HINDUSTAN PAPER CORPORATION LTD. versus GOVERNMENT OF KERALA & OTHERS

Citation: [1986] 2 S.C.R. 581 · Decided: 16-04-1986 · Supreme Court of India · Bench: E.S. VENKATARAMIAH · Disposal: Appeal(s) allowed

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Judgment (excerpt)

-
581 
HINDUSTAN PAPER CORPORATION LTD. 
A 
v. 
GOVERNMENT OF KERAIA & OTHERS 
APRIL 16, 1986 
[E,S, VENKATARAMIAH AND M,P, TIIAKKAR, JJ,] 
B 
Constitution of 
India, 
1950 -
Article 19(6)(ii) -
, 
Governmant 
owned 
industry 
Necessity 
for 
grant 
of 
concessions. 
Kerala Forest Produce (Fixation of Selling Price) Act, 
1978 - Section 6 - Constitutional validity of -
Action of 
C 
1" State Governrent exemptiag Governmant companies from operation 
.>. of section 5 of the Act - Whether valid and legal. 
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 pri<:<!s of 
D 
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 
E 
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 
F 
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 4nd fixed 
the price below which forest produce covered by the Act could 
not be sold. 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
582 
SUPREME COURT REPORTS 
[1986] 2 S.C.R. 
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--{;eneral 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 -r 
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) 
-fl 
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 0-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 Ker ala 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-C) 
-
H.P. CORPN, v. GOVT. OF KERALA [VENKATARAMIAH, J,] 
583 
S. 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 effocted at a price 
less than the price notified under s, 3 of the Act. The 
notified price has 
to be

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