2026 (1) TMI 1183 - HC - Customs

Minimum Import Price for agricultural imports upheld despite non-compliance with laying requirement; notifications remain valid, Parliament to be informed.

Validity of imposing Minimum Import Price conditions on certain agricultural imports was assessed under the Foreign Trade (Development and Regulation) ... Validity Of Imposition of condition of “Minimum Import Price” for Black Pepper, Areca-nuts, Apples, in purported exercise of power under Section 3 of Foreign Trade (Development and Regulation) Act, 1992 ('FTDR' Act) - non-compliance of sub-section (3) to Section 19 - Laying of delegated legislation before Parliament - Substance over form in validity of subordinate legislation - Judicial review of subordinate legislation - Ministerial publication by DGFT and exercise of Central Government power - HELD THAT:- Importantly, Section 3 of FTDR Act expressly provides that the Central Government may make provision for prohibiting, restricting or otherwise regulating import or export of goods or services. Impugned notification even if assumed to prohibit Black Pepper with a Minimum Import Price of less than Rs. 500, power to impose/issue such prohibitory condition/restriction is traceable to subsection (2) to Section 3. We see no reason why the principle laid therein that validity ought to be decided not on the basis of nomenclature but by looking to the substance and effect, would not apply while examining a challenge to the vires of the subordinate legislation. Applying the above reasoning it would be clear that the impugned instrument though titled “notification” is in substance, restriction imposed on import on the basis of Minimum Import Price, thus traceable to sub-section (2) to Section 3 of FTDR Act. We thus find challenge on the ground that nomenclature is not in conformity with sub-section (2) to section 3 of FTDR Act is devoid of merit. It is evident that the laying clause in subsection (3) to section 19 of the FTDR Act is directory and not mandatory. The contention of the petitioners that non-compliance with the laying clause would prove fatal to its validity is thus, liable to be rejected. The impugned notification / order issued by the Central Government are valid, notwithstanding failure to comply with the laying cause in terms of Section 19(3) of the FTDR Act. If the impugned notifications are still in vogue and if the laying clause has not been complied with till date, the Central Government shall now place the impugned notification before each House of Parliament the impugned order / notification at the earliest. In view of the fact that the impugned notifications have been upheld, wherever, the challenge is to the notice, the petitioners are at liberty to file their objections within a period of two (2) weeks from the date of receipt of a copy of this order and if any such reply is filed, the same shall be considered and appropriate orders shall be passed in accordance with law, after affording the petitioners an opportunity of hearing. Writ Petitions are disposed of on the above terms. Issues: (i) Whether the impugned notifications fixing Minimum Import Price (MIP) were ultra vires Section 3(2) of the Foreign Trade (Development and Regulation) Act, 1992 because they were issued/published by the Directorate General of Foreign Trade instead of the Central Government or because they were styled as notifications rather than Orders; (ii) Whether failure to lay the Orders/notifications before both Houses of Parliament in terms of Section 19(3) of the FTDR Act renders the impugned instruments void.Issue (i): Whether the impugned instruments imposing MIP are invalid as not being Orders made by the Central Government under Section 3(2) of the FTDR Act.Analysis: The power to prohibit, restrict or regulate imports is conferred on the Central Government by Section 3(2) of the FTDR Act. The impugned instruments record publication by the Ministry/Directorate and recite exercise of power under Section 3. Authority to act may be traced to the Central Government even where publication is effected by DGFT. Established authorities recognise that validity of subordinate legislation is determined by substance and traceability to enabling statute rather than by nomenclature or stylistic formalities; errors in reciting the source or labelling do not defeat statutory competence where the power is otherwise traceable.Conclusion: The challenge that the instruments are invalid because they were issued/published by DGFT or styled as notifications rather than Orders is rejected; the instruments are intra vires Section 3(2) of the FTDR Act. Conclusion is against the petitioners.Issue (ii): Whether non-compliance with Section 19(3) (laying the Order/notification before both Houses of Parliament) renders the impugned instruments void.Analysis: Section 19(3) requires that every Order be laid before each House for a statutory period and contemplates that Parliament may modify or annul such Order, saving validity of prior acts. Authorities interpreting similar laying provisions have held that such provisions are generally directory where no consequence of automatic invalidation is prescribed; the Legislature's omission of a termination consequence and precedent decisions establish that failure to lay does not, by itself, render the instrument void. Comparative statutory provisions and authoritative decisions support treating the laying requirement under Section 19(3) as directory.Conclusion: The challenge that non-laying under Section 19(3) invalidates the instruments is rejected; the laying requirement is directory and does not itself vitiate the impugned instruments. Conclusion is against the petitioners.Final Conclusion: The impugned notifications/orders imposing Minimum Import Prices are valid and the writ petitions challenging their validity are dismissed; petitioners retain statutory remedies (filing objections to show-cause notices or appeals against adjudication) subject to the terms specified in the order.Ratio Decidendi: Where a subordinate legislative instrument effects a restriction traceable to the enabling statute, courts will look to substance and traceability to the statutory power rather than nomenclature or formal defects, and a laying requirement that prescribes no automatic consequence for non-compliance is directory and does not, by itself, render the instrument void.