t, IN THE HIGH COI]RT OF DELHI AT NEW DELI{I W.P.(O 3373/2010 & CM No.6762l2010 INDIAN CYCLE AND RICKSHAW TYRE MANUFACTURERS ASSOCIATION ..... Petitioner Through: Mr. Sandeep Sethi, Sr. Advocate with Mr. Rajesh Sharma, Advocates. VETSUS UOI AND ANR ..... ResPondents Through: Ms. Rajdipa Behura with \&. Jeet Pathak. Advocates. +60 AUTOMOTIVE TYRE MANUFACTURERS ASSOCIATION .... Petitioner Through: Mr. Sandeep Sethi, Sr. Advocate with . Rajesh Sharma, Advocates. VETSUS UOI AND ANR ..... ResPondents Through: Ms. Rajdipa Behura with r* Mr. Jeet Pathak, Advocates. WITH +61 W.P.(O 3376/2010 & CM No.6765/2010 ALL INDIA RUBBER INDUSTRIES ASSOCIATION ..... Petitioner Through: Mr. R.K. Abhichandani, Sr. Advocate with Mr. Rajesh Sharma, Advocates. VETSUS UOI AND ANR ..... ResPondents Through: Ms. Rajdipa Behura with Mr. Jeet Pathak, Advocates. CORAM: JUSTICE S. MURALIDHAR W.P.(C) Nos.3373/2 OtO, 337 4/2010 & 337 6/2010 Page 1 of 6 $- * 59 + .676312010 Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified 2t ORDER 17.05.2010 1. The grievance in these three petitions is that the representations made by the Petitioners to the Union of India for reducing the customs duty of natural rubber from 20% to 7.5Yo in consonance with inverted duty structure policy announced by the Government in the Foreign Trade Policy-2004-2009 were either not considered or satisfactorily dealt with. Inter alia it is stated that these representations were made on24th February 2OOg,23'd July 2009, 1lth August 200g,26th November 200g,8th December 2009,5th January 2010, 6th J ' January ZO\O and26th March 2OlO to the Ministry of Commerce. 2.By a conrmunication dated 29th September 20Og of the Rubber Board, Government of India, it was stated that the Petitioner's representations have been rejected. The relevant portion of the communication reads as under:- "Reduction of import duty of NR from 20% to I}Yo This matter has been raised by rubber consuming industries on several occasions citing inverted duty structure. There are several criteria being followed by Government in the fixation of tariffs including inverted duty structure, parity with similar products, parity with synonymous products in comparable countries, comparative competitive strength of producer/consumers, strategic importance of the commodities from a national point of view and other socio-economic factors. The Government also conducts regular consultations with different segments of stakeholders to get their feedback on the existing tariff rates. The consistent view of the govemment, based on the cited criteria and consultations, o w.p.(c) Nos.3373/2 OtO, 337 4/ 2010 & 337 6/20LO Page 2 of 6 3, J has been that the import duty of dry forms of NR would not be reduced. " 3. Reference is also made to a communication dated 4th November 2009 of the Ministry of Commerce whereby it was stated as under:- "2. The domestic NR production accounts for 99.7% of domestic consumption. Thus there is no need to depend mainly on external sources for raw material requirements by the tyre industry. There are more than a million small rubber growers with an average size of holding of 0.5 hectares. In order to project the interest of these growers, the additional duty free import of NR is not permitted. The future trading in NR is used as an instrument to support and supplement rubber trade in the country. However, there are strict regulations in place to prevent high volatility through manipulative trading practices. As regards, withdrawal on cess on NR, it has been considered and decided to retain it as the proceeds of the cess collected are being utilized for the developmental activities undertaken by the Board. As regards, inspection of imported rubber and import of all grades of NR. BIS has been requested to expedite and publish the standards for all grades of rubber. 3. A am also to inform that there are provisions within the existing system, where the consuming industry can redress their grievances. As regards, representation in the Board. I am to inform that adequate representation has been given to' all sectors of the NR and rubber industry. 4. The Government of India is fully sensitive to its role in protecting small and marginal farmers engaged in the sector without disbalancing the requirements of Industry.' .U 3 w. p. (c) Nos.3373/2 OtO, 337 4/ 2010 & 337 6/2070 Page 3 of 6 'r - .J 3a. Reference is also made to the 162"d Board meeting of the Rubber Board held on I2'h May 2010 which according to the Petitioner, addressed the problems of the rubber growers, were not the rubber industries. 4. This Court has heard the submissions of Mr. Sandeep Sethi, Senior Advocate appearing for the Petitioner in W.P.(C) No.3373l2010 and W.P.(C) No.337412010 and Mr. R.K. Abichandani, learned Senior Advocate appearing for the Petitioner in W.P.(C) No.3376 l2OIO. The two issues raised by learned senior counsel for the Petitioners were: (a) The failure of the Central Government to fix both the maximum and the minimum price of rubber under Section 13 of the Rubber Act, 1947 ('Act'). The price of rubber in the domestic market was stated to be abnormally high at around Rs.170 per kg, whereas it ought to be at a reasonable level of Rs.80 per kg. It is pointed out that production is falling short of consumption and the unusual rise in the prices is attributed to speculative interests. It is stated that the Central Govemment had reneged on the assurance given of removing the inverted duty structure, which had also been recommended by the Hooda and Kelkar Committees. (b) The decision to permit futures hading in rubber was contrary to the structural price fixation mechanism under Section 13 of the Act. 5. The scope of interference by this Court in matters of price fixation is limited. In undertaking an exercise of price fixation it is essential for the Government to undertake a wide ranging consultation with all the persons W.P.(C) Nos.3373/20t},3374/2010 & 3376/2OtO Page 4 of 6 t .l t^ who are likely to be affected by such decision whether they are rubber growers or the rubber industries. The Court can enquire whether such procedure has been adopted. Prima facie, it appears not to have 6..n undertaken in the present case. Second, the question whether relevant materials were considered can also be gone into. No doubt, there is a Rubber Board, which should primarily be seized of these issues. However, from the documents produced oir record, it is not clear to this Court that the Ministry of Commerce and/or the Rubber Board has adequately addressed the issues _J raised by these Petitioners. 6. This Court is of the considered view, that the Ministry of Commerce and/or the Rubber Board should consider carefully the several representations made by the Petitioner. Preferably, the representations of each of the Petitioners shall be given a hearing and thereafter a detailed order passed on those representations giving the reasons for the decision. It is only then that a Court which is asked to judicially review such decision can possibly know what factors weighed with the Government in arriving at its decision. 7. Consequently, this Court directs the Union of India and Ministry of Commerce to consider the above representations including the present petition which wilt be treated as forming part of such representation within a period of eight weeks from today. The Respondents will give the representative of each of the Petitioners a hearing during which they will be permitted to present any additional materials they have on the above issues. An intimation, ten days in advance of such hearing, should be given to the w,p. (c) Nos.3373/2 O:IO, 337 4/ 2010 & 337 6 / zOtO Page 5 of 6 C, Petitioners by the Ministry of Commerce. ideally, the Secretary, Ministry of Commerce should for the pu{pose of such hearing constitute a panel comprising experts from,the Rubber Board. A reasoned order containing the decision of the Government in the matter will be passed within a period of four weeks thereafter. Such decision shall be communicated to each of the Petitioners by the Ministry of Comrirerce within a period of two weeks .thereafter. ^ 8. If any of the Petitioners is still aggrieved thereafter, it will be open to such t r Petitioner to avail further remedies as may be available to it in law. 9. With these directions, the writ petitions are disposed of. The pending applications are also disposed of in the above terms. MAY 17,2010 .bs \#, \,_/' S. MURALIDHAR,J. ts W. P. (C) Nos.3373/2 OtO, 337 4/ 2010 & 337 6/ 2OLO a Page 6 of 6