ishwarbhai Patel Etc. v. Union of India (1970) 3 SCC 400:[1969] 3 SCR 254 – followed.

4. Articles XI and XIX of GATT-1994 and the statutory scheme vide Sections 3 and 9A of FTDR Act and the Safeguard Measures (Quantitative Restriction) Rules, 2012. Indian Parliament, two years prior to the signing of GATT1994, had enacted the FTDR Act which was enforced with effect from 7th August 1992. Sections 11 to 14 of the FTDR Act came into force immediately and other provisions came into force on 19th June 1992. The FTDR Act had repealed the Imports and Exports (Control) Act, 1947 and the Foreign Trade (Development and Regulation) Ordinance, 1992 with the stipulation that anything done or any action taken under the Ordinance shall be deemed to have been done or taken under the corresponding provisions of the FTDR Act. The Statement of Objects and Reasons for enacting the FTDR Act, as recorded, are to acknowledge that foreign trade is the driving force of economic activity as this spurs economic growth and there is increasing interdependence and that the goals of the new policy were to increase productivity and competitiveness by ensuring that the trade policies serve as an instrument to create an environment that will provide a strong impetus to exports, facilitate imports and render export activity more profitable. Section 9A of the FTDR Act is the only section in Chapter IIIA with the heading ‘Quantitative Restrictions and this section was inserted by Amendment Act 25 of 2010 with effect from 27th August 2010. Subsequently, in exercise of powers conferred by sub-section (3) to Section 9A of the FTDR Act, the Central Government had published and notified the Safeguard Measures (Quantitative Restrictions) Rules, 2012, which became applicable on the date of their publication in the Gazette of India dated 24th May 2012. [Paras 48, 50][424-D-G; 427-A-C] Report of WTO Dispute Settlement Body’s panel on “India-Quantitative Restrictions on Imports of Agricultural, Textile and Industrial Products” – referred to.

5.1 Discussion and interpretation of Sections 3 and 9A of the FTDR Act.

Section 3 of the FTDR Act, as enacted, had undergone amendments by addition of proviso to sub-section (2) and by insertion of sub-section (4) vide Act 25 of 2010 with effect from 25th August 2010. Sub-section (1) of Section 3 states that the Central Government may, by an Order published in the Official Gazette, make provision for the development and regulation of foreign trade by facilitating imports and increasing exports. It is a general provision which has no reference to GATT-1994. It authorises the Central Government to publish an order in the Official Gazette for development and regulation of foreign trade, i.e. imports and exports. Sub-section (2) states that the Central Government can, by an order in the Official Gazette, make a provision for prohibiting or restricting or otherwise regulating, in all or specified cases and subject to such exceptions, if any, the import or export of goods and after the amendment vide Act

25 of 2010, services or technology. Sub-section (2) to Section 3, therefore, authorises the Central Government to, by an Order published in the Official Gazette, make provisions restricting the imports or exports. Imposition of quantitative restrictions on imports or exports would clearly fall within sub-section (2) to Section 3 of the FTDR Act. Sub-section (3) to Section 3 states that where an order is passed under sub-section (2) whereby the import or export of goods is prohibited, restricted or otherwise regulated, the goods in question would be deemed to be prohibited goods under Section 11 of the Customs Act, 1962 and accordingly the provisions of the latter Act would apply. [Para 54][438-E-H; 439-A-B]

5.2 Sub-section (4) to Section 9A of the FTDR Act introduced by Act 25 of 2010 with effect from 27th August 2010, requires some elucidation. The sub-section on one hand states that no permit or licence shall be necessary for imports or exports of goods, nor any goods shall be prohibited from import or export, except as may be required under the FTDR Act, or the rules or orders made thereunder. At the same time, by using the phrase ‘without prejudice to anything contained in any other law, rule, regulation, notification or order’, it protects the operation of the other law, rule, regulation, notification or order to the extent that they do not directly or indirectly deal with the permit or licence necessary for import or export of goods or prohibit import or export of goods. Operation of such law, rule, regulation, notification or order not dealing with the permit or licence necessary for import or export on a prohibition of import of goods is, therefore, protected and not overridden. Sub-section (4) to Section 3 therefore gives limited primacy to the FTDR Act, restricting it to the scope and subject matter of the FTDR Act, and not to override other laws. This is also clear from Section 18A of the FTDR Act which was also enacted and inserted by Act

25 of 2010 with effect from 27th August 2010. The provisions of FTDR Act, therefore, are in addition to, and not in derogation of, the provisions of any other law for the time being in force. This would be the correct way to harmoniously read and interpret subsection (4) to Section 3 and Section 18A of the FTDR Act. Subsection (4) to Section 3 of the FTDR Act, therefore, in the context of import and exports or prohibition of imports or exports of goods states that no permit or licence shall be necessary or required except as may be required under the FTDR Act, rules or orders made thereunder. The expression ‘order’, as per clause (h) to Section (2) of the FTA means any Order made by the Central Government under Section 3. It is therefore, clear that there is no violation of Section 3 of the FTDR Act in the issuance of the impugned notifications or orders, which are intra vires and not ultra vires. [Para 55][439-B-E, F-G; 440-A-B]

5.3 Article XI of the GATT-1994 has not been statutorily made a subject of ‘act of transformation’ and incorporated in the domestic legislation, i.e. the FTDR Act. The FTDR Act does not legislate and transform Article XI of the GATT-1994. Section 3 of the FTDR Act empowers and authorises the Central Government, i.e. the Union of India to frame policy, rules or regulations for import or export of goods. The policy is made under Section 5 of the Act. Thus, the Central Government i.e. the Union of India has been given the necessary discretion and election with regard to framing of policies for import and export of goods, services and technology. Therefore, implementation of GATT-1994, including Article XI, is left to the Central Government by means of delegated legislation. Clause (2) of Article XI of GATT-1994 states that provisions of paragraph (1) shall not extend to three specified situations as stated in subclauses (a), (b) or (c). Clause (c) deals with import restrictions on any agricultural or fisheries product, imported in any form necessary for enforcement of governmental measures specified therein. Similarly, Article XII of GATT-1994 states that notwithstanding the provisions of paragraph (1) of Article XI, any contracting party, in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported, subject to the provisions of paragraphs of that Article. Paragraph (1) to Article XI is not an absolute rule. It is subject to exceptions in the form of paragraph (2) to Article XI, Article XII and other provisions. Of course, the conditions specified the respective Articles have to be satisfied for a contracting party to be GATT-1994 compliant. Reference to this position is necessary and required when Section 9A of the FTDR Act is interpreted which incorporates into the domestic law Article XIX of GATT-1994, but neither Article XI and nor all exceptions by implication. Consequently, Section 9A for the FTDR Act, is to be understood an enabling provision empowering imposition of ‘quantitative restrictions’ after following the procedure in the situations referred to therein. However it does not limit and restrict the expans and power of the Central Government to prohibit, regulate or restrict imports of goods in terms of Section 3(2) of the FTDR Act. As a sequitur, it has to be held that notwithstanding Section 9A, the Central Government continues and has authority to impose quantitative restrictions by an order under Section 3(2) of the FTDR Act. Principle of Lex specialis derogat legi generali, therefore, is not applicable to the case in hand. [Paras 56-58][440-C-D, G-H; 441-A-F]

5.4 Section 9A of the FTA was enacted by Act 25 of 2010 pursuant to the recommendations of the Standing Committee. Section 9A substantially incorporates, with some modifications, provisions of Article XIX of GATT-1994. Rules made in 2012 are also in conformity with the provisions of the WTO Agreement on Safeguards made in terms of Article XIX of GATT-1994. Subrule (3) to Rule 5 of the Safeguard Measures (Quantitative Restrictions) Rules, 2012 states and sets out the conditions for applicability of Rule 9A, which are: (i) increased imports; (ii) serious injury or threat of serious injury; and (iii) a causal link between increased imports and alleged serious injury or threat of serious injury. The expression ‘increased imports’ has been defined in terms of increased quantity to mean increase in imports in absolute terms or relative to domestic production. The expressions ‘serious injury’ and ‘threat of serious injury’ have been defined in clauses (c) and (d) of sub-clause (4) to Section 9A to mean injury causing significant overall impairment in the position of a domestic industry and a clear and imminent danger of serious injury respectively. The expression ‘domestic industry’ has also been defined in clause (b) to sub-section (4) to Section 9A. Similarly, the expression ‘interested party’ has been defined in sub-rule (d) to Rule 2 of the Safeguard Measures (Quantitative Restriction) Rules, 2012 and includes exporter or foreign producer or the importer of goods for the purposes of imposition of safeguard quantitative restrictions on trade or business association. It also includes the government of the exporting country or producer of goods or directly competitive goods in India or a trade or business association.The need to enact Section 9A arose from the obligations flowing from Article XIX, as restriction in form of ‘quantitative restriction’, require a procedure to be followed. Affected parties including exporters, importers have to be heard. Consequently, ‘act of transformation’ was required. Article XIX of GATT-1994 is an escape provision, i.e. a provision which entitles a contracting state to escape from the rigours of paragraph (1) of Article XI of GATT-1994. Similar ‘acts of transformation’ have been undertaken by enacting Custom Valuation Rules, provision of antidumping, countervailing duty etc. but the entire GATT-1994 does not stand transposed and enacted by way of statutory law or delegated legislation. This being the position, Section 9A has to be interpreted as an escape provision when the Central Government i.e. the Union of India may escape the rigours of paragraph (1) of Article XIX of GATT-1994. Section 9A is not a provision which incorporates or transposes paragraph (1) of Article XI into the domestic law either expressly or by necessary implication. To hold to the contrary, it would be holding that the Central Government has no right and power to impose ‘quantitative restrictions’ except under Section 9A of the FTDR Act. This would be contrary to the legislative intent and objective. Section 9A of the FTDR Act does not elide or negate the power of the Central Government to impose restrictions on imports under sub-section (2) to Section 3 of the FTDR Act. [Paras 59-61][441-F; 442-B-G; 443-A-C]

5.5 The impugned notifications would be valid as they have been issued in accordance with the power conferred in the Central Government in terms of sub-section (2) to Section 3 of the FTDR Act. The powers of the Central Government by an order imposing restriction on imports under sub-section (2) to Section 3 is, therefore, not entirely curtailed by Section 9A of the FTDR Act. [Para 62][443-D-E]

6. Conclusion

The impugned notifications and the trade notices are upheld and the challenge made by the importers is rejected. The imports, if any, made relying on interim order(s) would be held to be contrary to the notifications and the trades notices issued under the FTDR Act and would be so dealt with under the provisions of the Customs Act 1962. The Writ Petitions subject matter of the Transfer Petitions, subject to E in the judgment (What is not decided) are dismissed. Writ Petitions filed by the intervenors before the respective High Courts shall stand dismissed in terms of this decision. [Para 67][444-F-G]

Raj Prakash Chemical v. Union of India (1986) 2 SCC 297: [1986] 1 SCR 448 – distinguished.

Gramophone Company of India Ltd. v. Birendra

Bahadur Pandey and Others (1984) 2 SCC 534: [1984]

2 SCR 664; Jolly George Varghese and Another v. The Bank of Cochin (1980) 2 SCC 360 : [1980] 2 SCR 913; Director General of Foreign Trade and Another v. Kanak Exports and Another (2016) 2 SCC 226: [2015]

15 SCR 287; Associated Cement Companies Ltd. v. Commissioner of Customs (2001) 4 SCC 593: [2001] 1 SCR 608; State of Punjab and Another v. Devans Modern Breweries Ltd. and Another (2004) 11 SCC 26: [2003] 5 Suppl. SCR 930; S&S Enterprise v. Designated Authority and Others (2005) 3 SCC 337: [2005] 2 SCR 255; Commissioner of Customs, Bangalore v. G.M. Exports and Others (2016) 1 SCC 91: [2015] 14 SCR 848 ; Entertainment Network (India) limited and Anr. v. Super Cassette Industries Ltd. and Ors (2008)

13 SCC 30: [2008] 9 SCR 165; His Holiness

Kesavananda Bharati Sripadagalvaru v. State of Kerala and Another (1973) 4 SCC 225: [1973] Suppl. SCR 1; Pratap Singh v. State of Jharkhand and Anr. (2005) 3 SCC 551:[2005] 1 SCR 1019 – referred to.

Karan Dileep Nevatia v. Union of India (2010) 1 Bom CR 588 – referred to.

Maclaine Watson& Co. Ltd.v. Department of Trade and Industry & Anr. (1989) 3 All ER 523; Lonrho Exports v. ECGD [1983] 3 W.L.R. 394; The Eschersheim Anr v. The Jade Erkowit And Anr. (1976) 1 All ER 920 (HL) – referred to.

The World Trade Organization, law, practice and policy Mitsuo Matsushita, Thomas J. Schoenbaum, Petros C. Mavroidis, and Michael Hahn, 3rd Edition 2015 at page Nos. 2 – 3, page No. 3 and page Nos. 33-40; Status of Treaties in Domestic Legal Systems; a policy analysis- Essay by Prof. John. H. Jackson – referred to.