Import licensing discretion cannot override statutory limits; arbitrary caps on maize imports were held unsustainable.

Where no statutory prohibition, policy restriction, or quantified cap existed for maize/pop corn imports under the governing foreign trade framework, the licensing authority could not lawfully reduce the requested authorisation by reference to processing capacity alone. The Court treated the curtailment as an arbitrary exercise of discretion, inconsistent with the statute and policy, and contrary to fairness, non-arbitrariness, and legitimate expectation. It further held that the restriction unreasonably interfered with the right to trade under Article 19(1)(g). The limitation to 2,000 metric tonnes was therefore unsustainable, and the balance quantity was directed to be authorised.

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Issues: Whether the licensing authority could restrict the petitioner's import authorisation for maize/pop corn to 2,000 metric tonnes in the absence of any demonstrated statutory prohibition, restriction, or quantitative limit, and whether the petitioner was entitled to the balance quantity of 8,000 metric tonnes.

Analysis: The governing scheme under the Foreign Trade (Development and Regulation) Act, 1992 empowers the Central Government to regulate imports and exports, including by prohibiting, restricting, or otherwise regulating imports, and to impose quantitative restrictions where such power is validly exercised. The respondents, however, were unable to show any order, policy restriction, or quantitative cap under the Act or the FTP-2023 specifically limiting import of maize/pop corn. Clause 2.13 of the FTP-2023 could not be used to confer an unfettered discretion to curtail the quantity sought, because authorisation decisions still had to conform to the statute, the rules, and the policy framework. The Court found that reducing the authorised quantity by reference to the petitioner's processing capacity was not traceable to any recognised legal standard, resulted in arbitrary treatment, and offended the principles of fairness, non-arbitrariness, and legitimate expectation. The restriction also amounted to an unreasonable interference with the petitioner's right to trade.

Conclusion: The restriction to 2,000 metric tonnes was held unsustainable, arbitrary, and violative of Article 19(1)(g) of the Constitution of India. The petitioner was entitled to authorisation for the remaining 8,000 metric tonnes.

Final Conclusion: The writ petition succeeded, and the respondents were directed to issue the remaining import authorisation to the petitioner expeditiously.

Ratio Decidendi: In the absence of a legally authorised restriction or quantitative cap under the governing statute or policy, the licensing authority cannot curtail import authorisation by an unregulated and arbitrary exercise of discretion.

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