Bhagwati, J. - (1.) These two writ petitions under Article 32 of the Constitution raise questions of some importance in the field of constitutional law but they are not abstract questions which can be divorced from the facts giving rise to them and in order to resolve them satisfactorily, it is necessary to state the facts in some detail. Though the petitioners in two writ petitions are different, the respondents are the same and the same Order of the State of Jammu and Kashmir is challenged in both the writ petitions. Hence whatever we say it regard to the first writ petition applies equally in regard to the second.
(2.) The dispute in these writ petitions relates to the validity of an Order dated 27th April, 1979, passed by the Government of Jammu and Kashmir, allotting to the 2nd respondents 10 to 12 lacs blazes annually for extraction of resin from the inaccessible chir forests in Poonch, Reasi and Ramban Divisions of the State for a period of 10 years on the terms and conditions set out in the Order. The validity of the Order has been challenged on various grounds which we shall presently set out, but in order to understand and appreciate these grounds, it is necessary to state briefly the circumstances in which the Order came to be passed by the Government of Jammu and Kashmir. There is a commodity called Oleo-resin, which we shall hereafter refer shortly as resin, which is a forest produce extracted from a certain species of trees popularly known as chir trees. The process of extraction is called 'tapping' and it involves several steps. Chir trees are annually given one or two wounds which are technically called blazes and cups and lips are fixed at the bottom of each blaze for collection of resin. The actual collection of resin starts from 1st April and ends on 31st October every year. The maximum flow of resin from blazes is during the months of May and June and in the subsequent months of the working season, namely, July to October, the flow gradually decreases due to the rainy season followed by fall in temperature. The tapping of resin is a continuous process and the initial blazings have to be followed by freshenings given every week. If the blazes are not freshened regularly, the resin ducts get blocked and the blazes become dry and once a blaze becomes dry, the flow of resin stops completely. The resin that is collected in the cups is transferred to tin containers every weekends or earlier if required, and the tin containers are then transported to the transit depots for being carried to the destination. This process of tapping requires employment of skilled labour and involves a considerable amount of expenditure. The State of Jammu and Kashmir started tapping operations in respect of its chir trees since about 1973 by giving contracts to private parties for extraction and collection of resin. The contracts were of three types: (1) One was contract on wage basis, commonly known as wage contract, which was given by auctioning the blazes to the person who was prepared to undertake the work of extraction and collection of resin at the lowest rates of labour charges and in such contract, the entire resin extracted and collected by the contractor would belong to the State and the contractor would be entitled only to the wage or labour charges for extraction and collection of resin. (2) The second type of contract was on the basis of royalty without load and under this contract, which was again given by auction stipulating for payment of royalty per blaze, the entire resin extracted and collected by the contractor would belong to him and he would be free to sell or process it as he liked. (3) The third type of contract given by the State was on the basis of royalty with load and under this contract, which was also given by auction, the royalty was payable per blaze and out of the resin extracted and collected by the contractor, a certain part would have to be surrendered to the State while the balance would remain with the contractor. Every year the State auctioned the blazes in the different forests within its territory and about 40 per cent of the forests were given on royalty basis, some with load and some without load, while the balance of about 60 per cent were given on wage contract basis.
(3.) The resin, which was thus obtained by the State by giving out blazes on contract whether on royalty-cum-load or on wage basis, was auctioned by the State from time to time and manufacturers having factories for manufacture of resin, turpentine and other derivatives purchased it at the auctions. It is common ground that most of these purchasers were manufacturers having their factories in Hoshiarpur district of Punjab and at the material time, they depended for their requirement of raw material solely on the resin available at the auctions held by the State since supply of resin had ceased to be available from Uttar Pradesh and Himachal Pradesh on account of the policy adopted by the Governments in these territories. The State, however, in furtherance of its policy to bring about rapid industrialisation, decided that from the year 1979-80 onwards, the resin extracted from its forests should not be allowed to be exported outside the territories of the State and should be utilised only by industries set up within the State. The State in fact entered into contracts with three manufacturers, namely, Prabhat Turpentine and Synthetics Pvt. Ltd., Dujodwala Resin and Turpentine Pvt. Ltd. and Pine Chemicals Ltd. under which these three manufacturers agreed to put up factories in the State for Manufacture of resin, turpentine and other derivatives and State agreed to make available to them respectively an assured supply of 4,000, 3500 and 8,000 metric tonnes of resin per year. The validity of these contracts was challenged before us in Writ Petns. Nos. 37-38 of 1979, but these writ petitions were dismissed by an Order made on 21-12-1979. The State had also commitments to supply resin to its own concern, namely, J and K Industries Ltd., which was running a factory for manufacture of resin and turpentine as also to various small scale units which were set up in the State. It appears that the total requirement of the State for the purpose of meeting these commitments was in the neighbourhood of 24,000 metric tonnes of resin. Now in view of the fact that quite a large number of forests were being given out by the State for tapping on royalty contract basis, sometimes with load and sometimes even without load, the aggregate quantity of resin which was being collected by the State was very much short of the total requirement of 24,000 metric tonnes and it was, therefore, felt to be absolutely necessary for the State of increase its procurement of resin so as to be able to meet its commitments. With this end in view a meeting of the Chief Conservator of Forests and other forest officials was held on 9th December, 1978 for the purpose of discussing ways and means for achieving a higher target of production of resin. It was decided at this meeting that the increased target of production could be achieved only through replacement of royalty contracts by wage contracts wherever possible and hence in future blazes should be auctioned for tapping only on wage contract basis.;