Report No. 108

2.11. State of Kerala v. Gwalior Rayons.-

The validity of the Kerala Private Forests (Vesting and Assignment Act, 1971, was challenged in this case1 by owners or lessees of large tracts of forest lands. One of the contentions was that the respondent Company established itself in Kerala for production of rayon cloth pulp from raw material supplied by Government, that the Government was unable to supply the raw material and by an agreement undertook not to legislate for the acquisition of private forests for a period of 60 years if the company purchased forest lands for the supply of raw materials, that the respondent did purchase a large tract and therefore, the agreement not to legislate should operate as equitable estoppel against the Government. The Court held:

"We do not see how an agreement of the Government can preclude legislation on the subject. The High Court has rightly pointed out that the surrender by the Government of its legislative powers to be used for public cannot avail the company or operate against the Government as equitable estoppel."

1. AIR 1973 SC 2734.