ORIENT PAPER AND INDUSTRIES LTD. AND ANR. ETC. ETC.versusSTATE OF ORISSA AND ORS. ETC.

                                                                                  ••

            ORIENT PAPER AND INDUSTRIES LTD. AND
A
                       ANR. ETC. ETC.
                                        v.

                   STATE OF ORISSA AND ORS. ETC.

B                            OCTOBER 30, 1990

      [L.M. SHARMA, T.K. THOMMEN AND K.N. SAIKJA, JJ.]

         Orissa Forest Produce (Control of Trade) Act, 1981: Section 1(3)
    and 3 Amendment and Validation Acts 1987 and 1989 and Notifications
C   dated September 21, 1988-Whether nu// and void-Rescindement of
    contracts-Permissibility of

          The appellants/petitioners in each of the two Appeals Writ Peti·
    tions are contractors. They had entered Into agreements with the State
    of Orissa in terms of which they bad obtained exclusive rights and
D   licences to fell, cot and remove bamboos from certain specified areas
    for the purpose of connrtlng them into pulp. The agreements were doe
    to expire on 30th September 1989. There contracts were rescinded by
    the Orissa Forest Produce (Control of Trade) Act, 1981(Act22of1981)
    which, in respect of bamboos, came into force w.e.r. 1.10.1988, when
    Orissa Forest Produce (Control of Trade) Amendment Act, 1989 (Act ·
E   4of1989) came into force. By virtue of the provisions of the Act and the
    notifications issued thereunder, the contractors were divested of all their
    contractual rights.

        Being aggrieved the appellants in both the appeals tiled writ peti-
  tions in the High Court praying for a declaration that the Act 22 of 1981
F and the notification of 21.9.1988 issued under Section 1(3) of the said
  Act have no application to the contracts entered into between the
  appellants and the State of Orissa and for a direction that the State be
  prohibited from enforcing the provisions of the said Act and to allow the
  appellants to cot and remove the bamboos from areas covered by the
  contracts. It was urged by the appellants that their rights in respect of
                                                                                   I
G bamboos are not annulled or affected by reason of Act 22 of 1981 as
  their rights are in the nature of profit a prendre, and thus not suscepti-
  ble of repudiation by statutory rescission of contracts. They relied on a
  decision of this Court in State of Orissa and Others v. The Titaghur
  Paper Mills Co. Ltd. and Anr .. [1985] 3 SCR 26. The High Court
  rejecting their contention that the rescission of their contracts did not
H affect their pre-existing l"ights which allegedly originated in grant inde-

                                       480
                                                                              481


-
                           ORIENT PAPER v. STATE OF ORJSSA

         pendent of any agreement of parties, held that the contractors were


-        replaced by the agents and that the decision in Titaghur's case did not
         deal with the question arising in the present case. The High Court
         accordingly dismissed the writ petitions. Hence these two appeals by the
         contractors.
                                                                                     A




               The appeUants Straw Products Ltd. med in this Court a writ            B
         petition under Art. 32 of the Constitution praying inter alia for &decla-
         ration that Act 4 of 1989 and the notification dated 21.9.1988 (S.R.O.
         No. 666 of 1988) and (S.R.O. 667 of 1988) are null and void. Orient
         Paper and Industries Ltd., the appeUants in the other appeals also med
         a writ petition for a declaration that Act 16 of 1987 and Act 15 of 1987
         (lst and 2nd Amendment Acts) and Notification dated 21.9.1988               C
         (S.R.O. No. 667 of 1988) are null and void.

              Before this Court besides the arguments advanced before the
        High Court by the appellants/petitioners it was further urged that the
        Act suffers from the vice of excessive delegation of powers to the
        Government and separate notification should have been issued to bring        D
        the amended provisions into the principal Act. The respondent-State
        controverted the arguments of the appellants and asserted that the .Acts
        in question are constitutionally valid.

               Dismissing the appeals and writ petitions, this Court,
                                                                                     E
                HELD: Any right or interest granted or recognised under such
         agreement was not an independent or pre-existing right or interest to
         survive the statutory rescission of the contract. Legislation has supu•
         seded all inconsistent and contrary rights. No right or interest or grant,
         whether contractual or prerogative in character in origin, whatever be
         its nature, source and scope, can survive a superseding valid legislation. F
    -·-- The decision in Titaghur is consistent with the proposition that all rights
         derived by the contractors, including profit a prendre were granted in
         te_rms of the agreements. All such rights are conditioned by and totally
         dependent on the agreements. Whatever mutual rights or obligations
         accrued or arose between the parties· to those agreements are ·purely
         contractual in character and incidence. [49SE-F & D]                        G

              All rights recognised under the bamboo contracts thus perished as
        from the date on which Act 22 of 1981 came into force in respect of
        bamboos in the areas in question, i.e. as from l.10.1988 being the date
        specified in terms of section 1(3). [498BJ
                                                                                     H
    482         SUPREME COURT REPORTS                 [1990] Supp. 2 S.C.R.

          While the protection and management of the forests, 22 of 1981,
A
    as its title and preamble indicate, are meant to control and regulate·
    trade in forest produce by creating a State monopoly, the later statute
    has rescinded all contracts for the purchase, sale, gathering or collec-
    tion of forest produce and has repudiated all rights created under such
    contracts and all grants of profit a prendre. The bamboo contractors,
B   are, therefore, not entitled to claim any independent right inconsistent
    with lhe statute as from the date specified under Section 1(3) namely
    1.10.1988. [500A-B]

          Smuggling in foresi produce has been a serious threat to national
    economy. No society can tolerate activities endangering the morale and
    economy of the people. This substantive evil with its corrupting and
c   debilitating influence is sought to be remedied by legislative control of
    trade in forest produce through State monopoly. These measures are
    undoubtedly well within the province of the legislature and reasonable
    and rationally adapted to the end sought. [501F-G]

D         The legislative findings and the subject-matter of the legislation,
    the area of its operation; its purpose and intent; its legislative history;
    the objects and reasons for the amendment made consequent on judicial
    decisions, the vice that is sought to be remedied, the legislative response
    to compelling necessities; all this, lends support to the presumption in
    favour of reasonableness, legality and constitutionality of the legislative
E   aciions in question. [SOlG-H]

          All rights and interests contrary to and inconsistent with the
    statute accordingly stands rescinded. There is no excessive delegation in
    such statutory grant of power. [502A-B]

F        Mis. Utkal Contractors and Joinery IPJ Ltd. and Ors. v. State of         •
    Orissa, [1987] Supp. SCC 751 & [.1987] 3 SCC 279; The State of Orissa
    v. Sudhansu Sekhar Misra and Ors., [1968] 2 SCR 155, 162; Krishna
    Kumar v. Union of India, JT (1988) 3 SC 173, 187, 192; Gangabai w/o
    Rambilas Gilda v. Chhabubai w;o Pukharajji Gandhi, [1982] 1 SCR
    1176, 1182; Prakash Amichand Shah v. State of Gujarat and Ors.,               "
                                                                                  •.

G   (1985] Supp. 3 SCR 1025, 1052, Sreenivasa General Traders and
    Others v. State of Andhra Pradesh and Others etc., AIR 1983 SC 1246;
    Attorney General v. De Keyser's Royal Hotel Ltd., [1920] AC 508;
    Thakur Jagannath Baksh Singh v. The United Provinces, AIR 1946 PC
    127, para 17; East End Dwelling Co. Ltd. v. Finsbury Borough
    Council. 1952 Ac 109, Shamrao V. Parulekar v. The District Ma1<istrate,
H   Thana, Bombay, [1952] SCR 683; Sardar !nder Singh v. The State of
•
              ORIENT PAPER v. STATE OF ORISSA [THOMMEN, J.[             · 483

    Rajasthan, [1957] SCR 605; Her Majesty the Queen v. Burah, [1877-78] 5
    IA 178, 194-95; Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. The Asst!.       A
    Commissioner of Sales Tax and Ors., .[1974] 2 SCR 879; Harishanker
    Bag/av. The State of M.P., [1955] 1 SCR 380, 388; Akadasi Padhan v.
    State of Orissa, [1963] Supp. 2 SCR 691; Hamdard Dawakhana (Wakf)
    Lal Kuan, Delhi and Anr. v. Union of India and Ors., [1960] 2 SCR
    671, 678-79; Mahant Motidas v. S.P. Sahi, AlR (1959) SC 942, 948,           B
    referred to.
          CIVIL APPELLATE/ORIGINAL JURISDICTION: Civil Ap-
    peal Nos. 4346-47 of 1988.
         From the Judgment and Order dated 7.10.1988 and 30.9.1988 of
    the Orissa High Court in O.J.C. Nos. 3235 and 3100 of 1988.
                                     AND
                                                                                c
          Writ Petition Nos. 1132/88 amd 474/89.
          (Under Artice 32 of the Constitution of India).
          A.K. Ganguli, Dr. Shankar Ghose, F.S. Nariman, Parag Tri-             D
    pathi, A.T. Patra, P.N. Gupta, Praveen Kumar, S.R. Agarwal,
    Sandeep Agarwal, P.N. Misra, R.F. Nariman and R.K. Jena for the
    Appellants/Petitioners.
         N.S. Hegde, Additional Solicitor General, S.C. Roy and G. Rath,
    Advocate Generals, Orissa, R.K. Mehta and Ms. Mona Mehta for the
    Respondents.                                                                E
         The Judgment of the Court was delivered by
          THOMMEN, J. These appeals by special leave arise from the
    judgments of the Orissa High Court in O.J.C: No. 3235 of 1988 and
    O.J .C. No. 3100 of 1988. The High Court dismissed the appellants'
    wtit petitions praying for a declaration that the Orissa Forest Produce     F
    (Control of Trade) Act, 1981 ('Act 22 of !981') and the Notification
    No. 6F- 10/88/21691/FFAH dated September 21, 1988 issued under
    section 1(3) of the said Act have no application to the contracts
    entered into between the appellants and the State of Orissa and for a
    direction to prohibit the respondent-State from enforcing the provi-
    sions of the said Act in pursuance of the said notification in respect of   G
    the said contracts and to allow the appellants to cut and remove
    bamboos from the areas covered by the contracts. One of the appel-
    lants in C.A. No. 4347 of 1988, namely, Straw Products Ltd. filed Writ
    Petition No. 474 of 1989 under Article 32 ·of the Constitution for a
    declaration that Ordinance No. I of 1989, the Orissa Forest Produce
    (Control of Trade) (Amendment) Act, 1989 ('Act 4 of 1989'). Notifi-         H
    cation No. 6F-10/88/21691/FFAH dated 21.9.1988 (S.R.0. No. 666 of
    484         SUPREME COURT REPORTS                [1990] Supp. 2 S.C::R.

A  1988) and Notification No. 6F- 10/88/21693/FFAH dated 21.9.1988
  (S.R.O. No. 667 of 1988) are null and void and for certain other reliefs.
  The appellants in C.A. No. 4346 of 1988, namely, Orient Paper &
  Industries Ltd. and another filed Writ Petition No. 1132 of 1988 (as
  amended in 1989) under Article 32 of the Constitution praying for a
  declaration that the Orissa Forest Produce (Control of Trade)
B
  (Amendment and Validation) Act, 1987 ('Act 16 of 1987') and Orissa
  Forest Produce (Control of Trade) (Second Amendment) Act, 1987
  {'Act 15 of 1987'); Ordinance No. 1 of 1989 and the Act which
  replaced.it (Act 4 of 1989); Notification No. 6F-10/88/21691/FFAH
  dated September 21, 1988 (S.R.O. No. 666 of 1988); and Notification
  No. 6F-10/88/21693/FFAH dated September 21, 1988 (S.R.O. No. 667
C of 1988) are null and void, and for certain other reliefs. The parties in
  these appeals and writ petitions shall hereinafter be conveniently
  referred to as 'the contractors'.

          The contractors had entered into agreements with the State of
D   Orissa in terms of which they had obtained exclusive rights and
    licences to fell, cut and remove bamboos from certain specified areas
    for the purpose of converting them into pulp. The agreements would
    have expired on. September 30, 1989. These agreements are generally
    referred to as the "bamboo contracts". These contracts were rescinded
    by Act 22 of 1981, which, in respect of bamboos, as we shall presently
E   see, came into force as from I. 10.1988. The contractors contend that
    their rights in respect of bamboos are not annulled or affected by
    reason of Act 22 of 1981. Their rights, they say, are in the nature of
    profit a prendre, and are not susceptible of repudiation by statutory
    rescission of contracts. They rely upon a decision of this Court in State
    of Orissa and Others v.· The Titaghur Paper Mills Co. Ltd. & Another,
    [ 1985] 3 SCR 26.
F
         The bamboo contract was considered by this Court in Titaghur
    (supra) with reference to the question whether the amount payable·
    under the contract was exigible to purchase tax under the Orissa Sales
    Tax Act, 1947 (as amended in 1977). This Court held:
G               " . . . . . . the. Bamboo Contract is not and cannot be a
                contract of sale of goods, It confers upon the Respondent
                Company a benefit to arise out of land, namely, the right to
                cut and remove bamboos which would grow from the soil
                coupled with several ancillary rights and is thus a.grant of a
H
                      a
                profit prendre .... "                                      '
         ORIENT PAPER v. STATE OF ORISSA (THOMMEN, J.I               485

Being a benefit to arise out of land, the contractors had.an interest in
                                                                            A
immovable property. So stating, this Court observed that the fact that
the agreement under which this interest in immovable property was
created was not evidenced by a registered document did not derogate
from its character as a grant because section 90 of the Registration Act
exempted it from registration. The question which arose in that deci-
sion was whether the amount payable under the bamboo contract was           B
exigible to purchase tax. The answer depended on the basic question
as to whether it was a contract of sale of goods or a contract conferring
an interest in immovable property. It was in answering that question
and in coming to the conclusion that it was not a contract of sale of
goods, but a grant of an interest in immovable property, that the Court
made an observation about the exemption from registration under
section 90 of the Registration Act. But whether the contract itself or      c
any right or interest stipulated or granted or recognised under the
contract was invalid for want of registration was not a question which
was directly or substantially in issue in that case. Whether any right or
interest was granted independently of or prior to contract was not
directly or even indirectly considered. We refer to this aspect of the      D
decision in Titaghur, ( 1985) 3 SCR 26 because much of the challenge
against the validity of the impugned provisions turns on the question as
to whether the right arising under the bamboo contract was a con-
tractual right so as to be affected by Act 22 of 1981 arid the notifica-
tions issued thereunder. On this question, Titaghur (siipra) is neither
res judicata nor precedent.                                                 E

       We may at this stage refer to the reliefs sought in Writ Petition
No. 1132 of 1988 (as amended in 1989). The writ petitioner in that case
has challenged the validity of Act .J6 of 1987. This challenge is no
longer sustainable in view of the decision e.f this Court in M/s. Utkal
Contractors and Joinery (P.) Ltd. and Others v. State of Orissa, (1987)     F
Supp. SCC 751 upholding the validity of the Orissa Forest Produce
(Control of Trade) (Amendment and Validation) Ordinance, 1987,
which was repealed by· Act 16 of 1987. The writ petitioner has also             •
challenged the validity of Act 15 of 1987 by which clause (b) of sub-
section (2) of section 5 of Act 22 of 1981 was deleted and section 12 of
the. said Act was substituted by a new provision. These amendments          G
are, in our view, procedural changes and a valid exercise of legislative
power to regulate and control trade in forest produce.

      Two forests Acts were in operation in the State of Orissa, i.e.,
the Indian Forest Act, 1927 and the Madras Forest Act, 1882. These
two enactments were repealed by the Orissa forest Act, 1972, which          H
    486         SUPREME COURT REPORTS               [ 1990] Supp. 2 S.C.R.
                                         '
    was enacted to consolidate and amend the laws relating to the protec-
A
    tion and management of forests in the State. Power is conferred on the
    Government under the Forest Act, 1972 to constitute any land which is
    the property of the Government, or over which the Government has
    proprietary rights, a reserved forest in the manner provided by the·
    Act. Protection and management of forest is the purpose of the Forest
B   Act. Act 22 of 1981 has been, on the other hand, enacted with a view
    to providing for control and regulation of trade in certain forest pro-
    duce by creation of State monopoly in such trade. The Statement of
    Objects and Reasons shows that the main object of creating State
    monopoly is to prevent smuggling of various kinds of forest produce
    which has been 'increasing day by day'. State monopoly of trade in
    forest produce is thus the object of Act 22 of 1981.
c
          'Forest produce' is defined to include bamboo as one of the
    items. One of the other items is sal seed. The Statement of Objects and
    Reasons shows that, barring a few items like sal seeds, many other
    items of minor forest.w;oduce were grown in private holdings as well as
D   in the Government owned forest areas. The implication was, there-
    fore, that sal seeds had been grown only on Government land. For the
    reason, referring to Act 22 of 1981, this Court in Utka/ Contractors and
    Joinery Pvt. Ltd. and Others v. State of Orissa and Others, [ 1987] 3
    sec 279 held:
E              "that scheme of the Act is, therefore, fully in tune with the
               object set out in the Statement of Objects and Reasons and
               in the preamble, namely, that of creating a monopoly in
               forest produce by making the government the exclusive
               purchaser of forest produce grown in private holdings".

F   So observing, this Court further held:

                "that the Act and the notification issued under the Act do
                not apply to forest produce grown in government forests
                and that it was not therefore, open to the government to
                treat the contra""ct dated May 25, 1979 as rescinded."
G
    To remove the impediment created by this decision in extending the
    Act to contracts concerning forest produce grown on Government
    lands, the Act was amended w.e.f. 5.9.1981 by Ordinance No. 1 of
    1987, which was repealed by Act 16 of 1987, the validity of which, as
    stated earlier, has been upheld by this Court in M/s. Utkal Contractors
H   and Joinery (Pvt.) Ltd. and Others v. State of Orissa, [ 1981] Supp. SCC
          ORIENT PAPER v. STATE OF OR!SSA ITHOMMEN, J.]                 487

751. As a result of Ordinance No. 1 of 1987 and Act 16 of 1987, the
                                                                               A
vice pointed out by this Court in Utkal Contractors and Joinery Pvt.
Ltd. and Others v. State of Orissa and Others, [1987] 3 SCC 279 has
been removed, and the Act has been made retrospectively applicable
with effect from 5.9.1981 to forest produce 'grown or found on land
owned by private persons or on land owned by the State Government
or in Government forests'. [See section 5(l)(a) as substituted by Act          B
16 of 1987.]             ·

       The principal Act, namely, Act 22 of 1981 "extends to the whole
of the State of Orissa": Section 1(3) says the Act 'shall come into force
in .such area or areas in relation to such forest produce and on such
date or dates as the State Government may, from time to time, by
notification, specify in this behalf'. Section 2 defines 'forest produce'.     c
Bamboo, as stated earlier, is one of the items of forest produce
specified under clause (c) of section 2. The effect of section 1(3), the
validity of which is in question in these proceedings, is that the Act
comes into force on different dates in respect of different areas and
different items of forest produae.                                             D

       Three notifications were issued on September 21, 1988. Notifica-
tion No. 6F-10/88/21691/FFAH (S.R.O. No. 666 of 1988) says".· ....
in exercise of the powers conferred upon by sub-section (3) of section 1
of the Orissa Forest Produce (Control of Trade) Act, 1981 (Orissa Act
22 of 1981), the State Government do hereby specify that the said Act          E
shall come into force in the areas covered by Government forests in
t.he State of Orissa in relation to bamboos of all species on the first day
of October, 1988". The result of this notification is that, as from
 1.10.1988, Act 22 of 1981 is made applicable to bamboos of all species
in areas covered by Government forests in the State of Orissa. That
Act 22 of 1981 is applicable to all Government forests in respect of all       F
forest produce is no longer in doubt in view of Act 16 of 1987. [See
M/s. Utkal Contractors and Joinery (Pvt.) Ltd. and Others v. State of
Orissa, [1987] Supp. SCC 751] Notification No. 6F-10/88/21695/FFAH
says " .... in pursuance .of the powers conferred upon by section 3 of
the Orissa Forest Produce (Contra.I of Trade) Act, 1981 (Orissa Act 22
of 1981), the State Government do hereby constitute with effect from           G
the !st day of October, 1988, the areas covered by Government
Forests in the State of Orissa excepting the area covered by the felling
series of J eypore Forest Division listed in the schedule in the district of
Koraput, into a unit for extraction of and trade in bamboos of all
species which is a forest produce specified in the Notification .....
No. 21691/FFAH., Dated the 21st September, 1988 issued unde~ sub-              H
    488        SUPREME COURT REPORTS               [ 1990] Supp. 2 S.C.R.

  section (3) of section 1 of the said Act." Notification No. 6F-10/88/
A 21693/FFAH (S.R.O. No. 667 of 1988) .says" ... in exercise of the
  powers conferred upon by sub-section ( l) of section 4 of the Orissa
  Forest Produce (Control of Trade) Act, 1981 (Orissa Act 22 of 1981)
  read with sub-rule (7) of the rule 3 of the Orissa Forest Produce (Con-
  trol of Trade) Rules, 1983, the State Government do hereby appoint
B the  Orissa Foresi Corporation Ltd. as the agent for extraction of and.
  trade in bamboo of all species, on its behalf, with effect from the first
  day of October, 1988 in respect of the Unit specified in the notification
  of the Government of Orissa .... no. 21695/FFAH dated the 21st
  Sept., 1988". The effect of these three notifications dated 21.9 .1988 is
  that as from the specified date, namely, 1st October, 1988, bamboos of
  all species in Government forests in the State of Orissa, come within
c the purview of Act 22 of 1981, and all contracts for the purchase, sale
                            or
  etc. of bamboos grown found in the said areas stand rescinded. The
  agents appointed by. the Government have, in respect of the notified
  units, become the sole repositories of authority to purchase or trans-
  port bamboos as from 1.10.1988.
D
        We shall now read the relevant sections.of the Act, in so far as·
  they are l)laterial:

               "1(3). It shall come into force in such area or areas in
               relation to such forest produce and on such date or dates as
E              the State Government may, from time to time, by notifica-
               tion, specify in this behalf".

                "3. Constitution of units-The State Government may ·
                divide every specified area into such number of units as it
                may deem fit:
F
                      Provided that a specified area may be divided into
                different units for different specified forest produce.,.

               "4. Appointment of agents. ( !) The State Government
               may, for the purchase of and trade in specified forest pro-
G              duce on its behalf, appoint one or more agents in respect of
               different units for all or any specified forest produce and
               any such agent may be appointed .in respect of more than
               one unit.~'
                                              "

H         Section 5, as it stood before it was amende~ by Act 4 of 1989,
    reads:                                  ·         ·,
          ORIENT PAPER v. STATE OF ORISSA (THOMMEN, J.)                489

            "5. Restriction on purchase and transport and rescission of
                                                                              A
            subsisting contracts. ( 1) On the issue of a notification under
            sub-s. (3) of S. 1 in respectnf any area-

            (a) all contracts for the purchase, sale, gathering or collec-
            tion of specified forest produce grown or found in the said
            area shall stand rescinded, whether such forest produce is        B
            grown or found on land owned by private persons or on
            land owned by the State Government or in Government
            forests, and,

            (b) no person, other than-

                  (i) the State Government.                                   c

                  (ii) an officer of the State Government authorised in
                  writing in that behalf, or

                  (iii) an agent in respect of the umt m which the            D
                  specified forest produce is grown or found.

            shall purchase or transport any specified forest produce in
            the said area.

                                    "                                         E

By these provisions and the notifications issued thereunder, the
contractors are divested of all their contractual rights. The High Court
rejected their contention that the recission of their contracts did not
affect their pre-existing rights which allegedly originated in grant inde-
pendent of any agreement of parties. The High Court held that the             F
contractors were replaced by the agents. The High Court further held
that the decision in Titaghur, [1985] 3 SCR 26 which related to the
question of exigibility to tax under the Orissa Sales Tax Act did not
deal with the question arising in the present cases.

      During the pendency of the proceedings in this Court, Act 22 of         G
1981 was amended by Act 4 of 1989 with retrospective effect. Subse-
quent to this amendment, Writ Petition No. 1132 of 1988 was
amended. Section 2 of the Amending Act provides:

            "2. In section 5 of the principal Act, for sub-section ( I)
            excluding clause (b) and the explanations thereunder, the         H
    490         SUPREME COURT REPORTS                [1990) Supp. 2 S.C.R.

A               following shall be substituted, namely:

                      '5. ( 1) Notwithstanding any provision to the con-
                      trary in any other law, on the issue of a Notification
                      under sub-section (3) of section 1 in respect of any
                      area,-
B
                      (a) all contracts for the purchase, sale, gathering or
                      collection of specified forest produce grown or found
                      in the said area and all grants ofp~ofii:a-prendre inc-
                      luding the right to enter upon the land, fell, cut and
                      remove the specified interest produce from the said
c                     area, shall stand rescinded, whether such forest pro-
                      duce is grown or found on land owned by private
                      persons or on land owned by the State Government
                      or in Government forests:

                            Provided that rescission of such contracts and
D                     grants shall not affect the customary rights, if any, of
                      the local Tribals to gather and collect the specified
                      forest produce;
                                        ,,

E   This amendment, beginning with the non obstante clause, provides
    that, on the coming into force of Act 22 of 1981 by notification issued
    under section 1(3), all contracts relating to any specified forest pro-
    duce for the purchase, sale, collection etc., including grants of profit a
    prendre, whether such produce is grown or found on private land or on
                          0


    Government land or in Government forest, would stand rescinded, but
F   such rescission would not affect customary right, if any, enjoyed by the
    local tribals to gather and collect specified forest produce.

          This sub-section overrides ""any provision to the contrary in any
    other law". These words are an expression of the widest amplitude
    engulfing all rules having the force of law, whichever be the source
G   from which they emanate--statutory, judicial or customary-the only
    exception, in the context, being the Constitution of India. This means,
    once brought into force, the sub-section will, subject to the Constitu-
    tion, operate with full vigour, notwithstanding any statute or judicial
    decision or any other rule recognising any right or interest or grant
    inconsistent with or contrary to the provisions of the sub-section.
H
           ORIBNT PAPER v. STATE OF ORISSA ITHOMMEN, J.]                491

         Sub-section (2) of section 1 of Act 4 of 1989 says that the Act
  "shall be deemed to have ·come into force on the date on which the A
  Orissa Forest Produce (Control of Trade) Act, 1981 (hereinafter refer-
  red to as the principal Act) had come into force, i.e. 5.9.81 when the
  principal Act wa> notified in the Orissa Gazette." The effect of this
· amendment is that all contracts and grants relating to the purchase,
  sale, collection etc. of forest produce, including profit a prendre, stood B
  rescined as from the date on which Act 22 of 1981 came into force in
  the particular areas in respect of the forest produce in question. The
  produce in question here being bamboos, the principal Act, as
  amended by Act 4 of 1989 with effect from 5.9.81, was attracted in full
  fqrce repudiating all contractual rights or grnnts of profit a prendre
  relating to bamboos wherever grown or found within the State as from
  the date specified by the notification issued under section 1(3) of the C
  Act. i.e., i. 10. 1988.

       The resultant position is that the contractors have lost all their
 rights under contract or grant respecting bamboos and they are
 deemed to have lost such rights, not prospectively from 3.4.1989,            D
 when the assent of the President to Act 4 of 1989 was first published in
 the Official Gazette (as per section 3(1)(ii) of the Orissa General
 Clauses Act, 1937), but from 1.10.1988 which is the date specified in
 the Notification dated September 21, 1988, issued under section 1(3)
 of Act 22 of 1981. In other words, the effect of Act 4·of 1989 is that the
 provisions of that Act are projected backwards and read into Act 22 of       E
 1981, and all the provisions of the principal Act, including the provi-
 sions added by the Amending Act, are deemed to have been on the
 statute book as from 5.9.1981, when the principal Act was notified in
 the Orissa Gazette, and the principal Act, including the amended
 provisions, came into force only as from the date speciiied m the
 notification issue.d under section 1(3) which, as seen above, in respect     F
 of the bamboosifo the areas in question, was 1. 10.1988.

      Mr. A.K;. Ganguli and. Dr. Shankar Ghosh, appearing for the
contractors, have raised various contentions. They submit that the
right of the contractors has arisen not by reason of contract but on the
strength of grant. Act 22 of 1981 rescinding contracts did not affect         G
rights in the nature of profit a prendre although their agreements in
terms stipulate that right. This question, they say, had been concluded
as early as 1985 by this Court in Titaghur [1985] 3 SCR 26. The
bamboo agreements are, therefore, not mere contracts attracted by
section 5 of Act 22 of 1981. Jn any view, they contend, neither Act 22
of 1981 _nor the subsequent amendments can affect bamboo contracts,           H
     492         SUPREME COURT REPORTS                [ 1990) Supp. 2 S.C.R.

     for section 1(3) which provided for coming into force of the Act on
A    different dates in different areas of different items of forest produce is
     invalid by reason of excessive delegation of power to the Government.
     They further point out that even assuming that Act 22 of 1981 was
     validly brought into force in respect of bamboos in the areas in ques-
     tion with effect from 1.10.1988, as provided by the Notification dated
B    September 21, 1988, such notification does not have the effect of
     bringing into force the provisions of the subsequent Act, namely, Act
     4 of 1989, notwithstanding the deeming provisions contained in the
     latter Act. They submit that the original Act having been brought into
     force in respect of bamboos as from 21.9.1988 by the aforesaid notifi-
     cation under section 1(3), the subsequent amendment of Act 22 of
      1981 by Act 4 of 1989, stating in section 1(2) thereof that the amended
c    provisions are deemed to have come into force as from 5.9.1981,
     would not introduce into the original Act the amended provisions of
     Act 4 of 1989, until specifically notified in terms of section 1(3).

           The Additional Solicitor General, Mr. Santosh Hegde as well as
D    the Advocate General for the State of Orissa, appearing for the
     respondents, submit that the rights or interests claimed by the con-
     tractors arose under the bamboo agreements. They can have no right
     apart from or independent of contract. Assuming that their right is in
     the nature of an interest in immovable property, characterised as profit
     a prendre it is neverthele.ss a right created or granted by. contract and
E    there is no independent existence for such right. The decision of this
     court in Titaghur, [ 1985] 3 SCR 26 is no authority for the proposition
     that the alleged rights of the contractors arose from a grant indepen-
     dent of contract. All that was, and could have been, decided in that
     case on the point was that the bamboo contracts were not contracts of
     sale of goods, but contracts under which a certain interest in immov-
F    able property was created, and the amounts payable under such con-
     tracts did not fall within the ambit of the Orissa Sales Tax Act. It is
     true that the Court used the expression 'grant' but that expression was
     borrowed from the agreements themselves. One of the parties to each
     of these agreements, namely, the Government of Orissa is referred to
     as the Grantor, and the other party, namely, the contractor is referred
G    to as the company. In terms of the agreements, certain rights and
     interests came to be granted to, or vested in, the contractors. Those
     rights and interests were granted by the agreements and not indepen-
     dent of the agreements.

          The Additional Solicitor General points out that Act 4 of 1989,
·H   by reason of the deeming provisions, must be projected into Act 22 of
          ORIENT PAPER v. STATE OF ORISSA [THOMMEN, J.)                 493

 1981, as if the provisions of the later Act had been written into the
                                                                               A
earlier Act, and as if they formed part of it, as from the date of
notification of the earlier Act, i.e., 5.9.1981. But the earlier Act came
into force in respect of a particular forest produce in question, i.e.,
bamboos in all the areas covered by Government forests from such
date as was specified by the notification issued under section 1(3}, i.e.,
 1.10.1988. Even assuming, he contends, that section 5(1), as it origi-        B
nally stood, did \not have the effect o( affecting the contractors' rights,
and assuming further that their rights, as claimed by them, flowed
from grant, such rights were rescinded as from 1.10.1988. In any view,
he contends, no grant or contract can survive legislation rescinding it.
The Additional Solicitor General points out that section 1(3) of Act 22
of 1981 cannot be assailed on the ground of.excessive delegation, for
there is no such vice in the provision and, in any view, it is a valid         C
"conditional legislation". He further submits that Act 22 of 1981 is
intended to control and regulate trade in forest produce by creation of
State monopoly, and its objects are not identical to the Orissa Forest
Act, 1972 which is intended for the protection and management of
forests in the State. The legislative object is, therefore, clearly distinct   D
and separate in respect of either enactment. In any view, he submits,
both the enactments having been passed by the same legislature, the
latter must prevail over the former in case of inconsistency. This is
clear from section 22 of Act 22 of 1981. Counsel says that no property
of the contractor is acquired as a result of the statute in question, for
all that is sought to be accomplished by it is taking over trade with a        E
view to State monopoly, and that the contractors had been given suffi-
cient notice to remove the bamboos already felled a.nd stored by them
in the premises. In any view, refund of proportionate royalty has been
tendered to them by the Government. Bamboos felled but not
removed from the forests prior to the date of the notification will be
sold by the Government exclusively to the contractors at the price             F
determined by the Government at Rs. 700 per MT minus Rs.310 per
MT being the cost of extraction and Rs.115 per MT being the royalty
already paid, the total deduction being Rs.425 per MT. Accordingly,
the balance sum of Rs.275 per MT is due and payable to the
contractors.
                                                                               G
      We are in complete agreement with the learned Judges of the
High Court that the decision of this Court in Titaghur, [ 1985] 3 SCR 26
is not an authority for the proposition that a right or .interest was
created in favour of the. bamboo contractors irrespective and indepen-
dent of contract. No such question arose, or could have arisen, m. that
case, for the assessment proceedings in question there arose Ion~              H
    494         SUPREME COURT REPORTS                 [ 1990] Supp. 2 S.C.R.

    before Ac.t 22 of 1981 was enacted. In fact this Court proceeded on the
A
    assumption ·that whatever was the nature of the right or interest that
    was ;n question, such right or interest wa:-; the creature or result of
    agreements between parties. What was in issue in that case was
    whether or not the Orissa Sales Tax Act was attracted. In negativing
    the contentions of the Revenue, this Court held that the contracts
B   crated merely an interest in immovable property and the amounts paid
    under the contracts did not represent sale or purchase of goods, and
    the Orissa Sales Tax Act was not attracted. The bamboo contracts
    conferred upon the contractors a benefit to arise out of land. It was a
    contractual right relating to immovable property and not relating to
    goods. This .was the crucial issue that was decided in that case regard-
    ing bamboo contracts.
c
          The authority of Titagt.ur, (1985] 3 SCR 26 is c•rnfined to matters
    which were directly and substantially in issue in that case. It is neither
    precedent nor res judicata for any other matter. "What is of the ess-
    ence in ii .decision is its ratio and not every observation found therein
D   nor what logic~lly follows from the various observations made in it."
    [Per Hegde, J., The State of Orissa v. Sudhansu Sekhar Misra and Ors.,
    [ 1968] 2 SCR 155, 162]. As stated by one of us (Saikia, J .) in Krishena
    Kumarv. Union of India, JT 19883SC 173, 187, 192:

                "The doctrine of precedent, that is, being bound by a pre-
E               vious decision, is limited to the decision itself and as to what
                is necessarily involved in it. It does not mean that this
                Court is bound by the various reasons given in support of
                it, especially when they contain 'propositions wider than
                the case itself required' ..... A deliberate and solemn
                decision of court made after argument on question of law
F               fairly arising in the case, and necessary to its determina-
                tion, is an authority, or binding precedent .. , .. ".

    In the words of Lord Halsbury, L.C. [Quinn v. Leathern, (1901] AC
    495, 506]: Quoted by Hegde; J., ibid.

G               " ..... there are two observations of a general character
                which I wish to make, and one is to repeat what I have very
                often said before, that every judgment must be read. as
                applicable to the particular facts proved, or assumed to be
                proved, since the generality of the expressions which may
                be found there are not intended to be expositions of the
H               whole law, but governed and qualified by the particular
          ORIENT PAPER v. STATE OF ORISSA !THOMMEN, J.]                 495

            facts of the case in which such expressions are to be found.
                                                                               A
            The other is tha\ a case is only an authority for what it
            actually decides. I entirely deny that it can be quoted for a
            proposition that may seem to follow logically from it. Such
            a mode of reasoning assumes that the law is necessarily a
            logical code, whereas every lawyer must acknowledge that
            the law is not always logical at all."                             B
                                                      (emphasis supplied)

      See also Gangabai w/o Rambilas Gilda v. Chhabubai w/o
Pukharajji Gandhi, [1982] 1SCR1176, 1182; PrakashAmichand Shah
v. State of Gujarat & Ors., [1985] Supp. 3 SCR 1025, 1052 and
Sreenivasa General Traders & Others v. State ofAndhra Pradesh and
Others etc., AIR 1983 SC 1246.                                                 c
      The decision in Titaghur, [1985] 3 SCR 26;as we see it, is consis-
tent with the proposition that all rights derived by the contractors,
including profit a prendre, were granted in terms of the agreements.
All such rights are conditioned by, and totally dependent on, the              D
agreements. Whatever mutual rights or obligations accrued or arose
between the parties to those agreements are purely contractual in
character and incidence.

      Any right or interest granted or recognised under such agree-
ment was not an independent or pre-existing right or interest to sur-          E
vive the statutory resci~sion of the contract. Legislation has super-
seded all inconsistent and contrary rights. No right or interest or grant,
whether contractual or prerogative in character or origin, whatever be
its nature, source and scope, can survive a superseding valid legisla-
tion. See Attorney General v. ·De Keyser's Royal Hotel Limited, [1920]
AC 508. In this context, the observation of the Privy Council in               F
Thakur Jagannath Baksh Singh v. The United Province.s, AIR 1946 PC
127, Para 17, is relevant:

            " . . . . . if once it be found that the subject-matter of a
            Crown ,grant is ·within the competence of a Provincial
            Legislature nothing can prevent that Legislature from              G
            legislating about it unless the C.onstitution Act itself expres-
            sly prohibits legislation on the subject either absolutely or
            conditionally."

All rights recognised under the bamboo contracts thus perished as
froni the date on which Act 22 of 1981 came into force in respect of           H
    496         SUPREME COURT REPORTS                [1990] Supp. 2 S.C.R.

    bamboos in the areas in question, i.e., as from 1.10.1988 being the,
A   date specified in terms of sec!ion 1(3).

          Significantly, no evidence has been placed before us to support
    the contention that the grant of profit a prendre arose independent of,
    and prior to, contract and the statutory rescission of contract did not
B   affect the grant. Strangely enough, the contractors rely upon their
    contracts when they seek to assert rights allegedly flowing from grant
    stipulated under the contracts. The very foundation of this right is
    traceable to contractual grant. Any such grant perished with its statu-
    tory re1mdiation.
                          '·   ...
          Subsequent amendment of Act 22 of 1981 by ;}ct 4 of 1989 to
c   include grants of profit a prendre was, in our view, merely clarifi-
    catory. Assuming that an interest in the nature of profit a prendre was
    vested in or granted to the contractors independent of contract, no
    such right or inte.rest could survive its statutory repudiation or repeal
 .. by the retrospective amendment of section 5( 1) by Act 4 of 1989:
D Thakur Jagannath Baksh Singh v. The United Provinces, AIR 1946 PC
    127.

           We see no substance in the contention that a second notification
    under section 1(3) of Act 22 of 1981 was required to bring into effect
    the substituted provisions introduced by Act 4 of 1989. That Act con-
E   taining the deeming provisions in section 1(2) is deemed to have come
    into force on the date on which Act 22 of 1981 came into force i.e., on
    5. 9. 1981 when that Act was notified in the Orissa Gazette. Section
    1(3) of Act 22 of 1981 being the governing provision for bringing the
    statute into force with specific reference to particular produce and
    particular areas as from specified dates, the statute came into force for
F   specific operation in respect of bamboos in the areas in question not on
    5.9.1981, but on 1.10.1988, as specified in the Notification dated
    September 21, 1988 issued by the Government of Orissa relating to
    bamboos in exercise of its powers under section 1(3) of the principal
    Act. The effect of the deeming provisions in Act 4 of 1989 is to project
    backwards the provisions of that Amending Act so as to read them into
G   the principal Act (Act 22 of 1981) as if they were part of the principal
    Act on the date on which it was notified in the Orissa Gazette, i.e., on
    5.9. 1981. The new provisions are thus, in the absence of any incon-
    sistency or absurdity, deemed to have always formed part of the provi-
    sions originally enacted. That being the position in law, as an inevit-
    able corollary, the notification issued under section 1(3) is deemed to
H   be applicable to the principal Act with the subsequently substit~ted
          ORIENT PAPER v. STATE OF ORISSA [THOMMEN, J.J                 497

retroactive provisions written into it; and, no further notification
                                                                               A
under section 1(3) in respect of Act 4 of 1989 is, therefore, required.
to recall the words of Lord Asquith in this context:

            "If you are bidden to treat an imaginary state of affairs as
            real, you must surely, unless prohibited from doing so, also
            imagine as real the consequences and incidents w.hich if the       B
            putative state of affairs had in fact existed, must inevitably
            have flowed from or accompanied it ..... The statute says
            that you must imagine a certain state of affairs; it does not
            say that having done so, you must cause or permit your
            imagination to boggle when it comes to the inevitable
            corollaries of that state of affairs."
                                                                               c
            (East End Dwelling Co. Ltd. v. Finsbury Borough Council,
            [1952] AC 109)

To contend that a second notification under section 1(3) of Act 22 of
1981 is required to bring Act 4 of 1989 into force is to cause or permit       D
one's imagination to boggle.·                         ·

    In Shamarao V. Parulekar v. The District Magistrate, Thana,
Bombay, [1952] SCR 683, Vivian Bose, J. stated:

            " ... the rule is that when a subsequent Act amends an             E
            earlier one is s~ch a way as to incorporate itself, or a part of
            itself, into the earlier, then the earlier Act must thereafter
            be read and construed (except where that would lead to a
            repugnancy, inconsistency or absurdity) as if the altered
            words had been written into the earlier Act with pen and
            ink and the old words scored out so that thereafter there is       f
            no need to refer to the amending Act at all ...... ".

So construed, in the absence of any repugnancy or inconsistency or
absurdity, we must read Act 22 of 1981 as if the new provisions had
been .written into the principal Act 'with pen and ink' and the old
words scored out. It is significant that while Act 22 of 1981, which           G
"extends to the whole of the State of Orissa" [S. 1(2)], came into force
on 5.9.1981 on publication in the Orissa Gazette (see S. 3(1)(ii) of the
Orissa General Clauses Act, 1937) the Act in terms of section 1(3)
came into force in respect of specific produce in specified areas only on
publication of separate notifications. Thus sal seeds were brought
under the Act at once and bamboos subsequently by separate notifica-           H
    498         SUPREME COURT REPORTS                 [1990] Supp. 2 S.C.R.

    lions. The operation of the Act in respect of specific areas and specific
A
    produce is made conditional upon specific notifications, partaking of the
    character of conditional legislation. So understood, the words 'all
    grants of profit a prendre' introduced by Act 4 of 1989 formed part of
    the principal Act at all material times, and these words along with the
    rest of the Act came into force in relation to bamboos in Government
B   forests as from the date specified in terms of section 1(3).

         We see no merits in the contention that section 1(3) is invalid by
    reason of excessive delegation. In Sardar lnder Siµgh v. The State of
    Rajasthan, [1957] SCR 605, Venkatarama Ayyat, l <Cferring to the
    proposition of law, which had the support of the majority of the
    learned Judges in re. Delhi Laws Act, 1912 [1951] SCR 747 stated:
c
                "when an appropriate Legislature enacts a law and authori-
              . ses an outside authority to bring it into force in such area or
                at such time as it may decide, that is conditional and not
                delegated legislation, and that such legislation is valid."
D
    After referring to the observation of Lord Selborne in Her Majesty The
    Queen v. Burah, [1877-78] 5 IA 178 Venkatarama Ayyar, J. concluded
    thus ibid, p. 618:

               "this is clear authority that a provision in a statute confer-
E              ring a power on an outside authority to bring it into force at
               such time as it might, in its own discretion, determine, is
               conditional and not delegated legislation, and that it will be
               valid, unless there is in the Constitution Act any limitation
               on its power to enact such a legislation."

F        We may in this connection set out the words of Lord Selbome in
    Her Majesty The Queen v. Burah, [1877-78] 5 .IA 178, 194-95 to which
    Venkatarama Ayyar, J. referred:

                 "the Legislature determined that, so far, a certain change
                 should take place; but that it was expedient to leave the
G                time, and the manner, of carrying it into effect to the dis-
                 cretion of the Lieutenant-Governor ..... The proper
                 Legislature has exercised its judgment as to place, pe~n,
                 laws, powers; and the result of that judgments has been to
                 legislate conditionally as to all these things. The condi-
                 tions having been fulfilled, the legislation is now absolute.
H              . Where plenary powers of legislation exist as to particular
         ORIENT PAPER v. STATE OF OR!SSA [THOMMEN, J.[              499

            subjects, whether in an Imperial or in a provincial Legisla-
                                                                           A
            ture, they may (in their Lordships' judgment) be well exer-
            cised, either absolutely or conditionally. Legislation, con-
            ditional on the use of particular powers, or on the exercise
            of a limited discretion, entrusted by the Legislature to
            persons in whom it places confidence, is no uncommon
            thing; and, in many circumstances, it may be highly conve-     B
            nient ... "    ,

Venkatarama Ayyar, J. further stated (ibid, pp. 618-619.):

             . . . . . The reason for upholding a legislative provision
           authorising an outside authority to bring an Act into force
           at such time as it may determine is that it must depend on C
           the facts as they may exist at a given point of time whether
           the law should then be made to operate, and that the deci-
           sion of such an issue is best left to an executive authority.
           Such legislation is termed conditional, because the Legisla-
           ture has itself made the law in all its completeness as D
           regards 'place, person, laws, powers', leaving nothing for
           an outside authority to legislate on, the only function
           assigned to it being' to bring the law into operation at such
           time as it might decide ..... ".

These observations show that section 1(3) is a true example of condi-      E
tional legislatio"n, and not delegated legislation, and it is perfectly
valid.

      Even if the section were to be seen as a delegation of power, it is
a power conferred on the Government to give full effect to the policy
behind the legislation, It is with a view to achieving that purpose that F.
the executive has been empowered to choose the time, place and forest
produce for bringing the .Act into operation having regard to the
particular facts and circumstances in the contemplation of the legisla-
ture. There is no excessive delegation in such statutory grant of power.
[See Gwalior Rayon Silk Mfg. (Wvg.) Co. Ltd. v. The Asstt. Commis-
sioner of Sales Tax & Ors., [1974] 2 SCR 879 and Harishanker Bag/av. G
The State of M.P., [1955] 1SCR380, 388].

      We see no substance in the contention that Orissa Forest Act,
1972 and Act 22 of 1981, as subsequently amended, address them-
selves to identical problems so as to make the latter a surplusage.
While the Orissa Forest Act, 1972 is concerned with the protection and H
    500         SUPREME COURT REPORTS                [1990) Supp. 2 S.C.R.

    management of the forests, Act 22 of 1981, as its title and preamble
A
    indicate, is meant to control and regulate trade in forest produce by
    creating a State monopoly. The later statute has rescinded all contracts
    for the purchase, sale, gathering or collection of forest produce and
    has repudiated all rights created by and arising under such contracts
    and all grants of profit a prendre. The bamboo contractors are, there-
B   fore, not entitled to claim any independent right inconsistent with the
    statute as from the date specified under section 1(3), namely,
    1.10.1988.

          Act 22 of 1981, as seen above, has been enacted to provide for
    control and regulation of trade in forest produce by creating ~ State
    monopoly in that trade. Control through monopoly has become neces-
c   sary because of rapid increase of smuggling activities in the State. [See
    M/s. Utkal Contractors and Joinery (P) Ltd. and Others v. State of
    Orissa, [1987] Supp. SCC 751]. All this is clear from the preamble to
    the Act as well as from the Statement of Objects and Reasons,
    (published in the Orissa Gazette, Extraordinary No. 325, dated
D   17.3.1981). The legislative object is sought to be achieved by means of
    various provisions in the Act, particularly section 3 constituting units
    of areas specified for the applicability of the Act; section 4 appointing
    agents in respect of such units; and, section 5 rescinding all contracts
    relating to forest produce and making agents the sole repositories of
    authority to purchase and transport forest produce specified in the
E   notification issued under section 1(3) of the Act. Such law creating
    State monopoly is presumed to be reasonable and in the interests of
    the general public. [See the principle stated in Akadasi Padhan v. State
    of Orissa, [1963] Supp. 2 SCR 691 at 704-705]. The Act stipulates
    appointment of agents who must necessarily work strictly on behalf of
    the State and not for themselves. The sections as such are, therefore,
F   not open to challenge [See Akadasi Padhan (supra} at 715-718]. These
    legislative measures are rationally related to the object sought to be
    achieved.

          We see no substance in the contention that the impugned provi·
    sions have resulted in acquisition of rights in land on principles of
G   compensation less favourable to the contractors in comparison to the
    allegedly like provisions of the Orissa Forest Act, 1972 providing for
    acquisition under the Land Acquisition Act 1 of 1984. The Orissa
    Forest Act, 1972, unlike Act 22 of 1981, provides for acquisition of
    land under the Land Acquisition Act I of 1984 when a right (other
    than a right to forest produce and certain other specified rights) is
H   claimed in that land. This means compensation under the Land
          ORIENT PAPER v. STATE OF ORISSA [THOMMEN, J.]                501

Acquisition Act is contemplated only where the right claimed is in
                                                                              A
respect of private land. The Orissa Forest ~ct does not provide for
acquisition or compensation under the Land Acquisition Act where
the right claimed is, as in the instant cases, in respect of forest produce
grown or found in Government forests. Act 22 of 1981 significantly
does not provide for acquisition of land, but for control of trade in
forest produce by creating a State monopoly to the exclusion of any           B
private person. No fundamental right of the contractors is affected by
such control through State monopoly, particularly when the con-
tractors have been given full liberty to remove all felled bamboos
within the stipulated period. In any case, whatever be the consequence
of the exclusion of the contractors from trade in forest produce, such
exclusion for the purpose of State monopoly .has been brought about
by authority of law. [See Akadasi Padhan, (supra) ].                          c
     As stated by this Court in Hamdard Dawakhana (Wakf) Lal
Kuan, Delhi and Another v. Union of India and Others, [1960] 2 SCR
671, 678-679]:
                                                                              D
            "         the legislature understands and appreciates the
            need of the people and the laws it enacts are directed to
            problems which are made munifest by experience and that
            the elected reppresentatives assembled in a legislature
            enact laws which they considered to be reasonable for the
            purpose for which they are enacted. Presumption is, there-        E
            fore, in favour of the constitutionality of an enactment.

See also Charanjit Lal Chowdhuri v. The Union of India & Ors., [1950]
SCR 869; The State of Bombay v. F.N. Bulsara, (1951] SCR 682, 708
and Mahant Moti Das v. S.P. Sahi, AIR 1959 SC 942, 948.
                                                                           F
       Smuggling in forest produce has been a serious threat to national ·
economy. No society can tolerate activities endangering the morale
and economy of the people. This substantive evil with its corrupting
and debilitating influence is sought to be remedied by legislative
control of trade in forest produce through State monopoly. These
measures are undoubtedly Well within the province of the legislature G
and reasonably and rationally adapted to the end sought. The legisla-
tive findings and the subject-matter of the legislation; the area of its
operation; its purpose and intent; its legislative history; the objects
and reasons for the amendments made consequent on judicial deci-
sions; the vice that is sought to be remedied; the legislative response to
compelling necessities. All this lends support to the presumption in H
    502        SUPREME COURT REPORTS                [ 1990) Supp. 2 S.C.R.

    favour of reasonableness, legality and constitutionality of the legisla-
A   tive actions in question. All rights and interests contrary to and incon-
    sistent with the statute accordingly stand rescinded.

         We see no merit in the challenge against the statutory provisions
    or the notifications issued thereunder or the actions taken in accor-
B   dance with them. The appeals and writ petitions are accordingly· dis-
    missed with costs.

    Y. Lal                                              Petitions dismissed.