The KARNATAKA SUPPLY OF FOREST PRODUCE BY GOVERNMENT (REVISION OF AGREEMENTS) ACT, 1987

THE KARNATAKA SUPPLY OF FOREST PRODUCE BY GOVERNMENT (REVISION OF 
AGREEMENTS) ACT, 1987 
ARRANGEMENT OF SECTIONS 
Statement of Objects and Reasons: 
Sections: 
 1. Short title and commencement. 
 2. Definitions. 
 3. Power of State Government to revise agreements for sale or supply of forest produce. 
 4. The price of forest produce sold or supplied to purchasers not to exceed market value. 
 5. Power of Government to terminate agreements. 
 6. Purchaser may terminate agreement after giving one month's notice. 
 7. Effect of other laws. 
 8. Power to make rules. 
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STATEMENT OF OBJECTS AND REASONS 
 Act 26 of 1989.- For scientific working of reserve forest, working plans covering period 15-20 
years are drawn up. During the last 40 years, several changes have taken place due to 
inaccessible areas getting to be accessible, revenue forest being transferred to the Forest 
Department and surrendered Cardamon Genima lai areas being resumed by the Forest 
Department. In the revised working plan drawn up, these facts have been taken into 
consideration as also the need to set aside blocks of forests for being constituted as forest 
sanctuaries and biosphere reserves. These changes have resulted in revising the working system 
necessitating extraction to be taken up by Govern mental agency in lieu of by the concessionaire 
industries. 
 During 1981, the Forest Act was amended empo wering the Government to abrogate the rates 
entered into in the agreements to prescribe new rates and to revise these rates once in two 
years. It is felt that considering the escalation in the prices covering certain individual species, 
Government be vested with the powers to revise the rates at lesser intervals. 
 Hence this Bill. 
 (Obtained from LAW 22 LGN 87.)   
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KARNATAKA ACT No. 26 OF 1989. 
(First published in the Karnataka Gazette Extraordinary on the Thirtieth day of  
November, 1989) 
THE KARNATAKA SUPPLY OF FOREST PRODUCE BY GOVERNMENT (REVISION 
OF AGREEMENTS) ACT, 1987. 
(Received the assent of the President on the Third day of September, 1989) 
 An Act to confer the Government of Karnataka with powers to revise and cancel 
certain agreements relating to the supply of forest produce by it and matters 
relating thereto. 
 W HEREAS it is considered necessary that the State Government should have the 
powers to revise, alter or cancel, from time to time the terms of certain agreements 
relating to supply of forest produce to ensure the principles of scientific management of 
forest based upon the working plan prescriptions, working schemes or sequences 
revised from time to time and silvicultural requirements and to ensure that the prices 
paid therefor are fair and no loss of income is caused to the State and also that it should 
have the powers to cancel agreements with a view to protect and maintain ecological 
balances and to protect and improve the environment and to safeguard the forests and 
the wildlife in the State of Karnataka and to provide for matters relating thereto; 
 B E it enacted by the Karnataka  State Legislature in the Thirty-eighth year of the 
Republic of India as follows :- 
 1. Short title and commencement.-  (1) This Act may be called the Karnataka 
Supply of Forest Produce by Government (Revision of Agreements) Act, 1987.  
 (2) It shall come into force at once. 
 2. Definitions.-  (1) In this Act, unless the context otherwise requires,- 
  (a) "agreement" shall include any cont ract, licence, bond, deed or grant or other 
document, whereby the Government agrees or has agreed to sell or supply any forest 
produce to any purchaser or to permit any forest produce to be collected and removed 
by any purchaser for consideration for a long term period, on terms and conditions 
specified therein. 
  (b) "forest produce" shall have the meaning assigned to it in the Karnataka 
Forest Act, 1963 (Karnataka Act 5 of 1964); 
  (c) "long term period" means any period exceeding twelve months; 
  (d) "price" includes the price or rate or value paid or to be paid, whether as 
consideration or otherwise, to the State Government by any person for the sales or 
supply of forest produce; 
  (e) "purchaser" means any person, including any company or association or 
body of individuals whether incorporated or not, who purchases or is supplied or granted 
or obtains any forest produce from the State Government under any agreement and the 
word 'purchaser' shall be construed accordingly. 
 (2) Words and expressions used in this Act, but not defined, shall have the meaning 
assigned to them in the Karnataka Forest Act, 1963 (Karnataka Act 5 of 1964). 
 3. Power of State Government to revise agreements for sale or supply of 
forest produce.- Notwithstanding anything contained in any law for the time being in 
force or in any agreement subsisting on the date of commencement of this Act or in any 
agreement which may be entered into by the State Government with any purchaser on 
or after the date of commencement of this Act, it shall be lawful for the State 
Government, by order published in the official Gazette, to add to, substitute, delete, 
modify, or otherwise amend any of the term s and conditions of any such agreement, for 
one or more of the following purposes, namely:- 
 (a) to provide for a revision or a periodical revision of the price of the forest produce 
agreed to be sold or supplied, where such agreement does not provide for any such 
revision or periodical revision, as the case may be, and, where such periodical revision 
is provided in the agreement, to provide for reducing or enhancing the period of revision: 
 Provided that the price once fixed shall not be liable to be revised by the State 
Government for a period atleast for twelve months from the date on which such fixation 
has come into force. 
 (b) to provide for modifying the quantity of forest produce agreed to be sold or 
supplied to the purchaser, having regard to the availability of such forest produce; 
 (c) to provide for modifying, limiting, alte ring, shifting or cancelling the areas allotted 
to or permitted to be worked by, the purchaser, having regard to the availability of forest 
produce or to secure the principles of scientific management of forest based upon the 
working plan prescription, working schemes or sequences and silvicultural requirements; 
 (d) to provide for the working of the forest or extraction of trees therefrom by the 
State Government or a corporation owned or controlled by it, instead of the purchaser or 
his agent with a view to ensure better working of forest and extraction of trees; 
 (e) to protect and maintain ecological balance in the State of Karnataka; 
 (f) to protect and improve the environment and to safeguard the forests and wild life 
in the State of Karnataka: 
 Provided that the State Government may, in furtherance of the purposes specified in 
clauses (e) and (f), cancel or modify  any agreement subsisting on the date of 
commencement of this Act or entered into thereafter, after giving the purchaser a 
reasonable opportunity to show cause why the agreement should not be cancelled or 
modified and may pending the showing of such cause, stay the implementation or further 
implementation of any such agreement. 
 4. The price of forest produce sold or supplied to purchasers not to exceed 
market value.- (1) The price for sale or supply of the forest produce, to be fixed at the 
time of any revision of the price under section 3 shall not exceed the market value of the 
forest produce at the time of such revision, as may be determined by the State 
Government in the prescribed manner. 
 (2) Where the price is fixed at the time of revision for the period exceeding twelve 
months at a time, the State Government may provide for an annual increase in the price 
towards anticipated escalation in the market value of the forest produce during the 
period the revised price is to remain in force. 
 5. Power of Government to terminate agreements.- (1) Notwithstanding anything 
contained in any law for the time being in force or in any agreement subsisting on the 
date of commencement of this Act or in any agreement, which may be entered into by 
the State Government with any purchaser on or after the commencement of this Act, the 
State Government may terminate any such agreement at any time, for breach, by the 
purchaser, of any of the terms and conditions of the agreement, as amended from time 
to time, after giving him a reasonable opportunity to show cause why the agreement 
should not be terminated and after giving him a notice of one month for such termination. 
 (2) The decision of the State Government in such cases shall be final. 
 6. Purchaser may terminate agreement after giving one month's notice.-  If any 
amendment made in the terms and conditions of an agreement under section 3 or any 
revision made in the price under that section, is not acceptable to the purchaser, he 
may, at his option, by giving to the State Government one month's notice in writing, 
within a period of three months from the date on which the amendment in the terms and 
conditions or the revision in the price, as the case may be, is communicated to him, 
terminate the agreement and accordingly the agreement shall stand terminated at the 
end of the notice period. 
 7. Effect of other laws.-  Save as provided in this Act, the provisions of this Act shall 
be in addition to and not in derogation of any other laws. 
 8. Power to make rules.- (1) The State Government may, subject to the condition 
of previous publication and by notification, make rules for carrying out the purposes of 
this Act. 
 (2) In particular and without prejudice to the generality of the foregoing provisions 
such rules may be made for all or any of the following matters, namely:- 
  (a) for giving notice of the amendment proposed to be made in agreement or of 
any revision of price proposed to be made under section 3 and for affording the 
purchaser an opportunity of showing cause against the proposal. 
  (b) the principles on which, the manner in which and the authority by which, the 
market value shall be determined for the purposes of section 4. 
 (3) Every rule made under this Act shall be laid as soon as may be after it is made 
before each House of the State Legislature, while it is in session, for a total period of 
thirty days, which may be comprised in one session or in two or more successive 
sessions, and if before the expiry of the sessi on in which it is so laid or the sessions 
immediately following both Houses agree in making any modification in the rule or both 
Houses agree that the rule should not be made, the rule thereafter shall have effect only 
in such modified form or be of no effect, as the case may be, so however, that any such 
modification or annulment shall be without prejudice to the validity of anything previously 
done under that rule. 
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 (The above translation of the ``dâ}ÖËrdâ %pâxX IyâR}âQÀâ}â°Q ÉâdÖËp⬪{â Éâpâ±pÖm° ÀâÃÖvâ°Àâ (a~âRª{âgâÔâ 
~âîÍâ"pâÇê) %º¾Ìâ°Àâ°, 1987 (1989pâ dâ}ÖËrdâ %º¾Ìâ°Àâ° ÉâªfêX26)''   was published in the official 
Gazette (Extraordinary) Part IV-2B dated 14-1-1991 as No. 13 under clause (3) of Article 
348 of the Constitution of India.) 
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