PRITI OIL LIMITED Vs. STATE OF ORISSA

JUDGEMENT

(1.) In the present writ petition, the petitioner a limited company engaged in the business of extraction of oil from oil seeds in its plant situated at Rengali in Sambalpur district assails the Government order dated 28-5-1999 (Annexure 8) as arbitrary and discriminatory in appointing the Orissa State Co-operative Marketing Federation (for short, the 'MARKFED') as the agent and the opposite party No. 6, M/s. Hanuman Vitamin Foods Limited, as the Raw Material Procurer (hereinafter referred to the 'RMP') for collection of Sal seeds during the year 1999 crop year ignoring its claim for such appointment.

(2.) Its case is, prior to 1995 under the Sal Seed Policy of the State Government, the Tribal Development Co-operative Corporation (for short, the 'TDCC') and the Orissa Forest Development Corporation (for short, the 'OFDC') were the agents for collecting the Sal seeds through tribal inhabitants on payment of wages. The Sal seeds so collected used to be put to public auction inviting tenders. In the year 1995, the Government found that oil extracting plants in Orissa were being affected for inadequate supply of Sal seeds and brought out a policy that all such oil extracting units would be appointed as the RMP under the OFDC and TDCC. Under this policy these Corporations were allotted different forest areas for collection. The RMPs were required to pay commission to the agents and royalties to the Government at a fixed rate. The object of this RMP policy in the year 1995 was with a view to ensure availability of raw materials to the plants of Orissa for their survival, general, and employment as well as for augmenting Government revenue by way of royalty and sale-tax and also ensuring certain income to the aforesaid two Corporations by way of fixed margin without any capital investment by the said Corporations. Accordingly to the petitioner, this RMP policy was introduced which proved to be effective and also gave desired result. For this Government was assured of royalties atleast 75% of the estimate crop but, in fact, such royalty also sometimes went upto 600 to 800 per metric tonnes. The OFDC and the TDCC used to get fixed margin of 150 per metric tonnes without any investment. The State also used to collect sales-tax through the two Corporations.

(3.) When the position stood thus, the Government by the impugned order (Anneuxre 8) appointed the OFDC and the TDCC as the agents for eleven forest divisions to each named in the notification and the MARKFED was appointed as the agent for the remaining five forest divisions namely Keonjhar, Bamara, Deogarh. Nawarangpur and Jeypore. The opposite party No. 6 M/s. Hanuman Vitamin Foods Limited was appointed as the RMP for the divisions allotted to MARKFED. It is alleged that the peti-tioner's case was illegally ignored. Such appointment of M/s. Hanuman Vitamin Foods Limited as RMP is only with the purpose of facilitating the company for earning unlawful gains by way of individual monopolistic trade which violated Art. 19(6) of the Constitution and thus a colourable exercise of the administrative powers of the State.It is the petitioner's case that though for the year 1999 crop year it made an application for such appointment as RMP which work it was doing since 1995 after the RMP policy of the Government, yet it was not given the privilege because of discrimination and arbitrary act of the Government. It is further claimed that as per the provisions of the Orissa Sal Seed (Control of Trade) Act, 1981 and the Rules thereof, the MARKFED did not make any application nor at any time it was the agent of the Government, or worked as a RMP, nor it has got any infrastructure. The appointment of the MARKFED as an agent of the Government and the appointment of opposite party No. 6 as the RMP under the MARKFED is wholly an arbitrary action which has to be struck down. The petitioner further claim that it had a legitimate expectation for such appointment inasmuch as it has been procuring the oil seeds since 1995 and being encouraged by the Government policy decision engaging RMP the company upgraded its machinaries by investing huge amount and this is only because of the promise of the Government and therefore the State is bound by the principle of estoppel to engage the petitioner as the raw material procurer.