A Division Bench of Justices Suman Shyam and Advait M. Sethna has dismissed a batch of petitions by merchant sugar exporters challenging the DGFT's 13 May 2026 notification that changed sugar's export status from 'Restricted' to 'Prohibited' until 30 September 2026.
The exporters, who held pre-existing private contracts and had received full advance payment from overseas buyers between 14 April and 4 May 2026, argued the ban retrospectively defeated their vested and legitimate expectation rights. The Court held that private bilateral contracts and advance payments do not confer a legal right capable of overriding a subsequent statutory export policy issued under the Foreign Trade (Development and Regulation) Act, 1992 in the larger public interest, invoking the maxim salus populi est suprema lex — the welfare of the people is the supreme law.
The ruling is an important risk-allocation point for trading houses and commodity exporters: an already-executed private sale contract, even with advance payment received, does not shield a trade from a subsequent government export restriction on an essential commodity, and contracts should be structured with that regulatory risk in mind.