Judgment

P. N. BHAGWATI, C.J.I. :- The dispute in these writ petitions relates to the validity of three Orders, one dt. 13th Oct. 1978 and the others dt. 21st Oct. 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. 4, 4,000 tonnes per annum to respondent No. 2 and 4,000 tonnes per annum to respondent No. 3. All the three impugned Orders provided for supply of oleo resin at the rate of Rs. 260/- per quintal exclusive of cost of tins, containers, sales tax etc. and under each of the three impugned orders, there was to be a moratorium on the rate for the first 5 years and thereafter the rate was liable to be increased or decreased according to the formula to be finalised between the Forest Department and respondent No. 2, 3 or 4 as the case may be. The validity of each of these three impugned Orders has been challenged in the present writ petitions. The grounds on which the challenge is based are, however, without substance and that is why we dismissed these writ petitions by an earlier Order made by us. The reasons for which we made the Order dismissing the writ petitions are identical with the reasons given by us while disposing of Writ Petns. Nos. 481-82 of 1979 namely, Kasturilal Reddy v. State of Jammu & Kashmir, (1980) 2 SCR 1338. But in order to appreciate the applicability of these reasons in the present writ petitions, it is necessary to briefly set out the circumstances in which the three impugned orders came to be passed by the State of Jammu & Kashmir.

2. There is a commodity called oleo resin which is a forest produce extracted from certain species of trees popularly known as chir trees. The process of extraction is called tapping. Oleo Resin is produced in only three States in the country namely, Himachal Pradesh, Uttar Pradesh and Jammu & Kashmir. It is an important raw-material for manufacture of rosin, turpentine and their derivatives. The quantity of resin extracted from Chir trees in Jammu & Kashmir was less than 6,000 tonnes in 1972-73 and its large potential had not been exploited until that time, though the States of Himachal Pradesh and Uttar Pradesh had been producing oleo resin for quite some time. 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 modem methods with a view to improving quality and out-put, diversification of products by processing industries and export of sophisticated products. 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 considerably as disclosed by the following figures:

1974-75 17,800 tonnes

1975-76 33,630 tonnes

1976-77 36,214 tonnes

1977-78 37,536 tonnes

1978-79 39,189 tonnes

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 contractors with the result that the production of oleo resin from these two States came down by about 40%. The consequence was that from 1976-77 to 1978-79 the production of oleo resin in the State of Jammu & Kashmir accounted for more than 50% of the total production of oleo resin in the country.

3. Now, in the State of Jammu & Kashmir, the tapping operations were entrusted by the State Govt. to private contractors since 1973 and majority of these private contractors were members of Hoshiarpur Rosin Manufacturers Association. The contracts for tapping which were given to the private contractors were of three types and the net result of giving these contra