LexKASTORI LAL LAKSHMI REDDY versus STATE OF JAMMU AND KASHMIR & ANOTHER
Open in Lexace · Ask the AI about this caseJudgment (excerpt)
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KASTOR! LAL LAKSHMI REDDY
v.
. •
STATE OF JAMMU AND KASHMIR & ANOTHER
A
May 9, 1980
~
8
[P. N, BHAGWATI, V. D. TULZAPURKAR AND R. S. PATHAK, JJ.]
Government co11tracts-Limita1ions -on the Government to gr(lll.t contracts
-Test of reasonableness-Concept of reasonableness and concept of public
interest, explained-Articles 14 & 19 of the Constitution.
Resin is a forest produce extracted from certain pieces of trees popularly
/
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known as Chir trees. The process of extraction is called tapping, involves -"\
several steps, and requires elnployment of skilled labour and involves a consi-
derable a.mount of expenditure. The State of J ammu & Kashmir started tapp-
ing operation in respect of its Chir trees since about 1973 by giving contracts
to private parties for extraction and collection ·of resin. The contracts were
of three types; one was contract on wage basis commonly known as wage· con-
tract which was given by auctioning the blazes to the person who was prepar-
D
ed. to undertake the work of extraction and Co11ection of resin at the lo"WeSt
rates of labour charges and in such contract the entire resin extracted
and
d.uected by the contractor would belong to the State and the contractor would
be entitled only to the wage or labour charges for ex.traction and collection of
resin; the second type of contract was on the basis of royalty without load and
under this contract which was given by auction stipulating for payment
<:I.
royalty per blaze, the entire resin extracted and collected by the contractor
. E
'WDuld belong to him and .he would be free to .sell or process it as he likes; the
"I
tmro type of contract ,... on the basis of royalty with load and under this
contract which was also given by auction. the royalty was payable per blaze and
out of resin extracted and collected by the companies, a certain
pa.rt would
have to be surrendered to tho Sta.le, while the balance wonld remain with !he •
contractor.
Esery year, the State auctioned the blazes in the different forests within .its
territory and about 40 per cent of the forests were given on royalty basis, some{
wlth load and some without load, while the balance of about 60 per cent were.
given on wage coiitrac:t ·basis.
Most of the contractors bidding at the auction'
were having their factories outside Jarnmu & Kashmir ·either in U.P. or
in
Punjab. The State in furtherance of its policy to bring about rapid industria, ·
· lisation decided that from the year 1979-80 onwards the resin extracted from its
£oreots should not be allowed to be exported outside the territories of the State
and should be utilised only by industries set up -within the State. The State, in
fact, entered into contracts with three manufacturers, namely, P.rabhat Turpen-
tine & Synthetics Pvt. Ltd., Dujedwala Resin and Turpentine Co. Ltd.
and
'l'ine Chemieals Ltd. Under these oontracts the three manufacturera agreed to
set up factories in the State for the manufacture of resin twpentine end other
derh·atives and the State agreed to make available to them respectively
an
·e=red supply of 4000, 3 500 and 8000 metric tonnes of resin per year. The
·H State had also commitments to supply reSin: to its· own··concerns namely, J&K.
Industries Ltd. which was running a factory for manufacture of resin and tur-
pentine a1 also to various small scale units which are set up in the State. Since
KAStURI LAL LAKSHMI Rl!Dl>Y V. STAT!! OF .r. & K·
1339
1!1e total requirement of theee 24,000 metric tonnes a.lways fell abort it wu
A
deeided at a meeting held on 9th Deoember, 1976 of .the .Forest officials that
the increue of target of production could be achievi:d only through replace-
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ment of royalty contracts by wage contracts wherever possible and hence Jn
future blazes should be auotionecl for tapping only on was• contract baiis.
There were certain forests in Resin and Ramban Division of the State which
was out of access on account of their distance from the roads and so were some
torests in the Poonch Division near the line of actual control and there were
· 1,28,856 blazes situated in the lower regions of inaccessible forests and
no
·contractors could be fowid ·for taking tapping contracts even on the basis of
royalty without load for blazes in the higher regions of the inacoesoible areas.
Jn the Rasi Division out of 6,08, 115 bla.zes which were attempted to be given
"'rfor tapping in the year 1976-77 on royalty contractExcerpt shown. Read the full judgment & AI analysis in Lexace.