IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR

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CIVIL WRIT No. 5078 of 2008

MAHADEV MARMO PVT. LTD.

V/S
UNION OF INDIA & ORS.

Mr. DINESH MEHTA, for the appellant / petitioner

Mr. VINEET KUMAR MATHUR], for the respondent UOI

Mr. RAVI BHANSALI ]
Mr. RISHABH SANCHETI] ]
Mr. P.S.BHATI ]
Mr. AJEET KUMAR SHARMA ] for applicants

Date of Order : 15.9.2008

HON'BLE SHRI N P GUPTA,J.

HON'BLE SHRI KISHAN SWAROOP CHAUDHARI,J.

ORDER
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By this petition, the petitioner seeks to have declared illegal, arbitrary and
unconstitutional, the following words in Policy Circular No.13(RE-2008) dt. 30.6.2008
produced with the writ petition as Annexure-4 “units who have been granted marble block
import licence under previous licensing years or are eligible to avail license in the current
licensing year (2008-09) under SIL category”. Other relief as claimed is, that the petitioner
may be declared entitled to avail import license under Annexure-4.

Necessary facts are, that according to the petitioner, in exercise of powers

conferred by section 5 of Foreign Trade (Development and Regulation) Act, 1992, the
concerned Ministry published Foreign Trade Policy 2004-2009, incorporating the provisions,
relating to export and import of goods and service. Then, the Director General of Foreign
Trade, New Delhi has issued annual supplement for the year 2007-08 and 2008-09, and the
said Director General issued a Policy Circular No.1 (RE-2007) dt. 26.7.2007, issuing
guidelines for import of rough marble blocks/slabs for the year 2007-08, laying down the
entitlement or quota of import of rough marble blocks, subject to ceiling provided therein,
however, out of the said quota, individual importers were allocated their share of total
quantity of import. Accordingly, the petitioner has been availing the quota. This licence was
issued to the petitioner for import, under Special Import Licences (SIL). It is alleged, that till
the year 2007-08, the import licences have been issued, only under SIL, and there was no
policy for entrepreneurs, other than those availing licence under SIL.

It is then alleged, that for the year 2008-09, the Director General issued Policy
Circular No.12 dt. 27.6.2008, laying down guidelines for import of rough marble blocks for
the year 2008-09, and the upper ceiling of the total import was fixed at 1.40 lacks metric ton.
This Circular has been produced as Annexure-3. Then, the said Director also issued a Policy
Circular No.13 dt. 30.6.2008, in addition to the previous guidelines, according to which,
units, who have been granted import licences under SIL, or who are eligible for avail
licences, in the current year, under the SIL, have been excluded. It is also alleged, that
quantity of licence or entitlement of licence thereunder, is in accordance with gang saw
machines installed in the premises. This Circular No.13 has been produced as Annexure-4.

The precise challenge, for the above relief, is on the ground, that according to
Annexure-4, the eligibility is based on the criteria being, units, who have installed marble
gang saw machine, and the units should have been in operation since prior to 31.3.2001, and
from out of this category, 100% EOU's, units in SEZ, and units who have been granted
marble block import licence under previous licensing years, or are eligible to avail licence in
the current licensing year (2008-09), under SIL category, has been excluded. Then, it has
also been provided, that all eligible units as above, should have indigenous sales turn over of
marble slabs/tiles of Rs.1.00 crore and above in each of three financial years 2004-05, 2005-
06, 2007-08 (2006-07). According to the petitioner, exclusion of those units, who have been
granted licence under SIL, or who are eligible to avail licence in the current licensing year
under SIL, is highly arbitrary and contrary to Foreign Trade Policy, unjust and unwarranted,
particularly in wake of the fact, that in the Policy Circular No.13, total entitlement for import
licence is 3000 metric ton marble blocks/slabs for the first gang saw machine, and 1500
metric ton for additional gang saw machine. It is contended, that once the Central
Government decides to permit import of such a huge quantity, based on manufacturing
capacity, exclusion of the units obtaining import licence under SIL, is highly arbitrary and
illegal. It is also contended, that the Government could and should have provided an option,
to be exercised by an individual entrepreneur, either to apply and avail licence under
Annexure-3, or Annexure-4. It is next contended, that Annexure-4 has been issued to give
benefit to the particular sect of entrepreneurs, excluding the existing licence holders, under
SIL category.

Reply has been filed on behalf of the respondents, contending inter alia, that
Annexure-4 was issued, especially to redress the grievance of the entrepreneurs, who were
not given the import licence under SIL Scheme, and the petitioner, who was, and is enjoying
the benefits under SIL Scheme, cannot question, when the benefit is extended to those
entrepreneurs, who were not enjoying the benefit under the SIL Scheme. It is also contended,
that by Annexure-4, Government has broad based licensing, by including units, which were
earlier not covered under the SIL Category. The policy has been devised in consultation with
the various State Governments, and the representatives of the industries. It is contended, that
if the option suggested by the petitioner is provided, very purpose of broad basing the eligible
entities would be defeated. It is also contended that on the same consideration, 100% EOU
units, and units in SEZ, have been excluded. It is denied that there is vast difference between
the maximum quantity of import, given under the import licence to the petitioner, and the
quantity to which the entrepreneur may be entitled, under Annexure-4, rather the quantity
3000 metric ton is upper most ceiling, which can be allowed to importers. Thus, the
apprehension of the petitioner is unfounded.

Rejoinder has been filed by the petitioner, reiterating the averments of the writ
petition. However, additional pleadings taken therein are, that the eligibility criteria of quota,
to which each unit is entitled, are different under Annexures-3 and 4, inasmuch as under
Annexure-3, the unit is entitled on the basis of eligible turnover of the previous year, whereas
under Annexure-4, entitlement is according to the turnover and number of gang saw
machines, installed in the unit before 2001.

During the pendency of this petition, certain applications have been filed by
individual entrepreneurs, who are covered by Annexure-4, and accordingly, applied for grant
of licence under Annexure-4, so also by some of the persons, who have been granted some
licences, seeking their impleadment as party respondent of the writ petition. Replies to those
applications have been filed, and before proceeding with the arguments on the main writ
petition, we have heard learned counsel for the applicants, and in view of the averments
contained at page 50 of the paper book, being internal page 5 of the rejoinder, the
applications are allowed, and all the applicants are impleaded as party respondents.

Thereafter, we have heard learned counsels on the merits of the matter.

At the outset, it may be observed that by Annexure-4, the persons like

petitioner, who have been enjoying, and are availing, import licences under the SIL, have not
been, altogether excluded from their entitlement to get import licence, rather they continue to
remain entitled to avail the licence under the SIL. Therefore, it cannot be said, that by issuing
the policy scheme Annexure-4, the persons including the petitioner have been deprived to do
their business or profession, within the meaning of Article 19(1)(g).

Coming to the aspect of the arbitrariness, as contended, it would suffice to say,

that the upper ceiling of the total import has been fixed at 1.40 lacks metric ton, under
Annexure-3, and identical upper limit has been fixed separately under Annexure-4, thus they
do not overlap, in the manner, that one does not take away the share of other. Then much of
the apprehension of the petitioner, is based on the entitlement to obtain licence up to 3000
metric ton on one gang saw machine, and 1500 metric ton for additional gang saw machine,
may be taken up. From a combined reading of Annexures-3 and 4, it would be clear, that the
eligibility to get the licence to the extent of quantity of marbles, to be imported under licence,
to be availed under Annexure-3, depends on the figure to be worked out, on the basis of
eligible turnover for the year 2007-08 i.e. the turnover of eligible firms for the year 2006-07,
or the turnover of these firms for the year 2004-05 with the cap of 10%, whichever is less.
Likewise, under Annexure-4, the eligibility of the unit for getting import licence is to be pro
rata, on the basis of average indigenous sales turnover of marble slabs/tiles, only in the
financial years 2004-05, 2005-06 and 2006-07. Thus, inherently and basically, the entitlement
to import licence for particular quantity of marbles under both Annexure-3 and 4 is, relatable
to the turnover of the firm concerned. Under Annexure-3, it is relatable to eligible turnover
for the relevant years with a specified cap, while under Annexure-4, it is relatable to average
indigenous sales turnover of the applicant concerned. Thus, more or less, the same criterion
has been applied for determining the eligibility, viz. depending on the turnover, under
Annexure-3 and Annexure-4 respectively. Then so far as the limit of 3000 metric ton for one
marble gang saw, and 1500 metric ton for additional gang saw is concerned, it is clear, that
this is the upper most overall ceiling for each individual applicant. Significantly, under
Annexure-3, no such overall ceiling has been prescribed. Obviously, with the result, that a
person, falling under Annexure-3, in a given case, may even be eligible for import licence for
marble, to an extent, for beyond the one permissible under Annexure-4.

Thus, it cannot be said, that the policy, being Annexure-4, is either arbitrary or irrational. May
be, that in given individual case, for the individual entrepreneur, at a given point of time, and
for given reason also, Annexure-4 may appear to be more beneficial than Annexure-3, but
then, for deciding the validity of Annexure-4, that alone cannot be considered. We have to
consider the two policies Annexure-3 and Annexure-4 on their own, and consider the various
aspects thereof, as considered above. However with a view to satisfy our ultimate judicial
conscience, we asked the rough figures, from the respondents about the number of persons
having licenses, or having applied under the two policy circulars, and we have been
informed, that the number of persons enjoying licence under SIL, is around or less than 30,
while the persons applying for, or having granted licenses under Annexure-4 far exceed 100.
It would suffice to observe, that the ultimate upper limit of import under Annexure-3, as well
as Annexure-4, is 1.40 lacks metric ton. It is simply required to be comprehended, that on the
one hand, as per Annexure-3, the total quantity 1.40 lacks metric ton is available for obtaining
import licence, to the persons numbering around 30, on the other hand, same quantity of
goods is available for obtaining import licence to persons, under Annexure-4, far outnumber
100. This, by itself, is enough to dispel all contentions, regarding arbitrariness, irrationality of
Annexure-4.

The writ petition thus lacks merit, and is, therefore, dismissed summarily.

( KISHAN SWAROOP CHAUDHARI ),J. ( N P GUPTA ),J.

/m.asif/