Legal principle

Legitimate expectation is not an enforceable right against a well-reasoned policy decision, and judicial interference is warranted only where the decision suffers from arbitrariness so as to offend Article 14, since supervening national and public interest prevails over private commercial interests.

Court decision

The Bombay High Court dismissed all the writ petitions, discharged the rule, and directed parties to bear their own costs, leaving petitioners free to sell or dispose of retained sugar in the domestic market subject to the Sugar Control Orders; the Union and DGFT succeeded.

Facts

The petitioners were merchant exporters of sugar who had entered into private contracts with overseas buyers against allocated export quotas, in some cases receiving full advance payments before 13 May 2026. Following a Committee of Ministers decision conveyed by the Department of Food and Public Distribution, the DGFT issued the impugned notification dated 13 May 2026 under the FTDR Act, changing sugar's export status from 'restricted' to 'prohibited' with immediate effect until 30 September 2026 or further orders, subject to certain stated conditions. The petitioners challenged the notification insofar as it prohibited exports even where payments had been received from overseas buyers before its issuance.

Key provisions

• Section 51, Customs Act, 1962 — Clearance of goods for exportation
• Section 3, The Foreign Trade (Development and Regulation) Act, 1992 — Powers to make provisions relating to imports and exports.
• Section 2(33), Customs Act, 1962 — Definitions
• Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.