Mahadev Marmo versus Union of India

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CIVIL WRIT No. 5078 of 2008


MAHADEV MARMO PVT. LTD.
V/S
UNION OF INDIA & ORS.


Mr. DINESH MEHTA, for the appellant / petitioner


Mr. VINEET KUMAR MATHUR], for the respondent UOI
Mr. RAVI BHANSALI ]
Mr. RISHABH SANCHETI] ]
Mr. P.S.BHATI ]
Mr. AJEET KUMAR SHARMA ] for applicants


Date of Order : 15.9.2008


HON'BLE SHRI N P GUPTA,J.
HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J.


ORDER


By this petition, the petitioner seeks to have
declared illegal, arbitrary and unconstitutional, the
following words in Policy Circular No.13(RE-2008) dt.
30.6.2008 produced with the writ petition as Annexure-4
“units who have been granted marble block import licence
under previous licensing years or are eligible to avail
license in the current licensing year (2008-09) under SIL
category”. Other relief as claimed is, that the petitioner
may be declared entitled to avail import license under
Annexure-4.


Necessary facts are, that according to the
petitioner, in exercise of powers conferred by section 5 of



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concerned Ministry published Foreign Trade Policy 20042009,
incorporating the provisions, relating to export and
import of goods and service. Then, the Director General of
Foreign Trade, New Delhi has issued annual supplement for
the year 2007-08 and 2008-09, and the said Director General
issued a Policy Circular No.1 (RE-2007) dt. 26.7.2007,
issuing guidelines for import of rough marble blocks/slabs
for the year 2007-08, laying down the entitlement or quota
of import of rough marble blocks, subject to ceiling
provided therein, however, out of the said quota,
individual importers were allocated their share of total
quantity of import. Accordingly, the petitioner has been
availing the quota. This licence was issued to the
petitioner for import, under Special Import Licences (SIL).
It is alleged, that till the year 2007-08, the import
licences have been issued, only under SIL, and there was no
policy for entrepreneurs, other than those availing licence
under SIL.


It is then alleged, that for the year 2008-09, the
Director General issued Policy Circular No.12 dt.
27.6.2008, laying down guidelines for import of rough
marble blocks for the year 2008-09, and the upper ceiling
of the total import was fixed at 1.40 lacks metric ton.
This Circular has been produced as Annexure-3. Then, the
said Director also issued a Policy Circular No.13 dt.



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according to which, units, who have been granted import
licences under SIL, or who are eligible for avail licences,
in the current year, under the SIL, have been excluded. It
is also alleged, that quantity of licence or entitlement of
licence thereunder, is in accordance with gang saw machines
installed in the premises. This Circular No.13 has been
produced as Annexure-4.


The precise challenge, for the above relief, is on
the ground, that according to Annexure-4, the eligibility
is based on the criteria being, units, who have installed
marble gang saw machine, and the units should have been in
operation since prior to 31.3.2001, and from out of this
category, 100% EOU's, units in SEZ, and units who have been
granted marble block import licence under previous
licensing years, or are eligible to avail licence in the
current licensing year (2008-09), under SIL category, has
been excluded. Then, it has also been provided, that all
eligible units as above, should have indigenous sales turn
over of marble slabs/tiles of Rs.1.00 crore and above in
each of three financial years 2004-05, 2005-06, 2007-08
(2006-07). According to the petitioner, exclusion of those
units, who have been granted licence under SIL, or who are
eligible to avail licence in the current licensing year
under SIL, is highly arbitrary and contrary to Foreign
Trade Policy, unjust and unwarranted, particularly in wake



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entitlement for import licence is 3000 metric ton marble
blocks/slabs for the first gang saw machine, and 1500


metric ton for additional gang saw machine. It is
contended, that once the Central Government decides to
permit import of such a huge quantity, based on

manufacturing capacity, exclusion of the units obtaining
import licence under SIL, is highly arbitrary and illegal.
It is also contended, that the Government could and should
have provided an option, to be exercised by an individual
entrepreneur, either to apply and avail licence under
Annexure-3, or Annexure-4. It is next contended, that
Annexure-4 has been issued to give benefit to the
particular sect of entrepreneurs, excluding the existing
licence holders, under SIL category.


Reply has been filed on behalf of the respondents,
contending inter alia, that Annexure-4 was issued,
especially to redress the grievance of the entrepreneurs,
who were not given the import licence under SIL Scheme, and
the petitioner, who was, and is enjoying the benefits under
SIL Scheme, cannot question, when the benefit is extended
to those entrepreneurs, who were not enjoying the benefit
under the SIL Scheme. It is also contended, that by
Annexure-4, Government has broad based licensing, by
including units, which were earlier not covered under the
SIL Category. The policy has been devised in consultation



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of the industries. It is contended, that if the option
suggested by the petitioner is provided, very purpose of
broad basing the eligible entities would be defeated. It is
also contended that on the same consideration, 100% EOU
units, and units in SEZ, have been excluded. It is denied
that there is vast difference between the maximum quantity
of import, given under the import licence to the
petitioner, and the quantity to which the entrepreneur may
be entitled, under Annexure-4, rather the quantity 3000
metric ton is upper most ceiling, which can be allowed to
importers. Thus, the apprehension of the petitioner is
unfounded.


Rejoinder has been filed by the petitioner,
reiterating the averments of the writ petition. However,
additional pleadings taken therein are, that the
eligibility criteria of quota, to which each unit is
entitled, are different under Annexures-3 and 4, inasmuch
as under Annexure-3, the unit is entitled on the basis of
eligible turnover of the previous year, whereas under
Annexure-4, entitlement is according to the turnover and
number of gang saw machines, installed in the unit before
2001.


During the pendency of this petition, certain
applications have been filed by individual entrepreneurs,



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grant of licence under Annexure-4, so also by some of the
persons, who have been granted some licences, seeking their
impleadment as party respondent of the writ petition.
Replies to those applications have been filed, and before
proceeding with the arguments on the main writ petition, we
have heard learned counsel for the applicants, and in view
of the averments contained at page 50 of the paper book,
being internal page 5 of the rejoinder, the applications
are allowed, and all the applicants are impleaded as party
respondents.


Thereafter, we have heard learned counsels on the
merits of the matter.


At the outset, it may be observed that by
Annexure-4, the persons like petitioner, who have been
enjoying, and are availing, import licences under the SIL,
have not been, altogether excluded from their entitlement
to get import licence, rather they continue to remain
entitled to avail the licence under the SIL. Therefore, it
cannot be said, that by issuing the policy scheme Annexure4,
the persons including the petitioner have been deprived
to do their business or profession, within the meaning of
Article 19(1)(g).


Coming to the aspect of the arbitrariness, as



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of the total import has been fixed at 1.40 lacks metric
ton, under Annexure-3, and identical upper limit has been
fixed separately under Annexure-4, thus they do not
overlap, in the manner, that one does not take away the
share of other. Then much of the apprehension of the
petitioner, is based on the entitlement to obtain licence
up to 3000 metric ton on one gang saw machine, and 1500
metric ton for additional gang saw machine, may be taken
up. From a combined reading of Annexures-3 and 4, it would
be clear, that the eligibility to get the licence to the
extent of quantity of marbles, to be imported under
licence, to be availed under Annexure-3, depends on the
figure to be worked out, on the basis of eligible turnover
for the year 2007-08 i.e. the turnover of eligible firms
for the year 2006-07, or the turnover of these firms for
the year 2004-05 with the cap of 10%, whichever is less.
Likewise, under Annexure-4, the eligibility of the unit for
getting import licence is to be pro rata, on the basis of
average indigenous sales turnover of marble slabs/tiles,
only in the financial years 2004-05, 2005-06 and 2006-07.
Thus, inherently and basically, the entitlement to import
licence for particular quantity of marbles under both
Annexure-3 and 4 is, relatable to the turnover of the firm
concerned. Under Annexure-3, it is relatable to eligible
turnover for the relevant years with a specified cap, while
under Annexure-4, it is relatable to average indigenous



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less, the same criterion has been applied for determining
the eligibility, viz. depending on the turnover, under
Annexure-3 and Annexure-4 respectively. Then so far as the
limit of 3000 metric ton for one marble gang saw, and 1500
metric ton for additional gang saw is concerned, it is
clear, that this is the upper most overall ceiling for each
individual applicant. Significantly, under Annexure-3, no
such overall ceiling has been prescribed. Obviously, with
the result, that a person, falling under Annexure-3, in a
given case, may even be eligible for import licence for
marble, to an extent, for beyond the one permissible under
Annexure-4.


Thus, it cannot be said, that the policy, being
Annexure-4, is either arbitrary or irrational. May be, that
in given individual case, for the individual entrepreneur,
at a given point of time, and for given reason also,
Annexure-4 may appear to be more beneficial than Annexure3,
but then, for deciding the validity of Annexure-4, that
alone cannot be considered. We have to consider the two
policies Annexure-3 and Annexure-4 on their own, and
consider the various aspects thereof, as considered above.
However with a view to satisfy our ultimate judicial
conscience, we asked the rough figures, from the
respondents about the number of persons having licenses, or
having applied under the two policy circulars, and we have



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under SIL, is around or less than 30, while the persons
applying for, or having granted licenses under Annexure-4
far exceed 100. It would suffice to observe, that the
ultimate upper limit of import under Annexure-3, as well as
Annexure-4, is 1.40 lacks metric ton. It is simply required
to be comprehended, that on the one hand, as per Annexure3,
the total quantity 1.40 lacks metric ton is available
for obtaining import licence, to the persons numbering
around 30, on the other hand, same quantity of goods is
available for obtaining import licence to persons, under
Annexure-4, far outnumber 100. This, by itself, is enough
to dispel all contentions, regarding arbitrariness,
irrationality of Annexure-4.


The writ petition thus lacks merit, and is,
therefore, dismissed summarily.


( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J.


/m.asif/