1. Import policy for gold changed from free to restricted — Petitioners' entitlement to transitional arrangement under para 1.05(b) of FTP. (Para 4 , 5 , 6 )
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2026 Supreme(Online)(Del) 20143
IN THE HIGH COURT OF DELHI AT NEW DELHI
Prathiba M. Singh, Vikas Mahajan, JJ
Kundan Care Products Limited – Appellant
Versus
Union of India – Respondent
W.P.(C) 432/2024|CM APPL. 2006/2024|CM APPL. 70118/2025|W.P.(C) 433/2024|CM APPL. 2008/2024|W.P.(C) 434/2024|CM APPL. 2010/2024|W.P.(C) 435/2024|CM APPL. 2012/2024
Advocates:
For the Appellants/Petitioners: Prithu Garg, Ashutosh Arvind Kumar, Aryan Bhati
For the Respondents: Balendu Shekhar, Krishna Chaitanya, Divyansh Singh Dev, Rajkumar Maurya, Shiva Lakshmi, Piyush Beriwal, Ruchita Srivastava, Sparsh Jain, Sachin Sachdev
For the Appellants/Petitioners: Prithu Garg, Ashutosh Arvind Kumar, Aryan Bhati
For the Respondents: Balendu Shekhar, Krishna Chaitanya, Divyansh Singh Dev, Rajkumar Maurya, Shiva Lakshmi, Piyush Beriwal, Ruchita Srivastava, Sparsh Jain, Sachin Sachdev
Advance payments made prior to a restrictive import notification provide greater security than an Irrevocable Commercial Letter of Credit (ICLC) and entitle bonafide importers to the same transitional benefits under the Foreign Trade Policy.
Headnote:(A) Foreign Trade Policy - Transitional Arrangements - Interpretation of Irrevocable Commercial Letter of Credit (ICLC) - Advance payments exceeding 90% of invoice value provide higher security to the seller than an ICLC and should be treated on a similar or higher footing for the purpose of extending transitional benefits. (Para 20, 27)
(B) Delegated Legislation - Retrospective Application - Notifications issued by the DGFT are delegated legislation and cannot operate retrospectively unless the parent statute expressly empowers the authority to do so. (Para 23)
(C) Administrative Law - Bonafide Transactions - Where petitioners are established traders and transactions are proven to be regular and bonafide, the court may extend the benefit of a policy exception to prevent hardship. (Para 26, 27)
Issues: Whether the Petitioners, having made substantial advance payments prior to the notification changing the import policy of gold from 'free' to 'restricted', are entitled to the benefit of transitional arrangements under Clause 1.05(b) of the Foreign Trade Policy.
Legal Category Hierarchy
- administrative law
- practice and procedure
-
constitutional law
- article 14 (Para 7)
- commercial law
Table of Contents
2. Petitioners claim benefit of transitional arrangement for advance payments; Respondent submits only ICLC transactions qualify. (Para 8 , 13 , 14 )
3. Advance payments stand on a higher pedestal than Letters of Credit; restrictive policy not retrospective. (Para 20 , 21 , 22 , 23 )
4. Transitional arrangement under para 1.05(b) extends to genuine transactions with advance payments made before the policy change. (Para 22 , 27 )
5. Benefit under para 1.05(b) extended to Petitioners; writ petitions disposed of accordingly. (Para 28 , 29 )
6. Whether advance payments qualify for transitional arrangement under para 1.05(b) of FTP, similar to Irrevocable Commercial Letters of Credit (ICLC)?
Yes, advance payments stand on a higher pedestal than ICLCs and are covered under the transitional arrangement if transactions are bonafide and made before the policy change. (Para 20 , 22 )
7. Whether an import policy notification changing the category from 'free' to 'restricted' can operate retrospectively?
No, such notifications are delegated legislation and cannot operate retrospectively unless the statute expressly empowers retrospective effect. (Para 23 , 25 )
8. What is the purpose of the exception for Irrevocable Commercial Letters of Credit under para 1.05(b)?
The exception protects transactions bonafide entered into prior to the notification, as ICLCs provide greater sanctity and assurance through banking oversight. (Para 19 , 22 )
9. Whether the Court can go behind the policy to grant benefit beyond the express wording of para 1.05(b)?
Yes, the Court can examine the intention behind the policy and extend benefit to transactions that are equally or more secure than ICLCs, such as substantial advance payments. (Para 22 )
JUDGMENT
Prathiba M. Singh, J.
1. This hearing has been done through hybrid mode.
2. These are four writ petitions filed by the following entities:
a. W.P.(C) 432/2024- This petition is filed by Kundan Care Products Ltd. now known as Absolute Herbs Exports Private Limited. The Petitioner is engaged in the business of import and trade of gold jewellery, gold dore bars and other precious metals. One of the objects of the Petitioner is to deal with the metal and ornaments, jewellery, stones, etc. The objects of the Petitioner as mentioned in the Memorandum of Association reads as under:
“III. The objects for -which the Company is established are: - (A) THE MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE: - To carry on the business of manufacture, Buy, sell, import, export, trade, retail, -wholesale. Refine, prepare, distribute, Fabricate, process, produce, grow, make, supply, Stock, commercialize, polish, design, display, examine, grind, grade, assort, develop, modify, build, encourage, alter, dismantle, provide, exchange, remove Set, convert, finish, cut, fit, trim. Contract, sub-contract, supply, turn to contract, supply, turn to account, let hire and to act as agent broker, merchants, agents, C & F agents, job worker consigner, contractor, vendor, collaborators, stockists, distributors or Otherwise to deal in all kind of products, goods, commodities and merchandise Of and for human & leaving creature care, use and consumption including but not restricted to a kinds of electrical, electronics, telecommunication products including’ mobile phones and their accessories, wearing and fashion apparels, garments, handicrafts, engineering goods, machine tools, hand tools, gold, silver, platinum, copper. Zinc lead applications, combinations & designs of rough, raw, cut, uncut, polished or processed, natural& manmade precious, semiprecious stones such’ as diamond ruby, pearls, gems stones, blue sapphires, topaz, opal, zircon, gold, stone & their Ornaments, jewelleries, articles, goods or things made in the combination of gold, Silver, platinum Or other metals and alloys thereof, and other varieties of stones and material, gold and silver coins, bars or in any other forms, precious and semi-precious metals, stones and metal products, tobacco (raw and manufactured) oils, Vanaspati, textile, fiber and -waste coir and jute and products thereof;’ -wood and timber and their products, petrol and petroleum products, natural gas, bones, crushed and uncrushed, coal and charcoal, chemicals and chemical preparation, glass and glassware, drugs and medicines, soaps, paints, paper and stationery, paper products, rubber and plastic goods, fruits, nuts, cashewnuts, kernels, grains, pulses, flour, confectionery, provisions, spirits, alcohols, beverages, perfumed, sprits, spices and tea, coffee, sugar and molasses, vegetables products, processed foods and packed food products, medical and surgical equipment.”
b. W.P.(C) 433/2024- This petition is filed by Kundan & Zeva Limited. The Petitioner is engaged in the business of manufacturing of minted gold and silver coins, trading in precious metals, and dealing in gold frames, gold bars, and allied products The objects of the Petitioner as mentioned in the Memorandum of Association reads as under:
“3.(a) The objects to be pursued by the company on its incorporation are: 1. To carry on the business of Manufacturing, trading, import, export of all kinds of gold, silver, platinum, diamond Jewellery & ornament made of precious or semi-precious stones & metals of any kind. 2. To manufacture, trade & deal in, manage, purchase or otherwise acquire and sell, dispose of import, export, exchange, hold and deal in diamond, precious stone, gold and silver chains, bullion and jewellery, pearls, coins, cups, medals, shields, curious articles of virtue, art and antiques and to deal, trade and establish showroom, shop for trading of goods for the above business.
3. To cut, saw, clean, polish, sort drill
