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REPORTABLE

IN THE SUPREME COURT OF INDIA

CIVIL APPELLATE JURISDICTION

CIVIL APPEAL NO. 4027 OF 2009

PARISONS AGROTECH (P) LTD. & ANR. .....APPELLANT(S)

VERSUS

UNION OF INDIA & ORS. .....RESPONDENT(S)

WITH

CIVIL APPEAL NO. 4028 OF 2009

AND

CIVIL APPEAL NO. 4029 OF 2009

J U D G M E N T

A.K. SIKRI, J.

Vide  Notification  No.39  (RE-2007)/2004-2009  dated

16.10.2007,  the  Central  Government  (respondent  No.1  herein)

prohibited the import of palm oil through Kochi port in Kerala.  It

was followed by another Notification No.63 (RE-2007)/2004-2009

dated  24.12.2007  whereby  the  import  of  palm  oil  has  been

prohibited through all  the ports  of  Kerala.   These Notifications

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were issued by the Central  Government in exercise of  powers

conferred by Section 5 read with Section 3 of The Foreign Trade

(Development and Regulation) Act, 1992 (hereinafter referred to

as  the  'Act').   All  the  appellants  filed  separate  writ  petitions

challenging the validity of these Notifications on the ground that

they were ultra vires the provisions of Section 3 of the Act and, in

any  case,  unconstitutional  as  offending  Article  14  of  the

Constitution  of  India.   The  writ  petitions  filed  by  them  were

dismissed by learned single Judge.  Matter was carried in appeal

before  the  Division  Bench  of  Kerala  High  Court,  but

unsuccessfully, as these appeals have also been dismissed.   

It is clear from the above that the issue involved in all these

appeals are identical.   This was the reason for  clubbing these

appeals so that they could be heard analogously and decided as

one batch.   However, for  the sake of  convenience,  we will  be

referring to the facts from Civil Appeal No.4027/2009 as well as

the impugned judgment dated 21.10.2008  which is impugned in

the said appeal.   

2. The appellants are engaged in refining and manufacture of edible

oils,  vanaspathi,  bakery  shortening,  margarine  etc.   Their

registered offices and the factories  are  in  the State of  Kerala.

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The main raw material used in the manufacture of RBD palm oil is

crude  palm oil.   The  appellants  have  been importing  this  raw

material  from  other  countries,  primarily  from  Indonesia  and

Malaysia.  Before the issuance of the aforesaid Notifications, this

import was through the ports of Kochi and Beypore from where it

used to be transported by road to its main factories which are in

Kozhikode and Malappuram, in the State of Kerala itself.   The

impugned  Notifications  have  prevented  them  from  importing

crude palm oil through the ports of Kochi and Beypore.  Instead,

they  are  forced  to  import  this  raw  material  through  the  ports

outside Kerala.  The effect thereof is that distance from the ports

of import to the factories of appellants in Kerala stands increased,

in  contrast  with  the  situation  prevailing  earlier.   It  has  led  to

increased  transportation  cost  for  the  appellants  and  that  is

precisely the cause of grievance.

3. As  mentioned  above,  vide  Notification  No.39

(RE-2007)/2004-2009 dated 16.10.2007, certain items mentioned

therein, which are all different varieties of crude palm oil, were not

allowed to be imported through Kochi port.  The Notification gives

the description of the items and mentions the policy condition in

respect thereof by stipulating: “import not permitted through Kochi

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port”.  This Notification was amended thereafter with the issuance

of Notification No.63 (RE-2007)/2004-2009 dated 24.12.2007 in

respect  of  same  items  by  enlarging  the  scope  of

restriction/prohibition  with  the  stipulation:  “import  not  permitted

through any port in Kerala”.

4. Again,  as  already  pointed  out  above,  these  Notifications  were

challenged on two grounds, viz.:  

(i)  The Notifications are issued purportedly in exercise of powers under

Section 5 read with Section 3 of the Act, but these provisions do

not  confer  any  such  power  on  the  Central  Government.

Therefore,  the  Notifications  are  ultra  vires the  provisions  of

Section 3(5) of the Act;

(ii)  Imposition of selective restriction and confining the prohibition of

import  of  crude  palm  oil  to  the  ports  in  Kerala  has  not  only

resulted in invidious discrimination, such an action is manifestly

arbitrary, irrational and unreasonable as well it is contended that

there is no rational objective which is sought to be achieved with

such Notifications and, therefore, they offends the equality clause

enshrined in Article 14 of the Constitution.   

5. Both  these  arguments  have  been  repelled  by  the  High  Court

which has found not  only  complete justification and rational  in

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issuing such Notifications, it has also held that power for issuing

such a Notification can be traced to the provisions of Section 3 of

the  Act.   Before  us,  the  appellants  have  raised  the  same

arguments and in the process also, submitted that the High Court

has  not  considered  the  aforesaid  twin  submissions  of  the

appellants in proper perspective, and, on the contrary, rejected

the  same  in  perfunctory manner  without  dealing  with  these

contentions  in  the  manner  they  were  placed  before  the  High

Court.  Before we record the arguments of Mr. Naphade, learned

Senior  Counsel  who  appeared  for  the  appellants  (counsel

appearing in other appeals adopted his arguments)  in detail,  it

may be advisable to state the reasons which were given by the

respondents  in  their  counter  affidavits  in  support  of  these

Notifications.   We  would,  however,  like  to  record  that  in  the

impugned judgment the discussion on this aspect is contained in

detail as well.   

6. State of Kerala is the largest producer of Coconut which is the

raw material for the production of coconut oil.  Coconut oil and

palm oil  are  competing  products.   For  production  of  palm oil,

crude  palm  oil  is  the  raw  material  which  is  largely  imported.

Since the import price of crude palm oil  is much less than the

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price of coconut oil, the price of coconut oil is higher than that of

the palm oil because of the aforesaid reason.  It was adversely

affecting the farmers in the State of Kerala which led to repeated

representations  on  their  behalf  to  the  Government  for  taking

remedial measures.  Having regard to the importance of this crop

not only for the economy of the State but also livelihood of about

35 lakhs farmers, the State Government has constituted Coconut

Development Board (hereinafter referred to as the 'Board') which

takes care of the interests of the farmers growing Coconut crop

and also takes initiatives and steps for the development of this

crop.   

7. The  significant  and  marked  difference  between  the  price  of

coconut  oil  and  palm  oil  manifested  the  fact  that  percentage

difference  between  the  two  stood  at  109%  in  the  year  2004,

reduced to 50% in December, 2006, to 12% in September 2007

and 0.6% in October 2007.  The Board also observed that the

import  of  palm  oil  in  one  particular  year  had  a  cascading

downward impact on coconut oil prices in the subsequent years.

For example, the huge import of 1,53,513 tonnes of palm oil in

2004-05 had led to a price decline in coconut  in 2005-06 and

2006-07.  While the average price of coconut oil is Rs.6,155/- per

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quintal in 2004-05, in 2005-06, it declined sharply to Rs.4,978/-

per  quintal  with  further  fall  in  2006-07  when  the  price  was

Rs.4,459/-  per  quintal.   This  raised  concern  with  the  policy

makers  to  protect  the  interest  of  huge  number  of  small  time

farmers in the State of Kerala.  Such concerns were raised by the

Board as well as Union of Coconut Farmers with the concerned

authorities  including  Chief  Minister,  who  in  turn,  took  up  the

matter  with the Central  Government  at  the highest  level.   The

narratives in this regard are stated in the impugned judgment of

the High Court itself and the discussion goes, somewhat, in the

following manner:

A  letter  dated  15.08.2005  was  written  by  All  Kerala  Coconut

Farmers' Union to increase minimum support price of copra and

to restrict import of coconut oil and copra.  In the letter, it is further

stated  that  the  steep  fall  in  the  prices  of  coconut,  copra  and

coconut  oil  is  in  view of  indiscriminate  import  of  coconut  and

coconut oil from foreign countries.  The reiteration of this request

is made by yet another letter dated 15.12.2005.  Sequel to these

two  letters,  Ministry  of  Agriculture  has  written  a  letter  dated

03.02.2006 to Joint Director of General Foreign Trade (JDGFT)

enclosing a copy of the letter from All Kerala Coconut Farmers

Union, Thrissur to increase minimum support price of coconut oil

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and to cut import of coconut and coconut oil into the country and

in that letter a request is made to JDGFT to offer their comments,

if  any.   The  Chairperson  of  the  Board  by  her  letter  dated

06.12.2006  addressed  to  Director  General  of  Foreign  Trade

(DGFT) seeks restrictions/prohibition on the import of coconut oil

and coconut oil cake and the reason being slump in the prices of

coconut and coconut oil  in the country and in particular, States

like Kerala.  This correspondence was forwarded by DGFT Office

to Ministry  of  Agriculture.   The Chief  Minister  of  Kerala by his

letter dated 19.04.2007 to the Hon'ble Prime Minister has brought

to his notice the plight of coconut farmers in the State, in view of

steep decrease in  the price of  coconut,  copra and coconut  oil

and, therefore, a request was made to reverse the decision to cut

import duties of palm oil.  This was followed by another letter by

Hon'ble Commerce Minister to Commerce Secretary requesting

the action on the letter of the Board dated 06.12.2006.  Then, the

another  crucial  letter  dated  08.05.2007,  wherein  the  Deputy

Secretary, Ministry of Commerce forwarded a report of the Centre

for  Development  Studies on import  of  palm oil  on the coconut

economy in Kerala to DGFT for its views on the detrimental effect

of import of palm oil on coconut prices.  In the report, the Centre

for Development Studies on imports of palm oil on the coconut

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economy in Kerala, in clear and unequivocal terms have stated,

“some of the recent years that have witnessed large imports of

palm oil have also reported high prices.  The influence of palm oil

imports  on  domestic  coconut  oil  prices  also  works  out  in  an

indirect  manner.  The  international  prices  of  coconut  oil  move

together with price of palm oil.  Even though coconut oil and palm

kernel oil are not perfect or close substitutes, many consumers

tend to substitute these oils in their use as edible oils.  As such

the possibility of palm oil imports having a dampening effect on

coconut oil prices cannot be ruled out”.  This is the report of the

independent agency set up to make a detailed study on the effect

of import of palm oil on the coconut economy in the State.  They

have given a gloomy picture of the whole scenario in regard to

the importation of palm oil into the State and what would be its

impact  on  the  coconut  oil  industry  in  the  State.   The  report

contains the facts and figures for a few previous years and how

the large importation of palm oil has cascading effect not only on

the prices of coconut and also on the prices of coconut oil.  On

05.06.2007, the Chairperson of the Board while bringing to the

notice of the Ministry of Agriculture the need for imposing total

ban on import of palm oil through the ports of Southern  States,

has  indicated  certain  details  with  regard  to  the  price  effect  of

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import  of  palm oil  into  the  State  of  Kerala  on  the  coconut  oil

industry in the State.   

8. This prompted Ministry of Agriculture to write a letter to the Prime

Minister's  Office  wherein  reference  was  made  to  the

communications received from Chief Minister of Kerala and the

Chairperson/Board  mentioning  about  the  declining  wholesale

price of coconut oil on the one hand and increase in wholesale

price of edible oil, on the other hand, which are causing hardship

to the coconut farmers.   In this letter, it  was also stated,  “that

considering the increased trend of edible oil prices as a whole,

their department had supported a recent proposal of Ministry of

Finance for reduction of duties on crude palm oil and reiterated

the suggestion not to allow import of palm oil through Southern

Ports as suggested by Chairperson of the Board”.  They sum it by

suggesting  that  the  import  of  palm  oil  to  Southern  Ports

particularly  through  Cochin,  Tuticorin,  Mangalore  and  Chennai

should be disallowed with immediate effect and also the import

duty of crude palm oil should not be reduced further, since it may

have  adverse  impact  on  the  livelihood  of  oil  seed  growers,

particularly the coconut farmers of Kerala as pointed out by the

Chief Minister of Kerala.  This was followed by the letter dated

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03.09.2007 by the Director of Statistics to the  Director General of

DGCI and seeking import data of palm oil for last three years in

the case of Cochin, Tuticorin, Mangalore and Chennai.  This was

followed by the fax message requesting the Chairperson to clarify

on certain issues narrated in her letter dated 05.06.2007.   

9. It is on the basis of the aforesaid material produced before the

Central Government which ultimately led to issuance of impugned

Notifications.  Existence of the aforesaid material, which is based

on the record that was even produced before the High Court as

well, is not in dispute.  In nutshell, the High Court considered the

following material produced before it by the respondents including

Union of India:

(a) Correspondence by the representatives of  the coconut farmers

with various Ministries including the Hon'ble Prime Minister.

(b) Letter  dated  06.12.2006  by  the  Chairperson  of  Coconut

Development  Board  addressed  to  Director  General  of  Foreign

Trade (DGFT).

(c) Letter dated 19.04.2007 by the Hon'ble Chief Minister addressed

to the Hon'ble Prime Minister.

(d) Letter by Hon'ble Commerce Minister to  Commerce Secretary.

(e) Letter  dated  08.05.2007  by  Deputy  Secretary,  Ministry  of

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Commerce.

(f) Report of Centre for Development Studies on import of palm oil

on the coconut economy in Kerala:

The report in clear and unequivocal terms has stated, “Some of the

recent years that have witnessed large imports of palm oil have

also reported high prices.  The influence of palm oil imports on

domestic coconut oil prices also works out in an indirect manner.

The international  prices  of  coconut  oil  move together  with  the

price of palm oil.  Even though coconut oil and palm kernel oil are

not  perfect  or  close  substitutes,  many  consumers  tend  to

substitute  these  oils  in  their  use  as  edible  oils.   As  such  the

possibility  of  palm  oil  imports  having  a  dampening  effect  on

coconut oil prices cannot be ruled out.”

On analysing the report, the High Court has made the following

remarks:  

“This is the report of the independent agency set up  to  make  a  detailed  study  on  the  effect  of import of palm oil on the coconut economy in the State.  They have given a gloomy picture of the whole  scenario  in  regard  to  the  importation  of palm oil  into  the  State  and what  would  be  its impact on the coconut oil  industry in the State. The report  contains the facts and figures for a few  previous  years  and  how  the  large importation of palm oil has cascading effect not only on the prices of coconut and also the prices of coconut oil.”

(g) Letter  dated  05.06.2007  by  the  Chairperson  of  Coconut

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Development  Board  to  Ministry  of  Agriculture  on  the  basis  of

which the High Court recorded the following findings:

“If we go by the tenor of the letter of the Hon'ble Chief  Minister  and the  letter  of  Chairperson of Coconut  Development  Board,  they  are  only referring to the plight of the coconut farmers in the State,  in  view of  large scale importation of palm oil  which is being used as a substitute to the  coconut  oil  by  the  poor  and  middle  class families in the State as an alternate for their day to day need of  edible  oil  and this  was precise reason for the Central Government to issue the impugned notification in the public interest and in particular  to protect  the interest  of  the coconut farmers in the State.”

(h) Letter  of  the  Ministry  of  Agriculture  to  Prime  Minister's

Office.

10. Mr. Naphade, however, argued that this material does not provide

any rationale for curbing the import through the ports in Kerala.

His submission was that by imposing ban on importation of palm

oil  through  the  ports  of  Kerala  alone,  no  such  purpose,  as

manifested, was going to be achieved.  He further submitted that

such a ban on importation of palm oil through the ports of Kerala

would bring no succour to the coconut oil prices.  In support of

this submission, he referred to the pleadings in para 6 of the writ

petition  tabulating  the  prices  of  coconut  oil  and  palm  oil

respectively from time to time with endeavour to point out that

there is nothing common as far as prices of the two products are

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concerned.  He further submitted that in the counter affidavit filed

by the Union of  India,  the figures shown in para 6 of  the writ

petition were not countered by the said respondents.  Thus, he

argued that there was no rational nexus between the two and no

intelligible  differentia could  be  deciphered  between  the  two

thereby rendering the decision arbitrary and bringing the decision

within the mischief of Article 14.  He submitted that the appellants

in  support  of  this  argument  of  discrimination,  referred  to  the

judgment of Calcutta High Court in Kalindi Woolen Mills (P) Ltd.

v. Union of India1 but the High Court rejected it without suitably

dealing with the same.  He also submitted that the interest of the

consumers was equally important and if the prices of the palm oil

are increased upwardly because of increase in transportation cost

etc., consumers would also be adversely effected and, therefore,

the decision was not in public interest.   

11. Having regard to the material that is produced and taken note of

by  us  in  extenso,  which  led  to  the  issuance of  the  impugned

Notifications,  we  are  unable  to  countenance  the  submissions

made by Mr. Naphade.  It is well known that State of Kerala is the

largest  producer  of  Coconut  and,  in  turn,  there  is  substantial

production of coconut oil as well.  It is also a matter of common

1 1994 (74) ELT 827

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knowledge  that  coconut  oil  as  well  as  palm  oil  are  used  for

cooking and other common purposes.  In that sense, coconut oil

and  palm  oil  are  competing  products.   Whereas  coconut  oil

produced from indigenous raw material and for the production of

palm oil  in India, the raw material  i.e. crude palm oil  is largely

imported.  Since the import price of crude palm oil has been much

less  than  the  price  of  coconut  oil,  the  perception  of  Coconut

growers  in  the  State  of  Kerala  was  that  it  was  affecting  their

livelihood.  It is a matter of record that there are approximately 35

lakhs farmers in the State of Kerala who sustain their livelihood

on Coconut crop.  Therefore, it becomes their life sustaining crop.

The Coconut crop covers more than 9 lakhs hectares in Kerala

and contributes to nearly 35% of the agricultural income of the

State which is a sufficient evidence to indicate that it is not only

main but important crop of the State.  The Coconut growers are

predominantly  small  and  marginal  with  the  average  size  of

holding being only half an acre.  As already pointed out above,

the  significant  and  marked  difference  between  the  price  of

coconut oil  and palm oil  was manifest the fact that percentage

difference  between  the  two  stood  at  109%  in  the  year  2004,

reduced to 50% in December, 2006, to 12% in September 2007

and 0.6% in October 2007.  The Board also observed that the

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import  of  palm  oil  in  one  particular  year  had  a  cascading

downward impact on coconut oil prices in the subsequent years.

For example, the huge import of 1,53,513 tonnes of palm oil in

2004-05 had led to a price decline in coconut  in 2005-06 and

2006-07.  While the average price of coconut oil is Rs.6,155/- per

quintal in 2004-05, in 2005-06, it declined sharply to Rs.4,978/-

per  quintal  with  further  fall  in  2006-07  when  the  price  was

Rs.4,459/- per quintal.  It is more than abundantly clear that the

restriction is  imposed keeping  in  view the  welfare  of  35 lakhs

farmers  in  the  State  of  Kerala.   Matter  was  examined  at  the

highest  level.   The Government  had two alternatives before it,

either to increase the custom duty i.e. duty on the import of crude

oil or to issue impugned Notification.  Enhancing the import duty

would  have  all  India  ramification,  whereas  the  problem  was

Kerala  specific.   Therefore,  instant  step  was  taken.   When  a

particular  decision  is  taken  in  the  interest  of  the  said  farmers

which are marginalized section of the society, more so for their

survival, this policy decision of the Central Government provides

a complete rational in support of the decision having nexus with

the objective sought to be achieved.   

12. No doubt, the writ court has adequate power of judicial review in

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respect of such decisions.  However, once it is found that there is

sufficient material for taking a particular policy decision, bringing it

within the four corners of Article 14 of the Constitution, power of

judicial review would not extend to determine the correctness of

such a policy decision or to indulge into the exercise of finding out

whether there could be more appropriate or better alternatives.

Once we find that  parameters of  Article 14 are satisfied;  there

was due application of mind in arriving at the decision which is

backed  by  cogent  material;  the  decision  is  not  arbitrary  or

irrational  and;  it  is  taken  in  public  interest,  the  Court  has  to

respect such a decision of the Executive as the policy making is

the domain of  the Executive and the decision in  question has

passed  the  test  of  the  judicial  review.   In  Union  of  India  v.

Dinesh  Engineering  Corporation2,  this  Court  delineated  the

aforesaid principle of judicial review in the following manner:  

“there is no doubt that this Court has held  in more than one case that where the decision of the authority  is  in  regard to  the policy  matter, this Court will not ordinarily interfere since these policy  matters  are  taken  based  on  expert knowledge of the persons concerned and courts are  normally  not  equipped  to  question  the correctness of a policy decision.  But then this does not mean that the courts have to abdicate their  right  to  scrutinise  whether  the  policy  in question is formulated keeping in mind all  the relevant facts and the said policy can be held to be  beyond  the  pale  of  discrimination  or

2 (2001) 8 SCC 491

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unreasonableness, bearing in mind the material on  record.   Any  decision  be  it  a  simple administrative  decision  or  policy  decision,  if taken without considering the relevant facts, can only be termed as an arbitrary decision.  If it is so, then be it a policy decision or otherwise, it will be violative of the mandate of Article 14 of the Constitution.”

13. The power of the Court under writ jurisdiction has been discussed

in Asif Hameed and Others.  v. State of Jammu and Kashmir

and Others3 in paras 17 and 19, which read as under:  

“17.   Before adverting to the controversy  directly involved  in  these  appeals  we  may  have  a  fresh look on the inter se functioning of the three organs of democracy under our Constitution. Although the doctrine  of  separation  of  powers  has  not  been recognised under  the  Constitution  in  its  absolute rigidity  but  the  Constitution  makers  have meticulously  defined  the  functions  of  various organs  of  the  State.  Legislature,  executive  and judiciary have to function within their own spheres demarcated under the Constitution. No organ can usurp  the  functions  assigned  to  another.  The Constitution trusts to the judgment of these organs to function and exercise their discretion by strictly following  the  procedure  prescribed  therein.  The functioning  of  democracy  depends  upon  the strength and independence of each of its organs. Legislature  and  executive,  the  two  facets  of people's will has no power over sword or the purse nonetheless  it  has  power  to  ensure  that  the aforesaid two main organs of State function within the  constitutional  limits.  It  is  the  sentinel  of democracy. Judicial review is a powerful weapon to restrain unconstitutional  exercise of  power by the legislature and executive. The expanding horizon of judicial review has taken in its fold the concept of social  and  economic  justice.  While  exercise  of powers by the legislature and executive is subject to  judicial  restraint,  the  only  check  on  our  own

3 1989 Supp (2) SCC 364

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exercise of power is the self-imposed discipline of judicial restraint.

xxx xxx xxx

19.  When a State action is challenged, the function of the court is to examine the action in accordance with law and to determine whether the legislature or the executive has acted within the powers and functions  assigned  under  the  Constitution  and  if not,  the court  must strike down the action. While doing  so  the  court  must  remain  within  its self-imposed limits. The court sits in judgment on the  action  of  a  coordinate  branch  of  the government.  While  exercising  power  of  judicial review of administrative action, the court is not an appellate  authority.  The  Constitution  does  not permit the court to direct or advise the executive in matters of policy or to sermonize qua any matter which under the Constitution lies within the sphere of  legislature  or  executive,  provided  these authorities  do  not  transgress  their  constitutional limits or statutory powers.”   

14. The aforesaid doctrine of separation of power and limited scope

of judicial review in policy matters is reiterated in State of Orissa

and Others v. Gopinath Dash and Others4:

“5.  While exercising the power of judicial review of administrative action, the Court is not the Appellate Authority and the Constitution does not permit the Court to direct or advise the executive in the matter of  policy  or  to  sermonise  qua  any  matter  which under the Constitution lies within the sphere of the legislature  or  the  executive,  provided  these authorities  do  not  transgress  their  constitutional limits or statutory power. (See Asif Hameed v. State of J&K; 1989 Supp (2) SCC 364 and Shri Sitaram Sugar  Co.  Ltd. v.  Union  of  India;  (1990)  3  SCC 223). The scope of judicial  enquiry is confined to the  question  whether  the  decision  taken  by  the Government is against any statutory provisions or

4 (2005) 13 SCC 495

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its violates the fundamental rights of the citizens or is  opposed  to  the  provisions  of  the  Constitution. Thus, the position is that even if the decision taken by  the  Government  does  not  appear  to  be agreeable to the Court, it cannot interfere.

6.   The correctness of the reasons which prompted the  Government  in  decision-making  taking  one course of action instead of another is not a matter of concern in judicial  review and the Court is not the appropriate forum for such investigation.

7.    The  policy  decision  must  be  left  to  the Government  as  it  alone  can  adopt  which  policy should be adopted after considering all the points from  different  angles.  In  the  matter  of  policy decisions  or  exercise  of  discretion  by  the Government  so  long  as  the  infringement  of fundamental right is not shown the courts will have no occasion to interfere and the Court will not and should  not  substitute  its  own  judgment  for  the judgment  of  the  executive  in  such  matters.  In assessing  the  propriety  of  a  decision  of  the Government  the  Court  cannot  interfere  even if  a second  view  is  possible  from  that  of  the Government.”

15. As far as classification based on geographical area is concerned

i.e. held to be permissible by this Court in Gopal Narain v. State

of Uttar Pradesh and another5, held as under:

“11.  Looking at the policy disclosed by Sections 7 and 8 and Section 128 of the Act and applying the liberal view a law of taxation receives in the application of  the doctrine of  classification, it  is not possible to say that the policy so disclosed infringes the rule of equality. This Court in more than one decision held that equality clause does not  forbid  geographical  classification,  provided the  difference  between  the  geographical  units has a reasonable relation to the object sought to

5 AIR 1964 SC 370

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be achieved. This principle has been applied to a taxation law in Khandige Sham Bhat's Case, AIR 1963  SC  591.   In  that  case,  this  Court  also accepted the principle that the legislative power to classify is of wide range and flexibility so that it can adjust its system of taxation in all proper and reasonable  ways.  It  is  indicated  in  “Willis  on Constitutional Law”, at p. 590, that a State can make  a  territory  within  a  city  a  unit  for  the purpose of taxation. So, the impugned section in permitting in the matter of taxation geographical classification,  which  has  reasonable  relation  to the  object  of  the  statute,  namely, for  providing special amenities for a particular unit the peculiar circumstances whereof demand them, does not in any way impinge upon the equality clause.”

16. We would also like to refer to the judgment of this Court in the

case of Premier Tyres Limited v. Kerala State Road Transport

Corporation6 wherein this Court held that when a policy decision

is taken in  the public  interest,  Courts  need not  tinker  with the

same.   

17. The locus classicus allowing freedom to the Executive to take

economic decisions is remarkably dealt with by this Court in R.K.

Garg  v.  Union of India7  and the following discussion from the

said judgment is again worth quoting:   

“8. Another rule of equal importance is that laws relating to economic activities should be viewed with  greater  latitude  than  laws  touching  civil rights such as freedom of speech, religion etc. It

6 1993 Supp. 2 SCC 146 7 (1981) 4 SCC 675

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has been said by no less a person than Holmes, J.,  that the legislature should be allowed some play  in  the  joints,  because  it  has  to  deal  with complex problems which do not admit of solution through  any  doctrinaire  or  strait-jacket  formula and this is particularly true in case of legislation dealing  with  economic  matters,  where,  having regard to the nature of the problems required to be dealt with, greater play in the joints has to be allowed to the legislature. The court should feel more  inclined  to  give  judicial  deference  to legislative  judgment  in  the  field  of  economic regulation than in other areas where fundamental human  rights  are  involved.  Nowhere  has  this admonition  been  more  felicitously  expressed than in  Morey v.  Doud, 354  US 457: 1 L Ed 2d 1485  (1957)  where  Frankfurter,  J.,  said  in  his inimitable style:

In  the  utilities,  tax  and  economic regulation  cases,  there  are  good  reasons  for judicial  self-restraint  if  not  judicial  deference to legislative judgment. The legislature after all has the  affirmative  responsibility.  The  courts  have only  the  power  to  destroy,  not  to  reconstruct. When  these  are  added  to  the  complexity  of economic regulation, the uncertainty, the liability to error, the bewildering conflict  of  the experts, and the number of times the judges have been overruled  by  events  —  self-limitation  can  be seen  to  be  the  path  to  judicial  wisdom  and institutional prestige and stability. The  Court  must  always  remember  that “legislation is directed to practical problems, that the economic mechanism is highly sensitive and complex,  that  many problems are singular  and contingent,  that  laws  are  not  abstract propositions and do not relate to abstract units and  are  not  to  be  measured  by  abstract symmetry”; “that exact wisdom and nice adaption of  remedy  are  not  always  possible”  and  that “judgment  is  largely  a  prophecy  based  on meagre  and  uninterpreted  experience”.  Every legislation  particularly  in  economic  matters  is essentially  empiric  and  it  is  based  on experimentation or what  one may call  trial  and error method and therefore it cannot provide for

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all  possible  situations  or  anticipate  all  possible abuses. There may be crudities and inequities in complicated  experimental  economic  legislation but  on  that  account  alone  it  cannot  be  struck down as invalid. The courts cannot,  as pointed out  by  the  United  States  Supreme  Court  in Secretary of Agriculture v. Central Roig Refining Company, 94 L Ed 381 : 338 US 604 (1950) be converted  into  tribunals  for  relief  from  such crudities  and  inequities.  There  may  even  be possibilities of abuse, but that too cannot of itself be  a  ground  for  invalidating  the  legislation, because it is not possible for any legislature to anticipate  as  if  by  some  divine  prescience, distortions  and  abuses  of  its  legislation  which may be made by those subject to its provisions and  to  provide  against  such  distortions  and abuses.  Indeed,  howsoever  great  may  be  the care  bestowed  on  its  framing,  it  is  difficult  to conceive of a legislation which is not capable of being abused by perverted human ingenuity. The Court must therefore adjudge the constitutionality of  such  legislation  by  the  generality  of  its provisions and not by its crudities or inequities or by  the  possibilities  of  abuse  of  any  of  its provisions.  If  any  crudities,  inequities  or possibilities  of  abuse  come  to  light,  the legislature can always step in and enact suitable amendatory  legislation.  That  is  the  essence  of pragmatic  approach  which  must  guide  and inspire  the  legislature  in  dealing  with  complex economic issues.

xx xx xx

19. It  is  true  that  certain  immunities  and exemptions  are  granted  to  persons  investing their unaccounted money in purchase of Special Bearer Bonds but  that is an inducement  which has  to  be  offered  for  unearthing  black  money. Those  who  have  successfully  evaded  taxation and concealed their income or wealth despite the stringent  tax  laws  and  the  efforts  of  the  tax department  are  not  likely  to  disclose  their unaccounted  money  without  some  inducement by way of immunities and exemptions and it must

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necessarily  be  left  to  the  legislature  to  decide what  immunities  and  exemptions  would  be sufficient for the purpose. It would be outside the province of the Court to consider if any particular immunity  or  exemption  is  necessary  or  not  for the  purpose  of  inducing  disclosure  of  black money. That  would depend upon diverse fiscal and economic considerations based on practical necessity  and  administrative  expediency  and would  also  involve  a  certain  amount  of experimentation  on  which  the  Court  would  be least  fitted to  pronounce.  The Court  would  not have the necessary competence and expertise to adjudicate  upon  such  an  economic  issue.  The Court  cannot possibly assess or  evaluate what would be the impact of a particular immunity or exemption  and  whether  it  would  serve  the purpose  in  view  or  not.  There  are  so  many imponderables  that  would  enter  into  the determination that it would be wise for the Court not to hazard an opinion where even economists may differ. The Court must while examining the constitutional validity of a legislation of this kind, “be resilient, not rigid, forward looking, not static, liberal,  not  verbal”  and  the  Court  must  always bear  in  mind  the  constitutional  proposition enunciated by the Supreme Court of the United States in Munn v. Illinois 94 US 13, namely, “that courts  do  not  substitute  their  social  and economic beliefs for the judgment of  legislative bodies”.  The  Court  must  defer  to  legislative judgment  in  matters  relating  to  social  and economic policies and must not interfere, unless the exercise of  legislative judgment  appears to be  palpably  arbitrary.  The  Court  should constantly  remind  itself  of  what  the  Supreme Court  of  the  United  States  said  in  Metropolis Theater  Company v.  City  of  Chicago,  57 L Ed 730 : 228 US 61 (1912):

The problems of government are practical ones and may justify, if they do not require, rough accommodations,  illogical  it  may  be,  and unscientific.  But even such criticism should not be hastily expressed. What is best is not always discernible,  the  wisdom of  any  choice  may be disputed  or  condemned.  Mere  error  of

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government are not subject to our judicial review. It is true that one or the other of the immunities or  exemptions  granted  under  the  provisions  of the  Act  may  be  taken  advantage  of  by resourceful  persons  by  adopting  ingenious methods and devices with a view to avoiding or saving tax.  But that cannot be helped because human ingenuity is so great when it comes to tax avoidance that it would be almost impossible to frame tax  legislation  which  cannot  be  abused. Moreover, as already pointed out above, the trial and error method is inherent in every legislative effort  to  deal  with  an  obstinate  social  or economic  issue  and  if  it  is  found  that  any immunity or exemption granted under the Act is being utilised for  tax  evasion or  avoidance not intended by the legislature,  the Act can always be amended and the abuse terminated. We are accordingly  of  the  view  that  none  of  the provisions of the Act is violative of Article 14 and its constitutional validity must be upheld.”

18. The aforesaid principle is echoed with equal emphasis in  Balco

Employees' Union (Regd.) v. Union of India and Others8 in the

following manner:

“46.  It is evident from the above that it is neither within the domain of the courts nor the scope of the judicial review to embark upon an enquiry as to whether a particular  public  policy is wise or whether better public policy can be evolved. Nor are our courts inclined to strike down a policy at the behest of a petitioner merely because it has been  urged  that  a  different  policy  would  have been fairer or wiser or more scientific  or more logical.

47. Process of disinvestment is a policy decision involving complex economic factors. The courts have consistently refrained from interfering with economic decisions as it  has been recognised

8 (2002) 2 SCC 333

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that  economic  expediencies  lack  adjudicative disposition  and  unless  the  economic  decision, based  on  economic  expediencies,  is demonstrated to be so violative of constitutional or  legal  limits  on  power  or  so  abhorrent  to reason, that the courts would decline to interfere. In  matters  relating  to  economic  issues,  the Government has, while taking a decision, right to “trial and error” as long as both trial and error are bona fide and within limits of authority. There is no  case  made  out  by  the  petitioner  that  the decision  to  disinvest  in  BALCO is  in  any  way capricious, arbitrary, illegal or uninformed. Even though  the  workers  may  have  interest  in  the manner in which the Company is conducting its business,  inasmuch as its  policy decision may have  an  impact  on  the  workers’  rights, nevertheless it is an incidence of service for an employee to accept a decision of the employer which has been honestly taken and which is not contrary to law.  

xx xx xx

Conclusion 92.  In a democracy, it is the prerogative of each elected  Government  to  follow  its  own  policy. Often a change in Government may result in the shift  in  focus  or  change  in  economic  policies. Any  such  change  may  result  in  adversely affecting  some  vested  interests.  Unless  any illegality  is  committed  in  the  execution  of  the policy  or  the  same is  contrary  to  law or  mala fide,  a  decision  bringing  about  change  cannot per se be interfered with by the court.

93.  Wisdom  and  advisability  of  economic policies  are  ordinarily  not  amenable  to  judicial review unless it  can be demonstrated that  the policy  is  contrary  to  any  statutory  provision  or the Constitution. In other words, it is not for the courts  to  consider  relative  merits  of  different economic policies and consider whether a wiser or  better  one  can  be  evolved.  For  testing  the correctness of a policy, the appropriate forum is Parliament and not the courts.  Here the policy

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was tested and the motion defeated in the Lok Sabha on 1-3-2001.”

19. Insofar as judgment of Calcutta High Court in  Kalindi Woolen

Mills (P) Ltd. (supra) is concerned, we have our reservations on

the  correctness  thereof  wherein  the  High  Court  found  that

Notification dated 28.04.1989 allowing imports of  Woolen rags,

Synthetic  rags,  Shoddy  wool  through  two  ports  only,  namely,

Bombay and Delhi ICD.  In any case, insofar as argument based

on Article 14 is concerned, the said judgment is distinguishable as

in that case the Court did not find any intelligible basis which was

disclosed  before  the  Court  either  in  the  affidavits  filed  by  the

Customs Authorities or in the Import Licensing Control Authorities

of  the  Government  of  India.   Likewise,  no  rational  nexus  for

imposing the restrictions on importation of the subject goods only

through Delhi ICD and Bombay ports disclosed.  In the absence

of such a justification, on the facts of that case, the Court found

the Notification to be violative of Article 14 of the Constitution.

20. In contrast, in the present case, as already pointed out above, the

respondents have been able to demonstrate intelligible basis for

issuing the impugned Notifications having rational nexus with the

objectives sought to be achieved.  We, thus, reject the arguments

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based on Article 14 of the Constitution.   

21. The  argument  of  Mr.  Naphade  to  the  effect  that  interests  of

consumers  is  equally  important  which  is  not  taken  into

consideration  needs  an  outright  rejection  for  more  than  one

reason.  In the first  place no such case was made out by the

appellants either in the High Court or even in the special leave

petition filed in this Court.  This argument was raised for the first

time during oral hearing.  There is, thus, no material produced on

record to show how the impugned Notification would affect the

interests of the consumers.  An argument of this nature cannot be

raised  in  the  air  without  having  solid  foundation  with  relevant

material.  In any case, as we have found that the Notifications

were issued in the interests of farmer class in the State of Kerala

and, therefore, they are in public interest, this argument is of no

avail.

22. With this, we advert to the other arguments, namely, whether the

Notifications  are  ultra  vires of  Section  3  of  the  Act.   Our

discussion has to, necessarily, start by noticing the provision of

Section 3, which reads as under:

“3.  Powers  to  make  provision  relating  to

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imports  and  exports.  –  (1)  The  Central Government  may,  by  Order  published  in  the Official  Gazette,  make  provision  for  the development  and  regulation  of  foreign  trade  by facilitating imports and increasing exports.  

(2) The Central Government may also, by Order published in the Official  Gazette,  make provision for  prohibiting,  restricting  or  otherwise  regulating,  in all  cases  or  in  specified  classes  of  cases  and subject  to  such  exceptions,  if  any,  as  may  be made by or under the Order, the import or export of goods or services or technology:

Provided  that  the  provisions  of  this  sub-section shall be applicable, in case of import or export of services or technology, only when the service or technology provider is availing benefits under the foreign  trade  policy  or  is  dealing  with  specified services or specified technologies.

(3)   All  goods  to  which  any  Order  under sub-section  (2)  applies  shall  be  deemed  to  be goods  the  import  or  export  of  which  has  been prohibited under  section 11 of  the Customs Act, 1962 (52 of 1962) and all the provisions of that Act shall have effect accordingly.

(4)  Without prejudice to anything contained in any other law, rule, regulation, notification or order, no permit or licence shall be necessary for import or export  of  any  goods,  nor  any  goods  shall  be prohibited for import or export except, as may be required under this Act,  or rules or orders made thereunder.”

23. Scope and ambit  of  the aforesaid provision was considered in

Abdul  Aziz  Aminudin  v.  State of  Maharashtra9,  wherein  this

Court held as under:

“11.  It is clear therefore that the power conferred under  Section  3(1)  of  the  Act  is  not  restricted

9 (1964) 1 SCR 830 : AIR 1963 SC 1470

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merely to prohibiting or restricting imports at the point of entry but extends also to controlling the subsequent disposal of the goods imported. It is for  the  appropriate  authority  and  not  for  the Courts to consider the policy, which must depend on  diverse  considerations,  to  be  adopted  in regard  to  the  control  of  import  of  goods.  The import  of  goods  can  be  controlled  in  several ways. If  it  is  desired that goods of a particular kind  should  not  enter  the  country  at  all,  the import of those goods can be totally prohibited. In case total prohibition is not desired, the goods could  be  allowed  to  come  into  the  country  in limited  quantities.  That  would  necessitate empowering  persons  to  import  under  licences certain fixed quantities of the goods. The quantity of  goods  to  be  imported  will  have  to  be determined on consideration of the necessity for having  those  goods  in  the  country  and  that again, would depend on the use to be made of those goods. It follows therefore that the persons licensed to import goods up to a certain quantity should  be  amenable  to  the  orders  of  the licensing  authority  with  respect  to  the  way  in which  those  goods  are  to  be  utilised.  If  the licensing authority has no such power, its control over the import cannot be effective. It may have considered it necessary to have goods imported for a particular purpose. If it cannot control their utilisation for that purpose, the imported goods, after  import,  can  be  diverted  to  different  uses, defeating thereby the very purpose for which the import  was  allowed  and  power  had  been conferred on the Central Government to control imports. It is therefore not possible to restrict the scope of the provision about the control of import to  the  stage  of  importing  of  the  goods  at  the frontiers  of  the  country. Their  content  is  much wider and extends to every stage at which the Government  feels  it  necessary  to  see that  the imported  goods  are  properly  utilised  for  the purpose for  which  their  import  was  considered necessary in the interests of the country.”

24. We may also point out that proviso to sub-section (2) as well as

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sub-section (4) were inserted by Act 25/2010 w.e.f. 27.08.2010. In

any case, we are primarily concerned with the interpretation of

sub-sections (1) and (2) of Section 3 as far as present case is

concerned.  Sub-section (1) empowers the Central Government

to make provision for the development as well as regulation of

foreign trade by facilitating imports and increasing exports.  Thus,

the Government is empowered to make provision insofar as they

relate  to  the  development  of  foreign  trade  and  it  has  also

empowered to regulate the foreign trade.   The two key words

here are 'development'  and 'regulation'.   It  is also important to

note that such development and regulation is aimed at facilitating

imports  as  well  as  increasing  exports.   First  argument  of  Mr.

Naphade was that regulatory provision has to be for facilitating

imports whereas in the present case, it was to curb the imports

insofar  as  ports  in  Kerala  are  concerned.   Sub-section  (2)  of

Section  3  further  empowers  the  Central  Government  to  make

provision  for:  (i)  prohibiting;  (ii)  restricting;  or  (iii)  otherwise

regulating  'the  import  or  export  of  goods  or  services  or

technology'.  It can be done in all cases or in specified classes of

cases.  The submission of Mr. Naphade was that such provisions

prohibiting, restricting or otherwise regulating are to be made in

respect of  import or export of  goods or services or  technology

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which  essentially  were  custom  based.   He  referred  to  the

definition of 'import' and 'export' contained in Section 2(e) of the

Act which, in relation to goods, means bringing into, or taking out

of, India any goods by land, sea or air.  He, thus, submitted that

insofar as import of goods is concerned, it only meant bringing

the said goods into India.  That is by crossing the custom barrier,

to bring the same in the territory of India.  Therefore, sub-section

(2)  is  with  reference  to  goods  and  not  with  place.   He  also

submitted that  the expression 'otherwise regulating'  referred to

licence  etc.  by  which  the  import  could  be  regulated  and  had

nothing to do with the 'place'.   Section 5 which existed at  the

relevant time reads as under:  

“5.   Export  and import policy. -  The Central Government  may, from time to  time formulate and  announce,  by  notification  in  the  Official Gazette, the export and import policy and may also, in the like manner, amend that policy.”

This  Section  is  substituted  by  amended  Section  5  w.e.f.

27.08.2010 and the amended Section reads as under:

“5.   Foreign  Trade  Policy. -  The  Central Government may, from time to time, formulate and  announce,  by  notification  in  the  Official Gazette, the foreign trade policy and may also, in like manner, amend that policy:

Provided  that  the  Central  Government may  direct  that,  in  respect  of  the  Special Economic Zones, the foreign trade policy shall apply  to  the  goods,  services  and  technology with  such  exceptions,  modifications  and

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adaptations,  as  may  be  specified  by  it  by notification in the Official Gazette.”

25. Mr. Naphade submitted that proviso which is added in the new

Section 5 for the first time relates to the place and since it was

conspicuously  absent  in  the  old  provision,  it  could  clearly  be

inferred that  Section 5 as it  stood at  the relevant time had no

bearing as far as place of import and export policy is concerned.

On that basis, he argued that Section 3 read with Section 5 did

not give any such power to issue Notifications of the nature which

is subject matter of these proceedings.  He, thus, submitted that

power could not be exercised by the Central Government to ban

or prohibit  the import  of  palm oil  through the ports of  State of

Kerala alone and if  any ban had to be imposed which should

have  been  done  in  all  the  ports  throughout  the  country.   He

further argued that Calcutta High Court in the case of  Kalindi

Woolen  Mills  (supra)  has  specifically  held  to  be  so  while

inculcating Sections 3 and 5 of the Act.   

26. These were countered by Mr. Panda, learned senior counsel for

the respondents by arguing that the impugned Notifications may

be considered with reference to Section 3(2) of  the Act  not  in

isolation,  but  on  a  harmonious  construction  of  the  same  with

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reference  to  the  statement  of  objects  and  reasons  to  the  Act

along with Sections 2(e), 3(3) and 5 of the Act along with Sections

7 and 11 of the Customs Act, 1962.  The Foreign Trade Policy of

2004-2009,  the  relevant  provisions  which  have  already  been

extracted herein before at Para 5 may also be considered.  This

approach,  according to  him,  would  be in  consonance with  the

ratio of the judgment of this Court in  Union of India  v.  Asian

Food Industries10:  

“25.  Would the terms 'restriction' and 'regulation' used in Clause 1.5 of the Foreign Trade Policy include prohibition also,  is one of  the principal questions involved herein.

26.  A citizen of India has a fundamental right to carry  out  the  business  of  export,  subject,  of course to the reasonable restrictions which may be  imposed  by  law.   Such  a  reasonable restriction was imposed in terms of the 1992 Act.

27.  The purport and object for which the 1992 Act was enacted was to make provision for the development  and  regulation  of  foreign  trade inter  alia  by  augmenting  exports  from  India. While laying down a policy therefor, the Central Government, however, had been empowered to make  provision  for  prohibiting,  restricting  or otherwise regulating export of goods.

28.  Section 11 of the 1962 Act also provides for prohibition.   When  an  order  is  issued  under sub-section (3) of Section 3 of the 1992 Act, the export  of  goods  would  be  deemed  to  be prohibited also under Section 11 of the 1962 Act and  in  relation  thereto  the  provisions  thereof shall also apply.

10 (2006) 13 SCC 542

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29.  Indisputably, the power under Section 3 of the 1992 Act is required to be exercised in the manner provided for under Section 5 of the 1992 Act.  The Central Government in exercise of the said power announced its Foreign Trade Policy for  the years 2004-2009.   It  also exercised its power of amendment by issuing the Notification dated  27.06.2006.   Export  of  all  commodities which were not earlier prohibited, therefore, was permissible till the said date.

xx xx xx

43.  We are, however, not oblivious of the fact that  in  certain  circumstances  regulation  may amount to prohibition.  But, ordinarily the word “regulate” would mean to control or to adjust by rule  or  to subject  to  governing principles (See U.P. Cooperative  Cane  Unions  Federations  v. West U.P. Sugar Mills Association and Others, (2004) 5 SCC 430, whereas the word “prohibit” would mean to forbid by authority or command. The expressions “regulate” and “prohibit” inhere in  them elements  of  restriction but  it  varies  in degree.   The element  of  restriction is  inherent both  in  regulative  measures  as  well  as  in prohibitive or preventive measures.

xx xx xx

46.  The terms, however, indisputably would be construed having regard to the text and context in which they have been used.  Section 3(2) of the  1992  Act  uses  prohibition,  restriction  and regulation.  They are, thus, meant to be applied differently.   Section  51  of  the  1962  Act  also speaks of prohibition.  Thus, in terms of the 1992 Act  as  also  the  policy  and  the  procedure  laid down thereunder, the terms are required to be applied in different situations where for different orders have to be made or different provisions in the same order are required therefore.”

He  also  submitted  that  the  above  approach  of  this  Court  for

harmonious  construction  finds  support  from  the  following  ratio  laid

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down by this Court in Bhatnagars & Co. Ltd. v. Union of India11:

“.......... In modern times, the export and import policy of  any democratic  State is bound to be flexible.  The needs of the country, the position of foreign exchange, the need to protect national industries and all  other relevant considerations have to be examined by the Central Government from time to time and rules in regard to export and import suitably adjusted.  It would, therefore, be  idle  to  suggest  that  there  should  be unfettered  and  unrestricted  freedom  of  export and import or that the policy of the Government in regard to export and import  should be fixed and not changed according to the requirements of the country.

xx xx xx  

It  was  open  to  the  Government,  and  indeed national interests made it their duty, to intervene and regulate the distribution of the commodity in a suitable manner.”

27. According  to  us,  we  need  not  deal  with  these  submissions

elaborately  as  the  aforesaid  contention  of  the  learned  senior

counsel  for  the appellants  need to  be discarded on altogether

different  reason.   These  arguments  ignore  the  crucial  words

appearing in sub-section (2) of Section 3, namely, provision for

prohibiting, restricting or otherwise regulating, the import or export

of goods etc. can be made “subject to such exceptions, if any, as

may be made by or under the Order”.  These words are of wide

amplitude giving necessary powers to make such exceptions as

the Central Government deems fit while issuing the Notifications

11 1957 SCR 701

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or  the  Order  in  prohibiting,  restricting  or  regulating  import  or

export of goods etc.  In the process, it can restrict the import of

particular  goods through particular  ports  or  disallow the import

through specified  ports  (See:  Asian  Food Industries judgment,

already extracted above). Of course, such an action cannot be

arbitrary or irrational and should be backed sound reasons.   

28. In the present case, as already held above, there is a sufficient

public good sought to be achieved by laying down the exception

banning the imports of  crude palm oil  through ports  in Kerala.

That, according to us, provides complete answer to the argument

of the learned senior counsel for the appellants.  Calcutta High

Court in  Kalindi Woolen Mills (P) Ltd.  (supra) overlooked the

aforesaid pertinent  aspect which gives sufficient  powers to the

Central  Government  to  act  in  the  manner  it  has  acted.   The

argument of Mr. Naphade predicated on the contrast between old

and new provisions of Section 5 of the Act, again, would be of no

avail in view of our aforesaid discussion holding that sub-section

(2) of Section 3 of the Act gives ample power to the Government

to issue such Notifications in exceptional cases and present case

falls within those parameters.  No other argument was addressed.

We, therefore, do not find fault with the view taken by the High

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Court upholding the Notifications in question.  These appeals are

accordingly dismissed.   

.............................................J. (A.K. SIKRI)

.............................................J. (ROHINTON FALI NARIMAN)

NEW DELHI; AUGUST  21, 2015.

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