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1981 Supreme(MP) 766
IN THE HIGH COURT OF MADHYA PRADESH
G. P. SINGH, FAIZANUDDIN, JJ.
M. P. OIL EXTRACTION PVT. LTD., RAIPUR, M. P. – Appellant
Versus
STATE OF M. P. – Respondent
Misc. Petn. No. 559 of 1981
Decided On : 21-08-1981
Important Points
Subject
Constitutional Law - Article 226
Act Referred
MADHYA PRADESH VAN UPAJ VYAPAR VINIYAMAN ADHINIYAM : S.2(d), S.12
Headnote
RESERVATION OF SAL SEED - MADHYA PRADESH VAN UPAJ (VYAPAR VINIYAMAN) ADHINIYAM, 1969 - INDUSTRIAL POLICY - DISCRIMINATION - CLASSIFICATION - CONCESSIONS TO NEW UNITS - CO-OPERATIVE SOCIETIES - CONTRACTUAL RIGHTS - AVAILABILITY OF RAW MATERIAL - MALA FIDES - SUMMARY: The Madhya Pradesh High Court examined the validity of reservations made by the State Government for the supply of Sal seed to certain industrial units, challenging the alleged discrimination against existing units. The Court analyzed the relevant provisions of the Madhya Pradesh Van Upaj (Vyapar Viniyaman) Adhiniyam, 1969, and the industrial policy adopted by the Government. It held that the classification of old and new units was reasonable and justified the differential treatment in terms of reservations. The Court also upheld the reservation in favor of a cooperative society, recognizing the benefits and concessions granted to such societies as promoting social justice. The Court rejected the petitioners' claim for relief based on an alleged concluded contract for the supply of Sal seed, emphasizing that contractual rights cannot be enforced under Article 226 of the Constitution. The Court further dismissed the petitioners' contention that there was insufficient raw material available for existing units, noting the potential for increased production with the growth of new units. The Court dismissed all petitions without any order as to costs.
Fact of the Case:
The petitioners, owners of solvent extraction plants, challenged the State Government's reservation of Sal seed for certain industrial units, alleging discrimination against existing units. They sought quashing of the reservations and similar reservations in their favor or execution of a formal agreement for the supply of Sal seed.
Finding of the Court:
The Court held that the classification of old and new units was reasonable and justified the differential treatment in terms of reservations. It upheld the reservation in favor of a cooperative society, recognizing the benefits and concessions granted to such societies as promoting social justice. The Court rejected the petitioners' claim for relief based on an alleged concluded contract for the supply of Sal seed, emphasizing that contractual rights cannot be enforced under Article 226 of the Constitution. The Court further dismissed the petitioners' contention that there was insufficient raw material available for existing units, noting the potential for increased production with the growth of new units.
Issues: 1. Whether the reservation of Sal seed for certain industrial units was discriminatory against existing units? 2. Whether the classification of old and new units was reasonable and justified the differential treatment in terms of reservations? 3. Whether the reservation in favor of a cooperative society was valid? 4. Whether the petitioners' claim for relief based on an alleged concluded contract for the supply of Sal seed was maintainable under Article 226 of the Constitution? 5. Whether there was sufficient raw material available for existing units?
Ratio Decidendi: 1. The classification of old and new units was reasonable and justified the differential treatment in terms of reservations, as it aimed to encourage new units and increase production of Sal seed. 2. The reservation in favor of a cooperative society was valid, as cooperative societies stand as a class and benefits granted to them ultimately benefit persons of small means and promote social justice. 3. The petitioners' claim for relief based on an alleged concluded contract for the supply of Sal seed was not maintainable under Article 226 of the Constitution, as contractual rights cannot be enforced under this provision. 4. The contention that there was insufficient raw material available for existing units was dismissed, as the potential for increased production with the growth of new units was recognized.
Final Decision: All petitions were dismissed without any order as to costs.
Advocate Appeared:
For the Appellant : N. S. Kale.
For the Respondent: Y. S. Dharmadhikari, M. M. Sapre, S. L. Saxena
JUDGMENT :
G. P. SINGH, J.
1. This order shall also dispose of Misc. Petitions Nos. 525, 592 and 650 all of 1981.
2. The petitioners in all these petitions are owners of solvent extraction plants. The solvent extraction plants of the petitioners in Misc. Petitions Nos. 525, 559 and 650 are located at Raipur and of the Petitioner in Misc. Petition No. 592 at Bilaspur. The petitioners use sal seed as raw material for extraction of sal oil. The petitioners also use rice bran, oil cakes and groundnut for extraction of other oils. The industrial units of the petitioners were set up long back. The dispute in these petitions relates to orders of reservation of sal seed made by the State Government.
3. Sal forests in the State are divided into 190 units. By order dated 21st April 1981, 66 units were reserved for the Madhya Pradesh State Co operative Marketing Federation Limited, for short, Marketing Federation which is an APEX Co-operative Society. By another order dated 6th February 1981, 27 units were reserved in favour of M/s. Sal Udyog Pvt. Ltd., for short, Sal Udyog who have established a new industrial plant for extraction of Sal oil and with whom the Goverment entered into an agreement on 30th August 1979 for supply of Sal seed for a period of twelve years. The remaining 94 units were disposed of by inviting tenders in accordance with the policy decision of the Government taken on 13th April 1981. The yearly produce of Sal seed from all the units for the year 1981 was estimated at 54,000 tonnes. The State Government also entered into an agreement for supply of Sal seed for a period of twelve years with M/s. Bastar Oil Products Pvt. Ltd., for short, Bastar Oil Products on 5th October 1979. The agreement is of the same nature as with Sal Udyog. Bastar Oil Products have not yet gone in production. There was, therefore, no reservation made in their favour for the year 1981.
4. Bastar Oil Products and Marketing Federation have been joined as parties only in Misc. Petitions Nos. 559 and 650 of 1981. Sal Udyog are parties in all the four petitions. All the petitioners pray for quashing of the reservation made in favour of Sal Udyog. The petitioners in Misc. Petitions Nos. 650 and 559 of 1981 also pray for quashing of reservations made in favour of Bastar Oil Products and Marketing Federation. The petitioners pray that the area reserved in favour of all these parties be disposed of by auction or by inviting tenders. In the alternative, the petitioners pray that similar reservation should be made in their favour. In Misc. Petition No. 650 of 1981, there is also an alternative prayer for directing execution of a formal deed of agrement for supply of 8000 tonnes of Sal seed for four years "on the basis of a concluded contract. There is a further prayer in Misc. Petition No. 650 of 1981 for quashing of notification dated 22nd April 1981 by which the Government has invited applications for establishment of new solvent extraction plants in the districts of Surguja, Raigarh and Bilaspur. with the assurance of supply of 10,000 tonnes of Sal seed per year.
5. Sal seed is a forest produce as defined in section 2(d) of the Madhya Pradesh Van Upaj (Vyapar Viniyaman) Adhiniyam, 1969. The State Government has monopoly for collection and purchase of Sal seed. Forest produce purchased by or belonging to the Government is sold or disposed of in such manner as the Government may direct (see section 12). Manufacturers, traders and consumers of forest produce fare required to be registered under section 11. Retail business in any forest produce cannot be carried on except under a licence granted under section 13.
6. The relevant information relating to industrial policy for forest-based industries in Madhya Pradesh is available from the report of a committee appointed by the Government which was published in May 1977. Sal forests in the State are mostly located in Bastar, Mandla, Balaghat, Raipur, Raigarh, Bilaspur, Surguja, Sidhi and Shahdol districts which for
