SC: GOI Can Impose Quantitative Restriction on Import Under S. 3(2) FDRT Act

Must Read

Himachal Pradesh High Court Supports Promotion Based on Seniority of Post Rather Based on the Eligibility Test

In the case of Ramesh Chand Versus State of Himachal Pradesh & Others, the petitioner, reached the court as...

NCDRC Dismisses PIL against Urologist, Holy Family Hospital, Says Mode Of Treatment Or Skill Differs From Doctor To Doctor

The National Consumer Dispute Redressal Commission (NCDRC) dismissed a petition against Holy Family Hospital and a Urologist, alleging negligence...

Himachal Pradesh High Court Disposes Suit for Possession and Permanent Prohibitory Injunction Due To Mutual Consent

In the case of Parveen Kumar vs Smt. Vijay Laxmi and Ors, the Petitioner, Parveen had filed a suit for declaration,...

Supreme Court Appoints Committee To Examine Arbitrariness of Sealing of Resorts in Elephant Corridor, Tamil Nadu

A Full Bench headed by the Chief Justice of India, in the matter of Hospitality Association of Mudumalai V. In...

Madhya Pradesh High Court Rules That Export Ban on N95 Masks & PPE Kits Does Not Violate Fundamental Right of Traders

The Madhya Pradesh High Court held that the formulation and regulation of trade policies were within the subjects of...

Delhi High Court Issues Notice To Two Pleas Filed Praying for Recognition of Same-Sex Marriage

The Court heard two writ petitions which urged that the Special Marriage Act and the Foreign Marriage Act be...

Follow us

The Supreme Court heard a set of pleas filed by various importers against the restrictions imposed by GOI on import quantity. The bench held that the GOI is empowered to do so under Section 3(2) of the Foreign Trade (Development and Restriction) Act, 1992.

Brief facts of the case

This case is an amalgamation of various petitions filed in different High Courts of the country by many importers. They challenged a set of notifications issued by the GOI restricting import of pulses and peas. In some cases, the HCs passed interim orders putting a stay on the notifications.

The GOI passed the impugned orders under Section 3 of the FTDR Act read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020. 

Arguments by the Petitioners

The main contention of the petitioners was that the notifications amounted to quantitative restrictions under Section 9A of the FDTR Act. As per the provision the Government has to inquire before imposing the quantitative restrictions. They must ensure that the importing of those goods in such quantity would cause harm to the domestic industry.

Further, in the exercise of power under sub-section (3) to Section 9A the Central Government has framed the Safeguard Measures (Quantitative Restrictions) Rules, 2012. They prescribe a mandatory and detailed procedure which has not been followed.

Also, the intention behind the FTDR Acts the development and regulation of foreign trade by facilitating imports and augmenting exports from India to make India competitive in conformity with GATT-1994 obligations. Section 3 incorporated Article XI of the GATT-1994 and Section 9A is almost a replica of Article XIX of the GATT-1994. The latter is the only provision allowing quantitative restrictions. It, thus, follows that unless the conditions of Section 9A of the FTDR Act are satisfied and the procedure prescribed under the Rules is followed, no ‘quantitative restrictions’ could have been imposed by the Union of India through the medium of the impugned notifications.

They assert that the GOI cannot use Section 3 when conditions of Section 9A are not satisfied and impose ‘quantitative restrictions’. This would render Section 9A redundant. It would allow the GOI to circumvent Section 9A and impose ‘quantitative restrictions’ under Section 3.

Arguments by the Respondents

The Union of India accepted that they did circumvent the conditions of Section 9A. They did not follow the procedure prescribed by the applicable Rules. But, they asserted that the provision is attracted only when the goods are imported into India in increased quantity under such conditions that might cause serious injury to the domestic industry.

Section 9A is enacted as a safeguard mechanism. It flows from Article XIX of the GATT-1994 and Article II of the WTO Agreement. 

Further, the notifications under challenge were issued under Section 3 of the Act. It permits the GOI to impose restrictions without any qualification of the nature specified in Section 9A. The powers vested on the Central Government via Section 3 and Section 9A are distinct and have no connection or interplay. The former is a general provision and of wide amplitude.

Court’s Observations

The Court observed that under Section 3(2) of the Act the Central Government has the power to make provisions restricting the imports and exports. The imposition of quantitative restrictions would fall under this.

Further, they referred to Section 9A for the Act as an enabling provision. It empowers the imposition of quantitative restrictions after following the procedure in the situations referred to therein. 

Yet, it does not limit and restrict the power of the Central Government under Section 3(2) of the FTDR Act. Thus, despite Section 9A, the Central Government has the authority to impose quantitative restrictions by an order under Section 3(2) of the FTDR Act. 

Section 9A has to be interpreted as an escape provision. It allows the Union of India to escape the rigours of paragraph (1) of Article XIX of GATT-1994. 

Holding that the Government can impose quantitative restrictions only through Section 9A would be contrary to the legislative intent.

Court’s Order

The Bench upheld the impugned notifications and notices rejecting all challenges made by the petitioners. The Customs Act of 1962 would be used to deal with any imports made relying on interim orders as they would be contrary to the trade notices issued.


Libertatem.in is now on Telegram. Follow us for regular legal updates and judgments from the court. Follow us on Google News, InstagramLinkedInFacebook & Twitter. You can also subscribe to our Weekly Email Updates. You can also contribute stories like this and help us spread awareness for a better society. Submit Your Post Now.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Latest News

Himachal Pradesh High Court Supports Promotion Based on Seniority of Post Rather Based on the Eligibility Test

In the case of Ramesh Chand Versus State of Himachal Pradesh & Others, the petitioner, reached the court as he was aggrieved by the...

NCDRC Dismisses PIL against Urologist, Holy Family Hospital, Says Mode Of Treatment Or Skill Differs From Doctor To Doctor

The National Consumer Dispute Redressal Commission (NCDRC) dismissed a petition against Holy Family Hospital and a Urologist, alleging negligence in diagnosing the septicemia and...

Himachal Pradesh High Court Disposes Suit for Possession and Permanent Prohibitory Injunction Due To Mutual Consent

In the case of Parveen Kumar vs Smt. Vijay Laxmi and Ors, the Petitioner, Parveen had filed a suit for declaration, possession and a permanent prohibitory...

Supreme Court Appoints Committee To Examine Arbitrariness of Sealing of Resorts in Elephant Corridor, Tamil Nadu

A Full Bench headed by the Chief Justice of India, in the matter of Hospitality Association of Mudumalai V. In Defence of Environment and Animals...

Madhya Pradesh High Court Rules That Export Ban on N95 Masks & PPE Kits Does Not Violate Fundamental Right of Traders

The Madhya Pradesh High Court held that the formulation and regulation of trade policies were within the subjects of the Central Government. Any reasonable...

Delhi High Court Issues Notice To Two Pleas Filed Praying for Recognition of Same-Sex Marriage

The Court heard two writ petitions which urged that the Special Marriage Act and the Foreign Marriage Act be interpreted to also apply to...

Supreme Court Allows Appeal Challenging Allahabad High Court Order Granting Interim Bail on Medical Grounds

An appeal was filed before the Supreme Court, challenging the Judgment & Order of the Allahabad High Court in the matter of State of U.P...

Bombay High Court Allows Petition Seeking Lawyers and Legal Clerks To Travel in Local Trains

The present hearing arose out of a batch of Public Interest Litigations that was filed in the Bombay High Court to permit the members...

Provisions for Retirement of Teachers Must Be Read With the Larger Interest of Students in Mind: Supreme Court

Supreme Court in Navin Chandra Dhoundiyal v State of Uttarakhand reinstated the appellants to their position as Professor on basis of re-employment till the...

Parties Cannot Deny Specific Performance Merely Due To Delay: Supreme Court

The Supreme Court, in Ferrodous Estate v P Gopirathnam, revisited the law on the specific performance of a contract. It reiterated that mere delay...

More Articles Like This

- Advertisement -