Case Note & Summary
The dispute arose from a closure notice issued to a saw mill operator under the Orissa Saw Mills & Saw Pits (Control) Act, 1991. The petitioner had established a saw mill in 1980 in Keonjhar district of Orissa. The Act, which came into force on 20 November 1991, was enacted to regulate establishment and operation of saw mills and saw pits and trade of sawing to protect and conserve forest and environment. Rules framed under the Act came into force on 18 November 1993. A notice under Section 4(1) of the Act directed the petitioner to close operations immediately. The petitioner challenged the constitutional validity of Section 4(1) and the notice before the Orissa High Court, contending violation of fundamental right to trade and business and invidious discrimination. The High Court dismissed the writ petition on 16 March 1995, relying on a Full Bench decision. The petitioner then approached the Supreme Court by special leave petition. The petitioner's saw mill was admittedly situated within a reserved forest, protected forest or forest area within 10 kilometres from the boundary of such forest area. Section 4(1) of the Act provided that no person shall establish or operate a saw mill or saw pit except under licence, with a proviso prohibiting establishment or operation within a reserved forest, protected forest or any forest area or within 10 kilometres from its boundary. Sub-section (2) saved only saw mills established by Orissa Forest Development Corporation Limited or other government agency prior to the appointed day, deeming them licensees. For other pre-existing saw mills, clause (ii) allowed operation for a transitory period of three months or until disposal of a licence application under Section 6, after which they were to cease operations. The Act also empowered the State to declare prohibited areas under Section 5 and provided for confiscation of property under Section 13 for contravention. The petitioner argued that the Act did not impose total ban but gave discretion to licensing authority, and that the geographical contiguity of Keonjhar district meant no mill could exist within 10 km, causing discrimination. The Supreme Court examined the scheme of the Act and held that the right to carry on trade or business under Article 19(1)(g) and Article 301 is subject to statutory regulation. It relied on Narendra Kumar v. Union of India to hold that the word restriction in Article 19(1)(g) may include total prohibition in certain rare cases where public interest demands. The court observed that reserved forests were being denuded by illicit felling, and preservation of forest was a matter of great public interest justifying total ban in prohibited areas. The individual interest must yield to public interest. The court further held that treating areas within the prohibited zone as a class was legislative scheme to achieve the object of preserving forest wealth; it was a class legislation and not discriminatory, thus not offending Article 14 or Article 301. Accordingly, the special leave petition was dismissed, upholding the constitutional validity of the total ban.
Headnote
A) Constitutional Law - Fundamental Right to Trade and Business - Total Prohibition as Reasonable Restriction - Constitution of India, 1950, Article 19(1)(g); Orissa Saw Mills & Saw Pits (Control) Act, 1991, Section 4(1) proviso - The petitioner operated a saw mill within 10 km of reserved forest and challenged total ban on operation as violating Article 19(1)(g). The Court held that restrictions under Article 19(1)(g) may include total prohibition in rare cases where public interest demands; preservation of forests from illicit felling justified total ban. Held that the ban was constitutional. (Paras 1-4) B) Constitutional Law - Equality and Trade Freedom - Geographical Classification Permissible - Constitution of India, 1950, Articles 14, 301; Orissa Saw Mills & Saw Pits (Control) Act, 1991, Section 4(1) proviso - The petitioner contended that mills in Keonjhar district were discriminated against due to geographical contiguity to forest area. The Court held that the legislature may treat areas within prohibited zone as a distinct class; classification was rational and in public interest. Held no violation of Article 14 or 301. (Paras 1-4) C) Statutory Interpretation - Licensing and Transitory Provisions - Scope of Section 4(2) - Orissa Saw Mills & Saw Pits (Control) Act, 1991, Sections 4(2), 6, 7 - The Court analysed that sub-section (2) saved only government mills and provided transitory period for existing private mills; the proviso imposed total embargo. Held that Act intended total prohibition in prohibited area and not discretionary licensing. (Paras 1-4)
Issue of Consideration
Whether the proviso to Section 4(1) of the Orissa Saw Mills & Saw Pits (Control) Act, 1991 imposing a total ban on saw mills within 10 km of reserved forest, protected forest or forest area was constitutionally valid under Articles 14, 19(1)(g) and 301 of the Constitution of India
Final Decision
Special leave petition dismissed. The Supreme Court upheld the constitutional validity of the proviso to Section 4(1) of the Orissa Saw Mills & Saw Pits (Control) Act, 1991, holding that total prohibition in prohibited area was a reasonable restriction in public interest to preserve forest wealth and prevent illicit felling. The classification of areas within prohibited zone was valid and did not offend Articles 14 or 301.
Law Points
- Restriction under Article 19(1)(g) includes total prohibition in rare cases for public interest
- Preservation of forest and prevention of illicit felling is a valid public interest
- Classification of areas within prohibited zone is reasonable and not discriminatory under Article 14
- Total ban on trade within prohibited area is not violative of Article 301
- Individual interest must yield to public interest
