COMBINED TRADERS BY ITS MANAGING PARTNER T. J. CHERIAN Vs. STATE OF T.N.

JUDGEMENT

(1.) THESE four writ petitions deal with the same controversy and the facts as can be gathered from the various affidavits filed in these writ petitions are as follows: The South India Viscose Limited, Coimbatore, hereinafter referred to as Viscose, is a company established in 1958. It has got its factory at Sirumugai near Mettupalayam, Avanashi Taluk, Coimbatore District. The factory is engaged in the manufacture of wood pulp, rayon am and staple fibre. The most essential raw material for high grade rayon pulp manufacture is bluegum timber grown in the Government reserve as well as private forests in the Nilgiris District. For the purpose of obtaining this raw material from the forests in the Nilgiris without any interruption to its work in the factory, the Viscose had approached the Government on several occasions. The Government entered into an agreement with the said Viscose on 5 -4 -1965 for the supply of bluegum wood over 7800 acres from 1966 to 1975 at Rs. 450/ - per acre per annum for the first three years and at revised rates for the subsequent years. The following are the details of the bluegum areas allotted to the said Viscose for working from 1966 to 1973: 1966... 300acres 1967... 406.45acres 1968... 589.85acres 1969... 800.00acres 1970... 788.32acres 1971... 900.00acres 1972... 1140.25acres 1973... 1000.00acres The rate of Rs. 450/ - was subsequently revised as Rs. 650/ - per acre from 1 -1 -1969 to 31 -3 -1974 and as Rs. 750/ - per acre from 1 -4 -1973. Since the Viscose was not able to get all its requirements of new material from these areas allotted by the Government, it had approached the Government for allotment of all the Government forest lands to it for purposes of getting the necessary bluegum timber. In order to consider this request of the Viscose, a meeting was held on 9 -5 -1966 at Ootacamund, attended by the Chief Minister of the State, the Minister for Co -operation, the Secretary to Government, Department of Agriculture, the Chief Conservator of Forests and a representative of the Viscose. As a result of the discussion, the Government arrived at certain conclusions, and those conclusions appear in the subsequent memorandom of the Government -Memorandum No. 48227/II/66 -7 Agriculture Department dated 7 -6 -1966. The Government at that conference did not take a final decision on the request of the Viscose for allotment of all the reserved forests of the Government with bluegum plantation for its benefit and they had allotted the acreage as indicated above. This memorandum points out that during the discussion, it was brought to notice that the bulk of bluegum wood auctioned in the Nilgiris District was not reaching the civil population for use as firewood, that the coupes were taken in auction by various contractors and that the wood was then exported outside the State; and that in view of this, the Government had decided that the bluegum wood sold out in auction in the Nilgiris District should be used only as fuel, posts etc., for the benefit of the civil population in the Nilgiris District and should not be allowed to go out of the District. Subsequent to this, the Government passed G. O. Ms. No. 3440, Agricultural Department dated 26 -10 -1966 which dealt with the supply of bluegum and wattle to viscose and considered its representations. The Government decided to allow upto 1000 acres to Viscose and that was to be done from 1972 to 1975 and the rate per acre was also revised his Government order also pointed out that as bluegum was more suitable than debarked wattle for rayon and paper industry, the Government decided that in future all the bluegum raised in the departmental plantations in the Nilgiris Division should be supplied to the pulpwood industries and that the debarked wattle wood might be made available to the public for use as firewood instead of bluegum. Notwithstanding this, the Government by the very same order also pointed out that the ban an the export of the bluegum raised by the Forest Department in the reserved forests in the Nilgiris District outside the district would continue, but the restriction imposed by the Government would not apply to bluegum felled by the Viscose exclusively for rayon pulp manufacture. Pursuant to the decision taken by the Government in their memorandum dated 7 -6 -1966, the following condition was imposed as condition No. 25 in the auction notice for the sale of bluegum in the Government reserved forests by public auction.

(2.) THERE is yet another matter to which I must draw attention at this stage itself and that is the price at which the bluegum wood was sold. The counter - affidavit filed on behalf of the Government points out that the price of bluegum firewood varies from Rs, 75/ - to Rs. 80/ - per tonne according to the prevailing local market rates, that Messrs. South India Viscose Limited are buying bluegum wood at Rs. 98/ per tonne at their depot at Mettupalayam, that the transport charges per tonne are Rs. 25/ - and that if that is deducted, it comes to Rs. 73/ - per tonee. However, in the affidavits filed in support of the writ petitions, it is stated in paragraph 5 thereof that the current purchase price of South India Viscose Limited, is Rs. 98.50 per tonne, while the price of Gwalior Rayons Ltd., offered at Mettupalayam depot is Rs. 92.75 per tonne and that if bluegum is sold as firewood, the rate will be Rs. 20/ - to Rs. 25/ - per tonne. But this controversy may not be relevant except to a limited extent to which I shall make reference later.

(3.) MR . K.K. Venugopal, who, as usual addressed very elaborate arguments, forward three contentions in support of these writ petitions. The first contention was that condition No. 25 violated freedom of trade, commerce and inter -course guaranteed under Article 301 of the Constitution of India. The second contention was that by preventing the petitioner from bidding at the auction in competition with those who had entered into contracts with Viscose for supply of bluegum wood the fundamental right of the petitioner under Article 19 (1) (g) of the Constitution of India has been violated. The third intention was that inasmuch as the authorities had permitted the removal of the bluegum wood from the Nilgiris District supply to Viscose and had not given any such permission to any other person, for instance, a person like the petitioner, who would like to remove the bluegum wood outside the district for supply to a competitor, namely, Messrs. Gwalior Rayons Limited, who is prepared to pay a higher price and as a consequence the petitioner also would be prepared to offer a higher bid at the auction, the action of the authorities would constitute violation of Article 14 of the Constitution of India. I shall consider the validity of these submissions in the order in which I have mentioned them.