Reasonableness of trade restrictions and promissory estoppel defeated a total ban on teak wood exports.
A total ban on export of teak wood in sawn sizes was found to fail the test of reasonableness under Article 19(1)(g) read with Article 19(6) because the record disclosed no relevant material or intelligible criteria to justify the restriction, and the classification and date-based distinctions were held discriminatory and disproportionate. The Court also accepted promissory estoppel, noting that exporters had acted on an earlier policy permitting such exports by entering firm contracts and receiving advance payments, so separate proof of detriment was unnecessary once their position had altered in reliance on the representation. The restriction was struck down and export licences were directed for qualifying pre-ban contracts.
Issues: (i) Whether the impugned amendment and public notice imposing a total ban on export of teak wood in sawn sizes were arbitrary, discriminatory and unconstitutional for want of relevant material and intelligible criteria. (ii) Whether the petitioners were entitled to relief on the basis of promissory estoppel and pre-ban commitments.
Issue (i): Whether the impugned amendment and public notice imposing a total ban on export of teak wood in sawn sizes were arbitrary, discriminatory and unconstitutional for want of relevant material and intelligible criteria.
Analysis: The restriction had to satisfy the test of reasonableness under Article 19(1)(g) read with Article 19(6), and any total prohibition required strong justification on disclosed material. The record showed no relevant data to support the asserted objectives of national economy, conservation, domestic demand, or industrial demand. The State failed to place the material before the Court despite opportunity, warranting an adverse presumption. The fixation of dates in the public notice was found to have no intelligible basis, and the classification adopted between teak and other timber species was held to be discriminatory and disproportionate.
Conclusion: The impugned ban and the connected public notice were held invalid, unconstitutional, arbitrary and discriminatory.
Issue (ii): Whether the petitioners were entitled to relief on the basis of promissory estoppel and pre-ban commitments.
Analysis: The export policy had earlier permitted teak exports in sawn sizes, and the petitioners had acted on that representation by entering into firm contracts and receiving advance payments. The change in policy, in the circumstances, attracted promissory estoppel. The Court held that it was not necessary to prove separate detriment once position had been altered in reliance on the promise.
Conclusion: The petitioners were entitled to invoke promissory estoppel and to have their pre-ban commitments honoured.
Final Conclusion: The impugned restriction on export of teak wood in sawn sizes was struck down, and the respondents were directed to grant export licences to the petitioners for qualifying pre-ban contracts supported by advance payment.
Ratio Decidendi: A total prohibition on trade must rest on relevant material and intelligible criteria, and where a citizen alters position in reliance on an announced policy, the State may be bound by promissory estoppel.
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AI Drafter ✕
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