Hindustan Paper Corporation Ltd. Vs.
Government of Kerala & Ors [1986] INSC 82 (16 April 1986)
VENKATARAMIAH, E.S. (J) VENKATARAMIAH, E.S.
(J) THAKKAR, M.P. (J)
CITATION: 1986 AIR 1541 1986 SCR (2) 581 1986
SCC (3) 398 1986 SCALE (1)870
CITATOR INFO:
R 1989 SC 903 (20)
ACT:
Constitution of India, 1950 - Article
19(6)(ii) Government owned industry - Necessity for grant OF concessions.
Kerala Forest Produce (Fixation of Selling
Price) Act, 1978 - Section 6 - Constitutional validity of - Action of State
Government exempting Government companies from operation of section 5 of the
Act - Whether valid and legal.
HEADNOTE:
The Kerala Forest Produce (Fixation of
Selling Price) Act, 1978 was enacted with the object of providing for the
procedure to be followed in fixing the selling prices of certain important
forest produce, for the prohibition of the sale of such forest produce at less
than the prices so fixed and for matters incidental or ancillary thereto. The
Act governs only those forests which are considered as "reserved
forests" within the meaning of Kerala Forests Act, 1961 and forests vested
in the Government under s. 3 of the Kerala Private Forests (Vesting and
Assignment) Act 1971.
Section 6 provides that the Government may in
public interest, by Notification in the Gazette, exempt the sale of any forest
produce (a) to any company owned by the Central Government or the Government of
Kerala, and (b) not exceeding 10 cubic meters, to any co-operative society
registered or deemed to be registered under the Kerala Co- operative Societies
Act, 1969 from the provisions of s. 5 subject to such conditions and
restrictions as may be specified in the Notification.
On March 9, 1979, the respondent-State
Government published a Notification exempting the appellant-company, the Kerala
State Bamboo Corporation Ltd. and the Travancore Private Industries Ltd. from
the provisions of s.5 and fixed the price below which forest produce covered by
the Act could not be sold.
582 Two private sector companies filed writ
petitions under Art. 226 questioning the constitutional validity of s.6 and the
Notification granting exemption in favour of the appellant-company and two
Government owned companies. The petitions were opposed alleging that s.6 of the
Act was constitutionally valid. At the hearing of the petitions, the Additional
Advocate-General appearing for the respondent- State Government conceded that
s. 6 of the Act was unconstitutional. The High Court, therefore, held that s. 6
of the Act was violative of Art. 14 and struck down the same as well as the
Notification.
The appellant-company filed appeals to this
Court.
Though no appeal was filed by the State
Government, at the hearing the counsel for respondent-State Government stated
that the concession made by the counsel for the State before the High Court,
was incorrect and supported the validity of s.6 of the Act and the Notification
granting exemption.
Allowing the appeals, ^
HELD: 1. The decision of the High Court that
s. 6 of the Kerala Forest Produce (Fixation of Selling Price) Act, 1978 was
violative of Art. 14 of the Constitution is liable to be set aside. [595 C]
2. Section 6 of the Act confers the power on
the State Government to grant exemption from the provisions of s. 5 of the Act.
The power conferred under s. 6 is not unfettered.
The Government can grant the exemption only
in the public interest. Such exemption can be granted only to a company owned
by the Central Government or the Government of Kerala.
[590 D-E]
3. Under cl. (b) of s.6 any sale of forest
produce not exceeding 10 cubic meters effected in favour of any co- operative
society registered or deemed to be registered under the Kerala Co-operative
Societies Act 1969 may be exempted from s. 5 of the Act by the State
Government. [590 E]
4. While issuing the notification granting
exemption it is open to the State Government to impose appropriate conditions
and restrictions. The State Government has to bear in mind the entire policy
and the object of the Act before exercising its power under s. 6. [590 F-G] 583
5. So far as consumers of forest produce who
are not A granted any exemption under s.6 are concerned any sale of forest
produce in their favour cannot be effected at a price less than the price
notified under s. 3 of the Act. The notified price has to be fixed on the basis
of the recommendation of the Expert Committee constituted under s.4 and the
Expert Committee is required to take into consideration the market price of the
forest produce, the cost of regenerating and maintaining the forest produce in
cases where regeneration is necessary after selling the forest produce and such
other materials as may be prescribed. Section 5 provides that the forest
produce covered by the Act shall not be sold at a price less than the price
which is determined on the basis of various factors, therefore, the consumers
cannot have any grievance.
They cannot claim that they must be shown any
concession and that the forest produce should be made available to them at a
price which would be lower than the market prices. Even when it is stated that
any company owned by the Central Government or the Government of Kerala or a
co-operative society may be supplied forest produce without the constraint
contained in s.5, it does not mean that the forest produce would be made
available to them at throw-away prices. It is reasonable to expect that the
price payable for the forest produce in question by the Government companies or
co-operative societies would be determined after negotiations having regard to
the public interest. [591 F-H; 592 A-C] E
6. In almost all the statutes by which the
fiscal or economic interests of the State are regulated provision for granting
exemption in appropriate cases would have necessarily to be there and the power
to grant exemption is invariably conferred on the Government concerned. [592
C-D]
7. It has now become a well-recognised and
constitutionally accepted legislative practice to incorporate provisions
conferring the powers of exemption on the Government in such statutes. Such
exemptions cannot ordinarily be granted secretly. A Notification would have to
be issued and published in the Gazette and it would be subject to the scrutiny
by the Legislature. The power can be exercised only in the public interest as
provided by the section itself. The validity of provisions conferring the power
of exemption has been consistently upheld by this Court. [592 E-F] 584 State of
Bombay and Another v. F.N. Balsara [1951] S.C.R. 682, relied upon.
8. The Government undertakings and companies
form a class by themselves since any profit that they may make would in the end
result in the benefit to the members of the general public. The profit, if any,
enriches the public coffer and not the private coffer. The role of industries
in the public sector is very sensitive and critical from the point of view of
national economy. Their survival very often depends upon the budgetary
provision and not upon private resources which are available to the industries
in the private sector. They are often established to break the power of
strangulation on economy which the industries in private sector may have
developed and may be using to choke the industrial growth of the country. An
exemption or a concession might provide them some breathing time or settling
down time. It may be treated as a subsidy at the worst. This appears to be the
policy behind Article 19(6)(ii) of the Constitution. In appropriate cases in
order to place an industry owned by the Government on an enduring basis in the
national interest, some concession may have to be shown to it. [592 H; 593 A-D]
9. The action of the State Government in
exempting the Government Companies from the operation of 8.5 does not in the
instant case amount to the exclusion of the industries in the private sector
from their business nor does it deny the usual supplies of forest produce used
as raw-materials by these industries. The Government is not shown to be taking
any undue advantage of the monopoly it enjoys as the owner of the forests and
the position it holds as the sole supplier in forest produce in fixing the
minimum prices in order to preserve the national wealth from being wasted away.
There fore, it cannot be said that the provision is either arbitrary or
unreasonable even though the Government industries may be rivals in trade to
the industries in the private sector. [593 E-G] Sher Singh v. Union of India
& Ors., [1984] 1 S.C.R. 464; Viklad Coal Merchant, Patiala & Ors. v.
Union of India Ors., [1984] 1 S.C.R. 657 and Fatehchand Himmatlal & Ors. v.
State of Maharashtra etc., [1977] 2 S.C.R. 828, relied upon.
State of Rajasthan v. Mukanchand & Ors.,
[1964] 6 S.C.R. 903, referred to. 585
10. Preference shown to Government companies
under 8. 6 A of the Act cannot be considered to be discriminatory as they stand
in a different class altogether and the classification made between the
Government companies and others for the purposes of the Act is a valid one.
Same is the case with the class which gives power under 8.6 of the Act to the
Government to exempt sales of forest produce in favour of co-operative
societies upto the limit mentioned therein. [594 E-F] P.V. Sivarajan v. The
Union of India and Anr., [1959] Suppl. 1 S.C.R. 779 and Orient Weaving Mills
(P) Ltd. v. The Union of India, [1962] Suppl. 3 S.C.R. 481, relied upon.
11. In the instant case, the writ petitioners
on whom the burden lay have not given any valid reason as to why it should be
held that impugned notification was not in the public interest. In the absence
of material it cannot be held that the impugned notification was not in the
public interest. [595 C-D]
CIVIL APPELLATE JURISDICTION: Civil Appeal No.
1871-76 of 1981.
From the Judgment and Order dated 15.4.1981
of the Kerala High Court in O.P. Nos. 6, 7, l005 1153, 1154 and 1345 of 1981. E
Dr. Y.S. Chitale, M. Ramchandran, Mrs. Shanta Vasudevan, P. Parameswaran and
A.S. Nambiar for the Appellant.
T.S. Krishnamurthy Iyer and P.K. Pillai for
the Respondents. F The Judgment of the Court was delivered by 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') The appellant Hindustan Paper Corporation Ltd. is a company owned by the
Central Government carrying on the 586 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 regeneration of the forest in the areas, the Chief
Conservator of Forests, Kerala State was required in consultation with the
appellant to prepare and implement a scientific management plan which would
include fireprotection and epidemic control programmes. The appellant agreed to
pay to the Government of Kerala royalty for the raw materials supplied to the
appellant at the rate of Rs.11 per tonne of green wood of eucalyptus grandis
and eucalyptus tereticornis (both with 50 per cent moisture) and at the rate of
Rs.12 per tonne of green reeds with 50 per cent moisture. There were several
other conditions in the agreement with which we are not concerned in these
cases.
After the above agreement was entered into
the appellant established its factory. The Punalur Paper Mills Ltd. and the
Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd. which were companies in the
private sector had also established their factories in the State of Kerala
which consumed forest produce as raw-material. The Kerala State Bamboo
Corporation Limited and the Travancore Plywood Industries Limited which were
owned by the Government of Kerala were also carrying on business in the State
of Kerala.
In the year 1978 the Act was passed by the
Kerala Legislature with the object of providing for the procedure to be
followed in fixing the selling prices of certain important forest produce, for
the prohibition of the sale of such forest produce at less than the prices so
fixed and for matters incidental or ancillary thereto. The Act was also
intended to provide for the proper regeneration and maintenance of the forests
in the State. The Act governs only those forests which 587 are considered as
reserved forests within the meaning of A Rerala Forest Act, 1961 and forests
vested in the Government under section 3 of the Kerala Private Forests (Vesting
and Assignment) Act, 1971. It provides for the determination of the selling
price of certain forest produce specified in clause (c) of section 2 of the
Act. Section 3 of the Act requires the Government to notify in the Gazette
before the end of each financial year the selling price of every forest produce
for the following financial year. The notified price has to be fixed by the
Government after taking into consideration the recommendations of the Expert
Committee consisting of the officers mentioned in section 4(2) of the Act.
Sub-section (3) of section 4 of the Act requires the Expert Committee to make
its recommendation having regard inter alia to the market price of the forest
produce, the cost of, regenerating and maintaining the forest produce in cases
where regeneration is necessary after selling the forest produce; and such
other matters as may be prescribed.
Section 5 is the crucial section in the Act.
It reads as follows:
"5. Forest produce to be sold at price
not less than the selling price - (1) After the date of the publication of the
notification under sub-section (2) of section 3, no forest produce shall be
sold by the Government or any forest officer at a price which is less than the
selling price of that forest produce.
(2) The sale of any forest produce in
contravention of sub-section (1) shall be null and void and shall not he
enforceable in a court of law." There is no prohibition of sale of forest
produce at prices higher than the prices mentioned in the notification.
Section 7 of the Act provides that 10 per
cent of the amount obtained by the sale of forest produce after the
commencement of the Act, subject to such rules as may be made under the Act,
should be set apart for being utilised for the development of forests. Section
8 enables the Government to make rules for the purpose of carrying into effect
the provisions of the Art. We are concerned in these cases with the validity of
section 6 of the Act which reads thus :
588 "6. Exemption - The Government may,
in the public interest, by notification in the Gazette, exempt the sale of any
forest produce - (a) to any company owned by the Central Government or the
Government of Kerala;
(b) not exceeding ten cubic meters, to any
co- operative society registered or deemed to be registered under the Kerala
Co-operative Societies Act, 1969 (21 of 1969) from the provisions of section 5,
subject to such conditions and restrictions as may be specified in the
notification." The Act came into force on its publication, i.e., on
September 26, 1978. On March 9, 1979 the Government of Kerala published a
notification exempting the appellant, i.e., Hindustan Paper Corporation Ltd.,
the Kerala State Bamboo Corporation Limited and the Travancore Plywood
Industries Limited from the provisions of section 5 of the Act. The relevant
part of the Notification and the Explanatory Note attached to it are given
below:
"No. G.O. (MS) lOO/79/AD Dated,
Trivandrum 9th March, 1979 S.R.O. No. 313/79:- In exercise of the powers
conferred by section 6 of the Kerala Forest Produce (Fixation of Selling Price)
Act, 1978 (29 of 1978), the Government of Kerala, being satisfied that it is
necessary so to do in the public interest, hereby exempt the sale of any forest
produce to the Kerala Newsprint Project under the Hindustan Paper Corporation,
the Kerala State Bamboo Corporation and the Travancore Plywood Industries,
Punalur from the provisions of section 5 of the said Act.
By order of the Governor K.V. Vidhyadharan
Additional Secretary to Govt.
589 EXPLANATORY NOTE After Government have
notified selling price of Forest Produce under section 3 of Act 29 of 1978,
Forest Produce cannot be sold at prices less than the selling price. Under
section 6 of the Act, Government can exempt in public interest, by
Notification, the sale of any Forest Produce to companies owned by the Central
Government, by Government of Kerala. As Kerala Newsprint Project, Bamboo
Corporation and the Tranvancore Plywood Industries, Punalur are undertakings of
the Central Government and the Government of Kerala respectively, it is
considered expedient to exempt these from the provisions of section 5 of the
Act.
The Notification is intended to achieve the
above purpose." The State Government issued the Notification under section
3 of the Act fixing the price below which forest produce covered by the Act
could not be sold. Aggrieved by the Notification granting exemption to the
Government companies, the two companies in the private sector, namely, Punalur
Paper Mills Limited and the Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd.
filed writ petitions in the High Court questioning the constitutional validity
of section 6 and the Notification granting exemption thereunder in favour of
the appellant Hindustan Paper Corporation Ltd. and two other companies owned by
the Government of Kerala.
The writ petitions were opposed by the
Government of Kerala, the appellant Hindustan Paper Corporation Ltd., the
Kerala State Bamboo Corporation Ltd. and the Tranvancore Plywood Industries
Ltd. In the counter-affidavit filed on behalf of the Government of Kerala the
contentions urged by the petitioners in the writ petitions were refuted and the
State Government took the stand that section 6 of the Act was constitutionally
valid. At the hearing of the writ petitions before the High Court, the
Additional Advocate General who appeared for the State Government conceded that
in his opinion section 6 of the Act was unconstitutional. Perhaps what he meant
was that he was not able to offer any good answer to the contentions urged by
the other side in support of the challenge to the constitutionality of the
concerned provision. A reference to 590 this concession which was neither here
nor there is found at the end of paragraph 22 of the judgment of the High
Court.
The High Court held that sec. 6 of the Act
was violative of Art. 14 of the Constitution and struck it down along with the
Notification. No appeal was filed by the State Govt. The above appeals are
filed by the Hindustan Paper Corporation Ltd. the appellant herein which is one
of the beneficiaries of the Notification granting exemption. But, at the
hearing of these appeals in this Court the learned counsel for the Government
of Kerala stated that the concession made by the learned counsel for the State
before the High Court was incorrect, and supported the validity of section 6 of
the Act and the Notification granting exemption issued thereunder.
These appeals are filed against the judgment
of the High Court after obtaining the leave of this Court under Article 136 of
the Constitution. Section 6 of the Act has already been set out above. It
confers the power on the State Government to grant exemption from the
provisions of section 5 of the Act. The power conferred under section 6 of the
Act is not unfettered. The Government can grant the exemption only in the
public interest. Such exemption can be granted only to a company owned by the
Central Government or the Government of Kerala. There is also, however, a
provision in clause (b) of section 6 of the Act, which ununderstandably has
also been struck down by the High Court, even though its validity has not been
expressly challenged. Under this provision any sale of forest produce not
exceeding ten cubic meters effected in favour of any co- operative society
registered or deemed to be registered under the Kerala Co-operative Societies
Act, 1969 may be exempted from section 5 of the Act by the State Government.
While issuing the notification granting
exemption it is open to the State Government to impose appropriate conditions
and restrictions. The State Government, of course, has to bear in mind the
entire policy and object of the Act before exercising its power under section 6
of the Act. At the outset it should be observed that the decision of the High
Court to the extent it has quashed clause (b) of section 6 of the Act which
gave power to the State Government to exempt the sale of any forest produce in
small quantities not exceeding 10 cubic meters to any co-operative society is
liable to be set aside straightaway without anything more as there was no
challenge to that part of the section at all and the High Court has not 591 at
all scrutinized the constitutional validity of this provision.
The reasons given by the High Court for
quashing section 6 of the Act are these :
(1) if the Government is given a power to
sell the produce at a lower price than the notified rate to the Government
companies it will enable the Government to cripple or in slow degrees to
eliminate the other consumers in the field. This conferment of power on the
state Government is discriminatory and unreasonable, (2) a Government company
is as such a legal entity as any other entity. It is a commercial corporation
acting on its own behalf and all consumers of the forest produce should have an
equal opportunity to get the goods. The Government company could not,
therefore, be given any favour, (3) there is no nexus between the object to be
achieved by the Act and the exemption to be granted in favour of the Government
companies, and (4) the submission made by the Additional Advocate General to
the effect that he could not support the validity of section 6 of the Act.
We find it difficult to accept the grounds on
which the High Court has held section 6 of the Act to be unconstitutional. So
far as consumers of forest produce who are not granted any exemption under
section 6 of the Act are concerned, any sale of forest produce in their favour
cannot be effected at a price less than the price notified under section 3 of
the Act. The notified price has to be fixed on the basis of the recommendation
to be made by the Expert Committee constituted under section 4 of the Act and
the Expert Committee is required to take into consideration the market price of
the forest produce, the cost of regenerating and maintaining the forest produce
in cases where regeneration is necessary after selling the forest produce and such
other matters as may be prescribed. If section 5 of the Act provides 592 that
the forest produce covered by the Act shall not be sold at a price less than
the price which is determined on the basis of the factors referred to above
which appear to bequite relevant they cannot have any grievance. They cannot
claim that they must be shown any concession and that the forest produce should
be made available to them at a price which would be lower than the market
price. Even when it is stated that any company owned by the Central Government
or the Government of Kerala or a co-operative society (subject to the limit as
regards the quantity of forest produce to be supplied) may be supplied forest
produce without the constraint contained in section 5 of the Act, it does not
mean that the forest produce would be made available to them at throw-away
prices. It is reasonable to expect that the price payable for the forest
produce in question by the Government companies or co-operative societies would
be determined after negotiations having regard to the public interest. In
almost all the statutes by which the fiscal or economic interests of the State
are regulated, provision for granting exemption in appropriate cases would have
necessarily to be there and the power to grant exemption is invariably
conferred on the Government concerned. The Legislature which is burdened with
heavy legislative and other types of work is not able to find time to consider
in detail the hardships and difficulties that are likely to result by the
enforcement of the statute concerned. It has, therefore, now become a
well-recognised and constitutionally accepted legislative practice to
incorporate provisions conferring the powers of exemption on the Government in
such statutes. Such exemptions cannot ordinarily be granted secretly. A
notification would have to be issued and published in the Gazette and in the
ordinary course it would be subject to the scrutiny by the Legislature. The
power can be exercised only in the public interest as provided by the section
itself. The validity of provisions conferring the power of exemption has been
consistently upheld by this Court in a number of decisions commencing with the
State of Bombay and Anr. v. F.N. Balsara, [1951] S.C.R. 682. The next question
is whether section 6 of the Act which restricts the power of the Government to
grant exemption to companies owned by the Central Government or the Government
of Kerala and to co-operative societies only is valid. As far as Government
undertakings and companies are concerned, it has to be held that they form a
class by themselves since any profit that 593 they may make would in the end
result in the benefit to the members of the general public. The profit, if any,
enriches the public coffer and not the private coffer. The role of industries
in the public sector is very sensitive and critical from the point of view of
national economy. Their survival very often depends upon the budgetary
provision and not upon private resources which are available to the industries
in the private sector. They are often established to break the power of
strangulation on economy which the industries in private sector may have
developed and may be using to choke the industrial growth of the country. An
exemption or a concession might provide them some breathing time or settling
down time. It may be treated as a subsidy at the worst. This appears to be the
policy behind Article 19(6)(ii) of the Constitution. In appropriate cases in
order to place an industry owned by the Government on an enduring basis in the
national interest, some concession may have to be shown to it. It is neither
alleged nor established that if the exemption is annulled the petitioners will
be richer by a single paise or if it is retained they will be poorer by a single
paise. The only purpose hinted at is that if the public sector is made to pay
more, it may use less raw- material which in turn might be available to the
private sector. Not a very laudable purpose to say the least of it.
The action of the State Government in
exempting the Government companies from the operation of section 5 of the Act
does not in the instant case amount to the exclusion of the industries in the
private sector from their business nor does it deny the usual supplies of
forest produce used as raw-material by these industries as alleged by them. The
Government is not shown to be taking any undue advantage of the monopoly it
enjoys as the owner of the forests and the position it holds as the sole
supplier of forest produce in fixing the minimum prices in order to preserve
the national wealth from being wasted away. In the circumstances of this case
it cannot be said that the provision is either arbitrary or unreasonable even
though the Government industries may be rivals in trade to the industries in
the private sector. In Sher Singh v. Union of India & Ors., [1984] 1 S.C.R.
464 this Court has upheld section 47 (H) of the Motor Vehicles Act, 1939 under
which a statutory preference is shown to a State Transport Undertaking. In
Viklad Coal Merchant, Patiala & Ors. v. Union of India & Ors., [1984] 1
S.C.R. 657, the preference shown to the Government in 594 allotment of railway
wagons for transporting coal has been upheld. Learned counsel for the
respondents however depended upon the decision of this Court in State of
Rajasthan v.
Mukanchand & Ors., [1964] 6 S.C.R. 903 by
which an exemption granted in respect of debts due to the State or a scheduled
bank from the operation of section 2(e) of the Jagirdar's Debt Reduction Act,
1937 was held to be in conformity with the object of the Act and so violative
of Article 14 of the Constitution. That case depended on the facts and
circumstances surrounding the statute in question. We may refer here to the
decision of this Court in Fatehchand Himmatlal & Ors. v. State of
Maharashtra etc., [1977] 2 S.C.R. 828 where it is observed at page 849 thus :
"There is no merit in the plea.
Liabilities due to government to local authorities are not tained with
exploitation of the debtor. Likewise, debts due to banking companies do not
ordinarily suffer from the overreaching, unscrupulousness or harsh treatment.
Moreover, financial institutions have, until recently, treated the villages and
urban worker and petty farmer as untouchables and so do not figure in the
picture. To exempt the categories above referred to is reasonable." Hence
preference shown to Government companies under section 6 of the Act cannot be
considered discriminatory as they stand in a different class altogether and the
classification made between Government companies and others for the purposes of
the Act is a valid one. Same is the case with the clause which gives power
under section 6 of the Act to the Government to exempt sales of forest produce
in favour of co-operative societies upto the limit mentioned therein. In P.V.
Sivarajan, v. Union of India & Anr., [1959] Suppl. 1 S.C.R. 779 the
exemption granted in favour of traders carrying on export business in a small
scale who formed co-operative societies was upheld. In Orient Weaving Mills (P)
Ltd. v. Union of India, [1962] Suppl. 3 S.C.R. 481 this Court upheld the
exemption granted in favour of power- loom weavers in a cooperative society
from the levy of central excise duties. We do not find any substance in the
contention that the provision granting exemption in favour of Government
companies and the co-operative societies as stated above is 595
unconstitutional. We must, however, express our dis-approval of one of the
reasons given by the High Court for striking down section 6 of the Act, namely,
"private sector consumers generally show more concern in the speedy
production of goods, in the finished products and in the sale of them which is
in public interest as well." The above observation is not warranted and is
presumably based on the personal opinion of the learned judges. It is
misleading and cannot in the circumstances of the case serve as a prop to
support the contention of the respondents.
Therefore, the decision of the High Court
that section 6 of the Act was violative of Article 14 of the Constitution is
liable to be set aside. We do not also approve of the finding of the High Court
that even assuming that the section was valid, the notification issued there under
was invalid. It may be stated here that the writ petitioners on whom the burden
lay have not given any valid reason as to why we should hold that the impugned
notification was not in the public interest. As mentioned earlier the
appellant, Hindustan Paper Corporation Ltd. established its factory after
entering into an agreement with the State Government as regards the regular
supply of raw-material from the forests in the State of Kerala for production
of newsprint and that the said factory was employing a large labour force. The
other two concerns in whose favour the exemption is granted by the impugned
notification are the concerns of Kerala Government itself. We have no material
in this case to hold that the impugned notification was not in the public
interest. We accordingly set aside the finding recorded by the High Court on
the validity of the notification also.
In the result, we allow the appeals, set
aside the judgment of the High Court and dismiss the writ petitions filed in
the High Court. There shall, however, be no order as to costs.
A.P.J. Appeals allowed.
Back
