Case: UNION OF INDIA &amp; ORS Vs. AGRICAS LLP &amp; ORS

5. The Union of India, vide Notification dated 29 th March 2019, had exercised the powers conferred to it under Section 3 of the FTDR Act, read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020 and amended the import policy conditions of items of Chapter 7 of the Indian Trade Classificatio`n (Harmonized System), 2017, Schedule-I (Import Policy) as under:S.O. 1478(E).- In exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central government hereby amends the Import Policy Conditions of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-I (Import Policy), as under:2. This notification shall come into force from the date of its publication in the official Gazette.xx xx xxS.O. 1479(E).- In exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central government hereby amends the Import Policy Conditions of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-I (Import Policy), as under:2. This notification shall come into force with effect from 1 st April, 2019.xx xx xxS.O. 1480(E).- In exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central government hereby amends the Import Policy Conditions of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-I (Import Policy), as under:2. This notification shall come into force from the date of its publication in the official Gazette.xx xx xxS.O. 1481(E).- In exercise of powers conferred by section 3 of the Foreign Trade (Development and Regulation) Act, 1992 (22 of 1922), read with paragraphs 1.02 and 2.01 of the Foreign Trade Policy, 2015-2020, as amended from time to time, the Central government hereby amends the Import Policy Conditions of items of Chapter 7 of the Indian Trade Classification (Harmonized System), 2017, Schedule-I (Import Policy), as under:2. This notification shall come into force from 1 st April, 2019.6. The Trade Notice dated 16 th April 2019 issued by the DGFT had laid down the modalities for making applications for import of Peas, beans of Moong and Urad and Pigeon Peas and had inter alia stipulated as under:a. Applications are invited online from the intending millers/refiners (having own refining / processing capacity) of pulses for its import as per ANF-2M of FTP 2015-20 to DGFT, at policy2-dgft@nic.in besides the concerned jurisdictional Regional Authorities.. Earlier, the Union of India had issued a notification dated 25 th April, 2018 under Section 3 of FTDR Act read with the paragraphs 1.02 and 2.01 of the Export – Import (EXIM) policy 2015-2020 by which peas were revised from free to restricted category for a period of three months, with a stipulation that during the period 1 st April, 2018 to 30 th June, 2018 total quantity of 1 lakh MT of Yellow Peas minus the quantity already imported from 1 st April, 2018 would be allowed against licence as per the procedure to be notified by the DGFT. The words already imported were defined to include shipment already arrived from 1 st April,2018 to 25 th April, 2018 and those shipments backed by irrevocable letter of credit or advance payments made through banking channel before 25 th April, 2018.8. Considering the hardships faced by the traders who had made advance payments, the DGFT vide Trade Notice No. 19 dated 5 th July 2018 had allowed the import of Peas proportionate to the advance payments made before 25 th April 2018. By another Trade Notice dated 6 th July 2018, Peas, other than Yellow Peas, imported during the intervening period between 25 th April 2018 to 15 th May 2018 and awaiting clearance at customs or consignment of Peas with Bill of Lading prior to 16 th May 2018 were permitted freely. By the third Trade Notice dated 17 th August 2018, import of maximum 125 MT of Peas per contract, irrespective of the advance payment, made before 25 th April 2018, was allowed.9. The Union of India had even earlier issued notifications dated 5 th August 2017 and 21 st August 2017 revising import of beans of Urad/Moong and Pigeon Peas/Toor dal from free to restricted with stipulations as to annual (fiscal year) quota and requirement of a prior licence from the DGFT. By notifications dated 24 th April 2018 import of beans of Urad/Moong and Pigeon Peas/Toor dal was to remain restricted requiring a prior licence with stipulation as to annual quota for the fiscal year 2018-19.10. M/s. Hira Traders had filed Writ Petition Nos. 15921-15924 of 2018 before the High Court of Judicature at Madras challenging Notification No. 4/2015-20 dated 25 th April 2018 and Trade Notices No. 05/2018 dated 9 th May 2018, No. 10/2018-19 dated 16 th May 2018 and No. 12/2018 dated 18 th May 2018 respectively. It had also prayed for permission by way of an interim order to import Peas as per the contracts. By interim order dated 28 th June 2018, the operation of Notification dated 25 th April 2018 was stayed by the Madras High Court, thereby permitting imports without an import licence.11. Several traders had thereafter filed Writ Petitions before different High Courts challenging imposition of restrictions on import of Peas and pulses and interim orders were passed staying the notifications which had the effect of permitting imports without any restriction as to quota or licence. The primary grounds raised in the Writ Petitions before the High Courts were:(a) The impugned notifications issued by the DGFT had the effect of modifying or amending the EXIM policy as the specified items were withdrawn from the free category and moved to restricted category. But, the DGFT, a statutory authority under the provisions of FTDR Act, was not authorised to authenticate/issue an order amending or modifying the EXIM policy as this power vests with the Central Government in terms of sub-section (2) to Section 3, read-with sub-section (3) to Section 6 of the FTDR Act, which states that powers exercisable under Section 3, 5,15,16 and 19 of the FTDR Act cannot be delegated to the DGFT or any other officer subordinate to the Director General.(b) Section 19(3) of the FTDR Act provides that every rule or every order passed by the Central Government shall be laid, as soon as may be after it is made, before each House of the Parliament while it is in session or thereafter. The impugned notifications had not been laid before the Houses of the Parliament.(c) The Notifications and trade notices suffer from the vires and defects mentioned by this Court in Director General of Foreign Trade and Another v. Kanak Exports and Another. (2016) 2 SCC 226. (d) The notifications and the trade notices offend the right to equality and violate Article 14 of the Constitution.12. The Writ Petitions filed by M/s. Hira Traders were dismissed by the Madras High Court on 4 th April 2019. The Bombay High Court dismissed akin Writ Petitions filed by M/s. Taj Agro Commodities Pvt. Ltd. and others on 3 rd July 2018. Similarly, Writ Petitions filed by M/s. Premium Pulses Products and others were dismissed by the Gujarat High Court on 19 th December 2018. The Madhya Pradesh High Court had also dismissed similar petitions including the petition filed by M/s. Siddhi Vinayak and another, vide judgment dated 25 th October 2018. Judgment of the Gujarat High Court was challenged before this Court in Special Leave Petition (Civil) No. 1922 of 2019 by M/s. Kusum Agency and the same was dismissed vide order dated 28 th January 2019. Subject matter of these Writ Petitions were the Notifications dated 5 th August 2017, 21 st August 2017 and 25 th April 2018 and the corresponding trade notices issued by the DGFT.13. Notwithstanding the aforesaid dismissals, as many as 90 Writ Petitions were filed before the Rajasthan High Court at Jaipur challenging the Notifications dated 29 th March 2019 and the Trade Notice dated 16 th April 2019. Similarly, Writ Petitions were filed before the High Courts of Delhi, Punjab and Haryana, Andhra Pradesh, Bombay and Calcutta. In several cases interim orders were passed permitting the importers to import Peas/pulses notwithstanding the fact that they had not been issued authorisation/import licences or the total imports would exceed the maximum or total quantity fixed in the impugned notifications.14. Before us, the importers had urged a new legal issue/point which was not specifically raised in the Writ Petitions; the impugned notifications were 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. Under sub-rule (4) to the above Rule, the Authorised Officer has power to initiate suo moto action if he is satisfied with the information received from any source that sufficient evidence exits regarding increased imports; serious injury or threat of serious injury to the domestic industry; and causal link between increased imports and serious injury or threat of serious injury to the domestic industry. Taking note of the submission, we had directed the parties to file brief written submissions and the propositions which they propose to canvass in the context of the issues to be dealt with by this Court. The Union of India was also asked to file a Statement/Note disclosing number of registered licences dealing with import of goods and quantity of average annual consumption of the concerned goods in the country. By another order dated 2 nd July, 2020 the Union of India was directed to file an affidavit clearly stating whether the impugned notifications are in the nature of quantitative restrictions and if so whether the procedure under Section 9A of the FTDR Act read with Safeguard Measures (Quantitative Restrictions) Rules, 2012 had been followed and to produce the relevant record thereof.

Reasoning:
15. At the outset, we must record that the importers, and in our opinion rightly, have not raised the contention that the DGFT could not have notified the impugned notifications. The notifications themselves record that they were published by the Ministry of Commerce and Industry, Department of Commerce, Directorate General of Foreign Trade. The first paragraph of the notification states that they had been issued by the Central Government in exercise of powers conferred under Article 77 of the Constitution. Clearly, the notifications were issued by the Central Government, and not the DGFT that had performed the ministerial act of publication. The decision to amend and issue the notification was of the Central Government. Neither Section 3(2) nor Section 6(3) of the FTDR Act was violated. This Court in Delhi International Airport Limited v. International Lease Finance Corporation and others (2015) 8 SCC 446 , had referred to Articles 77 and 166 of the Constitution and held that the Constitution stipulates that whenever executive action is taken by way of an order or instrument it shall be expressed to be taken in the name of the President and Governor in whose name the executive power of the Union and the States, respectively, are vested. Article 77 does not provide for delegation of any power, albeit under sub-section (3) of Article 77, the President is to make Rules for more convenient transaction of business and allocation of same amongst Ministers. Under the Government of India (Transaction of Business) Rules, 1961, the government business is divided amongst Ministers and specific functions are allocated to different Ministries. The Director General of Foreign Trade is an ex officio Additional Secretary in the Government of India and is appointed by the Central Government under sub-section (1) to Section 6 of the FTDR Act to advise the Central Government in formulation and carrying out the Foreign Trade Policy. Wherefore, even the website of the Ministry of Commerce and Industry, Department of Commerce, states that the DGFT is an agent of the Central Government and attached office to it. Further, clause (2) of Article 77 provides that validity of an order or instrument made or executed in the name of the President, authenticated in the manner specified in the Rules made by the President, shall not be called in question on the ground that it is not an order or an instrument made or executed by the President. Therefore, the contention of issuance of the impugned notification sans authority, cannot be sustained.17. We would also without any hesitation reject the contention raised by some of the importers that the impugned notification is illegal because of vagueness or allows restricted quantity of 1/1.5 lakh MT of Peas (Pisum Sativum) including Yellow Peas, Green Peas, Dun Peas and Kaspa Peas as against a licence, meaning thereby each licensee is allowed to import the maximum quantity specified in the notification. In other words, the total quantity specified in the notification is per licensee and not for the total imports of the commodity specified in the notification. The submission has no merit as the notification expressly uses the expression total quantity of the commodity specified which could be imported. There is no ambiguity or vagueness in the notifications, relevant portions of which have been quoted above. Even otherwise the expression total quantity cannot be construed as quantity per licence issued as the number of licences issued concerning the subject goods could be numerable (as per the Union of India 2248,1016 and 2915 licences were issued in 2019-20 for import of Tur, Moong and Urad dals against restricted quota of 4,1.5 and 4 lakh MT, respectively). If each licence holder is allowed to import 1/1.5 lakh MT of Peas, the total import would well exceed the total annual consumption after we account for the production within India. In our opinion, the plea and interpretation of the importers if accepted will not only be contrary to the express language of the notification but would frustrate the intent and object of restricting the imports of the stated goods by prescribing a quota. We decline and would not accept this farfetched and somewhat drivel interpretation of simple and straight forward words.18. We would also reject the contention raised by the importers that the Trade Notices issued by the DGFT violate Sections 3 and 5 read with sub-section (3) of Section 6 of the FTDR Act as they had the effect of superseding the Notifications or imposing a new criterion and eligibility condition not envisaged by the notifications. The legal effect of the notifications was to amend the EXIM policy whereby the specified commodities would henceforth not be free (importable without restriction) but would fall in the restricted category. Once the commodities were shifted to the restricted category, the requirement of licence would flow from the mandate of Section 3 of the FTDR Act read with Rule 4 of the Foreign Trade (Regulation) Rules, 1993.Paragraph 2.10 sets the matter beyond controversy as it states that the goods which are freely importable without a restriction may be imported by any person. However, if goods require authorisation, actual user alone may import such goods. However, the DGFT can dilute and dispense with the actual user condition.19. The effect of the Notifications, as noticed and beyond doubt, is to bring the specified commodities from free to the restricted category and therefore the imports in question would require a prior authorisation for import. The requirement of licence is nothing but authorisation. Therefore, in terms of paragraph 2.10, the imports of the specified commodities would only be by the actual user, unless the actual user condition was specifically dispensed with or diluted by the DGFT. The Directorate by specifying that the licence would be issued to the miller or refiner has, therefore, just clarified that the actual user alone will be permitted to import the restricted goods mentioned in the notification for which a prior authorisation or licence is required. The importers are traders and it is not the case of any of the importers that they are the actual users. Further, none of the importers have applied for a licence or authorisation for import of the restricted commodities. Violation of clause 9.03 of the EXIM Policy defining the expression Actual User, is neither alleged nor argued before us.20. The importers have raised the contention that the expression if such imports used in the second sentence of paragraph 2.10 only qualifies the first sentence of paragraph 2.10. We do not accept the contention, for paragraph 2.10 consists of two parts. The first part relates to goods which are freely importable without any licence and states that such goods that can be imported by any person. The second part refers to such imports which require authorisation and not the imports which are freely importable without any restriction. Actual user condition, therefore, applies by default when imports require an authorisation. However, the DGFT can specifically dispense with or dilute the actual user condition.27. While interpreting the domestic law enshrining Human Rights (and sometimes environment issues) this Court on some occasions has relied on international conventions and treaties where the terms of any legislation are absent, not clear or are reasonably capable of more than one meaning. In such cases, where there are statutes, rules etc. the meaning which in consonance with the treaties can be relied upon, for there is a prima facie presumption that the Parliament did not intend to act in breach of international law, including State treaty obligations. Part-III of the Indian Constitution a-priori incorporates and recognises the Human Rights, consequently recourse to international conventions can be made to interpret and borrow explicit terminologies and nuances to bailiwick Human Right jurisprudence. However, in the present case we are examining an economic and fiscal legislation or rather economic policy decision taken by the Union of India. These decisions on human rights therefore would not be of much assistance.29. Indian Parliament, two years prior to the signing of GATT-1994, had enacted the FTDR Act which was enforced with effect from 7 th August 1992. Sections 11 to 14 of the FTDR Act came into force immediately and other provisions came into force on 19 th June 1992. The FTDR Act had repealed the Imports and Exports (Control) Act, 1947 and the Foreign Trade (Development and Regulation) Ordinance, 1992 with the stipulation that anything done or any action taken under the Ordinance shall be deemed to have been done or taken under the corresponding provisions of the FTDR Act. The Statement of Objects and Reasons for enacting the FTDR Act, as recorded, are to acknowledge that foreign trade is the driving force of economic activity as this spurs economic growth and there is increasing interdependence and that the goals of the new policy were to increase productivity and competitiveness by ensuring that the trade policies serve as an instrument to create an environment that will provide a strong impetus to exports, facilitate imports and render export activity more profitable.31. Section 9A of the FTDR Act is the only section in Chapter IIIA with the heading Quantitative Restrictions and this section was inserted by Amendment Act 25 of 2010 with effect from 27 th August 2010. Subsequently, in exercise of powers conferred by sub-section (3) to Section 9A of the FTDR Act, the Central Government had published and notified the Safeguard Measures (Quantitative Restrictions) Rules, 2012, which became applicable on the date of their publication in the Gazette of India dated 24 th May 2012Sub-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. We are not concerned with the proviso to sub-section (2) in the present case. Sub-section (3) to Section 3 states that where an order is passed under sub-section (2) whereby the import or export of goods is prohibited, restricted or otherwise regulated, the goods in question would be deemed to be prohibited goods under Section 11 of the Customs Act, 1962 and accordingly the provisions of the latter Act would apply.36. Sub-section (4) to Section 9A of the FTDR Act introduced by Act 25 of 2010 with effect from 27 th August 2010, requires some elucidation. The sub-section on one hand states that no permit or licence shall be necessary for imports or exports of goods, nor any goods shall be prohibited from import or export, except as may be required under the FTDR Act, or the rules or orders made thereunder. At the same time, by using the phrase without prejudice to anything contained in any other law, rule, regulation, notification or order, it protects the operation of the other law, rule, regulation, notification or order to the extent that they do not directly or indirectly deal with the permit or licence necessary for import or export of goods or prohibit import or export of goods. Operation of such law, rule, regulation, notification or order not dealing with the permit or licence necessary for import or export on a prohibition of import of goods is, therefore, protected and not overridden. Sub-section (4) to Section 3 therefore gives limited primacy to the FTDR Act, restricting it to the scope and subject matter of the FTDR Act, and not to override other laws. This is also clear from Section 18A of the FTDR Act which was also enacted and inserted by Act 25 of 2010 with effect from 27 th August 2010The provisions of FTDR Act, therefore, are in addition to, and not in derogation of, the provisions of any other law for the time being in force. This would be the correct way to harmoniously read and interpret sub-section (4) to Section 3 and Section 18A of the FTDR Act. We may, at this stage, notice that the original amendment had used the phrase Notwithstanding anything contained in any other law, rule, regulation, notification or order, but the Standing Committee had noticed the contradiction and also the object and purpose behind enacting sub-rule (4) and had recommended that the said expression should be replaced with the expression Without prejudice to anything contained in any other law, rule, regulation, notification or order. Sub-section (4) to Section 3 of the FTDR Act, therefore, in the context of import and exports or prohibition of imports or exports of goods states that no permit or licence shall be necessary or required except as may be required under the FTDR Act, rules or orders made thereunder. The expression order, as per clause (h) to Section (2) of the FTA means any Order made by the Central Government under Section 3. It is, therefore, clear to us that there is no violation of Section 3 of the FTDR Act in the issuance of the impugned notifications or orders, which are intra vires and not ultra vires.37. We have already reproduced and quoted Article XI (Paragraph 47 (supra).) of the GATT- 1994 and have to say that the same has not been statutorily made a subject of act of transformation and incorporated in the domestic legislation, i.e. the FTDR Act. The FTDR Act does not legislate and transform Article XI of the GATT-1994. As noticed above, Section 3 of the FTDR Act empowers and authorises the Central Government, i.e. the Union of India to frame policy, rules or regulations for import or export of goods. The policy is framed under Section 5 of the ActThe policy is framed under Section 5 of thereads as under:5. Foreign Trade Policy. – The Central Government may, from time to time, formulate and announce, by notification in the Official Gazette, the foreign trade policy and may also, in like manner, amend that policy:Provided that the Central Government may direct that, in respect of the Special Economic Zones, the foreign trade policy shall apply to the goods, services and technology with such exceptions, modifications and adaptations, as may be specified by it by notification in the Official Gazette.Thus, the Central Government i.e. the Union of India has been given the necessary discretion and election with regard to framing of policies for import and export of goods, services and technology. Therefore, implementation of GATT-1994, including Article XI, is left to the Central Government by means of delegated legislation.38. Clause (2) of Article XI of GATT-1994 states that provisions of paragraph (1) shall not extend to three specified situations as stated in sub-clauses (a), (b) or (c). Clause (c) deals with import restrictions on any agricultural or fisheries product, imported in any form necessary for enforcement of governmental measures specified therein. Similarly, Article XII of GATT-1994 states that notwithstanding the provisions of paragraph (1) of Article XI, any contracting party, in order to safeguard its external financial position and its balance of payments, may restrict the quantity or value of merchandise permitted to be imported, subject to the provisions of paragraphs of that Article. Paragraph 23 (supra) lists a number of other provisions, which allow and permit exceptions. We have referred to these provisions to highlight that paragraph (1) to Article XI is not an absolute rule. It is subject to exceptions in the form of paragraph (2) to Article XI, Article XII and other provisions. Of course, the conditions specified the respective Articles have to be satisfied for a contracting party to be GATT- 1994 compliant.39. Reference to this position is necessary and required when we interpret Section 9A of the FTDR Act which we would accept incorporates into the domestic law Article XIX of GATT-1994, but neither Article XI and nor all exceptions by implication. Consequently, Section 9A for the FTDR Act, is to be understood an enabling provision empowering imposition of quantitative restrictions after following the procedure in the situations referred to therein. However it does not limit and restrict the expans and power of the Central Government to prohibit, regulate or restrict imports of goods in terms of Section 3(2) of the FTDR Act. As a sequitur, it has to be held that notwithstanding Section 9A, the Central Government continues and has authority to impose quantitative restrictions by an order under Section 3(2) of the FTDR Act. Principle of Lex specialis derogat legi generali, therefore, is not applicable to the case in hand.Section 9A substantially incorporates, with some modifications, provisions of Article XIX of GATT-1994. Rules made in 2012 are also in conformity with the provisions of the WTO Agreement on Safeguards made in terms of Article XIX of GATT-1994. Sub-rule (3) to Rule 5 of the Safeguard Measures (Quantitative Restrictions) Rules, 2012 states and sets out the conditions for applicability of Rule 9A, which are: (i) increased imports; (ii) serious injury or threat of serious injury; and (iii) a causal link between increased imports and alleged serious injury or threat of serious injury. The expression increased imports has been defined in terms of increased quantity to mean increase in imports in absolute terms or relative to domestic production. The expressions serious injury and threat of serious injury have been defined in clauses (c) and (d) of sub-clause (4) to Section 9A to mean injury causing significant overall impairment in the position of a domestic industry and a clear and imminent danger of serious injury respectively. The expression domestic industry has also been defined in clause (b) to sub-section (4) to Section 9A. Similarly, the expression interested party has been defined in sub-rule (d) to Rule 2 of the Safeguard Measures (Quantitative Restriction) Rules, 2012 and includes exporter or foreign producer or the importer of goods for the purposes of imposition of safeguard quantitative restrictions on trade or business association. It also includes the government of the exporting country or producer of goods or directly competitive goods in India or a trade or business association .41. The need to enact Section 9A arose from the obligations flowing from Article XIX, as restriction in form of quantitative restriction, require a procedure to be followed. Affected parties including exporters, importers have to be heard. Consequently, act of transformation was required. Article XIX of GATT-1994 is an escape provision, i.e. a provision which entitles a contracting state to escape from the rigours of paragraph (1) of Article XI of GATT- 1994. Similar acts of transformation have been undertaken by enacting Custom Valuation Rules, provision of antidumping, countervailing duty etc. but the entire GATT-1994 does not stand transposed and enacted by way of statutory law or delegated legislation.42. This being the position, 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 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, we would be 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.43. In other words, 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, therefore, not entirely curtailed by Section 9A of the FTDR Act.45. In the present case, this Court is not called upon to decide and examine the obligations of the Contracting Parties in terms of GATT-1994. Our findings and ratio are confined and restricted to interpretation of Section 3 and 9A of the FTDR Act and in that context we have referred to GATT-1994.46. Learned counsel for some of the importers had placed reliance on Raj Prakash Chemical v. Union of India (1986) 2 SCC 297 , which judgment, in our opinion, has no application. In Raj Prakash Chemical (supra), the petitioner had acted under a bona fide belief in view of judgments and orders of High Courts and the interpretation placed by the authorities. In this background, observations were made to giving benefit to the importers, despite the contrary legal interpretation. In the instant case, the importers rely upon the interim orders passed by the High Courts whereas on the date when they filed the Writ Petitions and had obtained interim orders, the Madras High Court had dismissed the Writ Petition upholding the notification. Similarly, the High Court of adjudicature at Bombay, High Court of Gujarat and the High Court of Madhya Pradesh had dismissed the Writ Petitions filed before them and upheld the notifications and the trade notices. Notwithstanding the dismissals, the importers took their chance, obviously for personal gains and profits. They would accordingly face the consequences in law. In these circumstances, the importers it cannot be said had bona fide belief in the right pleaded.E. What is not decided47. Learned counsel for some of the importers had submitted that they have preferred statutory appeals against orders suspending or terminating import export code. The said aspect has not been examined and decided and hence we make no comment and observation. The statutory appeals, if any, preferred by the importer(s) will be decided in accordance with law.6. Application of treaties into national legal systems and the hierarchical status of the norms to be so applied are extraordinarily complex and vary from country to country depending upon constitutional and other municipal rules. Further, a number of legal and constitutional issues regarding international treaties arise in domestic law, like the power to negotiate, sign and exit a binding international obligation or treaty, validity of a treaty under the national constitutional law, power to implement the treaty obligations and applicability of treaty in domestic law including the principle of invocability or justiciability as contrasted from direct applicability and hierarchy of norms in domestic law where the treaty norms conflict with the norms of the domestic law. There is no uniformity in approach on these aspects as there are different national systems of treaty applications . Two aspects relevant in the present case are; (i) applicability of the international treaty in domestic law and (ii) invocability of the treaty in municipal law and before the municipal courts.7. In spite of there being different constitutional and statutory approaches on applicability, the States as signatories to the international treaty are under an obligation to act in conformity and bear responsibility for breaches, be it as a consequence of legislative enactment, executive action or even judicial decisions. The State cannot plead and rely upon internal law including judicial decisions as a defence to a claim for breach of an international obligation. Acts of legislation, executive measures and judicial decision making are not treated as third party acts for which the State is not responsible. The national law, executive mandate and action and the decisions of the domestic courts are facts which express the will and constitutes activities of the State. In international law, municipal laws cannot prevail upon the treaties as internal actions must comply with the international obligation. They may constitute breach of the treaty.8. Thus, breach of a stipulation in international law cannot be justified by the State by referring to its domestic legal position. This rule of international law is unexceptionable and prosaic, as the contra view would permit the international obligations to be evaded by the simple method of domestic legislation, executive action or judicial decision. Contracting States are under an obligation to act in conformity with the rules of international law and bear responsibility for breaches whether committed by the legislature, executive or even judiciary. In a way, therefore, international treaties are constraint on sovereign activity, albeit voluntarily agreed.9. For the purpose of GATT-1994, municipal laws are evidences of fact, including evidence of conduct in violation of the norms and objective of the treaty. At the same time, failure to enact an internal domestic law in conformity with the international obligation is not a breach of international law, unless there is such requirement and obligation created by the international treaty. In the absence of any such binding clause, breach arises only when the State concerned fails to observe its obligation on a specific occasion.Invocability in simple terms refers to justiciability; admissibility of a claim before the national courts. It is not connected with the defence or merits of the defence. In case where an act of transformation is required, treaties may partially or entirely become part of the domestic law. Where the treaty or portion thereof become a part of the domestic law by act of transformation, it is obvious that only the part incorporated or transformed into domestic law is invocable and justiciable and not the parts that are not codified into domestic law. However, invocability can embrace several ideas which are intertwined and is of specific concern in cases of constitutions allowing direct application. Here invocability is a generic term which means to embrace a small inventory of means of judicial control over the use in a particular law suit of the direct applicability of the treaty. As in case of act of transformation, even in direct application cases, some jurisdictions accept the principle of partial direct application and, therefore, the treaty is directly applicable for some purposes and not others.11. Most jurists draw distinction between direct application of treaties in domestic law, and national legal systems that mandate and require act of transformation for an international treaty to apply and be a part of domestic law. Direct application means and mandates that the treaty norms, either wholly or to some extent, are directly treated as norms of domestic law and enjoy the statutory law status by default in the domestic legal system. The term direct application will also cover situations in which government or different levels of government utilise treaty norms as part of domestic jurisprudence and is not limited to situations in which private parties can sue on the basis of the treaty norms. As explained below, there is distinction between direct application and invocability. Act of transformation principle means and implies that an international treaty is not directly applicable in the domestic law system and requires provision in the domestic rules before it is applied. Transformation is a word of wide amplitude and does not refer to mere implementation as it includes the right of the country to adopt, amend or modify the treaty language into domestic jurisprudence. The act of transformation is different from direct application as in the former the treaty is not received and treated as part of domestic jurisprudence until it is published and made part of the domestic jurisdiction in the same manner as other law.Except to the extent that a treaty becomes incorporated into the laws by a statute, the courts in United Kingdom have no power to enforce treaty rights and obligations at the behest of foreign government or even a citizen of the United Kingdom. It has been also held that decision as to whether the terms of the treaty have been complied with are matters exclusively for the Crown as the court must speak with the same voice as the executive (Lonrho Exports v. ECGD, [1998] 3 W.L.R 394.) . This principle is subject to the exceptions in cases where reference to the treaty is needed to explain the relevant factual background in cases where terms of the treaty are incorporated in a contract or the legislation refers to a relevant but un-incorporated treaty. However, an unincorporated international treaty can give rise to legitimate expectations that the executive, in the absence of statutory or executive indications to the contrary, will act in conformity with the treaty. In all other cases, rights and duties of the British subjects are affected by an Act of Parliament which is necessary for the provisions of the particular treaty to be operative within the United Kingdom. Further and at the same time, there is a presumption in English law that legislation is to be construed as to avoid conflict with international law. This specifically applies when interpretation to the Act of Parliament is in question, i.e. while interpreting the enactment as a consequence of the act of transformation. The courts would intend to bring the treaty into effect if the provisions are unambiguous unless they have no choice. In United Kingdom, the legislature is required to enact laws, that incorporate and transform treaties or treaty norms into domestic law. Variation of this approach is to be found in other countries like Germany and Italy. Thus, there is great diversity of national constitutional systems regarding international treaty application.15. The law in India is not very different from other Commonwealth Countries. Article 73 of the Constitution delineates the extent of executive power of the Union which extends to all matters with respect to which the Parliament has the power to make laws and it extends to the exercise of such rights, authority and jurisdiction as are exercisable by the Central Government by virtue of any treaty or agreement. Proviso to the Article deals with limitation of the executive power under sub-clause (a) with which we are not concerned. Chapter I of Part XI of the Constitution, captioned Relations between the Union and the Sates vide different Articles stipulates that in respect of List 1 of the 7th Schedule the Parliament has exclusive power to make laws for the whole or any of the territory of India; in respect of List II (State List) the legislatures of the States have exclusive power to make laws for the whole or any part of the States; and in respect of List III (Concurrent List) the Parliament and the State Legislatures have the power to make laws. For the purpose of the present case, Article 253 of the Constitution is important as it states that notwithstanding anything in the foregoing provisions of this Chapter, the Parliament has the power to make laws for the whole or any part of the territory of India for implementing any treaty, agreement or convention with any other country or countries or decisions made at any international conference, association or body.17. More important for our purpose is the concurring opinion of Shah, J. who had quoted the effect of international treaty on the rights of the citizen/subjects of the State as stated in Oppenheims International Law, 8 th Edition, in the following words:...Such treaties as affect private rights and, generally, as required for their enforcement by English Courts a modification of common law or of a statute must receive parliamentary assent through an enabling Act of Parliament. To that extent binding treaties which are part of International Law do not form part of the law of the land unless expressly made so by the Legislature.(page 40)The binding force of a treaty concerns in principle the contracting States only, and not their subjects. As International Law is primarily a law between States only and exclusively, treaties can normally have effect upon States only. This rule can, as has been pointed out by the Permanent Court of International Justice, be altered by the express or implied terms of the treaty, in which case its provisions become self- executory. Otherwise, if treaties contain provisions with regard to rights and duties of the subjects of the contracting States, their Courts, officials, and the like, these States must take steps as are necessary according to their Municipal Law, to make these provisions binding upon their subjects, Courts, officials, and the like.(page 924)Referring to the power under Article 73 of the Constitution and the power of the Parliament to make laws in terms of Article 253, Shah, J. had further observed:80...By Article 73, subject to the provisions of the Constitution, the executive power of the Union extends to the matters with respect to which the Parliament has power to make laws. Our Constitution makes no provision making legislation a condition of the entry into an international treaty in times either of war or peace. The executive power of the Union is vested in the President and is exercisable in accordance with the Constitution. The Executive is qua the State competent to represent the State in all matters international and may by agreement, convention or treaties incur obligations which in international law are binding upon the State. But the obligations arising under the agreement or treaties are not by their own force binding upon Indian nationals. The power to legislate in respect of treaties lies with the Parliament under Entries 10 and 14 of List I of the Seventh Schedule. But making of law under that authority is necessary when the treaty or agreement operates to restrict the rights of citizens or others or modifies the laws of the State. If the rights of the citizens or others which are justiciable are not affected, no legislative measure is needed to give effect to the agreement or treaty.. It was also clarified that Article 253 deals with the legislative power of the Parliament and thereby confers power on the Parliament which it may not otherwise possess. This provision does not seek to circumscribe the extent of power conferred under Article 73. In other words, in consequence of the exercise of executive power, rights of the citizens or others are restricted or infringed, or laws are modified, the exercise of power must be supported by legislation; where there is no such restriction, infringement of the right or modification of the laws, the executive is competent to exercise the power.21. Afore-quoted decisions are on the legal effect of international treaties in the domestic law in India. The ratio of these decisions primarily relates to and is confined to the requirement and mandate of the need for act of transformation to be a part and parcel of domestic law, which confers a right to invocability. The ratio of the above decisions has to be distinguished from decisions interpreting domestic law after the act of transformation consequent to which portions of GATT-1994 stand enacted thereby conferring right of invocability to parties.GATT-1994 is an international convention framed after great deliberation and exercise, to develop and promote international trade.