Jagannatha Shetty, J. - (1.) "Sal seed" which is a minor forest produce at Orissa has again become the major subject of litigation between commercial users and the State of Orissa.
(2.) The petitioners herein are holders of long term license from the Government of Orissa for collection of sal seeds from certain specified forest divisions on payment of royalty. The State of Orissa enacted Orissa Forest Produce (Control of Trade) Act, 1981 (The "Act"). It received the assent of President on August 21, 1481. The object of the Act was to prevent smuggling forest (produce) and also to provide State monopoly in such forest produce. Under S. 1(3) of the Act the State is empowered from time to time to issue a notification specifying the area or areas the forest produce in relation to which and the date from which the Act shall come into force. Purporting to act under this provision a notification dated December 9, 1982 was issued by the State Government directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds. Thereafter, the Government refused to accept royalty from the petitioners in respect of certain forest divisions on the ground that the notification had the effect of rescinding the existing contracts between the Government and the petitioners. The petitioners thereupon moved the Orissa High Court with Writ Petitions for declaration that the said notification was void and did not have the effect of rescinding their contracts in relation to sal seeds. The Orissa High Court dismissed the Writ Petitions. The matter was brought before this- Court in Civil Appeals Nos. 6230-31 of 1983. This Court allowed the appeals by judgment dated May 5, 1987, which has been since reported in Utkal Contractors and Joinery Pvt. Ltd. v. State of Orissa, AIR 1987 SC 1454 (1987) 3 SCC 279.
(3.) The nub of the arguments in those appeals was that the Act was not concerned with the sal seeds grown in the Government lands or Government Forests, and in any event, the petitioners' contract remained untouched by the notification dated December 9, 1982. It was also contended that since the Government was already the owner of forest produce in Government lands, all that was necessary to create a State monopoly in any forest produce was to vest in the Government the exclusive right to such forest produce grown in private holding. After dealing with the object of the Act and relevant provisions, a bench of this Court consisting one of us (O. Chinnappa Reddy, J.) said : "Thus none of these provisions deals with forest produce grown in Government lands nor is there any other provision in the Act which expressly deals with forest produce grown in Government lands. The scheme of the Act is, therefore, fully in tune with the object set out in the Statement of Objects and Reasons and in the. Preamble, namely that of creating a monopoly in forest produce by making the Government the exclusive purchaser of forest produce grown in private holdings. It was argued by the learned Additional Solicitor General that S. 5(1)(a) was totally out of tune with the rest of the provisions and, while the rest of the provisions dealt with forest produce grown in private holdings the very wide language of S. 5(1)(a) made it applicable to all forest produce whether grown in private holdings or Government forests. We do not think that it is permissible for us to construe S. 5(1)(a) in the very wide terms in which we are asked to construe it by the learned Additional Solicitor General because of its wide language, as that would merely introduce needless confusion into the scheme of the Act. Having scanned the object and the scheme of the Act, having examined each of the provisions of the Act textually and contextually, we do not think it is proper for us to construe the words of S. 5(1)(a) in their literal sense; we think that the proper way to construe S. 5(1)(a) is to give a restricted meaning to the wide and general words there used so as to fit into the general scheme of the Act and S. 5(1)(b) are concerned by the conjunction 'and', and having regard to the circumstances leading to the enactment and the policy and design of the Act, we think that clauses (a) and (b) must be construed in such a way as to reflect each other. We have no doubt that the contracts relating to specified forest produce which stand rescinded are contracts in relation to forest produce grown in private holdings only. If the very object of the Act is to create a monopoly in forest produce in the Government so as to enable the Government, among other things, to enter into contracts, there was no point in rescinding contracts already validly entered into by the Government. Again S. 5(1) does not bar any future contracts by the Government in respect of forest produce; if so, what is the justification for construing S. 5(1) in such a way as to put an end to contracts already entered into by the Government. Viewing S. 5(1)(a) and S. 5(1)(b) together and in the light of the preamble and the Statement of Objects and Reasons and against the decor of the remaining provisions of the Act, we have no doubt that S. 5(1) like the rest of the provisions applied to forest produce grown in private holdings and not to forest produce grown in Government lands.";