Chinnappa Reddy, J. - (1.) On December 12, 1967, the State of Orissa granted a license for collection of Sal Seeds' from eleven Forest Divisions to M/s. Utkal Contractors and Joinery Private Limited. The agreement provided for the sale and purchase of Sal Seeds falling on the ground naturally in the forests. There was a stipulation that the company should establish solvent extraction units in the backward areas of Mayur Bhanj and Sambatpur. There was also all option for renewal of the lease for a further period of ten years. It was later agreed that the period from October 1, 1967 to September 30, 1969 should be treated as experimental period and the lease should be deemed to have commenced from October 1, 1969 and to last for a period of ten years. The Orissa Oil Industries Limited, a public limited company, was floated by the Utkal Contractors and Joinery Private Limited and it was agreed that the State Government should also contribute to the share capital of the company. It was agreed that the Utkal Contractors and Joinery Private Limited should supply Sal Seeds to the two solvent extraction plants of the Orissa Oil Industries Limited, one set up at Bairangpur in Mayurbhanj District with a capacity to crush 2 1,000 M.T. Sal Seeds and the other at Sasan in Sambalpur District with a capacity to crush 21,000 M.T. sal seeds. Thereafter on May 25, 1979, agreements renewing the leases for the purchase and removal of sal seeds from the eleven Forest Divisions for a further period of ten years from October 1, 1979 to September 30, 1989 were entered into by the Utkal Contractors and Joinery Private Limited and the Government of Orissa. This was followed up by an agreement between the Utkal Contractors and Joinery Private Limited and the Orissa Oil Industries Limited for the supply of the entire collection of sal seeds from the eleven Forest Divisions by the Utkal Contractors to the Orissa Oil Industries. While so the Orissa Forest Produce (Control of Trade) Bill 1981 was introduced in the Legislative Assembly of Orissa State. The Statement of Objects and Reasons was as follows:-"Smuggling of various forest produces are increasing day by day. The present provisions of the Orissa Forest Act, 1972 for checking, hoarding did transport of forest produce are not adequate to bring the culprits to book. The said Act is not adequate for imposition of any restrictions of control on trade in forest produce by framing rules thereunder. Barring few items like sal seeds, most of the important items of minor forest produce such as Mahua flowers, Tamarind, Charmaji, Karanja and the like are grown in private holdings as well as in the forest areas owned by Government. Unscrupulous traders take advantage of this situation and evade the law under the cover that the produce relates to private land and not to forests under the control of Government. Instances of smuggling in such cases are too many and the smugglers are escaping with impunity because of absence of any legislation providing for State monopoly in forest produce. Enactment of a separate legislation for the purpose is, therefore, absolutely necessary. The Bill seeks to achieve the above purpose."
(2.) It appears from a perusal of the Statement of Objects and Reasons that the object of the proposed Act was to prevent smuggling of forest produce like Mahua flowers, Tamarind, Charmaji, Karanja, etc. which were grown both in private holdings and Government forests. The object of the legislation was to prevent smuggling in such forest produce and to provide for State monopoly therein. It is seen that the Statement of Objects and Reasons expressly mentions sal seeds as a forest produce which is grown in Government Forests and not in private holdings.
(3.) The Orissa Forest Produce (Control of Trade) Act, 1981 received the assent of the President of India on August 21, 1981. Under S. 1(3) of the Act, the State Government 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 with effect from which the Act shall come into force. Purporting to act under this provision, a notification was issued by the Government of Orissa on December 9, 1982 directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds. We are told that this is the only notification issued so far under S. 1(3) of the Act, despite the fact that in the very Statement of Objects and Reasons it was expressly recited that sal seeds was not a forest produce grown in Government forests. In fact, we find that even after the commencement of the Act and before the issue of the Notification, there were negotiations between the Utkal Contractors and Joinery Private Limited and the State Government for long term agreements for purchase and sale of sal seeds in Athagarh and Puri Forest Divisions. Such agreements were in fact entered into in relation to Parlakhemundi Forest Division between the State of Orissa and Indo East Extraction. Limited. On December 24, 1982, the Government refused to accept royalty from Utkal Contractors and Joinery Private Limited in respect of Dhenkanal and Sambalpur Forest Division on the ground that the Notification dated December 9, 1982 had the effect of rescinding the contract between the company and the Government. Thereupon Utkal Contractors and Joinery Private Limited and Orissa Oil Industries Limited filed a writ petition in the Orissa High Court for a declaration that the Notification dated December 9, 1982 did not have the effect of rescinding the contracts which they had with the State Government. The Writ Petition was dismissed by the Orissa High Court. The Utkal Contractors and Joinery Private Limited and Orissa Oil Industries Limited have filed Civil Appeal No. 6230 of 1983. In another case on similar facts the Orissa Minor Oil Private Limited have filed Civil Appeal No. 6231 of 1983.;