RBI export ban on PPE kits ‘was in furtherance of a legitimate goal’: SC

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RBI export ban on PPE kits ‘was in furtherance of a legitimate goal’: SC

The Supreme Court, on Monday, held that a Reserve Bank of India (RBI) ban on exporting PPE kits during the second wave of the pandemic was a legitimate aim, which was of sufficient importance to override the Constitutional right of freedom to conduct business.

“The RBI elaborated on the state of the pandemic in the country and the necessity of ensuring adequate stock of PPE products. The executive’s aim to ensure sufficient availability of PPE products, considering the ongoing pandemic, is legitimate. Accordingly, we hold that the impugned measure was enacted in furtherance of a legitimate aim that was of sufficient importance to override a constitutional right of freedom to conduct business,” a Bench, led by Justice DY Chandrachud, held in a judgment.

Sale of PPE products

The verdict was based on an appeal filed by the Managing Director of a firm, who was stopped from acting as an intermediary in the sale of PPE products to the US.

The Revised Guidelines on Merchanting Trade Transactions (MTT), issued by the RBI in January 2020, however, banned the export of PPE products through successive notifications even as the death rate from the pandemic climbed.

The petitioner, Akshay N Patel, argued that the prohibition in the export of PPE products was in violation of his right to equality and arbitrary. Disagreeing, Justice Chandrachud, for the Bench, reasoned that the prohibition was based on a legitimate goal.

“When an Indian entity facilitates the trade of PPE products to another nation, it takes away from India’s possible stock in the global market… there is a rational nexus in the prohibition of MTTs in respect of PPE products and the public health of Indian citizens,” Justice Chandrachud explained.

The court said that the “democratic interests that secure the well-being of the masses cannot be judicially aborted to preserve the unfettered freedom to conduct business of the few”.

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