Delhi HC allows Mumbai firm to export peas to Pak

Despite the ban on export of pulses, the Delhi High Court has directed the Centre to permit Mumbai-based Agri Trade India Services Pvt Ltd to export 30,000 metric tonne of chick peas to Pakistan.

The case assumes importance in view of the ban imposed by the Centre on export of pulses on July 22 to tackle the seasonal rise in prices of essential commodities.

While rejecting the Centre's plea that the ban would be effective from the date it was reported in the media on June 22, a division bench of Justices Mukul Mudgal and S Muralidhar held that such change would be given effect only when it was officially notified in accordance with the Foreign Trade (Development and Regulation) Act, 1992, on June 27 and not retrospectively.

"... there is no manner of doubt that the only acceptable mode of bringing about the change in policy is by a notification in the Official Gazette," the judges stated in the 56-page order.

The court observed that an element of public interest was also involved in getting our citizens to honour commitments in the course of international trade.

"What is at stake is not merely the money involved in the trans-border transactions, but the reputation of our traders that they will be able to deliver as assured," the court observed.

It also held that the impugned government notification of July 4 was illegal and ultra vires of the Constitution on the ground that even if the power to amend the policy existed with the Centre, it cannot restrict or prohibit the export of goods retrospectively, as it would adversely affect already accrued contractual and property rights and obligations.

Agri Trade India, a subsidiary of Singapore-based Agrocorp International Pte Ltd, had entered into a contract with the Trading Corporation of Pakistan (TCP) for supply of two consignments of 30,000 mt of chick pea at $650 an mt.

The company had furnished performance guarantee equivalent to 5 per cent of the value of the contracted quantity through a bank of Singapore and TCP had opened two irrevocable letters of credit (LCs) in favour of Agri Trade on June 24.

While the media had reported the ban on June 22, the government had issued a notification prohibiting the export of several pulses on July 27.

However, it had issued another notification on July 4 extending the ban from June 22 in view of public interest.