1987 (5) TMI 369 - SC - Indian Laws

Summary

Issues Involved:
1. Applicability of the Orissa Forest Produce (Control of Trade) Act, 1981 to forest produce grown in Government forests.
2. Interpretation of Section 5(1) of the Act.
3. Validity of contracts under Explanation II to Section 5(1).

Summary:

1. Applicability of the Orissa Forest Produce (Control of Trade) Act, 1981 to forest produce grown in Government forests:
The appellants argued that the Orissa Forest Produce (Control of Trade) Act, 1981 was intended to create a monopoly in forest produce for the Government and should only apply to forest produce grown on private lands, not Government forests. The Court examined the Statement of Objects and Reasons, which highlighted the need to prevent smuggling of forest produce grown on private lands, and noted that sal seeds were explicitly mentioned as being grown only in Government forests. The Court concluded that the Act was not intended to apply to forest produce grown in Government forests.

2. Interpretation of Section 5(1) of the Act:
Section 5(1)(a) states that all contracts for the purchase, sale, gathering, or collection of specified forest produce in the specified area shall stand rescinded. Section 5(1)(b) restricts the purchase and transport of specified forest produce to the State Government, its officers, or agents. The Court held that these provisions, when read with the rest of the Act, were intended to apply to forest produce grown on private lands. The Court emphasized the need to interpret the statute in light of its context and purpose, which was to create a monopoly in forest produce for the Government by controlling produce grown on private lands.

3. Validity of contracts under Explanation II to Section 5(1):
Explanation II to Section 5(1) states that the purchase of specified forest produce from the State Government or its officers or agents shall not be deemed to be a purchase in contravention of the Act. The Court found that this explanation did not save the contracts in question because the Act did not apply to forest produce grown in Government forests. Therefore, the contracts between the appellants and the State Government were not rescinded by the notification issued under the Act.

Conclusion:
The Supreme Court declared that the Orissa Forest Produce (Control of Trade) Act, 1981 and the notification issued under it did not apply to forest produce grown in Government forests. Consequently, the contracts between the appellants and the State Government were not rescinded. The appeals were allowed, and the parties were directed to work out their rights in light of this declaration, considering the interim orders issued during the litigation.