The Nagpur Bench of the Bombay High Court has issued a stay order against a government notification that prohibited the export of Non-Basmati Rice under certain conditions. With this order, the petitioners would be allowed to export 79,250 metric tonne of rice. The court’s decision came in response to petitions filed by companies belonging to the ‘Greta Group’, involved in the business of rice and related products. The petitioners challenged the notification issued by the Union of India on July 20, 2023, under the Foreign Trade (Development and Regulation) Act, 1992. The notification effectively amended the export policy and previously allowed free export of Non-Basmati Rice, to now prohibit its export under most circumstances. Key arguments presented before the court highlighted several critical points. Firstly, the petitioners contended that the sudden prohibition severely impacted their existing contracts with foreign buyers, which were based on the previous free export policy. These contracts, totaling 79,250 metric tonne of rice, were entered into prior to the notification and are crucial for the petitioners’ business commitments.

 

The petitioners argued that the government’s decision lacked due process and alleged a violation of natural justice as no prior notice or consultation with exporters was conducted. They also asserted that the retrospective application of the notification was unjust which potentially led to a major financial losses and legal disputes. The counsel of the petitioners stressed that the petitioners had a legitimate expectation, under Article 14 and Article 19(1)(g) of the Constitution of India, to honour their contractual obligations as per the existing export policy. They pointed out that similar issues had been addressed favourably in previous cases related to export policy changes.

 

The Division Bench of Justices Avinash Gharote and M S Jawalkar stated in the order, “The restriction imposed vide clause 2 of the notification dated July 20, 2023, denying the benefit of para 1.05 of the Foreign Trade Policy 2023 regarding transitional arrangement to the petitioners, is clearly not justified, in absence of any reasons in that regard, forthcoming from the respondents, specifically in view of the fact, that it is not disputed that the Foreign Trade Policy (FTP) 2023, is applicable to the petitioners.” It further said, “We therefore, hold and declare, that the impugned notification, dated July 20, 2023, insofar as it denies the benefit of the transitional arrangement as contained in para-1.05 of the FTP 2023, is bad-in-law and the benefit of this transitional arrangement would be available to the petitioners, in case the requirements, as indicated in clause (b) therein are complied by the petitioners.” Sr Adv M G Bhangde, Adv i/b Shyam Dewani, Adv S Sarda, Adv A Bangde represented petitioners. DGGI N S Deshpande, Adv S N Bhattad represented State.