Statutory monopoly for public benefit cannot justify selective exclusion of new traders from Kendu leaf disposal schemes.

A statutory monopoly over Kendu leaves must be administered for public benefit, not to confer private gain on selected traders. The scheme allowing offers only from existing licensees or old contractors was discriminatory because it excluded other traders and new entrants without a real and substantial nexus to the object of the monopoly. Section 10 of the Orissa Kendu Leaves (Control of Trade) Act did not authorise the State to create such a selective advantage. The exclusion was held arbitrary and unreasonable, and the scheme was unconstitutional for infringing Articles 14 and 19(1)(g), without protection under Article 19(6)(ii).

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Issues: Whether the scheme for sale of Kendu leaves, which confined the opportunity to make offers to existing licensees or old contractors, was protected as part of the State monopoly or was violative of Articles 14 and 19(1)(g) of the Constitution.

Analysis: The statutory monopoly in Kendu leaves could be administered only for the benefit of the State and the general public. Section 10 of the Orissa Kendu Leaves (Control of Trade) Act, 1961, which permitted sale or disposal in such manner as the Government may direct, did not authorise the State to create a monopoly in favour of selected traders or to confer private gain on a limited class of persons. A scheme that restricted participation to old contractors or prior licensees excluded other traders and new entrants without any real and substantial basis connected with the object of the monopoly. The plea of bona fides did not cure the vice of discrimination where the scheme itself imposed unreasonable and arbitrary exclusion.

Conclusion: The impugned schemes were held to be unconstitutional and invalid as they infringed Articles 14 and 19(1)(g) and were not protected by Article 19(6)(ii).

Final Conclusion: The State could regulate disposal of Kendu leaves under its monopoly, but it could not adopt a selective scheme that unfairly excluded other traders and diverted the benefit of the monopoly to a chosen class.

Ratio Decidendi: A statutory monopoly must be operated for public benefit, and a disposal scheme that grants exclusive trading opportunities to a restricted class without a rational nexus to the object of the monopoly is unconstitutional.

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