IMPORTANT POINTS
Policy decision to protect marginal farmers of Kerala having a intelligible rationale of public good and nexus with the objective sought to be achieved is in consonance with Article 14 of the Constitution.
Classification based on geographical area is permissible.
The Executive is free to take policy decisions in economic matters.
Scope of judicial review would not extend to determining correctness of policy decision or finding out whether there was any more appropriate or better alternative.
Argument raised for the first time before Supreme Court without any foundation is not permissible.
Under Section 3(2) of The Foreign Trade (Development and Regulation) Act, 1992 Central Government can restrict import of particular goods through particular ports or disallow the import through specified ports.

Judgment

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 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. 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 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