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1989 (5) TMI 317
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.... Bharat Sangal, Harish N. Salve, T.V.S.N. Chari, Ms. Sunita Modigunda, Ms. Vrinda Grover and S.K. Bhattacharya for the Petitioner G. Ramaswamy, Additional Solicitor General Anil Dev Singh, P.S. Shroff, S.S. Shroff, R. Karanjawala, Mrs. M. Karanjawala, Ejaz Maqbool, Mrs. Shobha Dikshit, E.C. Aggarwal, B.V. Desai, Ms. Madhavi Gupta, C.S. Vaidyanathan and S.V. Deshpande for the Respondent JUDGEMENT RANGANATH MISRA, J. These are three petitions under Art. 32 of the Constitution by three different groups of petitioners. In each of these writ petitions petitioner No. 1 is a private limited company and the second petitioner is a shareholder thereof. The petitioner company in each of these cases obtained the right to collect oleo resin gum or to process the same for industrial purposes from the State of Jammu & Kashmir and each of them seeks to challenge the vires of the provisions of the Jammu & Kashmir Extraction of Resin Act (7 of 1986) (hereinafter referred to as the 'Act'). Though there are some variations of facts relevant to each of the writ petitions, the allegations are more or less similar in regard to the relevant contentions--both factual and legal. When ....
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....R 1336). The order made in favour of the petitioner-company in writ petition No. 794/86 and incorporated in the agreement dated 6.11. 1978 had also been challenged in a separate writ petition before this Court and the reasoned order for rejection of the writ petition is found in Brij Bhushan & Ors. v. State of Jammu & Kashmir & Ors., [1986] 2 SCC 354. While the petitioner-company in writ petition No. 751/86 had agreed to work as tapper and processor on the stipulation that 25% of the annual collection of gum subject to minimum of 1500 metric tonnes would be made over to the Government company (J & K Industries Limited) and out of the rest not exceeding the limit of 3500 metric tonnes would be used by them, the petitioner-company in writ petition No. 794/86 who had been operating from before as tappers only entered into a formal agreement with the State claiming to process and manufacture down-stream goods. The writ petitioner-company in writ petition No. 798/86 had agreed to work as processor only. In the seventies, the State of Jammu & Kashmir decided to industrialise the hitherto under-developed State and with that end in view came forward with scheme and threw open invitat....
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....s Limited, the resin products, if any surplus, shall be sold by it to the small scale units and medium scale units in the State in such manner as may be provided for, and at such price as may be fixed by the Jammu & Kashmir Industries Limited in consultation with the Government. 5. Fixation of price- (1) The Government shall, having due regard to the following facts, fix the price at which resin shall be sold by it during a year, namely (a) the sale price of resin, if any, fixed under this Act during the preceding three years; (b) the cost of transport; (c) the cost of extraction of resin; (d) the cost of packing of resin including the cost of container in which resin is delivered; (e) the prevalent sale price at which resin is being sold in other resin producing States; (f) any other factor which the Government considers relevant. (2) The price so fixed shall be published in the Official Gazette and shall not be altered during the year to which it relates." In exercise of the rule-making power, the State Government has brought into force a set of rules known as the Jammu & Kashmir Extraction of Resin Rules, 1986 with effect from 27.9.1986. It is no....
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....rty' known to jurisprudence has expanded through several pronouncements of this Court. Ramana Dayaram Shetty v. The International Airport Authority of India & Ors., [1979] 3 SCR 1014, to which one of us (the learned Chief Justice) was party held: "Today the Government in a welfare State is the regulator and dispenser of special services and provider of a large number of benefits, including jobs, contracts, licences, quotas, mineral rights etc. The Government pours forth wealth, money, benefits, services, contracts, quotas and licences. The valuables dispensed by Government take many forms, but they all share one characteristic. They are steadily taking the place of traditional forms of wealth. These valuables which derive from relationships to Government are of many kinds. They comprise social security benefits, cash grants for political sufferers and the whole scheme of State and the local welfare. Then again, thousands of people are employed in the State and the Central Governments and local authorities. Licences are required before one can engage in many kinds of business or work. The power of giving licences means power to withhold them and this gives control to the Gove....
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.... licences, quotas, minerals rights etc." In Subodh Gopal Bose's case [1954] SCR 587, this Court had pointed out: "The word 'property' in the context of Article 31 (the same should be the meaning under Article 19(1)(f) which is designed to protect private property in all its forms, must be understood both in a corporeal sense as having reference to all those specific things that are susceptible of private appropriation and enjoyment as well as in its juridical or legal sense of a bundle of rights which the owner can exercise under the municipal law with respect to the user and enjoyment of those things to the exclusion of all others." Again, in Dwarkadas Shrinivas of Bombay v. The Sholapur Spinning & Weaving Co. Ltd. & Ors., [1954] SCR 674, this Court held: "A contract or agreement which a person may have with the company and which may be cancelled by the Directors in exercise of powers under ordinance will undoubtedly be property within the meaning of the two articles." In R.C. Cooper v. Union of India, [1970] 3 SCR 530 an eleven-Judge Bench at page 567 of the Reports, stated: "By Entry 42 in the Concurrent List power was conferred upon the Parliament and th....
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....re a fundamental right, they must receive the widest interpretation and must be held to refer to property of every kind." At p. 360 of the Reports, the Court again stated that every form of property, tangible or intangible, including debts and choses in action constituted property, In this group of cases before us the executive grant or the contract created interest in the petitioners and there is no room to doubt that by such process in favour of the petitioners property right had been created. Learned Additional Solicitor General appearing for the State had contended that the contractual interest or the interest in terms of the Government order did not constitute property and relied upon certain precedents of this Court. The Coal Nationalisation case on which reliance was mainly placed is clearly distinguishable on facts. We do not think it necessary to refer to other authorities as the ones referred to above are binding precedents and unequivocally indicate that the interests which are in dispute before us do constitute property entitled to protection under Art. 19(1)(f) and are covered by Art. 31(2) of the Constitution. Reliance has been placed by learned Additional....
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....o possession of any property to the State or to a corporation owned or controlled by the State, it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives any person of his property." Learned Additional Solicitor General's contention has been that under the provisions of s. 3 of the Act the rights that vested in the petitioners stand wiped out or extinguished but those rights have not been vested in either the State or the Government company. This contention overlooks the resultant outcome of the provisions of the Act. Section 3 which takes away private fights and authorises Government alone to extract, transport it and acquire, possess or dispose of or otherwise deal with the resin extracted and manufactured within the State and s. 4 authorises Government to sell the same to the Government company for processing. What is taken away under s. 3 from the hands of private parties is undoubtedly given by the same provision to Government. In Madan Mohan Pathak's case (supra), this Court had pointed out: "The verbal veil constructed by employing the device of extinguishment of debt cannot be permitted to ....
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....ce the outstanding leases and sub-leases are terminated, the Central Government and the other authorities will be free to apply for a mining lease. Any lease-hold interest which the Central Government, for example, may thus obtain does not directly or immediately flow from the termination brought about by section 3(3)(b). Another event has to intervene between the termination of existing leases and the creation of new interests. The Central Government, etc. have to take a positive step for obtaining a prospecting licence or a mining lease. Without it, the Act would be ineffective to create of its own force any right or interest in favour of the Central Government, a Government Company or a Corporation owned, managed or controlled by the Central Government." The statutory scheme of the Act which we are considering is to extinguish private rights both in respect of Government owned trees as also trees in private ownership and to vest those rights in the State Government or the Government company. The facts in this group of cases, therefore, clearly indicate that there is a direct relationship between nullification of the private rights and vesting of those in the State or the Gove....