PARISONSAGROTECH (P) LTD. &ANR.versusUNION OF INDIA & ORS.

                     [2015] 10 S.C.R. 505


          PARISONSAGROTECH (P) LTD. &ANR.                            A
                                v.
                   UNION OF INDIA & ORS.
                (Civil Appeal No.4027 of 2009)
                      AUGUST21, 2015                                 B

           [A.K. SIKRI AND R. F. NARIMAN, JJ.]

     Foreign Trade (Development and Regulation) A<;t, 1992
- s. 5 rw s. 3 - Issuance of Notification whereby ban on
importation of palm oil through all the ports of Kera/a - Validity   C
of the Notifications - Challenge to - Held: When a particular
decision is taken in the interest of the farmers who are a
marginalized section of the society, more so for their survival,
this policy decision of the Central Government provides a            D
complete rational in support of the decision having nexus
with the objective sought to be achieved- There is intelligible
basis for issuing the impugned Notifications having rational
nexus with the objectives sought to be achieved - There is a
sufficient public good sought to be achieved by laying down          E
the exception banning the imports of crude palm oil through
ports in Kera/a - s. 3(2) gives ample power to the Government
to issue such Notifications in exceptional cases and instant
case falls within those parameters - Thus, no error in the
view taken by the High Court upholding the Notifications -           F
Constitution of India, 1950 -Article 14.

     Administrative law- Policy decision - Judicial Review-
Power of- Held: once it is found that there is sufficient material
for taking a particular policy decision, bringing it within the G
four comers of Article 14, power ofjudicial review would not
extend to determine the correctness of such a policy decision
or to indulge into the exercise of finding out whether there
could be more appropriate or better alternatives- Constitution
                              505                                  H
506         SUPREME COURT REPORTS                [2015] 10 S.C.R.

A     oflndia, 1950-Article 14.

          Dismissing the appeals, the Court

           HELD: 1.1 Since the import price of crude palm oil
      has been much less than the price of coconut oil, the
8
      perception of Coconut growers in the State of Kerala
      was that it was affecting their livelihood. It is a matter of
      record that there are approximately 35 lakhs farmers in
      the State of Kerala who sustain their livelihood on
c     Coconut crop. Therefore, it becomes their life sustaining
      crop. The Coconut crop covers more than 9 lakhs
      hectares in Kerala and contributes to nearly 35% of the
      agricultural income of the State which is a sufficient
      evidence to indicate that it is not only·main but important
o     crop of the State. The Coconut growers are
      predominantly small and marginal with the average size
      of holding being only half an acre. The significant and
      marked difference between the price ofcoconut oil a.id
      palm oil was manifest the fact that percentage difference
E     between the two stood at 109% in the year 2004, reduced
      to 50% in December, 2006, to 12% in September 2007
      and 0.6% in October 2007. The Board also observed that
      the import of palm oil in one particular year had a
      cascading downward impact on coconut oil prices in the
 F    subsequent years. It is more than abundantly clear that
      the restriction is imposed keeping in view the welfare of
      35 lakhs farmers in the State of Kerala. Matter was
      examined at the highest level. The Government had two
      alternatives before it, either to increase the custom duty
G     i.e. duty on the import of crude oil or to issue impugned
      Notification. Enhancing the import duty would have all
      India ramification, whereas the problem was Kerala
      specific. Therefore, instant step was taken. When a
H     particular decision is taken in the interest of the said
      farmers who are a marginalized section of the society,
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                  507
               INDIA&ORS.

more so for their survival, this policy decision of the A
Central Government provides a complete rational in
support of the decision having nexus with the objective
sought to be achieved. [Para 11] [519-H; 520-A-H]

     1.2 The writ court has adequate power of judicial          B
review in respect of such decisions. However, once it is
found that there is sufficient material for taking a
particular policy decision, bringing it within the four
corners of Article 14 of the Constitution, power of judicial
review would not extend to determine the correctness            C
of such a policy decision or to indulge into the exercise
of finding out whether there could be more appropriate
or better alternatives. Once the parameters of Article 14
are satisfied; there was due application of mind in arriving
at the decision which is backed by cogent material; the         D
decision is not arbitrary or irrational and; it is taken in
public interest, the Court has to respect such a decision
of the Executive as policy making is the domain of the
Executive and the decision in question has passed the
test of judicial review. [Para 12] [521-A-D]                    E
                                         •
    1.3 The respondents have been able to demonstrate
intelligible basis for issuing the impugned Notifications
having rational nexus with the objectives sought to be
achieved. [Para 20] [532-C]                                     F

     1.4 The concern is with the interpretation of s. 3(2)
of the Foreign Trade (Development and Regulation) Act,
1992. Sub-section (1) empowers the Central Government
to make provision for the development as well as G
regulation of foreign trade by facilitating imports and
increasing exports. Thus, the Government is empowered
to make provision insofar as they relate to the
development of foreign trade and it has also empowered
to regulate the foreign trade. The two key words here H
508      SUPREME COURT REPORTS               [2015] 10 S.C.R.


A are 'development' and 'regulation'. Such development
  and regulation is aimed at facilitating imports as well as
  increasing exports. [Para 24] (535-C-D]

       1.5 The submissions by the appellant ignore the
B crucial words appearing in sub-section (2) of Section 3,
  namely, provision for prohibiting, restricting or otherwise
  regulating, the import or export of goods etc. can be
  made "subject to such exceptions, if any, as may be made
  by or under the Order". These words are of wide
C amplitude giving necessary powers to make such
  exceptions as the Central Government deems fit while
  issuing the Notifications or the Order in prohibiting,
  restricting or regulating import or export of goods etc.
  In the process, it can restrict the import of particular
D goods through particular ports or disallow the import
  through specified ports. OJ course, such an action
  cannot be arbitrary or irrational and should be backed
  by sound reasons. (Para 27] [540-B-E]

 E     1.6 There is a sufficient public good sought to be
   achieved by laying down the exception banning the
   imports of crude palm oil through ports in Kerala. Sub-
   section (2) of Section 3 of the Act gives ample power to
   the Government to issue such Notifications in
 F exceptional cases and instant case falls within those
   parameters. Therefore, there is no fault with the view
   taken by the High Court upholding the Notifications.
   [Para 28] [540-F, H; 541-A-B]

G        Kalindi Woolen Mills (P) Ltd. v. Union of India
         1994 (74) ELT 827; Union of India v. Dinesh
         Engineering Corporation (2001) 8 SCC 491; Asif
         Hameed and Others. v. State of Jammu and
         Kashmir and Others 1989 Supp (2) SCC 364:
H        1989 ( 3 ) SCR 19 ; State of Orissa and Others v.
PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF           509
             INDIA&ORS.

  Gopinath Dash and Others (2005) 13 SCC 495:          A
  2005 (5) Suppl. SCR 89t; Gopal Narain v. State
  of Uttar Pradesh and another AIR 1964 SC 370:
  1964 SCR 869; Premier Tyres Umited v. Kera/a
  State Road Transport COrporation 1993 Supp. 2
  SCC 146; R.K. Galfl v. Union of India (1981) 4       B
  sec 675: 1982 (1) SCR 947; Balco Employees'
  Union (Regd.) v. Union of India and Others (2002)
  2 sec 333: 2001 ( 5) Suppl. SCR 511; Abdul
  AzizAminudin v. State of Maharashtra (1964) 1
  SCR 830; Union of India v. Asian Food Industries     c
  (2006) 13 sec 542: 2008 (8 > suppl. scR 485;
  Bhatnagars & CO. Ltd. v. Union of India 1957 SCR
  701 -referrecllo.

               Case Law Reference                      D

1994 (74) ELT 827           referred to.    Para 10

(2001 >s sec 491            referred to.    Para 12

1989 (3) SCR 19             referred to.    Para 13    E

2005 (5) Suppl. SCR 699     referred to.    Para 14

1964 SCR 869                referred to.    Para 15
                                                       F
1993 supp. 2sec146          referred to.    Para 16

1982 (1) SCR 947            referred to.    Para 17

2001 (5) Suppl. SCR 511     referred to.    Para 18
                                                       G
(1964) 1SCR830              referred to.    Para 23

2006 (8 ) Suppl. SCR   as referred to.      Para 26

1957 SCR 701 .              referred to.    Para26
                                                       H
510         SUPREME COURT REPORTS                  [2015] 10 S.C.R.


A        CIVIL APPELLATE JURISDICTION: Civil Appeal No.
      4027 of 2009.

       From the Judgment and Order dated 21.10.2008 of the
   High Court of Kerala at Ernakulam in Dismissing W.A. No.
 B 642 of 2008.

                                     WITH

          C. A. NOS. 4028 and 4029 OF 2009.

 C        Shekhar Naphade, Harish Beeran, Mushtaq Salim, R.S.
      Jena, Siddhartha Jha, V. K. Monga for the Appellants.

          Jaideep Gupta, A. K. Panda, G. Prakash, Jishme M.L.,
      Ramesh Babu M.R., Ritesh Kumar, Sunita Rani Singh, B,K,
 D    Prasad fortheRespondents.

          The Judgment of the Court was delivered by

           A.K. SIKRI, J. 1. Vide Notification No.39 (RE-2007)/2004-
      2009 dated 16.10.2007, the Central Government (respondent
 E    No.1 herein) prohibited the import of palm oil through Kochi
      port in Kerala. It was fellowed by another Notification No.63
      (RE-2007)/2004-2009 dated 24 .12 .2007 wher~by the import
      of palm oil has been prohibited through all the ports of Kerala.
 F    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
 G    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
 H    Division Bench of Kera la High Court, but ·unsuccessfully, as
   PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                          511
            INDIA & ORS. [AK. SIKRI, J.]

 these appeals have also been dismissed.                                 A

      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             B
 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                  c
  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,            o
  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                E
  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,       F
  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- G
 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 H
512        SUPREME COURT REPORTS                   (2015] 10 S.C.R.


A 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".
 B
          4. Again, as already pointed out above, these
      Notifications were challenged on two grounds, viz.:

        (i} The Notifications are issued purportedly in exercise of
 c           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 viras the provisions of Section 3(5} of the Act;

        (ii} Imposition of selective restriction and confining the
 D
             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
 E           rational objective which is sought to be achieved with
          - such Notifications and, therefore, they offends the
             equality clause enshrined in Article 14 of the
             Constitution.

 F       5. Both these arguments have been repelled by the High
   Court which has found not only complete justification and
   rational in issuing such Notifications, it has also held that power
   for issuing such a Notification can be traced to the provisions
   of Section 3 oftheAct. Before us, the appellants have raised
 G the same arguments and in the process also, submitted that
   the High Court has not considered the aforesaid twin
   submissions of the appellants in proper perspective, and, on
   the contrary, rejected the same in perfunctory manner without
   dealing with these contentions in the manner they were placed
 H before the High Court. Before we record the arguments of Mr.
   PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                 513
            INDIA & ORS. [A.K. SIKRI, J.]

Naphade, learned Senior Counsel who appeared for the A
appellants (counsel appearing in other appeals adopted his
arguments) in detail, it may be advisable to state the reasons
which were given by the respondents in their counter affidavits
in support of these Notifications. We would, however, like to
record that in the impugned judgment the discussion on this B
aspect is contained in detail as well.

       6. State of Kerala is the largest producer of Coconut which
 is the raw material for the production of coconut oil. Coconut
 oil and palm oil are competing products. For production of C
 palm oil, crude palm oil is the raw material which is largely
 imported. Since the import price of crude palm oil is much
 less than the price of coconut oil, the price of coconut oil is
 higherthan that of the palm oil because of the aforesaid reason.
 It was adversely affecting the farmers in the State of Kerala D
 which led to repeated representations on their behalf to the
 Government for taking remedial measures. Having regard to
·the importance of this crop not only for the economy of the
 State but also livelihood of about 35 lakhs farmers, the State
 Government has constituted Coconut Development Board E
 (hereinafter referred to as the 'Board') which takes care of the
 interests of the farmers growing Coconut crop and also takes
 initiatives and steps for the development of this crop.

      7. The significant and marked difference between the price F
of coconut oil and palm oil manifested the fact that percentage
difference between the two stood at 109% in the year 2004,
reduced to 50% in December, 2006, to 12% in September
2007 and 0.6% in October 2007. The Board also observed
that the import of palm oil in one particular year had a cascading G
downward impact on coconut oil prices in the subsequent
years. For example, the huge import of 1,53,513 tonnes of
palm oil in 2004-05 had led to a price decline in coconut in
2005-06 and 2006-07. While the average price of coconut oil H
is Rs.6, 155/- per quintal in 2004-05, in 2005-06, it declined
514         SUPREME COURT REPORTS                   [2015] 10 S.C.R.


A     sharply to Rs.4,978/- per quintal with further fall in 2006-07
      when the price was Rs.4,459/- per quintal. This raised concern
      with the policy makers to protect the interest of huge number
      of small time farmers in the State of Kerala. Such concerns
      were raised by the Board as well as Union of Coconut Farmers
B     with the concerned authorities including Chief Minister, who in
      turn, took up the matter with the Central Government at the
      highest level. The narratives in this regard are stated in the
      impugned judgment of the High Court itself and the discussion
      goes, somewhat, in the following manner:
c
               A letter dated 15.08.2005 was written by All Kerala
      Coconut Farmers' Union to increase minimum support price
      of copra and to restrict import of coconut oil and copra. In the
      letter, it is further stated that the steep fall in the prices of
D     coconut,· copra and coconut oil is in view of indiscriminate
      import of coconut and coconut oil from foreign countries. The
      reiteration of this request is made by yet another letter dated
      15.12.2005. Sequel to these two letters, Ministry of Agriculture
      has written a letter dated 03.02.2006 to Joint Director of
E     General Foreign Trade (JDGFT) enclosing a copy of the letter
      from All Kerala Coconut Farmers Union, Thrissurto increase
      minimum support price of coconut oil and to cut import of
      coconut and coconut oil into the country and in that letter a
F     requestismadetoJDGFTtooffertheircomments, if any. The
      Chairperson of the Board by her letter dated 06.12.2006
      addressed to Director General of Foreign Trade (DGFT) seeks
      restrictions/prohibition on the import of coconut oil and coconut
      oil cake and the reas<?n being slump in the prices of coconut
G     and c·oconut oil in the country and in particular, States like
      Kerala. This correspondence was forwarded by DGFT Office
      to Ministry of Agriculture. The Chief Minister of Kerala by his
      letter dated 19.04.2007 to the Hon'ble Prime Minister has
      brought to his notice the plight of coconut farmers in the State,
H     in view of steep decrease in the price of coconut, copra and
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION-OF                    515
           INDIA & ORS. [A.K. SIKRI, J.]

coconut oil and, therefore, a request was made to reverse the        A
decision to cut import duties of palm oil. This was followed by
another letter by Hon'ble Commerce Minister to Commerce
Secretary requesting the action on the letter of the Board dated
06.12.2006. Then, the another crucial letter dated 08.05.2007,
wherein the Deputy Secretary, Ministry of Commerce                   B
forwarded a report of the Centre for Development Studies on
import of palm oil on the coconut economy in Kerala to DGFT
for its views on the detrimental effect of import of palm oil on
coconut prices.~ In the report, the Centre for Development
Studies on imports of palm oil on the coconut economy in             C
Kerala, in clear and unequivocal terms have stated, "some of
the recent years that have witnessed large imports of palm oil
have also reported high prices. The influence of palm oil
imports on domestic coconut oil prices also works out in an          D
indirect manner. The international prices of coconut oil move
together with price of palm oil. Even though coconut oil and
palm kernel oil are not perfect or close substitutes, many
consumers tend to substitute these oils in their use as edible
oils. As such the possibility of palm oil imports having a           E
dampening effect on coconut oil prices cannot be ruled out".
This is the report of the independent agency set up to make a
detailed study on the effect of import of palm oil on the coconut
economy in the State. They have given a gloomy picture of the
whole scenario in regard to the importation of pa Im oil into the    F
State and what would be its impact on the coconut oil industry
in the State. The report contains the facts and figures for a few
previous years and how the large importation of palm oil has
cascading effect not only on the prices of coconut and also on
the prices of coconut oil. On 05.06.2007, the Chairperson of         G
the Board while bringing to the notice of the Ministry of
Agriculture the need for imposing total ban on import of palm
oil through the ports of Southern States, has indicated certain
details with regard to the price effect of import of palm oil into
the State of Kerala on the coconut oil industry in the State.        H
516       - SUPREME COURT REPORTS                    [2015] 10S.C.R.


A           8. This prompted Ministry of Agriculture to write a letter to
      the Prime Minister's Office wherein reference was made to
      the communications received from Chief Minister of Kerala
      and the Chairperson/Board mentioning about the declining
      wholesale price of coconut oil on the one hand and increase
B     in wholesale price of edible oil, on the other hand, which are
      causing hardship to the coconut farmers. In this letter, it was
      also stated, "that considering the increased trend of edible oil
      prices as a whole, their department had supported a recent
      proposal of Ministry of Finance for reduction-Of duties on crude
C     palm oil and reiterated the suggestion not to allow import of
      palm oil through Southern Ports as suggested by Chairperson
      of the Board". They sum it by suggesting that the import of
      palm oil to Southern Ports particularly through Cochin, Tuticorin,
      Mangalore c;ind Chennai should be disallowed with immediate
 0
      effect and also the import duty of crude palm oil should not be
      reduced further, since it may have adverse impact on the
      livelihood of oil seed growers, particularly the coconut farmers
      of Kera la as pointed out by the Chief Minister of Kerala. This
E     was followed by the letter dated 03.09.2007 by the Director of
      Statistics to the Director General 9f DGCI and seeking import
      data of palm oil for last three years in the case of Cochin,
      Tuticorin, Mangalore and Chennai. This was followed by the
      fax message requesting the Chairperson to clarify on certain
 F    issues narrated in her letter dated 05.06.2007.

       9. It is on the basis of the aforesaid material produced
  before the Central Government which ultimately led to issuance
  of impugned Notifications. Existence of the aforesaid material,
G which is based on the record that was even produced before
  the High Court as well, is not in dispute. In nutsheil, the High
  Court considered the following material produced before it by
  the respondents including Union of India:

         (a) Correspondence by the representatives of the coconut
H
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                517
          - INDIA&ORS. [AK. SIKRI, J.]

         farmers with various Ministries including theHon'ble A
         Prime Minister.

  (b) Letter dated 06.12.2006 by the Chairperson of Coconut
      Development Board addressed to Director General of
      Foreign Trade (DGFT).                                 B
  (c) Letter dated 19.04.2007 by the Hon'ble Chief Minister
      addressed to the Hon'ble Prime Minister.

  (d) Letter by Hon'ble Commerce Minister to Commerce
      Secretary.                                               c
  (e) Letter dated 08.05.2007 by Deputy Secretary, Ministry
      of Commerce.

  (f)    Report of Centre for Development Studies on import D
         of palm oil on the coconut economy in Kerala:

     The report in clear and unequivocal terms has stated,
"Some of the recent years that have witnessed large imports
of palm oil have also reported high prices. The influence of E
palm oil imports on domestic coconut oil prices also works
out in an indirect manner. The international prices of coconut
oil move together with the price of palm oil. Even though
coconut oil and palm kernel oil are not perfect or close
substitutes, many consumers tend to substitute these oils in F
their use as edible oils. As such the possibility of palm oil
imports having a dampening effect cm coconut oil prices cannot
be ruled out."

     On analysing the report, the High Court has made the G
following remarks:

        "This is the report of the independent agency set up to
        make a detailed study on the effect of import of palm oil
        on the coconut economy in the State.They have given a H
        gloomy picture of the whole scenario in regard to the
518         SUPREME COURT REPORTS                   [2015] 10 S.C.R.


A          importation of palm oil into the State and what would be
           its impact on the coconut oil industry in the State. The
           report contains the facts and figures for a few previous
           years and how the large importation of palm oil has
           cascading effect not only on the prices of coconut and
B          also the prices of coconut oil."

         (g) Letter dated 05.06.2007 by the Chairperson of Coconut
             Development Board to Ministry of Agriculture on the
             basis of which the High Court recorded the following
C            findings:

           "If we go by the tenor of the letter of the Hon'ble Chief
           Minister and the letter of Chairperson of Coconut
           Development Board, they are only referring to the plight
 D·        of the coconut farmers in the State, in view of large scale
           importation of palm oil which is being used as a substitute
           to the coconut oil by the poor and middle class families
           in the State as an alternate for their day to day need of
           edible oil and this was precise reason for the Central
 E         Government to issue the impugned notification in the
           public interest and in particular to protect the interest of
           the coconut farmers in the State."

           (h) Letter of the Ministry of Agriculture to Prime Minister's
 F    Office.

        10. Mr. Naphade, however, argued thatthis material does
   not provide any rationale for curbing the import through the
   ports in Kerala. His submission was that by imposing ban on
 G importation of palm oil through the ports of Kerala alone, no
   such purpose, as manifested, was going to be achieved. He
   further submitted that such a ban on importation of palm oil
   through the ports of Kerala would bring no sucaour to the
   coconut oil prices. In support of this submission, he referred
 H to the pleadings in para 6 of the writ petition tabulating the
     PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                   519
              INDIA & ORS. [AK. SIKRI, J.j

prices of coconut oil and palm oil respectively from time to           A
time with endeavour to point out that there is nothing common
as far as prices of the two products are concerned. He further
submitted that in the counter affidavit filed by the Union of India,
the figures shown in para 6 of the writ petition were not
countered by the said respondents. Thus, he argued that there          B
was no rational nexus between the two and no intelligible
differentia could be deciphered between the two thereby
rendering the decision arbitrary and bringing the decision within
the mischief of Article 14. He submitted that the appellants in
support of this argument of discrimination, referred to the            C
judgment of Calcutta High Court in Kalindi Woolen Mills (P)
Ltd. v. Union of lndia 1 but the High Court rejected it without
suitably dealing with the same. He also submitted that the
interest of the consumers was equally important and if the             D
prices of the palm oil are increased upwardly because of
increase in transportation cost etc., consumers would also be
adversely effected and, therefore, the decision was not in public
interest.

      11. Having regard to the material that is produced and E
taken note of by us in extenso, which led to the issuance of the
impugned Notifications, we are unable to countenance the
submissions made by Mr. Naphade. It is well known that State
of Kera la is the largest producer of Coconut and, in turn, there F
is substantial production of coconut oil as well. It is also a
matter of common knowledge that coconut oil as well as palm
oil are used for cooking and other common purposes. In that
sense, coconut oil and palm oil are competing products.
Whereas coconut oil produced from indigenous raw material G
and for the production of palm oil in India, the raw material i.e.
crude palm oil is largely imported. Since the import price of
crude palm oil has been much less than the price of coconut
oil, the perception of Coconut growers in the State of Kerala
1
    1994 (74) ELT 827                                                  H
520        SUPREME COURT REPORTS                  [2015] 105.C.R.


A was that it was affecting their livelihood. It is a matter of record
  that there are approximately 35 lakhs farmers in the State of
  Kera la who sustain their livelihood on Coconut crop. Therefore,
  it becomes their life sustaining crop. The Coconut crop covers
  more than 9 lakhs hectares in Kerala and contributes to nearly
B 35% of the agricultural income of the State which is a sufficient
  evidence to indicate that it is not only main but important crop
  of the State. The Coconut growers are predominantly small
  and marginal with the average size of holding being only half
  an acre. As already pointed out above, the significant and
C marked difference between the price of coconut oil and pahn
  oil was manifest the fact that percentage difference between
  the two stood at 109% in the year 2004, reduced to 50% in
  December, 2006, to 12% in September 2007 and 0.6% in
  October 2007. The Board also observed that the import of
0
  palm oil in one particular year had a cascading downward
  impact on coconut oil prices in the subsequent years. For
  example, the huge import of 1,53,513 tonnes of palm oil in
  2004-05 had led to a price decline in coconut in 2005-06 and
E 2006-0.7. While the average price of coconut oil is Rs.6, 155/
  - per quintal in 2004-05, in 2005-06, it declined .sharply to
  Rs.4,978/- perquintal with further fall in 2006-07 when the price
  was Rs.4,459/- per quintal. It is more than abundantly clear
  that the restriction is imposed keeping in view the welfare of
F 35 lakhs farmers in the State of Kerala. Matter was examined
  at the highest level. The Government had two alternatives
  before it, either to increase the custom duty i.e. duty on the
  import of crude oil or to issue impugned Notification.
  Enhancing the import duty would have all India ramification,
G whereas the problem was Kerala specific. Therefore, instant
  step was taken. When a particular decision is taken in the
  interest of the said farmers which are marginalized section of
  the society, more so for their survival, this policy decision of
  the Central Government provides a complete rational in support
H of the decision having nexus with the objective sought to be
   PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                 521
            INDIA & ORS. [AK. SIKRI, J.)

achieved.                                                         A

     12. No doubt, the writ court has adequate power of judicial
review in respect of such decision~. However, once it is found
that there is sufficient material for taking a particular policy
decision, bringing it within the four corners of Article 14 of the B
Constitution, power of judicial review would not extend to
determine the correctness of such a policy decision or to
indulge into the exercise of finding out whether there could be
more appropriate or better alternatives. Once we find that
parameters of Article 14 are satisfied; there was due C
application of mind in arriving at the decision which is backed
by cogent material; the decision is not arbitrary or irrational
and; it is taken in public interest, the Court has to respect such
a decision of the Executive as the policy making is the domain
of the Executive and the decision in question has passed the D
test of the judicial review. In Union of India v. Dinesh
Engineering Corporation 2 , this co·urt delineated the
aforesaid principle of judicial review in the following manner:

       "there is no doubt that this Court has held in more than E
       one case that where the decision of the authority is in
       regard to the policy matter, this Court will not ordinarily
       interfere since these policy matters are taken based on
       expert knowledge of the persons concerned and courts
       are normally not equipped to question the correctness F
       of a policy decision. But then this does not mean that
       the courts have to abdicate their right to scrutinise whether
       the policy in question is formulated keeping in mind all
       the relevant facts and the said policy can be held to be
       beyond the pale of discrimination or unreasonableness, G
       bearing in mind the material on record. Any decision be
       it a simple administrative decision or policy decision, if
       taken without considering the relevant facts, can only be
2 (2001)   a sec 491                                              H
522          SUPREME COURT REPORTS                     (2015] 10 S.C.R.


A           termed as an arbitrary decision. If it is so, then be it a
            policy decision or otherwise, it will be violative of the
            mandate of Article 14 of the Constitution."

          13. The power of the Court under writ jurisdiction has been
 B    discussed in Asif Hameed and Others. v. State of Jammu
      and Kashmir and Others3 in paras 17 and 19, which read as
      under:

            "17. Before adverting to the controversy directly involved
c           in these appeals we may have a fresh look on the inter
            se functioning of the three organs of democracy under
            our Constitution. Although the doctrine of separation of
            powers has not been recognised under the Constitution
            in its absolute rigidity but the Constitution makers have
D           meticulously defined the functions of various organs of
            the State. Legislature, executive and judiciary have to
            function within their own spheres demarcated under the
            Constitution. No organ can usurp the functions assigned
            to another. The Constitution trusts to the judgment of these
E           organs to function and exercise their discretion by strictly
            following the procedure prescribed therein. The
            functioning of democracy depends upon the strength and
            independence of each of its organs. Legislature and
            executive, the two facets of people's will has no power
 F          over sword or the purse nonetheless it has power to
            ensure that the aforesaid two main organs of State
            function within the constitutional limits. It is the sentinel of
            democracy. Judicial review is a powerful weapon to
            restrain unconstitutional exercise of power by the
G           legislature and executive. The expanding horizon of
            judicial review has taken in its fold the concept of social
            and economic justice. While exercise of powers by the
            legislature and executive is subject to judicial restraint,
      ----
H     '1989 Supp (2) sec 364
•
    PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                  523
             INDIA& ORS. [AK. SIKRI, J.]

      the only check on our own exercise of power is the self-     A
      imposed discipline of judicial restraint.

      xxx                    xxx                   xxx
      19. When a State action is challenged, the function of
                                                                   8
      the court is to examine the action in accordance with law ·
      and to determine whether the legislature or the executive
      has acted within the powers and functions assigned
      under the Constitution and if not, the court must strike
      down the action. While doing so the court must remain        c
      within its self-imposed limits. The court sits in judgment
      on the action of a coordinate branch of the government.
      While exercising power of judicial review of
      administrative action, the court is not an appellate
      authority. The Constitution does not permit the court to D
      direct or advise the executive in matters of policy or to
      sermonize qua any matter which under the Constitution
      lies within the sphere of legislature or executive, provided
      these authorities do not transgress their constitutional
      limits or statutory powers."                                 E
     14. The aforesaid doctrine of separation of power and
limited scope of judicial review in policy matters is reiterated
in State of Orissa and Others v. Gopinath Dash and
Others4:                                                           F

      "5. While exercising the power of judicial review of
      administrative action, the Court is not the Appellate
      Authority and the Constitution does not permit the Court
      to direct or advise the executive in the matter of policy or G
      to sermonise qua any matter which under the Constitution
      lies within the sphere of the legislature or the executive,
      provided these authorities do not transgress their
      constitutional limits or statutory power. (See AsifHameed
• (2005) 13 sec 495                                                H
                                                                   •
524          SUPREME COURT REPORTS                 [2015) 10 S.C.R.


A           v. State of J&K; 1989 Supp (2) SCC 364 and Shri
            Sitaram Sugar Co. Ltd. v. Union oflndia; (1990) 3 SCC
            223). The scope of judicial enquiry is confined to the
            question whether the decision taken by the Government
            is against any statutory provisions or its violates the
 B          fundamental rights of the citizens or is opposed to the
            provisions of the Constitution. Thus, the position is that
            even if the decision taken by the Government does not
            appear to be agreeable to the Court, it cannot interfere.

C           6. The correctness of the reasons which prompted the
            Government in decision-making taking one course of
            action instead of another is not a matter of concern in
            judicial review and the Court is not the appropriate forum
            for such investigation.
D
            7. The policy decision must be left to the Government as
            it alone can adopt which policy should be adopted after
            considering all the points from different angles. In the
            matter of policy decisions or exercise of discretion by
 E          the Government so long as the infringement of
            fundamental right is not shown the courts will have no
            occasion to interfere and the Court will not and should
            not substitute its own judgment for the judgment of the
            executive in such matters. In assessing the propriety of
 F          ::1 decision of the Government the Court cannot interfere ·
            even if a second view is possible from that of the
            Government."

       15. As far as classification based on geographical area
G is concerned i.e. held to be permissible by this Court in Gopa/
  Narain v. State of Uttar Pradesh and another", held as
  under:

        "11. Looking at the policy disclosed by Sections 7 and 8
      ---
 H    5 AIR 1964 SC 370
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                      525
           INDIA & ORS. [A.K. SIKRI, J.]

      and Section 128 of the Act and applying the liberal view         A
      a law of taxation receives in the appHcation of the doctrine
      of classification, it is not possible to say that the policy
      so disclosed infringes the rule of equality. This Court in
      more than one decision held that equality clause does
      not forbid geographical classification, provided the             B
      difference between the geographical units has a
      reasonable relation to the object sought to be achieved.
      This principle has been applied to a taxation law in
      Khandige Sham Bhat's Case, AIR 1963 SC 591. In that
      case, this Court also accepted the principle that the            C
      legislative power to classify is of wide range and flexibility
      so that it can adjust its system of taxation in all proper
      and reasonable ways. It is indicated in "Willis on
      Constitutional Law", at p. 590, that a State can make a          D
      territory within a city a unit for the purpose of taxation.
      So, the impugned section in permitting in the matter of
      taxation geographical classification, which has
      reasonable relation to the object of the sfatute, namely,
      for providing special amenities for a particular unit the        E
      peculiar circumstances whereof demand them, does not
      in any way impinge upon the equality clause."

     16. We would also like to refer to the judgment of this Court
in the case of Premier Tyres Limitedv. Kera/a State Road F
Transport Corporation6 wherein this Court held that when a
policy decision is taken in the public interest, Courts need not
tinker with the same.

     17. The locus classicus allowing freedom to the Executive
to take economic decisions is remarkably dealt with by this            G
Court in R.K. Garg v. Union of lndia7 and the following
discussion from the said judgment is again worth quoting:

• 1993 Supp. 2 sec 146
'(1981) 4 sec 675                                                      H
526   SUPREME COURT REPORTS                    [2015) 1OS.C.R.


A     "8. Another rule of equal importance is that laws relating
      to economic activities should be viewed with greater
      latitude than laws touching civil rights such as freedom
      of speech, religion etc. It has been said by no less a
      person than Holmes, J., that the legislature should be
B     allowed some play in the joints, because it has to deal
      with complex problems which do not admit of solution
      through any doctrinaire or strait-jacket formula and this
      is particularly true in case of legislation dealing with
      economic matters, where, having regard to the nature of
c     the problems required to be dealt with, greater play in
      the joints has to be allowed to the legislature. The court
      should feel more inclined to give judicial deference to
      legislative judgment in the field of economic regulation
      than in other areas where fundamental human rights are
 D
      involved. Nowhere has this admonition been more
      felicitously expressed than in Morey v. Doud, 354 US
      457: 1 L Ed 2d 1485 (1957) where Frankfurter, J., said
      in his inimitable style:
 E              In the utilities, tax and economic regulation
      cases, there are good reasons for judicial self-restraint
      if not judicial deference to legislative judgment. The
      legislature after all has the affirmative responsibility. The
      courts have only the power to destroy, not to reconstruct.
 F
      When these are added to the complexity of economic
      regulation, the uncertainty, the liability to error, the
      bewildering conflict of the experts, and the number of
      times the judges have been overruled by events - self-
G     limitation can be seen to be the path to judicial wisdom
      and institutional prestige and stability.

      The Court must always remember that "legislation is
      directed to practical problems, that the economic
      mechanism is highly sen~itive and complex, that many
 H
      problems are singular and contingent, that laws are not
PARISONSAGROTECH (I-') LTD. &ANR. v. UNION OF                  527
         INDIA & ORS. [AK. SIKRI, J.]

  abstract propositions and do not relate to abstract units        A
  and are not to be measured by abstract symmetry"; "that
  exact wisdom and nice adaption of remedy are not
  always possible" and that "judgment is largely a prophecy
  based on meagre and uninterpreted experience". Every
  legislation particularly in economic matters is essentially      B
  empiric and it is based on experimentation or what one
  may call trial and error method and therefore it cannot
  provide for all possible situations or anticipate all possible
  abuses. There may be crudities and inequities in
  complicated experimental economic legislation but on             C
  that account alone it cannot be struck down as invalid.
  The courts cannot, as pointed out by the United States
  Supreme Court in Secretary of Agriculture v. Central
  Roig Refining Company, 94 L Ed 381 : 338 US 604
                                                                   0
  (1950) be converted into tribunals for relief from such
  crudities and inequities. There may even be possibilities
  of abuse, but that too cannot of itself be a ground for
  invalidating the legislation, because it is not possible for
  any legislature to anticipate as if by some divine               E
  prescience, distortions and abuses of its legislation which
  may be made by those subject to its provisions and to
  provide against such distortions and abuses. Indeed,
  howsoever great may be the care bestowed on its
  framing, it is difficult to conceive of a legislation which is   F
  not capable of being abused by perverted human
  ingenuity. The Court must therefore adjl!dge the
  constitutionality of such legislation by the generality of its
  provisions and not by its crudities or inequities or by the
  possibilities of abuse of any of its provisions. If any          G
  crudities, inequities or possibilities of abuse come to
  light, the legislature can always step in and enact suitable
  amendatory legislation. That is the essence of pragmatic
  approach which must guide and inspire the legislature
  in dealing with complex economic issues.                         H
528   SUPREME COURT REPORTS                      [2015] 10 S.C.R.


A              xx               xx                   xx
      19. It is true that certain immunities and exemptions are
      granted to persons investing their unaccounted money
      in purchase of Special Bearer Bonds but that is an
 B    inducement which has to be offered for unearthing black
      money. Those who have successfully evaded taxation
      and concealed their income or wealth despite the
      stringent tax laws and the efforts of the tax department
      are not likely to disclose their unaccounted money without
c     some inducement by way of immunities and exemptions
      and it must necessarily be left to the legislature to decide
      what immunities and exemptions would be sufficient for
      the purpose. It would be outside the province of the Court
      to consider if any particular immunity or exemption is
D     necessary or not for the purpose of inducing disclosure
      of black money. That would depend upon diverse fiscal
      and economic considerations based on practical
      necessity and administrative expediency and would also
      involve a certain amount of experimentation on which the
 E    Court would be least fitted to pronounce. The Court would
      not have the necessary competence and expertise to
      adjudicate upon such an economic issue. The Court
      cannot possibly assess or evaluate what would be the
      impact of a particular immunity or exemption and whether
 F
      it would serve the purpose in view or not. There are so
      many imponderables that would enter into the
      determination that it would be wise for the Court not to
      hazard an opinion where even economists may differ.
G     The Court must while examining the constitutional validity
      of a legislation of this kind, "be resilient, not rigid, forward
      looking, not static, liberal, not verbal" and the Court must
      always bear in mind the constitutional proposition
      enunciated by the Supreme Court of the United States in
 H    Munn v. Illinois 94 US 13, namely, "that courts do not
PARISONSAGROTE:GH (P) LTD. &ANR. v. UNION OF                 529
         INDIA & ORS. [AK. SIKRI, J.]

  substitute their social and economic beliefs ·for the A
  judgment of legislative bodies". The Court must defer to
  legislative judgment in matters relating to social and
  economic policies and must not interfere, unless the
  exercise of legislative judgment appears to be palpably
  arbitrary. The Court should constantly remind itself of what B
  the Supreme Court of the United States said in Metropolis
   Theater Company v. City of Chicago, 57 L Ed 730 : 228
  us 61 (1912):
  The problems of government are practical ones and              C
  may justify, if they do not require, rough
  accommodations, illogical it may be, and unscientific ..
  But even such criticism should not be hastily
  expressed. What is best is not always discernible, the
  wisdom of any choice may be disputed or condemned.             D
  Mere error of government are not subject to our judicial
  review. It is true that one or the other of the immunities
  or exemptions granted under the provisions of the Act
  may be taken advantage of by resourceful persons by
  adopting ingenious methods and devices with a view             E
  to avoiding or saving tax. But that cannot be helped
  because human ingenuity is so great when it comes
  to tax avoidance that it would be almost impossible to
  frame tax legislation which cannot be abused.                  F
  Moreover, as already pointed out above, the trial and
  error method is inherent in every legislative effort to
  deal with an obstinate social or economic issue and if
  it is found that any immunity or exemption granted
  under the Act is being utilised for tax evasion or             G
  avoidance not intended by the legislature, the Act can
  always be amended and the abuse terminated. We
  a re accordingly of the view that none of the provisions
  of the Act is violative of Article 14 and its constitutional
  validity must be upheld."                                      H
530        SUPREME COURT REPORTS                    [2015) 10 S.C.R.


A         18. The aforesaid principle is echoed with equal
      emphasis in Ba/co Employees' Union (Regd.) v. Union of
      India and Others8 in the following manner:

          "46. It is evident from the above that it is neither within
 B        the domain of the courts nor the scope of the judicial
          review to embark upon an enquiry as to whether a
          particular public policy is wise or whether better public
          policy can be evolved. Nor are our courts inclined to strike
          down a policy at the behest of a petitioner merely
c         because it has been urged that a different policy would
          have been fairer or wiser or more scientific or more
          logical.

          4 7. Process of disinvestment is a policy decision involving
 D        complex economic factors. The courts have consistently
          refrained from interfering with economic decisions as it
          has been recognised that economic expediencies lack
          adjudicative disposition and unless the economic
          decision, based on economic expediencies, is
 E        demonstrated to be so violative of constitutional or legal
          limits on power or so abhorrent to reason, that the courts
          would decline to interfere. In matters relating to economic
          issues, the Government has, while taking a decision,
          right to "trial and error'' as long as both trial and error are
 F        bona fide and within limits of authority. There is no case
          made out by the petitioner that the decision to disinvest
          in BALCO is in any way capricious, arbitrary, illegal or
          uninformed. Even though the workers may have interest
          in the manner in which the Company is conducting its
G         business, inasmuch as its policy decision may have an
          impact on the workers' rights, nevertheless it is an
          incidence of service for an employee to accept a
          decision of the employer which has been honestly taken
      ----
 H • (2002) 2 sec 333
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF               531
           INDIA & ORS. [A.K. SIKRI, J.]

     and which is not contrary to law.                         A

              xx            xx           xx
     Conclusion

     92. In a democracy, it is the prerogative of each elected B
     Government to follow its own policy. Often a change in
     Government may result in the shift in focus or change in
     economic policies. Any such change may result in
     adversely affecting some vested interests. Unless any
     illegality is committed in the execution of the policy or C
     the same is contrary to law or mala fide, a decision
     bringing about change cannot per se be interfered with
     by the court.

     93. Wisdom and advisability of economic policies are D
     ordinarily not amenable to judicial review unless it can
     be demonstrated that the policy is contrary to any statutory
     provision or the Constitution. In other words, it is not for
     the courts to consider relative merits of different economic
     policies and consider whether a wiser or better one can E
     be evolved. For testing the correctness of a policy, the
     appropriate forum is Parliament and not the courts. Here
     the policy was tested and the motion defeated in the Lok
     Sabha on 1-3-2001."
                                                               F
     19. Insofar as judgment of Calcutta High Court in Kalindi
Woolen Mills (P) Ltd. (supra) is concerned, we have our
reservations on the correctness thereof wherein the High Court
found that Notification dated 28.04.1989 allowing imports of
Woolen rags, Synthetic rags, Shoddy wool through two ports G
only, namely, Bombay and Delhi ICD. In any case, insofar as
argument based on Article 14 is concerned, the said judgment
is distinguishable as in that case the Court did not find any
intelligible basis which was disclosed before the Court either H
532         SUPREME COURT REPORTS                    [2015] 10 S.C.R.


A     in the affidavits filed by the Customs Authorities or in the Import
      Licensing Control Authorities of the Government of India.
      Likewise, no rational nexus for imposing the restrictions on
      importation of the subject goods only through Delhi ICD and
      Bombay ports disclosed. In the absence of such a justification,
B     on the facts of that case, the Court found the Notification to be
      violative of Article 14 of the Constitution.

            20.ln contrast, in the present case, as already pointed out
      above, the respondents have been able to demonstrate
C     intelligible basis for issuing the impugned Notifications having
      rational nexus with the objectives sought to be achieved. We,
      thus, reject the arguments based on Article 14 of the
      Constitution.

o       21. The argument of Mr. Naphade to the effect that interests
  of consumers is equally important which is not taken into
  consideration needs an outright rejection for more than one
  reason. In the first place no such case was made out by the
  appellants either in the High Court or even in the special leave
E petition filed in this Court. This argument was raised for the
  first time during oral hearing. There is, thus, no material
  produced on record to show how the impugned Notification
  would affect the interests of the consumers. An argument of
  this nature cannot be raised in the air without having .solid
F foundation with relevant material. In any case, as we have
  found that the Notifications were issued in the interests of
  farmer class in the State of Kerala and, therefore, they are in
  public interest, this argument is of no avail.

G          22. With this, we advert to the other arguments, namely,
      whether the Notifications are ultra vires of Section 3 of the
      Act. Our discussion has to, necessarily, start by noticing the
      provision of Section 3, which reads as under:

H           "3. Powers to make provision relating to imports
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                    533
           INDIA & ORS. [AK. SIKRI, J.]

     and exports. - (1) The Central Government may, by A
     Order published in the Official Gazette, make provision
     for the development ·and regulation of foreign trade by
     facilitating imports and increasing exports.

      (2) The Central Government may also, by Order published     B
      in the Official Gazette, make provision for

     prohibiting, restricting or otherwise regulating, in all
     cases or in specified classes of cases and subject to
     such exceptions, if any, as may be made by or under the      c
     Order, the import or export of goods or services or
     technology:                         ·

      Provided that the provisions of this sub-section shall be
      applicable, in case of import or export of services or
                                                                0
     .technology, only when the service or technology provider
      is availing benefits under the foreign trade policy or is
      dealing with specified services or specified
      technologies.

      (3) All goods to which any Order under sub-section (2)      E
      applies shall be deemed to be goods the import or export
      of which has been prohibited under section 11 of the
      Customs Act, 1962 (52of1962) and all the provisions of
      that Act shall have effect accordingly.
                                                                  F
      (4) Without prejudice to anything contained in any other
      law, rule, regulation, notification or order, no permit or
      licence shall be necessary for import or export of any
      goods, nor any goods shall be prohibited for import or
      export except, as may be required under this Act, or rules G
      or orders made thereunder."

    23. Scope and ambit of the aforesaid provision was
considered in Abdul Aziz Aminudin v. State of Maharashtra9 ,
'(1964) 1 SCR 830: AIR 1963 SC 1470                               H
534      SUPREME COURT REPORTS                   [2015] 10 S.C.R.


A wherein this Court held as under:

        "11. It is clear therefore that the power conferred under
        Section 3(1) of the Act is not restricted merely to
        prohibiting or restricting imports at the point of entry but
B       extends also to controlling the subsequentdisposal of
        the goods imported. It is forthe appropriate authority and
        not for the Courts to consider the policy, which must
        depend on diverse considerations, to be adopted in
        regard to the control of import of goods. The import of
c       goods can be controlled in several ways. If it is desired
        that goods of a particular kind should not enter the country
        at all, the import of those goods can be totally prohibited.
         In case total prohibition is not desired, the goods could
        be allowed to come into the country in limited quantities.
D       That would necessitate empowering persons to import
        under licences certain fixed quantities of the goods. The
        quantity of goods to be imported will have to be
        determined on consideration of the necessity for having
        those goods in the country and that again, would depend
 E      on the use to be made of those goods. It follows therefore
        that the persons licensed to import goods up to a certain
        quantity should be amenable to the orders of the licensing
        authority with respect to the way in which those goods
        are to be utilised. If the licensing authority has no such
 F
        power, its control over the import cannot be effective. It
        may have considered it necessary to have goods
        imported for a particular purpose. If it cannot control their
        utilisation for that purpose, the imported goods, after
G       import, can be diverted to different uses, defeating
        thereby the very purpose for which the import was allowed
        and power had been conferred on the Central Government
        to control imports. It is therefore not possible to restrict
        the scope of the provision about the control of import to
H       the stage of importing of the goods at the frontiers of the
  PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                  535
           INDIA & ORS. [A.K. SIKRI, J.]

      country. Their content is much wider and extends to every A
      stage at which the Government feels it necessary to see
      that the imported goods are properly utilised for the
      purpose for which their import was considered necessary
      in the interests of the country."
                                                                  B
     24. We may also point out that proviso to sub-section (2)
as well as sub-section (4) were inserted by Act 25/2010 w.e.f.
27.08.2010. In any case, we are primarily concerned with the
interpretation of sub-sectivns (1) and (2) of Section 3 as far
as present case is concerned. Sub-section (1) empowers the C
Central Government to make provision for the development
as well as regulation of foreign trade by facilitating imports
and increasing exports. Thus, the Government is empowered
to make provision insofar as they relate to the development of
foreign trade and it has also empowered to regulate the foreign D
trade. The two key words here are 'development' and
'regulation'. It is also important to note that such development
and regulation is aimed at facilitating imports as well as
increasing exports. First argument of Mr. Naphade was that
regulatory provision has to be for facilitating imports whereas E
in the present case, it was to curb the imports insofar as ports
in Kerala are concerned. Sub-section (2) of Section 3 further
empowers the Central Government to make provision for: (i)
prohibiting; (ii) restricting; or (iii) otherwise regulating 'the F
import or export of goods or services or technology'. It can be
done in all cases or in specified classes of cases. The
submission of Mr. Naphade was that such provisions
prohibiting, restricting or otherwise regulating are to be made
in respect of import or export of goods or services or technology G
which essentially were custom based. He referred to the
definition of 'import' and 'export' contained in Section 2(e) of
the Act which, in relation to goods, means bringing into, or
taking out of, India any goods by l~nd, sea or air. He, thus,
submitted that insofar as import of goods is concerned, it only H
536         SUPREME COURT REPORTS                    [2015] 10 S.C.R.


A     meant bringing the said goods into India. That is by crossing
      the custom barrier, to bring the same in the territory of India.
      Therefore, sub-section (2) is with reference to goods and not
      with place. He also submitted that the expression 'otherwise
      regulating' referred to licence etc. by which the import could
B     be regulated and had nothing to do with the 'place'. Section 5
      which existed at the relevant time reads as under:

           "5. Export and import policy. - The Central
           Government may, from time to time formulate and
C          announce, by notification in the Official Gazette, the
           export and import policy and may also, in the like manner,
           amend that policy."

          This Section is substituted by amended Section 5 w.e.f.
o     27.08.2010 and the amended Section reads as under:

           "5. Foreign Trade Policy. - The Central Government
           may, from time to time, formulate and announce, by
           notification in the Official Gazette, the foreign trade policy
E          and may also, in like manner, amend that policy:

           Provided that the Central Government may direct that, in
           respect of the Special Economic Zones, the foreign trade
           policy shall apply to the goods, services and technology
           with such exceptions, modifications and adaptations, as
F
           may be specified by it by notification in the Official
           Gazette."

       25. Mr. Naphade submitted that proviso which is added
  in the new Section 5 for the first time relates to the place and
G since it was conspicuously absent in the old provision, it could
  clearly be inferred that Section 5 as it stood at the relevant
  time had no bearing as far as place of import and export policy
  is concerned. On that basis, he argued that Section 3 read
H with Section 5 did not give any such power to issue
  Notifications of the nature which is subject matter of these
     PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                       537
              INDIA & ORS. [AK. SIKRI, J.]

proceedings. He, thus, submitted that power could not be                A
exercised by the Central Government to ban or prohibit the
import of palm oil through the ports of State of Kerala alone
and if any ban had to be imposed which should have been
done in all the ports throughout the country. He further argued
that Calcutta High Court in the case of Kalindi Woolen Mills            B
(supra) has specifically held to be so while inculcating Sections
3 and 5 of the Act.

     26. These were countered by Mr. Panda, learned senior
counsel for the respondents by arguing that the impugned C
Notifications may be considered with reference to Section 3(2)
of the Act not in isolation, but on a harmonious construction of
the same with reference to the statement of objects and reasons
to the Act along with Sections 2(e), 3(3) and 5 of the Act along
with Sections 7 and 11 of the CustomsAct, 1962. The Foreign D
Trade Policy of 2004-2009, the relevant provisions which have
already been extracted herein before at Para 5 may also be
considered. This approach, according to him, would be in
consonance with the ratio of the judgment of this Court in Union
of India v. Asian Food lndustries 10 :                           E

        "25. Would the terms 'restriction' and 'regulation' used
        in Clause 1.5 of the Foreign Trade Policy include
        prohibition also, is one of the principal questions involved
        herein.                                                         F

        26. 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 G
        the 1992 Act.

  27. The purport and object for which the 1992Act was
  enacted was to make provision for the development and
---
10   (2006) 13 sec 542                                                  H
538    SUPREME COURT REPORTS                   [2015] 10 S.C.R.


A     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.
B
        28. Section 11 of the 1962 Act also provides for
        prohibition. When an order is issued under sub-section
        (3) of Section 3 ofthe 1992Act, the export of goods would
        be deemed to be prohibited also under Section 11 of
C     . the 1962 Act and in relation thereto the provisions thereof
        shall also apply.

      29. Indisputably, the power under Section 3 of the 1992
      Act is required to be exercised in the manner provided
o     for under Section 5 of the 1992 Act. The Central
      Government in exercise of the said power announced
      its Foreign Trade Policy for the years 2004-2009. It also
      exercised its power of amendment by issuing the
      Notification dated 27.06.2006. Export of all commodities
E     which were not earlier prohibited, therefore, was
      permissible till the said date.

      xx               xx             xx
      43. We are, however, not oblivious of the fact that in
 F
      certain circumstances regulation may amount to
      prohibition. But, ordinarily the word "regulate" would mean
      to control or to adjust by rule or to subject to governing
      principles (See U.P. Cooperative Cane Unions
G     Federations v. West U.P. Sugar Mills Association and
      Others, (2004) 5 SCC 430, whereas the word "prohibit"
      would mean to forbid by authority or command. The
      expressions "regulate" and "prohibit" inhere in them
      elements of restriction but it varies in degree. The
H     element of restriction is inherent both in regulative
     PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                     539
              INDIA & ORS. [A.K. SIKRI, J.]

            measures as well as in prohibitive or preventive            A
            measures.

            xx              xx            xx
            46. The terms, however, indisputably would be construed B
            having regard to the text and context in which they have
            been used. Section 3(2) of the 1992Act 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    c
            also the policy and the procedure laid down thereund~r.
            the terms are required to be applied in different situations
            where for different orders have to be made or different
            provisions in the same order are required therefore."
                                                                        D
     He also submitted that the above approach of this Court
for harmonious construction finds ·support from the following
ratio laid down by this Court in Bhatnagars & Co. Ltd. v.
Union oflndia 11 :

            ".......... In modern times, the export and import policy of E
            any democratic State is bound to be flexible. The needs
            of the country, the position of foreign exchange, the need
            to protect national industries and all other relevant
            considerations have to be examined by the Central F
            Government from time to time and rules in regard to export
            and import suitably adjusted. It would, therefore, be idle
            to suggest that there should be unfettered and
            unrestricted freedom of export and import or that the
            policy of the Government in regard to export and import G
       ..   should be fixed and not changed according to lhe
            requirements of the country.

                     xx            xx             xx
11
     1957 SCR 701                                                       H
540        SUPREME COURT REPORTS                   [2015) 10 S.C.R.


A         It was open to the Government, and indeed national
          interests made it their duty, to intervene and regulate the
          distribution of the commodity in a suitable manner."

        _27. According to us, we need not deal with these
 B submissions elaborately as the aforesaid contention of the
   learned senior counsel for the appellants need to be discarded
   on altogether different reason. These arguments ignore the
   crucial words appearing in sub-section (2) of Section 3, namely,
   provision for prohibiting, restricting or otherwise regulating, the
 C import or export of goods etc. can be made "subject to such
   ~xceptions, if any, as may be made by or under the Order".
   These words are of wide amplitude giving necessary powers
   to make such exceptions as the Central Government deems
   fit while issuing the Notifications or the Order in prohibiting,
 D restricting or regulating import or export of goods etc. In the
   process, it can restrict the import of particular goods through
   particular ports or disallow the import through specified ports
   (See: Asian Food Industries judgment, already extracted
   above). Of course, such .an action cannot be arbitrary or
 E irrational and should be backed sound reasons.

        28. In the present case, as already held above, there is a
   sufficient public good sought to be achieved by laying down
   the exception banning the imports of crude palm oil through
 F ports in Kerala. That, according to us, provides complete
   answer to the argument of the learned senior counsel for the
   appellants. Calcutta High Court in Kalindi Woolen Mills (P)
   Ltd. (supra) overlooked the aforesaid pertine.nt aspect which
   gives sufficient powers to the Central Government to act in the
 G menner it has acted. The argument of Mr. Naphade predicated
   on the.contrast between old and new provisions of Section 5
   of the Act, again, would be of no avail in view of our aforesaid
   discussion holding that sub-section (2) of Section 3 of the Act
 H gives ample power to the Government to issue such
   PARISONSAGROTECH (P) LTD. &ANR. v. UNION OF                     541
            INDIA & ORS. [AK. SIKRI, J.]

Notifications in exceptional cases and present case falls within A
those parameters. No other argument was addressed. We,
therefore, do not find fault with the view taken by the High Court
upholding the Notifications in question. These appeals are
accordingly dismissed.
                                                                    B
Nidhi Jain                                    Appeals dismissed.