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TMI Blog1990 (10) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... ate from enforcing the provisions of the said Act in pursuance of the said notification in respect of the said contracts and to allow the appellants to cut and remove bamboos from the areas covered by the contracts. One of the appellants in C.A. No. 4347 of 1988, namely, Straw Products Ltd. filed Writ Petition No. 474 of 1989 under Art. 32 of the Constitution for a declaration that Ordinance No. 1 of 1989, the Orissa Forest Produce (Control of Trade) (Amendment) Act. 1989 ('Act 4 of 1989), Notification No. 6F-10/ 88/ 21691 / FFAH dated 21-9-88 (S. R.O. No. 666 of 1988) and Notification No.6F-10/88/ 21693/FFAH dated 21-9-1988 (S.R.O. No. 667 of 1988) are null and void and for certain other reliefs. The appellants, in C.A. No. 4346 of 1988, namely, Orient Paper and Industries Ltd., and another filed Writ Petition No. 1132 of 1988 (as amended in 1989) under Art. 32 of the Constitution praying for a declaration that the Orissa Forest Produce (Control of Trade) (Amendment and Validation) Act, 1987 ('Act 16 of 1987) and Orissa Forest Produce (Control of Trade) (Second Amendment) Act, 1987 ('Act 15 of 1987); Ordinance No. 1 of 1989 and the Act which replaced it (Act 4 of 1989) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract of sale of goods or a contract conferring an interest in immovable property. It was in answering that question and in coming to the conclusion that it was not a. contract of sale of goods, but a grant of an interest in immovable property, that the Court made an observation about the exemption from registration under S. 90 of the Registration Act. But whether the contract itself or any right or interest stipulated or granted or recognised under the contract was invalid for want of registration was not a question was directly or substantially in issue in that case. Whether any right or interest was granted independently of or prior to contract was not directly or even indirectly considered. We refer to this aspect of the decision in Titaghur [(1985) 3 SCR 261 because much of the challenge against the validity of the impugned provisions turns on the question as to whether the right arising under the bamboo contract was a contractual right so as to be affected by Act 22 of 1981 and the notifications issued thereunder. On this question, Titaghur (supra) is neither res judicata nor precedent. We may at this stage refer to the reliefs sought in Writ Petition No. 1132 of 1988 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [(1987 3 SCC 279] held: (AIR 1966 SC 1170) at page 292 (1987) 3 SCC: that scheme of the Act is, therefore, fully in tune with the object set out in the Statement of Objects and Reasons and in the preamble, namely, that of creating a monopoly in forest produce by making the Government the exclusive purchaser of forest produce grown in private holdings . So observing, this Court further held that the Act and the notification issued under the Act do not apply to forest produce grown in Government forests and that it was not therefore, open to the Government to treat the contract dated 25/05/1979 as rescinded. To remove the impediment created by this decision in extending the Act to contracts concerning forest produce grown on Government lands, the Act was amended we.f., 5-9-1981 by Ordinance No. 1 of: 1987, which was repealed by Act 16 of 1987, the validity of which, as stated earlier, has been upheld by this Court in M/s. Utkal Contractors and Joinery (P) Ltd. v. State of Orissa (1987 Su pp SCC751): (AIR,1987SC2310). Asaresu lt of Ordinance No. 1 of 1987 and Act 16 of 1987, the vice pointed out by this Court in Utkal Contractors and Joinery Pvt. Ltd. v. State of Orissa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3) of S. 1 of the said Act. Notification No. 6F10/88 /21693/FFAH (S. R. 0. No. 667 of 1988) says in exercise of the powers conferred upon by sub-sec. (1) of S. 4 of the. Orissa Forest Produce (Control of Trade) Act, 1981 (Orissa Act 22 of 1981) road with sub-rule (7) of R. 3 of the Orissa Forest Produce (Control of rade) Rules, 1983, the State Government do hereby appoint the Orissa Forest Corporation Ltd., as the agent for extraction of and trade in bamboo of all species, on its behalf, with effect from the first day of October, 1988 in respect of the Unit specified in the notification of the Government of Orissa No. 21695 / FFAH dt. the 2 1 st Sept., 1988 . The effect of these three notifications dated 21-9-1988 is that as from the specified date, namely, Ist October, 1988, bamboos of all species in Government forests in the State of Orissa, come within the purview of Act 22 of 1981, and all contracts for the purchase, sale etc. of bamboos grown or found in the said areas stand rescinded. The agents appointed by the Government have, in respect of the notified units, become the sole repositories of authority to purchase or transport bamboos as from 1-10-1988. We shall now re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 of 1981 was amended by Act 4 of 1989 with retrospective effect. Subsequent to this amendment. Writ Petition No. 1132 of 1988 was amended. Section 2 of the Amending Act provides: 2. In section 5 of the principal Act, for sub-section (1) excluding clause (b) and the explanations thereunder, the following shall be substituted, namely:- Under sub-section (3) of Section 1 in respect of any area,- (a) all contracts for the purchase, sale, gathering or collection of specified forest produce grown or found in the said area and all grants of profits a prendre including the right to enter upon the land, fell, cut and remove the specified forest produce from the said area, shall stand rescinded, whether such forest produce is grown or found on land owned by private persons or on land owned by the State Government or in Government forests provided that rescission of such contracts and grants shall not affect the customary rights, if any, of the local Tribals to gather and collect the specified forest produce;... This amendment, beginning with the non obstante clause, provides that, on the coming into force of Act 22 of 1981 by notification issued under Section 1 (3), all contr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich is the date specified in the Notification dated 21/09/1988, issued under Section 1(3) of Act 22 of 1981. In other words, the effect of Act 4 of 1989 is that the provisions of that Act are projected backwards and read into Act 22 of 198 1, and all the provisions of the principal Act, including the provisions added by the Amending Act, are deemed to have been on the statute book as from 5-9-1981, when the principal Act was notified in the Orissa Gazette and the principal Act, including the amended provisions, came into force only as from the date specified in the notification issued under Section 1 (3) which, s seen above, in respect of the bamboos in the areas in question, was 1-10-1988. Mr. A. K. Ganguli and Dr. Shankar Ghosh, appearing for the contractors, have raised various contentions. They submit that the right of the contractors has arisen not by reason of contract but on the strength of grant. Act 22 of 1981 rescinding contracts did not affect rights in the nature of profits a prendre although their agreements in terms stipulate that right. This question, they say, had been concluded as early as 1985 by this Court in Titaghur ((1985) 3 SCR 26). The bamboo agreements ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expression was borrowed from the agreements themselves. One of the parties to each of these agreements, namely, to Government of Orissa is referred to as the Grantor, and the other party, namely, the contractor is referred to as the company. In terms of 'the agreements. certain rights and interests came to be granted to, or vested in, the contractors. Those rights and interests were granted by, the agreements and not independent of the agreements. The Additional Solicitor General points out that Act 4 of 1989, by reason of the deem;ng provisions, must be projeted into Act 22 of 1981, as if the provisions of the later Act had been written into the earlier Act, and as it they formed part of it, as from the date of notification of the earlier Act, i.e., 5-9-1981. But the earlier Act came into force in respect of a particular forest produce in question, i.e., bamboos in all the areas covered by Governmerit forests f,.rom such date as was specified by the notification issued under Section 3(1), i.e., 1-10-1988. Even assuming, he contends, that Section 5(1), as it originally stood, did not have the effect of affecting the contractors' rights, and assuming further that their ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the nature of the right or interest that was in question, such right or interest was the creature or result of agreements between parties. What was in issue in that case was whether or not the Orissa Sales Tax Act was attracted. negativing the contentions of the Revenue, this Court held that the contracts created merely an interest in immovable property anci the amounts paid under the contracts did not represent sale or purchase of goods, and 'the Orissa Sales Tax Act was not attracted. The bamboo contracts conferred upon the contracts a benefit to arise out of land. It was a contractual right relating to immovable property and not relating to goods. This was the crucial issue that was decided in that case regarding bamboos contracts. 9. The authority of Titaghur ((1985) 3 SCR 26) is confined to matters which were ,directly and substantially in issue in that case. It is neither precedent nor resjudicata ior any other matter. What is from the various observations made in it. (Per Hegde, J., THE State of Orissa v. Sudhansu Sekhar Misra, (AIR 1968 SC 647) : (1968) 2 SCR 155, 162). As stated by one of us (Saikia, J.) in Krishena Kumar v. Union of India (JT (1990) 3 SC 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gislation has superseded all inconstant and contrary rights. No right or interst or grant, whether contractual or prerogative in character or origin, whatever be nature, source and scope, can survive a superseding valid legislation. See Attorney General v. De Keyser's Royal Hotel Limited ((1920) AC 508). In this context, the observation of the Privy Council in Thakur Jagannath Baksh Singh v. The United Provinces (AIR 1946 PC 127 para 17) is relevant at page 130; AIR 1946 PC: ... ... if once it be found that the subject matter of a Crown grant is within the competence of a Provincial Legislature nothing can prevent that Legislature from legislating about it unless the Constitution Act itself expressly prohibits legislation on the subject either absolutely or conditionally. All rights recognised under the bamboo contracts perished as from the date on which Act 22 of 1981 came into force in respect of bamboos in the areas in question, i.e., as from 1-10-1988 the date specified in terms of Section 1(8). 11. Significantly, no evidence has been placed before us to support the contention that the grant of profits a prendre arose independent of, and prior to, contract and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it; and, no further notification under Section 1 (3) in respect of Act 4 of 1989 is, therefore, required. To recall the words of Lord Asquith in this context: If you are bidden to treat an imaginary state of affairs as real, you must surely, unless prohibited from doing so, also imagine as real the consequences and incidents which if the putative state of affairs had in fact existed, must inevitably have flowed from or accompanied it... . The statute says that you must imagine a certain state of affairs; it does not say that having done so, you must cause or permit your imagination to boggle when it comes to the inevitable corollaries of that state of affairs. (East End Dwelling Co. Ltd. v. Finsbury Borough Council, 1952 AC 109). To contend that a second. notification under Section 1(3) of Act 22 of 1981 is required io bring Act 4 of 1989 into force is to cause or permit one's imagination to boggle. In Shamarao v. Parulekar V. The District Magistrate, Thana, Bombay ((1952) SCR 683): (AIR 19511 SC 23), Vivian Bose, J. stated : ... ... the rule is that when a subsequent Act amends an earlier one in such a way as to incorporate itself, or a part of 'itself, int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermine, is conditional and not delegated legislation, and that it will be valid, unless there is in the Constitution Act any limitation on its power to enact such a legislation. 13. We may in this connection set out the words of Lord Selborne in Her Majesty The Queen v. Burah ((1 877-8) 5 IA 178, 194-95) to which Venkatarama Ayyar, J. referred: To leave the time, and the manner, of carring it into effect to the discretion of the Lieutenant-Governor The proper Legislature has exercised its judgment as to place, person, laws, powers; and the result of that judgment has been to legislate conditionally as to all these things. The conditions having been fulfilled, the legislation is now absolute. Where plenary powers of legislation exist as to particular subjects, whether in an Imperial or in a provincial Legislature, they may (in their Lordships' judgment) be well exercised, either absolutely or conditionally. Legislation, conditional on the use of particular powers, or on the exeicise of a limited discretion, entrusted by the Legislature to persons in whom it places confidence, is no uncommon thing; and, in many circumstances, it may be. highly convenient... .. Venkatar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... become necessary because of rapid increase of smuggle activities in the State. All this is clear from the preamble to the Act as well as from the Statement of Objects and Reasons (published in the Orissa Gazette, Extrao rdinary No. 325, dated 17-31981). The legislative object is sought to be achieved by means of applicability of the Act; Section 4 appointing agents in respect of such units; and, Section 5 rescinding all contracts relating to forest produce and making agents the sole repositories of authority to purchase and transport forest produce specified in the notification issued under Sectioi 1(3) of the Act. Such law creating State monopoly is presumed to be reasonable and in the interests of the general pubic. The Act stipulates appointment of agents who must necessarily work strictly on behalf of the State and not for themselves. The sections as such are, therefore, not open to challenge These legislative measures are rationally related to the object sought to be achieved. 15. We see no substance in the contention that the impugned provisions have resulted in acquisition of rights in land on principles of compensation less favourable to the contractors in comparison ..... X X X X Extracts X X X X X X X X Extracts X X X X
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