Under section 6 of the Act, Government can exempt in public interest, by Notification, the sale of any Forest Produce to companypanies owned by the Central Government, by Government of Kerala.
Aggrieved by the Notification granting exemption to the Government companypanies, the two companypanies in the private sector, namely, Punalur Paper Mills Limited and the Gwalior Rayon Silk Manufacturing Wvg.
The Act was also intended to provide for the proper regeneration and maintenance of the forests in the State.
EXPLANATORY NOTE After Government have numberified selling price of Forest Produce under section 3 of Act 29 of 1978, Forest Produce cannot be sold at prices less than the selling price.
S. Krishnamurthy Iyer and P.K. Pillai for the Respondents.
The Act governs only those forests which are companysidered as reserved forests within the meaning of A Rerala Forest Act, 1961 and forests vested in the Government under section 3 of the Kerala Private Forests Vesting and Assignment Act, 1971.
From the Judgment and Order dated 15.4.1981 of the Kerala High Court in O.P. Nos.
F The Judgment of the Court was delivered by VENKATARAMIAH J. In these appeals by special leave we are companycerned with the question of companystitutional validity of section 6 of the Kerala Forest Produce Fixation of Selling Price Act, 1978 Act 29 of 1978 hereinafter referred to as the Act The appellant Hindustan Paper Corporation Ltd. is a companypany owned by the Central Government carrying on the business of manufacturing newsprint at its factory in the State of Kerala.
In the year 1978 the Act was passed by the Kerala Legislature with the object of providing for the procedure to be followed in fixing the selling prices of certain important forest produce, for the prohibition of the sale of such forest produce at less than the prices so fixed and for matters incidental or ancillary thereto.
1871 76 of 1981.
By order of the Governor V. Vidhyadharan Additional Secretary to Govt.
Before its factory was established an agreement was entered into between the appellant Hindustan Paper Corporation Ltd. and the Government of Kerala on October 7, 1974 under which the Government of Kerala agreed to grant to the appellant the right of free use of water from the Muvattupuzha river for the purpose of manufacturing newsprint and also to make available annually to the appellant 1,50,000 tonnes of eucalyptus wood.
The Government of Kerala further agreed to keep reserved from the date of agreement the State plantations of eucalyptus grandis in Pamba, Kottayam, Punalur, Thenmalai and Trivandrum Forest Divisions as companystituted then for the appellant and number to permit harvesting of eucalyptus wood and reeds by other parties and for the regeneration of the forest in the areas, the Chief Conservator of Forests, Kerala State was required in companysultation with the appellant to prepare and implement a scientific management plan which would include fireprotection and epidemic companytrol programmes.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The appellant agreed to pay to the Government of Kerala royalty for the raw materials supplied to the appellant at the rate of Rs.11 per tonne of green wood of eucalyptus grandis and eucalyptus tereticornis both with 50 per cent moisture and at the rate of Rs.12 per tonne of green reeds with 50 per cent moisture.
After the above agreement was entered into the appellant established its factory.
E Dr. Y.S. Chitale, M. Ramchandran, Mrs. Shanta Vasudevan, P. Parameswaran and A.S. Nambiar for the Appellant.
Co. Ltd. which were companypanies in the private sector had also established their factories in the State of Kerala which companysumed forest produce as raw material.
There were several other companyditions in the agreement with which we are number companycerned in these cases.
At the hearing of the writ petitions before the High Court, the Additional Advocate General who appeared for the State Government companyceded that in his opinion section 6 of the Act was unconstitutional.
The Kerala State Bamboo Corporation Limited and the Travancore Plywood Industries Limited which were owned by the Government of Kerala were also carrying on business in the State of Kerala.
The Punalur Paper Mills Ltd. and the Gwalior Rayon Silk Manufacturing Wvg.
Co. Ltd. filed writ petitions in the High Court questioning the companystitutional validity of section 6 and the Notification granting exemption thereunder in favour of the appellant Hindustan Paper Corporation Ltd. and two other companypanies owned by the Government of Kerala.
The writ petitions were opposed by the Government of Kerala, the appellant Hindustan Paper Corporation Ltd., the Kerala State Bamboo Corporation Ltd. and the Tranvancore Plywood Industries Ltd. In the companynter affidavit filed on behalf of the Government of Kerala the companytentions urged by the petitioners in the writ petitions were refuted and the State Government took the stand that section 6 of the Act was companystitutionally valid.
6, 7, l005 1153, 1154 and 1345 of 1981.
