Back
2020 Supreme(Bom) 312
IN THE HIGH COURT OF JUDICATURE AT BOMBAY, NAGPUR BENCH
R.K. DESHPANDE, AMIT B. BORKAR, JJ.
Ballarpur Industries Limited and ors. - Petitioners
Versus
The State of Maharashtra - Respondent
Writ Petition No.3659 of 2009, 1486 of 2014
Decided On : 06-03-2020
Advocate Appeared:
For the Petitioner:Shri Sunil Manohar, Senior Advocate, assisted by Shri Akshay Naik, Advocate
For the Respondent: Shri Neeraj Patil, Assistant Government Pleader
Headnote:
Forest Produce - Agreement - Maharashtra Supply of Forest Produce by Government (Revision of Agreements) Act, 1982, Rules of 1983 - The court held that the State Government had the power to unilaterally change, alter, or substitute the rates for supply of bamboo and periodicity of revision under the agreement by following the procedure prescribed under the Act and Rules. The retrospective effect given to the revision of rates and periodicity in the Government Orders was beyond the competence and quashed. The petitioner was directed to withdraw the excess amount deposited and the State Government was directed to communicate the proposed demand for the remaining amount within a month.
Fact of the Case:
The petitioner, a company engaged in manufacturing paper products, had an agreement with the State Government for the supply of bamboo. The State Government issued a show cause notice proposing a revision of the rates for the supply of bamboo, which was opposed by the petitioner. Subsequently, the Government Order revising the rates was issued, leading the petitioner to challenge the show cause notice and the Government Orders.
Finding of the Court:
The court found that the State Government had the power to unilaterally change, alter, or substitute the rates for supply of bamboo and periodicity of revision under the agreement by following the procedure prescribed under the Act and Rules. However, the retrospective effect given to the revision of rates and periodicity in the Government Orders was beyond the competence and quashed. The petitioner was directed to withdraw the excess amount deposited, and the State Government was directed to communicate the proposed demand for the remaining amount within a month.
Issues: The issues before the court were whether it was necessary for the State Government to amend the agreement to revise the rates and periodicity and whether the State Government was competent to revise the rates and periodicity with retrospective effect.
Ratio Decidendi: The court held that the State Government had the power to unilaterally change, alter, or substitute the rates for supply of bamboo and periodicity of revision under the agreement by following the procedure prescribed under the Act and Rules. However, the retrospective effect given to the revision of rates and periodicity in the Government Orders was beyond the competence and quashed.
Final Decision: The court partly allowed the petitions, quashing the Government Orders to the extent they were given retrospective effect. The petitioner was directed to withdraw the excess amount deposited, and the State Government was directed to communicate the proposed demand for the remaining amount within a month.
JUDGMENT :
R.K. DESHPANDE, J.
1. The petitioner in both these petitions is Ballapur Industries Ltd., a Company duly established and incorporated under the Companies Act, 1913, having its registered office at Ballarpur, District Chandrapur. It is engaged in the business of manufacturing pulp, paper, paper board and other paper products in the industry set up sometime in the year 1947. The industrial bamboo cut is the raw material which is used in the process of manufacturing. Since 1947, there has been an agreement entered into between the State Government and the petitioner-Company to harvest bamboo from the forest area on payment of royalty as per the agreement. The first agreement was dated 31-7-1947 with the then Government of the Central Provinces and Berar, and after 1960 with the State Government. The second agreement was entered into on 10-12-1962 for the period from 14-11-1962 to 30-6-1991.
2. The agreement with which these two petitions pertain, was entered into on 11-3-2004 for a period of ten years, commencing from 1-10-2004 and ending on 30-9-2014. It was for supply of 1,81,540 metric tonnes of bamboo from the Government forest areas in the Gadchiroli and Chandrapur districts, specified in Schedules A and B to the agreement. Clauses (7) (a) and (b) of this agreement being relevant, are reproduced below :
“(7) (a) The unit of measurement for the quantities of bamboo available under this Agreement shall be “‘Metric Tonne’ (Air Dry)”. The Company shall pay to the Government sale price at the rate of Rs.650/- per A.D.M.T. (Air Dry Metric Tonne) for the quantity of bamboo made available to it for cutting and removal in accordance with Clauses 6 hereinabove, for supplies during the period from 2004- 2005 to 2008-2009. For the subsequent supply years i.e. from 2009- 2010 to 2013-2014, the Company shall pay t he sale price to be fixed with an annual escalation of 5% or the Whole Sale price Index, whichever is higher over the sale price fixed for each preceding supply year in this manner.
(b) The sale price payable by the Company to the Government hereunder for respective supply years as calculated in the manner aforesaid shall be as follows :
| Supply Year | Sale Price |
| 2004-2005 | Rs.650/- per A.D.M.T. |
| 2005-2006 | Rs.650/- per A.D.M.T. |
| 2006-2007 | Rs.650/- per A.D.M.T. |
| 2007-2008 | Rs.650/- per A.D.M.T. |
| 2008-2009 | Rs.650/- per A.D.M.T. |
| 2009-2010 | (Rs.650/- + 5% of Sale Price for 2008-2009 or the Whole Sale Price Index, whichever is higher) per A.D.M.T. |
| 2010-2011 | (Sale Price for 2009-2010 + 5% of Sale Price for 2009-2010 or the Whole Sale Price Index, whichever is higher) per A.D.M.T. |
| 2011-2012 | Sale Price for 2010-2011 + 5% of Sale Price for 2010-2011 or the Whole Sale Price Index, whichever is higher) per A.D.M.T. |
| 2012-2013 | Sale Price for 2011-2012 + 5% of Sale Price for 2011-2012 or the Whole Sale Price Index, whichever is higher) per A.D.M.T. |
| 2013-2014 | Sale Price for 2012-2013 + 5% of Sale Price for 2012-2013 or the Whole Sale Price Index, whichever is higher) per A.D.M.T.” |
3. Clause (2)(a) of the agreement defines “Bamboo” for the purposes of agreement as under :
““Bamboo” shall mean the bamboo extracted from Commercial Bamboo and Nistar Bamboo Felling Series of the concerned Forest Division which are to be used for the purpose of manufacturing pulp, paper, paper boards and other paper products.”
4. On 9-3-2009, a show cause notice was given to the petitioner regarding revision of agreement as per Rule 3(1) of the Maharashtra Supply of Forest Produce (Revision of Agreement) Rules, 1983 (for short, “the Rules of 1983”). It was proposed to fix the rate of bamboo supply at Rs.1,495/- per metric tonne instead of Rs.650/- per metric tonne, contained in clause (7) of the agreement dated 11-3-2004, for the supply in the year 2005-06. As per Rule 3(2) of the
