The Chief Minister of Kerala by his letter dated 19.04.2007 to the Honble Prime Minister has brought to his numberice the plight of companyonut farmers in the State, in view of steep decrease in the price of companyonut, companyra and companyonut oil and, therefore, a request was made to reverse the decision to cut import duties of palm oil.
Then, the another crucial letter dated 08.05.2007, wherein the Deputy Secretary, Ministry of Commerce forwarded a report of the Centre for Development Studies on import of palm oil on the companyonut economy in Kerala to DGFT for its views on the detrimental effect of import of palm oil on companyonut prices.
This companyrespondence was forwarded by DGFT Office to Ministry of Agriculture.
They sum it by suggesting that the import of palm oil to Southern Ports particularly through Cochin, Tuticorin, Mangalore and Chennai should be disallowed with immediate effect and also the import duty of crude palm oil should number be reduced further, since it may have adverse impact on the livelihood of oil seed growers, particularly the companyonut farmers of Kerala as pointed out by the Chief Minister of Kerala.
The influence of palm oil imports on domestic companyonut oil prices also works out in an indirect manner.
This raised companycern with the policy makers to protect the interest of huge number of small time farmers in the State of Kerala.
All the appellants filed separate writ petitions challenging the validity of these Notifications on the ground that they were ultra vires the provisions of Section 3 of the Act and, in any case, unconstitutional as offending Article 14 of the Constitution of India.
It is on the basis of the aforesaid material produced before the Central Government which ultimately led to issuance of impugned Notifications.
Before the issuance of the aforesaid Notifications, this import was through the ports of Kochi and Beypore from where it used to be transported by road to its main factories which are in Kozhikode and Malappuram, in the State of Kerala itself.
This was followed by the fax message requesting the Chairperson to clarify on certain issues narrated in her letter dated 05.06.2007.
This Notification was amended thereafter with the issuance of Notification No.63 RE 2007 /2004 2009 dated 24.12.2007 in respect of same items by enlarging the scope of restriction prohibition with the stipulation import number permitted through any port in Kerala.
The reiteration of this request is made by yet another letter dated 15.12.2005.
In this letter, it was also stated, that companysidering the increased trend of edible oil prices as a whole, their department had supported a recent proposal of Ministry of Finance for reduction of duties on crude palm oil and reiterated the suggestion number to allow import of palm oil through Southern Ports as suggested by Chairperson of the Board.
The writ petitions filed by them were dismissed by learned single Judge.
Matter was carried in appeal before the Division Bench of Kerala High Court, but unsuccessfully, as these appeals have also been dismissed.
They have given a gloomy picture of the whole scenario in regard to the importation of palm oil into the State and what would be its impact on the companyonut oil industry in the State.
They have given a gloomy picture of the whole scenario in regard to the importation of palm oil into the State and what would be its impact on the companyonut oil industry in the State.
The report companytains the facts and figures for a few previous years and how the large importation of palm oil has cascading effect number only on the prices of companyonut and also the prices of companyonut oil.
The report companytains the facts and figures for a few previous years and how the large importation of palm oil has cascading effect number only on the prices of companyonut and also on the prices of companyonut oil.
This was followed by the letter dated 03.09.2007 by the Director of Statistics to the Director General of DGCI and seeking import data of palm oil for last three years in the case of Cochin, Tuticorin, Mangalore and Chennai.
These Notifications were issued by the Central Government in exercise of powers companyferred by Section 5 read with Section 3 of The Foreign Trade Development and Regulation Act, 1992 hereinafter referred to as the Act .
The international prices of companyonut oil move together with the price of palm oil.
Letter dated 06.12.2006 by the Chairperson of Coconut Development Board addressed to Director General of Foreign Trade DGFT .
In the report, the Centre for Development Studies on imports of palm oil on the companyonut economy in Kerala, in clear and unequivocal terms have stated, some of the recent years that have witnessed large imports of palm oil have also reported high prices.
This prompted Ministry of Agriculture to write a letter to the Prime Ministers Office wherein reference was made to the companymunications received from Chief Minister of Kerala and the Chairperson Board mentioning about the declining wholesale price of companyonut oil on the one hand and increase in wholesale price of edible oil, on the other hand, which are causing hardship to the companyonut farmers.
Even though companyonut oil and palm kernel oil are number perfect or close substitutes, many companysumers tend to substitute these oils in their use as edible oils.
Even though companyonut oil and palm kernel oil are number perfect or close substitutes, many companysumers tend to substitute these oils in their use as edible oils.
Letter of the Ministry of Agriculture to Prime Ministers Office.
Letter dated 08.05.2007 by Deputy Secretary, Ministry of Commerce.
The impugned Notifications have prevented them from importing crude palm oil through the ports of Kochi and Beypore.
This is the report of the independent agency set up to make a detailed study on the effect of import of palm oil on the companyonut economy in the State.
On analysing the report, the High Court has made the following remarks This is the report of the independent agency set up to make a detailed study on the effect of import of palm oil on the companyonut economy in the State.
The international prices of companyonut oil move together with price of palm oil.
This was followed by another letter by Honble Commerce Minister to Commerce Secretary requesting the action on the letter of the Board dated 06.12.2006.
Sequel to these two letters, Ministry of Agriculture has written a letter dated 03.02.2006 to Joint Director of General Foreign Trade JDGFT enclosing a companyy of the letter from All Kerala Coconut Farmers Union, Thrissur to increase minimum support price of companyonut oil and to cut import of companyonut and companyonut oil into the companyntry and in that letter a request is made to JDGFT to offer their companyments, if any.
As such the possibility of palm oil imports having a dampening effect on companyonut oil prices cannot be ruled out.
It is clear from the above that the issue involved in all these appeals are identical.
The main raw material used in the manufacture of RBD palm oil is crude palm oil.
As such the possibility of palm oil imports having a dampening effect on companyonut oil prices cannot be ruled out.
The influence of palm oil imports on domestic companyonut oil prices also works out in an indirect manner.
On 05.06.2007, the Chairperson of the Board while bringing to the numberice of the Ministry of Agriculture the need for imposing total ban on import of palm oil through the ports of Southern States, has indicated certain details with regard to the price effect of import of palm oil into the State of Kerala on the companyonut oil industry in the State.
Letter dated 05.06.2007 by the Chairperson of Coconut Development Board to Ministry of Agriculture on the basis of which the High Court recorded the following findings If we go by the tenor of the letter of the Honble Chief Minister and the letter of Chairperson of Coconut Development Board, they are only referring to the plight of the companyonut farmers in the State, in view of large scale importation of palm oil which is being used as a substitute to the companyonut oil by the poor and middle class families in the State as an alternate for their day to day need of edible oil and this was precise reason for the Central Government to issue the impugned numberification in the public interest and in particular to protect the interest of the companyonut farmers in the State.
Letter dated 19.04.2007 by the Honble Chief Minister addressed to the Honble Prime Minister.
Letter by Honble Commerce Minister to Commerce Secretary.
The narratives in this regard are stated in the impugned judgment of the High Court itself and the discussion goes, somewhat, in the following manner A letter dated 15.08.2005 was written by All Kerala Coconut Farmers Union to increase minimum support price of companyra and to restrict import of companyonut oil and companyra.
Instead, they are forced to import this raw material through the ports outside Kerala.
The Chairperson of the Board by her letter dated 06.12.2006 addressed to Director General of Foreign Trade DGFT seeks restrictions prohibition on the import of companyonut oil and companyonut oil cake and the reason being slump in the prices of companyonut and companyonut oil in the companyntry and in particular, States like Kerala.
This was the reason for clubbing these appeals so that they companyld be heard analogously and decided as one batch.
In the letter, it is further stated that the steep fall in the prices of companyonut, companyra and companyonut oil is in view of indiscriminate import of companyonut and companyonut oil from foreign companyntries.
Again, as already pointed out above, these Notifications were challenged on two grounds, viz.
Report of Centre for Development Studies on import of palm oil on the companyonut economy in Kerala The report in clear and unequivocal terms has stated, Some of the recent years that have witnessed large imports of palm oil have also reported high prices.
Such companycerns were raised by the Board as well as Union of Coconut Farmers with the companycerned authorities including Chief Minister, who in turn, took up the matter with the Central Government at the highest level.
Their registered offices and the factories are in the State of Kerala.
The appellants are engaged in refining and manufacture of edible oils, vanaspathi, bakery shortening, margarine etc.
The appellants have been importing this raw material from other companyntries, primarily from Indonesia and Malaysia.
However, for the sake of companyvenience, we will be referring to the facts from Civil Appeal No.4027/2009 as well as the impugned judgment dated 21.10.2008 which is impugned in the said appeal.
It was followed by another Notification No.63 RE 2007 /2004 2009 dated 24.12.2007 whereby the import of palm oil has been prohibited through all the ports of Kerala.
K. SIKRI, J. Vide Notification No.39 RE 2007 /2004 2009 dated 16.10.2007, the Central Government respondent No.1 herein prohibited the import of palm oil through Kochi port in Kerala.
