THE STATE OF WEST BENGAL AND ORS. versus M/S VEEJAY INTERNATIONAL (INDIA) AND ORS.

Citation: [2007] 2 S.C.R. 1007 · Decided: 20-02-2007 · Supreme Court of India · Bench: ARIJIT PASAYAT · Disposal: Appeal(s) allowed
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Judgment (excerpt)

-.A 
THE STATE OF WEST BENGAL AND ORS. 
A 
v. 
MIS VEEJAY INTERNATIONAL (INDIA) AND ORS. 
FEBRUARY 20, 2007 
[DR. ARIJIT PASAYAT AND S.H. KAPADIA, JJ.] 
B 
West Bengal Rice and Paddy Control Order, 1997-Clauses 9 & 10-
Regulations regarding stora[jf! of rice and paddy for export and export there 
of-Clauses held to be contrary to Foreign Trade Development and Regulation 
Act by High Court-On appeal, held: Clauses relate to only certain restrictions C 
on some parts of export activities-They are regulatory in nature without 
affecting the policy flowing from the Trade Act-Foreign Trade Development 
and Regulation Act, 1992-Section 5-Essential Commodities Act, 1995-
Section 3. 
State Government, by a Notification issued West Bengal Rice and Paddy 
Control Order, 1997 (Control Order) in exercise of Power available under 
Essential Commodities Act, 1955. Clauses 9 and IO thereof were challenged 
in Writ Petition. High Court held that the clauses were contrary to the policy 
declared under the Foreign Trade Development and Regulation Act, 1992 
D 
(Foreign Trade Act). Hence the present appeal. 
E 
Allowing the appeal, the Court 
HELD: I. Section 5 of the Foreign Trade Act authorizes the Central 
Government to formulate and announce, by notification in the Official Gazette, 
the export and import policy as also to amend the same in like manner. If the F 
clauses 9 and IO of the Control Order and Section 5 of the policy of the 
Foreign Trade Act are harmonized, that rules out any conflict. [Para Pl 
[I012-G] 
2. The Control Order was passed in exercise of power available under 
Essential Commodities Act, 1955 "Export" under the Foreign Trades Act G 
involves several activities. It includes transport, international contract between 
parties, interstate movement and delivery to the buyer outside the country. 
The impugned clauses of the Control Order relate to certain restrictions on 
some parts of the activities. By no stretch of imagination they can be 
considered to be opposed to the policy of export. The clauses are regulatory 
1007 
H 
1008 
SUPREME COURT REPORTS 
[2007) 2 S.C.R. 
A in nature and character without in any manner affecting the policy flowing 
from Section S of the Foreign Trade Act. It is not that any unbridled and/or 
,.\ -
arbitrary power was given to the authorities as held by the High Court. In 
fact, the pa.rameters of exercise of power are inbuilt in Clause 10. Reasons 
were required to be recorded. This was to be done objectively and not 
subjectively as appears to have been concluded by the High Court. Looked at 
B from any angle, the High Court's judgment is indefensible. (Para 14) 
[1013-B-DI 
K. Ramanathan v. State of Tamil Nadu and Anr., [1985) 2 SCC 116, 
referred to. 
C 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 5048 of2000. 
From Judgment and final Order dated 28.4.1999 of the High Court of 
Calcutta at Calcutta in M.A.T. No. 2689/1998. 
Altaf Ahmad, Neelam Sharma and Tara Chandra Sharma for the 
D Appellants. 
Sarla Chandra for the Respondents. 
The Judgment of the Court was delivered by 
E 
DR. ARIJIT PASAYAT, J. I. Challenge in this appeal is to the judgment 
rendered by a Division Bench of the Calcutta High Court holding that clauses 
9 and 10 of the Notification No.4784-F.S./FS/Sectt/Food/148-1/97, dated 
19.12.1997 issued in exercise of the powers conferred by Section 3 of the 
Essential Commodities Act, 1955 (in short the 'Act') read with Government 
of India, Ministry of Agriculture and Irrigation (Department of Food) Order 
F No. G.S.R. 800 dated 8th June, 1978 was contrary to the policy declared under 
the Foreign Trade Development and Regulation Act, 1992 (in short 'Foreign 
Trade Act'). Accordingly, it was held as follows: 
"In view of our findings aforementioned it must be held that the order 
does not conform to the policy laid down by the Central Government 
G 
in exercise of its power conferred upon it under Section 5 of the 1992 
Act inasmuch as in terms thereof, the Central Government could not 
even itself interfere with the proclaimed policy relating to import and 
export adopted by it in terms of Section 5 of the 1992 Act." 
2. By the abovesaid notification order in question was made which was 
H called West Bengal Rice and Paddy Control Order, 1997 (for short 'the Control 
TilESTATEOFWESTBENGAL v. VEEJA YINTERNA TIONAL(INDIA)[PASA YAT,J.] j 009 
Order'). 
A 
3. Background facts in a nutshell are as follows: 
4. The notification in question was issued purportedly wi
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