Case Note & Summary
The dispute arose from the Government of Uttar Pradesh's policy governing allotment of khair wood, a forest produce used in kattha factories. The State had permitted industrial units based on forest produce to be set up from September 12, 1983, but later imposed restrictions due to non-availability of khair wood in the State. The appellant, an association of industries, challenged the refusal to relax the ban on registration and allotment for small scale industrial units. The Government had given relaxation on February 25, 1984, allowing the Director of Industries to encourage small scale industries on the condition that they would purchase khair wood from outside the State. Respondent No.4 obtained provisional registration for one year on February 11, 1986. The Government introduced a complete ban on registration from December 11, 1986. The appellant association requested cancellation or relaxation of the ban, but the Director refused. The appellant then filed a writ petition in the High Court of Allahabad, which was dismissed by a Division Bench on May 3, 1991, holding that the matter was one of policy taken at the highest level and the Court was not inclined to examine its correctness. On appeal to the Supreme Court, the appellant contended that the Government had allowed other units to obtain khair wood from the Government quota but denied the same to S.S.I. units registered under provisional registration, which was discriminatory and violative of Article 14 of the Constitution. The State, in its counter filed before the Supreme Court, stated that a committee chaired by the Secretary of Forest had met on December 13, 1990, and decided that small scale units registered prior to December 11, 1986 were entitled to be considered for allotment, while any unit registered thereafter would be allowed to operate only if it obtained required wood from outside the State. The committee had examined the question of availability and allotment of khair wood and imposed the cut-off date because of non-availability of forest produce in the State. The Supreme Court found that the relaxation granted on February 25, 1984 was subject to the condition that such industries would not apply for U.P. forest wood and would obtain it from outside the State. It further noted that provisional registration was valid only until or before December 11, 1986, after which a complete ban on registration was imposed for allotment of forest produce. The Court held that the cut-off date was a policy decision based on scarcity of forest produce and was not arbitrary or discriminatory. It upheld the High Court's refusal to interfere and dismissed the appeal with no order as to costs.
Headnote
A) Constitutional Law - Equality and Non-Discrimination - Allotment of Khair Wood to Small Scale Industries - Constitution of India, 1950, Article 14 - The appellant association contended that denial of khair wood allotment to S.S.I. units registered under provisional registration after the cut-off date was discriminatory. The Government had constituted a committee which examined non-availability of forest produce and fixed December 11, 1986 as the cut-off date, requiring units registered thereafter to obtain wood from outside the State. Held that such policy decision was not arbitrary and did not violate Article 14; appeal dismissed. (Paras 1-2) B) Administrative Law - Judicial Review of Policy Decisions - Scope of Court Interference in Government Policy on Scarce Natural Resources - Constitution of India, 1950, Article 14 - The High Court declined to examine the correctness of the Government's policy on allotment of forest produce, holding it to be a matter of policy at the highest level. The Supreme Court upheld that approach, holding that matters of policy relating to allocation of scarce forest resources are not to be interfered with by courts unless mala fide or arbitrary. Held that the cut-off date was reasonable given non-availability of khair wood; no interference warranted. (Paras 1-2)
Issue of Consideration
Whether the policy imposing complete ban on registration of small scale industrial units after December 11, 1986 for allotment of khair wood was discriminatory and violative of Article 14 of the Constitution of India; whether the High Court rightly declined to examine the correctness of the policy decision.
Final Decision
The Supreme Court dismissed the appeal and upheld the High Court's order. It held that the cut-off date of December 11, 1986 imposed by the Government for allotment of khair wood to small scale industries was a policy decision based on non-availability of forest produce, not arbitrary or discriminatory, and therefore not interfered with under Article 14. No costs were awarded.
Law Points
- Policy decisions of government regarding allotment of scarce natural resources not ordinarily subject to judicial review
- cut-off date based on availability of forest produce is reasonable and not violative of Article 14 of Constitution of India
- 1950.
