UTKAL CONTRACTORS & JOINERY PRIVATE LIMITED & ORS. ETC. versus STATE OF ORISSA & ORS.

Citation: [1987] 3 S.C.R. 317 · Decided: 07-05-1987 · Supreme Court of India · Bench: O. CHINNAPPA REDDY · Disposal: Appeal(s) allowed

Cited by 7 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

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UTKAL CONTRACTORS & JOINERY PRIVAIB LIMITED & 
A 
ORS. ETC. 
v. 
STAIB OF ORISSA & ORS. 
MAY 7, 1987 
[O. CHINNAPPA REDDY AND V. KHALID JJ.] 
Orissa Forest Produce (Control of Trade) Act, 1981: ss. 5(l)(a) 
and 5(1)(b)-Whether applicable to forest produce grown in Govern-
ment lands-Existing contracts for collection, purchase and sale of sal 
B 
seeds in respect of Government forests-Whether rescinded. 
C 
Statutory interpretation: Wide words not to be given literal 
meaning-To be construed contextually restricting scope of pro-
vision in consonance with the object, reasons and scheme of the 
Act. 
Sub-section (1) of s. 5 of the Orissa Forest Produce (Control of 
Trade) Act, 1981 provides that on the issue of a notification under 
sub-s. (3) of s. 1 in respect of an area (a) all contracts for the purchase, 
sale, gathering or collection of specified forest produce shall stand resci-
nded, ilnd (b) no person other than the State Government or its officers 
or agents shall purchase or transport any specified forest produce in the 
said area. Explanation II thereto provides that purchase of specified 
forest produce from the State Government or its officers or agents is not 
to be deemed to be a purchase in contravention of the provisions of the 
Act. 
The appellant-company was granted a licence for collection, sale 
and purchase of sal seeds from Government forests on the stipulation 
that it would establish solvent extraction units in backward areas. The 
appellant-company was to supply sal seeds to these extraction plants. 
D 
E 
F 
The agreement was renewed for a further period of ten years from 
G 
October 1, 1979. The State Government by a notification dated 
December 9, 1982 issued under sub-s. (3) of s. 1 brought the Act Into 
~ force immediately in the whole of the State in relation to sal seeds. 
Thereafter it refused to accept royalty from the appellant on the ground 
that the notification had the effect of rescinding the contract between 
the company and the Government. 
H 
317 
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318 
SUPREME COURT REPORTS 
[1987) 3.S.C.R. 
A 
A writ petition filed by the company for a declaration that the 
abovesaid notification did not have the effect of rescinding their con-
tract with the State Government, was dismissed by tbe High Conrt. 
In the appeals to this Court it was contended for the appellants 
that the Act had no application to the produce grown in Government 
B forests, that the Act was aimed at creating a monopoly in forest produce 1. 
in the Government by vesting in it the exclusive right to purchase forest 
produce grown in private holdings, and that even otherwise Explana-
_,. 
tion II to s. 5(1) saved such contracts for the purchase of specified forest 
" 
produce from Government lands at .... On behalf of the respondents it 
was contended that the very wide language of s. 5(1)(a) made it appli-
C cable to all forest produce whether grown in private holdings or 
Government forests, and that the contract being for collection and not 
f 
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for purchase o forest produce it was not saved by the Explanation II to 
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D 
E 
s. 5(1). 
Allowing the appeals, the Court, 
HELD: 1. The Orissa Forest Produce (Control of Trade) Act, 
1981 and the notification issued under it do not apply to the forest 
produce grown in Government forests. It was not, therefore, open 
to the Government to treat the contracts with the appellants as res-
cinded. [333C) 
2. The scheme of the Act is 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 Govern-
ment the exclusive purchaser of forest produce grown in private hold-
ings. Sections 4, 5(1)(b), 5(3), 7, 8 and 9 deal with purchase of forest 
F 
produce by the State Government. This can only be of forest produce 
grown in private holdings and not in Government forests since there 
can be no question of or providing for the purchase by the Government 
of forest produce grown on Government lands. The only provision in 
the Act which expressly deals with sale of forest produce by the State 
Government is s. 12, and that again is confined to the sale of specified 
G forest produce purchased by the State Government. The Act, therefore, 
cannot to said to have any application to produce grown in Government 
forests. [331H-332A, 331FG, EF, CD, F, 323E) 
3.1 The safest guide to the interpretation of a statute is the reason 
for it, which ca

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