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Rasbihari Panda and ors. Vs. State of Orissa - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtOrissa High Court
Decided On
Case NumberO.J.C. Nos. 49, 52, 87, 131 and 132 of 1968
Judge
Reported inAIR1968Ori182; 34(1968)CLT605
ActsCode of Civil Procedure (CPC) , 1908; Orissa Kendu Leaves (Control of Trade) Act, 1961 - Sections 10; Constitution of India - Articles 14, 19 and 19(6)
AppellantRasbihari Panda and ors.
RespondentState of Orissa
Appellant AdvocateD. Sahu and ;M.C. Chagla, Advs. (in No. 49/68), ;D. Sahu and ;M.C. Chagla and ;K.C.J. Roy, Advs. (in No. 87/68), ;R.N. Misra, ;R.C. Patnaik and ;M.C. Chagla, Advs. (in No. 52/68) and ;D. Sahu, ;A.S.R.
Respondent AdvocateAdv. General
DispositionPetitions dismissed
Cases ReferredRaghubar Dayal v. Union of India
Excerpt:
- motor vehicles act, 1988 [c.a. no. 59/1988]section 173(1) proviso; [d. biswas, amitava roy & i.a.ansari, jj] appeal without statutory deposit but within limitation/or extended period of limitation maintainability - held, if the provision of a statute speaks of entertainment of appeal, it denotes that the appeal cannot be admitted to consideration unless other requirements are complied with. the provision of sub-section (1) of section 173 permits filing of an appeal against an award within 90 days with a rider in the first proviso that such appeal filed cannot be entertained unless the statutory deposit is made. the period of limitation is applicable only to the filing of the appeal and not to the deposit to be made. it, therefore, appears that an appeal filed under section 173 cannot.....barman, c.j.1. this is a group of five writ petitions filed under article 226 of the constitution seeking to challenge the action of the government of orissa in the matter of their selection of purchasers of kendu leaves by advance purchase contract through private negotiation in the manner they purported to do in exercise of their power under section 10 -- a provision relating to disposal of kendu leaves -- of the orissa kendu leaves ' (control of trade) act, 1961 (orissa act 28 of 1961) (hereinafter refened to as the act of 1961) the object of which as its preamble shows, it to provide for control and regulation of trade in kendu leaves by the creation of state monopoly in such trade 2. the main grounds on which the petitioners seek to challenge the action of the state government are.....
Judgment:

Barman, C.J.

1. This is a group of five writ petitions filed under Article 226 of the Constitution seeking to challenge the action of the Government of Orissa in the matter of their selection of purchasers of Kendu leaves by advance purchase contract through private negotiation in the manner they purported to do in exercise of their power under Section 10 -- a provision relating to disposal of Kendu leaves -- of the Orissa Kendu Leaves ' (Control of Trade) Act, 1961 (Orissa Act 28 of 1961) (hereinafter refened to as the Act of 1961) the object of which as its preamble shows, it to provide for control and regulation of trade in Kendu leaves by the creation of State monopoly in such trade

2. The main grounds on which the petitioners seek to challenge the action of the State Government are that they are mala fide arbitrary, discriminatory, unconstitutional and violative of Article 14 of the Constitution Though the facts in all these petitions are not exactly the same, the points raised in them are common; so it will be sufficient if we mention the facts in O. J. C. 49 of 1968 and deal with that petition on merits. Our decision on that petition, mainly on the points of law without going into the disputed question of facts and figures with their alleged political aspects and implications, as not necessary for the purpose of deciding the points of law, will naturally govern the other writ petitions in this group.

3. In Orissa the legislative background in respect of Kendu leaves is this: In 1949 the Government of Orissa passed an order in exercise of the powers conferred on them by Sub-section (1) of Section 3 of the Orissa Essential Articles Control and Requisition (Temporary Powers) Act, 1947 (Orissa Act 1 of 1947). This Order was called the Orisss Kendu Leaves (Control and Distribution) Order, 1949. The broad scheme of this order was to divide the area of the State into units and issue licenses to person' who were entitled to trade in Kendu leaves This order was followed by the Orissa Kendu Leaves Control Order, 1960 passed under the said provision of Act 1 of 1947 The present Act of 1961 was passed with the object of creating State monopoly in trade in Kendu leaves.

4. The broad features of the Act of 1961 as a statute to provide for control of trade in Kendu leaves, are these The Act, consists of 20 sections and as its preamble reads it was passed as the legislature thought that it was expedient to provide for regulation of trade in Kendu leaves by the creation of State monopolv in such trade. Section 3 lays down restriction on purchases in that it provides to the effect that no person other than the Government, an officer of Government authorised in that behalf, or an agent in respect of the unit in which the leaves have grown shall purchase or transport Kendu leaves. Section 4 provides that the State Government in consultation with the Advisory Committee shall fix the price at which Kendu leaves shall be purchased by them under the conditions as provided therein. Section 10, with which we are mainly concerned, gives the power to the State Government to sell or otherwise dispose of the Kendu leaves purchased by Government in such manner as the Government may direct. Section 11 lays down how the net profits derived by Government from trade in Kendu leaves are to be applied in that not less than 50 per cent thereof shall be paid to the Samitis and Grama Pancha-yats to be allocated and utilised in the manner as stated therein. The question of the legality of the manner in which the State of Orissa purported to find purchasers by private negotiation -- as a departure from the method adopted by them in previous years,-- arose in the circumstances hereinafter stated.

5. On February, 2, 1966 by a Tender noticp published in the Orissa Gazette state to be under Section 10 of the Act of 1961 as mentioned in the notice, sealed tenders were invited from persons or parties desirous of purchasing Kendu leaves purchased or collected by Government or by their officers or their agents under the provisions of the Act in the units as constituted under Section 5 of the Act during the year 1966 on the terms and conditions, all as stated therein. The notice stated inter alia that it shall be open to the Government to reject any Tender in respect of any unit without assigning any reason therefor; that if the tenders in respect of any unit are not found suitable or satisfactory, it shall be open to Government to negotiate with one or more tenders in respect of the unit. There was a renewal clause in the said tender notice which is this:

' If the person appointed as purchaser during the currency of his agreement in respect of any Unit duly observes and performs all the terms and conditions to the satisfaction of the Government and if the Government are satisfied that the purchaser has been prompt in taking delivery of leaves and making payments the Government may grant to the purchaser a renewal of his appointment for one year on such terms and conditions as may be mutually agreed upon.'

The petitioner's point is that under the aforesaid renewal clause quoted above, the purchaser has to apply for renewal for one year during the currency of the agreement and cannot apply for such renewal after the expiry of the agreement, nor can the Government offer renewal to the purchaser unless the purchaser applied for the renewal as stated in the petition.

6. Early in 1963 the Government of Orissa in the Co-operation and Forestry Department purported to offer to renew the leases of the purchasers of the different Kendu leave units for the year 1968 subject to their accepting the terms offered by the State Government. The relevant portion of one such offer by letter dated January 13, 1968 addressed to M/s. Bavaji Moti Bhai of Khetrajpur, district Sambalpur, purchaser of unit No 43 of Sambalpur Division, Is quoted below;

'1. I am directed to say that it has been decided by Government to renew the lease of the Kendu leave unit No. 43 of Sambalpur Division for the year 1968 only, subject to your accepting the terms offered hereunder:

1.No. of bass of Kendu leaves to be purchased in the Unit9382.Purchase price of a bag of kendu leave of one quintal1033.Purchase price of a bag of kendu leave in excess of the number in item 1 above

054.Compensation paybale per bag falling short of the number noted in item 1 above

2.505.Security Deposit gross Rs. 5 of the profit. 2. x x x x

3. Your acceptance of the offer is required to be received in this Department in writing, on or before 24-1-1968 at 11 A.M positively failing which it will be deemed that you do not accept the terms offered for renewal of the unit in your favour during 1968 and the same will be settled by inviting tenders

Sd. U. K. Parida

Under Secretary to Government'.

The above is a specimen of the form, containing the terms and conditions, in which the State Government offered to renew the leases for the year 1968.

7. The said offer in writing to renew the leases appears to have been cancelled by the State Government on February 16, 1968 by the issue of a letter to the prospective lessees for the year 1968, in a form, a specimen of which for appreciation of the implication? thereof -- is quoted below

'Government of Orissa

Co-operation & Forestry Department.

To

Sri.....................

Sub. State trading in Kendu leaves -

selection of purchasers in respect of

Unit No. ............ for the year 1968.

Your offer to purchase kendu leaves in Unit ......... at an enhanced rate was invited vide this department letter No. ............CF dt on the basis of the conditionsof the previous year's contract form. Government have since decided to change theconditions of the advance purchase contract and as such this Department letterNo. CF dt. maybe treated as cancelled.

Government have decided to invite offers for advance purchases of Kendu leaves only from persons who purchased kendu leaves from individual units during the last year and who acted as purchasers without default and to the satisfaction of the Government. You are requested to intimate by 21-2-1968 to the Secretary Co-operation and Forestry Department Bhubaneswar, whether you are willing to offer to make advance purchase? of kendu leaves from Unit No.under terms and conditions as specified in the Contract form attached herewith. In case you make an offer within the due date Government will consider the acceptance of your offer on receipt of your offer. In case your offer is accepted, you must execute an agreement before the concerned Divisional Forest Officer on or before 24-2-1968.

Under secretary to Government.'

8. The main points on which the petitioners challenge the legality of the course of action sought to be adopted by the State Government -- advance purchase contracts by private negotitation in preference to open competition -- in the manner as indicated above are, in substance, these: Kendu leaf has an all India market and Orissa Kendu leaf has the reputation of being the best and this year (1968) the market price of Kendu leaves is stated to be much higher for reasons stated in the petition, by reference to certain facts and figures the correctness of which is not admitted nor are they relevant for the purpose of these writ petitions to be decided on points of law. It was also submitted by the petitioners that the manner in which the State Government purported to enter into the advance purchase contracts by private negotiation for the sale of Kendu leaves, shows that the State Government sought to give precedence to their private interests in preference to public benefit envisaged by State monopoly, and that the so-called State monopoly trade in Kendu leaves is a colourable device to make it appear constitutional and permissible under Article 19(6)(ii) of the Constitution; further that in order to mislead the public and the growers it was being given out on behalf of the Government that they resorted to private negotiation to avoid cutthroat competition. It was contended by the petitioners that the State monopoly policy purported to have been adopted under the Act of 1961 is a fraud on the Constitution and that the purported renewal negotiations are mala fide acts done for the purpose of increasing the party funds at the cost of public revenue and at the cost of the growers and pluckers of Kendu leaves and, as such, the acts of the State Government are mala fide and unconstitutional -- all as stated in Para 27 of the petition. It was also contended on behalf of the petitioners that the discriminatory manner in which the State Government purported to find purchases for the Kendu leaves by inviting offers to enter into advance purchase contracts by private negotiations, instead of by open competition, without giving an opportunity to all competitors to purchase from the Government, was violative of Article 14 of the Constitution.

9. The points for consideration are: Was such action of the State Government in purported exercise of the power conferred on them by Section 10 of the Act of 1961 for disposal of Kendu leaves either by sale or otherwise 'in such manner as Government may direct' illegal? Was such action mala fide, arbitrary and unconstitutional as violative of Article 14 These require a careful examination of Section 10 of the Act of 1961 which reads as follows:

'10. Disposal of leaves: Kendu leaves purchased by Government or by their officers or agents under this Act, shall be sold or otherwise disposed of in such manner as Government may direct.'

The arguments urged on behalf of the petitioners are in substance these: Section 10 invests Government with uncontrolled discretion to direct disposal of Kendu leaves by sale or otherwise in such manner as they may please that Section 10 is to be read as a part of the Act whose purpose is to create State monopoly in trade in Kendu leaves; any power of the State Government to direct the manner of disposal of Kendu leaves is a power which has to be exercised in the ultimate interest of the State. The petitioners' point is that the ultimate object of State monopoly is public good which it is the duty of the State, as the monopolist in Kendu leaf trade to safeguard and not the interest of a particular class or a group of persons, that is persons to whom the advance purchase contracts had been offered for acceptance bv private negotiations; that a distinction has to be kept in view between state monopoly in the State's own interest and State monopoly in the interest of a small class or group of traders The point canvassed on behalf of the petitioners on Article 14 is that equality of opportunity must be given io all persons who wish to purchase Kendu leaves from the State. It was argued that although the State has a right to sell or not to sell -- in fact it is open to the State to dispose of Kendu leaves by any method other than by sale -- but once the Stale chooses to adopt the method of disposal by sale it cannot pick and choose the purchasers at its own will: equal opportunity must be given to all who may offer to purchase Kendu leaves from the State. The petitioners' point is that it is not lawful for the State to sell only to a particular class or group of persons nor should the State pick and choose purchasers by offering to enter into advance purchase contracts by private negotiations.

10. The scheme of the Act for State monopoly in Kendu leaf trade in Orissa is this: Section 3 gives the State monopoly to purchase Kendu leaves in that it provides that no person other than the Government or its officer or agent shall purchase or transport any Kendu leaves; Section 3 is thus a provision regarding Sate monopoly of purchase Section 10 is a corresponding provision regarding State monopoly of sale: it gives monopoly to the State for disposal of Kendu leaves 'in such manner Government may direct' The questions are: To whom the State is to sell? Is there any restriction in the Act as to whom the Government is to sell? Can the State arbitrarily pick and choose purchasers? According to the petitioners, the object of the Act is to obtain competitive price for the kendu leaves: Government must act reasonably and bona fide in the interest of the State because ultimately not less than 50 per cent of the net profits derived by Government from the trade in Kendu leaves under the Act is to be paid to the Samitis and Grama Panchayats: thus a considerable percentage of the net profits from the sale proceeds of Kendu leaves is to be allocated and utilised in the public interest in the manner as provided In Section 11 of the Act regarding the application of the net profit.

11. The object and the purpose of the Act being clear from the language of the provisions of the Act itself, they cannot be affected by the preamble. It is well settled that when the language of the Act is clear and the object and scope of the same are not open to doubt, the preamble cannot either restrict or extend the enacting part of the Act; the preamble is often no more than a recital of some of the inconveniences and does not exclude any others if the remedy is effected by the statute. In the present case the ultimate object of the Act of 1961 is public interest which is clear from the provisions of the Act itself including the provision for allocation and utilisation of a certain minimum percentage of the net profits for the public good as provided therein. It if in furtherance of this object that the preamble states that it is expedient to provide for regulation of trade in Kendu leaves by creation of State monopoly in such trade evidently and purposely -- for public interest.

12. There can be no dispute about the position that in the ultimate interest of the State, the Government have to so sell the Kendu leaves in such manner as to get the highest price because a large percentage of the net profits is to be allocated and utilised in public interest as provided in the Act. The question is: Did the Orissa Government act bona fide in adopting the manner --offering to enter into advance purchase contracts by private negotiations -- for selling Kendu leaves in 1968? Indeed, whether a particular method -- by private negotiations or by open competition -- would ultimately yield higher or lower net profits is all a matter of speculation; nobody can guarantee what would be the ultimate result. Even so. Government must act as a prudent businessman would do to get the maximum yield out of the sale

13. The explanation of the Government of Orissa as stated in paragraphs 5 and 14 of their counter affidavit, for adopting the manner of offering to renew the leases of existing dealers appointed by the previous Government by private negotiations -- as they purported to do -- was in substance this: During the previous years there was little safeguard for the interests of the tenants and pluckers of Kendu leaves but this year, as the State Government claim safeguards were taken to protect their (tenants' and pluckers') interests. It is said that till 1967 no rate was fixed for dried and processed leaves in the hands of growers, but after the present Government came into office in 1967 a sum of Rs. 35 per bag was fixed for processed leaves in the hands of the growers; in 1968 it has been raised to Rs. 45 per bag; also in 1968 the remuneration of the pluckers has been raised under the arrangement made by the Government inasmuch as the growers and pluckers of leaves will get a sum of Rs. 47 lack1 over and above the amount that they were earning till 1967 The State Government also plaim to have tried to fetch this year (1968) an unprecedently large amount of revenue to the State by the elimination of corruption through personal negotiations either by settlement or by way of avoiding unscrupulous speculative tenders in that during 1967-68 the total gross income was Rs 1 crore 24 lacks whereas during this year (1968-69) under the arrangement made by Government the State will get Rs. 1 crore 94 lakhs; and a sum of Rs. 47 lakhs will go to the growers and pluckers in excess over what they got during the previous years. Therefore, the total pecuniary benefit to the State and the people during 1968 would be to the extent of Rs 2 crore 38 lakhs. Thus, the State Government would get Rs. 1 crore 14 lakhs over and above what they got by way of revenue during the previous year; the increase of the total benefit is claimed to be almost 100 per cent. The present offer of sale made by the State Government to the existing dealers appointed by the previous Government is independent of the renewal clause in the tender notice of 1966, which was adopted by the previous Government as a method -- which has no binding statutory force -- for sale of Kendu leaves in that particular year It is also claimed by the present Government that they intend to keep everything clear, that is to say the transactions would not only be lawful in form but also in substance.

14. The arguments urged on behalf of the petitioners overlook the very purpose and object of the Act of 1961 --- namely control and regulation of trade in Kendu leaves by creation of State monopoly in such trade -- in the interest of the State and its people as evident from the clear language of the sections of the Act including Section 11 read with the preamble which is a guide to the intention of the legislature and is in fact a good means of finding out the meaning and, as it were, the key to the understanding of it: and as the preamble usually states or professes to state the general object and intention of the legislature in passing the enactment, it may legitimately be consulted to solve any ambiguity if at all

15. In the present case the preamble to the Act of 1961 is this:

'An act to provide for 'Control' of Trade in Kendu leaves Whereas it is expedient to provide for 'regulation' of trade in Kendu leaves by creation of 'State monopoly' In such trade'

(Underlining is ours -- portion underlined is out In ' ' -- Ed)

Section 10 confers on the State Government the power of disposal of Kendu leaves by sale or otherwise in such manner as Government may direct' Thus, Section 10 provides that the manner of disposal of Kendu leaves by sale or otherwise will be directed by the State Government Section 11 provides for the application of the net profits for public good by allocation and utilisation of certain percentage of the net profits in the manner as provided therein; the section provides how ultimate public benefit from the State monopoly of trade in Kendu leaves is to be attained. The attainment of this object needs control and regulation of the State monopoly in trade in Kendu leaves created by the Act which is evident from the preamble itself as quoted above. The preamble serves as a guide to the intention of the legislature.

16. The question then arises: How are control and regulation of trade in Kendu leaves by the State Government, as contemplated by the Act. to be achieved? In our opinion, the most effective means -- apart from the State Government's monopoly of purchase as provided in Section 3 -- is the exercise of the State Government's power of disposal and fixation of the method by which the Kendu leaves are to be sold or otherwise disposed of in such manner as Government may direct as provided in Section 10. The letter of February 16, 1968 by which Government decided to invite offers for advance purchase of Kendu leaves only from persons who purchased Kendu leaves from individual units during the previous year and who acted as purchasers without default and to the satisfaction of the Government, was only a fixation of the manner in which the Government decided to sell Kendu leaves during that particular year 1968

17. In out opinion the Government's purported offer to enter into advance purchase contracts with a class of persons -- in whom the Government had evidently confidence in that such persons acted as purchasers without default and to the satisfaction of the Government during the previous year -- cannot be said to be mala fide as alleged- The Government has every right to select the Kendu leaf purchasers in the manner the Government purported to direct The power or the discretion of the Government conferred by Section 10 to sell or otherwise dispose of the Kendu leaves in such manner they may direct is an executive discretion conferred on the Government for the purpose of controlling and regulating the trade in Kendu leaves of which the Government had the monopoly under the Act In other words, no person, as of right can claim to enter into a contract for purchase of Kendu leaves from the Government This view is amply supported by the decision of the Supreme Court who held that it is perfectly open in Government even as it is to a private party, to choose a person to their liking to fulfil contracts which they wish in be performed. When one person is chosen rather than another, the aggrieved party cannot claim protection of Article 14 of the Constitution because the choice of the person to fulfil a particular contract must be left to the Government. Thus, although a citizen of India has a fundamental right to carry on a trade or business but he has no fundamental right to insist upon the Government or any other individual doing business with him; the Government as well as any individual has got a right to enter or not to enter into a contract with a particular person. The Government has also the right to decide on the terms of the contract, C.K. Achutan v. State of Kerala, 1959 SCJ 465; see K. Bhaskaran v. State of Kerala, AIR 1958 Ker 333; Vedachala Mudaliar v. Divisional Engineer, Highways. Saidapet. Madras. AIR 1955 Mad 365.

18. In regard to Article 14, the argument on behalf of the petitioners was that Section 10 conferred an unguided and arbitrary power upon the State Government to choose any group of purchasers it liked by private negotiation at any time it pleased in the manner it purported to do the effect of such an action being vitally to affect the interests of other prospective purchasers who might have offered higher prices in case of sale by public auction of tender notice. In our opinion there is no substance in this submission We have already referred to and quoted the relevant sections of the Act dealing with State monopoly in Kendu leaves trade and the necessity of controlling and regulating such trade. It is not trading in every commodity that requires control and regulation: the need of the necessary control and regulation by creating State monopoly in Kendu leaves trade depends on factors which are far from static and similarly the need for bringing the trade in Kendu leaves (including buying and selling) within the regulatory provisions of the Act depends on factors which are subject to variations from year to year. Besides the size of Kendu leaves production, the scale of the demand for it in relation to supply and demand not capable of being quantitatively fixed but changing from year to year so as to require a continuous assessment through intelligent speculation are all elements that necessitate control and regulation, and these are variable; besides, there are different modes of sale including forward (advance purchase) contracts by fixation of prices, private negotiation, public auction and tender. It is not possible to be exhaustive in naming the several factors, but these are some of the characteristics which call for and make possible effective control and regulation. It therefore follows that the manner of sale or disposal otherwise as the Government may direct, which would satisfy the tests or requirements ran only be ascertained from time to time after enquiry and investigation They cannot obviously be specified in a statute. It is because of these considerations and the need for effective control and regulation of trade in Kendu leaves by the creation of State monopoly in such trade in Kendu leaves that Section 10 of the Act has left wide discretion to the State Government to sell or otherwise dispose of the Kendu leaves in such manner as they may direct; in other words it has cast on the State Government the duty of directing the disposal of Kendu leaves by sale or otherwise in an appropriate manner according to the needs of the situation as may exist from year to year. The purposes for which the power or discretion conferred by Section 10 is to be used furnish sufficient guidance as to preclude any challenge on the ground of violation of Article 14.

19. So, the adoption by the State Government of a particular manner of sale of Kendu leaves, as depending on factors which may vary from year to year, necessarily involves the exercise of discretion based on their own satisfaction as to the necessity of that particular manner of sale in the light of the varying factors existing in a particular year. The manner of the exercise of this discretion -- even if it may be an error of judgment -- is not justiciable so long as it is exercised bona fide in public interest. In the present case, there is nothing to show that the Government's action was not bona fide. It is a duty of the State, in order to raise the maximum net profits derived by Government from the trade in Kendu leaves under the Act, to determine in what manner they shall direct sale or disposal otherwise of Kendu leaver from year to year; it is its duty to raise such net profits from the trade in Kendu leaves for public purpose It was on these considerations that in 1968 the State Government decided to invite offers for advance purchase of Kendu leaves only from persons who purchased Kendu leaves from individual units during the previous year and who acted as purchasers without default and to the satisfaction of the Government; such prospective purchasers were requested to intimate by a certain fixed date, whether they were willing to offer to make advance purchases of Kendu leaves from a particulars unit under the terms and conditions specified in the attached contract form Government by directing such manner -- inviting offers for advance purchases of Kendu leaves through private negotiations -- eliminated unscrupulous speculation and risk of trade combines to reduce the prices over which the State Government could not have any control as reasonably and understandably apprehended: such reduction of prices would have the effect of reducing the net profits to be derived by Government from the trade in Kendu leaves to the ultimate detriment to public interest which would frustrate the very object of the State monopoly in trade in Kendu leaves as envisaged bv the Act of 1961.

20. We would therefore hold that even if there is any error of judgment on the part of the State Government in adopting this particular manner of sale by private negotiation, as they purported to adopt for the year 1968, it cannot be challenged in a court of law. Even if adopt ion of such a manner also resulted in some discrimination in favour of one group of persons to the exclusion of others, it cannot be held to be violative of Article 14 of the Constitution because here classification if any, falls into two groups: One group consisting of persons who acted as purchasers without default and to the satisfaction of the Government in the previous year from whom alone Government invited offers for advance purchase of Kendu leaves in 1968; and the other group consisting of persons, unknown stranger purchasers, from whom the Government did not think it safe to venture to invite offers for advance purchase of Kendu leaves apprehending that it might lead to unscrupulous speculation and trade combines to reduce prices with adverse consequence on the net profits and the public benefit to be derived therefrom as explained above. Such classification is reasonable, having regard to its nexus in relation to the object of the Act and cannot be said to be the result of any uncontrolled or unguided or arbitrary exercise of the power or discretion conferred on the Government under Section 10 so as to offend Article 14 of the Constitution. This our view is based on the principles underlying the decisions of the Supreme Court in Raghubar Dayal v. Union of India, AIR 1962 SC 263 and Orient Weaving Mills, v. Union of India AIR 1963 SC 98.

21. That apart. Article 19(6)(ii) which provides to the effect that the citizens' right to carry on any business as provided in Article 19(1)(g) shall not prevent the State from making any law relating to the carrying on by the State, of any trade, whether to the exclusion complete or partial, of citizens or otherwise, is a complete answer to the argument that Section 10 of the Act creating State monopoly in Kendu leaves trade is discriminatory inasmuch as it excludes a certain class of prospective purchasers from entering into the trade in Kendu leaves in Orissa, As we have already shown, the exclusion of a certain class of prospective purchasers of Kendu leaves is based on a reasonable classification for the purpose of achieving the very object of the Act In fact it was conceded on behalf of the petitioners that they were not challenging the vires of Section 10

22. In the ultimate analysis, we hold that the Government's exercise of the power or discretion under Section 10 cannot be said to be arbitrary as it is open to the Government to direct the sale or disposal of Kendu leaves in any manner they may direct -- either by advance purchase contracts by private negotiations or by public auction or by tender; it is not a case where the State Government has exercised this power or discretion without jurisdiction. This court is not concerned with the propriety of the Government's action in adopting the particular manner of sale or disposal as it purported to direct Evidently, the Government acted, as any prudent businessman would do for the purpose of setting the maximum revenue -- net profits --from the trade in Kendu leaves Government's direction in exercise of the power or discretion conferred on them under section 10 as to whether a particular manner of sale or disposal will he suitable in a particular year will depend entirely on their subjective satisfaction upon consideration of a number of factors which may vary from year to year Such direction by the State Government as to the particular manner of sale or disposal in a particular year as dependent on the subjective satisfaction of the Government as aforesaid, is not justiciable There is also nothing on record to show lack of bona fides on the part of the State Government in adopting the manner it did--private negotiation -- in the matter of sale of Kendu leaves in 1968 nor have we been shown any material to hold that if action was capricious or arbitrary or in excess of its jurisdiction. We do not accept the argument that the action of the State Government in exercising its power or discretion under Section 10 is violative of Article 14 of the Constitution for reasons discussed above.

23. In the result all the five writ petitions O. J. Cs 49 87, 52, 131 and 132 of 1968 fail and are dismissed There will be no order as to costs

A. Misra, J.

24.I agree,


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