Content Provider | Supreme Court of India |
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e-ISSN | 30484839 |
Language | English |
Access Restriction | NDLI |
Subject Keyword | Constitution of India – Art. 14 19(1)(g) and 21 |
Content Type | Text |
Resource Type | Law Judgement |
Jurisdiction | India |
Case Type | Appeal |
Court | Supreme Court of India |
Disposal Nature | Appeal Dismissed |
Headnote | Constitution of India – Art. 14, 19(1)(g) and 21 – Foreign Exchange Management Act, 1999 – ss. 10(4), 11(1) – Merchanting Trade Transactions Guildelines, 2020 – Clause 2(iii) – Proportionality of clause 2(iii) – The appellant is the managing director of a firm that manufactures and trades in pharmaceuticals and personnel protection equipment products such as masks, gloves, sanitizers, PPE overalls, and ventilators etc. – Appellant obtained International Merchanting Trade Transaction (MTT) contract to serve as an intermediary between the sale of PPE products by a supplier in China to a buyer in the United States – Appellant requested its bank for required documents to execute the MTT contract – The bank informed the appellant that RBI had denied permission for his MTT contract, on the basis of clause 2(iii) of the 2020 MTT Guidelines – At the relevant time, the export of PPE products were banned by the Government through various notifications due to ongoing COVID-19 pandemic – Therefore, MTT contracts concerning PPE were considered impermissible – Writ petition by the appellant – Appellant challenged the Constitutionality of clause 2(iii) of 2020 MTT guidelines – High Court upheld the constitutionality of clause 2(iii) – On appeal, held: The UOI’s policy to ban the export of PPE products reflects their stance on the product’s non-tradability during the COVID-19 pandemic – It highlights a clear policy choice under which Indian entities shall not be allowed to export these products outside of India, in all probability to the highest buyers across the globe who may end up hoarding the global supply – Hence, banning MTTs in PPE products was critical in ensuring that Indian foreign exchange reserves are not utilized to facilitate the hoarding of PPE products with wealthier nations – A mere ban on exports would not regulate the utilisation of Indian foreign exchange – Hence, in order to keep India’s policy position consistent across the board, the prohibition of MTTs in respect of PPE products was necessary and the only alternative of ensuring the realisation of legitimate State interest – The High Court was correct in holding that clause 2(iii) of the 2020 MTT Guidelines was a proportionate measure ensuring the availability of sufficient domestic stock of PPE products – The measure was validly enacted, in pursuance of legitimate state interest and did not disproportionately impact the fundamental rights of the appellant – Hence, Clause 2(iii) passes muster u/Art.14, 19(1)(g) and 21. |
Judge | Hon'ble Dr. Justice D.Y. Chandrachud |
Neutral Citation | 2021 INSC 828 |
Petitioner | Akshay N Patel |
Respondent | Reserve Bank Of India & Anr. |
SCR | [2021] 13 S.C.R. 231 |
Judgement Date | 2021-12-06 |
Case Number | 6522 |
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