The Hindu Business Line : HC quashes floor price for arecanut import

Chennai, Oct. 14 The Madurai Bench of the Madras High Court has set aside the June 4 notification of the Directorate General of Foreign Trade (DGFT) fixing a minimum import price for arecanut (betelnut).

Allowing a batch of writ petitions from importers of Mumbai and Kolkata challenging the notification, Mr Justice K. Chandru held that the DGFT had no power to issue the notification under the Foreign Trade (Development Regulation) Act, 1992. Price fixing for arecanut on an “artificial” basis could not be done in the light of enactments such as Customs Act and Customs Tariff Act. Also, no material data had been furnished for arriving at the figure of Rs 35 a kg (c.i.f) for the imported commodity.

By the impugned notification, importers were directed to import arecanuts at the c.i.f value of Rs 35 a kg. The petitioners contended that such a price fixation was arbitrary and curtailed the right of importers under articles 19(1)(g) and 301 of the Constitution. When the import policy of the Government envisaged free import of arecanuts, there was no question of restricting the right of importers.

The DGFT, in its counter, said the notification was essential inasmuch as the price of imported arecanut was very low and this resulted in declining trend in the domestic price and consequential loss for domestic growers. Also, the policy would prevent inferior quality arecanut from being imported.

The judge said when the market for arecanut required 90 per cent import, and free import policy had been evolved for such import, the present notification was contrary to such a policy. It also made the importers to commit further illegalities of retention of amounts in foreign countries. The argument that sub-standard material was being imported was not supported by any records.

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