Holding

The total prohibition on saw‑mill operations within the prohibited area is a valid restriction on the right to carry on trade and business under Articles 19(1)(g) and 301, and the geographical classification is permissible class legislation, so the provision is constitutional.

Summary

The petitioner, Sushila Saw Mill, operated a saw mill in Keonjhar district of Orissa, which lay within a "prohibited area" defined as a reserved forest or within 10 km of its boundary. Under the Orissa Saw Mills & Saw Pits (Control) Act, 1991, Section 4(1) imposes a total embargo on establishing or operating saw mills in such areas, and the mill was served a notice to shut down. The mill challenged the provision, alleging violation of its fundamental rights to carry on trade and business under Articles 19(1)(g) and 301, and claiming discriminatory class legislation in breach of Article 14. The Supreme Court held that a total prohibition can be a reasonable restriction in the public interest of forest conservation, and that the geographical classification constitutes valid class legislation, not discrimination. Consequently, the provision was upheld as constitutional and the petition was dismissed.

Issues considered

The validity of the prohibition under Section 4(1) of the Orissa Saw Mills & Saw Pits (Control) Act, 1991 in view of Articles 19(1)(g) and 301 of the Constitution.
Whether the classification based on geographical contiguity violates the equality clause, Article 14.
Whether the Act creates a total ban or merely a licensing discretion.
Whether the restriction is reasonable and in the public interest.

Legislation cited

Constitution of Indias. Article 14, s. Article 19(1)(g), s. Article 301
Orissa Saw Mills & Saw Pits (Control) Act, 1991s. 13, s. 4(1), s. 4(2), s. 5, s. 6, s. 7

Subjects

Article 19(1)(g)Article 14Article 301environmental protectionforest conservationclass legislationtotal prohibitionsaw mill regulationpublic interestrestriction

Judgment

A SUSHILA SAW MILL
v.
STATE OF ORISSA AND ORS.

JULY 31, 1995
B [K. RAMASWAMY AND K.S. PARIPOORNAN, JJ.]

Orissa Saw Mills & Saw Pits (Control) Ac~ 1991

Section 4(1j-Proviso-Establishment and Operation of Saw mills-
C Regulation of-Creation of Prohibition Zone-Total prohibition to cany on
Saw mill business in reserved forest as well as within JO kms. from the
boundaries of reserved forests-Held valid arid not violative of Articles 14,
19(1)(g) and 301.

Constitution of India: 1950:
D
Article 14-Class Legislation-Validity of-Statute-Object to preserve
forest wealth and environment-Prohibition to cany on Saw Mill Busi-
ness-Because of geographical contiguity entire area of one distlict covered by
prohibition zone-Held it was a class legislation and not discriminatory.
E Article 19(1)(g)-Right to carry on trade and business-Restric-
tion-Held it includes prohibition.

With a view to regulating the establishment and operation of saw
mills and saw pits and the trade of sawing so as to protect and conserve
F forest and environment the State of Orissa enacted Orissa Saw Mills and
Saw Pits (Control) Act, 1991. Section 4 of the Act enjoined that on and
after the appointed day no person· should establish or operate a saw mill
or saw pit or sawing operations except under the authority and subject to
the conditions of licences granted under the Act. Further under proviso to
G Section 4(1) a total embargo was placed on the right to carry on trade and
business in saw milling operations or sawing operation within the
prohibited area i.e. within a reserved forest, protected forest or any forest
area or within 10 k.m. from the boundary of such forest or forest area. The
petitioner, which established a saw mill within the prohibited area and was
issued a notice to close down its operation with immediate effect, chal-
H lenged the validity of S.4(1) and the notice issued to it before the High
426
SUSHILA SAW MILL v. STATE 427

court contending that (i) its right to carry on trade and business was A
violated; (ii) the Act does not contemplate a total ban on the right to carry
on the saw mill business; (iii) mills situated within the district covered by
the prohibited zone have been discriminated vis-a-vis other districts be-
cause geographical contiguity of the district was such that no saw mill
could be established within 10 kms. of the forest as envisaged under
B
proviso to Section 4(1) of the Act.

The Division Bench of the High Court dismissed the petition and
upheld the validity of the impugned provision. The appellant preferred a
special leave petition before this Court.

Dismissing this petition, this Court
c
HELD : 1. The right to carry on trade or business envisaged under
Art. 19(1) (g) and Art. 301 is subject to the statutory regulation. In the
public interest restriction under Article 19(1) (g) may in certain rare cases
include total prohibition. It is seen that the reserved forest is being D
denuded or depleted by illicit felling. Thereby denudation of the reserved
forest was noticed by the legislature . The preservation of the forest is a
matter of great public interest and one of the rare cases that demanded
the total ban by the legislature. The Act came to be enacted to impose a
total ban in prohibited area for the period during which the ban is in E
operation, to carry on saw mills business or sawing operation within the
prohibited area. It is, therefore, clear that the statute intends to impose a
total ban which is found to be in "public interest". The individual interest,
therefore, must yield place to the public interest. Accordingly, it is neither
arbitrary nor unreasonable. (431-D; G-H; 432-A-B]
F
Narendra Kumar & Ors. v. Union of India and Ors., AIR (1960) SC
430, relied on.

Lakshmi Narayan Saw Mills & Ors. v. State of Orissa & Ors., (1995) 1
OLR 1 FB, approved.
G
M/s. Saraswati Saw Mills Etc. Etc. v. State of Orissa and Ors., (1995)
79 C.R.T. P.61, cited.

2. It is true that by geographical contiguity, Keonjhar District ap-
pears to have been situated within the prohibited area but that is the
legislative mandate t~at the entire area covered within the prohibited zone H
428 SUPREME COURT REPORTS [1995] SUPP. 2 S.C.R.

A is treated as a class as against the other area. Therefore, when the limits
of that district are within prohibited zone of the reserved or protected or
forest area Etc. or within 10 k.m., it is a legislative scheme to give effect to
the legislative object in the public interest to preserve forest wealth and
environment and to put end to illicit felling of forest growth. Therefore, it
is a class legislation; it is not discriminatory and does not offend Art. 14
B or Article 301 of the Constitution. It is a valid law. [432-B-D]

CIVIL APPELLATE JURISDICTION: Special Leave Petition (C)
No. 14702 of 1995.

C From the Judgment and Order dated 16.3.95 of the Orissa High
Court in O.J.C. No. 1545 OF 1995.

.t·~ Kishore Kumar Patel and S.M. Garg for the Petitioners.

The following Order of the Court was delivered :
D
This special leave petition arises from the order of the Division
Bench of Orissa High Court dated March 16, 1995 in Civil Writ Petition
No. 1545 of 1995. The petitioner has established a Saw mill in the year 1980
in Keonjhar District of Orissa State. The notice under s.4(1) of Orissa Saw
Mills & Saw Pits (Control) Act, 1991 (for short 'the Act') was issued to
E the petitioner to close down its operations with immediate effect. Challeng-
ing the validity of s.4(1) of the Act and the notice, he filed the writ petition
contending that it violates his fundamental right to carry on trade and
business and also created invidious discrimination to the Saw Mills/Saw
Pits situated in that district vis-a-vis other districts. It was also contended
F that the Act did not create any total ban but gave discretion to the licensing
authority to grant or refuse the renewal of licence. Without considering
their application for renewal; direction to close down the mill is arbitrary.
The Division Bench negatived both the contentions relying upon its Full
Bench judgment in Lakshmi Narayan Saw Mills & Ors. v. State of Orissa &
Ors., (1995) 1 OLR 1 FB. The petitioner placed reliance on a Division
G Bench judgment of that Court in M/s. Saraswati Saw Mills Etc. Etc. v. State
of Orissa and Ors., (1995) 79 C.R.T. p.61. It is contended for the petitioner
that the views of the Full Bench and the Division Bench judgment in
question are not ~orrect. A reading of the Act does not indicate that the
statute imposed total prohibition on the right to carry on the Saw Mill
H business. Even otherwise, mills situated within the district have been dis-
SUSHILASAWMILL v. STATE 429

criminated as its geographical contiguity of District is such that no Saw Mill A
can be established or exist within 10 k.m. as envisaged under proviso to
s.4(1) of the Act. Therefore, it violates their fundamental rights under
Arts.14, 19(1)(g) and 301 of the Constitution.

The Act came into force on November 20, 1991. The Rules made in
exercise of the power under s.23 have come into force on November 18, B
1993. The Act was enacted to regulate establishment and operation of Saw
Mills and Saw Pits and trade of sawing to protect and conserve forest and
environment and for matters incidental thereto or connected therewith.
The "forest area" is defined to mean all notified lands as forest under any
law and administered as forest whether State-owned or private and C
whether wooded or maintained as a potential forest land. Section 5 em-
powers the Government to declare for a specified period reserved forest
etc. Section 4 of the Act provides establishment and operation of Saw Mills
and Saw Pits. The said section provides as under :

"4. Establishment and operation of saw mill and saw pit. D
(1) On and after the appointed day, no person shall establish or
operate a saw mill or saw pit except under the authority and subject
to the conditions of a licence granted under this Act :

Provided that no person shall establish or operate any saw mill or E
saw pit within a reserved forest, protected forest or any forest area
within ten kilometers from the boundary of any such forest or for~st
area.

(2) Notwithstanding anything contained in sub-s.(1) -
F
(i) a saw mill or saw pit, established by the Orissa Forest Develop-
ment Corporation Limited or by any other agency of the Govern-
ment prior to the appointed day, may continue to be operated by
such Corporation or agency, as the case may be, and in such a
case, the Corporation or agency, as the case may be, shall be G
deemed to be licensee for the purposes of the Act;

(ii) a saw mill or saw pit other than one referred to in clause.(i)
and establishment prior to the appointed day may continue to be
operated and shall be deemed to be a saw mill or saw pit, as the
case may be, licensed under this Act. :- H
430 SUPREME COURT REPORTS [1995) SUPP. 2 S.C.R.

A (a) for a period of three months from the appointed day; or

(b) if an application made in accordance with section 6 for a
licence is pending on the expiry of the period specified in clause
(a), till the disposal of such application under sub-s.(2) of s.7".
B
The petitioner-Saw Mill is admittedly situated within the reserved
forest or protected forest or forest area within 10 k.m. from the boundary
of such forest area. Thus, the petitioner's Saw Mill is situated within the
prohibited area. The question, therefore, is whether the prohibition con-
tained in statute is valid in law? Section 4 regulates establishment and
c operation of Saw Mills and Saw Pits under the Act enjoining that on and
after the appointed day no person shall establish or operate a Saw Mill or
Saw Pit or sawing operations except under the authority and subject to the
conditions of licences granted under the Act. The proviso which was
assailed in this petition puts further embargo that no person shall establish
D or operate any Saw Mill or Saw Pit which is situated in a reserved forest,
protected forest or any forest area or within 10 k.m. from the boundary of
such forest or forest area. By applying non-obstante clause, sub-s. (2) of
s.4 relieves from the operation of proviso of suo-s. (1) of s.4, only a Saw
Mill or a Saw Pit established by Orissa Forest Development Corporation
Ltd. or any other. agency of the Government prior to the appointed day.
E Their continuance and operation are only saved and they are ?eemed to
be the. licensee for the purpose of regulation of the Act. Clause (ii) thereof
.
mandates that the Saw Mill or Saw . Pit. other than
'
covered
. by Clause (i) of
s.4(2) established prior to the appointed day may continue to be operated
and shall be deemed to be Saw Mill or Saw Pit and deemed to have been
F licensed under the Act but it is only a transitory provision as indicated in
sub-clauses (a) & (b) thereof. In other words,, the Sa~ Mill established
prior to the Act coming into foi;ce, i.e., the appointed day, and continuing
. to operate after the Act has came into force, shall,be entitled to. ~arry on
its operations for a period of three ~onths from tht?, appoint~d day or till
the application for licence or renewa~ made under s.6 ~s pen~iIJ.g,09~sidera-
G tion and is disposed of under sub-,s.(.2) of s.7.:. Se<;ti~~ .S,.gi,ven,pqwer to
the State. to declare prohibited area and ss. [2) envisages ~µ~ q;w:~g the
subsisting period of the prohibited area the. cop.sequen,ces. ~~V<? been
e~umerated under sub-s. (2) of.s.4 and provi,so to S.4(1), namely;~prohibi
tion to grant a licence for establishment of a S~w, Mill or S!'1w: Pit, or
H. operation of the existing saw inill or saw pit was. restricted to. the period
SUSHILASAWMILL v. STATE 431

specified in clauses (a) and (b) of s.4(2)(ii); and prohibition to renew the A
licences to a Saw Mill situated within the prohibited area during that
period. A Saw Mill or a Saw Pit "shall cease to operate and keep its saw
operation closed". The only enabling power given to the licensing authority
was to see that existing stock may be disposed of and no claim for damages
was permitted. For their contravention s.13 gives power to confiscate the B
property. Section 6 and 7 operate to grant licences in areas other than the
p~ohibited area. Rule 3 of the rules gives effect to the provision of the Act
and the grant of the licence will be subject to the conditions enumerated
in Clauses (i) to (v) of Rule 6. Section 7 enjoins the Licensing officer to
grant or refuse to grant licence in accordance with the provision of the Act
and the Rules and for the reasons enumerated thereunder. C

It would thus be seen that the Act intended to regulate the operations
of the Saw Mill and Saw Pit or Sawing. The right to carry on trade or
business envisaged under Art.19(1) (g) and Art. 301 is subject to the _
statutory regulation. When the statute prescribes total prohibition to con- D
tinue to operate even the existing Saw Mills situated within the prohibited
area, the right to carry on trade or business is subject to the provisions of
the Act. Proviso to Section 4(1) puts a total embargo on the right to carry
on trade or business in Saw milling operation or Sawing operation within
the prohibited area. It is settled law that in the public interest restriction E
under Art. 19(1)(g) may in certain rate cases include total prohibition. This
Court in Narendra Kumar & Ors. v. Union of India and Ors., AIR (1%0)
SC 430 held that it is reasonable to think that makers of the Constitution
considered the word 'restriction' to be sufficiently wide to save laws incon-
sistent with Art.19(1), or taking away the rights conferred by the Article,
provided this inconsistency or taking away was reasonable in the interest
F
of the different matters mentioned in the clause. There can be no doubt,
therefore, that they intended the word 'restriction' to include cases of
prohibition also in certain rare cases. The contention that a law prohibiting
the exercise of a fundamental right is in no case saved cannot, therefore,
be accepted. It is seen tht the reserved forest is being denuded or depleted G
by illicit felling. Thereby denudation of the reserved forest was noticed by
the legislature. The preservation of the forest is a matter of great public
interest and one of the rare cases that demanded the total ban by the
legislature. The Act caine to be enacted to impose a total ban in prohibited
area for the period during which the ban_ is in operation, to carry on Saw H
432 SUPREME COURT REPORTS [1995) SUPP. 2 S.C.R.

A Mills business or Sawing operation within the prohibited area. It is, there-
fore, clear that the statute intends to impose a total ban which is found to
be in "public interest". The individual interest, therefore, must yield place
to the public interest.

Accordingly, it is neither arbitrary nor unreasonable. The Full Bench
B of the High Court upheld the provision as valid and in this case it has
rightly declared the law. It is true that by geographical contiguity, Keonjhar
District appears to have been situated within the prohibited area but that
is the legislative mandate that the entire area covered within the prohibited
zone is treated as a class as against the other area. Therefore, when the
c limits of that district are within prohibited zone of the reserved or
protected or forest area etc. or within 10 k.m., it is a legislative scheme to
give effect to the legislative object in the public interest to preserve forest
wealth and environment and to put end to illicit felling of forest growth.
Therefore, it is a class legislation; it is not discriminatory and does not
D offend Art.14 or Article 301 of the Constitution. It is a valid law. The
Special Leav~ Petition is accordingly dismissed.

T.NA. Petition dismissed.