Case BriefsSupreme Court

Supreme Court: The 3-judge bench of AM Khanwilkar, Dinesh Maheshwari and Sanjiv Khanna, JJ has held that the provisions of Foreign Trade (Development and Regulation) Act, 1992 (FTDR Act) are in addition to, and not in derogation of, the provisions of any other law for the time being in force and that 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.

Issue before the Court

The notifications dated 29th March 2019 bearing S.O. Numbers. 1478-E,1479-E, 1480-E and 1481- were challenged for being 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 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 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.

On applicability of Section 3(2) of the FTDR Act on imposition of quantitative restrictions on imports or exports

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.

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 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, 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 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.”

On Section 9A of the FTDR Act being an escape provision

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 General Agreement on Tariff and Trade (GATT)-1994. 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, would mean 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 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.”

Conclusion

The impugned notifications would be valid as they have been issued in accordance with the power conferred in the 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 not entirely curtailed by Section 9A of the FTDR Act.

[Union of India v. Agricas LLP, 2020 SCC OnLine SC 675, decided on 26.08.2020]

Case BriefsSupreme Court

Supreme Court: Dealing with the authority of the “Monitoring Committee to seal the residential premises on the private land” particularly when they are not being used for the “commercial purpose”, the 3-judge bench of Arun Mishra, BR Gavai and Krishna Murari, JJ has held that the Monitoring Committee is not authorized to take action concerning the residential premises situated on the private land. If there is unauthorized construction or in case of deviation, the requisite provisions are under the Delhi Municipal Corporation Act, 1957 (DMC Act), such as sections 343, 345, 347(A), 347(B).

In the order reported in (2004) 6 SCC 588 in this case, this Court considered the question of regularization of illegal industrial activities in the context of a violation of Master Plan and industrial activities in residential non­-conforming areas of Delhi. Requisite directions were issued for closure or relocation of industrial units non­confirming with the ecological balance considering the right of a hygienic, clean and safe environment. The Monitoring Committee was appointed and empowered in 2006 by this Court to take action within the powers conferred vide judgment in M.C. Mehta v. Union of India, (2006) 3 SCC 399. The Monitoring Committee was authorized to take care of the unauthorized colonies, and the Special Task Force was directed to remove the encroachments from the public roads and public streets.

Considering the various orders passed by it from time to time, before the constitution of the Monitoring Committee, The Court found that it, at no point in time, has empowered the Monitoring Committee to take action with respect to residential premises not used for commercial purpose.

“No doubt about it that matter of encroachment is a matter of concern, but the Monitoring Committee can act within the four corners of powers conferred upon it and purpose for which the court appointed the Monitoring Committee. It cannot exceed its powers and take any action beyond its authorization by the court.”

Considering it’s order dated 7.9.2018 where the Court had specifically noted in the aforesaid paragraph that the Monitoring Committee is doing it’s best to remove the encroachments/ unauthorized constructions or misuse of the property, The Court said that but that the same relates to the encroachments on the public land and unauthorized colonies, and at no point of time this Court has authorized the Monitoring Committee to take action concerning residential premises which were standing on the private land and were not being misused.  The aforesaid observations are not with respect to the Committee’s authorization but have to be read in the context of the purpose for which the Monitoring Committee had been appointed.

“The power of the Monitoring Committee could not be said to be widened by the aforesaid observations made in the order. This Court specifically dealt with in several orders the questions relating to power and the purpose for which the Monitoring Committee had been appointed.”

When asked to give it’s considered opinion specifically as to whether at any point in time in the past, it sealed any residential premises, which were not misused for commercial purposes, the Monitoring Committee kept silent on this aspect and did not cite even a single such instance.

It further noticed that the power of sealing of property carries civil consequences. A person can be deprived of the property by following a procedure in accordance with law.  The Monitoring Committee is not authorized to take action concerning the residential premises situated on the private land. If there is unauthorized construction or in case of deviation, the requisite provisions are under the DMC Act, such as sections 343, 345, 347(A), 347(B).   The mode of action and adjudication under the Act is provided including appellate provisions and that of the Tribunal.

“It would not be appropriate to the Monitoring Committee to usurp statutory powers and act beyond authority conferred upon it by the Court.  The Monitoring Committee could not have sealed the residential premises, which were not misused for the commercial purpose, nor it could have directed the demolition of those residential properties.”

It noticed that when the Monitoring Committee is not empowered to take action, the incumbents could not have   been deprived of the due process of protection in accordance with law.  As against the action of the Monitoring Committee, no appeal lies elsewhere. Even High Court is not authorized to entertain any matter and scrutinize its action, such is the drastic step taken by this Court by  way of an exceptional measure in public interest, and it is confined to the misuse of residential property for commercial purpose and encroachments and unauthorized construction on the public land, roads.

“Article 300A of the Constitution provides that nobody can be deprived of the property and right of residence otherwise in the manner prescribed by law.  When the statute prescribes a mode, the property’s deprivation cannot be done in other modes since this Court did not authorize the Committee to take action in the matter. An action could have been taken in no other manner except in accordance with the procedure prescribed by law.”

[MC Mehta v. Union of India, 2020 SCC OnLine SC 648, decided on 14.08.2020]

Case BriefsSupreme Court

Supreme Court: The bench of Ashok Bhushan and KM Joseph, JJ decided some important questions dealing with the Hindu Religious and Charitable Endowments Act, 1959 and held that the Commissioner, while hearing the appeal under Section 69 of Act, 1959, is not a Court. It said,

“When an appeal is provided against the order of the Commissioner under Section 69 to the Court which is defined under Section 6(7), there is no question of treating the Commissioner as a Court under the statutory scheme of Act, 1959.”

The Court also held that the applicability of Section 29(2) of the Limitation Act is with regard to different limitations prescribed for any suit, appeal or application when to be filed in a Court. It further held,

“Section 29(2) cannot be pressed in service with regard to filing of suits, appeals and applications before the statutory authorities and tribunals provided in a special or local law. The Commissione while hearing of the appeal under Section 69 of the Act, 1959 is not entitled to condone the delay in filing appeal, since, provision of Section 5 shall not be attracted by strength of Section 29(2) of the Act.”

On the question whether the statutory scheme of Act 1959 indicate that Section 5 of Limitation Act is applicable to proceedings before its authorities, the Court said that There is no other provision in the scheme from which it can be inferred that Act, 1959 intended applicability of Section 5 of the Limitation Act to proceedings of appeal before the Commission.

[Ganesan v. Commissioner, Tamil Nadu Hindu Religious and Charitable Endowments Board, 2019 SCC OnLine SC 651, decided on 03.05.2019]

Case BriefsSupreme Court

Supreme Court: Asking High Court to be more circumspect before it restrains an investigation under the statutory authority of the Director General of the Competition Commission, the bench of Dr. DY Chandrachud and Hemant Gupta, JJ remitted back a matter to Delhi High Court that dealt with the powers of search and seizures of the Director General of CCI.

Relevant Provisions
  • Section 41(3) of Competition Act, 2002 specifically incorporates a reference to Section 240A in its application to an investigation by the Director General under the provisions of the Competition Act 2002.
  • Under Section 240A, an Inspector who has reasonable ground to believe that books and papers of, or relating to, any company may be destroyed, mutilated, altered, falsified or secreted may apply to the Magistrate to secure an authorisation for the seizure of the books and papers.
Background
  • The Chief Metropolitan Magistrate allowed the application on 17 September 2014. The search operation was carried out on 19 September 2014.
  • An interim application was filed before the Delhi High Court in the pending writ petition for quashing the search and seizure and for the return of all documents, hard drives and laptops seized during the course of the search and seizure operation and for a stay on the investigation.
  • The Delhi High Court, by its order dated 26 September 2014, stayed further proceedings before the Director General of Investigation.
  • Applying the provision under Section 240A of the Companies Act, 1956, the High Court had held that a reading of the order passed by the Chief Metropolitan Magistrate does not indicate any authorisation to the Director General to carry out any other exercise other than searching for relevant material.
Ruling

The Court noticed that the provisions of Section 240A do not merely relate to an authorisation for a search but extend to the authorisation of a seizure as well. Unless the seizure were to be authorised, a mere search by itself will not be sufficient for the purposes of investigation.

It, hence, held,

“Having due regard to the provisions of Section 240A and the underlying purpose of Section 41(3), we are of the view that the blanket restraint which has been imposed by the learned Single Judge on the appellants utilising the seized material for any purpose whatsoever was not warranted. The High Court has blocked the investigation on an erroneous construction of the powers of the Director General.”

[Competition Commission of India v. JCB India Ltd., CRIMINAL APPEAL NO. 76-77 OF 2019, order dated 15.01.2019]