Statutory interpretation limits forest produce control law to private holdings, preserving existing contracts for Government forest produce.

General words in a statute must be read in light of the enactment's object, preamble and scheme, and not in a way that defeats its legislative purpose. Applying that approach, the SC held that the Orissa Forest Produce (Control of Trade) Act, 1981 and the notification issued under it were confined to forest produce grown on private holdings, where the State was intended to act as exclusive purchaser. They did not extend to sal seeds and other produce already owned by the State in Government forests, so existing collection and purchase contracts could not be treated as rescinded on that basis. The appeals therefore succeeded and the declaration in favour of the appellants was sustained.

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Issues: Whether the Orissa Forest Produce (Control of Trade) Act, 1981 and the notification issued under it applied to sal seeds grown in Government forests so as to rescind existing contracts for their collection and purchase.

Analysis: The statutory scheme, read with the Statement of Objects and Reasons and the preamble, showed that the Act was enacted to prevent smuggling of forest produce grown on private holdings and to create a State monopoly in such forest produce by making the Government the exclusive purchaser. The provisions relating to agents, purchase, transport, depots, fixation of price, registration of growers and disposal of produce all proceeded on the basis of purchase from private holdings, not on the basis of produce already owned by the State in Government forests. In that setting, the wide words of Section 5(1)(a) could not be read literally in isolation; they had to be confined to contracts concerning forest produce grown in private holdings. The inclusion of sal seeds in the definition of forest produce did not alter that conclusion.

Conclusion: The Act and the notification issued under it did not apply to forest produce grown in Government forests, and the Government could not treat the existing contracts as rescinded on that basis.

Final Conclusion: The appeals succeeded, the declaration in favour of the appellants was sustained, and the parties were left to work out their rights in accordance with that declaration.

Ratio Decidendi: General words in a statute must be construed in light of the object, preamble and scheme of the enactment, and where the legislative purpose is confined to a particular class of transactions, a broad literal meaning that defeats that purpose must be restricted accordingly.

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