2003 (5) TMI 480 - SC - Indian Laws

Supreme Court Upholds Policy Decision on Permit Renewal

Union Of India And Anr. Versus International Trading Co.

The Supreme Court allowed the appeals, setting aside the High Court's judgment. It held that the policy decision against the renewal of permits was ... Whether on the touchstone of reasonableness the policy decision comes out unscathed? Held that:- Reasonableness of restriction is to be determined in an objective manner and from the standpoint of interests of the general public and not from the standpoint of the interest of persons upon whom the restrictions have been imposed or upon abstract consideration. A restriction cannot be said to be unreasonable nearly because in a given case, it operates harshly. In determining whether there is any unfairness involved; the nature of the right alleged to have been infringed the underlying purpose of the restriction imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing condition at the relevant time, enter into judicial verdict. The reasonableness of the legitimate expectation has to be determined with respect to the circumstances relating to the trade or business in question. Cancalization of a particular business in favour of even a specified individual is reasonable where the interests of the country are concerned or where the business affects the economy of the country. The appellants have relied upon the change in Government policy prescribing that there shall be no grant of renewal/extension for charter/lease permits. Learned Solicitor General has stated that if respondents apply in terms of prevailing EXIM policy, as was done by the affronted 32 vessels, due consideration in accordance with law shall be made. Keeping in view the analysis made of legal positions, and in the absence of any material to discount legitimacy of policy, the respondents have not made out a case for interference. In the aforesaid background the residual plea of the respondents regarding legitimate expectation is also sans merit. The appeals deserve to be allowed. Issues Involved:1. Delay in renewal of permits.2. Legitimacy of the policy decision against renewal.3. Application of doctrines of legitimate expectation and promissory estoppel.4. Alleged discrimination in granting permits to other vessels.5. Judicial review of administrative policy decisions.Detailed Analysis:1. Delay in Renewal of Permits:The respondents applied for the renewal of permits under the Maritime Zones of India (Regulation of Fishing by Foreign Vessels) Act, 1981, and the corresponding Rules of 1982. Despite filing applications with the requisite fees, no express orders were passed, and renewal fees were returned without reasons or reference to any policy decision. The High Court directed the Union of India to dispose of the renewal applications expeditiously.2. Legitimacy of the Policy Decision Against Renewal:The High Court noted that the renewal of permits is a valuable right and can only be refused on cogent and valid grounds. It observed that the government's policy decision, which was based on the Murari Committee's recommendations, was contrary to the statute and thus required reconsideration. However, the Supreme Court emphasized that public interest outweighs private interest, and the policy decision taken by the government was legitimate and not contrary to the statute.3. Application of Doctrines of Legitimate Expectation and Promissory Estoppel:The High Court held that there was a legitimate expectation that the renewal would be granted, and the doctrine of promissory estoppel applied. However, the Supreme Court clarified that these doctrines cannot override public interest. The policy decision, being in public interest and not arbitrary, did not violate the respondents' legitimate expectations. The Court stated that legitimate expectation does not automatically confer a right and must be balanced against public policy considerations.4. Alleged Discrimination in Granting Permits to Other Vessels:The respondents argued that 32 other vessels were permitted to fish despite the policy, indicating discrimination. The Supreme Court rejected this claim, stating that even if there was improper permission granted to other vessels, it does not justify granting renewal to the respondents. The principle of 'two wrongs do not make a right' was emphasized, and the concept of equal treatment under Article 14 of the Constitution does not support repeating a wrong action.5. Judicial Review of Administrative Policy Decisions:The Supreme Court reiterated that courts should not interfere with policy decisions unless they are arbitrary or violate statutory provisions. The Court highlighted that policy decisions must be fair, reasonable, and not arbitrary. The wide discretion of the executive in policy matters should be respected unless there is clear evidence of unreasonableness or bad faith. The Court cited previous judgments to support the principle that judicial review is limited to ensuring the legality and reasonableness of administrative actions.Conclusion:The Supreme Court allowed the appeals, setting aside the High Court's judgment. It held that the policy decision against the renewal of permits was legitimate, reasonable, and in public interest. The doctrines of legitimate expectation and promissory estoppel could not override the policy decision. The claim of discrimination based on the permits granted to other vessels was not upheld, and the principle of non-arbitrariness in administrative actions was reinforced. The Court directed that if the respondents apply under the prevailing EXIM policy, their applications should be considered in accordance with the law.