VIDARBHA VENEER INDUSTRIES LIMITED Vs. STATE OF MAHARASHTRA

JUDGEMENT

(1.) THE petitioners carry on the business of manufacturing veneer, ply wood and allied ply wood products at their factory situated at M. I. D. C. Estate, Nagpur, in the Vidarbha Region. According to the petitioners, in the year 1974 they set up their factory at Nagpur in view of the Government Resolution No. FND/1269/211097-2 dated 25th September, 1969 passed by the Government of Maharashtra, Revenue and Forest Department. The Resolution sets out that forest industries in Maharashtra State are largely located in the Bombay Pune Region. These industries are generally located in areas remote from important resource centres; while industrial development has languished over the extensive forest areas in the regions of the State which have substantial surplus production potential. The Resolution also states that there is a need for a rational dispersal of industries in the under-developed regions of the State. Therefore, to achieve national economic planning for forest industries and encourage establishment of resource oriented industries to utilise available surplus production from the forest areas in the State, the Government has taken various policy decisions. These include, inter alia, granting of applications for forest based industries in the proximity of forest regions. Under Clause (2), the available limited production of certain forests on which specific industries entirely depend, are to be reserved for the industries as specified in that Resolution. Clause (3) of the Resolution states that the lease of forest produce should be granted to forest based industries initially for 20 years as set out therein. Clause (5) states that the forest produce should be supplied to the industry charging royalty corresponding to market rates for the produce with keen competitive demand and on such other Terms and Conditions as may be mutually agreed upon. Clauses (5) and (7) on which the petitioners are basing their claim, are as follows :

(2.) ACCORDINGLY, the petitioners negotiated with the Revenue and Forest Department, Government of Maharashtra, for setting up their timber based industry in Nagpur. The initial proposal of the petitioners was for setting up two units. The Government, however, agreed to supply forest raw material on a long term basis only to the 1st unit of the 1st petitioner. Therefore, ultimately, an agreement has been arrived at between the petitioners and the State of Maharashtra for supply of their requirements which is recorded in the letter dated 1st September, 1973 addressed by the Chief Conservator of Forests, Maharashtra State, to the petitioners. The agreement records the requirements of timber as claimed by the petitioners. It also records that out of the proposed two units, the Government was in a position to supply on a long term basis forest raw materials only in respect of the 1st unit viz. , M/s. Vidarbha Veneer Industries, who are the present petitioner No. 1, provided they agree to accept timber of several specifications as set out in that letter. The second paragraph of the letter sets out the quantities of timber which would be made available to the 1st petitioner subject to annual availabiltiy. The quantities of teak and miscellaneous timber which will be so supplied annually are set out in the said paragraph with their specifications. Paragraph 3 of the letter sets out the conditions which cover the long term lease of forest produce to the petitioners. It states that the lease would be initially for a period of 20 years. Sub-para (ii) states that royalty to be fixed for the supply of timber would be determined by the Government with reference to the prevalent market rates. Sub-clause (iii) sets out that the royalty will be reviewed after every three years. Sub-clause (iv) states that the quantities of various species to be supplied are given in Annexure I to the letter. Accordingly, from 1st February, 1974 the petitioners have received supply of timber for the 1st petitioners factory at Nagpur under this agreement at prices which have been fixed and reviwed at three-yearly intervals.

(3.) IN 1982, in view of the fact that the demand for various produce like teak-wood had considerably increased and the price-trend was upwards, the Government decided in public interest to pass a Government Resolution dated 6th January, 1982 under which it was decided that there should be no reservation of specific forest produce for specific industries. It was, inter alia, decided that a committee consisting of the representatives of the Revenue and Forest Department, Industries Department and the Finance Department should make recommendations regarding fixation of initial price of forest produce or its revision. One of the decisions taken was that price of forest produce should be revised annually. However, in respect of the commitments for supply of forest produce to forest based industries already made, the prices should be revised as provided in the respective agreements unless such terms were modified.