Freedoms can't become weapon for private businesses against public interest: SC

SC says policy on ban of PPE export during Covid-19 pandemic reflects India's policy

The Supreme Court on Monday said rights and freedoms guaranteed under the Constitution to carry on trade should not be allowed to become a weapon in the arsenal of private businesses to disable regulation enacted in public interest.

“The right to equality and the freedom to carry on one’s trade cannot inhere a right to evade or avoid regulation," a bench of Justices D Y Chandrachud, Vikram Nath and B V Nagarathna said.

The bench said in liberalised economies, regulatory mechanisms represent democratic interests of setting the terms of operation for private economic actors.

“This court does not espouse shunning of judicial review when actions of regulatory bodies are questioned," it noted.

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Justice Chandrachud, who authored the judgment on behalf of the bench, said, “A regulated economy is a critical facet of ensuring a balance between private business interests and the State’s role in ensuring a just polity for its citizens”.

However, a casual invalidation of regulatory action in the garb of upholding fundamental rights and freedoms, without a careful evaluation of its objective of social and economic control, would harm the general interests of the public, the court added.

The top court dismissed an appeal by one Akshay N Patel against the Madhya Pradesh High Court order, which upheld Clause 2(iii) of the Revised Guidelines on Merchanting Trade Transactions (MTT) of January 23, 2020 issued by the Reserve Bank of India, in the exercise of its power under Section 10(4) and 11(1) of the Foreign Exchange Management Act 1999.

The appellant obtained an international contract to serve as an intermediary between the sale of PPE products by a supplier in China to a buyer in the United States.

In May 2020, the RBI denied for him permission for contract on the basis of MTT Guidelines.

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The government had then banned the export of PPE products in the backdrop of the Covid-19 pandemic.

The bench noted scholars across the world have warned against the judiciary constitutionalising an unregulated marketplace.

The bench said while MTTs in PPE products may not directly reduce the stock of these products in India, it still does contribute to their trade between two foreign nations.

“In doing so, it directly reduces the available quantity of PPE products in the international market, which may have been bought by India, if so required. As such, MTTs contribute to reducing the available stock of PPE products in the international market that India could have acquired," the bench noted.

It further added that Centre’s policy to ban the export of PPE products reflects their stance on the product’s non-tradability during the Covid pandemic.

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