1981 (2) TMI 245 - SC - Indian Laws

State Government's Arbitrary Resin Quota Allocation Ruled Unconstitutional

The court found that the State Government's allocation of resin quotas was arbitrary and violated Article 14 of the Constitution of India. The court ... - Issues Involved:1. Arbitrary and discriminatory allocation of resin quotas.2. Violation of Article 14 of the Constitution of India.3. Adherence to the State Industrial Policy.Detailed Analysis:1. Arbitrary and Discriminatory Allocation of Resin Quotas:The petitioners challenged the orders of the State of Jammu and Kashmir allotting quotas of resin to certain respondents while denying similar treatment to them. The petitioners argued that these orders were arbitrary and violated their rights under Article 14 of the Constitution of India. The petitioners' industries were small-scale industries manufacturing resin and turpentine oil, and they had been provisionally or formally registered. Despite applying for the allotment of resin, the government, citing a policy decision from March 20, 1978, refused to allocate resin to them. In contrast, respondents No. 4 to 16 received allotments even though many were not formally registered at the time of the impugned orders.2. Violation of Article 14 of the Constitution of India:The petitioners contended that the denial of resin allocation to them while favoring respondents No. 4 to 16 constituted discriminatory treatment, violating Article 14. The impugned orders, annexed as Annexures N to Z-1, indicated preferential treatment to certain respondents without a rational basis. The State of Jammu and Kashmir, in its counter affidavit, did not deny the petitioners' allegations but justified the allocations based on implementing the State Industrial Policy as outlined in the 'Report of the Development Review Committee, Jammu and Kashmir.'3. Adherence to the State Industrial Policy:The State Government claimed the allocations were made to implement the industrial policy aimed at balanced economic development, self-sufficiency, and generating employment. However, the petitioners argued that the allocations were inconsistent with the policy, as the majority of the industries, including the petitioners' and respondents No. 4 to 16, were located in the Jammu region. The government failed to explain the basis for the allocations favoring new allottees in the same region.Judgment:The court found that the State Government did not follow its industrial policy in practice, except in the cases of five respondents: M/s Rajindra Resin and Turpentine Industries, M/s Sud Pine Industries, M/s Kashmir R & T Works, M/s Bakshi Resin & Turpentine, and M/s K. C. Soni Resin & Turpentine. The court held that the impugned orders lacked a rational basis and were arbitrary, thus violating Article 14. Consequently, the court quashed the allotment orders, except for the five respondents mentioned. The State of Jammu and Kashmir was directed to make other allotments of raw materials to the applicants in light of the court's observations.Costs:Respondent No. 1, the State of Jammu and Kashmir, was ordered to pay costs of Rs. 100.00 to each of the petitioners. The petition was partly allowed, and the rules were made absolute except as against the five respondents who were found to have been allocated resin in accordance with the policy.Conclusion:The judgment underscores the importance of non-arbitrary and equitable allocation of resources, adherence to policy guidelines, and upholding constitutional rights under Article 14. The court's decision to quash the arbitrary allocations while upholding those made in line with the policy serves as a reminder of the need for transparency and fairness in administrative decisions.