Vijay Rosin & Turpentine Factory, ... vs Union Of India And Anr.
1970 Latest Caselaw 221 Del

JUDGMENT

Hardyal Hardy, J.

(1) The petitioner is a partnership firm carrying on the business of manufacturing rosin and turpentine oil at Hoshiarpur, (Punjab). All its partners claim to be displaced persons from West Pakistan who have since the partition of the country in 1947 settled down in India. It has moved this Court under Articles 226 and 227 of the Constitution for appropriate writs, orders and/or directions requiring the Government of Himachal Pradesh to desist from giving effect to its decision of with-holding from sale by public auction, the stocks of resin extracted from the forests in the Union, territory of Himachal Pradesh and also to forbear from transferring the same to any one else, to the exclusion of the petitioner. The petition also contains a prayer for quashing all orders made by the respondents in that behalf.

(2) The main allegations on which the petitioner seeks relief are that in 1948, pursuant to certain assurances and undertaking given by the Government of East Punjab to the effect that in the event of displaced persons from West Punjab installing factories for processing raw resin from the forests, the entire stock of resin available from the Punjab Forests would be made available to them by the Government, the petitioner and other displaced persons connected with the trade in resin (a gummy exudation from matured chir (Plnus lingi folia) trees, set up ten small-scale industries in the District of Hoshiarpur for proceessing resin. In due course, 32 more factories employing 5000 workmen and involving a total capital out-lay of about 2 crores of rupees and an yearly out-turn of over 9000 tonnes of resin and 24 lac litres of turpentine oil were established. The petitioner contends that the undertaking and assurance given by the Government of Punjab having been acted upon on both sides for a continuous period of nearly 20 years, matured into a binding contract. which could not be unilaterly terminated to the detriment of the factory owners.

(3) According to the petitioner, the total quantity of raw resin processed in the various units in Hoshiarpur District exceeds 6 lac maunds, the supplies of which were being secured by the owners of factories by public auctions of raw resin extracted from forests in the Districts of Kangra, Hoshiarpur, Gurdaspur, Simla, Nalagarh, Patiala, Solan, Mandi, Chamba, Kulu, Bilaspur and Nahan.

(4) In 1963 the Government of Punjab by an executive order, decided to supply the entire quantity of resin extracted from the forests located in the State of Punjab to a Co-operative Society called the Shivalak Resin and General Mills Co-operative Society, Garget (District Hoshiarpur). Its action was however challenged in a writ petition (being Civil Writ No. 1750 of 1963) filed by one of the industrialists in the High Court of Punjab at Chandigarh and was struck down by a Bench decision of that Court reported as A.T.R. 1966 Punjab 16.

(5) On the coming into force of the Punjab Re-organisation Act, 31 of 1966, the forests located in the Districts of Kangra, Simla, and Gurdaspur which previously formed part of the State of Punjab were transferred to Himachal Pradesh, but even after such transfer the Government of Himachal Pradesh continued the practice of distributing the forest-produce of raw resin by means of public auctions. Later however, by an executive decision the Government of Himachal Pradesh decided to instal one more factory in addition to the factory already installed by it at Nahan for processing raw resin and started with-holding substantial quantities of raw resin from public auctions on the pretext that such supplies would be needed for meeting the requirements of the proposed new factory, although even the earlier enterprise of the State at Nahan had been running at a loss for the past several years despite the fact that supplies of raw resin to that factory were being made at much lower prices than those at which the petitioner and other owners of factories at Hoshiarpur were purchasing the same.

(6) The petitioner alleges that recently the authorities have, despite protests from the industrialists concerned, completely stopped all public auctions of resin on the plea that stocks were being built up for the second factory which was being installed at Bilaspur. The petitioner contends that the action of the Government in with-holding from public use the resin available from the forests of the State and monopolising the entire produce exclusively for its factory or factories amnounts to invasion of its fundamental right guaranteed under Articles 14, 19(1)(f) and 19(1)(g) of the Constitution. The action of the Government is ultra vires the Constitution because no specific legislation has been enacted by a competent legislature authorising the Government to create a monopoly in its favor.

(7) The petitioner further contends that the Government is not competent under any law to with-hold the supply of raw resin from the public. The contention, that being the owner of raw resin it is empowered to deal with the commodity in any manner it likes, has already been rejected by the Punjab High Court in Civil Writ. No. 1750 of 1963 and that the said decision is binding on the Government.

(8) In the counter-affidavit filed on behalf of the respondents, certain preliminary objections have been raised to the maintainability of the petition. A detailed reference to those objections will be made hereafter.

(9) As regards the petitioner's averments on merits, it is stated that there is nothing on record to show that any undertaking or assurance was given as alleged or that the same has resulted in a contract between the Government and the factory-owners.

(10) The respondents deny that the judgment of the Punjab High Court in Civil Writ No. 1750 of 1963 has any bearing on the present case or that it binds the Government of India or the Government of Himachal Pradesh in any manner.

(11) As regards the second factory in the public sector which was to be established at Bilaspur, it is stated that that factory will have a processing capacity of 2 lack maunds (7400 tonnes) of resin. The factory at Nahan, which is already running processes one lac maunds (3700 tonnes) of resin. In all, both the factories will process 11,000 tonnes of resin out of 17,000 tonnes of resin produced in Himachal Pradesh thereby leaving a surplus of about 6000 tonnes (80,250) maunds extracted HCD./71-9 from Government forests, which will be available for sale.

(12) It may be mentioned here that. although this was the position taken by the respondents in the first counter- affidavit which was filed on 23-8-1968, since then there has been a change in their attitude and they are not prepared even to concede the petitioner's right to the surplus quantity being made available for sale by public auction. We will advert to this aspect of the matter later when we come to deal with the contentions of the parties advanced in the course of counsel's arguments.

(13) The petitioner's contention that the factory at Nahan has been running at a loss is not admitted by the respondents, and although the petitioner's statement that raw resin is being supplied to the said factory at cheaper rates has not been controverter, it is asserted that the supply of resin at cheaper rates to the factory helps in stabilizing the resin market.

(14) The petitioner's contention about the necessity of legislation or that the State is not competent to utilise its own resources for its own use without specific legislation in that behalf is refuted and it is denied that what has been done by the Government amounts , creation of monopoly in its favor. The respondents claim that in any event the creation of monopoly in favor of public sector is permissible under the provisions of the Constitution.

(15) In the rejoinder affidavit filed on behalf of the petitioner firm, the correctness of the preliminary objections has been denied and the averments made in the petition have been reiterated with a few more defails.

(16) In para 5 of the rejoinder affidavit however the petitioner makes a significant admission that the only material question involved in the disposal of this writ petition is whether the executive authorities of Himachal Pradesh Government were competent in law to withdraw from public use, the supply of natural resources of the State.

(17) These then are the main pleas on which the learned counsel for the parties based their respective contentions at the hearing of the petition.

(18) We shall first take up the preliminary objections to the maintainability of the petition raised on behalf of the respondents.

(19) The respondents' objection on the score of Section 69 of the Partnership Act, 1932 was thus formulated by the learned counsel appearing on their behalf. It was urged that one of the grounds on which governments action had been assailed by the petitioner was based on what the petitioner described as a contact resulting from the undertaking given by the Government of Punjab at the conference held in 1948 to the effect that the entire produce of resin from the forests of Punjab would be sold by public auction which contract the petitioner asserted, had been acted upon for 20 years. Assuming that were so, the proceedings instituted by the petitioner would in that case be for enforcement of a right arising from a contract and would be hit by sub-Section (3) of Section 69 of the Partnership Act, 1932. The petitioner had neither produced the certificate of registration nor had it produced any other document showing that the persons suing were or had been shown in the Register of Firms as partners in the firm. There was only a bald assertion in the rejoinder affidavit filed by Shri Jagdish Chander, a partner of the firm, to the effect that "the petitioner firm is a registered partnership concern."

(20) In support of his argument reliance was placed on a judgment of the Supreme Court in. Jagdish Chandra Gupta v. Kojaria Traders {India) Limited where it was held that the words "other proceedings' in Section 69(3) of the Partnership Act, were not controlled by the preceding expression "claim of set oil" and applied to all precedings including one under Section 8(2) of the Arbitration Act, 1940. It was argued that since the proceedings under Article 226 of the Constitution were also civil proceedings, the same meaning would have to be given so the words "other proceedings" in this petition. There is force in this argument.

(21) Mr. Aggarwala, learned counsel for the petitioner, however submitted that he did not wish to rest his case on the so-called contract at all and that that part of the petitioner's plea may be ignored. In view of the stand taken by Mr. Aggarwala, the objection raised by the learned counsel for the respondent need not be pursued further.

(22) The second objection relates to the locus standi of the petitioner firm to maintain a petition, for enforcement of fundamental rights guaranteed under Article 19 of the Constitution. The question that the protection of article 19 of the Constitution is available to citizens only and that the word "citizen" applies only to a natural person, is now authoritatively settled by the two decisions of the Supreme Court in State Trading Corporation of India Limited v. The Commercial Tax Officer and Others (A.I.R. 1963 S.C. 1811 and The Tata Engineering and Locomotive Co. Limited v. The State of Bihar . Both these decisions relate to a corporation, but the learned counsel for the respondents contended that the same considerations would apply in the case of a firm. Support for this argument was sought from a decision of Andhra Pradesh High Court in Andhra Pradesh Non-Gazetted Officers Association and State of Andhra Pradesh (1960-(1)L.L.J. 156) where it was held that a society registered under the Societies Registration Act, 1860 has a juristic personality of its own, distinct and separate from its members and is therefore not a citizen. As such it is not entitled to the benefits of the fundamental right guaranteed under Article 19 of the Constitution.

(23) Counsel for the respondents also brought to our notice a Bench decision of Bombay High Court in The Sakharakherda Education Society v. The State of Maharashtra where it was said that: "IT is indeed not every association of persons who do business or carry on trade that can be regarded as falling within the decision of the Supreme Court in the State Trading Corporation Case, Air 1963 Sc 1811 referred to above. To extend it to such association would mean that it would extend to a partnership or even a joint family inasmuch as a partnership can sue in its partnership name and the joint family can sue through its Karta."

(24) Learned counsel for the respondents submitted that the above observations were not correct in that they did not take into consideration the provisions of the Citizenship Act (LVII of 1955) which prescribed the conditions subject to which "persons can become citizens". Section 2(1)(f) of the Act provides that the word "person" does not incude any company or association or body of individuals whether incorporated or not." According to the learned counsel, partnership firm is an un-incorporated association or body of individuals and therefore cannot be a citizen.

(25) Learned counsel further argued that just as in the case of companies the Supreme Court had rejected the argument of "tearing the corporate veil" the same argument should apply to the case of a firm.

(26) It seems to us that whatever may be the merits of this argument in the case of an association registered under the Societies Registration Act, 1860, the position with respect to a partnership firm cannot be the same.

(27) It may be, and indeed it is, that the partnership firm as such cannot be regarded as a citizen and therefore cannot claim the benefit of Article 19 of the Constitution. Take for instance, the case of a partnership having one or more foreigners with one or more Indian nationals as its partners. Surely, such a partnership cannot claim to be a citizen because of the presence of one or more nationals of this country among its partners. It is well established that "a firm is not an entity or 'person' in law but is merely an association of individuals and a firm name is only a collective name of those individuals who constitute a firm. In other words, a firm name is merely a compendious mode of designating the persons who have agreed to carry on business in partnership". (See Dulichand Laxhminarayan v. Commissioner of Income-tax, Nagpur .

(28) It is true that for certain purposes e.g. Income-tax Act etc. a partnership firm has been treated as a unit of assessment, distinct from the partners constituting the firm. Similarly under the provisions of Order Xxx of the Code of Civil Procedure, a firm can sue and be sued in its own name. But even there the distinction between the partners and the firm is more artificial than real and the firm can by no means be regarded as a juristic entity which is distinct and separate from its partners. The proceedings instituted by the petitioner firm which is constituted by partners who are all Indian citizens, for the enforcement of the fundamental rights guaranteed under Article 19 of the Constitution are in reality proceedings for and on behalf of the partners composing the firm and it is the fundamental rights of those partners which have to be considered by us. The objection raised by the learned counsel for the respondents therefore fails and is rejected.

(29) The third objection raised by the learned counsel for the respondents about the petitioner firm having no recognised legal right, contractual or otherwise, to compel the Government-owned forests in Himachal Pradesh, relates to the merits of the controversy and therefore cannot be treated as a preliminary objection.

(30) This takes us to the principal contentions urged by Mr. Aggarwala on behalf of the petitioner which may be summarised as under:-

(1)Government's decision in with-holding the entire produce of raw resin which was previously being sold by public auction, infringes the fundamental rights of the partners constituting the petitioner firm and other industrialists under clauses (f) and (g) of Article 19 of the Constitution and the restrictions imposed by the Government on the exercise of the above rights cannot be supported under clause (6) of Article 19.

(2)The law requires that the disposal of resin has to be by public auction and there is no provision of law which authorises the Government to withhold from sale the entire quantity of resin.

(3)The impugned decision creates amonopoly in the right to distribute resin, in favor of a public sector undertaking. As the members of the public are excluded the decision is discriminatory.

(4)The decision violates the undertaking and assurances given by the Government of the erstwhile State of Punjab that the resin available from the forests which then lay within the territories of Punjab State, would be available to the industrialists. The said undertaking and assurances may not amount to a contract, but the same having been acted upon by the industrialists in investing large sums of money, the Government of Himachal Pradesh, as successor to the Government of Punjab, is bound to honour the same and the obligations resulting there from.

(5)The decision is un-reasonable and arbitrary inasmuch as it results in loss to the persons employed in the industry without corresponding benefit to the State and is thus an abuse of the State power in violation of Article 39(b) which provides that the State shall, in particular "direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good."

(6)The decision of the Punjab High Court in Civil Writ No. 1750 of 1963 operates as res-judicata in respect of matters decided in that judgment.

(31) Taking the last contention first, the argument of the learned counsel is that the judgment of the Punjab High Court decided three points : first, the resin extracted from forests should be sold by public auction; second, the monopoly in favor of one co-operative society cannot be created to the detriment of other interests and third, the petitioners have a fundamental right under Article 19(1)(g) and the restrictions imposed by the Government on the exercise of that right are not reasonable.

(32) A close examination of the judgment shows that the facts in that case were entirely different. Apart from. the fact that the parties in that case and in the case before us are not the same, even otherwise the decision cannot operate as res-judicata.

(33) The question raised in that case was with regard to the right of the Government to transfer to one particular co-operative society the entire produce of resin from the forests and jagirs within the State of Punjab at a conces- sional price though, previously for several years in the past, it was being sold by public auction. The monopoly which the Government had thus created, was in favor of one particular co-operative society. To such a case clause (6) of Article 19 which excepts from the operation of clause (g) of Article 19(1), a monopoly in any trade, business, industry or service carried on by the State or by a corporation owned or controlled by the State, apparently did not apply. The Co-operative Society in that case was neither a State enterprise nor was it a Corporation owned or controlled by the State.

(34) It may also be mentioned that that was a case relating to the sale of resin and the only question was whether the sale could be to one particular party to the exclusion of the other members of the public in the manner it was sought to be done. The question of Government's right to with-hold resin from sale to the public, in order that the entire produce may be used in its own factories, was not before the Court. Hence it was not necessary for the Court in that case to go into the question whether there was any statutory obligation on the part of the Government to sell the entire forests produce of resin by public auction. The decision therefore cannot be held to operate as res-judicata in respect of the matter not decided therein.

(35) The other contentions raised by the learned counsel would appear to be all inter-connected and may therefore be dealt with together. It was argued that under the law it was incumbent on the Government to sell the entire quantity of resin to the public by auction. Section 2(4) of the Indian Forest Act, 1927 defines "forest-produce" as including "resin" while Section 76(c) of the said Act empowers the State Government to make rules for the preservation, re-production and disposal of trees and timber or other forest-produce belonging to Government. Para 3, Chapter I, Volume I of the Punjab Forest Manual which sets out the basis on which the National Forest Policy of India has been formulated, under-lines six paramount needs of the country. Among those needs, the need for sustained supply of timber and other forest-produce to meet the requirements of defense, communications and industry is one of the six vital needs, which the forests are intended to satisfy. The satisfaction of the needs of the industry being thus one of the vital functions which the forest-produce is intended to fulfill: this function can only beperformed if resin is offered to the public by sale and that has been the practice which the Government has been following during all these years.

(36) In this connection, reliance was placed on Rule 17.10 of the Rules contained in the Punjab Forest Manual Vol. Ii which provides that at the end of each year a statement of sale of resin will be prepared by the Divisional Forest Officer of the Forest Division in which resin is collected, in the form prescribed therein. On the basis of this Rule it was contended that it was obligatory on the Government to sell the entire forest-produce to the public and since that was the only mode of disposal of forest-produce provided for in the Manual, any departure from that rule was contrary to law.

(37) We are unable to read the above provisions as casting any obligation on the Government to offer the entire produce of raw resin to the public for sale by public auction. It is true that if it is decided at any time to sell the said produce it is but proper that the sale should be effected in the open market by public auction and the produce cannot be diverted for the use of any individual or society to the exclusion, complete or partial, of other citizens. But there is nothing in the Forest Act or in the rules framed there under which prevents the Government from utilising the produce of resin for the purpose of carrying on manufacturing operations in a factory or factories owned by it.

(38) That apart, we are also not prepared to hold that Rule 17.10 in the Punjab Forest Manual Vol. Ii page 453 and the form prescribed therein, is a rule having a binding force equal to that of a rule framed under a statute. As it is, most of the rules contained in the Punjab Forest Manual, except those made under Sections 32 and 76 of the Indian Forest Act, 1927 are departmental instructions which are intended for the guidance of the officials of the Forest Department. The Rules contained in Volume Ii of the Manual almost wholly relate to establishment, accounts, budget and office business in the forest divisions and offices under the administrative control of the Chief Conservator of Forests and cannot therefore be regarded as having the force of law.

(39) Mr. Aggarwala next argued that under Article 39 of the Constitution the State has been. enjoined to direct its policy towards securing that the ownership and control of the material resources of the community are so distributed as best to subserve the common good. According to the learned counsel, this makes out a sharp distinction between the property and resources owned by a private individual and those owned by the State. While it is open to a private individual, subject to certain restrictions imposed by law, to deal with his property in any way he likes, the same cannot be said of the property and material resources owned and controlled by the State. They have to be distributed with an eye to subserve the common good. In the present case, the petitioner and other industrialists have invested large sums of money and have established a large number of industrial units which depend upon the supply of raw resin extracted from the forests owned and controlled by the State. With the stoppage of that supply it would be impossible for them to carry on their business.

(40) It was contended that even according to the figures relating to the working of the Government Resin and Turpentine Factory at Nahan, the profits shown to have been earned by the enterprise, were actually no profits at all. According to the said affidavit the profits earned by the said factory during the five years 1962-63 to 1966-67 were as follows:- Year Gross profits Net profit (Rs.) (Rs.) 1962-63 3,59,847 2,45,832 1963-64 4,51,129 2,14,793 1964-65 6,23,411 3,22,842 1965-66 9,07,353 5,74,295 1966-67 4,51,529 24,458

the petitioner had alleged that the profits claimed by the factory would be transformed into a complete loss if it were kept in view that as against the supplies of resin to the private industrialists at an average price of Rs.140.00 per quintal the supplies to the factory at Nahan had been uniformly made at the rate of Rs. 85.00 per quintal.. Moreover, the factory was not required to pay any taxes. Thus the running of the factory was resulting in com- plete loss to the exchequer which was losing at the rate of Rs. 55.00 per quintal on the price of raw resin and about Rs. 2 lacs a year on account of taxes etc.

(41) It seems to us that in view of the admission in para 2 of the rejoinder affidavit filed on behalf of the petitioner that the petitioner did not claim that the factories at Hoshiarpur were depending exclusively on the resin produced in the forests of integrated areas of combined Punjab and that they were also exploiting other resources in the country, it cannot be reasonably contended that by with-holding supplies of raw resin from sale to the public the Government had deprived the petitioner and other industrialists of their right to carry on their business of manufacturing and processing resin in the factories established by them.

(42) The first case to which our attention was invited was Rai Sahib Ram Jawaya Kapur and others v. The State Punjab . Mr. Aggarwala said that he was citing the above decision for the limited purpose of relying upon the following observations at page 238 of the report:- "SPECIFIClegislation may indeed be necessary if the Government requires certain powers in addition to what they possess under ordinary law in order to carry on the particular trade or business. Thus when it is necessary to encroach upon private rights in order to enable the Government to carry on their business, a specific legislation sanctioning such course would have to be passed".

(43) He submitted that in the present case it was open to the Government to have specific legislation enacted for the purpose of appropriating the entire produce of resin for use in its own factories, but since the encroachment on the private rights of the petitioner and other industrialists had taken place under an executive fiat without any legislation on the point, the action of the Government was liable to be struck down.

(44) We have already said that the petitioner has not been able to show that its partners and other industrialists have any right, contractual or otherwise, to acquire raw resin extracted from Government forests nor have they been able to prove that the Government is bound to sell the produce to the public. The petitioner's contention that without the supplies of resin from Government forests the factories engaged in manufacturing and processing resin and turpentine will have to be closed down, has also not been proved. The argument about the Government having encroached upon any private rights of the petitioner is therefore entirely devoid of merit. The business that the petitioner is carrying on is of running a factory or factories for processing raw resin. The action taken by the Government does not prevent the petitioner from carrying en that business. In this view of the matter, there is hardly any question of a monopoly having been created by the Government in its own favor for which any specific legislation is necessary.

(45) In a way, the case of Rai Sahib Ram J away a Kapur and others may even be said to go against the contention of the petitioner. In that case the petitioner's right to print and publish any books they liked and to offer them for sale had not been taken away and all they had lest was the chance of their books being approved by the Government on which they could not possibly insist. Similarly in the present case no body is taking away the petitioner's right to carry on its business. The only thing that has happened is that the Government is denying it the chance of purchasing raw resin from Government forests to which the petitioner has failed to establish any right. There is thus no question of any encroachment on the alleged rights of the petitioner either under clause (g) or clause (f) of Article 19.

(46) It cannot be denied that article 298 of the Constitution empowers the Government to carry on any trade or business and also to acquire, hold and dispose of property and that for doing so no legislative enactment is necessary.

(47) MI. Aggarwala then referred to the case of Saghir Ahmed v. The State of U.P. and others . The legislation in that case had excluded all private bus owners from the field of transport business. This was prima facie an infraction of the provision contained in Article 19(1)(g) of the Constitution. The question before their Lordships therefore was whether this invasion by the legislature of the fundamental right could be justified under clause (6) of Article 19 of the ground that it imposed reasonable restrictions on the exercise of the right in the interest of the general public.

(48) Basing himself on the observations at page 726 of the report of the judgment that ".. . -when the enactment on the face of it is found to violate a fundamental right guaranteed under Article 19(1)(g) of the Constitution, it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in clause (6) of the Article. If the respondents do not place any matenal before the court to establish that the legislation comes within the permissible limits of clause (6), it is surely not for the appellants to prove negatively that the legislation was not reasonable and was not conducive to the welfare of the community. In the present case we have absolutely no materials before us to say in which way the establishment of State monopoly in regard to road transport service in the particular areas would be conducive to the general welfare of the public."

(49) Mr. Aggarwala submitted that in the present case no material had been placed by the Government that the establishment of State monopoly in the use of raw resin from its forests was conducive to the welfare of the community and amounted to utilization of the material resources of the State to the best advantage of the community. On the other hand. the petitioner had shown that even the first factory owned by the Government had been running at a loss, or at any rate, its performance could hardly compare favorably with the factories in the private sector. It was therefore urged that the restrictions imposed by the Government could not satisfy the test of reasonableness laid down in clause (6) of Article 19.

(50) Clause (6) of Article 19 which was amended by the Constitution (First Amendment), Act, 1951 with a view to provide that a State can create a monopoly in its favor in respect of any trade or business, hardly leaves any room for such argument. The result of the amendment is that the State has not to justify such action as reasonable in a court of law and no objection can be taken to it on the ground that it is aninfringement of the right guaranteed under Article 19(1)(g) of the Constitution. In this view of the matter, the argument that the Government factory at Nahan is running at a loss or is not showing any profits or that the private enterprise is likely to be more efficient than a public sector enterprise, is not a matter with which this Court can deal. Mr. Aggarwala however submitted that although the creation of monopoly was within the scope of Article 19(6) of the Constitution as amended, it could still be challenged on the ground that it was created without any specific legislation or that it indirectly impinged on other right of the petitioner. Support for this proposition was sought from the decisions of the Supreme Court in Akadasi Padhan v. State of Orissa (1963(2) S.C.R. 691 Rashbihari Pandu etc. v. State of Orissa (1969(1) Supreme Court Cases 414 and Messrs Virajlal Manilal and Co. and others v. State of Madhya Pradesh and others (1969(2) Supreme Court Cases 248.

(51) Special emphasis was laid by the learned counsel on the observations of Shah J. who spoke for the Court in Rashbihari Panda's case in which it was said that '"both the schemes evolved by the Government were violative of the fundamental right of the petitioners under Articles 19(1)(g) and 14 because the schemes gave rise to a monopoly in the trade in Kendu leaves to certain traders, and singled out other traders for discriminatory treatment."

(52) We fail to see how the above observations can be of any assistance to the argument of the learned counsel in the case before us. What was assailed in that case was not the creation of monopoly by the Government in the trade in Kendu leaves in its own favor but the action of the Government in giving exclusive right to some persons to make offers to purchase Kendu leaves. It was in respect of this action of the Government that his Lordship said: "THEright to make offers being open to a limited class of persons it effectively shut out all other persons carrying on trade in Kendu leaves and also new entrants into that business. It was ex fade discriminatory, and imposed unreasonble restrictions upon the right of persons other than existing contractors to carry on business."

(53) No such question can be said to arise in the present case.

(54) There can be no doubt that what the amended clause (6} of Article 19 immunizes from attack is the creation of monopoly by the State in its own favor in so far as the infraction complained of is of a right guaranteed under Article 19(1)(g). There is however no such im- munity from attack when the Act creating a monopoly contains certain other incidental provisions which are not essential to it. the validity of those provisions can still be tested under the first part of Article 19(6). Like-wise if those provisions directly impinge or- any other fundamental right guaranteed by Article 19(1), the validity of those provisions has also to be tested by reference to the corresponding clauses of Article 19. (see Akadasi Padhan case cited supra).

(55) In the view we have taken however, no such question as is sought to be raised by Mr. Aggarwala can he said to arise for decision. We therefore do not consider it necessary to deal with the argument of the laerned counsel that even undo" the amended clause (6) it is not open to the State to create a monopoly in its fayour by executive action, and that title protection is available only when the creation of monopoly is the result of specific legislation.

(56) It may be mentioned here that although the qestion of discrimination under Article 14 of the Constitution was also raised by Mr. Aggarwala at. the commencement of his argument, no argument was actually addressed by him in the end.

(57) As we have already held that the petitioner and other industrialists have no legal right to insist upon the raw resin extracted from Government forests being sold to the public, the question as to whether the Government needs the entire quantity of resin obtained from its forests either for the purpose of building stocks to feed the two factories installed by it at Nahan and Bilaspur or for the purpose of making the surplus available for use in case the installed capacity of the two factories is expanded at any time, cannot arise for discussion in this case. The matter is indeed one of administrative discretion with which this Court can hardly interfere. We have no doubt that the Government is not interested in building stocks of resin beyond what is legitimately required for use in the two factories at Nahan and Bilaspur and therefore whatever surplus is available (as was admitted in the counter-affidavit at one stage) will be offered by it to the public for sale in the open market, only it cannot be pressurised into doing so against its own judgment.

(58) At the end of his argument, Mr. Aggarwala sought to raise an additional ground of attack by contending that the forests from which resin was being extracted was the property of Union of India and did not belong to the Government of Himachal Pradesh. He contended that as the order with-holding the entire produce of resin from sale to the public and transferring it to the two factories at Nahan and Bilaspur was made by the Government of Himachal Pradesh, the order was ultra vires the Constitution. In this connection our attention was drawn by the learned counsel to Articles 294 and 295 of the Constitution. As the question which the learned counsel wanted to raise, involved an inquiry into facts and the point had not been raised either in the original petition or in the rejoinder affidavit filed on behalf of the petitioner and the respondents had no opportunity of meeting the same we did not allow the point to be raised at the stage of arguments.

(59) The result of the fore-going discussion is that there is no merit in this petition. The same is accordingly dismissed with costs. Counsel's fee Rs. 500.00.