TMI Blog1971 (1) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... as purchasers. 2. To appreciate the grievances of the petitioners it is necessary to note in brief how the trade in Kendu leaves has been taken over by the State of Orissa by successive legislation and two decisions of this Court bearing thereupon. Kendu leaves appear to have formed a lucrative source of revenue for the State of Orissa 'for many years past. After the merger of the Indian States with the Province of Orissa the Government of Orissa passed an order in exercise of the powers under Section 3(1) of the Orissa Essential Articles Control and Requisitioning (Temporary Powers) Act, 1947 by which the Kendu leaves growing areas in the State were divided into units and licences were issued to persons entitled to trade in such leaves. The District Magistrate fixed the minimum rates from time to time and the Order provided that the licensees were bound to purchase Kendu leaves from the pluckers or owners of private trees and forests at rates not below the minimum prescribed. The licensees were however not fettered in the matter of the sales of the leaves after purchase. This was followed by the Orissa Kendu Leaves Control Order, 1960 which effected some changes in the sche ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld but Rule 7(5) promulgated under the Act was held to be bad because it left it to the sweet will and pleasure of the officer concerned to fix any terms and conditions regarding agents on an ad hoc basis on the ground that the agency permitted under Article 19(6)(ii) of the Constitution had to be an agency in the strict and narrow sense of the term and could only include agents who could be said to carry on the monopoly at every stage on behalf of the State for its benefit and not for their 'own benefit at all. 4. In effect this Court upheld the creation of State monopoly and the employment of agents for carrying on the monopoly business by the State but Rule 7(5) was held to be invalid for the reasons indicated. According to the petitioner after the judgment of this Court the form of the agreement for agents known as the 'G' form was introduced under the rules and two sets of persons were employed to carry on the business of the State monopoly, one set known as the 'agents' and the other purchasers . The agents were to purchase and collect Kendu leaves on behalf of the Government and the purchasers were to purchase from the Government, the rates of purchas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. It was ex facie discriminatory, and imposed unreasonable restrictions upon the right of persons other than existing contractors to carry on business. The Court found that no explanation had been attempted on behalf of the State as to why an offer made by a well-known manufacturer of bidis interested in the trade to purchase the entire crop of Kendu leaves for the year 1968 for three crores of rupees was turned down. The plea put forward on behalf of the Government that its action was bona fide was held not to be an effective answer to a claim made by a citizen that his fundamental rights were infringed, by the action of the Government. It however appeared to this Court that during the pendency of the proceedings the entire year for which the contracts were given had expired and the persons to whom the contracts were given were not before the Court. In these circumstances counsel for the appellants agreed that it would be sufficient if it was directed that the tenders for purchase of Kendu leaves be invited by the Government in the next season from all persons interested in that trade. Acting upon this suggestion the Court directed that the State Government would act in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ttack In the petition is directed against the addition of a provision to Section 3(2) by which a registered grower might be permitted to transport his leaves from any place within the unit wherein such leaves were grown to any other place outside the unit for the purpose of sale to the Government or any agent in respect of the unit authorised to purchase the same from him. Complaint was also made about the amendment of Section 8(1) relating to the appointment of agents by the addition of the proviso: that the Government may for the purpose of purchase of leaves from the registered growers, appoint an additional agent in respect of one or more units. Challenge was also made to several clauses in Rule 5-B which provide for disposal of Kendu leaves. Those Clauses are (6), (7), (8), (9) and (16) which run thus: (6) At the time of opening of the tenders, the tenderer shall produce a certificate of solvency for at least 1/4 of the total annual purchase price according to the rate quoted by him, granted by a Revenue Officer not below the rank of a Sub-divisional Officer if the tenderer has landed property at a place, wherein the Orissa Public Demands Recovery Act, 1962, is in for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Under Clause (1) Government was empowered to appoint agents for a unit or units under Sub-section (1) of Section 8 and to publish a notice in the official Gazette and in such other manner as was thought fit, giving terms and conditions of agency and inviting any applications for such agency, provided that no application need be invited for appointment of the additional agent referred to under the provisions of Sub-section. (1) of Section 8 and such additional agent might be appointed directly by Government subject to such terms and conditions as might be decided upon, the additional agent having to execute an agreement in Form I. By Clause (2) the application for agency was to be in form E and was to be submitted to such authority by such date and in such manner as may be specified in the notice. Under Clause (3) every application was to be accompanied by a treasury challan showing a cash deposit of ₹ 500/-in the name of the Divisional Forest Officer as advance security deposit The applicant was also to furnish a certificate of solvency for a sum calculated at the rate of ₹ 10/-per bag for the stipulated number of bags for the respective unit, granted by a Revenue Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iscretion of the Government and the power to authorise registered growers to transport their leaves outside the unit in which they were grown were all aimed at confining the business in the hands of a chosen few completely ousting others. (d) No principle was followed in accepting tenders. The claims of highest bidders were ignored to accommodate favourites of authorities. Appointments were in some cases made of persons whose tenders were lower than the highest ones offered. In some cases areas were settled with persons who had never submitted any tender for the area and in others settlement was made with a non-tenderer at a lower price. 9. Before us, learned Counsel for the petitioners limited himself to the following objections: (1) Agents could not be allowed to be nominees of purchasers. They ought to be independent contractors. (2) The provision for appointment of additional agents under the proviso to Section 8 and Rule 7(1) were unreasonable and arbitrary. (3) The appointment of purchasers who were not the highest tenderers was also arbitrary and mala fide. Rule 5-B(7) which allowed the Government to accept or reject all or any of the tenders without assigning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be necessary to enable the Government to control the business in Kendu leaves effectively. Nothing was shown to us as to how any of these provisions in form G for the appointment of agents and form I for the appointment of additional agents worked against the interest of the Government working a monopoly business. The provision for appointment of additional agents and additional purchasers are not per se bad. The exigency of business may require such appointments. Further we find ourselves unable to appreciate the points sought to be made on the basis that some of the agents were nominees or relations of the purchasers. We do not see how this can affect the scheme of State monopoly. An agent had to purchase 'Kendu leaves from growers at prices fixed by the Government under Section 4(1) and he had to deliver processed Kendu leaves to such persons as were to be directed by the Forest Officers. He was to be entitled to various charges including- (1) a fixed sum per bag of processed leaves towards costs incurred for collecting the leaves, storage, transport, packing and other charges, and (2) remuneration at the rate fixed for each bag of processed leaves which he secured ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in which the contracts current at the time of the filing of the petition had been settled. The counter affidavit on behalf of the State of Orissa shows that forest and other lands, producing Kendu leaves were divided into 180 units for the years 1969, 1970 and 1971. Three units out of these were reserved for the Orissa Forest Corporation; the remaining 177 units for the public tender. Out of these 167 units were settled at the highest prices offered. 139 out of 167 were settled in favour of persons who actually made the highest tenders. 29 units were settled at the highest prices offered but in favour of other tenderers on considerations such as past experience, clean past records, etc. One unit was settled by negotiation at a price higher than the highest tender received. In the case of 5 units persons who had offered inflated and speculative prices did not turn up and the units were settled with the next best tenderers. In the case of one unit on the highest tenderer withdrawing his tender it was settled in favour of another tenderer who was to pay the next highest price. In the case of another unit the highest tenderer who had been a defaulter in the previous year had his tender ..... X X X X Extracts X X X X X X X X Extracts X X X X
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