Withdrawal of non-basmati rice export permission challenged; exporters permitted to ship broken rice procured and stored before policy change.

Withdrawal of permission for export of non-basmati rice altered policy protection for persons who had acted on the prior regime, and the restricted protection to three categories was held inadequate; consequence: persons outside those categories who entered contracts and procured broken rice before the policy change are entitled to protection. The abrupt policy change was regarded as arbitrary in effect on vested expectations; consequence: an interim direction was issued permitting exporters to ship broken rice procured and stored before 08.09.2022, with further proceedings listed for counter-affidavits.

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Issues:
1. Challenge to notification prohibiting export of broken rice.
2. Exemption criteria under the notification.
3. Arbitrariness of policy change affecting vested rights.
4. Discrimination in granting exemptions.
5. Impact on ongoing contracts and potential damages.
6. Legal precedents supporting protection of vested rights.
7. Necessity of interim relief for petitioners to export broken rice.

Detailed Analysis:
The High Court of Andhra Pradesh addressed multiple issues in a judgment concerning the prohibition of broken rice export. Initially permitted, the export was later banned through a notification by the Director General of Foreign Trade, prompting challenges via Writ Petitions. The sudden policy shift in 2022 prohibited broken rice export, exempting specific consignments under certain conditions until 15.10.2022. Petitioners contended the policy change was arbitrary, affecting vested rights and ongoing contracts, potentially leading to damages and arbitration disputes. They argued for equal exemption treatment, highlighting accumulated broken rice stocks procured before the policy change.

The Court considered legal arguments citing Supreme Court judgments emphasizing protection of vested rights and intervention against policy decisions violating fundamental rights. The Deputy Solicitor General defended the policy change citing price surge and food security concerns, noting exemptions for advanced stage contract holders. Petitioners' counsels stressed time-sensitive contracts, potential damages, and lack of domestic market for broken rice, foreseeing substantial losses if unable to export. They urged for interim relief to prevent contract breaches and financial losses.

Drawing parallels to a similar situation in 2007-2008, the Court noted the necessity of protecting those who acted based on the existing policy. It criticized the limited exemption categories in the impugned notification, advocating for broader protection considering the petitioners' circumstances. Consequently, the Court issued interim directions allowing petitioners to export pre-policy change broken rice stored in warehouses before 08.09.2022, without permitting further exports. The judgment balanced the need for protection of vested rights against the policy's objectives, ensuring fairness and addressing potential economic harm to the petitioners.

In conclusion, the Court's decision provided temporary relief to the petitioners, acknowledging the need to safeguard vested rights and mitigate potential financial losses arising from the abrupt policy change. The judgment highlighted the importance of balancing policy objectives with individual rights, emphasizing the court's role in ensuring fairness and equity in such matters.

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