JUDGMENT

VENKATARAMIAH, J.:— In these appeals by special leave we are concerned with the question of constitutional 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).

2. The appellant Hindustan Paper Corporation Ltd. is a company owned by the Central Government carrying on the business of manufacturing newsprint at its factory in the State of Kerala. 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 constituted then for the appellant and not to permit harvesting of eucalyptus wood and reeds by other parties and for the r