2003 Supreme(SC) 561

2003(4) Supreme 114
SUPREME COURT OF INDIA
(From Delhi High Court)
Shivaraj V. Patil and Arijit Pasayat, JJ.
Union of India & Anr. -Appellants
versus
International Trading Co. & Anr. -Respondents
Civil Appeal Nos. 4020-4023 of 2003
(Arising out of SLP (C) No. 2780-2783 of 2003)
Decided on 7-5-2003
Counsel for the Parties :
For the Appellants : K.N. Raval, Solicitor General, T.V. Ratnam, K. Subba Rao and B.V. Balaram Das, Advocates.
For the Respondents : G.L. Sanghi, Sr. Advocate, Rohit Tandon and Hari Shankar K., Advocates.

IMPORTANT POINT
If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies and the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed.

Headnote:Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981-Maritime Zones of India, (Regulation of Fishing by Foreign Vessels) Rules 1982-Charter/lease permits to operate Foreign Deep Sea Fishing Vessels-Government Policy of no grant of renewal/extension for these permits-Validity challenged-Effect of permission granted to 32 vessels-National priorities-Trade policies-Judicial review, scope of-Appellant stated that if respondents apply in terms of prevailing EXIM policy, as done by 32 vessels, due consideration in accordance with law shall be made-Absence of any material to discount legitimacy of policy -No case made out for interference.

       Held : Legitimacy of the policy decision has not been questioned by the respondents. What is highlighted is that notwithstanding the policy their rights are unaffected. Doctrines of promissory estoppel and legitimate expectation cannot come in the way of public interest. Indisputably, public interest has to prevail over private interest. The case at hand shows that a conscious policy decision has been taken and there is no statutory compulsion to act contrary. In that context, it cannot be said that respondents have acquired any right for renewal. The High Court was not justified in observing that the policy decision was contrary to statute and for that reason direction for consideration of the application for renewal was necessary. Had the High Court not recorded any finding on the merits of respective stands, direction for consideration in accordance with law would have been proper and there would not have been any difficulty in accepting the plea of the learned counsel for the respondents. But having practically foreclosed any consideration by the findings recorded, consideration of the application would have been mere formality and grant of renewal would have been the inevitable result, though it may be against the policy decision. That renders the High Court judgment indefensible. (Paras 11 & 12)

       What remains now to be considered, is the effect of permission granted to the 32 vessels. As highlighted by learned counsel for the appellants, even if it is accepted that there was any improper permission, that may render such permissions vulnerable so far as 32 vessels are concerned. But it cannot come to the aid of respondents. It is not necessary to deal with that aspect because two wrongs do not make one right. A party cannot claim that since something wrong has been done in another case; direction should be given for doing another wrong. It would not be setting a wrong right, but would be perpetuating another wrong. In such matters there is no discrimination involved. The concept of equal treatment on the logic of Article 14 of the Constitution of India, 1950 (in short the Constitution ) cannot be pressed into service in such cases. What the concept of equal treatment presupposes is existence of similar legal foothold. It does not countenance repetition of a wrong action to bring both wrongs on par. Even if hypothetically it is accepted that wrong has been committed on some other cases by introducing a concept of negative equality respondents cannot strengthen their case. They have to establish strength of their case on some other basis and not by claiming negative equality. (Para 13)

       (ii) Administrative Law-Government Policy, change in-Powers of Court-Test of reasonableness-Fairness in action by the State-Non arbitrariness.

       Held : While the discretion to change the policy in exercise of the executive power, when not trammeled by any statute or rule is wide enough, what is imperative and implicit in terms of Article 14 is that a change in policy must be made fairly and should not give impression that it was so done arbitrarily or by any ulterior criteria. The wide sweep of Article 14 and the requirement of every State action qualifying for its validity on this touchstone irrespective of the field of activity of the State is an accepted tenet. The basic requirement of Article 14 is fairness in action by the State, and non-arbitrariness in essence and substance is the heart beat of fair play. Actions are amenable, in the panorama of judicial review only to the extent that the State must act validly for a discernible reasons, not whimsically for any ulterior purpose. The meaning and true import and concept of arbitrariness is more easily visualized than precisely defined. A question whether the impugned action is arbitrary or not is to be ultimately answered on the facts and circumstances of a given case. A basic and obvious test to apply in such cases is to see whether there is any discernible principle emerging from the impugned action and if so, does it really satisfy the test of reasonableness. Where a particular mode is prescribed for doing an act and there is no impediment in adopting the procedure, the deviation to act in different manner which does not disclose any discernible principle which is reasonable itself shall be labelled as arbitrary. Every State action must be informed by reason and it follows that an act uninformed by reason is per se arbitrary. (Paras 15 & 16)

       If the State acts within the bounds of reasonableness, it would be legitimate to take into consideration the national priorities and adopt trade policies. As noted above, the ultimate test is whether on the touchstone of reasonableness the policy decision comes out unscathed. Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interests of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable merely because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed, the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Canalisation of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. (Paras 22 & 23)