[Cites 17, Cited by 0]
Delhi High Court
Devki Global Capital Private Limited & ... vs Union Of India Through Secretary, ... on 12 March, 2026
Author: C. Hari Shankar
Bench: C. Hari Shankar
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ LPA 211/2020, CM APPLs. 21903/2020, 18627/2021,
3902/2022, 8008/2022, 14929/2022, 24835/2022, 63980/2023,
12112/2025 & 30365/2025
Judgment reserved on: 25.02.2026
Judgment pronounced on: 12.03.2026
DEVKI GLOBAL CAPITAL
PRIVATE LIMITED & ANR. .....Appellant
Through: Mr. Jayant Mehta, Sr. Adv. with
Ms. Damini Chawla, Mr. Pallav Arora, Mr.
Vishal Thakur and Mr. Harsh Gupta, Advs.
versus
UNION OF INDIA THROUGH SECRETARY,
MINISTRY OF FINANCE & ANR. .....Respondent
Through: Mr. Mukul Singh, CGSC with
Mr. Aryan Dhaka and Mr. Vikrant Badesra,
Advs.
Mr. Ripudaman Bhardwaj, CGSC
Mr. Gaurav Barathi, Mr. Vishal Thakur, Mr.
Chirantan Priyadarshan, Advs. for intervenor
+ LPA 212/2020, CM APPLs. 19507/2020, 18625/2021,
3852/2022, 7311/2022, 14928/2022 & 25233/2022
SUN ORGANIC INDUSTRIES
PRIVATE LIMITED & ANR. .....Appellant
Through: Mr. Ashish Dholakia, Sr. Adv.
with Ms. Damini Chawla, Adv.
versus
UNION OF INDIA THROUGH SECRETARY,
MINISTRY OF FINANCE & ANR. .....Respondent
Through: Mr. Ripu Daman Bharadwaj,
CGSC with Mr. Kushagra Kumar and Mr.
Amit Kumar Rana, Advs. for UOI
+ LPA 213/2020, CM APPLs. 19510/2020, 18629/2021,
3854/2022, 7702/2022, 14940/2022 & 25232/2022
Signature Not Verified
Signed By:PRAGYA LPA 211/2020 and other connected matters Page 1 of 25
ARORA
Signing Date:12.03.2026
18:13:12
SHAMBHU MERCANTILE
LIMITED & ANR. .....Appellant
Through: Ms. Damini Chawla, Adv.
versus
UNION OF INDIA THROUGH SECRETARY,
MINISTRY OF FINANCE & ANR. .....Respondent
Through: Mr. Mukul Singh, CGSC with
Mr. Aryan Dhaka and Mr. Vikrant Badesra,
Advs. for UOI
+ LPA 214/2020, CM APPLs. 19513/2020, 18623/2021,
7940/2022, 15194/2022 & 24836/2022
K.L. GUPTA AND SONS
PRIVATE LIMITED & ANR. .....Appellant
Through: Ms. Damini Chawla, Adv.
versus
UNION OF INDIA THROUGH SECRETARY,
MINISTRY OF FINANCE & ANR. .....Respondent
Through: Ms. Arti Bansal CGSC with Ms.
Shruti Goel. Advs.
CORAM:
HON'BLE MR. JUSTICE C. HARI SHANKAR
HON'BLE MR. JUSTICE OM PRAKASH SHUKLA
JUDGMENT
% 12.03.2026
OM PRAKASH SHUKLA, J.
1. Through the present Letters Patent Appeals1, the Appellants
assail the correctness of the common judgment dated 14.07.20202,
rendered by the learned Single Judge of this Court in W.P. (C) Nos.
7676/2019, 11123/2019, 11125/2019, and 13124/2019. These writ
petitions were filed by the Appellants raising substantially similar
grievances, primarily concerning the refusal of Respondent No. 2 to
1 "LPA" hereinafter
2 "Impugned Judgment" hereinafter
register the Appellants' sales contracts for the import of poppy seeds
from the Republic of Turkey3, in accordance with the Guidelines dated
25.06.20194 issued by Respondent No. 1. Furthermore, the Appellants
raised concerns before the learned Single Judge regarding the fixation
of a Country Cap, which was alleged to have been determined in
contravention of the applicable framework.
2. The Appellants contended that poppy seeds were freely
importable under the Foreign Trade Policy of India, subject to the
condition that sales contracts for such imports must be registered with
Respondent No. 2. The crux of the Appellants' grievance is that despite
their sales contracts for the import of poppy seeds from Turkey having
been registered with the Turkish Grain Board5 in accordance with the
Guidelines, Respondent No. 2 did not register their sales contracts in
India, thereby rendering them without the requisite import permits. The
said non-registration resulted in the Appellants being unable to import
the poppy seeds, causing them significant financial loss.
3. Since all the appeals arise from the same lis and revolve around
substantially similar questions of fact and law, they are being disposed
of through this common judgment. For convenience, and with the
consent of the parties, LPA No. 211/2020 shall serve as the lead case,
and the decision herein shall apply to the other appeals.
4. The brief facts leading to the present appeals are as follows:
3 "Turkey" hereinafter
4 "Guidelines" hereinafter
5 "TMO" hereinafter
Brief Facts
5. The Appellants herein are importers of poppy seeds and engaged
in the business of importing and selling poppy seeds in India.
6. The Central Bureau of Narcotics6, functioning under the
Department of Revenue, Ministry of Finance, Government of India, is
the authority entrusted with regulating the import of poppy seeds into
India. CBN has been arrayed as Respondent No. 2 in the present
appeals, while the Union of India has been arrayed as Respondent No.1.
7. Respondent No. 1 entered into a Memorandum of
Understanding7 on 23.05.2018 with Turkey to regulate the import of
legally cultivated poppy seeds into India. Article III of this MOU
prescribes the procedure for registration of sales contracts, requiring the
TMO to maintain an Online System Portal8 through which Turkish
exporters must register sales contracts entered into with Indian
importers for the export of poppy seeds with the TMO. Upon such
registration, CBN is required to register the said sales contracts on the
basis of the details reflected on the portal.
8. Article III of the MOU further stipulates that TMO shall not
register sales contracts exceeding the Country Cap, which is the
permissible annual quantity of poppy seeds that may be imported from
6 "CBN" hereinafter
7 "MOU" hereinafter
"The portal" hereinafter
Turkey into India, as determined by the Government of India in
consultation with the Government of Turkey. This cap takes into
account Turkey's crop-year production, carry-forward stock, and its
domestic or export requirements.
9. In accordance with the MOU, CBN issued a Public Notice dated
25.06.2019, along with the Guidelines, specifying the process for
registering sales contracts pertaining to the import of poppy seeds from
Turkey for the crop year 2018-19. Thereafter, Turkish exporters
proceeded to register their sales contracts with the TMO.
10. However, at the time of the issuance of the Public Notice and
Guidelines, the Country Cap for the crop year 2018-19, which was
required to be fixed as mandated by the MOU, had not yet been fixed.
Aggrieved by non-fixation of the Country Cap, the Appellants filed
W.P.(C) No. 7676/2019 before this Court, contending that the
registration process could not lawfully proceed in the absence of the
fixation of the Country Cap. The Appellants argued that no steps
towards registration ought to be permitted until the Country Cap was
fixed.
11. On 30.07.2019, the Respondents conceded before the learned
Single Judge that the Country Cap had not yet been fixed. The
Respondents further submitted that, in view of the strict timelines, no
imports would be permitted for the crop year 2018-19 irrespective of
the registration of sales contracts with the TMO. The learned Single
Judge also granted an interim stay on the import of poppy seeds until
the next date of hearing.
12. Subsequently, on 02.08.2019, a provisional Country Cap of
18,000 MT was fixed for the crop year 2019-20.
13. With the fixation of the Country Cap, the issue in W.P.(C) No.
7676/2019 was confined to determining whether contracts registered
with the TMO prior to the fixation of the Country Cap could be
considered for import for the crop year 2019-20. In this regard, CBN
sought clarification from TMO, which confirmed that all previously
registered contracts would be removed from the system and would not
be considered for registration for the crop year 2019-20. This position
was further clarified vide a letter dated 06.09.2019 from Turkish
Embassy to CBN, indicating that all exporters would be required to
apply afresh with the TMO, and that only valid applications would
thereafter be uploaded on the portal accessible to the CBN for the
issuance of import permits.
14. In light of the above clarifications, W.P. (C) No. 7676/2019 was
disposed of by order dated 11.09.2019.
15. Thereafter, CBN issued a fresh Public Notice dated 13.09.2019,
declaring the provisional Country Cap of 18,000 MT for the crop year
2019-20 and inviting the registration of sales contracts in accordance
with the Guidelines, requiring exporters in Turkey to first register their
sales contracts with the TMO.
16. Subsequently, TMO opened the portal for the registration of sales
contracts on 25.09.2019. The Appellants' exporters and several other
exporters registered their respective sales contracts. The relevant
particulars of the quantities to be imported by the Appellants are as
follows: -
LPA No. Quantity to be imported
211/2020 90MT
212/2020 144MT
213/2020 450MT
214/2020 450MT
17. While the Appellants' sales contracts stood registered with the
TMO, these registrations were not reflected in the portal accessible to
the CBN. As a result, no import permits were issued by the CBN to the
Appellants.
18. The Appellant9 filed CM APPL. No. 45339/2019 in W.P.(C) No.
7676/2019 to raise the grievance that, despite the registration of their
contracts with the TMO, CBN had declined to register the contracts in
India. Subsequently, the Appellants in the connected appeals also filed
separate writ petitions, aggrieved by the non-issuance of import permits
by CBN despite registration of their sales contracts with TMO.
19. In response to this grievance, CBN sought clarification from the
TMO. By a letter dated 30.10.2019, the TMO informed CBN that the
Appellants' contracts could neither be approved nor uploaded, as the
notified Country Cap of 18,000 MT had already been exhausted by
other registered contracts. It was further indicated that these sales
contracts could be uploaded if the Government of India revised the
Country Cap, and also indicated availability of 26,540 MT of poppy
seeds in Turkey for export to India.
20. Relying on the above communication regarding the availability
of an additional quantity of poppy seeds in Turkey for export, the
Appellants submitted representations to the respondents on 01.01.2020
and 02.01.2020, seeking enhancement of the provisional Country Cap.
In response, it was conveyed that the final Country Cap for the crop
year 2019-20 had been fixed at 18,000 MT in accordance with the
applicable Guidelines.
21. Aggrieved by both the fixation of the final Country Cap at 18,000
MT and the non-registration of their contracts, the Appellants
challenged the Respondents' actions before the learned Single Judge.
Finally, the dispute before the learned Single Judge primarily circled
around on the following premise:
• The Appellants contended that the fixation of the final
Country Cap at 18,000 MT was arbitrary since the Country
Cap should have been determined after taking into account
Turkey's crop year production, carry-forward stock, and
export availability, as mandated under the MOU. They
highlighted that the availability of an additional 8,438 MT of
poppy seeds in Turkey wasn't accounted while determining
the Country Cap.
• The Appellants argued that registration with TMO ought to
have automatically resulted in the corresponding registration
by CBN, lack thereof was violative of Article III of the MOU.
• The Appellants further contended that W.P.(C) No.
7676/2019 had been disposed of with an assurance that all
pre-Country Cap registrations would be cancelled and the
registration process would recommence. However, contrary
to this assurance, the very same contracts were re-registered
with the TMO, thereby denying the Appellants an equal
opportunity to participate in the process and vitiating the
fairness of the entire exercise.
22. The learned Single Judge dismissed the writ petitions by the
Impugned Judgment dated 14.07.2020, holding that the determination
of the Country Cap falls squarely within the domain of economic
policy, and in the absence of mala fides, unreasonableness or
arbitrariness does not warrant judicial interference. It was further
concluded that no breach was found on part of the Respondents in non-
registration of the Appellant's import contracts for intervention by the
Court.
23. Hence, the present LPAs have been filed.
Rival Submissions Before this Court
Submissions of learned Senior Advocates Mr. Jayant Mehta and
Mr. Ashish Dholakia
24. Learned Senior Counsel for the Appellants submitted that the
Appellants had duly registered their sales contracts on 25.09.2019 with
the TMO and had been issued valid registration numbers. However,
despite timely registration, CBN did not process their sales contracts,
while other contracts registered within the same time frame, and even
those registered subsequently, were processed. It was further contended
that such unequal treatment, without any disclosed rationale or
justification, was manifestly arbitrary and discriminatory.
25. Learned Senior Counsel further argued that, in terms of the
Guidelines read with the MOU, the registration of a sales contract with
the TMO ought to have been automatically reflect on the portal
accessible to CBN. The subsequent insistence on a separate stage of
"uploading", as indicated in the communication dated 30.10.2019,
introduced an artificial distinction between registration and uploading
that was not contemplated under the governing framework. This,
according to the Appellants, contravened both the Guidelines and the
MOU, by creating an additional procedural barrier not envisaged under
the framework.
26. It was further contended that the non-reflection of the
Appellants' registrations on the ground of the exhaustion of the Country
Cap was itself contrary to the MOU, which envisages that registrations
shall not exceed the notified quantity. The Appellants argued that, in
such circumstances, the CBN should have sought clarification from the
TMO regarding how excess registrations were entertained.
Additionally, it was submitted that the CBN ought to have objected to
the introduction of any post-registration conditions not envisaged under
the MOU and ensured that, if the registrations exceeded the Cap, a fair
and transparent mechanism for allocation should be devised by the
Respondents and failure to do so is in a violation of Article 14 of the
Constitution of India10.
27. Learned Senior Counsel submitted that the Respondents'
conduct, viewed in its entirety, disclosed manifest procedural
irregularity and arbitrariness, as (i) CBN failed to disclose the complete
particulars of contracts registered prior to the fixation of the Country
Cap; (ii) the attempt to shift responsibility onto TMO for non-furnishing
of such details was untenable, particularly given CBN's admitted access
to the online portal under the MOU; and (iii) despite earlier
representations that pre-Cap registrations would be cancelled and that
the process would recommence afresh, the same contracts were
allegedly re-registered, thereby compromising transparency and
depriving the Appellants of a fair and equal opportunity to participate
in the process, in violation of the principles of fairness, transparency,
and equality under Articles 14 and 19(1)(g) of the Constitution.
28. It was further contended that the allocation of the Country Cap,
which regulates the permissible quantum of poppy seed imports,
constitute the distribution of a limited, State-controlled commercial
opportunity. Such a decision must, therefore, satisfy the constitutional
mandate of fairness, transparency, and non-arbitrariness under Articles
14 and 19(1)(g). CBN cannot evade its obligation to ensure that the
mechanism under the MOU is implemented in a fair and transparent
manner. The Appellants relied upon various judgments, including
Centre for Public Interest Litigation and Others v. Union of India and
others11; Natural Resources Allocation, In re, Special Reference No.
10 "Constitution" hereinafter
11 (2012) 3 SCC 1
1 of 201212, Sterling Computers Ltd. v. M & N Publications Ltd.13,
Scheduled Castes and Scheduled Tribes Officers' Welfare Council v.
State of U.P.14, DDA v. Joint Action Committee, Allottee of SFS
Flats15, Securities and Exchange Board of India vs. Pan Asia
Advisors Limited & Anr.16, Humanity v. State of W.B.17, , Bennett
Coleman & Co. v. Union of India18, City Industrial Development
Corpn. v. Platinum Entertainment,19 Mannalal Jain v. State of Assam
and Others20, Bharti Airtel Ltd. v. Union of India21 and Haridas
Exports vs. All India Float Glass Manufacturers' Association 22, to
support their submissions.
Submissions of learned CGSC Mr. Mukul Singh
29. Per contra, learned Counsel for the Respondents contended that
under the Guidelines and the MOU, the registration of sales contracts
was to be undertaken exclusively by the TMO on its portal. Any
grievance related to non-registration or non-reflection of contracts,
therefore, lies within the domain of the TMO. CBN's role is limited to
accessing the system and verifying registrations reflected therein for the
purpose of granting import licenses. It was submitted that no fault could
be attributed to the CBN for the non-reflection of the Appellants'
contracts in the system, as CBN had acted strictly in accordance with
12 (2012) 10 SCC 1
13 (1993) 1 SCC 445
14 (1997) 1 SCC 701
15 (2008) 2 SCC 672
16 (2015) 14 SCC 71
17 (2011) 6 SCC 125
18 (1972) 2 SCC 788
19 (2015) 1 SCC 558
20 (1961) SCC OnLine SC 355
21 (2015) 12 SCC 1
22 (2002) 6 SCC 600
the prescribed procedure.
30. Learned Counsel further submitted that there was no violation of
Articles 14 or 19(1)(g) of the Constitution. Import regulation is a matter
of economic policy framed in public interest, and such policy decisions
are not subject to judicial interference unless shown to be manifestly
arbitrary or unreasonable. Relying on the decisions in Daruka & Co. v.
Union of India23, and A.K. Traders v. Union of India24, it was
contended that such policy decisions are presumed to be in the public
interest, and no individual has an absolute right to import. Even if the
regulation affects business interests, it does not warrant judicial
interference, as it pertains to a matter of economic policy. Hence, the
Respondents' actions do not warrant judicial scrutiny under Articles 14
and 19(1)(g) of the Constitution.
Analysis
31. We have heard learned Counsel for both the parties at length,
perused the material on record, and examined the relevant judgments.
32. It is undisputed that the Appellants' sales contracts were
registered with the TMO. It is equally conceded by the Respondents
that numerous contracts, registered within the same time frame, were
processed and granted registration by the CBN, whereas the Appellants'
sales contracts were not registered by the CBN as they were not
reflected on the portal accessible to the CBN.
23 (1973) 2 SCC 617
24 2022 SCC OnLine Kar 1269
33. The principal question that arises for consideration is whether,
under the scheme of the Guidelines and the MOU, CBN can be held
liable for the non-registration of the Appellants' contracts when such
contracts were registered with the TMO. Furthermore, we must
determine whether any independent obligation rested upon the CBN to
take any action or otherwise act upon in any manner despite the fact that
the Appellants' sales contracts were not reflected on the portal
accessible to CBN.
34. Before proceeding to examine these issues, it is pertinent to
delineate the scope of appellate interference, as recently reiterated by
the Supreme Court in Bihar Industrial Area Development Authority v.
Scope Sales (P) Ltd.25. The Court held that the exercise of intra-court
appellate jurisdiction is limited and warranted only "where the
judgment or order under challenge is demonstrably erroneous or
suffers from perversity". The appellate Bench ought not to substitute its
own view merely because another view is possible on the same set of
facts. The Court further observed that as long as the view taken by the
learned Single Judge is plausible, the appellate Bench should refrain
from substituting it with its own view.
35. Therefore, to begin with, it is appropriate to reproduce the
relevant portion of the Impugned Judgment, which reads as follows:
"31. In view of the above, it is can be seen that the respondent
no.2 is to verify the fact of registration of the sales contract by the
1MO through the online system maintained by the TMO. The
25 2026 SCC OnLine SC 112
submission of the respondents that the contract of the petitioners
were not found as registered on the online system maintained by the
TMO, has not been controverted by the petitioners by production of
any document. The only submission made is based on the. document
which shows that a registration number has been granted to the
petitioners. Incase, even after the grant of such registration, the sale
contracts are not being shown on the online system, the petitioners
should have approached the TMO for the due reflection of such
contracts on its online system. However, again, no document has
been filed by the petitioners to show any such attempt by the
petitioners or the result thereof. The reasons for non-reflection of
the contracts of the petitioners on the online system are therefore,
not discernable as a fact, however, only on basis of assumption."
32. It is also to be noted that in terms of Clause 1 and Clause 2 of
the Guidelines, it is the exporting company in Turkey which has to
get the sales contract registered with the TMO and only upon such
registration, the Indian importer can approach the respondent no.2
for seeking registration of the sales contract. Therefore, registration
of the Agreement by TMO is a matter between the exporter and the
TMO, with which the respondents cannot be concerned or in any
manner influence. The TMO shall be bound by its own procedures
and law applicable in Turkey. This Court cannot examine the
procedure followed by the TMO or issue any directions
thereagainst. This court also cannot ask TMO to explain how, if at
all, and on what basis only the contracts that were registered prior
to notification of the Country Cap got re-registered thereafter.
33. As far as the respondents are concerned, once the sales contracts
of the petitioners were not found on the online system as being
registered by the TMO, the respondents have rightly refused to
register such contracts and no fault can be found in such an exercise.
34. In this light, the submission of the learned counsel for the
petitioners of 'first cum first serve' principle having been followed
by the respondents or the registration being made by the
respondents in some arbitrary manner, cannot also be sustained.
35. I may only note that Clause 3 of the MOU between the
Government of India and Government of Turkey casts a
responsibility on the TMO not to register sales contract in excess of
the Country Cap declared by the Government of India. It would be
for the TMO therefore, to determine in what manner and following
what procedure such contracts shall be registered by it. It can also
not be said that the respondents have failed to discharge any duty by
not inquiring from the TMO about the non-registration of
petitioners' contracts. In any case, the occasion for the respondents
to adopt 'first cum first serve' principle would never arise."
(emphasis supplied)
36. From the analysis undertaken by the learned Single Judge, it is
clear that the conclusions reached were based largely on the
interpretation of the relevant clauses of the Guidelines governing the
procedure for registration. To that end, we consider it apposite to
reproduce the relevant clauses hereunder-
"III. Procedure
(i) Once the application is received by Narcotics Commissioner,
requesting for registration of sales contract for import of poppy
seeds from Turkey, the office of the Narcotics Commissioner shall
verify the fact of registration of sales contract by TMO (through
online system maintained by TMO).
(ii) If the sales contract is found to be registered by TMO, Narcotics
Commissioner will grant provisional registration to importer if
condition as specified in Para -II are fulfilled. Such provisional
registration will be sent to the importer and the online system
maintained by TMO shall be up-dated accordingly.
(iii) The applicant importer, on receiving provisional registration
will be required to open Irrevocable Letter of Credit (ILC) in favour
of Turkish Exporter or make advance payment to the extent of
minimum 20% of total contract value of qty. allowed to be registered
in provisional registration.
Explanation: Contract value for the purpose of this clause will be
computed proportionately in case quantity allowed to be imported
under provisional registration is less than the quantity indicated in
the sales contract..."
(emphasis supplied)
37. It is pertinent to note that these Guidelines were issued in
pursuance of Article III of the MOU, which provides the procedural
framework governing the registration and import of poppy seeds. The
Appellants have placed reliance on both the Guidelines and the MOU.
Hence, it is also necessary to reproduce Article III hereunder for clarity:
Article III Of MOU
"1. TMO shall maintain an online system to enable regulation of
export of poppy seeds from Turkey to India. Exporting companies
shall submit application through the EIB to TMO for obtaining
membership of the online System.
2. Each year, the quantity of poppy seeds which shall be imported
by India from Turkey shall be decided by Government of India in
consultation with Government of Turkey taking into account the
production of poppy seeds in Turkey in a crop year, balance from
previous crop years and domestic or other export requirement of
Republic of Turkey.
3. The exporting companies shall get registered with the TMO. Each
sales contract entered into by the exporting company with Indian
importer shall be registered with TMO through the online system
referred. It shall be the responsibility of TMO not to register sales
contract in excess of the quantity referred to in sub-clause 2 of this
article.
4. Taking into account the quantity as referred to in Sub Clause (2)
above, every year both parties may consider to set a quantity to be
imported by any Indian importer in a crop year.
5. The CBN will register the sales contract registered by TMO as
per details accessed on the online system maintained by TMO in
accordance with guidelines for registration laid down by DoR. The
CBN shall upload the details of sales contract so registered by it on
the online system. TMO shall allow the export in respect of only
those contracts so registered by CBN."
(emphasis supplied)
38. A plain reading of Clause 1 of the MOU makes it evident that the
obligation to establish and maintain the portal vests exclusively with
the TMO. Clause 3 requires exporting companies to secure the
registration of their sales contracts with the TMO, and simultaneously
obliges the TMO not to register sales contracts beyond the notified
Country Cap. Notably, Clause 5 unambiguously stipulates the
responsibility of the CBN to "register the sales contract registered by
TMO as per details accessed on the online system maintained by TMO".
39. The scheme emerging from these clauses is clear: the portal is to
be maintained solely by the TMO, and exporters are required to register
their sales contracts with the TMO. The role of the CBN is restricted to
accessing the portal and verifying the sales contracts reflected therein,
after which the CBN registers the contracts.
40. The limited role of the CBN is further reinforced by Clauses (i)
and (ii) of the Guidelines, which confine its function to verification of
sales contracts through the portal maintained by the TMO. It is only
when the sales contracts are reflected on the portal that the CBN can
proceed to grant registration. Thus, CBN's role is purely consequential
and dependent upon the reflection of contracts by the TMO on the
portal.
41. In this case, it is evident from the letter dated 30.10.2019 that the
Appellants' sales contracts were not reflected on the portal accessible
to the CBN, as the said contract could not be uploaded by the TMO
since the Country Cap had already been exhausted due to other sales
contracts. Once it is established that under the MOU, the CBN has no
obligation to register contracts that are not reflected on the portal
maintained by the TMO, the issue of any default on the part of the CBN
in not registering the Appellants' contracts does not arise, considering
that their contracts were not reflected on the portal.
42. The Appellants' argument that mere registration with the TMO
should ipso facto result in reflection on the portal, and that the
subsequent step of "uploading" introduced by the TMO in its
communication dated 30.10.2019 is an artificial or extraneous
requirement, is not supported by the record. Indeed, the material placed
before us suggests otherwise.
43. A clear distinction between registration and uploading is evident
in the communication dated 06.09.2019, which stated that contracts
registered by the TMO were subsequently uploaded on the system
accessible to the CBN. Aforesaid communication further clarified that,
following the declaration of a new Public Notice, exporters were
required to submit fresh applications for registration for the upcoming
period, and only valid applications would thereafter be uploaded by the
TMO for issuance of import permits. This distinction between
registration and uploading is thus evident from the communication
dated 06.09.2019 issued well before the present lis arising from the non-
registration of the Appellants' sales contracts by the CBN, as outlined
below:
"2. The Turkish Exporters applications, which were supported
by signed contracts and fully complying with all terms stipulated
with CBN in its Public Notice dated 25 June 2019, were registered
by TMO and the same were uploaded to CBN for about 18,000 MT
being the quantity envisaged to be exported from Turkey to India,
against crop year 2018-19, for issuance of Import Permits for
shipment by 31July 2019."
"3. Due to lack of Country Cap being declared by Government of
India, no Import Permits were issued by CBN, resulting that the said
registrations made by TMO and its uploading with CBN, for the
crop year 2018-19 have since lapsed, along with expiry of its
shipment period i.e. 31July 2019."
****
5. Upon declaration of new Public Notice by CBN, all Turkish
Exporters would be required to make new application for fresh
registration of their Export Contracts with TMO, for shipment under
2019-20 period and the valid applications, shall be uploaded by
them with CBN, for issuance of Import Permits."
(emphasis supplied)
44. Article III (5) of the MOU further highlights the distinction
between "registration" and "uploading", although for CBN, by
expressly stating that "CBN shall upload the details of sales contract so
registered by it on the online system". Therefore, uploading is a distinct
step that occurs after registration, rather than being an automatic
outcome of registration. Accordingly, we are unable to concur with the
learned Senior Counsel for the Appellants that the reflection of the
portal accessible to CBN is an inescapable sequitur to mere registration
with the TMO.
45. It is equally clear that if mere registration with the TMO were to
automatically result in reflection on the portal accessible to the CBN,
by dispensing with the stage of uploading, the mechanism would
effectively be reduced to a rigid first-come-first-serve system, thereby
denying an equitable opportunity of even participation to all.
46. With respect to the mandate under Article 14 and 19 of the
Constitution, we concur with the law laid down in Centre for Public
Interest Litigation (supra), Natural Resources Allocation (supra) and
other precedents relied upon by the Appellants that government action
in matters involving of grant of largesse, including the distribution of
import licences must be fair and non-arbitrary. However, we find no
breach of these principles in the present case. The role of CBN, as
defined in the MOU, is triggered only when the contracts are reflected
on the portal, which did not occur in the present case. Whether non-
uploading of the Appellants' contracts was justified or not is not a
matter for adjudication in these proceedings since the writ court cannot
sit in appeal over the decision taken by a foreign entity i.e., TMO or the
mechanism adopted by the TMO of any verification layer within its
domain under the MOU.
47. The Appellant's allegation of favouritism or a pick-and-choose
approach on the part of the CBN, thereby attributing arbitrariness is
equally unfounded. If the CBN had selectively countersigned some
registrations while excluding others despite being reflected on the
portal, a question of arbitrariness might have arisen. However, in the
present case, since the Appellants' contracts were not uploaded on the
portal at all, no such question of attributing arbitrariness can arise
against the CBN. Any grievance regarding preferential uploading, if at
all, would lie against the TMO. A remedy under Article 226 cannot be
stretched to examine the method adopted by the TMO, as it is a foreign
authority operating under the laws of Turkey.
48. The mere fact that the Appellants may not have an efficacious
remedy against the TMO cannot justify imposing liability on the CBN
in the absence of any proven breach of legal duty on its part. We concur
with the finding of the learned Single Judge that, since the Appellants'
sales contracts were not reflected on the portal, the CBN's refusal to
register them cannot be faulted. The learned Single Judge has also
rightly observed that Article III(3) of the MOU casts the responsibility
on TMO not to register sales contracts in excess of the Country Cap
and, therefore, it is for the TMO to determine the manner and procedure
for such registration.
49. During the course of arguments, it was submitted that, upon
becoming aware of the registrations having exceeded the Country Cap,
the CBN should have intervened to ensure a fair mechanism for the
distribution of import licenses instead of continuing registration on first
come first serve basis. CBN's failure to do so, it was argued, amounted
to a violation of Article 14, thereby making it a fit case for the exercise
of writ jurisdiction by this Court.
50. In Union of India and Ors. v. Hindustan Development
Corporation and Ors26, the Supreme Court explained the scope and
limits of the doctrine of legitimate expectation in safeguarding against
arbitrariness, if any, in the exercise of power by public authorities. It
was observed as follows:
"28. Time is a three-fold present: the present as we experience it,
the past as a present memory and future as a present expectation.
For legal purposes, the expectation cannot be the same as
anticipation. It is different from a wish, a desire or a hope nor can
it amount to a claim or demand on the ground of a right. However
earnest and sincere a wish, a desire or a hope may be and however
confidently one may look to them to be fulfilled, they by themselves
cannot amount to an assertable expectation and a mere
disappointment does not attract legal consequences. A pious hope
even leading to a moral obligation cannot amount to a legitimate
expectation. The legitimacy of an expectation can be inferred only if
it is founded on the sanction of law or custom or an established
procedure followed in regular and natural sequence. Again, it is
distinguishable from a genuine expectation. Such expectation should
be justifiably legitimate and protectable. Every such legitimate
expectation does not by itself fructify into a right and therefore it
does not amount to a right in the conventional sense."
(emphasis supplied)
51. A reading of the aforesaid excerpt reveals that legitimate
expectation must be founded on a right, rather than on a mere hope,
wish or anticipation. This principle was further affirmed by Supreme
Court in Army Welfare Education Society v. Sunil Kumar Sharma&
Ors.27 and followed by a Division Bench of this Court in CBSE v.
Prabhroop Kaur Kapoor28.
26 (1993) 3 SCC 499
27 (2024) 16 SCC 598
28 2026 SCC OnLine Del 656
52. In the present case, nothing has been presented to establish any
obligation on the part of the CBN to monitor, supervise, or intervene in
the registration process adopted by the TMO in Turkey. CBN's
obligations are clearly defined by the MOU, and no residual or implied
duty to intervene can be inferred from the MOU. The expectation that
the CBN should have exceeded its defined role finds no support in
either the MOU or the guidelines, nor does it flow from any legally
enforceable right. Furthermore, had CBN taken such action, it would
have amounted to overstepping the framework negotiated between the
two sovereign governments where the obligation is on the TMO till the
time sales contracts reflects on the portal to the CBN. Therefore, such
an expectation from the CBN cannot be transformed into a legally
enforceable right, nor can it constitute a breach of any legal duty on the
part of the CBN so as to justify the intervention by this Court.
53. The Appellant's reliance on Haridas (supra) and invocation of
the "effects doctrine" to assume jurisdiction over actions taken abroad
is misplaced. In Haridas (supra), the Supreme Court held that the
doctrine applies where an agreement or conduct outside India results in
a restrictive trade practice within India that adversely affects
competition in the domestic market. In the present case, the import of
poppy seeds from Turkey is regulated through the fixation of a Country
Cap as per the MOU. Since the Country Cap for the crop year 2019-20
had already been exhausted by other sales contracts, the TMO could not
upload the Appellants' sales contracts. Mere non-uploading of the
Appellants' sales contracts by the TMO neither constitutes a restrictive
trade practice nor has it been shown to cause any distortion of
competition or adverse effect on pricing in the Indian market so as to
attract the effects doctrine.
54. As far as the plea to draw an adverse inference against the CBN
is concerned, it is untenable. The portal is admittedly maintained by the
TMO, and if details concerning de-registered contracts after the
declaration of the Country Cap were not provided by the TMO, CBN
cannot be held responsible for the absence of such information. In the
absence of material showing that the contracts registered before the
declaration of Country Cap were re-registered, and in view of the fact
that there was no explicit prohibition on filing fresh applications for the
same contracts resulting in their re-registration after the declaration of
the Country Cap, the broad allegations of collusion or denial of a fair
opportunity to the Appellants remain unsupported and are therefore
rejected.
Conclusion
55. In view of the reasons set out above, we find no grounds to differ
from the view expressed in the Impugned Judgment.
56. The role of CBN, as per the governing framework under the
MOU and the Guidelines, is limited and arises only upon the reflection
of sales contracts on the portal maintained by TMO. The Appellants'
grievance stems primarily from the non-uploading of their contracts by
the TMO. However, no legal liability can be fastened upon the CBN for
the actions or omissions of TMO. No violation of the MOU, the
Guidelines, or Articles 14 and 19 of the Constitution has been
established.
57. Accordingly, we conclude that the present appeals are devoid of
merit and, therefore, liable to be dismissed.
58. Pending applications, if any, stand disposed of. No order as to
costs.
OM PRAKASH SHUKLA, J.
C. HARI SHANKAR, J.
MARCH 12, 2026/gunn/ss/pa
