2006 Supreme(SC) 1056

2006(9) Supreme 206
SUPREME COURT OF INDIA
(From Gujarat High Court)
S.B. Sinha and Markandey Katju, JJ.
Union of India & Ors. - Appellants
versus
M/s. Asian Food Industries - Respondent
Civil Appeal No. 4695 of 2006
(Arising out of SLP (C) No. 17008 of 2006)
With
Civil Appeal No. 4696 of 2006
(Arising out of SLP (C) No. 17558 of 2006)
Decided on 7-11-2006
Counsel for the Parties :
For the Appellants : Vikas Singh ASG, K. Swami, Tufail A. Khan and V.K. Verma Advocates.
For the Respondent : Bharat Rao, Huzefa Ahmade, Joseph Kodinth, Ejaz Maqbool, Ms. Taruna Singh, Punit Dutt Tyagi, Ajay Choudhary and Nimish Gupta, Advocates.

IMPORTANT POINT
Prohibition promulgated by a statutory order in terms of Section 5 of the Foreign Trade (Development and Regulation) Act read with the relevant provisions of the policy decision in the light of sub-section (2) of Section 3 of the Act can only have a prospective effect. By reason of a policy, a vested or accrued right cannot be taken away. Such a right, therefore, cannot a fortiori be taken away by an amendment thereof.

Headnote:(i) Customs Act, 1962 - Sections 11, 16, 39, 50 and 51 - Foreign Trade (Development and Regulation) Act, 1992 - Section 5 - Foreign Trade Policy - A purported decision taken by the Central Government to ban export of pulses on 22.6.2006 - That decision was widely reported in electronic media and print media - Notification banning export of pulses was issued by the Central Government only on 27.6.2006 wherein Central Government prohibited export of various goods for a period of six months - Respondent, exporter of various kinds of pulses and grains having received orders for supply of pulses from the Overseas Importers executed several contracts between 22.4.2006 and 2.5.2006 - It received 20% of contract amount by way of advance towards the said supply from the importers on 9.5.2006 - Shipment of 20 containers out of 107 containers took place during the period between 22.6.2006 and 24.6.2006 - Remaining 87 containers were cleared and Export orders dated 23.6.2006, 24.6.2006 and 26.6.2006 were issued by the custom authorities - Bills of lading were also issued - Superintendent (Customs) on or about 28.6.2006 directed the Port Trust that no further consignment be allowed to be shipped which has passed out of the charge of customs - Another notification was issued by the Central Government on 4.7.2006 u/s 5 of the 1992 Act permitting export of pulses against irrevocable letter of credit prior to 22.6.2006 - Respondents seeking permission to shift the 87 containers of vessels in view of notification dated 4.7.2006 which was refused - Writ petitions - Delhi High Court declared notification dated 4.7.2006 as ultra vires - Whether Gujarat High Court was justified in permitting loading of goods - (No).

       Held : 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. (Para 21)

       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.(Para 22)

       The scheme of the Foreign Trade Policy postulates that when the policy provisions are amended which are disadvantageous to the exporters, the modification would not be attracted. (Para 28)

       It furthermore lays down that although actual export had not taken place but in the event goods are handed over to the custom authorities before expiry of the export obligation period but actual export takes place after expiry thereof, the same shall be considered within the export obligation and taken towards fulfillment of such obligation.(Para 29)

       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 wherefor different orders have to be made or different provisions in the same order are required therefor.(Para 39)

       The Delhi High Court, however, in our view correctly opined that the notification dated 4.07.2006 could not have been taken into consideration on the basis of the purported publicity made in the proposed change in the export policy in electronic or print media. Prohibition promulgated by a statutory order in terms of Section 5 read with the relevant provisions of the policy decision in the light of Sub-section (2) of Section 3 of the 1992 Act can only have a prospective effect. By reason of a policy, a vested or accrued right cannot be taken away. Such a right, therefore, cannot a fortiori be taken away by an amendment thereof.(Para 41)

       We, therefore, are of the opinion that whereas the judgment of the Gujarat High Court must be upheld, that of the Delhi High Court, albeit for different reasons, cannot be sustained. (Para 43)

       (ii) WORDS AND PHRASES - Word ‘regulate’ - Ordinarily the word would mean to control or to adjust by rule or to subject to governing principles - In certain circumstances regulation may amount to prohibition - Element of restriction is inherent both in regulative measures as well as in prohibitive or preventive measures.(Paras 36 and 37)

       (iii) WORDS AND PHRASES - Word ‘prohibit’ - Means to forbid by authority or command - Expressions ‘regulate’ and ‘prohibit’ inhere in them elements of restriction but it varies in degree.(Para 36)

       (iv) INTERPRETATION OF STATUTES - Rule of strict construction - Applicability - In construing a prohibitory order, whereas rule of strict construction must be followed, interpretation which subserves intention of the Central Government should be given effect to - A statute may have to be construed in the light of subordinate legislations framed thereunder - When subordinate legislation has been framed by the same authority which exercises the power under the policy - Intention of such policy maker must be found out from the words used therein albeit having regard to the rights of exporters which are sought to be protected thereby - Foreign Trade (Development and Regulation) Act, 1992 - Sections 3(1) and 5.(Para 42)