Dara Ramanarasimham vs Government of Andhra Pradesh and Others

The petitioner is seeking a Mandamus to direct the first respondent to execute the agreement with the petitioner in terms of G. O. Ms. No. 587 dt, June 22, 1976 and to supply soft wood at the rate fixed, viz., Rs. 250/- per cmt, prescribed in the said G. O. Though there is no relief sought for against the second and fourth respondents, viz, The Chief Conservator of Forests and the Andhra Pradesh Forest Development Corporation Limited in this regard, the petitioner is permitted to amend the prayer to incorporate the same and it is accordingly amended, seeking relief against the 2nd and 4th respondents also.

The facts are not in dispute. The petitioner approached the Government for supply for soft wood pieces for the purpose of manufacturing splints and veneers. The petitioner is a small scale unit. The Government, in G. O. Ms. No. 587 dt. June 22, 1976 directed the Chief Conservator of Forests (2nd respondent) to enter into an agreement with the petitioner after the agreement is drafted as per the conditions mentioned above and after it is scrutinized by the Government Pleader. Conditions Nos. 1 to 10 have been imposed thereunder. It would appear from the record that correspondence went on between the parties and ultimately the petitioner by letter dt. July 13, 1977 undertook to pay at the rates fixed by the Government for the supply of soft wood. Pursuant thereto, supply was started on Aug. 4, 1977. In the meanwhile, the Government issued Memo No. 3571 dt. Aug. 1 1977 directing the Chief Conservator of Forests to supply soft Wood to all small scale industries at market rates. This Memo was subsequently modified by Memo No. 28409 dt. Aug. 3, 1979 directing the Chief Conservator of Forests to fix the rates on the basis of the recommendations made by the Pricing Committee for Small Scale Industries constituted in G. O. Ms. No. 364 dt. May 10, 1979 pursuant to which the rates have been determined and they are being supplied to the various industries on annual basis determining the prices twice every year in the months of April and Nov., of the calendar year.

The case of the petitioner is that in terms of Cl. (3) of the G. O. 587, the petitioner is entitled to the supply of soft wood at the rate of Rs. 250/- per cmt measured at midgrith under bark, subject to revision for every three years and the Department cannot now insist upon the revision under the Memos referred to earlier. This Court, by interim order dt. Dec 20, 1979 directed the petitioner to pay the prevailing rate at Rs. 285/- per cmt. , and accordingly, it is stated, that the petitioner has been making payment thereof.

The sole question that arises for consideration in this writ petition is whether the G. O., as simpliciter can be directed to be enforced or whether this Court in exercise of its power under Art. 226 of the Constitution, could modify Cl. (3) of the Conditions imposed in G. O. Ms. No. 587 dt. June 22, 76 and incorporate the subsequent developments whether the petitioners would be bound by the orders issued by the Govt. The petitioner has admittedly acquired no concluded and vested right under the contract. Undoubtedly the Court has got wide discretion in the grant of the relief. It is well settled that the Court can take into account the subsequent developments. The Government, after issuance of the above G. O., have revised the rates and also constituted three men committee to revise the prices for the wood to be supplied to all the small scale units from time to time depending upon the increase or decrease of the prices of the soft wood. Therefore, the Court can take judicial notice of the subsequent developments. As on date, there is no concluded contract. Therefore, the petitioner cannot insist upon the enforcement of Cl. (5) of the G. O., disregarding the subsequent development in the increase of the prices and fixation thereof by the Govt. In Ram and Shyam Company Vs. State of Haryana and Others, (para 12) Desai, J., speaking for the Court, held :

"Let us put into focus the clearly demarcated approach that distinguishes the use and disposal of private property and socialist property. Owner of private property may deal with it in any manner he likes without causing injury to any one else. But the socialist or if that word is jarring to some, the community or further the public property has to be deal with for public purpose and in public interest. The marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song. On the other hand, disposal of public property partakes the character of a trust in that in its disposal there would be nothing hanky panky and that it must be done at the best price so that larger revenue coming into the coffers of the State administration would serve public purposes viz., the Welfare State may be able to expand its beneficent activities by the availability of larger funds. This is subject to one important limitation that socialist property may be disposed at a price lower than the marker price or even for a token price to achieve some defined constitutionally recognised public purpose, one such being to achieve the goals set out in Part IV of the Constitution. But where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy. An owner of private property need not auction it nor is he bound to dispose it of at a current market price. Factors such as personal attachment, or affinity, kinship, empathy, religious sentiment or limiting the choice to whom he may be willing to sell, may permit him to sell the property at a song and without demur. A welfare State as the owner of the public property has no such freedom while disposing of the public property. A welfare State exists for the largest good of the largest number more so when it proclaims to be a socialist State dedicated to eradication of poverty. All its attempt must be to obtain the best available price while disposing of its property because the greater the revenue, the welfare activities will get a fillip and shot in the arm. Financial constraint may weaken the tempo of activities. Such an approach serves the larger public purpose of expanding welfare activities primarily for which the Constitution envisages the setting up of a welfare State."

In view of the clear pronouncement of their Lordships, it is the duty of this Court, as a part of the State within the meaning of Art. 12 to see that the State would get maximum price for its property. Wood is the national property and the Govt., is the best person to dispose of the property in the best manner to augment the revenue of the State for implementation of the welfare schemes. No one has a vested light to a forest produce except at a price offered. Government is the guardian of the finances of the State and is expected to protect the financial interest of the State. In that pursuit, obviously it intended to equalise the rise in demand of the wood and price thereof so as to secure reasonable price for the forest produce. No accusing finger can be pointed out at them. When the Government itself cannot act in a manner which would benefit a private party at the cost of the State which itself is unreasonable, can the Court ignore to take note thereof and create a circumstance in his favour tending to have unjust benefit at the expense of the State. It is stated by the learned Government pleader that on account of the supply to the petitioner, if it is to be made in terms of Condition (3) of the G. O., as on date, the loss would be to the Court, the petitioner cannot have an unfair advantage over the other small scale units similarly situated, that too at the expense of the public revenue. Therefore, it is inexpedient to direct execution of a lease simpliciter in terms of condition (3) alone without regard to the public interest and the loss to the public exchequer : "The rate of royalty for the two species shall be at such prevailing rates as may be fixed or revised from time to time pursuant to the recommendation of the Pricing Committee per cmt.'' measured at midgrith under bark."

The second respondent, viz, the Chief Conservator of Forests is accordingly directed to execute the lease to be operative for a period of ten years with effect from Aug. 4, 1977 for supply of soft wood, in the light of the direction given by the Government from time to time and the fourth respondent shall abide by it in supply of soft wood to the petitioner and the petitioner shall pay the price for the soft wood at the prevailing rates from the date of supply on par with the rates fixed for the other small scale units in terms of condition (3) thereof.

The writ petition is accordingly allowed, but in the circumstances without costs. Advocate''s fee Rs. 150/-.

Petition allowed.