Premium Sugars Vs Union of India (Bombay High Court)
The Bombay High Court dismissed petitions challenging the Directorate General of Foreign Trade (DGFT) Notification dated 13th May 2026, which amended the export policy for sugar from “Restricted” to “Prohibited” with immediate effect until 30th September 2026 or until further orders, whichever was earlier. The Petitioners, merchant exporters, contended that they had entered into private contracts with overseas buyers and, in some cases, received advance payments before the Impugned Notification. They argued that the change in policy unfairly affected pre-existing transactions and invoked legitimate expectation, promissory estoppel, vested rights, Article 14 and Article 19(1)(g) of the Constitution.
The Respondents submitted that the prohibition represented a policy decision taken in larger public interest to secure adequate domestic sugar availability and price stability. The Respondents relied on the Foreign Trade (Development and Regulation) Act, 1992, the Foreign Trade Policy, 2023 and the circumstances surrounding declining domestic sugar production. The Court noted that production for the 2025-26 season was estimated at around 343 LMT but had declined to around 308 LMT, and that the policy decision followed consideration by the Inter-Ministerial Committee, Committee of Secretaries and Committee of Ministers.
The Court held that execution of bilateral private contracts and receipt of advance payments did not confer a legal right capable of superseding the Impugned Notification. It noted that the Petitioners did not hold Irrevocable Commercial Letters of Credit before the Notification and had not obtained the registration contemplated under paragraph 1.05(b) of the Foreign Trade Policy, 2023. The Court distinguished Shriram Food Industry Ltd. vs. Union of India and Others on the basis that the petitioners in that case had Irrevocable Commercial Letters of Credit.
