There is no fundamental right to import anything without any restrictions

Isha Sawant | Government Law College | 2rd October 2020

Chailbihari Trading Private Limited Company v. Union of India

Facts:

The petitioner- Chailbihari Trading Private Limited Company challenged the guidelines dated 25^th June, 2019 issued by the respondent no.2- Central Bureau of Narcotics to regulate import of poppy seeds into India from Turkey. The petitioners stated that the guidelines are an unconstitutional restriction on their right to trade and carry on business. It is not disputed that the Central Bureau of Narcotics regulates poppy seed import into India. The petitioners being registered importers have the necessary license. They agree that there is a cap or quota on the poppy seed import from various points of origin, and there is a cap on the quantity imported for each foreign exporter country. Until recently, the import permissions were by sale of lots. The respondents issued a public notice on 25^th June 2019, in which guidelines for registration of sales contract regarding poppy seed imports from Turkey were laid down. Clause I provide for determining a country cap, which is to be approved by the Department of Revenue based on Narcotics Commissioner’s recommendation, a representative of Directorate General of Foreign Trade and representative of Department of Revenue. The country cap would be based on stock and production of poppy seeds as communicated by the Turkish Grain Board (TMO) or the Turkish Embassy in India, so this cap is not ad hoc or without basis. Clause II provides for the Turkish exporter to be registered with the TMO, the Indian importer has to approach the Narcotics Commissioner for registration of sales contract, conditions for which are prescribed. One condition being each importer can register the quantity applied for or 25 containers (450MT) whichever is less during a particular crop year, along with other detailed provisions for procedure, validity, surrender and penalty.

Issues:

• Whether the Government issued notification to regulate import of poppy seeds in India is unreasonable or discriminatory.
• Whether the notification violates the petitioner’s right to trade and occupation.

Legal Provisions:

• Narcotic Drugs and Psychotropic Substances Act, 1985 section-9 Power of Central Government to permit, control and regulate.
• Constitution of India, 1950 Article 19 (g) to practise any profession, or to carry on any occupation, trade or business.

Petitioner’s Contention:

The petitioner contends that the registration process will create a monopoly and the old system of drawing lots was preferable. They also stated that if the Turkish exporter is registered with the TMO, the requirement for the Indian importer to register is unreasonable and will cause duplication of work. They stated that earlier restriction was of 5 containers and by raising it to 25 the rich and powerful importers will only get the imports. They argued that the time frames are unrealistic and a form of invidious discrimination.

Respondents’ Contention:

The counsel for respondent no.1 referred to the decision of the division bench of Allahabad High Court in Ayurveda Sewashram Kalyan Samiti v. Union of India and others (2014) whereby it was noticed that India is a signatory to the Single Convention on Narcotic Drugs 1961. It was noted that though narcotic and such substances have scientific and medical uses they are also abused and trafficked, beside the constitutional mandate to the state to promote health and nutrition led to the formation of the Indian Policy to Prevent Drug Abuse. India is also a signatory to three other conventions on drug-related matters. The case was regarding import of poppy seeds and the court in that case observed three conditions governing import of poppy seeds- point of origin, importer’s certification that poppy was cultivated legally and the import contacts to be registered with Narcotics Commissioner. 

Observations of the Court:

The court did not find any merit in these contentions. It stated that there was no fundamental right to be an importer or to import poppy seeds, or to import anything without restrictions or without any restrictions only on terms beneficial to a particular person. They stated that the burden of proof is on the petitioner to show how the notification is arbitrary and discriminatory. If a classification is challenged it must be shown that it has no connection to the object of the impugned law, and the petitioner were unable to prove this.  It was clarified that the notification was made pursuant to the MoU between India and Turkey dated 23^rdMay 2018 and by a notification dated 29^th July 2016, the Government of India gave powers to the Department of Revenue to frame guidelines to give effect to the National policy on Narcotic Drugs and Psychotropic Substances controlled by the NDPS Act 1985, the MoU being sovereign cannot be challenged. The notification provides guideline to prevent cartelization, artificial blocking of country caps and artificial raising of re-sale prices. The court noted that no one complained against this notification, also one Ms. Setalvad, an importer had contested this petition. The court noted that the present petition does not question the power to frame such guidelines. The court observed that NDPS Act, chapter III, sec-9 gives Central Government power to control and regulate production, manufacture, import and export of substances including opium poppy cultivation and production all of which is regulated. Chapter III-A of the Foreign Trade (Development and Regulation) Act 1992, inserted by the 2010 amendment which gives powers to the central government to impose quantitative restrictions on import, these restrictions can continue for a maximum period of 4 years expendable by a like period. The court noted that once it is found that there is power to regulate and impose quantitative restriction and there is no challenge to the exercise of that power, nothing remains of the petition. The court criticized the petitioners for filing a petition challenging a government policy framed in a legitimate exercise of statutory power, with no data to support their allegations. The court observed that the petitioner seeks to scrap this new policy and be governed by the old policy without giving any reasons or evidence for the same. The court noted that the objections regarding the registration were not new and the petitioners themselves had followed them in the past. It noted that since the guidelines were issued in furtherance of larger interest then the commercial interest of the petitioners may suffer.

Judgement:

The court did not find merit in the petitioners’ contention and dismissed the petition.