- (1.) THE petitioner is a forest contractor and owns his industry at Bareilly. In parts of this province Borang trees grow sporadically mixed up with other species of trees. The State Government was not aware of its utility for the manufacture of pencils and slat and for a number of years these trees used to be sold along with other spe cies of trees. But, when this fact came to the knowledge of the State Government, it decided to allot available Borang trees to bona fide registered pencil and slat manu facturers, instead of selling the trees by public auction. With the growth of the pen cil industry in the State a shortage of Borang wood set in and as the pencil and slat manufacturers were at issue as to the Dumber of trees to be allotted to them, the Government decided to auction the Borang trees. This decision was taken by a letter issued by the Chief Conservator of Forest on the 28th August, 1972 (Annexure 'A' to the petition). The letter, however, confined the auction only to such pencil manufactur ers who had obtained a certificate from the industries Department The category of pier -sons entitled to participate in the auction was however extended so as to include slat manufacturers also, by another order dated 7th September, 1971. Thereafter, an auction notice on 28th September, 1971 was issued but it expressly stated that only pencil and slat manufacturers would be entitled to bid at the auction. It appears that earlier to this by an order dated 4th September, 1971 (Annexure 'A') to the counter -affidavit, the State Government, Industries Department, had issued instructions that only such pen cil and slat manufacturers should be per mitted to bid at the auction who had ob tained certificates from the Industries De partment. The auction was, thereafter, held on the 28th September, 1971 in respect of certain areas and on the 12th October, 1971, in respect of others. The petitioner has challenged this auction and has prayed for quashing the same. A further prayer has been made for directing the respon dents Nos. 1 to 6 not to make any auction of Borang trees on the basis of directions contained in the letter dated 28th August, 1971 and 7th September, 1971 (Annexures 'A' and 'BO to the petition.
(2.) COUNSEL for the petitioner has Urged that the State Government in confin ing the auction only to pencil manufactur ers and manufacturers of pencil slat has without any reasonable basis, discriminated against the other bidders and the act of the State Government in adopting this proce dure for the sale of Borang trees imposes an unreasonable restriction on the peti tioner's right of carrying on business of forest contract. Counsel for the respondents has on the other hand urged that the trees in question were the exclusive property of the State Government and it could adopt any method it liked for conducting the sale of the trees and none of the fundamental rights of the petitioner have as such been infringed During the course of hearing, counsel for the State made a statement that the trees were comprised in a reserved forest Reserved forests axe constituted under Chapter 2 of the Indian Forest Act In order to constitute a reserved forest, State Government has to issue notification under Section 4 of the Indian Forest Act Thereafter, a Forest Settlement Officer appointed for hearing objections which be made by every person claiming any right mentioned under Sections 4 and 5 of the Act Section 7 empowers the Forest Settle ment Officer to make an inquiry in the mat ter. In case claims are made relating to shifting cultivation, the Forest Settlement Officer records statements of parties and makes a report to the State Government setting forth the particulars of the claim and of any local rule or order under which the practice is allowed or regulated. The Stall Government, thereafter, is empowered to pass an order either permitting or prohibit ing the practice of shifting cultivation. By Section 11 of the Act the Forest Settlement Officer is empowered to admit or reject the various claims made either in full or in part If a claim is admitted, the land is ex cluded from the boundaries of the forest, or, in the alternative if it if possible to reach an agreement with the claimant for the surrender of his right then the area it included in the forest In case no agree ment is reached and the land if not exclud ed from the limits of the proposed forest power is given to acquire the land in ac cordance with the provisions of the Land Acquisition Act Thereafter, a record of rights which are admitted is made under Section 14 of the Act Section 16 of the Act provides for commutation of certain rights, which are of such a7 nature that exer cise of those rights would be inconsistent with the maintenance of the reserved forest This section makes provisions for compen sation being paid for such commutation of rights. Thereafter, under Section 20 of the Act the State Government if empowered to issue a notification declaring an area to be a reserved forest Section 23 bars the accrual of any right in a reserved forest, except by succession, or under a grant or contract made by or on behalf of Govern ment or of some persons in whom such rights were vested when the notifications under Section 20 of the Act were issued. Section 25 empowers the forest officers, after obtaining the sanction of the Statt Government to stop any public or private way or water course in a reserved forest Section 26 of the Act makes certain acts punishable in respect of a reserved forest The State Government as such exercises certain statutory powers in respect of reserv ed forests and rights therein can be acquir ed only in accordance with the provisions of Section 23 of the Act The right which the vendees have acquired in respect of Bo rang trees is a right conferred by a contract, which is one of the modes contemplated by Section 23 of the Act. The question that arises in the present petition is as to whe ther the procedure adopted by the Stat Government foe conferring rights in respect of the forest produce a forest, which is gov erned by the provisions of Chapter 2 of the Indian Forest Act, if in accordance with the law. The forests which have been con stituted a reserved forest, in accordance with the provisions of Indian Forest Act are undoubtedly the property of the Govern ment, but in a democratic constitution the property held by the State is not held by the State as a monarch for private or per sonal purposes. It is held for public pur poses. It, as such, must be administered in such a way as to ensure the greatest amount of benefit to the public and the revenues of the State Government. The obligation to hold property for public purpose is inherent in all democratic constitutions. The property held as such, has to be administered in a way, so as not to enrich a particular cate gory of persons to the detriment of other citizens and also in such a manner as to ensure that the maximum possible benefit accrues to the revenues of the State. This position is well settled in the United States. In the case of Van Brocklin v. Anderson, (1884 -85) 29 L Ed 845 = (117 US 151), on p. 847 the U. S. Supreme Court observed as under "The United States does not and can not hold property, as a monarch may, for private or personal purposes. All the pro perty and revenues of the United States must be held and applied, as taxes, duties, imposts and excises must be laid and col lected, to pay the debts and provide for the common defence and general welfare of the United States."
(3.) THIS position was reiterated in the case of United States v. Martha Insley, (1887 -88) 32 L Ed 968 = (130 US 263). Referring to the nature and the purpose for which pro perty is held by the United States, then Lordships on page 969 observed:;