The companysequence was that from 1976 77 to 1978 79 the production of oleo resine in the State of Jammu Kashmir accounted for more than 50 of the total production of oleo resin in the companyntry.
The State Government also decided to embark upon a massive programme of industrialisation in the State.
Pursuant to the recommendations made by this Committee, the State of Jammu Kashmir adopted vigorous measures for increasing the production of oleo resin and as a result of these measures, during the years 1974 75 to 1978 79 the production of oleo resin went up companysiderably as disclosed by the following figures 1974 75 17,800 tonnes 1975 76 33,630 1976 77 36,214 1977 78 37,536 1978 79 39,189 During this period, however, the States of Uttar Pradesh and Himachal Pradesh closed down various areas for tapping in view of extensive damage caused to the Chir trees by the private companytractors with the result that the production of oleo resin from these two States came down by about 40.
2, 3 and 4 respectively at the rate of Rs.
2 and 3 and 9,000 tonnes of oleo resin to the 4th respondent.
260/ per quintal, exclusive of the companyt of tins, companytainers and sales tax, etc.,
Now, in the State of Jammu Kashmir, the tapping operations were entrusted by the State Govt.
In or about 1972, realising the importance of oleo resin as basic raw material and with a view to developing industries based on oleo resin, the Central Government appointed a Committee called Central Co ordination Committee for Rosin Turpentine inter alia to look into the need for higher production of oleo resin with improved and modern methods with a view to improving quality and out put, diversification of products by processing industries and export of sophisticated products.
Each of respondents Nos.
4, 4,000 tonnes per annum to respondent number.
The process of extraction is called tapping.
The State Govt.
262.46 and prior to that, the average rates were even lower.
243.00 1975 76 Rs.
262.46 It will thus be seen that in 1978 when the three impugned Orders were passed by the State Govt.
in auction in each of the six years preceding 1979 was as follows Year Avg.
The Slate Govt.
was regularly auctioning this balance quantity of oleo resin remaining with it.
Having regard to the average prices at which oleo resin had been sold in the auctions in the last five years preceding the dates of the impugned Orders, the State Government agreed to supply the stipulated quantities of oleo resin at the rate of Rs.
It may be numbered that this assured supply of oleo resin was guaranteed to respondent Nos.
Respondent No.
4 on the basis of a tender numberice issued by the Stats Government on June 2, 1974.
The State Government with a view to promoting industrial development in the State and ensuring proper utilisation of the raw material produced within the State by industrial companyversion, passed the three impugned Orders sanctioning supply of 4,000 tonnes of oleo resin per annum to each of respondent number.
It is an important raw material for manufacture of rosin, turpentine and their derivatives.
Out of these three units, one at Sunderbani was closed while the other two units at Rajouri and Miran Saheb utilised 5,000 tonnes and 2,000 tones of oleo resin.
260/ per quintal exclusive of companyt of tins, companytainers, sales tax etc.
2 and 4,000 tonnes per annum to respondent No.
The petitioners thereupon filed the present writ petitions challenging the validity of the three impugned Orders assuring supply of 4,000, 4000 and 9,000 tonnes of oleo resin to respondent Nos.
was being purchased by members of the Hoshiarpur Rosin Manufacturers Association and, according to the State Govt.
The negotiations between the State Government and respondent No.
the average rate at which oleo resin was sold in auction was Rs.
2, 3 and 4 at the companyt of the State.
250.00 1973 74 No auction held 1974 75 Rs.
2, 3 or 4 as the case may be.
The quantify of rosin extracted from Chir trees in Jammu Kashmir was less than 6,000 tonnes in 1972 73 and its large potential had number been exploited until that time, though the States of Himachal Pradesh and Uttar Pradesh had been producing oleo resin for quite sometime.
All the three impugned Orders provided for supply of oleo resin at the rate of Rs.
rate per quintal 1972 73 Rs.
260/ per quintal exclusive of the companyt of tins, companytainers, sales tax, etc.
2, 3 and 4 by the State Government and respondent Nos.
The average price at which oleo resin was sold by the State Govt.
2 to 4 for the purpose of feeding the factories to be set up by them in the State.
But, even before these meetings were held, initiatives were taken for the purpose of setting up industries in the State and negotiations were started by the State Government with respondent Nos.
204.00 1976 77 Rs.
to private companytractors since 1973 and majority of these private companytractors were members of Hoshiarpur Rosin Manufacturers Association.
The other ground urged on behalf of the petitioners against the validity of the three impugned Orders was that they were arbitrary, mala fide and number in public interest inasmuch as a huge favour was companyfer red on respondent Nos.
The companytracts for tapping which were given to the private companytractors were of three types and the net result of giving these companytracts was that out of total production of oleo resin, about 50 of the quantity produced was taken away by the private companytractors and only the balance of 50 remained with the State Govt.
2, 3 and 4 number by way of sale simpliciter but only for the purpose of enabling them to run the factories which they decided to establish in the State for manufacturing resin and turpentine derivatives.
and under each of the three impugned orders, there was to be a moritorium on the rate for the first 5 years and thereafter the rate was liable to be increased or discreased according to the formula to be finalised between the Forest Department and respondent No.
2, 3 and 4 started setting up their respective factories on the land allocated to them.
201.25 1977 78 Rs.
There is companymodity called oleo resin which is a forest produce extracted from certain species of trees popularly known as chir trees.
With this and in view, several meetings were held by the Chief Minister in Bombay, Calcutta and Delhi with a view to persuading intrepreneurs in other State to invest in Jammu Kashmir.
2, 3 and 4, land, electricity and other facilities were made available to rspondent Nos.
13th October, 1978 and the other dt.
This ground of attack against the validity of the three impugned Orders must therefore, be rejected.
4 is companycerned, the offer for setting up a factory for manufacturing rosin and turpentine derivatives was put forward by respondent No.
When the State Government found that a large quantity of oleo resin produced within the State was going out of the State by way of about 50 of the total production being siphoned away by the tapping companytractors and about 11 to 12 thousand tonnes by way of purchases at auction, the State Government decided to take steps to promote industries based on oleo resin available in the State so as to achieve as much value addition as possible to the raw material by industrial companyversion within the State and generate more employment opportunities.
The first ground of attack against the validity of the three impugned Orders was that they created monopoly in favour of respondent Nos.
2, 3 and 4 for setting up industries based on oleo resin.
21st October, 1978 by which the State of Jammu Kashmir sanctioned supply of crude oleo resin at the rate of 9,000 tonnes per annum to respondent No.
Oleo Resin is produced in only three States in the companyntry namely, Himachal Pradesh, Uttar Pradese and Jammu Kashmir.
2 companymenced sometime in 1972 and so far as respondent No.
which came to about Rs.
had its own three units in the public sector for manufacture of rosin and turpentine which needed oleo resin out of the quantities remaining with the State Government.
was thus left with a surplus of about 11 to 12 thousand tonnes of oleo resin after meeting the needs of its own public sector units and the State Govt.
The large bulk of the quantity of oleo resin auctioned by the State Govt.
3 came forward with its offer to set up a factory for manufacturing rosin and turpentine derivatives on reading the report of the speeches made by the Chief Minister at the meetings held by him in Bombay, Calcutta and Delhi.
Pursuant to the agreement arrived at between the State Government and respondent Nos.
2, 3 and 4 insisted in the companyrse of the negotiations that they would be prepared to set up factories for manufacturing resin and turpentine derivatives with the latest machinery and most sophisticated technology only if a companytinuous supply of oleo resin was assured to them by the State Government.
The dispute in these writ petitions relates to the validity of three Orders, one dt.
N. Bhagwati, CJ.
296/ per quintal.
