Holding

The impugned notifications and trade notice are valid exercises of the Central Government’s power under Section 3(2) of the FTDR Act, and Section 9A does not limit that authority, rendering the measures intra vires.

Summary

The Union of India amended the import policy for peas and other pulses, shifting them from a free to a restricted category and imposing quantitative import limits through notifications and a trade notice issued under the Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act). Importers challenged the validity of these notifications, arguing that the Directorate General of Foreign Trade (DGFT) lacked authority, that the measures violated Sections 3 and 9A of the FTDR Act, and that they were inconsistent with Article XI of GATT‑1994. The Court held that the notifications were issued by the Central Government under the power conferred by Section 3(2) of the FTDR Act, that Section 9A does not curtail the broader authority of Section 3(2), and that GATT‑1994 provisions have not been transformed into domestic law to the extent claimed. Consequently, the notifications and trade notice were upheld as intra vires, and the importers’ challenges were rejected. The Court also clarified the interpretation of “total quantity” and the “actual user” condition in the EXIM policy.

Issues considered

The DGFT’s authority to issue the notifications and trade notice under the FTDR Act.
Whether the impugned notifications violate Section 3(2) or Section 9A of the FTDR Act.
The applicability of Article XI of GATT‑1994 to the domestic import restrictions.
The correct interpretation of the phrase “total quantity” in the notifications.
The relevance of the “actual user” condition under the EXIM policy.

Legislation cited

Customs Act, 1962s. 11
Foreign Trade (Development and Regulation) Act, 1992s. 11, s. 18A, s. 3(2), s. 3(4), s. 5, s. 6(3), s. 9A
Foreign Trade (Regulation) Rules, 1993s. 4
Government of India (Transaction of Business) Rules, 1961
Safeguard Measures (Quantitative Restrictions) Rules, 2012

Subjects

Foreign Trade Development and Regulation ActImport restrictionsQuantitative restrictionsGATT 1994WTOArticle 77 ConstitutionSection 3(2) FTDRSection 9A FTDRActual user conditionSafeguard measuresTrade policy

Judgment

372 [2020]REPORTS
SUPREME COURT 14 S.C.R. 372 [2020] 14 S.C.R.

A UNION OF INDIA AND OTHERS
v.
AGRICAS LLP AND OTHERS ETC.
(Transfer Petition (Civil) Nos. 496-509 of 2020)
B AUGUST 26, 2020
[A. M. KHANWILKAR, DINESH MAHESHWARI AND
SANJIV KHANNA, JJ.]
Foreign Trade (Development and Regulation) Act, 1992 –
ss.3(2), 9A – Statutory Scheme of – Notifications, trade notices were
C
issued amending the import policy for peas, pulses shifting them
from free to restricted category requiring prior authorization for
import – Validity of – Held: There is no violation of s.3 in the issuance
of the impugned notifications or orders, which are intra vires and
not ultra vires – Further, implementation of GATT-1994, including
D Article XI, is left to the Central Government by means of delegated
legislation – FTDR Act does not legislate and transform Article XI
of the GATT-1994 – Notwithstanding s.9A, the Central Government
continues and has authority to impose quantitative restrictions by
an order u/s.3(2) – Impugned notifications are valid as they are
issued in accordance with the power conferred in the Central
E
Government in terms of sub-section (2) to s.3 – International
Convention/Treaties – General Agreement on Tariff and Trade
(GATT), 1947; General Agreement on Tariff and Trade (GATT), 1994
– Articles XI and XIX – Constitution of India – Arts. 73, 77, 253,
Part XI- Chapter I – Government of India (Transaction of Business)
F Rules, 1961 – Customs Act, 1962 – s.11 – Safeguard Measures
(Quantitative Restrictions) Rules, 2012 – Foreign Trade (Regulation)
Rules, 1993 – Doctrines/Principles – Principle of invocability or
justiciability; Act of transformation.
International Convention/Treaties – International treaty –
G General Agreement on Tariff and Trade, 1994 (GATT-1994) – Effect
of on domestic law; Obligations of contracting party – Discussed.
International Convention/Treaties – International customary/
treaty law Applicability in domestic law – Theories – Dualism and
Monism – Discussed.
H
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 373

Foreign Trade (Development and Regulation) Act, 1992 – A
ss.3(4), 18A – Held: provisions of FTDR Act are in addition to, and
not in derogation of, the provisions of any other law for the time
being in force – This would be the correct way to harmoniously
read and interpret sub-section(4) to s.3 and s.18A.
Foreign Trade (Development and Regulation) Act, 1992 – B
ss.3, 9A – Interpretation of – Discussed.
Maxims – Lex specialis derogat legi generali – When not
applicable – Discussed.
Words & Expressions – ‘direct application’ – Meaning of –
Held: It means and mandates that the treaty norms, either wholly or C
to some extent, are directly treated as norms of domestic law and
enjoy the statutory law status by default in the domestic legal system
– International Convention/Treaties.
Disposing of the transfer petitions, the Court
D
HELD: 1.1 Discussion on challenge to the role and authority
of the Directorate General of Foreign Trade (DGFT) to issue the
Notifications and Trade Notice and interpretation of the words
“total quantity”
The importers have rightly not raised the contention that
E
the DGFT could not have notified the impugned notifications.
The notifications themselves record that they were published by
the Ministry of Commerce and Industry, Department of
Commerce, Directorate General of Foreign Trade. The first
paragraph of the notification states that they had been issued by
the Central Government in exercise of powers conferred under F
Article 77 of the Constitution. Clearly, the notifications were
issued by the Central Government, and not the DGFT that had
performed the ministerial act of publication. The decision to
amend and issue the notification was of the Central Government.
Neither Section 3(2) nor Section 6(3) of the Foreign Trade
G
(Development and Regulation) Act, 1992 (FTDR) Act was violated.
Article 77 does not provide for delegation of any power, albeit
under sub-section (3) of Article 77, the President is to make Rules
for more convenient transaction of business and allocation of same

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374 SUPREME COURT REPORTS [2020] 14 S.C.R.

A amongst Ministers. Under the Government of India (Transaction
of Business) Rules, 1961, the government business is divided
amongst Ministers and specific functions are allocated to different
Ministries. The Director General of Foreign Trade is an ex officio
Additional Secretary in the Government of India and is appointed
by the Central Government under sub-section (1) to Section 6 of
B
the FTDR Act to advise the Central Government in formulation
and carrying out the Foreign Trade Policy. Wherefore, even the
website of the Ministry of Commerce and Industry, Department
of Commerce, states that the DGFT is an agent of the Central
Government and attached office to it. Further, clause (2) of Article
C 77 provides that validity of an order or instrument made or
executed in the name of the President, authenticated in the
manner specified in the Rules made by the President, shall not
be called in question on the ground that it is not an order or an
instrument made or executed by the President. Therefore, the
contention of issuance of the impugned notification sans authority,
D
cannot be sustained. [Para 15][396-E-H; 397-A-E]
Delhi International Airport Limited v. International
Lease Finance Corporation and Others (2015) 8 SCC
446: [2015] 2 SCR 1040 - relied on.
E 1.2 FTDR Act vide Section 3(2) authorises the Central
Government to prohibit, restrict or otherwise regulate the import
or export of goods, by an order published in the Official Gazette.
FTDR Act vide Section 11(1) prohibits imports or exports of goods
in contravention of the FTDR Act, the rules and orders made
thereunder and the EXIM Policy. Section 5 of the FTDR Act
F authorizes the Central Government to formulate and announce
the EXIM Policy by notification in the Official Gazette. Under
Section 11(2) of the FTDR Act, when a person makes or abets or
attempts to make any import or export in contravention of the
FTDR Act, any rule or order made thereunder or the EXIM policy,
G he is liable to pay penalty upto Rs.10,000/- or five times the value
of the goods, services or technology, whichever is greater.
Section 11 of the Customs Act,1962 provides that the Central
Government may by a notification in the Official Gazette prohibit,
absolutely or subject to conditions as specified, import or export

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UNION OF INDIA AND OTHERS v. AGRICAS LLP 375

of any good. The listed purposes are wide and range from A
conservation of foreign exchange and safeguarding of balance of
payments, avoiding shortage of goods, prevention of surplus of
any agricultural or fisheries product, prevention of serious injury
to domestic production, establishment of any industry and lastly
compendiously includes “any other purpose conducive to the
B
interest of the general public”. Under clause (d) to Section 11 of
the Customs Act goods imported or exported (or attempted to
be imported or exported) contrary to any prohibition are liable to
confiscation. [Para 16][397-E-H; 398-A-C]
1.3 The contention raised by some of the importers that
the impugned notification is illegal because of vagueness or allows C
restricted quantity of 1/1.5 lakh MT of Peas (Pisum Sativum)
including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas as
against a licence, meaning thereby each licensee is allowed to
import the maximum quantity specified in the notification is
rejected. In other words, the total quantity specified in the D
notification is per licensee and not for the total imports of the
commodity specified in the notification. The submission has no
merit as the notification expressly uses the expression ‘total
quantity’ of the commodity specified which could be imported.
There is no ambiguity or vagueness in the notifications. Even
otherwise the expression ‘total quantity’ cannot be construed as E
quantity per licence issued as the number of licences issued
concerning the subject goods could be numerable (as per the
Union of India 2248,1016 and 2915 licences were issued in 2019-
20 for import of Tur, Moong and Urad dals against restricted quota
of 4,1.5 and 4 lakh MT, respectively). If each licence holder is F
allowed to import 1/1.5 lakh MT of Peas, the total import would
well exceed the total annual consumption after accounting for
the production within India. The plea and interpretation of the
importers if accepted will not only be contrary to the express
language of the notification but would frustrate the intent and
object of restricting the imports of the stated goods by prescribing G
a quota. The legal effect of the notifications was to amend the
EXIM policy whereby the specified commodities would henceforth
not be ‘free’ (importable without restriction) but would fall in the

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376 SUPREME COURT REPORTS [2020] 14 S.C.R.

A restricted category. Once the commodities were shifted to the
restricted category, the requirement of licence would flow from
the mandate of Section 3 of the FTDR Act read with Rule 4 of the
Foreign Trade (Regulation) Rules, 1993. Further, the EXIM
Policy regulates the restricted goods under Paragraphs 2.04, 2.08
and 2.10 of Policy. [Paras 17, 18][398-C-G; 399-A-C]
B
1.4 The effect of the Notifications is to bring the specified
commodities from free to the restricted category and therefore
the imports in question would require a prior authorisation for
import. The requirement of licence is nothing but authorisation.
Therefore, in terms of paragraph 2.10, the imports of the specified
C commodities would only be by the ‘actual user’, unless the ‘actual
user’ condition was specifically dispensed with or diluted by the
DGFT. The Directorate by specifying that the licence would be
issued to the miller or refiner has, therefore, just clarified that
the ‘actual user’ alone will be permitted to import the restricted
D goods mentioned in the notification for which a prior authorisation
or licence is required. The importers are traders and it is not the
case of any of the importers that they are the ‘actual users’.
Further, none of the importers have applied for a licence or
authorisation for import of the restricted commodities. Violation
of clause 9.03 of the EXIM Policy defining the expression ‘Actual
E User’, is neither alleged nor argued. Paragraph 2.10 consists of
two parts. The first part relates to goods which are freely
importable without any licence and states that such goods that
can be imported by any person. The second part refers to such
imports which require authorisation and not the imports which
F are freely importable without any restriction. ‘Actual user’
condition, therefore, applies by default when imports require an
authorisation. However, the DGFT can specifically dispense with
or dilute the ‘actual user’ condition. [Paras 19, 20][400-C-F; 401-
A-C]
G 2.1 Section 9A of the FTDR Act and it’s interpretation.
(i) General Agreement on Tariff and Trade – 1947 and 1994.
Conference at Bretton Woods, New Hampshire in 1944 lead
to establishment of the ‘International Monetary Fund’ and the
‘World Bank’, but the attempt to establish ‘International Trade
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 377

Organisation’ to develop and coordinate international trade A
faltered and was finally given up in 1950. However, multilateral
trade negotiations had continued with the objective to prepare a
multilateral treaty containing general principles of international
trade and a schedule of tariff reductions. By the end of 1947, the
work on the General Agreement on Tariff and Trade (‘GATT’),
B
1947 and tariff reduction was finalised and agreed upon. On or
about 8th July 1947, Government of India became a signatory
and ratified GATT-1947. However, GATT-1947 is considered to
be a failure or at best had a limited impact. What followed was
several years of intense negotiations involving over 100 nations
that finally ended in 1994 at Marrakesh, Morocco, with a C
multilateral international treaty of over 400 pages of basic text
with substantive rules and tariff schedules. The final act signed
exceeded 26,000 pages. This treaty popularly known as General
Agreement on Tariff and Trade (GATT-1994) was signed by 128
countries including India on 1st January 1995. On the same day,
D
the World Trade Organisation (WTO), an institution with a
secretariat and staff, replaced GATT and came into existence, as
the international organisation for overseeing and regulating
functioning of the multilateral trade system. GATT-1994 in
nutshell is a rule-oriented package consisting of multilateral trade
agreements annexed to a single document and works on the basis E
of single undertaking approach whereby all agreements annexed
become binding on all the members as single body of law. The
main agreement consists of the preamble and XVI articles
establishing the WTO, four annexures and declarations, decisions
and understandings. Article XI prohibits quotas, import or export
F
licences and other non-tariff measures, with some exceptions.
Annexure 2 consists of the Understanding on Rules and
Procedures Governing Settlement of Disputes, referred to as the
Dispute Settlement Understanding, providing mechanism for
resolution of trade disputes among WTO members. Annexure 3
establishes the trade policy review mechanism, with procedure G
for periodic review of compliance with the WTO agreement by
each member. Annexure 4 consists of plurilateral trade
agreements binding only on the parties that have accepted them.
GATT-1994 also has provisions that allow and permit exceptions.
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378 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Article XIX is an exception and sometimes referred to as the
escape clause, that provides emergency action where serious
injury is caused or threatens domestic industry. The ‘Marrakesh
Agreement’ enacts and incorporates rules-oriented approach
regulating the conduct of the WTO members and are designed
to ensure that the tariff concessions and the multilateral trade
B
treaty works as intended and not undermined. Articles XXII
provides for sympathetic consideration and consultation and
satisfactory solution with respect to any matter affecting the
operation of GATT-1994. Article XXIII allows GATT contracting
party to make a complaint should it consider that another
C contracting party is directly or indirectly nullifying, impairing the
GATT-1994 or otherwise impeding attainment of its objective:
(a) by failure in carrying out its obligations; (b) by measures, even
when they are not in conflict with GATT-1994; and (c) in any other
situation. These Articles XXII, XXIII emphasise on the need for
consultation, withdrawal of conflicting measures and mutual
D
satisfactory solution of the matter by the contracting parties
concerned, consistent with the GATT-1994. Albeit on failure to
reach a satisfactory adjustment within reasonable time or in case
of (c), the matter is to be referred to the Contracting Parties to
investigate and make recommendations to the offending party or
E make a ruling on the matter, as appropriate. The dispute resolution
mechanism in Annexure 2 contains 27 Articles totalling about
143 paragraphs and four appendices. The WTO, at the top,
consists of Ministerial Conference which meets not less than
every two years. Next there are four councils, including the
General Council which has an overall supervising authority and
F
to carry out many functions of the Ministerial Conference. In
addition, there are Council for Trade Inputs, Council for Trade
and Services, and Council for Trade Related Aspects of
Intellectual Property Rights. The General Council, as per the
WTO Charter, discharges the responsibility of the Dispute
G Settlement Body (DSB). Thus, the WTO Charter adopts a
legalistic and a rule-oriented approach for resolving issues relating
to violation of the GATT agreements. The DSB establishes
Panel(s) and on adoption of Panel (and the Appellate Body)
reports, provides for implementation of the recommendation and
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 379

rulings, and can authorise action for failure to comply with the A
recommendation(s) and ruling. The procedure adopted for the
dispute resolution mechanism is to facilitate prompt settlement
of situations with the objective and purpose that the ‘Marrakesh
Agreement’ is preserved and not nullified or impaired.
[Paras 21-24][401-C-F, G-H; 402-A-C, F, G-H; 403-A-C, D-E;
B
404-A-C; 405-A-B, E]
2.2 (ii) Obligations of the contracting party and effect of
international treaty, namely, GATT-1994 on the domestic law.
Two aspects relevant in the present case are; (i) applicability
of the international treaty in domestic law and (ii) ‘invocability’ of C
the treaty in municipal law and before the municipal courts.
Breach of a stipulation in international law cannot be justified
by the State by referring to its domestic legal position. This rule
of international law is unexceptionable and prosaic, as the contra
view would permit the international obligations to be evaded by D
the simple method of domestic legislation, executive action or
judicial decision. Contracting States are under an obligation to
act in conformity with the rules of international law and bear
responsibility for breaches whether committed by the legislature,
executive or even judiciary. In a way, therefore, international
treaties are constraint on sovereign activity, albeit voluntarily E
agreed. For the purpose of GATT-1994, municipal laws are
evidences of fact, including evidence of conduct in violation of
the norms and objective of the treaty. At the same time, failure to
enact an internal domestic law in conformity with the international
obligation is not a breach of international law, unless there is F
such requirement and obligation created by the international
treaty. In the absence of any such binding clause, breach arises
only when the State concerned fails to observe its obligation on a
specific occasion. Various theories have been put forward to
explain applicability of international customary and treaty law in
domestic law. The dualist position is that the international G
municipal law operates separately and before any rule or principle
of international law can have effect within the domestic
jurisdiction, it must be expressly or specifically transformed into
municipal law by use of appropriate constitutional machinery.
Dualism stresses that international law and municipal law exist H
380 SUPREME COURT REPORTS [2020] 14 S.C.R.

A separately and cannot have effect on or overrule the other.
Consequently, the municipal laws and international laws can
operate simultaneously as they regulate different subject matters.
International law is between sovereign States, while the municipal
law applies within the State and regulates legal relationship
between the citizens/subjects inter se and the citizen/subject and
B
the State. Monistic legal systems include international treaties
in domestic law. Monism takes the form of assertion of the
supremacy of the international law even within the national
sphere, with the understanding and belief that an individual is a
subject of international law. International norms provide the basic
C norms for the national legal order, and both are a part of the same
systems of norms. Most jurists draw distinction between ‘direct
application’ of treaties in domestic law, and national legal systems
that mandate and require ‘act of transformation’ for an
international treaty to apply and be a part of domestic law. ‘Direct
application’ means and mandates that the treaty norms, either
D
wholly or to some extent, are directly treated as norms of domestic
law and enjoy the statutory law status by default in the domestic
legal system. The term ‘direct application’ will also cover
situations in which government or different levels of government
utilise treaty norms as part of domestic jurisprudence and is not
E limited to situations in which private parties can sue on the basis
of the treaty norms. There is distinction between direct application
and ‘invocability’. ‘Act of transformation’ principle means and
implies that an international treaty is not directly applicable in
the domestic law system and requires provision in the domestic
rules before it is applied. ‘Transformation’ is a word of wide
F
amplitude and does not refer to mere implementation as it includes
the right of the country to adopt, amend or modify the treaty
language into domestic jurisprudence. The ‘act of transformation’
is different from ‘direct application’ as in the former the treaty is
not received and treated as part of domestic jurisprudence until
G it is published and made part of the domestic jurisdiction in the
same manner as other law. There is great diversity of national
constitutional systems regarding international treaty application.
[Paras 25, 27-30, 32][406-A, D-G; 407-A-H]

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UNION OF INDIA AND OTHERS v. AGRICAS LLP 381

2.3 It would be now appropriate to refer to the principle of A
‘invocation’. Invocability in simple terms refers to justiciability;
admissibility of a claim before the national courts. It is not
connected with the defence or merits of the defence. In case
where an ‘act of transformation’ is required, treaties may partially
or entirely become part of the domestic law. Where the treaty or
B
portion thereof become a part of the domestic law by ‘act of
transformation’, it is obvious that only the part incorporated or
transformed into domestic law is invocable and justiciable and
not the parts that are not codified into domestic law. However,
invocability can embrace several ideas which are intertwined and
is of specific concern in cases of constitutions allowing direct C
application. Here ‘invocability’ is a generic term which means to
embrace a small inventory of means of judicial control over the
use in a particular law suit of the direct applicability of the treaty.
As in case of ‘act of transformation’, even in direct application
cases, some jurisdictions accept the principle of partial direct
D
application and, therefore, the treaty is directly applicable for some
purposes and not others. [Para 33][410-D-G]
Status of Treaties in Domestic Legal System; A Policy
Analysis Essay by Professor John H. Jackson –
referred to.
E
In re. Berubari Union (I) AIR 1960 SC 845:[1960] 3
SCR 250; Rai Sahib Ram Jawaya Kapur and Others v.
State of Pubjab AIR 1955 SC 549:[1955] 2 SCR 225;
Ram Kishore Sen and Others v. Union of India and
Others AIR 1966 SC 644: [1966] 1 SCR 430 – referred
to. F

3. Legal position in India.
The law in India is not very different from other
Commonwealth Countries. Article 253 of the Constitution states
that notwithstanding anything in the foregoing provisions of this G
Chapter, the Parliament has the power to make laws for the whole
or any part of the territory of India for implementing any treaty,
agreement or convention with any other country or countries or

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382 SUPREME COURT REPORTS [2020] 14 S.C.R.

A decisions made at any international conference, association or
body. [Para 34][411-C, E-F]
Maganbhai Ishwarbhai Patel Etc. v. Union of India
(1970) 3 SCC 400:[1969] 3 SCR 254 – followed.
4. Articles XI and XIX of GATT-1994 and the statutory
B scheme vide Sections 3 and 9A of FTDR Act and the Safeguard
Measures (Quantitative Restriction) Rules, 2012.
Indian Parliament, two years prior to the signing of GATT-
1994, had enacted the FTDR Act which was enforced with effect
from 7th August 1992. Sections 11 to 14 of the FTDR Act came
C into force immediately and other provisions came into force on
19th June 1992. The FTDR Act had repealed the Imports and
Exports (Control) Act, 1947 and the Foreign Trade (Development
and Regulation) Ordinance, 1992 with the stipulation that anything
done or any action taken under the Ordinance shall be deemed
D to have been done or taken under the corresponding provisions
of the FTDR Act. The Statement of Objects and Reasons for
enacting the FTDR Act, as recorded, are to acknowledge that
foreign trade is the driving force of economic activity as this spurs
economic growth and there is increasing interdependence and
that the goals of the new policy were to increase productivity and
E competitiveness by ensuring that the trade policies serve as an
instrument to create an environment that will provide a strong
impetus to exports, facilitate imports and render export activity
more profitable. Section 9A of the FTDR Act is the only section
in Chapter IIIA with the heading ‘Quantitative Restrictions and
F this section was inserted by Amendment Act 25 of 2010 with effect
from 27th August 2010. Subsequently, in exercise of powers
conferred by sub-section (3) to Section 9A of the FTDR Act, the
Central Government had published and notified the Safeguard
Measures (Quantitative Restrictions) Rules, 2012, which became
applicable on the date of their publication in the Gazette of India
G dated 24th May 2012. [Paras 48, 50][424-D-G; 427-A-C]
Report of WTO Dispute Settlement Body’s panel on
“India-Quantitative Restrictions on Imports of
Agricultural, Textile and Industrial Products” – referred
to.
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 383

5.1 Discussion and interpretation of Sections 3 and 9A of A
the FTDR Act.
Section 3 of the FTDR Act, as enacted, had undergone
amendments by addition of proviso to sub-section (2) and by
insertion of sub-section (4) vide Act 25 of 2010 with effect from
25th August 2010. Sub-section (1) of Section 3 states that the B
Central Government may, by an Order published in the Official
Gazette, make provision for the development and regulation of
foreign trade by facilitating imports and increasing exports. It is
a general provision which has no reference to GATT-1994. It
authorises the Central Government to publish an order in the
Official Gazette for development and regulation of foreign trade, C
i.e. imports and exports. Sub-section (2) states that the Central
Government can, by an order in the Official Gazette, make a
provision for prohibiting or restricting or otherwise regulating,
in all or specified cases and subject to such exceptions, if any,
the import or export of goods and after the amendment vide Act D
25 of 2010, services or technology. Sub-section (2) to Section 3,
therefore, authorises the Central Government to, by an Order
published in the Official Gazette, make provisions restricting the
imports or exports. Imposition of quantitative restrictions on
imports or exports would clearly fall within sub-section (2) to
Section 3 of the FTDR Act. Sub-section (3) to Section 3 states E
that where an order is passed under sub-section (2) whereby the
import or export of goods is prohibited, restricted or otherwise
regulated, the goods in question would be deemed to be prohibited
goods under Section 11 of the Customs Act, 1962 and accordingly
the provisions of the latter Act would apply. [Para 54][438-E-H; F
439-A-B]
5.2 Sub-section (4) to Section 9A of the FTDR Act
introduced by Act 25 of 2010 with effect from 27th August 2010,
requires some elucidation. The sub-section on one hand states
that no permit or licence shall be necessary for imports or exports G
of goods, nor any goods shall be prohibited from import or export,
except as may be required under the FTDR Act, or the rules or
orders made thereunder. At the same time, by using the phrase
‘without prejudice to anything contained in any other law, rule,

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A regulation, notification or order’, it protects the operation of the
other law, rule, regulation, notification or order to the extent that
they do not directly or indirectly deal with the permit or licence
necessary for import or export of goods or prohibit import or
export of goods. Operation of such law, rule, regulation,
notification or order not dealing with the permit or licence
B
necessary for import or export on a prohibition of import of goods
is, therefore, protected and not overridden. Sub-section (4) to
Section 3 therefore gives limited primacy to the FTDR Act,
restricting it to the scope and subject matter of the FTDR Act,
and not to override other laws. This is also clear from Section
C 18A of the FTDR Act which was also enacted and inserted by Act
25 of 2010 with effect from 27th August 2010. The provisions of
FTDR Act, therefore, are in addition to, and not in derogation of,
the provisions of any other law for the time being in force. This
would be the correct way to harmoniously read and interpret sub-
section (4) to Section 3 and Section 18A of the FTDR Act. Sub-
D
section (4) to Section 3 of the FTDR Act, therefore, in the context
of import and exports or prohibition of imports or exports of goods
states that no permit or licence shall be necessary or required
except as may be required under the FTDR Act, rules or orders
made thereunder. The expression ‘order’, as per clause (h) to
E Section (2) of the FTA means any Order made by the Central
Government under Section 3. It is therefore, clear that there is
no violation of Section 3 of the FTDR Act in the issuance of the
impugned notifications or orders, which are intra vires and not
ultra vires. [Para 55][439-B-E, F-G; 440-A-B]
F 5.3 Article XI of the GATT-1994 has not been statutorily
made a subject of ‘act of transformation’ and incorporated in the
domestic legislation, i.e. the FTDR Act. The FTDR Act does not
legislate and transform Article XI of the GATT-1994. Section 3
of the FTDR Act empowers and authorises the Central
Government, i.e. the Union of India to frame policy, rules or
G regulations for import or export of goods. The policy is made
under Section 5 of the Act. Thus, the Central Government i.e.
the Union of India has been given the necessary discretion and
election with regard to framing of policies for import and export

H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 385

of goods, services and technology. Therefore, implementation of A
GATT-1994, including Article XI, is left to the Central
Government by means of delegated legislation. Clause (2) of
Article XI of GATT-1994 states that provisions of paragraph (1)
shall not extend to three specified situations as stated in sub-
clauses (a), (b) or (c). Clause (c) deals with import restrictions on
B
any agricultural or fisheries product, imported in any form
necessary for enforcement of governmental measures specified
therein. Similarly, Article XII of GATT-1994 states that
notwithstanding the provisions of paragraph (1) of Article XI, any
contracting party, in order to safeguard its external financial
position and its balance of payments, may restrict the quantity or C
value of merchandise permitted to be imported, subject to the
provisions of paragraphs of that Article. Paragraph (1) to Article
XI is not an absolute rule. It is subject to exceptions in the form
of paragraph (2) to Article XI, Article XII and other provisions.
Of course, the conditions specified the respective Articles have
D
to be satisfied for a contracting party to be GATT-1994 compliant.
Reference to this position is necessary and required when Section
9A of the FTDR Act is interpreted which incorporates into the
domestic law Article XIX of GATT-1994, but neither Article XI
and nor all exceptions by implication. Consequently, Section 9A
for the FTDR Act, is to be understood an enabling provision E
empowering imposition of ‘quantitative restrictions’ after following
the procedure in the situations referred to therein. However it
does not limit and restrict the expans and power of the Central
Government to prohibit, regulate or restrict imports of goods in
terms of Section 3(2) of the FTDR Act. As a sequitur, it has to be
F
held that notwithstanding Section 9A, the Central Government
continues and has authority to impose quantitative restrictions
by an order under Section 3(2) of the FTDR Act. Principle of Lex
specialis derogat legi generali, therefore, is not applicable to the
case in hand. [Paras 56-58][440-C-D, G-H; 441-A-F]
5.4 Section 9A of the FTA was enacted by Act 25 of 2010 G
pursuant to the recommendations of the Standing Committee.
Section 9A substantially incorporates, with some modifications,
provisions of Article XIX of GATT-1994. Rules made in 2012 are

H
386 SUPREME COURT REPORTS [2020] 14 S.C.R.

A also in conformity with the provisions of the WTO Agreement on
Safeguards made in terms of Article XIX of GATT-1994. Sub-
rule (3) to Rule 5 of the Safeguard Measures (Quantitative
Restrictions) Rules, 2012 states and sets out the conditions for
applicability of Rule 9A, which are: (i) increased imports; (ii)
serious injury or threat of serious injury; and (iii) a causal link
B
between increased imports and alleged serious injury or threat
of serious injury. The expression ‘increased imports’ has been
defined in terms of increased quantity to mean increase in imports
in absolute terms or relative to domestic production. The
expressions ‘serious injury’ and ‘threat of serious injury’ have
C been defined in clauses (c) and (d) of sub-clause (4) to Section 9A
to mean injury causing significant overall impairment in the
position of a domestic industry and a clear and imminent danger
of serious injury respectively. The expression ‘domestic industry’
has also been defined in clause (b) to sub-section (4) to Section
9A. Similarly, the expression ‘interested party’ has been defined
D
in sub-rule (d) to Rule 2 of the Safeguard Measures (Quantitative
Restriction) Rules, 2012 and includes exporter or foreign
producer or the importer of goods for the purposes of imposition
of safeguard quantitative restrictions on trade or business
association. It also includes the government of the exporting
E country or producer of goods or directly competitive goods in
India or a trade or business association.The need to enact Section
9A arose from the obligations flowing from Article XIX, as
restriction in form of ‘quantitative restriction’, require a
procedure to be followed. Affected parties including exporters,
importers have to be heard. Consequently, ‘act of transformation’
F
was required. Article XIX of GATT-1994 is an escape provision,
i.e. a provision which entitles a contracting state to escape from
the rigours of paragraph (1) of Article XI of GATT-1994. Similar
‘acts of transformation’ have been undertaken by enacting Custom
Valuation Rules, provision of antidumping, countervailing duty
G etc. but the entire GATT-1994 does not stand transposed and
enacted by way of statutory law or delegated legislation. This
being the position, Section 9A has to be interpreted as an escape
provision when the Central Government i.e. the Union of India
may escape the rigours of paragraph (1) of Article XIX of GATT-
H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 387

1994. Section 9A is not a provision which incorporates or A
transposes paragraph (1) of Article XI into the domestic law either
expressly or by necessary implication. To hold to the contrary, it
would be holding that the Central Government has no right and
power to impose ‘quantitative restrictions’ except under Section
9A of the FTDR Act. This would be contrary to the legislative
B
intent and objective. Section 9A of the FTDR Act does not elide
or negate the power of the Central Government to impose
restrictions on imports under sub-section (2) to Section 3 of the
FTDR Act. [Paras 59-61][441-F; 442-B-G; 443-A-C]
5.5 The impugned notifications would be valid as they have
been issued in accordance with the power conferred in the Central C
Government in terms of sub-section (2) to Section 3 of the FTDR
Act. The powers of the Central Government by an order imposing
restriction on imports under sub-section (2) to Section 3 is,
therefore, not entirely curtailed by Section 9A of the FTDR Act.
[Para 62][443-D-E] D
6. Conclusion
The impugned notifications and the trade notices are upheld
and the challenge made by the importers is rejected. The imports,
if any, made relying on interim order(s) would be held to be
contrary to the notifications and the trades notices issued under E
the FTDR Act and would be so dealt with under the provisions of
the Customs Act 1962. The Writ Petitions subject matter of the
Transfer Petitions, subject to E in the judgment (What is not
decided) are dismissed. Writ Petitions filed by the intervenors
before the respective High Courts shall stand dismissed in terms F
of this decision. [Para 67][444-F-G]
Raj Prakash Chemical v. Union of India (1986) 2 SCC
297: [1986] 1 SCR 448 – distinguished.
Gramophone Company of India Ltd. v. Birendra
Bahadur Pandey and Others (1984) 2 SCC 534: [1984] G
2 SCR 664; Jolly George Varghese and Another v. The
Bank of Cochin (1980) 2 SCC 360 : [1980] 2 SCR 913;
Director General of Foreign Trade and Another v.
Kanak Exports and Another (2016) 2 SCC 226: [2015]
H
388 SUPREME COURT REPORTS [2020] 14 S.C.R.

A 15 SCR 287; Associated Cement Companies Ltd. v.
Commissioner of Customs (2001) 4 SCC 593: [2001] 1
SCR 608; State of Punjab and Another v. Devans
Modern Breweries Ltd. and Another (2004) 11 SCC 26:
[2003] 5 Suppl. SCR 930; S&S Enterprise v. Designated
Authority and Others (2005) 3 SCC 337: [2005] 2
B
SCR 255; Commissioner of Customs, Bangalore v. G.M.
Exports and Others (2016) 1 SCC 91: [2015] 14
SCR 848 ; Entertainment Network (India) limited and
Anr. v. Super Cassette Industries Ltd. and Ors (2008)
13 SCC 30: [2008] 9 SCR 165; His Holiness
C Kesavananda Bharati Sripadagalvaru v. State of Kerala
and Another (1973) 4 SCC 225: [1973] Suppl. SCR 1;
Pratap Singh v. State of Jharkhand and Anr. (2005) 3
SCC 551:[2005] 1 SCR 1019 – referred to.
Karan Dileep Nevatia v. Union of India (2010) 1 Bom
D CR 588 – referred to.
Maclaine Watson& Co. Ltd.v. Department of Trade and
Industry & Anr. (1989) 3 All ER 523; Lonrho Exports
v. ECGD [1983] 3 W.L.R. 394; The Eschersheim Anr v.
The Jade Erkowit And Anr. (1976) 1 All ER 920 (HL) –
E referred to.
The World Trade Organization, law, practice and policy
Mitsuo Matsushita, Thomas J. Schoenbaum, Petros
C. Mavroidis, and Michael Hahn, 3rd Edition 2015 at
page Nos. 2 – 3, page No. 3 and page Nos. 33-40;
F Status of Treaties in Domestic Legal Systems; a policy
analysis- Essay by Prof. John. H. Jackson – referred
to.
Case Law Reference
[2015] 15 SCR 287 referred to Para 11 (c)
G
[2015] 2 SCR 1040 relied on Para 15
[1969] 3 SCR 254 followed Para 35
[1960] 3 SCR 250 referred to Para 35

H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 389

[1955] 2 SCR 225 referred to Para 35 A
[1966] 1 SCR 430 referred to Para 35
[1984] 2 SCR 664 referred to Para 38
[1980] 2 SCR 913 referred to Para 39
[2001] 1 SCR 608 referred to Para 41 B
[2003] 5 Suppl. SCR 930 referred to Para 42
[2005] 2 SCR 255 referred to Para 43
[2015] 14 SCR 848 referred to Para 44
[2008] 9 SCR 165 referred to Para 45 C
[1973] Suppl. SCR 1 referred to Para 45
[2005] 1 SCR 1019 referred to Para 45
[1986] 1 SCR 448 distinguished Para 65
CIVIL ORIGINAL JURISDICTION: Transfer Petition (Civil)
D
Nos. 496-509 of 2020
(Petitions filed under Article 139A (1) with rule XL of Supreme
Court Rules, 2013)
With
T.P.(Civil) D.No. 8823 of 2020. E
Tushar Mehta, SG, Aman Lekhi, ASG, Harish Salve, Arvind Datar,
Shyam Divan, Ravindra Shrivastava, Sr. Advs., Rajat Nair, Ms. Swati
Ghildiyal, Ms. Sunita Sharma, Mrs. Anil Katiyar, K. R. Sasiprabhu,
Aashish Chauhan, Aditya Shandilya, Kailash Pandey, Ranjeet Singh,
Gaichangpou Gangmei, Udayditya Bannerjee, K. Raghavachryulu, B. F
Ramana Murthy, Udit Malik, Anshuman Shrivastava, Abhijeet
Shrivastava, Ms. Garima Tiwari, Karan Khanna, Mrs. Swarupama
Chaturvedi, Hitesh Jain, Aman Jha, Ashutosh Mohan, Atishay Jain,
Somiran Sharma, Aashish Chauhan, Ms. Swagoti Batchas, Saransh Saini,
Vivek Jain, Ms. Anshul Sharma, Bhrigu Sharma, Ms. Suchitra Kumbhat,
Nirvikar Singh, Ms. Anisha Upadhyay, Puneet Parihar, Bhrigu Sharma, G
Ms. Vrinda Bhandari, Pranav Jain, Siddhant Buxy, Pradeep Aggarwal,
Ankit Sethi, Lal Pratap Singh, Umesh Pratap Singh, Arjun Aggarwal,
Ms. Ruchi Kohli, Nitin Mishra, Ms. Mitali Gupta, Advs. for the appearing
parties.
H
390 SUPREME COURT REPORTS [2020] 14 S.C.R.

A The Judgment of the Court was delivered by
SANJIV KHANNA, J.
Applications seeking intervention/impleadment are allowed.
2. Considering the nature of controversy involved, this Court, with
B the consent of the counsels for the parties, vide order dated 29th June
2020 had deemed it appropriate to hear and decide challenge to the
validity of the notifications dated 29th March 2019 bearing S.O. Numbers.
1478-E,1479-E, 1480-E and 1481-E pending in several Writ Petitions
filed before different High Courts. We have also examined and decided
the connected challenge to the Trade Notice dated 16th April 2019 issued
C by the Directorate General of Foreign Trade on the ground of excessive
delegation as not being in accord with sub-section (2) to Section 3 read
with the bar under sub-section (3) to Section 6 of the Foreign Trade
(Development and Regulation) Act, 1992 (hereinafter referred to as
‘FTDR Act’).
D 3. Accordingly, we had heard arguments and by this common
judgment would be disposing of the respective Writ Petitions, subject
matter of these Transfer Petitions. This decision would also apply to the
Writ Petitions filed by the intervening applicants.
4. For the sake of convenience, we would be referring the Central
E Government and the authorities collectively as ‘the Union of India’ and
the Writ Petitioners synchronously as ‘importers’. For clarity and
wherever necessary we have referred to the Directorate General of
Foreign Trade, as the ‘DGFT’. DGFT is an authority constituted under
the FTDR Act and appointed by the Central Government to advise them
on foreign trade policy and is responsible for carrying out that policy.
F
A. Factual background and legal issues.
5. The Union of India, vide Notification dated 29th March 2019,
had exercised the powers conferred to it under Section 3 of the FTDR
Act, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy,
2015-2020 and amended the import policy conditions of items of Chapter
G
7 of the Indian Trade Classificatio‘n (Harmonized System), 2017,
Schedule-I (Import Policy) as under:
“S.O. 1478(E).- In exercise of powers conferred by section 3 of
the Foreign Trade (Development and Regulation) Act, 1992 (22
of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade
H Policy, 2015-2020, as amended from time to time, the Central
UNION OF INDIA AND OTHERS v. AGRICAS LLP 391
[SANJIV KHANNA, J.]

government hereby amends the Import Policy Conditions of items A
of Chapter 7 of the Indian Trade Classification (Harmonized
System), 2017, Schedule-I (Import Policy), as under:
Exim Item Description Existing Revised Policy
Code Policy Condition
0713 Beans of the SPP Restricted Import of Moong shall be subject
3110 Vigna Mungo (L.) an annual (fiscal year) quota of B
Hepper. 1.5 lakh MT per procedure to be
0713 Split notified by Directorate General of
90 10 Foreign Trade: -
0713 Other Provided that this restriction shall
90 90 not apply to Government’s import
commitments under any bilateral
or Regional Agreement or
Memorandum of Understanding.
C

2. This notification shall come into force from the date of its
publication in the official Gazette.
xx xx xx
S.O. 1479(E).- In exercise of powers conferred by section 3 of D
the Foreign Trade (Development and Regulation) Act, 1992 (22
of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade
Policy, 2015-2020, as amended from time to time, the Central
government hereby amends the Import Policy Conditions of items
of Chapter 7 of the Indian Trade Classification (Harmonized
E
System), 2017, Schedule-I (Import Policy), as under:
Exim Item Description Existing Existing Policy Revised Policy
Code Policy Condition Condition
0713 Peas (Pisum Sativum) Restricted Restricted for During the period
1000 including Yellow peas, the period from from 1st April, 2019 to
Green peas, Dun peas 1st January, 31st March, 2020,
and Kaspa peas 2019 to 31st total quantity of 1.5 F
0713 Split March, 2019 Lakh MT of Peas
90 10 shall be allowed
0713 Other against licence as per
90 90 the procedure to be
notified by
Directorate General of
Foreign Trade
G
2. This notification shall come into force with effect from 1st
April, 2019.
xx xx xx
S.O. 1480(E).- In exercise of powers conferred by section 3 of
the Foreign Trade (Development and Regulation) Act, 1992 (22 H
392 SUPREME COURT REPORTS [2020] 14 S.C.R.

A of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade
Policy, 2015-2020, as amended from time to time, the Central
government hereby amends the Import Policy Conditions of items
of Chapter 7 of the Indian Trade Classification (Harmonized
System), 2017, Schedule-I (Import Policy), as under:
B Exim Item Description Existing Revised Policy condition
Code Policy
Condition
0713 Beans of the SPP Restricted. Import of Urad shall be subject
31 90 Vigna Radiata to an annual (fiscal year) quota
(L.) Wilezek of 1.5 lakh MT as per procedure
0713 Split to be notified by Directorate
C 90 10 General of Foreign Trade:
0713 Other
90 90 Provided that this restriction
shall not apply to Government’s
import commitments under any
Bilateral or Regional Agreement
or Memorandum of
D Understanding.
2. This notification shall come into force from the date of its
publication in the official Gazette.
xx xx xx
S.O. 1481(E).- In exercise of powers conferred by section 3 of
E
the Foreign Trade (Development and Regulation) Act, 1992 (22
of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade
Policy, 2015-2020, as amended from time to time, the Central
government hereby amends the Import Policy Conditions of items
of Chapter 7 of the Indian Trade Classification (Harmonized
F System), 2017, Schedule-I (Import Policy), as under:
E x im Ite m D e s c rip t io n E x is tin g R e v is e d P o lic y c o n d itio n
C ode P o lic y
C o n d itio n
0713 P ig e o n P e a s (C aja n u s R e s tr ic te d . Im p o rt of P ig e o n Pe as
60 00 C aja n)/ T o o r D al (C a j a n u s C a j a n )/T o o r D al
0713 S p lit s h a ll b e s u b je c t to a n a n n u a l
90 10 (f is c a l Y e a r) q u o ta o f 0 2 la k h
0713 O th e r M T a s p e r p r o c e d u r e to b e
G 90 90 n o tif ie d by D ir e c to r a te
G e n e ra l o f F o r e ig n T r a d e :

P r o v id e d th a t th is re s tric tio n
s h a ll not a p p ly to
G o v e r n m e n t’ s im p o r t
c o m m itm e n ts un de r any
B i late r a l or R e g io n a l
A g reem en t o r M em oran d u m
o f U n d e r s ta n d in g .
H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 393
[SANJIV KHANNA, J.]

2. This notification shall come into force from 1st April, 2019.” A
6. The Trade Notice dated 16th April 2019 issued by the DGFT
had laid down the modalities for making applications for import of Peas,
beans of Moong and Urad and Pigeon Peas and had inter alia stipulated
as under:
“a. Applications are invited online from the intending millers/refiners B
(having own refining / processing capacity) of pulses for its import
as per ANF-2M of FTP 2015-20 to DGFT, at policy2-dgft@nic.in
besides the concerned jurisdictional Regional Authorities.”
7. Earlier, the Union of India had issued a notification dated 25th
April, 2018 under Section 3 of FTDR Act read with the paragraphs 1.02 C
and 2.01 of the Export – Import (EXIM) policy 2015-2020 by which
peas were revised from ‘free’ to ‘restricted’ category for a period of
three months, with a stipulation that during the period 1st April, 2018 to
30th June, 2018 total quantity of 1 lakh MT of Yellow Peas minus the
quantity already imported from 1st April, 2018 would be allowed against D
licence as per the procedure to be notified by the DGFT. The words
‘already imported’ were defined to include shipment already arrived from
1st April,2018 to 25th April, 2018 and those shipments backed by
irrevocable letter of credit or advance payments made through banking
channel before 25th April, 2018.
E
8. Considering the hardships faced by the traders who had made
advance payments, the DGFT vide Trade Notice No. 19 dated 5th July
2018 had allowed the import of Peas proportionate to the advance
payments made before 25th April 2018. By another Trade Notice dated
6th July 2018, Peas, other than Yellow Peas, imported during the
intervening period between 25th April 2018 to 15th May 2018 and awaiting F
clearance at customs or consignment of Peas with Bill of Lading prior to
16th May 2018 were permitted freely. By the third Trade Notice dated
17th August 2018, import of maximum 125 MT of Peas per contract,
irrespective of the advance payment, made before 25th April 2018, was
allowed. G
9. The Union of India had even earlier issued notifications dated
5th August 2017 and 21st August 2017 revising import of beans of Urad/
Moong and Pigeon Peas/Toor dal from ‘free’ to ‘restricted’ with
stipulations as to annual (fiscal year) quota and requirement of a prior
licence from the DGFT. By notifications dated 24th April 2018 import of
H
394 SUPREME COURT REPORTS [2020] 14 S.C.R.

A beans of Urad/Moong and Pigeon Peas/Toor dal was to remain
restricted requiring a prior licence with stipulation as to annual quota for
the fiscal year 2018-19.
10. M/s. Hira Traders had filed Writ Petition Nos. 15921-15924
of 2018 before the High Court of Judicature at Madras challenging
B Notification No. 4/2015-20 dated 25th April 2018 and Trade Notices
No. 05/2018 dated 9th May 2018, No. 10/2018-19 dated 16th May 2018
and No. 12/2018 dated 18th May 2018 respectively. It had also prayed
for permission by way of an interim order to import Peas as per the
contracts. By interim order dated 28th June 2018, the operation of
Notification dated 25th April 2018 was stayed by the Madras High Court,
C thereby permitting imports without an import licence.
11. Several traders had thereafter filed Writ Petitions before
different High Courts challenging imposition of restrictions on import of
Peas and pulses and interim orders were passed staying the notifications
which had the effect of permitting imports without any restriction as to
D quota or licence. The primary grounds raised in the Writ Petitions before
the High Courts were:
(a) The impugned notifications issued by the DGFT had the effect
of modifying or amending the EXIM policy as the specified
items were withdrawn from the free category and moved to
E restricted category. But, the DGFT, a statutory authority
under the provisions of FTDR Act, was not authorised to
authenticate/issue an order amending or modifying the EXIM
policy as this power vests with the Central Government in
terms of sub-section (2) to Section 3, read-with sub-section
(3) to Section 6 of the FTDR Act, which states that powers
F exercisable under Section 3, 5,15,16 and 19 of the FTDR
Act cannot be delegated to the DGFT or any other officer
subordinate to the Director General.
(b) Section 19(3) of the FTDR Act provides that every rule or
every order passed by the Central Government shall be laid,
G as soon as may be after it is made, before each House of the
Parliament while it is in session or thereafter. The impugned
notifications had not been laid before the Houses of the
Parliament.
(c) The Notifications and trade notices suffer from the vires
H and defects mentioned by this Court in Director General of
UNION OF INDIA AND OTHERS v. AGRICAS LLP 395
[SANJIV KHANNA, J.]

Foreign Trade and Another v. Kanak Exports and A
Another.1
(d) The notifications and the trade notices offend the right to
equality and violate Article 14 of the Constitution.
12. The Writ Petitions filed by M/s. Hira Traders were dismissed
by the Madras High Court on 4th April 2019. The Bombay High Court B
dismissed akin Writ Petitions filed by M/s. Taj Agro Commodities Pvt.
Ltd. and others on 3rd July 2018. Similarly, Writ Petitions filed by M/s.
Premium Pulses Products and others were dismissed by the Gujarat
High Court on 19th December 2018. The Madhya Pradesh High Court
had also dismissed similar petitions including the petition filed by M/s. C
Siddhi Vinayak and another, vide judgment dated 25th October 2018.
Judgment of the Gujarat High Court was challenged before this Court in
Special Leave Petition (Civil) No. 1922 of 2019 by M/s. Kusum Agency
and the same was dismissed vide order dated 28th January 2019. Subject
matter of these Writ Petitions were the Notifications dated 5th August
2017, 21st August 2017 and 25th April 2018 and the corresponding trade D
notices issued by the DGFT.
13. Notwithstanding the aforesaid dismissals, as many as 90 Writ
Petitions were filed before the Rajasthan High Court at Jaipur challenging
the Notifications dated 29th March 2019 and the Trade Notice dated
16th April 2019. Similarly, Writ Petitions were filed before the High Courts E
of Delhi, Punjab and Haryana, Andhra Pradesh, Bombay and Calcutta.
In several cases interim orders were passed permitting the importers to
import Peas/pulses notwithstanding the fact that they had not been issued
authorisation/import licences or the total imports would exceed the
maximum or total quantity fixed in the impugned notifications. F
14. Before us, the importers had urged a new legal issue/point
which was not specifically raised in the Writ Petitions; the impugned
notifications were in the nature of ‘quantitative restrictions’ under Section
9A of the FTDR Act, which could be only imposed by the Central
Government after conducting such enquiry, as is deemed fit, and on G
being satisfied that the “goods are imported into India in such quantities
and under such conditions as to cause or threatens to cause serious
injury to domestic industry.” Further, in exercise of power under sub-
section (3) to Section 9A the Central Government has framed the
1
(2016) 2 SCC 226. H
396 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Safeguard Measures (Quantitative Restrictions) Rules, 2012, that
prescribe mandatory and detailed procedure for initiation, investigation,
hearing to parties and adjudication by the Authorised Officer, which
statutory mandate has not been followed. Under sub-rule (4) to the above
Rule, the Authorised Officer has power to initiate suo moto action if he
is satisfied with the information received from any source that sufficient
B
evidence exits regarding increased imports; serious injury or threat of
serious injury to the domestic industry; and causal link between increased
imports and serious injury or threat of serious injury to the domestic
industry. Taking note of the submission, we had directed the parties to
file brief written submissions and the propositions which they propose to
C canvass in the context of the issues to be dealt with by this Court. The
Union of India was also asked to file a Statement/Note disclosing number
of registered licences dealing with import of goods and quantity of
average annual consumption of the concerned goods in the country. By
another order dated 2nd July, 2020 the Union of India was directed to
file an affidavit clearly stating whether the impugned notifications are in
D
the nature of ‘quantitative restrictions’ and if so whether the procedure
under Section 9A of the FTDR Act read with Safeguard Measures
(Quantitative Restrictions) Rules, 2012 had been followed and to produce
the relevant record thereof. We shall elaborate and decide the argument
subsequently.
E B. Discussion on the challenge to the role and authority of
the DGFT to issue the Notifications and Trade Notice and
interpretation of the words “total quantity”.
15. At the outset, we must record that the importers, and in our
opinion rightly, have not raised the contention that the DGFT could not
F have notified the impugned notifications. The notifications themselves
record that they were published by the Ministry of Commerce and
Industry, Department of Commerce, Directorate General of Foreign
Trade. The first paragraph of the notification states that they had been
issued by the Central Government in exercise of powers conferred under
G Article 77 of the Constitution. Clearly, the notifications were issued by
the Central Government, and not the DGFT that had performed the
ministerial act of publication. The decision to amend and issue the
notification was of the Central Government. Neither Section 3(2) nor
Section 6(3) of the FTDR Act was violated. This Court in Delhi
International Airport Limited v. International Lease Finance
H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 397
[SANJIV KHANNA, J.]

Corporation and others2, had referred to Articles 77 and 166 of the A
Constitution and held that the Constitution stipulates that whenever
executive action is taken by way of an order or instrument it shall be
expressed to be taken in the name of the President and Governor in
whose name the executive power of the Union and the States,
respectively, are vested. Article 77 does not provide for delegation of
B
any power, albeit under sub-section (3) of Article 77, the President is to
make Rules for more convenient transaction of business and allocation
of same amongst Ministers. Under the Government of India (Transaction
of Business) Rules, 1961, the government business is divided amongst
Ministers and specific functions are allocated to different Ministries.
The Director General of Foreign Trade is an ex officio Additional C
Secretary in the Government of India and is appointed by the Central
Government under sub-section (1) to Section 6 of the FTDR Act to
advise the Central Government in formulation and carrying out the Foreign
Trade Policy. Wherefore, even the website of the Ministry of Commerce
and Industry, Department of Commerce, states that the DGFT is an
D
agent of the Central Government and attached office to it. Further, clause
(2) of Article 77 provides that validity of an order or instrument made or
executed in the name of the President, authenticated in the manner
specified in the Rules made by the President, shall not be called in question
on the ground that it is not an order or an instrument made or executed
by the President. Therefore, the contention of issuance of the impugned E
notification sans authority, cannot be sustained.
16. FTDR Act vide Section 3(2), as elucidated and examined below,
authorises the Central Government to prohibit, restrict or otherwise
regulate the import or export of goods, by an order published in the
Official Gazette. FTDR Act vide Section 11(1) prohibits imports or exports F
of goods in contravention of the FTDR Act, the rules and orders made
thereunder and the EXIM Policy. Section 5 of the FTDR Act authorizes
the Central Government to formulate and announce the EXIM Policy by
notification in the Official Gazette. Under Section 11(2) of the FTDR
Act, when a person makes or abets or attempts to make any import or
export in contravention of the FTDR Act, any rule or order made G
thereunder or the EXIM policy, he is liable to pay penalty upto Rs.10,000/
- or five times the value of the goods, services or technology, whichever
is greater. Section 11 of the Customs Act,1962 provides that the Central

2
(2015) 8 SCC 446 H
398 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Government may by a notification in the Official Gazette prohibit,
absolutely or subject to conditions as specified, import or export of any
good. The listed purposes are wide and range from conservation of foreign
exchange and safeguarding of balance of payments, avoiding shortage
of goods, prevention of surplus of any agricultural or fisheries product,
prevention of serious injury to domestic production, establishment of any
B
industry and lastly compendiously includes “any other purpose conducive
to the interest of the general public”. Under clause (d) to Section 11 of
the Customs Act goods imported or exported (or attempted to be imported
or exported) contrary to any prohibition are liable to confiscation.
17. We would also without any hesitation reject the contention
C raised by some of the importers that the impugned notification is illegal
because of vagueness or allows restricted quantity of 1/1.5 lakh MT of
Peas (Pisum Sativum) including Yellow Peas, Green Peas, Dun Peas
and Kaspa Peas as against a licence, meaning thereby each licensee is
allowed to import the maximum quantity specified in the notification. In
D other words, the total quantity specified in the notification is per licensee
and not for the total imports of the commodity specified in the notification.
The submission has no merit as the notification expressly uses the
expression ‘total quantity’ of the commodity specified which could be
imported. There is no ambiguity or vagueness in the notifications, relevant
portions of which have been quoted above. Even otherwise the expression
E ‘total quantity’ cannot be construed as quantity per licence issued as the
number of licences issued concerning the subject goods could be
numerable (as per the Union of India 2248,1016 and 2915 licences were
issued in 2019-20 for import of Tur, Moong and Urad dals against
restricted quota of 4,1.5 and 4 lakh MT, respectively). If each licence
F holder is allowed to import 1/1.5 lakh MT of Peas, the total import would
well exceed the total annual consumption after we account for the
production within India. In our opinion, the plea and interpretation of the
importers if accepted will not only be contrary to the express language
of the notification but would frustrate the intent and object of restricting
the imports of the stated goods by prescribing a quota. We decline and
G would not accept this farfetched and somewhat drivel interpretation of
simple and straight forward words.
18. We would also reject the contention raised by the importers
that the Trade Notices issued by the DGFT violate Sections 3 and 5 read
with sub-section (3) of Section 6 of the FTDR Act as they had the
H effect of superseding the Notifications or imposing a new criterion and
UNION OF INDIA AND OTHERS v. AGRICAS LLP 399
[SANJIV KHANNA, J.]

eligibility condition not envisaged by the notifications. The legal effect of A
the notifications was to amend the EXIM policy whereby the specified
commodities would henceforth not be ‘free’ (importable without
restriction) but would fall in the restricted category. Once the commodities
were shifted to the restricted category, the requirement of licence would
flow from the mandate of Section 3 of the FTDR Act read with Rule 4
B
of the Foreign Trade (Regulation) Rules, 1993. Rule 4 reads as under:
“4. Application for grant of licences– A person may make an
application for the grant of a licence to import or export goods in
accordance with the provisions of the Policy or an Order made
under section 3.”
C
Further, the EXIM Policy regulates the restricted goods under
Paragraphs 2.04, 2.08 and 2.10 of Policy, which read as under:
“2.04 Authority to specify Procedures
DGFT may specify procedure to be followed by an exporter or
importer or by any licensing/Regional Authority (RA) or by any D
other authority for purposes of implementing provisions of FT
(D&R) Act, the Rules and the Orders made there under and FTP.
Such procedure, or amendments, if any, shall be published by means
of a Public Notice.
xx xx xx E
2.08 Export/Import of Restricted goods/Services
Any goods/service, the export or import of which is ‘Restricted’
may be exported or imported only in accordance with an
Authorisation/Permission or in accordance with the procedure
F
prescribed in a Notification/Public Notice issued in this regard.
xx xx xx
2.10 Actual User Condition
Goods which are importable freely without any ‘Restriction’ may
be imported by any person. However, if such imports require an G
Authorisation, actual user alone may import such good(s) unless
actual user condition is specifically dispensed with by DGFT.”
Paragraph 2.08 states that any goods or services, import or export
of which is restricted, can be exported or imported only in accordance
with the authorisation/permission or in accordance with the procedure H
400 SUPREME COURT REPORTS [2020] 14 S.C.R.

A prescribed in the notification/public notice in this regard. Paragraph 2.04
states that the DGFT may specify procedures to be followed by an
exporter or an importer or by a licencing/regional authority, etc. for the
purpose of implementing provisions of the FTDR Act, the rules and orders
made thereunder. Such procedures or amendments, if any, shall be
published by means of a public notice. Paragraph 2.10 sets the matter
B
beyond controversy as it states that the goods which are freely importable
without a restriction may be imported by any person. However, if goods
require authorisation, ‘actual user’3 alone may import such goods.
However, the DGFT can dilute and dispense with the ‘actual user’
condition.
C 19. The effect of the Notifications, as noticed and beyond doubt,
is to bring the specified commodities from free to the restricted category
and therefore the imports in question would require a prior authorisation
for import. The requirement of licence is nothing but authorisation.
Therefore, in terms of paragraph 2.10, the imports of the specified
D commodities would only be by the ‘actual user’, unless the ‘actual user’
condition was specifically dispensed with or diluted by the DGFT. The
Directorate by specifying that the licence would be issued to the miller
or refiner has, therefore, just clarified that the ‘actual user’ alone will be
permitted to import the restricted goods mentioned in the notification for
which a prior authorisation or licence is required. The importers are
E traders and it is not the case of any of the importers that they are the
‘actual users’. Further, none of the importers have applied for a licence
or authorisation for import of the restricted commodities. Violation of
clause 9.03 of the EXIM Policy defining the expression ‘Actual User’,
is neither alleged nor argued before us.
F
3
9.03 “Actual User” is a person (either natural or legal) who is authorized to use
imported goods in his/its own premise which has a definitive postal address.
(a) “Actual User (Industrial)” is a person (either natural & legal) who utilizes imported
goods for manufacturing in his own industrial unit or manufacturing for his own use in
another unit including a jobbing unit which has a definitive postal address.
(b) “Actual User (Non-Industrial)” is a person (either natural & legal) who utilizes the
G imported goods for his own use in:
(i) any commercial establishment, carrying on any business, trade or profession, which
has a definitive postal address; or
(ii) any laboratory, Scientific or Research and Development (R&D) institution,
university or other educational institution or hospital which has a definitive postal
address; or
H (iii) any service industry which has a definitive postal address.
UNION OF INDIA AND OTHERS v. AGRICAS LLP 401
[SANJIV KHANNA, J.]

20. The importers have raised the contention that the expression A
‘if such imports’ used in the second sentence of paragraph 2.10 only
qualifies the first sentence of paragraph 2.10. We do not accept the
contention, for paragraph 2.10 consists of two parts. The first part relates
to goods which are freely importable without any licence and states that
such goods that can be imported by any person. The second part refers
B
to such imports which require authorisation and not the imports which
are freely importable without any restriction. ‘Actual user’ condition,
therefore, applies by default when imports require an authorisation.
However, the DGFT can specifically dispense with or dilute the ‘actual
user’ condition.
C. Section 9A of the FTDR Act and it’s interpretation. C

(i) General Agreement on Tariff and Trade – 1947 and 1994.
21. Conference at Bretton Woods, New Hampshire in 1944 lead
to establishment of the ‘International Monetary Fund’ and the ‘World
Bank’, but the attempt to establish ‘International Trade Organisation’ to D
develop and coordinate international trade faltered and was finally given
up in 1950. However, multilateral trade negotiations had continued with
the objective to prepare a multilateral treaty containing general principles
of international trade and a schedule of tariff reductions. By the end of
1947, the work on the General Agreement on Tariff and Trade (‘GATT’),
1947 and tariff reduction was finalised and agreed upon. Interim E
commission of the ‘International Trade Organisation’ became the GATT
Secretariat based in Geneva, Switzerland. On or about 8th July 1947,
Government of India became a signatory and ratified GATT-1947.
However, GATT-1947 is considered to be a failure or at best had a
limited impact. Most jurists and economists hold that the GATT-1947 F
suffered from ‘birth defects’ as it did not have a legal personality, lacked
established procedures and organizational structure in the absence of a
charter; had ‘provisional application’ as it had provisions permitting
contracting parties to maintain legislations in-force inconsistent with the
‘grandfathering rights’ and there was ambiguity and confusion about the
GATT’s authority and decision making ability4. G

22. What followed was several years of intense negotiations
involving over 100 nations that finally ended in 1994 at Marrakesh,
4
The World Trade Organization, law, practice and policy Mitsuo Matsushita, Thomas
J. Schoenbaum, Petros C. Mavroidis, and Michael Hahn, 3rd Edition 2015 at page
Nos. 2 – 3.
H
402 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Morocco, with a multilateral international treaty of over 400 pages of
basic text with substantive rules and tariff schedules. The final act signed
exceeded 26,000 pages. This treaty popularly known as GATT-1994
was signed by 128 countries including India on 1st January 1995. On the
same day, the World Trade Organisation (WTO), an institution with a
secretariat and staff, replaced GATT and came into existence, as the
B
international organisation for overseeing and regulating functioning of
the multilateral trade system. GATT-1994 in nutshell is a rule-oriented
package consisting of multilateral trade agreements annexed to a single
document and works on the basis of single undertaking approach whereby
all agreements annexed become binding on all the members as single
C body of law. The main agreement consists of the preamble and XVI
articles establishing the WTO, four annexures and declarations, decisions
and understandings. Annexure I to the multilateral agreement is divided
into three parts. Annexure 1A consists of the GATT-1994 and twelve
other agreements on agriculture; application of sanitary and phytosanitary
measures; textiles and clothing; technical barriers to trade; trade related
D
investment measures; anti-dumping duty; rules of customs valuation;
rules of pre-shipment valuation; rules of origin; import licensing
procedures; subsidies and countervailing measures; and safeguards.
Article II of GATT-1994 limits tariff charges to those agreed in the
Schedules of Concessions, while Article I lay down the principle of Most-
E Favoured-Nation giving benefit of the concessions to all WTO members.
Article III mandates requirement of national treatment of import with
respect to taxes and regulations. Articles VI and XVI relate to subsidies,
antidumping and countervailing duties. Article VII incorporates rules on
valuation for customs purposes. Article XI, which we shall subsequently
examine, prohibits quotas, import or export licences and other non-tariff
F
measures, with some exceptions. Annexure 1A includes schedule of
concessions from each major trading country and a general interpretative
note that provides that in case of a conflict between provisions of GATT-
1994 and another Annexure A-1 agreement, the provisions of latter would
control. Annexure 1B consists of the General Agreement on Trade in
G Services. Annexure 1C consists of the Agreement on Trade Related
Aspects of Intellectual Property Rights. Annexure 2 consists of the
Understanding on Rules and Procedures Governing Settlement of
Disputes, referred to as the Dispute Settlement Understanding, providing
mechanism for resolution of trade disputes among WTO members.
Annexure 3 establishes the trade policy review mechanism, with
H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 403
[SANJIV KHANNA, J.]

procedure for periodic review of compliance with the WTO agreement A
by each member. Annexure 4 consists of plurilateral trade agreements
binding only on the parties that have accepted them.
23. GATT-1994 also has provisions that allow and permit
exceptions. There are exceptions to quotas for balance-of-payments
purposes in Article XII, XIII, XV and XVII, Section B, exceptions for B
developing countries vide Article XVIII and Part IV and exception for
health, safety, protection of natural resources and other matters in Article
XX. Article XIX, which we would again refer to, is an exception and
sometimes referred to as the escape clause, that provides emergency
action where serious injury is caused or threatens domestic industry.
There are exceptions for national security vide Article XXI, customs C
unions and free trade areas vide Article XXIV, waivers by the contracting
parties vide Article XXV and ‘opt out’ option on ‘one-time basis’ when
a new member joins GATT vide Article XXXV5.
24. The ‘Marrakesh Agreement’ enacts and incorporates rules-
oriented approach regulating the conduct of the WTO members and are D
designed to ensure that the tariff concessions and the multilateral trade
treaty works as intended and not undermined. Articles XXII6 provides
for sympathetic consideration and consultation and satisfactory solution
with respect to any matter affecting the operation of GATT-1994. Article
XXIII7 allows a GATT contracting party to make a complaint should it E
5
The World Trade Organization, law, practice and policy Mitsuo Matsushita, Thomas
J. Schoenbaum, Petros C. Mavroidis, and Michael Hahn, 3rd Edition 2015 at page
No. 3.
6
XXII. Consultation
1. Each contracting party shall accord sympathetic consideration to, and shall afford
adequate opportunity for consultation regarding, such representations as may be made F
by another contracting party with respect to any matter affecting the operation of this
Agreement. 2. The CONTRACTING PARTIES may, at the request of a contracting
party, consult with any contracting party or parties in respect of any matter for which
it has not been possible to find a satisfactory solution through consultation under
paragraph 1.

7
XXIII. Nullification or Impairment
G
1. If any contracting party should consider that any benefit accruing to it directly or
indirectly under this Agreement is being nullified or impaired or that the attainment of
any objective of the Agreement is being impeded as the result of (a) the failure of
another contracting party to carry out its obligations under this Agreement, or (b) the
application by another contracting party of any measure, whether or not it conflicts
with the provisions of this Agreement, or (c) the existence of any other situation, the H
404 SUPREME COURT REPORTS [2020] 14 S.C.R.

A consider that another contracting party is directly or indirectly nullifying,
impairing the GATT-1994 or otherwise impeding attainment of its objective:
(a) by failure in carrying out its obligations; (b) by measures, even when
they are not in conflict with GATT-1994; and (c) in any other situation.
These Articles emphasise on the need for consultation, withdrawal of
conflicting measures and mutual satisfactory solution of the matter by
B
the contracting parties concerned, consistent with the GATT-1994. Albeit
on failure to reach a satisfactory adjustment within reasonable time or in
case of (c) (supra), the matter is to be referred to the Contracting Parties
to investigate and make recommendations to the offending party or make
a ruling on the matter, as appropriate. As the question of invocation and
C jurisdiction of the national or domestic court arises for consideration in
the present case, we would like to slightly elaborate on the dispute
resolution mechanism in Annexure 2. It contains 27 Articles totalling
about 143 paragraphs and four appendices. For the present case, it would
be suffice to record that the WTO, at the top, consists of Ministerial
Conference which meets not less than every two years. Next there are
D
four councils, including the General Council which has an overall
supervising authority and to carry out many functions of the Ministerial
Conference. In addition, we have Council for Trade Inputs, Council for
contracting party may, with a view to the satisfactory adjustment of the matter, make
written representations or proposals to the other contracting party or parties which it
E considers to be concerned. Any contracting party thus approached shall give sympathetic
consideration to the representations or proposals made to it.
2. If no satisfactory adjustment is effected between the contracting parties concerned
within a reasonable time, or if the difficulty is of the type described in paragraph 1 (c)
of this Article, the matter may be referred to the CONTRACTING PARTIES. The
CONTRACTING PARTIES shall promptly investigate any matter so referred to them
and shall make appropriate recommendations to the contracting parties which they
F consider to be concerned, or give a ruling on the matter, as appropriate. The
CONTRACTING PARTIES may consult with contracting parties, with the Economic
and Social Council of the United Nations and with any appropriate inter-governmental
organization in cases where they consider such consultation necessary. If the
CONTRACTING PARTIES consider that the circumstances are serious enough to
justify such action, they may authorize a contracting party or parties to suspend the
G application to any other contracting party or parties of such concessions or other
obligations under this Agreement as they determine to be appropriate in the
circumstances. If the application to any contracting party of any concession or other
obligation is in fact suspended, that contracting party shall then be free, not later than
sixty days after such action is taken, to give written notice to the Executive Secretary¹
to the CONTRACTING PARTIES of its intention to withdraw from this Agreement
and such withdrawal shall take effect upon the sixtieth day following the day on which
H such notice is received by him.
UNION OF INDIA AND OTHERS v. AGRICAS LLP 405
[SANJIV KHANNA, J.]

Trade and Services, and Council for Trade Related Aspects of Intellectual A
Property Rights. The General Council, as per the WTO Charter,
discharges the responsibility of the Dispute Settlement Body (DSB).
Thus, the WTO Charter adopts a legalistic and a rule-oriented approach
for resolving issues relating to violation of the GATT agreements. The
DSB establishes Panel(s) and on adoption of Panel (and the Appellate
B
Body) reports, provides for implementation of the recommendation and
rulings, and can authorise action for failure to comply with the
recommendation(s) and ruling. The DSB, though a part of the General
Council, has its own Chairman and follows separate procedures. The
Panels are normally composed of three persons, and in exceptional cases
five, who are well qualified government or non-government individuals C
selected from a roaster of persons suggested by WTO members. The
panel members serve in their individual capacities and not as
representatives of WTO members. The Appellate Body reviews Panel
decisions. The Appellate Body is a standing institution composed of
seven persons appointed by DSB for four-year term. Members of the
D
Appellate Body must be persons with recognised authority with
demonstrated expertise in law and international trade who are not
affiliated with any government. Membership of the Appellate Body is
broadly representative of the membership of the WTO. The procedure
adopted for the dispute resolution mechanism is to facilitate prompt
settlement of situations with the objective and purpose that the ‘Marrakesh E
Agreement’ is preserved and not nullified or impaired.
(ii) Obligations of the contracting party and effect of
international treaty, namely, GATT-1994 on the domestic law.
25. Application of treaties into national legal systems and the
hierarchical status of the norms to be so applied are extraordinarily F
complex and vary from country to country depending upon constitutional
and other municipal rules. Further, a number of legal and constitutional
issues regarding international treaties arise in domestic law, like the power
to negotiate, sign and exit a binding international obligation or treaty,
validity of a treaty under the national constitutional law, power to implement G
the treaty obligations and applicability of treaty in domestic law including
the principle of invocability or justiciability as contrasted from direct
applicability and hierarchy of norms in domestic law where the treaty
norms conflict with the norms of the domestic law. There is no uniformity
in approach on these aspects as there are different national systems of
H
406 SUPREME COURT REPORTS [2020] 14 S.C.R.

A treaty applications8. Two aspects relevant in the present case are; (i)
applicability of the international treaty in domestic law and (ii) ‘invocability’
of the treaty in municipal law and before the municipal courts.
26. In spite of there being different constitutional and statutory
approaches on applicability, the States as signatories to the international
B treaty are under an obligation to act in conformity and bear responsibility
for breaches, be it as a consequence of legislative enactment, executive
action or even judicial decisions. The State cannot plead and rely upon
internal law including judicial decisions as a defence to a claim for breach
of an international obligation. Acts of legislation, executive measures
and judicial decision making are not treated as third party acts for which
C the State is not responsible. The national law, executive mandate and
action and the decisions of the domestic courts are facts which express
the will and constitutes activities of the State. In international law,
municipal laws cannot prevail upon the treaties as internal actions must
comply with the international obligation. They may constitute breach of
D the treaty.
27. Thus, breach of a stipulation in international law cannot be
justified by the State by referring to its domestic legal position. This rule
of international law is unexceptionable and prosaic, as the contra view
would permit the international obligations to be evaded by the simple
E method of domestic legislation, executive action or judicial decision.
Contracting States are under an obligation to act in conformity with the
rules of international law and bear responsibility for breaches whether
committed by the legislature, executive or even judiciary. In a way,
therefore, international treaties are constraint on sovereign activity, albeit
voluntarily agreed.
F
28. For the purpose of GATT-1994, municipal laws are evidences
of fact, including evidence of conduct in violation of the norms and
objective of the treaty. At the same time, failure to enact an internal
domestic law in conformity with the international obligation is not a breach
of international law, unless there is such requirement and obligation
G created by the international treaty. In the absence of any such binding
clause, breach arises only when the State concerned fails to observe its
obligation on a specific occasion.

8
Prof. John. H. Jackson in his essay- Status of Treaties in Domestic Legal Systems; a
policy analysis.
H
UNION OF INDIA AND OTHERS v. AGRICAS LLP 407
[SANJIV KHANNA, J.]

29. Various theories have been put forward to explain applicability A
of international customary and treaty law in domestic law. The dualist
position is that the international municipal law operates separately and
before any rule or principle of international law can have effect within
the domestic jurisdiction, it must be expressly or specifically transformed
into municipal law by use of appropriate constitutional machinery. Dualism
B
stresses that international law and municipal law exist separately and
cannot have effect on or overrule the other. Consequently, the municipal
laws and international laws can operate simultaneously as they regulate
different subject matters. International law is between sovereign States,
while the municipal law applies within the State and regulates legal
relationship between the citizens/subjects inter se and the citizen/subject C
and the State. Monistic legal systems include international treaties in
domestic law. Monism takes the form of assertion of the supremacy of
the international law even within the national sphere, with the
understanding and belief that an individual is a subject of international
law. International norms provide the basic norms for the national legal
D
order, and both are a part of the same systems of norms.
30. Most jurists draw distinction between ‘direct application’ of
treaties in domestic law, and national legal systems that mandate and
require ‘act of transformation’ for an international treaty to apply and be
a part of domestic law. ‘Direct application’ means and mandates that
the treaty norms, either wholly or to some extent, are directly treated as E
norms of domestic law and enjoy the statutory law status by default in
the domestic legal system. The term ‘direct application’ will also cover
situations in which government or different levels of government utilise
treaty norms as part of domestic jurisprudence and is not limited to
situations in which private parties can sue on the basis of the treaty F
norms. As explained below, there is distinction between direct application
and ‘invocability’. ‘Act of transformation’ principle means and implies
that an international treaty is not directly applicable in the domestic law
system and requires provision in the domestic rules before it is applied.
‘Transformation’ is a word of wide amplitude and does not refer to mere
implementation as it includes the right of the country to adopt, amend or G
modify the treaty language into domestic jurisprudence. The ‘act of
transformation’ is different from ‘direct application’ as in the former the
treaty is not received and treated as part of domestic jurisprudence until
it is published and made part of the domestic jurisdiction in the same
manner as other law. H
408 SUPREME COURT REPORTS [2020] 14 S.C.R.

A 31. The Constitution of Netherlands is generally regarded as
monistic since it expressly provides that certain treaties are directly
applied and the treaties are superior to all law including constitutional
laws. The 1958 Constitution of France also calls for the direct application
and a higher status for treaties than later legislations. Similar provisions
are to be found in different ways in the Constitutions of Belgium and
B
Switzerland. Under the United States jurisprudence, a differentiation is
made between ‘self-executing treaties’ which can be directly applied
and ‘non-self-executing treaties’9. Courts have ruled that a directly self-
executing treaty has same status as federal laws and the latest in time
therefore prevails. Consequently, a later internal federal statue will prevail
C over the international agreement. GATT-1994 in the United States legal
system is a ‘non-self-executing treaty’. The European Union is established
by two treaties namely the Treaty of European Union and the Treaty on
the Functioning of the European Union. Member States have attributed
the European Union with competence that may either a-priori render
the pertinent state activity incompatible with European law or may, through
D
use of such legal title, pre-empt the states from continuing to act or
legislate. This could lead to exclusive European Union external
competence even in the area of shared internal competence. European
Union Law enjoys primacy over the laws of the member states and may
have direct effect. Union legislators are on equal footing and are directly
E elected to the European Parliament and the Council for the European
Union. However, both European Union and member States are members
of the WTO and are contracting parties to GATT-1994. International
agreements concluded by European Union become integral part of the
European Union’s legal order and are hierarchically positioned between
the two founding treaties and the ordinary secondary legislation, which
F
principle applies to GATT-1994. On this basis it has been held that the
European Union law is to be interpreted in light of the WTO obligation to
ensure GATT-1994 consistent interpretation of the European Union
legislation. At the same time, authors and jurists have observed that
individuals and member States challenge for GATT-1994 incompatibility
G secondary legislation have received different answers as in some cases
it has been held that international agreement will only be granted direct
effect if the provisions are capable of conferring rights on citizens of the

9
Prof. John. H. Jackson in his essay- Status of Treaties in Domestic Legal Systems; a
H policy analysis.
UNION OF INDIA AND OTHERS v. AGRICAS LLP 409
[SANJIV KHANNA, J.]

community which they can invoke before the court10. (Aspect of A
‘invocability’ has been separately examined below.)
32. United Kingdom, being a parliamentary democracy, the treaties
generally do not have direct statute like application, though they may
have other internal effects. United Kingdom and other parliamentary
democracies, like Canada and Australian systems, are generally B
considered as prime example of a dualist system. In United Kingdom,
the Crown is the constitutional authority to enter into treaties and this
prerogative power cannot be infringed by the courts. Further, treaties
cannot operate by themselves and require passing off an enabling statute.
Lord Oliver in the House of Lords decision in Maclaine Watson & Co.
Ltd. v. Department of Trade and Industry & Anr.11 had noted: C

“...as a matter of the constitutional law of the United Kingdom,
the royal prerogative, whilst it embraces the making of treaties,
does not extend to altering the law or conferring rights on individuals
or depriving individuals of rights which they enjoy in domestic law
without the intervention of Parliament. Treaties, as it is sometimes D
expressed, are not self-executing. Quite simply, a treaty is not
part of English law unless and until it has been incorporated into
the law by legislation.”
Except to the extent that a treaty becomes incorporated into the
laws by a statute, the courts in United Kingdom have no power to enforce E
treaty rights and obligations at the behest of foreign government or even
a citizen of the United Kingdom. It has been also held that decision as to
whether the terms of the treaty have been complied with are matters
exclusively for the Crown as ‘the court must speak with the same voice
as the executive’12. This principle is subject to the exceptions in cases F
where reference to the treaty is needed to explain the relevant factual
background in cases where terms of the treaty are incorporated in a
contract or the legislation refers to a relevant but un-incorporated treaty.
However, an unincorporated international treaty can give rise to legitimate
expectations that the executive, in the absence of statutory or executive
indications to the contrary, will act in conformity with the treaty. In all G

10
The World Trade Organization, law, practice and policy Mitsuo Matsushita, Thomas
J. Schoenbaum, Petros C. Mavroidis, and Michael Hahn, 3rd Edition 2015 at page
Nos. 33–40.
11
(1989) 3 All ER 523
12
Lonrho Exports v. ECGD, [1998] 3 W.L.R 394. H
410 SUPREME COURT REPORTS [2020] 14 S.C.R.

A other cases, rights and duties of the British subjects are affected by an
Act of Parliament which is necessary for the provisions of the particular
treaty to be operative within the United Kingdom. Further and at the
same time, there is a presumption in English law that legislation is to be
construed as to avoid conflict with international law. This specifically
applies when interpretation to the Act of Parliament is in question, i.e.
B
while interpreting the enactment as a consequence of the ‘act of
transformation’. The courts would intend to bring the treaty into effect if
the provisions are unambiguous unless they have no choice. In United
Kingdom, the legislature is required to enact laws, that incorporate and
transform treaties or treaty norms into domestic law. Variation of this
C approach is to be found in other countries like Germany and Italy. Thus,
there is great diversity of national constitutional systems regarding
international treaty application.
33. It would be now appropriate to refer to the principle of
‘invocation’. Invocability in simple terms refers to justiciability;
D admissibility of a claim before the national courts. It is not connected
with the defence or merits of the defence. In case where an ‘act of
transformation’ is required, treaties may partially or entirely become part
of the domestic law. Where the treaty or portion thereof become a part
of the domestic law by ‘act of transformation’, it is obvious that only the
part incorporated or transformed into domestic law is invocable and
E justiciable and not the parts that are not codified into domestic law.
However, invocability can embrace several ideas which are intertwined
and is of specific concern in cases of constitutions allowing direct
application. Here ‘invocability’ is a generic term which means to embrace
a small inventory of means of judicial control over the use in a particular
F law suit of the direct applicability of the treaty. As in case of ‘act of
transformation’, even in direct application cases, some jurisdictions accept
the principle of partial direct application and, therefore, the treaty is directly
applicable for some purposes and not others. Professor John H. Jackson,
a leading jurist on this subject, whose treatise and essays have helped us
understand the GATT and the complexities, in his essay ‘Status of
G Treaties in Domestic Legal System; A Policy Analysis’ referring to
‘invocability’ even in cases of direct application in domestic law, has
observed as under:
“Even when the rule of direct application covers most, or
theoretically all, treaties or certain broad categories of treaties,
H courts will find ways to avoid applying the treaty norm in particular
UNION OF INDIA AND OTHERS v. AGRICAS LLP 411
[SANJIV KHANNA, J.]

cases, perhaps by relying on one or another concept that can be A
lumped under the rubric of invocability (e.g. standing), or by holding
that the treaty norm is designed to constrain or assist certain
government agencies and not private litigants. Or the court may
refuse to apply a treaty directly because it is not “specific and
precise” enough for that purpose, a concept akin to “justiciability”.
B
Other disqualifying concepts may also be employed.”
(iii) Legal position in India.
34. The law in India is not very different from other Commonwealth
Countries. Article 73 of the Constitution delineates the extent of executive
power of the Union which extends to all matters with respect to which C
the Parliament has the power to make laws and it extends to the exercise
of such rights, authority and jurisdiction as are exercisable by the Central
Government by virtue of any treaty or agreement. Proviso to the Article
deals with limitation of the executive power under sub-clause (a) with
which we are not concerned. Chapter I of Part XI of the Constitution,
captioned ‘Relations between the Union and the Sates’ vide different D
Articles stipulates that in respect of List 1 of the 7th Schedule the
Parliament has exclusive power to make laws for the whole or any of
the territory of India; in respect of List II (State List) the legislatures of
the States have exclusive power to make laws for the whole or any part
of the States; and in respect of List III (Concurrent List) the Parliament E
and the State Legislatures have the power to make laws. For the purpose
of the present case, Article 253 of the Constitution is important as it
states that notwithstanding anything in the foregoing provisions of this
Chapter, the Parliament has the power to make laws for the whole or
any part of the territory of India for implementing any treaty, agreement
or convention with any other country or countries or decisions made at F
any international conference, association or body.
35. Constitutional Bench of this Court in Maganbhai Ishwarbhai
Patel Etc. v. Union of India13 had examined the question whether the
Government of India should be restrained from ceding without approval
of the Parliament the ‘undemarcated area’ in the Runn of Kutch to G
Pakistan as awarded in the award dated 19th February 1968. In the
judgment authored by Hidayatullah, C.J., on behalf of himself and three
other Judges, he referred to the earlier decisions of this Court in In re.

13
(1970) 3 SCC 400 H
412 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Berubari Union (I)14, Rai Sahib Ram Jawaya Kapur and Others v.
State of Pubjab15 and Ram Kishore Sen and Others v. Union of India
and Others16 and noticed the distinction between (i) formation of the
treaty; and (ii) performance of the treaty obligation. The first is an
executive act and the second a legal act if domestic law is required.
Unless the Parliament assents to the treaty and accords its approval to
B
the first executive act, the performance has no force of law though the
treaties created by the executive action bind the contracting States and,
therefore, means must be found for their implementation within law.
Consequently, whenever a peace treaty involves municipal execution,
statutes have to be passed. While accepting the contention that precedents
C of this Court are clear that no cession of Indian territory can take place
without constitutional amendment, the Constitution Bench held that the
settlement of a boundary dispute cannot be held to be cession of territory.
Accordingly, the decision to implement the award by exchange of letters
treating the award as an operating treaty by demarcating the correct
boundary line was within the executive power of the government, and
D
no constitutional amendment was required.
36. More important for our purpose is the concurring opinion of
Shah, J. who had quoted the effect of international treaty on the rights of
the citizen/subjects of the State as stated in Oppenheim’s International
Law, 8th Edition, in the following words:
E
“...Such treaties as affect private rights and, generally, as required
for their enforcement by English Courts a modification of common
law or of a statute must receive parliamentary assent through an
enabling Act of Parliament. To that extent binding treaties which
are part of International Law do not form part of the law of the
F land unless expressly made so by the Legislature.
(page 40)
The binding force of a treaty concerns in principle the contracting
States only, and not their subjects. As International Law is primarily
G a law between States only and exclusively, treaties can normally
have effect upon States only. This rule can, as has been pointed
out by the Permanent Court of International Justice, be altered by

14
AIR 1960 SC 845
15
AIR 1955 SC 549
H 16
AIR 1966 SC 644
UNION OF INDIA AND OTHERS v. AGRICAS LLP 413
[SANJIV KHANNA, J.]

the express or implied terms of the treaty, in which case its A
provisions become self-executory. Otherwise, if treaties contain
provisions with regard to rights and duties of the subjects of the
contracting States, their Courts, officials, and the like, these States
must take steps as are necessary according to their Municipal
Law, to make these provisions binding upon their subjects, Courts,
B
officials, and the like.
(page 924)”
Referring to the power under Article 73 of the Constitution and
the power of the Parliament to make laws in terms of Article 253, Shah,
J. had further observed: C
“80...By Article 73, subject to the provisions of the Constitution,
the executive power of the Union extends to the matters with
respect to which the Parliament has power to make laws. Our
Constitution makes no provision making legislation a condition of
the entry into an international treaty in times either of war or D
peace. The executive power of the Union is vested in the President
and is exercisable in accordance with the Constitution. The
Executive is qua the State competent to represent the State in all
matters international and may by agreement, convention or treaties
incur obligations which in international law are binding upon the
State. But the obligations arising under the agreement or treaties E
are not by their own force binding upon Indian nationals. The
power to legislate in respect of treaties lies with the Parliament
under Entries 10 and 14 of List I of the Seventh Schedule. But
making of law under that authority is necessary when the treaty
or agreement operates to restrict the rights of citizens or others or F
modifies the laws of the State. If the rights of the citizens or
others which are justiciable are not affected, no legislative measure
is needed to give effect to the agreement or treaty.”
37. It was also clarified that Article 253 deals with the legislative
power of the Parliament and thereby confers power on the Parliament G
which it may not otherwise possess. This provision does not seek to
circumscribe the extent of power conferred under Article 73. In other
words, in consequence of the exercise of executive power, rights of the
citizens or others are restricted or infringed, or laws are modified, the
exercise of power must be supported by legislation; where there is no
H
414 SUPREME COURT REPORTS [2020] 14 S.C.R.

A such restriction, infringement of the right or modification of the laws, the
executive is competent to exercise the power. The dictum in Maganbhai
Ishwarbhai Patel (supra) can be summarised17 as under:
“(i) The stipulations of a treaty duly ratified by the Central
Government, do not by virtue of the treaty alone have the force of
B law.
(ii) Though the Executive (Central Government) has power to
enter into international treaties/agreements/ conventions under
Article 73 (read with Entries 10 & 14 of List I of the VII Schedule
to the Constitution of India) the power to legislate in respect of
C such treaties/agreements/conventions, lies with Parliament. It is
open to Parliament to refuse to perform such treaties/agreements/
conventions. In such a case, while the treaties/agreements/
conventions will bind the Union of India as against the other
contracting parties, Parliament may refuse to perform them and
leave the Union of India in default.
D
(iii) Though the applications under such treaties/agreements/
conventions are binding upon the Union of India (referred to as
“the State” in Maganbhai’s case) these treaties/agreements/
conventions “are not by their own force binding upon Indian
nationals”.
E
(iv) The making of law by Parliament in respect of such treaties/
agreements/conventions is necessary when the treaty or
agreement restricts or affects the rights of citizens or others or
modifies the law of India,

F (v) If the rights of citizens or others are not affected or the laws
of India are not modified then no legislative measure is needed to
give effect to such treaties/agreements/conventions.”
38. Even earlier in Gramophone Company of India Ltd. v.
Birendra Bahadur Pandey and Others18, this Court had held as under:
G “5. There can be no question that nations must march with the
international community and the Municipal law must respect rules
of International law even as nations respect international opinion.
The comity of Nations requires that Rules of International law
17
Karan Dileep Nevatia v. Union of India, (2010) 1 Bom CR 588
18
H (1984) 2 SCC 534
UNION OF INDIA AND OTHERS v. AGRICAS LLP 415
[SANJIV KHANNA, J.]

may be accommodated in the Municipal Law even without express A
legislative sanction provided they do not run into conflict with Acts
of Parliament. But when they do run into such conflict, the
sovereignty and the integrity of the Republic and the supremacy
of the constituted legislatures in making the laws may not be
subjected to external rules except to the extent legitimately
B
accepted by the constituted legislatures themselves. The doctrine
of incorporation also recognises the position that the rules of
international law are incorporated into national law and considered
to be part of the national law, unless they are in conflict with Act
of Parliament. Comity of Nations or no, Municipal Law must
prevail in case of conflict. National Courts cannot say yes if C
Parliament has said no to a principle of international law. National
Courts will endorse international law but not if it conflicts with
national law. National courts being organs of the National State
and not organs of international law must perforce apply national
law if international law conflicts with it. But the Courts are under
D
an obligation within legitimate limits, to so interpret the Municipal
Statute as to avoid conformation with the comity of Nations or
the well-established principles of International law. But if conflict
is inevitable, the latter must yield.”
39. In Jolly George Varghese and Another v. The Bank of
Cochin19 this Court, while dealing with the application of an international E
covenant pertaining to prohibition of civil imprisonment on non-discharge
of decree debt, observed that even though India be a signatory of a
covenant and Article 51(c) of the Constitution obligates the State to
“foster respect for international law and treaty obligations in the dealings
of organised people with one another”, the provisions of the international F
covenant is to be applied by an Indian Court when there is a specific
provision in the Indian law. The positive commitment in the international
agreement ignites legislative action at home but does not automatically
make the covenant an enforceable part of the corpus juris of India.
The international conventional law must go through the process of
transformation into municipal law before the international treaty can G
become an internal law. The Court, dealing with the enforceability of the
international law at the instance of individuals, observed that the remedy
for breaches of International Law in general is not to be found in the law
19
(1980) 2 SCC 360 H
416 SUPREME COURT REPORTS [2020] 14 S.C.R.

A courts of the State because International Law per se or proprio vigore
has not the force or authority of civil law, till under its inspirational impact
actual legislation is undertaken. The individual citizens, therefore, cannot
complain about their breach in the municipal courts even if the country
concerned has adopted the covenants and ratified the operational protocol.
B 40. Afore-quoted decisions are on the legal effect of international
treaties in the domestic law in India. The ratio of these decisions primarily
relates to and is confined to the requirement and mandate of the need
for ‘act of transformation’ to be a part and parcel of domestic law, which
confers a right to invocability. The ratio of the above decisions has to be
distinguished from decisions interpreting domestic law after the ‘act of
C transformation’ consequent to which portions of GATT-1994 stand
enacted thereby conferring right of invocability to parties. The decisions
referred to in paragraphs 41 to 44 and relied upon by the importers fall in
the second category.
41. This Court had the occasion to examine and interpret Customs
D Valuation Rules, 1988 that were framed keeping in view the GATT
protocol and WTO agreement in Associated Cement Companies Ltd.
v. Commissioner of Customs20 and it was observed:
“45. It will be appropriate to note that the Customs Valuation Rules,
1988 are framed keeping in view the GATT protocol and the WTO
E agreement. In fact our rules appear to be an exact copy of GATT
and WTO. For the purpose of valuation under the 1988 Rules the
concept of “transaction value” which was introduced was based
on the aforesaid GATT protocol and WTO agreement. The shift
from the concept of price of goods, as was classically understood,
F is clearly discernible in the new principles. Transaction value may
be entirely different from the classic concept of price of goods.
Full meaning has to be given to the rules and the transaction value
may include many items which may not classically have been
understood to be part of the sale price.”

G 42. Similarly, in State of Punjab and Another v. Devans Modern
Breweries Ltd. and Another21, this Court while examining the rationale
behind imposition of countervailing duty had referred to the WTO
agreement to observe and hold as under:

20
(2001) 4 SCC 593
H 21
(2004) 11 SCC 26
UNION OF INDIA AND OTHERS v. AGRICAS LLP 417
[SANJIV KHANNA, J.]

“305. The economic rationale is very doubtful, as the effect of a A
countervailing duty is to make the product more expensive in the
importing country. However, there has been some level of an
explanation provided. Every time a tariff barrier is negotiated and
agreed on, WTO members have reasonable expectations that they
can profit from the conditions of competition established in the
B
market of the member, binding its tariff and gain market share.
Moreover, members have “paid” for the binding by promising to
open up their market, that is, by binding their own tariffs. WTO
members may not frustrate their promises by subsidising their
domestic industry producing the product for which a tariff binding
has been previously offered. If this were allowed WTO members C
might lose the incentive to make concessions in the future.
(See The World Trade Organisation — Law, Practice and
Policy by Mitsuo Matsushita, Thomas J. Schoenbaum and Petros
C. Mavroidis, p. 279.)”
43. In S&S Enterprise v. Designated Authority and Others22, D
this Court while examining the question of levy of anti-dumping duty had
referred to the terms of GATT and WTO to observe:
“4. In our opinion, the interpretation of Rule 14(d) by Respondent
1 and the Tribunal is incorrect and contrary to its language. The imposition
of anti-dumping duty is under Section 9-A of the Customs Tariff Act, E
1975 and the Rules and is the outcome of the General Agreement on
Tariff and Trade (GATT) to which India is a party. The purpose behind
the imposition of the duty is to curb unfair trade practices resorted to by
exporters of a particular country of flooding the domestic markets with
goods at rates which are lower than the rate at which the exporters
normally sell the same or like goods in their own countries so as to cause F
or be likely to cause injury to the domestic market. The levy of anti-
dumping duty is a method recognised by GATT which seeks to remedy
the injury and at the same time balances the right of exporters from
other countries to sell their products within the country with the interest
of the domestic markets. Thus the factors to constitute “dumping” are G
(i) an import at prices which are lower than the normal value of the
goods in the exporting country; (ii) the exports must be sufficient to
cause injury to the domestic industry.”

22
(2005) 3 SCC 337 H
418 SUPREME COURT REPORTS [2020] 14 S.C.R.

A 44. In Commissioner of Customs, Bangalore v. G.M. Exports
and Others23, again while examining the question of levy of anti-dumping
duty, this Court had emphasised that the correct approach to the
construction of a statute made in response to international treaty obligation
is to give effect to the obligations in international law. If there be a
difference in the language of the statutory provision and that of the
B corresponding provision of the convention, then the statutory language
should be construed in the same sense as that of the convention if the
words of the statute are reasonably capable of bearing that meaning. 24
It was emphasised that the municipal law should not only carry out the
treaty obligation but should be construed in a way not to be inconsistent
C with the terms of the treaty. This principle of interpretation is embodied
in the principle that the statute needs to be construed uniformly by all
member nations who are signatories and should, therefore, not be
controlled by domestic precedents. The interpretation should be based
on broad principles of general application in a purposive and not in a
narrow literal manner. At times the answer to ambiguity can be found in
D the object and the structure of the convention, the language used and the
subject matter with which it deals and what was sought to be achieved
is a uniform international code. The legal position was summarised as
under:
“23. A conspectus of the aforesaid authorities would lead to the
E following conclusions:
(1) Article 51(c) of the Constitution of India is a Directive Principle
of State Policy which states that the State shall endeavour to
foster respect for international law and treaty obligations. As a
result, rules of international law which are not contrary to domestic
law are followed by the courts in this country. This is a situation in
F which there is an international treaty to which India is not a
signatory or general rule of international law are made applicable.
It is in this situation that if there happens to be a conflict between
domestic law and international law, domestic law will prevail.
(2) In a situation where India is a signatory nation to an international
G treaty, and a statute is passed pursuant to the said treaty, it is a
legitimate aid to the construction of the provisions of such statute
that are vague or ambiguous to have recourse to the terms of the
treaty to resolve such ambiguity in favour of a meaning that is
consistent with the provisions of the treaty.
23
(2016) 1 SCC 91
H 24
The Eschersheim Anr v. The Jade Erkowit And Anr. (1976) 1 All ER 920 (HL)
UNION OF INDIA AND OTHERS v. AGRICAS LLP 419
[SANJIV KHANNA, J.]

(3) In a situation where India is a signatory nation to an international A
treaty, and a statute is made in furtherance of such treaty, a
purposive rather than a narrow literal construction of such statute
is preferred. The interpretation of such a statute should be
construed on broad principles of general acceptance rather than
earlier domestic precedents, being intended to carry out treaty
B
obligations, and not to be inconsistent with them.
(4) In a situation in which India is a signatory nation to an
international treaty, and a statute is made to enforce a treaty
obligation, and if there be any difference between the language of
such statute and a corresponding provision of the treaty, the
statutory language should be construed in the same sense as that C
of the treaty. This is for the reason that in such cases what is
sought to be achieved by the international treaty is a uniform
international code of law which is to be applied by the courts of all
the signatory nations in a manner that leads to the same result in
all the signatory nations.”
D
This Court also referred to clause (c) of Article 51 of the
Directive Principles of State Policy, which states that the State shall
endeavour to foster respect for international law and treaty obligations.
45. We would also refer to Entertainment Network (India)
limited and Anr. v. Super Cassette Industries Ltd and Ors.25, wherein E
this Court dealt with the application of international conventions in India
and observed that while interpreting the domestic/municipal laws,
conventions/norms can be relied for the following purposes: (i) as a means
of interpretation; (ii) justification or fortification of a stance taken; (iii) to
fulfil spirit of international obligation which India has entered into, when
they are not in conflict with the existing domestic law; (iv) to reflect F
international changes and reflect the wider civilisation; (v) to provide a
relief contained in a covenant, but not in a national law; and (vi) to fill
gaps in law.
Thereafter, reference was made on case-laws, beginning from
His Holiness Kesavananda Bharati Sripadagalvaru v. State of G
Kerala and Another26, wherein it was held that international conventions
or the norms of international law can be used to interpret domestic law
provided they are not inconsistent with domestic legislation i.e. by reason
25
(2008) 13 SCC 30
26
(1973) 4 SCC 225 H
420 SUPREME COURT REPORTS [2020] 14 S.C.R.

A thereof, the tenor of domestic law should not be breached, and further in
case of inconsistency the domestic legislation shall prevail. It was also
observed that if there is no statutory law in India in the field, interpretation,
if any, must give a regard to the ever-changing global scenario. This
principle was accordingly applied in Pratap Singh v. State of Jharkhand
and Anr27 to interpret Juvenile Justice Act. It was further elucidated:
B
“78. However, applicability of the international conventions and
covenants, as also the resolutions, etc. for the purpose of
interpreting domestic statute will depend upon the acceptability of
the conventions in question. If the country is a signatory thereto
subject of course to the provisions of the domestic law, the
C international covenants can be utilised. Where international
conventions are framed upon undertaking a great deal of exercise
upon giving an opportunity of hearing to both the parties and filtered
at several levels as also upon taking into consideration the different
societal conditions in different countries by laying down the
D minimum norm, as for example, the ILO Conventions, the court
would freely avail the benefits thereof.
79. Those conventions to which India may not be a signatory but
have been followed by way of enactment of new parliamentary
statute or amendment to the existing enactment, recourse to
E international convention is permissible. This kind of stance is
reflected from the decisions in People’s Union for Civil
Liberties v. Union of India, Madhu Kishwar v. State of
Bihar, Kubic Darusz v. Union of India, Chameli Singh v. State
of U.P., C. Masilamani Mudaliar v. Idol of Sri
Swaminathaswami Swaminathaswami Thirukoil, Apparel
F Export Promotion Council v. A.K. Chopra, Kapila
Hingorani v. State of Bihar, State of Punjab v. Devans Modern
Breweries Ltd. and Liverpool & London S.P. & I Assn.
Ltd. v. M.V. Sea Success I.”
GATT-1994 is an international convention framed after great
G deliberation and exercise, to develop and promote international trade.
46. While interpreting the domestic law enshrining Human Rights
(and sometimes environment issues) this Court on some occasions has
relied on international conventions and treaties where the terms of any

27
H (2005) 3 SCC 551
UNION OF INDIA AND OTHERS v. AGRICAS LLP 421
[SANJIV KHANNA, J.]

legislation are absent, not clear or are reasonably capable of more than A
one meaning. In such cases, where there are statutes, rules etc. the
meaning which in consonance with the treaties can be relied upon, for
there is a prima facie presumption that the Parliament did not intend to
act in breach of international law, including State treaty obligations. Part-
III of the Indian Constitution a-priori incorporates and recognises the
B
Human Rights, consequently recourse to international conventions can
be made to interpret and borrow explicit terminologies and nuances to
bailiwick Human Right jurisprudence. However, in the present case we
are examining an economic and fiscal legislation or rather economic
policy decision taken by the Union of India. These decisions on human
rights therefore would not be of much assistance. C
(iv) Text of Articles XI and XIX of GATT-1994 and the
statutory scheme vide Sections 3 and 9A of FTDR Act and the
Safeguard Measures (Quantitative Restriction) Rules, 2012.
47. Having regard to the general law on the question of treaties
and its application in domestic law in India and other countries, we would D
now reproduce Articles XI and XIX of the GATT-1994, which read as
under:
“
Article XI
General Elimination of Quantitative Restrictions E
1. No prohibitions or restrictions other than duties, taxes or other
charges, whether made effective through quotas, import or export
licences or other measures, shall be instituted or maintained by
any contracting party on the importation of any product of the
territory of any other contracting party or on the exportation or F
sale for export of any product destined for the territory of any
other contracting party.
2. The provisions of paragraph 1 of this Article shall not extend to
the following:
(a) Export prohibitions or restrictions temporarily applied to prevent G
or relieve critical shortages of foodstuffs or other products essential
to the exporting contracting party;
(b) Import and export prohibitions or restrictions necessary to the
application of standards or regulations for the classification, grading
or marketing of commodities in international trade;
H
422 SUPREME COURT REPORTS [2020] 14 S.C.R.

A (c) Import restrictions on any agricultural or fisheries product,
imported in any form, necessary to the enforcement of
governmental measures which operate:
(i) to restrict the quantities of the like domestic product permitted
to be marketed or produced, or, if there is no substantial domestic
B production of the like product, of a domestic product for which
the imported product can be directly substituted; or
(ii) to remove a temporary surplus of the like domestic product,
or, if there is no substantial domestic production of the like product,
of a domestic product for which the imported product can be
C directly substituted, by making the surplus available to certain groups
of domestic consumers free of charge or at prices below the
current market level; or
(iii) to restrict the quantities permitted to be produced of any animal
product the production of which is directly dependent, wholly or
D mainly, on the imported commodity, if the domestic production of
that commodity is relatively negligible.
Any contracting party applying restrictions on the importation of
any product pursuant to sub-paragraph (c) of this paragraph shall
give public notice of the total quantity or value of the product
E permitted to be imported during a specified future period and of
any change in such quantity or value. Moreover, any restrictions
applied under (i) above shall not be such as will reduce the total of
imports relative to the total of domestic production, as compared
with the proportion which might reasonably be expected to rule
between the two in the absence of restrictions. In determining
F this proportion, the contracting party shall pay due regard to the
proportion prevailing during a previous representative period and
to any special factors* which may have affected or may be
affecting the trade in the product concerned.
xx xx xx
G
Article XIX
Emergency Action on Imports of Particular Products
1. (a) If, as a result of unforeseen developments and of the effect
of the obligations incurred by a contracting party under this
H Agreement, including tariff concessions, any product is being
UNION OF INDIA AND OTHERS v. AGRICAS LLP 423
[SANJIV KHANNA, J.]

imported into the territory of that contracting party in such A
increased quantities and under such conditions as to cause or
threaten serious injury to domestic producers in that territory of
like or directly competitive products, the contracting party shall
be free, in respect of such product, and to the extent and for such
time as may be necessary to prevent or remedy such injury, to
B
suspend the obligation in whole or in part or to withdraw or modify
the concession.
(b) If any product, which is the subject of a concession with respect
to a preference, is being imported into the territory of a contracting
party in the circumstances set forth in sub-paragraph (a) of this
paragraph, so as to cause or threaten serious injury to domestic C
producers of like or directly competitive products in the territory
of a contracting party which receives or received such preference,
the importing contracting party shall be free, if that other contracting
party so requests, to suspend the relevant obligation in whole or in
part or to withdraw or modify the concession in respect of the D
product, to the extent and for such time as may be necessary to
prevent or remedy such injury.
2. Before any contracting party shall take action pursuant to the
provisions of paragraph 1 of this Article, it shall give notice in
writing to the CONTRACTING PARTIES as far in advance as E
may be practicable and shall afford the CONTRACTING
PARTIES and those contracting parties having a substantial
interest as exporters of the product concerned an opportunity to
consult with it in respect of the proposed action. When such notice
is given in relation to a concession with respect to a preference,
the notice shall name the contracting party which has requested F
the action. In critical circumstances, where delay would cause
damage which it would be difficult to repair, action under paragraph
1 of this Article may be taken provisionally without prior
consultation, on the condition that consultation shall be effected
immediately after taking such action. G
3. (a) If agreement among the interested contracting parties with
respect to the action is not reached, the contracting party which
proposes to take or continue the action shall, nevertheless, be
free to do so, and if such action is taken or continued, the affected
contracting parties shall then be free, not later than ninety days H
424 SUPREME COURT REPORTS [2020] 14 S.C.R.

A after such action is taken, to suspend, upon the expiration of thirty
days from the day on which written notice of such suspension is
received by the CONTRACTING PARTIES, the application to
the trade of the contracting party taking such action, or, in the
case envisaged in paragraph 1 (b) of this Article, to the trade of
the contracting party requesting such action, of such substantially
B
equivalent concessions or other obligations under this Agreement
the suspension of which the CONTRACTING PARTIES do not
disapprove.
(b) Notwithstanding the provisions of sub-paragraph (a) of this
paragraph, where action is taken under paragraph 2 of this Article
C without prior consultation and causes or threatens serious injury
in the territory of a contracting party to the domestic producers of
products affected by the action, that contracting party shall, where
delay would cause damage difficult to repair, be free to suspend,
upon the taking of the action and throughout the period of
D consultation, such concessions or other obligations as may be
necessary to prevent or remedy the injury.
48. Indian Parliament, two years prior to the signing of GATT-
1994, had enacted the FTDR Act which was enforced with effect from
7th August 1992. Sections 11 to 14 of the FTDR Act came into force
E immediately and other provisions came into force on 19th June 1992.
The FTDR Act had repealed the Imports and Exports (Control) Act,
1947 and the Foreign Trade (Development and Regulation) Ordinance,
1992 with the stipulation that anything done or any action taken under
the Ordinance shall be deemed to have been done or taken under the
corresponding provisions of the FTDR Act. The Statement of Objects
F and Reasons for enacting the FTDR Act, as recorded, are to acknowledge
that foreign trade is the driving force of economic activity as this spurs
economic growth and there is increasing interdependence and that the
goals of the new policy were to increase productivity and competitiveness
by ensuring that the trade policies serve as an instrument to create an
G environment that will provide a strong impetus to exports, facilitate imports
and render export activity more profitable.
49. In order to appreciate the contentions of the parties, we would
now like to reproduce Sections 3 and 9A of the FTDR Act, which read
as under:
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 425
[SANJIV KHANNA, J.]

“3. Powers to make provisions relating to imports and A
exports.– (1) The Central Government may, by Order published
in the Official Gazette, make provision for the development and
regulation of foreign trade by facilitating imports and increasing
exports.
(2) The Central Government may also, by Order published in the B
Official Gazette, make provision for prohibiting, restricting or
otherwise regulating, in all cases or in specified classes of cases
and subject to such exceptions, if any, as may be made by or
under the Order, the import or export of goods or services or
technology:
C
Provided that the provisions of this sub-section shall be applicable,
in case of import or export of services or technology, only when
the service or technology provider is availing benefits under the
foreign trade policy or is dealing with specified services or specified
technologies.
D
(3) All goods to which any Order under sub-section (2) applies
shall be deemed to be goods the import or export of which has
been prohibited under section 11 of the Customs Act, 1962 (52 of
1962) and all the provisions of that Act shall have effect accordingly.
(4) Without prejudice to anything contained in any other law, rule, E
regulation, notification or order, no permit or licence shall be
necessary for import or export of any goods, nor any goods shall
be prohibited for import or export except, as may be required
under this Act, or rules or orders made thereunder.
xx xx xx F
9A. Power of Central Government to impose quantitative
restrictions.– (1) If the Central Government, after conducting
such enquiry as it deems fit, is satisfied that any goods are imported
into India in such increased quantities and under such conditions
as to cause or threaten to cause serious injury to domestic industry,
G
it may, by notification in the Official Gazette, impose such
quantitative restrictions on the import of such goods as it may
deem fit:
Provided that no such quantitative restrictions shall be imposed
on any goods originating from a developing country so long as the
H
426 SUPREME COURT REPORTS [2020] 14 S.C.R.

A share of imports of such goods from that country does not exceed
three per cent. or where such goods originate from more than
one developing country, then, so long as the aggregate of the
imports from all such countries taken together does not exceed
nine per cent. of the total imports of such goods into India.
B (2) The quantitative restrictions imposed under this section shall,
unless revoked earlier, cease to have effect on the expiry of four
years from the date of such imposition:
Provided that if the Central Government is of the opinion that the
domestic industry has taken measures to adjust to such injury or
C threat thereof and it is necessary that the quantitative restrictions
should continue to be imposed to prevent such injury or threat and
to facilitate the adjustments, it may extend the said period beyond
four years:
Provided further that in no case the quantitative restrictions shall
D continue to be imposed beyond a period of ten years from the
date on which such restrictions were first imposed.
(3) The Central Government may, by rules provide for the manner
in which goods, the import of which shall be subject to quantitative
restrictions under this section, may be identified and the manner
E in which the causes of serious injury or causes of threat of serious
injury in relation to such goods may be determined.
(4) For the purposes of this section—
(a) “developing country” means a country notified by the Central
Government in the Official Gazette, in this regard;
F
(b) “domestic industry” means the producers of goods (including
producers of agricultural goods)—
(i) as a whole of the like goods or directly competitive goods in
India; or
G (ii) whose collective output of the like goods or directly competitive
goods in India constitutes a major share of the total production of
the said goods in India;
(c) “serious injury” means an injury causing significant overall
impairment in the position of a domestic industry;
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[SANJIV KHANNA, J.]

(d) “threat of serious injury” means a clear and imminent danger A
of serious injury.]
50. Section 9A of the FTDR Act is the only section in Chapter
IIIA with the heading ‘Quantitative Restrictions’28 and this section was
inserted by Amendment Act 25 of 2010 with effect from 27th August
2010. Subsequently, in exercise of powers conferred by sub-section (3) B
to Section 9A of the FTDR Act, the Central Government had published
and notified the Safeguard Measures (Quantitative Restrictions) Rules,
2012, which became applicable on the date of their publication in the
Gazette of India dated 24th May 2012, the relevant portion of which
reads as under:
C
xx xx xx
2. Definitions
(b)”Authorised Officer” means the Authorised Officer designated
as such under sub-rule(1) of rule 3;
D
(c) “increased quantity” includes increase in import whether in
absolute terms or relative to domestic production;
(d) “interested party” includes –
(i) an exporter or foreign producer or the importer of goods
(which is subject to investigation for purposes of imposition of E
safeguard quantitative restrictions) or a trade or business
association, majority of the members of which are producers,
exporters or importers of such goods;
(ii) the Government of the exporting country; and
(iii) a producer of the like goods or directly competitive goods F
in India or a trade or business association, a majority of members
of which produce or trade the like goods or directly competitive
goods in India;
(e) “like goods” means goods which is identical or alike in all
respects to the goods under investigation, or in the absence of G
28
The report of WTO Dispute Settlement Body’s panel on “India-Quantitative
Restrictions on Imports of Agricultural, Textile and Industrial Products” has interpreted
the expression ‘Quantitative Restrictions’ in Art.XI of GATT,1994. The decisions of
the panel are binding on parties and are not binding interpretation of WTO agreements,
as they have no precedential value and the doctrine of stare decisis has no application.
The reasoning being persuasive can be adopted. H
428 SUPREME COURT REPORTS [2020] 14 S.C.R.

A such goods, other goods which has characteristics closely
resembling those of the goods under investigation;
(f) “quantitative restrictions” means any specific limit on quantity
of goods imposed as a safeguard measure under the Act;
(g) “specified country” means a country or territory which is a
B member of the World Trade Organization and includes the country
or territory with which the Government of India has an agreement
for giving it the most favoured nation treatment;
3. Responsibility of Authorised Officer for making enquiry
in respect to safeguard quantitative restrictions—
C (1) The Central Government shall, by notification in the Official
Gazette, designate an officer not below the rank of Additional
Director General of Foreign Trade as an Authorised officer for
making investigation for the purpose of this rules.
(2) The Authorised Officer shall be responsible for conducting
D investigation, under sub-section (1) of section 9A, for the purpose
of imposition of safeguard quantitative restrictions and making
necessary recommendation therein to the Central Government.
(3) The Directorate General of Foreign Trade shall provide
secretarial support and the services of such other persons and
such other facilities as it deems fit.
E
4. Duties of Authorised Officer .— It shall be the duty of the
Authorised Officer —
(a) to investigate the existence of serious injury or threat of serious
injury to domestic industry as a consequence of increased import
F of a goods into India;
(b) to identify the goods liable for quantitative restrictions as a
safeguard measure;
(c) to submit its findings, to the Central Government as to the
serious injury or threat of serious injury to domestic industry
consequent upon increased import of goods into India from the
G
specified country;
(d) to recommend—
(i) the nature and extent of quantitative restrictions which, if
imposed, shall be adequate to remove the serious injury or threat
of serious injury to the domestic industry; and
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[SANJIV KHANNA, J.]

(ii) the duration of imposition of safeguard quantitative A
restrictions and where the period so recommended is more
than one year, to recommend progressive liberalisation adequate
to facilitate positive adjustment; and
(e) to review the need for continuance of the safeguard
quantitative restrictions. B
5. Initiation of investigation.—
(1) The Authorised Officer shall, on receipt of a written application
by or on behalf of the domestic producer of like goods or directly
competitive goods, initiate an investigation to determine the
existence of serious injury or threat of serious injury to the domestic C
industry, caused by the import of a goods in such increased
quantities, absolute or relative to domestic production.
(2) The application referred to in sub-rule (1) shall be made in
Form appended to these rules and be supported with-
D
(a) the evidence of -
(i) increased imports as a result of unforeseen development;
(ii) serious injury or threat of serious injury to the domestic
industry; and
(iii) a causal link between imports and the alleged serious E
injury or threat of serious injury;
(b) a statement on the efforts being taken, or planned to be
taken, or both, to make a positive adjustment to increase in
competition due to imports; and
F
(c) a statement mentioning whether an application for the
initiation of a safeguard action on the goods under investigation
has also been submitted to the Director General of Safeguards,
Department of Revenue.
(3) The Authorised Officer shall not initiate an investigation G
pursuant to an application made under sub-rule (1), unless, it
examines the accuracy and adequacy of the evidence provided in
the application and satisfies himself that there is sufficient evidence
regarding—
(a) increased imports;
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430 SUPREME COURT REPORTS [2020] 14 S.C.R.

A (b) serious injury or threat of serious injury; and
(c) a causal link between increased imports and alleged serious
injury or threat of serious Injury.
(4) Notwithstanding anything contained in sub-rule (1), the
Authorised Officer may initiate an investigation suo moto, if, it is
B satisfied with the information received from any source that
sufficient evidence exists as referred to in clause (a), clause (b)
or clause (c) of subrule (3).
6. Principles governing investigations. —

C (1) The Authorised Officer shall, after it has decided to initiate
investigation to determine serious injury or threat of serious injury
to domestic industry, consequent upon the increased import of a
goods into India, issue a public notice notifying its decision which,
inter alia, contain information on the following, namely:-

D (a) the name of the exporting countries, the goods involved
and the volume of import;
(b) the date of initiation of the investigation;
(c) a summary statement of the facts on which the allegation
of serious injury or threat of serious injury is based;
E (d) reasons for initiation of the investigation;
(e) the address to which representations by interested parties
should be directed; and
(f) the time-limits allowed to interested parties for making their
F views known.
(2) The Authorised Officer shall forward a copy of the public
notice to the Central Government in the Ministry of Commerce
and Industry and other Ministries concerned, known exporters of
the goods, the Governments of the exporting countries concerned
G and other interested parties.
(3) The Authorised Officer shall also provide a copy of the
application referred to in sub-rule (1) of rule 5, to-
(a) the known exporters, or the concerned trade association;
(b) the Governments of the exporting countries; and
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[SANJIV KHANNA, J.]

(c) the Central Government in the Ministry of Commerce and A
Industry:
Provided that the Authorised Officer shall also make available a
copy of the application, upon request in writing, to any other
interested person.
(4) The Authorised Officer may issue a notice calling for any B
information in such form as may be specified in the notice from
the exporters, foreign producers and governments of exporting
countries and such information shall be furnished by such persons
and governments in writing within thirty days from the date of
receipt of the notice or within such extended period as the C
Authorised Officer may allow on sufficient cause being shown.
Explanation.—For the purpose of this rule, the public notice and
other documents shall be deemed to have been received one week
after the date on which these documents were put in the course
of transmission to the interested parties by the Authorised Officer.
D
(5) The Authorised Officer shall provide opportunity to the
industrial user of the goods under investigation and to representative
consumer organisations in cases where the goods is commonly
sold at retail level to furnish information which is relevant to the
investigation including inter alia, their views if imposition of
safeguard quantitative restrictions is in public interest or not. E

(6) The Authorised Officer may allow an interested party or its
representative to present the information relevant to investigation
orally but such oral information shall be taken into consideration
by the Authorised Officer only when it is subsequently submitted
in writing. F
(7) The Authorised Officer shall make available the evidence
presented to it by one interested party to all other interested parties,
participating in the investigation.
(8) In case where an interested party refuses access to or
G
otherwise does not provide necessary information within a
reasonable period or significantly impedes the investigation, the
Authorised Officer may record its findings on the basis of the
facts available and make such recommendations to the Central
Government as it deems fit under such circumstances.
xx xx xx H
432 SUPREME COURT REPORTS [2020] 14 S.C.R.

A 8. Determination of serious injury or threat of serious
injury.—
The Authorised Officer shall determine serious injury or threat of
serious injury to the domestic industry taking into account, inter
alia, the following principles, namely:-
B (a) in the investigation to determine whether increased imports
have caused or are threatening to cause serious injury to a domestic
industry, the Authorised Officer shall evaluate all relevant factors
of an objective and quantifiable nature having a bearing on the
situation of that industry, in particular, the rate and amount of the
C increase in imports of the goods concerned in absolute and relative
terms, the share of the domestic market taken by increased imports,
changes in the level of sales, production, productivity, capacity
utilisation, profits and losses, and employment; and
(b) the determination referred to in clause (a) shall not be made
D unless the investigation demonstrates, on the basis of objective
evidence, the existence of the causal link between increased
imports of the goods concerned and serious injury or threat thereof:
Provided that when factors other than increased imports are
causing injury to the domestic industry at the same time, such
E injury shall not be attributed to increased imports and in such cases,
the Authorised Officer may refer the complaint to the authority
for anti-dumping or countervailing duty investigations, as
appropriate.
9. Final findings.— (1) The Authorised Officer shall, within eight
F months from the date of initiation of the investigation or within
such extended period as the Central Government may allow,
determine whether, as a result of unforeseen developments the
increased imports of the goods under investigation has caused or
threatened to cause serious injury to the domestic industry, and a
casual link exists between the increased imports and serious injury
G or threat of serious injury and recommend –
(i) the extent and nature of quantitative restrictions which, if
imposed, would be adequate to prevent or remedy ‘serious
injury’ and to facilitate positive adjustment, as the case may
be;
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UNION OF INDIA AND OTHERS v. AGRICAS LLP 433
[SANJIV KHANNA, J.]

(ii) the extent of quantitative restrictions so that the quantity of A
imports is not reduced to the quantity of imports below the
level of a recent period which shall be the average of import in
the last three representative years for which statistics are
available and justification if a different level is necessary to
prevent or remedy serious injury;
B
(iii) the quota to be allocated among the supplying countries,
and the allocation of shares in the quota for such specified
countries which have a substantial interest in supplying the
goods;
(iv) the duration of imposition of quantitative restrictions and C
where the duration of imposition of quantitative restrictions is
more than one year, the progressive liberalisation adequate to
facilitate positive adjustment.
(2) The final findings if affirmative shall contain all information on
the matter of facts and law and reasons which have led to the D
conclusion.
(3) The Authorised Officer shall issue a public notice recording
his final findings.
(4) The Authorised Officer shall send a copy of the public notice
regarding his final findings to the Central Government in the E
Ministry of Commerce and Industry and a copy thereof to the
interested parties.
10. Imposition of safeguard quantitative restrictions.—
The Central Government may based on the recommendation of F
the Authorised Officer, by a notification in the Official Gazette,
under sub-section (I)
of section 9A of the Act, impose upon importation into India of the
goods covered under the final determination, a safeguard
quantitative restrictions not exceeding the amount or quantity which G
has been found adequate to prevent or remedy serious injury and
to facilitate adjustment.
11. Imposition of safeguard quantitative restrictions on non-
discriminatory basis.—
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434 SUPREME COURT REPORTS [2020] 14 S.C.R.

A Any safeguard quantitative restrictions imposed on goods under
these rules shall be applied on a non-discriminatory basis to all
imports of the goods irrespective of its source.
12. Date of commencement of safeguard quantitative
restrictions.—
B The safeguard quantitative restrictions levied under these rules
shall take effect from the date of publication of the notification in
the Official Gazette, imposing such quantitative restrictions.
13. Duration .—

C (1) The safeguard quantitative restrictions imposed under rule 10
shall be for such period of time as may be necessary to prevent or
remedy serious injury and to facilitate adjustment.
(2) Notwithstanding anything contained in sub-rule (1), safeguard
quantitative restrictions imposed under rule 10 shall, unless revoked
D earlier, cease to have effect on the expiry of four years from the
date of its imposition: Provided that if the Central Government is
of the opinion that the domestic industry has taken measures to
adjust to such serious injury or threat thereof and it is necessary
that the safeguard quantitative restrictions should continue to be
imposed, to prevent such serious injury or threat and to facilitate
E adjustments, it may extend the period beyond four years: Provided
further that in no case the safeguard quantitative restrictions shall
continue to be imposed beyond a period of ten years from the
date on which such restrictions were first imposed.
14. Liberalization of safeguard quantitative restrictions. –
F
If the duration of the safeguard quantitative restrictions imposed
under rule 10 exceeds one year, the restriction shall be progressively
liberalised at regular intervals during the period of its imposition.
(v) Contention of the importers on Sections 3 and 9A of the
FTDR Act and the response by the Union of India.
G
51. Before we go on the interpretation of respective sections,
namely, Sections 3 and 9A of the FTDR Act, we would like to reproduce
in brief the contentions of the importers. The importers submit that the
FTDR Act was introduced and enacted for development and regulation
of foreign trade by facilitating imports and augmenting exports from
H
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[SANJIV KHANNA, J.]

India and to make India competitive in conformity with GATT-1994 A
obligations. Section 3 of the FTDR Act reflects the said position and
incorporates Article XI of the GATT-1994 which stipulates that there
shall not be any provision or restrictions other than duty, taxes and other
charges by any contracting party. Section 9A is almost a replica of
Article XIX of the GATT-1994 and this is the only provision which confers
B
power on the Central Government to impose ‘quantitative restrictions’
on imports. It, therefore, follows that unless the conditions of Section
9A of the FTDR Act are satisfied and the procedure prescribed under
the Rules is followed, no ‘quantitative restrictions’ could have been
imposed by the Union of India through the medium of the impugned
notifications. Section 9A is a special provision dealing with ‘quantitative C
restrictions’, whereas Section 3 is a general provision. The Union of
India cannot take recourse to Section 3 when conditions of Section 9A
are not satisfied and impose ‘quantitative restrictions’, otherwise, Section
9A would become redundant for the reason that Union of India could
always impose ‘quantitative restrictions’ under the general power. This
D
would be in conformity with the India’s obligation under GATT-1994 and
the domestic or municipal law must be construed in consonance with the
GATT-1994 obligations.
52. For quantitative restrictions to be imposed under Section 9A
of the FTDR Act, following conditions must be cumulatively satisfied,
namely, (a) increased quantities of imports (b) that have caused (c) E
serious injury or threaten to cause serious injury to domestic industries.
Further, as per the procedure prescribed by the Rules, the Appropriate
Authority has to initiate proceedings, investigate, hear parties and
adjudicate on the satisfaction of the conditions. In the present case,
there has been no increase in imports as per the following table: F
1 Apr – 31 Mar Peas in metric ton
2014-2015 19,51,973
2015-2016 22,45,390
2016-2017 31,02,75729
2017-2018 28,77,032 G
2018-2019 8,51,408
2019-2020 6,66,69630

29
As per the Union of India, the import of Peas in 2016-17 was 31,72,758 MT.
30
As per the Union of India, the import of Peas in 2016-17 was 6,52,607 MT. H
436 SUPREME COURT REPORTS [2020] 14 S.C.R.

A ‘Quantitative restrictions’ were imposed in the financial year 2018-
19. Further, the Union of India has themselves stated that there was
serious injury to the domestic industry due to import of pulses and Peas.
Our attention was drawn to paragraphs 5 and 9 of the written submissions
filed by the Union of India, which read as under:
B “5. It is submitted that the farmers are one of the most important
stakeholders in matters related to import / export of agricultural
goods and the Government is required to strike a balance between
the interests of domestic producers and importers. Thus, whenever
it is observed that large scale imports of an item is adversely
impacting the interest of the domestic producers, due to fall in
C prices in the local market, the Government in consultation with
stakeholders concerned, tries to uphold the interests of domestic
producers through suitable measures like restriction on import
quotas etc.
Xx xx Xx
D 9. It is submitted that since domestic production of pulses / grams
has been very good, therefore the Government has imposed
restrictions on the import of peas. Yellow Peas which are largely
imported to India are mainly grown in countries like Canada, Russia,
Ukraine etc. Due to agro-climatic conditions of these countries
E they export peas in bulk. Therefore, price of Yellow Peas is lower
in comparison to other imported / domestically available pulses,
including Gram. It is to be noted that the end use of Gram is mainly
flour, commonly known as “Besan”, used in preparations of Indian
savouries. As per industry estimates, about 70% of the Gram
produced is used in manufacture of Besan. It is informed that
F Yellow Peas are a near perfect substitute for Gram in the making
of Besan. As the price of imported Yellow Peas in India is cheaper
than the domestic market price of Gram, a huge shift in industry
usage from Gram to Yellow Peas had happened. Increased supply
of Yellow Peas had taken away Gram demand, the resulting in fall
G in prices of Gram. Thus, despite large scale procurement of Gram
under the PSS scheme in Rabi 2018 and 2019, prices of Gram
continued to be below the MSP announced by the government.”
Thus, the Union of India themselves have accepted that the
conditions of Section 9A had impelled then to issue the impugned
notifications but they did not follow the procedure prescribed by the
H applicable Rules.
UNION OF INDIA AND OTHERS v. AGRICAS LLP 437
[SANJIV KHANNA, J.]

53. The Union of India, in their affidavit filed on 26th June 2020, A
have pleaded that they were required to strike a balance between the
farmers and the importers as largescale imports would adversely impact
the interests of the farmers due to fall in prices in the local market.
Reference was made to the Minimum Support Price (MSP) for Moong,
Urad and Toor dal and Gram fixed on the recommendation of the
B
Commission for Agricultural Costs and Prices. Further, the Central
Government under the schemes being run had procured 85 lakh MT of
pulses directly from 53 lakh farmers by paying them MSP in the last five
years. There was also increase in production of pulses from 25.42 Million
MTs in 2017-18 to 26.66 Million MTs in 2020-21. Imported Yellow Peas
are the perfect substitute for Gram in making of Besan which is primarily C
used in preparation of Indian savouries. As the price of imported Yellow
Peas in India is cheaper than the domestic price of Gram, a huge shift in
industry usage from Gram to Yellow Peas has taken place. In these
circumstances that the government has imposed restrictions from April,
2018 onwards with a small window of annual quota for permitted imports.
D
However, in view of the interim orders passed by the various High Courts,
the actual imports of peas were to the tune of 8,51,408 MT and 6,52,607
MTs in 2018-2019 and 2019-2020 respectively, though the annual quota
for these two years was 1/1.50 lakh MTs. The Government is presently
holding a buffer stock of 26.94 lakh MT of Gram, against the target
quantity of 3 lakh MTs. The Gram is being sold at Rs.4,000 – 4,200 per E
quintal, which is below the MSP of Rs.4,875/- per quintal. Imported CIF
value of Yellow Peas is Rs.2,028/- per quintal. Due to the pandemic, the
farmers could be compelled to make panic disposal at much lower prices.
In the further affidavit filed on 1st July 2020, the Union of India has
stated that they had not issued any quota for Peas, Yellow Peas etc. as
F
inspite of restricted quota of 1 lakh and 1.5 lakh MTs for Peas in the
Financial Years 2018-19 and 2019-20, due to interim orders passed by
the various High Courts, the actual import was 8.51 lakh MTs and 6.67
lakh MTs during the Financial Years 2018-19 and 2019-20, respectively.
Consequently, it has been decided not to import Yellow Peas in the current
Financial Year 2020-21. In the affidavit filed on 6th July 2020, with G
reference to Section 9A of the FTDR Act, the Union of India has stated
that the said section is attracted only when the goods are imported into
India in increased quantity and under such conditions as to cause or
threaten to cause serious injury to domestic industry. Section 9A is enacted
as a safeguard mechanism in terms of Article XIX of the GATT-1994
H
438 SUPREME COURT REPORTS [2020] 14 S.C.R.

A and Article II of the WTO Agreement on Safeguards vide the Amendment
Act, 2010. The notifications under challenge have been issued within
the express terms of Section 3 of the FTDR Act which permits the
Central Government to impose restrictions without any qualification of
the nature specified in Section 9A. Power of the Central Government to
restrict imports to limited quantities under Section 3 and quantitative
B
restrictions under Section 9A of the FTDR Act are completely distinct
and have no connection or interplay. The power under Section 3(2) of
the FTDR Act is of a wide amplitude. Reference is also made to Rule
5(2) to assert that there is necessity of evidence that the imports had
increased as a result of ‘unforeseen developments’ in addition to the
C necessity for evidence disclosing serious injury or threat of serious injury
to domestic industry and a causal link between imports and serious injury.
The restrictions have been imposed not due to increased quantities of
imports but to prevent panic disposal by farmers as the prices of Gram
would come down. It is submitted that special provisions like 9A of the
FTDR Act would be limited to areas within its scope leaving the general
D
provision free to operate in other areas.
(vi) Discussion and interpretation of Sections 3 and 9A of
the FTDR Act.
54. Section 3 of the FTDR Act, as enacted, had undergone
E amendments by addition of proviso to sub-section (2) and by insertion of
sub-section (4) vide Act 25 of 2010 with effect from 25th August 2010.
Sub-section (1) of Section 3 states that the Central Government may, by
an Order published in the Official Gazette, make provision for the
development and regulation of foreign trade 2. by facilitating imports
and increasing exports. It is a general provision which has no reference
F to GATT-1994. It authorises the Central Government to publish an order
in the Official Gazette for development and regulation of foreign trade,
i.e. imports and exports. Sub-section (2) states that the Central
Government can, by an order in the Official Gazette, make a provision
for prohibiting or restricting or otherwise regulating, in all or specified
G cases and subject to such exceptions, if any, the import or export of
goods and after the amendment vide Act 25 of 2010, services or
technology. Sub-section (2) to Section 3, therefore, authorises the Central
Government to, by an Order published in the Official Gazette, make
provisions restricting the imports or exports. Imposition of quantitative
restrictions on imports or exports would clearly fall within sub-section
H (2) to Section 3 of the FTDR Act. We are not concerned with the
UNION OF INDIA AND OTHERS v. AGRICAS LLP 439
[SANJIV KHANNA, J.]

proviso to sub-section (2) in the present case. Sub-section (3) to Section A
3 states that where an order is passed under sub-section (2) whereby
the import or export of goods is prohibited, restricted or otherwise
regulated, the goods in question would be deemed to be prohibited goods
under Section 11 of the Customs Act, 1962 and accordingly the provisions
of the latter Act would apply.
B
55. Sub-section (4) to Section 9A of the FTDR Act introduced by
Act 25 of 2010 with effect from 27th August 2010, requires some
elucidation. The sub-section on one hand states that no permit or licence
shall be necessary for imports or exports of goods, nor any goods shall
be prohibited from import or export, except as may be required under
the FTDR Act, or the rules or orders made thereunder. At the same C
time, by using the phrase ‘without prejudice to anything contained in any
other law, rule, regulation, notification or order’, it protects the operation
of the other law, rule, regulation, notification or order to the extent that
they do not directly or indirectly deal with the permit or licence necessary
for import or export of goods or prohibit import or export of goods. D
Operation of such law, rule, regulation, notification or order not dealing
with the permit or licence necessary for import or export on a prohibition
of import of goods is, therefore, protected and not overridden. Sub-
section (4) to Section 3 therefore gives limited primacy to the FTDR
Act, restricting it to the scope and subject matter of the FTDR Act, and
not to override other laws. This is also clear from Section 18A of the E
FTDR Act which was also enacted and inserted by Act 25 of 2010 with
effect from 27th August 2010 and reads as under:
“18A. Application of other laws not barred.– The provisions
of this Act shall be in addition to, and not in derogation of, the
provisions of any other law for the time being in force.” F

The provisions of FTDR Act, therefore, are in addition to, and
not in derogation of, the provisions of any other law for the time being in
force. This would be the correct way to harmoniously read and interpret
sub-section (4) to Section 3 and Section 18A of the FTDR Act. We
may, at this stage, notice that the original amendment had used the phrase G
‘Notwithstanding anything contained in any other law, rule, regulation,
notification or order’, but the Standing Committee had noticed the
contradiction and also the object and purpose behind enacting sub-rule
(4) and had recommended that the said expression should be replaced
with the expression ‘Without prejudice to anything contained in any other H
440 SUPREME COURT REPORTS [2020] 14 S.C.R.

A law, rule, regulation, notification or order’. Sub-section (4) to Section 3
of the FTDR Act, therefore, in the context of import and exports or
prohibition of imports or exports of goods states that no permit or licence
shall be necessary or required except as may be required under the
FTDR Act, rules or orders made thereunder. The expression ‘order’,
as per clause (h) to Section (2) of the FTA means any Order made by
B
the Central Government under Section 3. It is, therefore, clear to us that
there is no violation of Section 3 of the FTDR Act in the issuance of the
impugned notifications or orders, which are intra vires and not ultra
vires.
56. We have already reproduced and quoted Article XI31 of the
C GATT-1994 and have to say that the same has not been statutorily made
a subject of ‘act of transformation’ and incorporated in the domestic
legislation, i.e. the FTDR Act. The FTDR Act does not legislate and
transform Article XI of the GATT-1994. As noticed above, Section 3 of
the FTDR Act empowers and authorises the Central Government, i.e.
D the Union of India to frame policy, rules or regulations for import or
export of goods. The policy is framed under Section 5 of the Act, which
reads as under:
“5. Foreign Trade Policy. – The Central Government may,
from time to time, formulate and announce, by notification in the
E Official Gazette, the foreign trade policy and may also, in like
manner, amend that policy:
Provided that the Central Government may direct that, in respect
of the Special Economic Zones, the foreign trade policy shall apply
to the goods, services and technology with such exceptions,
F modifications and adaptations, as may be specified by it by
notification in the Official Gazette.”
Thus, the Central Government i.e. the Union of India has been
given the necessary discretion and election with regard to framing of
policies for import and export of goods, services and technology.
G Therefore, implementation of GATT-1994, including Article XI, is left to
the Central Government by means of delegated legislation.
57. Clause (2) of Article XI of GATT-1994 states that provisions
of paragraph (1) shall not extend to three specified situations as stated in
sub-clauses (a), (b) or (c). Clause (c) deals with import restrictions on
H 31
Paragraph 47 (supra).
UNION OF INDIA AND OTHERS v. AGRICAS LLP 441
[SANJIV KHANNA, J.]

any agricultural or fisheries product, imported in any form necessary for A
enforcement of governmental measures specified therein. Similarly,
Article XII of GATT-1994 states that notwithstanding the provisions of
paragraph (1) of Article XI, any contracting party, in order to safeguard
its external financial position and its balance of payments, may restrict
the quantity or value of merchandise permitted to be imported, subject to
the provisions of paragraphs of that Article. Paragraph 23 (supra) lists B
a number of other provisions, which allow and permit exceptions. We
have referred to these provisions to highlight that paragraph (1) to Article
XI is not an absolute rule. It is subject to exceptions in the form of
paragraph (2) to Article XI, Article XII and other provisions. Of course,
the conditions specified the respective Articles have to be satisfied for a C
contracting party to be GATT-1994 compliant.
58. Reference to this position is necessary and required when we
interpret Section 9A of the FTDR Act which we would accept
incorporates into the domestic law Article XIX of GATT-1994, but neither
Article XI and nor all exceptions by implication. Consequently, Section D
9A for the FTDR Act, is to be understood an enabling provision
empowering imposition of ‘quantitative restrictions’ after following the
procedure in the situations referred to therein. However it does not limit
and restrict the expans and power of the Central Government to prohibit,
regulate or restrict imports of goods in terms of Section 3(2) of the
FTDR Act. As a sequitur, it has to be held that notwithstanding Section E
9A, the Central Government continues and has authority to impose
quantitative restrictions by an order under Section 3(2) of the FTDR
Act. Principle of Lex specialis derogat legi generali, therefore, is not
applicable to the case in hand.
59. Section 9A of the FTA was enacted by Act 25 of 2010 pursuant F
to the recommendations of the Standing Committee which has opined as
under:
Clause 9 seeks to insert a new Chapter IIIA, with heading
“Quantitative Restrictions”, after Section 9 of the Act, pertaining
to Power of the Central Government to impose Quantitative G
Restrictions. The Committee was informed that the proposed
amendment seeks to make a clear provision in the Foreign Trade
(Development and Regulation) Act for allowing Quantitative
Restrictions (QRs) to be imposed to protect domestic industry
from serious injury in case of a surge in imports. While such
measures are available for all the WTO member countries, yet H
442 SUPREME COURT REPORTS [2020] 14 S.C.R.

A safeguard measures in the form of Quantitative Restrictions are
not provided for under any Indian law. This is in accordance with
the provision to incorporate safeguard measures in the form of
Quantitative Restrictions, as provided in Article XIX of GATT
and the WTO Agreement on Safeguards.
B Section 9A substantially incorporates, with some modifications,
provisions of Article XIX of GATT-1994. Rules made in 2012 are also
in conformity with the provisions of the WTO Agreement on Safeguards
made in terms of Article XIX of GATT-1994. Sub-rule (3) to Rule 5 of
the Safeguard Measures (Quantitative Restrictions) Rules, 2012 states
and sets out the conditions for applicability of Rule 9A, which are: (i)
C increased imports; (ii) serious injury or threat of serious injury; and (iii) a
causal link between increased imports and alleged serious injury or threat
of serious injury. The expression ‘increased imports’ has been defined
in terms of increased quantity to mean increase in imports in absolute
terms or relative to domestic production. The expressions ‘serious injury’
D and ‘threat of serious injury’ have been defined in clauses (c) and (d) of
sub-clause (4) to Section 9A to mean injury causing significant overall
impairment in the position of a domestic industry and a clear and imminent
danger of serious injury respectively. The expression ‘domestic industry’
has also been defined in clause (b) to sub-section (4) to Section 9A.
Similarly, the expression ‘interested party’ has been defined in sub-rule
E (d) to Rule 2 of the Safeguard Measures (Quantitative Restriction) Rules,
2012 and includes exporter or foreign producer or the importer of goods
for the purposes of imposition of safeguard quantitative restrictions on
trade or business association. It also includes the government of the
exporting country or producer of goods or directly competitive goods in
F India or a trade or business association32.
60. The need to enact Section 9A arose from the obligations
flowing from Article XIX, as restriction in form of ‘quantitative restriction’,
require a procedure to be followed. Affected parties including exporters,
importers have to be heard. Consequently, ‘act of transformation’ was
G required. Article XIX of GATT-1994 is an escape provision, i.e. a provision
which entitles a contracting state to escape from the rigours of paragraph
(1) of Article XI of GATT-1994. Similar ‘acts of transformation’ have
been undertaken by enacting Custom Valuation Rules, provision of
32
The words “unforeseen developments” are not to be found in Section 9A of the
FTDR Act and Rule 5(3) but they find mention in Rule 5(2). It is clarified that we have
H not examined and decided the need to establish “unforeseen developments”.
UNION OF INDIA AND OTHERS v. AGRICAS LLP 443
[SANJIV KHANNA, J.]

antidumping, countervailing duty etc. but the entire GATT-1994 does not A
stand transposed and enacted by way of statutory law or delegated
legislation.
61. This being the position, Section 9A has to be interpreted as an
escape provision when the Central Government i.e. the Union of India
may escape the rigours of paragraph (1) of Article XIX of GATT-1994. B
Section 9A is not a provision which incorporates or transposes paragraph
(1) of Article XI into the domestic law either expressly or by necessary
implication. To hold to the contrary, we would be holding that the Central
Government has no right and power to impose ‘quantitative restrictions’
except under Section 9A of the FTDR Act. This would be contrary to
the legislative intent and objective. Section 9A of the FTDR Act does C
not elide or negate the power of the Central Government to impose
restrictions on imports under sub-section (2) to Section 3 of the FTDR
Act.
62. In other words, the impugned notifications would be valid as
they have been issued in accordance with the power conferred in the D
Central Government in terms of sub-section (2) to Section 3 of the FTDR
Act. The powers of the Central Government by an order imposing
restriction on imports under sub-section (2) to Section 3 is, therefore, not
entirely curtailed by Section 9A of the FTDR Act.
63. To be fair, learned counsel appearing for the importers had E
conceded that they cannot enforce or claim violation of paragraph (1) of
Article XI of GATT-1994 in the domestic courts in India unless the said
Article has been expressly or by necessary implication incorporated and
transposed in the domestic law, that is, the FTDR Act.
64. In the present case, this Court is not called upon to decide and F
examine the obligations of the Contracting Parties in terms of GATT-
1994. Our findings and ratio are confined and restricted to interpretation
of Section 3 and 9A of the FTDR Act and in that context we have
referred to GATT-1994.
D. Contention of the importers of bona fide imports under G
interim orders and prayer for partial relief.
65. Learned counsel for some of the importers had placed reliance
on Raj Prakash Chemical v. Union of India33, which judgment, in
33
(1986) 2 SCC 297 H
444 SUPREME COURT REPORTS [2020] 14 S.C.R.

A our opinion, has no application. In Raj Prakash Chemical (supra), the
petitioner had acted under a bona fide belief in view of judgments and
orders of High Courts and the interpretation placed by the authorities.
In this background, observations were made to giving benefit to the
importers, despite the contrary legal interpretation. In the instant case,
the importers rely upon the interim orders passed by the High Court’s
B
whereas on the date when they filed the Writ Petitions and had obtained
interim orders, the Madras High Court had dismissed the Writ Petition
upholding the notification. Similarly, the High Court of adjudicature at
Bombay, High Court of Gujarat and the High Court of Madhya Pradesh
had dismissed the Writ Petitions filed before them and upheld the
C notifications and the trade notices. Notwithstanding the dismissals, the
importers took their chance, obviously for personal gains and profits.
They would accordingly face the consequences in law. In these
circumstances, the importers it cannot be said had bona fide belief in
the right pleaded.
D E. What is not decided
66. Learned counsel for some of the importers had submitted that
they have preferred statutory appeals against orders suspending or
terminating import export code. The said aspect has not been examined
and decided and hence we make no comment and observation. The
E statutory appeals, if any, preferred by the importer(s) will be decided in
accordance with law.
F. Conclusion
67. Accordingly, we uphold the impugned notifications and the
trade notices and reject the challenge made by the importers. The imports,
F if any, made relying on interim order(s) would be held to be contrary to
the notifications and the trades notices issued under the FTDR Act and
would be so dealt with under the provisions of the Customs Act 1962.
The Writ Petitions subject matter of the Transfer Petitions, subject to E
above (What is not decided) are dismissed. Writ Petitions filed by the
G intervenors before the respective High Courts shall stand dismissed in
terms of this decision. Pending application(s), if any, also stand disposed
of in the above terms. No order as to costs.

Divya Pandey Petition disposed of

H