LexUTKAL CONTRACTORS & JOINERY (P) LTD. & ORS. versus STATE OF ORISSA
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A B UTKAL CONTRACTORS & JOINERY (P) LTD. & ORS. v. STATE OF ORISSA SEPTEMBER 24, 1987 [O. CHINNAPPA REDDY AND K. JAGANNATHA SHETTY, JJ.] Constitution of India: Articles 19, 32, 245 and 246-Laws for creating State monopolies either partially or complete in respect of any trade/business/industry/service-Whether State empowered c to make-Laws relating to trading activities-Whether can be pre- sumed to be reasonable and in general public interest-Legislation rendering judicial decision ineffective by enacting valid law- Whether Legislature competent to enact-Whether such law can be retrospective. D E Orissa Forest Produce (Control of Trade) Amendment and Validation Ordinance, 1987: Sections 1 to 5-0rdinance pro- mulgated to render ineffective Supreme Court's decision striking down 1981 Act-Validity of-Whether encroachment on judicial power-Notification validated by ordinance-Effect of. )- Statutory Interpretation: Executive Policy/Statement of Objects ... and Reasons of Act/Ordinance-Whether can control actual words - used in the legislation. F The Orissa Forest Produce (Control of Trade) Act, 1981 was 1. ~ enacted to prevent smuggling forest produce and also to provide State ~ - monopoly in such forest produce. The State was empowered under section 1(3) of the Act, from time to time to issue a notification specify- ing the area or areas, the forest produce in relation to which and the date from which the Act shall come into force. The State Government G issued a notification dated December 9, 1982 directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sat seeds. ,..... The petitioners were holders of long term license from the H Government for collection of sal seeds from certain specified forest 314 - UTKAL CONTRACTORS v. STATE OF ORISSA 315 divisions on payment of royalty. Consequent upon the issue of the above A notification, the Government refused to accept royalty from the peti- tioners in respect of certain forest divisions on the ground that the notification had the effect of rescinding the existing contracts between the Government and the petitioners. The petitioners thereupon filed writ petitions before the High B Court for a declaration that the above notification was void, and did not have the effect of rescinding their contracts in relation to sal seeds. The High Coort dismissed the writ petitions. The Supreme Coor!, allowing the appeals of the petitioners, held that the Act and the notification issued thereunder did not apply to forest produce grown in Government forests and that it was not, therefore, open to the Government to treat C the contract dated May 25, 1979, as rescinded. On May 29, 1987, the Governor of Orissa promulgated Orissa Forest Produce (Control of Trade) (Amendment and Validation) Ordi- nance 1987 deeming it to have come into force with effect from September 5, 1981, when the principal Act was notified in the Gazette, D rendering the aforesaid decision ineffective. The petitioners challenged the validity of this Ordinance in this Court. Dismissing the writ petitions, this Court, HELD: 1.1. The impugned Ordinance is valid and cannot be challenged on any ground. [327Bl 1.2 The object to the Act was to prevent smuggling and to provide E for State monopoly in the specified forest produce and not to provide F State monopoly only to prevent smuggling. The validity of the statutory notification cannot be judged merely on the basis of statement of objects and reasons accompanying the Bill. Nor could it be tested by the Government policy from time to time. [3J8Bl The executive policy of the Government or the statement of G objects and reasons of the Act or Ordinances cannot control the words used in the legislation. [323F l Central Bank of India v. Their Workmen, [1%0) l SCR 200 and State of West Bengal v. Union of India, (1964) 1 SCR 371 at p. 382, relied on. H A B c 316 SUPREME COURT REPORTS [1988] I S.C.R. 1.3 It is open to the State to make laws for creating State mono- polies either partially or complete in respect of any trade or business or industry or service. The State may enter into trade like any other person either for administrative reasons or with the object of mitiga- ting the evils in the trade, or even for the purpose of making profits in order to enrich the State exchequer. The law relating to such trading activities must be presumed to be re
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