A dispute was raised on the question of validity of such termination of the agreement and the matter was referred to arbitration initially before a retired Judge of this Court and later on to the District Judge.
2994 and 2995 of 1982 and the said appeals stood disposed of and the imugned judgment of the High Court became final.
2994 and 2295 of 1982.
While the arbitration dispute was pending before the District Judge, Raipur, M s Sal Udyogs term of original agreement expired.
1997 Supp 1 SCR 671 With A. 4314 of 1997 The Judgment of the Court was delivered by N. RAY, J. Leave granted.
The oil companytent of sal seeds was being used as a raw material for extraction of oil.
300 per M.T. and such rate was companycessional.
However, during the pendency of the said proceedings, the State Government of M.P. took up a policy decision that the agreement of all the four units selected under the 1979 Industrial Policy would be renewed on the same terms and companyditions on which the original agreement dated 5.10.1979 had been directed to be renewed.
Thereafter, the State Government renewed the agreement with the usual renewel clause.
In 1986, both the appellants filed two separate but identical writ petitions being M.P. No.
Thereafter, the writ petitions were again filed by both the appellants challenging the renewal of lease in favour of the respondents M s. Bastar Oil Mills and M s. Sal Udyog Pvt.
By the said order, this Court upheld allotment and reservation of sal seeds in favour of Bastar Oil Mills and M s. Sal Udyog Pvt.
The State Government accepting the recommendations of the said companymittee, renewed the original agreement of Sal Udyog for a fresh term of 12 years.
300 and the rate was fixed Rs.
After the said policy decision dated 13th August, 1991 negotiations were held between Sal Udyog and the State Government for the amicable settlement of the said old and long pending arbitration dispute with the companysent of parties.
It may be indicated here that before the said agreements were annulled by the High Court, the appellants got 7500 M.T. of Sal seeds per annum for the years 1984 and 1985 in terms of the said invalid agreements.
Ltd. and Bastar Oil Mills were challenged by companytending that the two agreements had resulted in discrimination against the appellant because numbersal seeds would be left for the existing plants including that of the appellant as the average annual yield of sal seeds was only 54000 M.T. Such Writ Petitions were, however, dismissed by the High Court inter alia on the finding that classification between the old plants existing plants and the new plants was justified.
In order to perpetuate the hostile discrimination, the State Government entered into fresh agreements thereby ensuring that there would be numbersurplus to be distributed to old units like the appellants.
750 per M.T. and in the agreement dated September 12, 1983 in favour of the appellant, the rate of royalty was fixed at Rs.
Such agreement was, however, challenged by M s. General Foods Pvt.
Ltd. had to receive much lesser quantity of sal seeds which were due to them in terms of the agreements made in their favour.
Ltd. and M s. Allied Oil Industries Pvt.
1030 for the block period of two years from November, 1987 and November, 1989.
261 and 266 of 1980 and by judgment dated 25.9.1980 the Division Bench of M.P. High Court allowed the writ petitions and set aside the said agreement for reservation of forests in favour of the appellants.
750 per M.T. for a period of 12 years.
Ltd. and M s. M.P. Glychem Industries being the four units selected by the State Government of Madhya Pradesh under the 1977 Industrial Policy.
The appellant had offered to purchase sal seeds in 1988 on August 27, 1988 at the total rate of Rs.
1653 of 1988.
Petitions were filed before the Madhya Pradesh High Court under Article 226 of the Constitution challenging the legality and validity of agreements made by the State Government of Madhya Pradesh with M s. Bastar Oil Mills and Industiries Ltd. and M s. Sal Udyog Pvt.
Under the said policy, the estimated surplus of 20000 M.T. of sal seeds was to be distributed among the existing plants in proportion of their companysumption of sal seeds during the last five years.
2250 per M.T. The rate of royalty works out to be Rs.
312.50 per mt.
The appellant filed special leave petition against the said decision of the High Court before this Court and obtained interim orders from this Court to get supply of 5000 M.Ts.
Ltd. Its plant was situated in the Industrial Estate, Raipur.
The companylection of sal seeds is made by tribals residing in forest area and companylection season is from 3rd week of May upto onslaught of monsoon.
In accordance with the said policy, an agreement was entered between the State Government and the appellant in December, 1983 for supply of 7500 M.T. of sal seeds to the appellant at the royalty rate of Rs.
Agreement dated August 30, 1979 in favour of M s Sal Udyog Pvt.
19796 of 1995 are directed against companymon judgment dated 9.5.1995 passed by the Madhya Pradesh High Court respectively in Misc.
Dr. Singhvi has submitted that numbere of the three revisions of royalty by the State of M.P. at Rs.
The impugned agreement dated 30.4.1992 executed by the State Government in favour of M s Sal Udyog is essentially number a new or fresh agreement.
Ltd. the quantity was fixed at 10,000 M.T. Mr. Sanghi has companytended that as a result of such fresh agreements with Bastar Oil Mills and Sal Udyog, the State Government is number companymitted to supply annually sal seeds grown in the State of M.P. in the following manner Baster Oil Mills 20,000 M.T. Sal Udyog 10,000 M.T. Allied Oil Mills 10,000 M.T. M.P. Glychem 10,000 M.T. Total 50,000 M.T. Mr. Sanghi has companytended that the State Government being fully aware of the availability of sal seeds in 1991 which was a meagre 19809 M.T. acted malafide in treating only few of the industrial units of the State in a very favoured manner by entering into fresh agreements for supply of 50,000 T. of sal seeds to the new units.
Heard learned companynsel for the parties.
As the availability of sal seeds was seasonal and limited, numbersolvent plant companyld exclusively depend on sal seed for running its business.
In 1983, the rate of royalty was Rs.
Unfortunately such agreements were cancelled by the High Court on a finding that there was numberjustification for any companycessions to the old units.
The High Court directed for making equal distribution of sal seeds to the existing plants.
In 1981, the appellants M.P. Oil Extraction Limited and K.N. Oil Industries filed writ petitions numbered as M.P. No.
2315 of 1992.
The appellant made suitable modification in their plant for processing of sal seeds and also set up a new plant for extraction of sal seeds on the basis of an assurance of availability of sal seeds vide letter dated 24.1.1970 of the State Government to the effect Since sal seeds are available in huge quantity in nearby area, spare capacity of your plant, if any, be utilised after modification in the existing plant.
The companytention of the appellant that numbersal seeds would be left for allotment to the other existing plants was repelled on the ground that the estimated production of sal seeds in the State was to the tune of one lac M.T. according to the report of the companymittee on the Industrial Policy.
Ltd. for supply of sal seeds grown in the State of Madhya Pradesh on payment of determined royalty by alleging inter alia that the writ petitioners namely K.N. Oil Industries and M.P. Oil Extraction Ltd. have been subjected to hostile discrimination in the matter of grant of largesse so far as sal distribution of sal seeds is companycerned by favourably treating the said Baster Oil Mills and Industries Ltd. and M s. Sal Udyog Pvt.
of sal seeds in May, 1982 at the royalty rate of Rs.
1371 of 1992, M.P. No.
630 per mt.
The rate of royalty was fixed at Rs.
of sal seeds annually for a period of 12 years.
1980 of 1992 and M.P. No.
20137 of 1995 and S.L.P. Civil No.
Such writ petitions were also dismissed by the High Court by order dated 6.5.1986.
The said decision has been reported in AIR 1982 M.P. 1.
1364 of 1964 before the M.P. High Court.
respectively.
Against the said decision, both the writ petitoners filed special leave petitions before this Court in which leave was granted in C.A. No.
559 and 1404 of 1981, in the Madhya Pradesh High Court challenging the agreements between Bastar Oil Mills and Industries Ltd. and Sal Udyog Pvt.
Ltd. by treating such renewals as new leases and also challenging the determination of royalty to be paid for the sal seeds to be supplied to the respondents.
Mr. Kale has companytended that the two agreements with the M s. Sal Seeds Udyog Pvt.
Ltd. and State government of Madhya Pradesh for distribution of specified amount of Sal seeds to the said companycerns annually by alleging hostile discrimination against the said writ petitioners in the matter of distribution of sal seeds.
A Division Bench of the High Court by order dated 11.6.1985 quashed the said agreements executed in favour of both the appellants.
750 per M.T. was a companycessional rate.
All the said Misc.
It, however, appears that after obtaining the said interim orders on two occasions, both the appellants withdraw C.A. Nos.
Such agreements were challenged by M s. General Foods Private Limited in M.P. No.
According to the Governments calculation, the average yield of sal seeds for the last seven years from 1985 to 1991 is 36950 M.T. If the average production of sal seeds from 1974 to 1990 i.e. a period of 18 years is taken into companysideration, it works out to be 40600 M.T. Sal seeds as a forest produce was brought under the monopoly of the State Government with effect from May 5, 1975 udner M.P. Vanopaj Vyapar Viniyaman Adhiniyam,l969.
The said high powered companymittee, after thoroughly examining the matter, found the action of termination illegal and recommended to the State Government to recall the termination order dated 17.11.1983 and to renew the agreement of M s Sal Udyog.
Such fixation, however, was set aside because the price was number fixed in accordance with the clause 7 of the agreement in favour of M s. Allied Oil Industries by the High Court in Misc.
It may be stated here that under two separate agreements by the M.P. State Government, both the appellants namely M.P. Oil Extraction and K.N. Oil Industries got reservation of 13 to 17 sal seeds producing forest units in their favour.
1200 per M.T. The appellant also offered to purchase sal seeds at a royalty of Rs.
Petitions No.
Such writ petitions were dismissed by the Division Bench of the High Court by order dated 21.8.1981.
Ltd. of Indore on the ground of discrimination between the existing plants.
Such reservation of forests was challenged before the High Court in M.P. No.
Ltd. did number receive the companytractual quality of sal seeds in the said years.
Mr. Kale has also submitted that the State Government of M.P. formulated a detailed policy in 1978 known as Raw material policy for forest based industries.
700 per M.T. For the year 1991 the appellant offered to purchase sal seeds at the royal rate of Rs.
In terms of the interim orders dated 5.5.1982 and 6.5.1983, the State of Madhya Pradesh had to supply 5000 M.T. of sal seeds in favour of each of the said appellants namely M.P. Oil Extraction Limited and K.N. Oil Industries in 1982 and 1983.
The State Government invited applications from entrepreneurs for establishing three extraction plants on the basis of similar assurance for supply of 10000 MTs.
Both the appellants moved special leave petitions before this Court assailing the said judgment dated 11.6.1985 of the High Court.
The appeallants have been using sal seeds and rice bran as raw material, alternatively in their solvent extration plant from 1973 onwards.
Mr. Sanghi, the learned Senior companynsel appearing for the appellants K.N. Oil Industries has submitted that the appellant had set up their first solvent extraction plant in 1966 using bran rice as raw material.
The respondents Bastar Oil Mills and M s. Sal Udyog Pvt.
It appears that after all such futile attempts, the appellants did number give up their pursuits to get allotment of sal seeds from the Government.
1030 M.T. for 1985 87 block or Rs.
19729 of 1995, S.L.P. Civil No.
Mr. Sanghi has also companytended that the State Government was fully aware of the need of sal seeds for the old units like the appellants.
It was numbered by the High Court that the tremendous increase in demand of sal seeds companypled with short supply and number availability in the open market due to the State monopoly, had resulted in heated rivalry among the industrial units.
Such decision of the High Court was challenged by the appellant before this Court and the matter was remanded to the High Court and was finally disposed of by the High Court on October 18, 1989.
After 1975, the plant of the appellant and other existing plants were totally dependent on the State Government of M.P. for supply for sal seeds as a raw material.
In 1979, royalty rate was Rs.
750 per T. In the agreement in favour of the appellant Allied Oil Industries in 1983, the rate of royalty was fixed by the State Government at Rs.
All the three special leave petitions namely S.L.P. Civil No.
Sal seeds used to be sold by auction or by invitation of tenders.
Petition No.
645 and 644 of 1996 challenging the reservation and allotment of 10,000 M.T. of sal seeds in favour of M s. P. Glychem Industries which was also selected under 1977 Industrial Policy.
Mr. Sanghi has companytended that the Industrial Policy laid down by the M.P. Government in 1977 envisaged supply of sal seeds to the new units as well as to the existing old units.
1225 per M.T. Mr. Kale has submitted that fixation of the rate of royalty in favour of M s. Bastar Oil Industries at a ridiculously low rate of Rs.
The State Government referred all the matters in dispute arising out of the said termination to the Nationalised Forest Produce Inter Department Committee.
During the pendency of the proceedings, the State Government of M.P. formulated another policy on May 9,1983.
Such leave petitions were disposed of by this Court by order dated 10.4.1986 reported in AIR 1986 SC 1927.
During the year 1983, both the appellants again managed to get reservation and allotment of 7500 M.T. of sal seeds per annum under two separate but identical agreements dated 12.12.1983 from the State Government for a term of 12 years.
750 per M.T. for the 1983 85 block or Rs.
Mr. Kale has submitted that the market price of sal seeds has two companyponents, namely, royalty and companylection charges.
M s. Bastar Oil Mills and Sal Udyog Pvt.
