PRAGATI SALT PRODUCTION AND SALES CO-OPERATIVE SOCIETY LTD. v. UNION OF INDIA (UOI)
1988-12-05
HARI LAL AGRAWAL, S.C.MOHAPATRA
body1988
DigiLaw.ai
JUDGMENT : H.L. Agarwal, C.J. - The Petitioner in this case is a co-operative society registered under the Orissa Co-operative Societies Act. The activity of the Petitioner, as claimed in the petition, is production of salt by the process of solar evaporation system in the vicinity of Huma in the district of Ganjam. On the plea that it espouses the cause of a large number of persons who have specialized in the skill of producing salt by the above process, it filed the present writ application designing it as a "public interest litigation" for cancellation of the leases granted by the Union of India in the Industrial Development Department in favour of opposite parties 4 to 8. The prayer made in the writ application is that opposite parties 1 to 3, i.e., the Central Government, the Salt Commissioner and the Assistant Salt Commissioner respectively, be restrained from granting any lease to opposite parties 4 to 8 with respect to he lands in question, and the renewal of the leases, if any, their favour be declared void. 2. The facts may be briefly noticed: The salt fields in question are comprised of 131 292 acres In December, 1967, the Government of India granted lease to the extent of 401.661 acres out of the above area of salt fields under-separate documents executed in favour of opposite parties 4 to 8 for a period of 20 years. These lease deeds were to expire on 31-12- 1987. Undisputedly, the leases, inter alia, contained a renewal clause reading as follows: The lease shall, subject to as herein provided, be for a period of 20 (twenty) years commencing from 1-1-68 and renewable for a further period as may be decided upon by the Government on such terms and conditions as the lessor may prescribe from time to time. 3. Apprehending that the leases would be renewed in pursuance of the aforesaid renewal clause, the present writ application was filed by the Petitioner on 22-12-1987, a few days before the date of expiry of the leases, claiming to be espousing the cause of thousands of persons engaged in the production of salt who are suffering on account of the grant of the leases in favour of opposite parties 4 to 8. 4.
4. On 24-12-1987, while issuing notice on the question of admission as well as stay, it was ordered by a Bench of this Court that fresh lease executed, If any, shall be subject to the result of this writ application. Fresh leases have been executed in the meantime in favour of opposite parties 4 to 8 containing the terms of the stay order as a stipulation in the lease. 5. The Petitioner has alleged that opposite parties 4 to 8 are making huge profits of more than Rs. 32 lakhs every season which amounts to exploiting the labourers as the labourers working in the production of salt gel only a microscopic share of the profit computed in terms of money and these lessees were playing with the lives of these persons and their livelihood. The Petitioner has further alleged that the salt producers, numbering about 2, 000, through their unions as well as individually have filed various representations to the authorities of the Central Government for ameliorations of their grievance, and granting leases through open tenders, but the Government decided to renew the leases in favour of the same parties on the plea that it would amount to violating the terms and conditions of the leases. The Petitioner has quoted excerpts from the letters of the concerned Minister to one of the Members of Parliament, Mr. Saifuddin Chaudhury. It was written to Mr. Chaudhury that he may advise the salt workers in that area to explore the possibility of getting Central State Government lands fit for salt manufacture This is how and why the Petitioner has filed the present writ application. 6. In the 13th paragraph of the petition, the Petitioner has raised the following points: (1) Renewal of the leases does not ensure any benefit either to the Government or to the consumers inasmuch as opposite parties 4 to 8 are merely intermediaries who were earning huge profits over the fruits of the labour of the salt producers. (2) The contractors sell the salt to the consumers at exorbitant price. (3) There was no reasonableness in granting leases to opposite parties 4 to 8 to the exclusion of the Petitioner.
(2) The contractors sell the salt to the consumers at exorbitant price. (3) There was no reasonableness in granting leases to opposite parties 4 to 8 to the exclusion of the Petitioner. (4) Renewal of the lease without any open tender was violative of Article 14, as annunciated in Annexure-4 Inasmuch as the objective of the Constitution of India is to establish socialistic State, the renewal of the lease deprived the salt workers from their right to exploit. This amounted to giving a monopoly business to the lease-holders without affording reasonable opportunity to others. 7. While separate counter affidavits have been filed by the opposite parties 4, 5, 6, 7, and 8, deposite parties 1 to 3 have filed a joint counter affidavit. 8. The stand taken by them (opposite parties 4 to 8) is that the colour of public interest litigation and espousing the cause of the salt workers by the Petitioner is a misnomer inasmuch as the Petitioner-society consists only of 16 persons who, He not at all salt workers. It has been further asserted that salt being an essential commodity and a national product manufacture of which requires a lot of technicalities and scientific method, the Government has decided to grant in the interest of the nation lease in their favour in preference to the co-operative societies and that leases are granted by the Government of India in accordance with the provisions of the Salt Act and on payment of the prescribed fees. It is alleged that the quantity of production during the last 3 years by the opposite parties is much more than that of all the co-operative societies to there working in the district of Ganjam. A comparative chart has also been filed as Annexure-A to the counter affidavit of opposite party No. 4. They have also refuted the allegation of the Petitioner that the opposite parties are making huge profits without any investment. They have further stated that though thousands of acres of salt field still remain idle and unexplored, the Petitioner did not make any application and that with a malicious motive it has now made an application in respect of the lease-hold area of 75 acres of opposite party No. 4 who has invested a huge amount in putting up various structures, setting up pump houses and installing costly machineries for manufacturing salt.
It has been further stated that the ground rent paid by the opposite parties is maximum and much higher than that charged by other States and that the workers are paid handsome wages at a rate higher than that paid by the Petitioner. Opposite party No. 4 has also filed a newspaper publication in the Economic Times dated 20-11-19 0 (Annexure-D) to show that tenders were oiled for by the Salt Department for leasing out more than 16000 acres of land within the district of Ganjam and that the Petitioner did not apply for lease on account of its inability to make huge investment in setting up the necessary infrastructure and that the present application for lease is the outcome of jealousy and business rivalry. On these and other assertions, the opposite parties have said that no breach of the fundamental right has been committed, and, in any case, the right if any, in the matter is with the opposite parties in view of the renewal clause of the lease deed which is a valuable vested right. A lots of facts have been Hated by the opposite parties to show as to how the working of the co-operative societies has been a total failure and how much loss they have caused to the nation. The counter affidavit of opposite party No. 5, is also on the same lines, This opposite party holds 10158 acres of land where he has set up permanent structures and installed machineries valued at the tune of several lakhs of rupees It is stated by him that the "so-called public interest cannot be stretched so as to make the Court deprive the lessees from renewing their leases and drive them from their field of operation". This opposite party has also similarly asserted that the workers working under the opposite parties are better off and get higher wages then those working under the co-operative societies. With respect to the allegation of monopolies created by the opposite parties, it is stated that besides the opposite parties there were 29 other such lesses who were operating in the field and that these opposite parties have been chosen on account of causes of bias. The counter affidavit of opposite party No. 6 is also on the same lines.
With respect to the allegation of monopolies created by the opposite parties, it is stated that besides the opposite parties there were 29 other such lesses who were operating in the field and that these opposite parties have been chosen on account of causes of bias. The counter affidavit of opposite party No. 6 is also on the same lines. It is further stated that the members of the Petitioner-society attacked the innocent salt workers while they were working in the field with deadly weapons to drive them away so as to stop the functioning of the opposite parties for which a Criminal case has been instituted vide F.I.R. Annexure-E. In paragraph 26, opposite party No. 60 leasses of 75 acres, has made the following allegation: 26. That the real fact for this writ application is that since these opposite parties are producing more quantity of qualitative salt and the Petitioner-society has not yet acquired any land. The other societies, namely, Astarang, Chudamani have miserably failed to produce the required quantity 1 hey are always apprehensive of losing their salt fields in the interest of nation. It will be evident from Annexure-A that the lease lands of these opposite parties 4 to 8 and others hold 716-042 acres of land and its production is 25157, 25713, 25987 tons in 1984, 1985 and 1985 respectively whereas the production of other co-operative societies from 606.08 acres of land was 13577, 12570 and 13439 tons in 1984, 1985 and 1986 respectively. Opposite party No. 7 who is also a lease in respect of 75 acres of land has made averments and assertions on the same line as those of the other opposite parties and there is nothing special to mention. Opposite party No. 8 is also a lessee in respect of 75 acres and he has taken the same stand as those of the other opposite parties. All the opposite parties have filed lease deeds and documents separately annexed to their respective counter affidavits. 9. A rejoinder has been filed by the Petitioner to all the counter affidavits refuting the charges. A copy of the Bye-laws extracted in the rejoinder shows that each member of the society is to be allotted not more than 3 acres of land.
9. A rejoinder has been filed by the Petitioner to all the counter affidavits refuting the charges. A copy of the Bye-laws extracted in the rejoinder shows that each member of the society is to be allotted not more than 3 acres of land. It appears from the statements made in paragraph 8 of the rejoinder that the co-operative societies operating in the area have been allowed now lands which are still to be made ready for producing the appropriate quantity of salt and thus there is bound to be a difference in the rate of production. The other averments are mere repetitions of the statements made in the writ petition. 10. A joint additional counter affidavit has been filed by the opposite parties to the rejoinder of the Petitioner on 6-10-1988 in which it is stated that by virtue of the renewal clause, leases have been renewed for a further period of 20 years commencing from 1-1-1988 vide Annexure-K and it would appear from the renewed lease as well as from the averments made in the official counter affidavit that the new lease deed does not contain any renewal clause. 11. Let us now refer to the counter-affidavit filed by opposite parties 1 to 3. Paragraph 9 of the counter affidavit reads as follows: 9. That the bets stated in para 4 of the writ petition are not fully correct. After independence, these lands vest with the Government of India. As per policy of Union of India, these salt fields were leased out to the Respondents 4 to 8 as per the terms and conditions set out in the lease deeds. It is also stated in this counter affidavit that out of the salt fields, 767384 acres have been leased out to the Human Co-operative Society and about 401 acres to all the opposite parties together and that the policy formulated by the Government for assigning salt lands to the Co-operative Societies at a concessional rate is applicable only in cases of fresh assignment. In support of this fact, a document has also been filed (Annexure-A/2).
In support of this fact, a document has also been filed (Annexure-A/2). These opposite parties have further stated that in pursuance of the renewal clause, the tenure of the present lease would be valid upto 31.12.2007 subject, however, to the result of the writ application and that the Government has already deleted the renewal clause in the fresh leases so that it may assign the land after the expiry of the present lease in the best public interest and consistent with the then policy of the Government It is also stated that the Government may also terminate the lease even during the mid-term as per the provisions of the lease agreement. 12. On the facts stated above, one fact becomes evident that the claim of the Petitioner that the present writ application has been filed to espouse the cause of the salt workers cannot be acceptable and accordingly, the submission of the Petitioner that it is a public interest litigation in the larger interest of the salt workers cannot be accepted. 13. In the case of Shri Sachidanand Pandey and Another Vs. The State of West Bengal and Others, the Supreme Court while dealing with a public interest litigations has laid down that it is only when Courts are apprised of gross violation of fundamental rights by a group or a class action or when basic human rights are invaded or when there are complaints of such acts as shock the judicial conscience, that the Courts should hear such cases. Examining the facts and circumstances emerging on the pleadings of the parties, it is obvious that the Petitioner cannot be said to be espousing the cause of anybody else than its own. Regarding the allegation of exploitation by the opposite parties of the salt workers employed by them, no material has been brought on record to show that opposite parties 4 to 8 are any way violating any Act or direction of the Government regarding payment of the minimum wages or any other condition of service thereby exploiting the labour force as such. It will be useful to refer the observations of the Supreme Court in the case of Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, cited on behalf of the Petitioner which would give an answer to the other submission of Mr.
It will be useful to refer the observations of the Supreme Court in the case of Kasturi Lal Lakshmi Reddy, Represented by its Partner Shri Kasturi Lal, Jammu and Others Vs. State of Jammu and Kashmir and Another, cited on behalf of the Petitioner which would give an answer to the other submission of Mr. Patnaik that the Government is ignoring the cooperative-societies in the matter of grant of lease and thus creating monopolies. 13. So also concept of public interest must as far as possible receive its orientation from the Directive Principles What according to the founding fathers constitutes the plainest requirement of public, interest is set out in the Directive Principles and they embody per excellence the constitutional concept of public interest. If, therefore, any governmental action is calculated to implement or give effect to a Directive Principle, it would ordinarily, subject to any other overriding considerations, be informed with public interest. In paragraph 14, it has been observed as follows: 14. Where any governmental action fails to satisfy the test of reasonableness and public interest discussed above and is found to be wanting in the qualify of reasonableness or lacking in the element of public interest, it would be liable to be struck down as invalid. It must follow as a necessary corollary from this proposition that the Government cannot act in a manner which would benefit a private party at the cost of the State, such an action would be both unreasonable and contrary to public interest.... But one basic principle which must guide the Court in arriving at its determination of this question is that there is always a presumption that the governmental action is reasonable and in public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not informed with public interest. This burden is a heavy one and it has to be discharged to the satisfaction and the Court by proper and adequate material.
This burden is a heavy one and it has to be discharged to the satisfaction and the Court by proper and adequate material. The court cannot lightly assume that the action taken by the Government is unreasonable or without public interest because, as we said above, there are a large number of policy considerations which must necessarily weight with the Government in taking action and therefore the Court would not strike down governmental action as invalid on this ground, unless it is clearly satisfied that the action is unreasonable or not in public interest. 14. It is not disputed that in a democratic set up, the rule of law must be followed and all governmental actions have to be kept within the ambit of this Law, In the famous case of Ramana Dayaram Shetty Vs. International Airport Authority of India and Others, the principle has been succinctly laid down in these words: ...Government is not free, like an ordinary individual, in selecting the recipients for its largess and it cannot choose to deal with any person it pleases in its absolute and unfettered discretion. Arbitrariness and fair play are the two basic tests in this regard. Here, the grievance of the Petitioner is that in granting the leases, the co-operative societies should be preferred. But material in abundance has been brought on record to dispel the impression sought to be created by the Petitioner in this regard to how that sufficient salt fields were available all the time and that the co-operative societies have also been granted quite large areas of salt fields. From the Bye-laws and the aims and objects of the Petitioner-society, it also appears that its individual member is not to be allotted more than 3 acres of land. In that event, wonder what investment such a member could make over the and which requires a lot of improvement and setting up of infrastructure. However, we are not concerned with these matters. 15. Another allegation by the opposite parties is that the lessees are making 'huge profits' at the sweat and labour of the salt workers and therefore, that amounts to their exploitation is far fetched and entirely misconceived which has no nexus with the well-known legal concept of exploitation. Earning of profit by any business house or industry would not by itself be attributed to the result of the exploitation of their employees or workmen.
Earning of profit by any business house or industry would not by itself be attributed to the result of the exploitation of their employees or workmen. Accordingly, I do not find any merit in the submission that the lessees, are making 'huge profits' in any manner and by exploiting their workmen. 16. We have seen that only a part of salt lands available in the vicinity of Human area has been settled with the lesses and that thousands of acres of such lands are available for which tenders were called for settling those lands. The Government has already deleted the renewal clause from the lease and, therefore, the question of monopoly or granting lease in perpetuity in favour of the present lessees is of no more problem. In this connection reference was made by Mr. Patnaik also to the case of Rashbihari Panda etc. Vs. State of Orissa, where, dealing with the sale of Kendu leaves, the Government of Orissa had invited offers for advance purchase only from the purchasers during the previous years in preference to the open competition. Though such action of the Government was held to be violative, the decision will have no application to this case because Kendu leaves could not be purchased in any other manner save and except the Government order and that was settled arbitrarily. The entire production of salt is governed by the Salt Act and the prices are kept under check by the Government. Rather, If I may say so, it is one of the commodities to which the price rise has not affected in the same ratio as to other commodities The Supreme Court has considered as to what kinds of contracts were opposed to public policy and may give rise to incontestable harm to the society. Production of salt in sufficient quantity is a question concerning the entire nation and the Government cannot take any risk in the matter of its production. T he procedure followed by the Government for production of salt in Humma area IS also prevalent in the other coastal areas also and I do not find any arbitrariness in the matter of renewal of the leases. The decision in Misra Agencies and Another etc. Vs. State of Orissa and Others, cited by Mr.
T he procedure followed by the Government for production of salt in Humma area IS also prevalent in the other coastal areas also and I do not find any arbitrariness in the matter of renewal of the leases. The decision in Misra Agencies and Another etc. Vs. State of Orissa and Others, cited by Mr. Patnaik where the act of refusal of allotment of wagons to some of the Applicants though, equally circumstanced was held to be arbitrary on examination of the record I do not think, the circumstances which impelled this Court to take the above view in that case have been established in the present case. 17. As a result of the above discussion, I come to the irresistible conclusion that the writ application has no merit and it must fail it is accordingly dismissed, but in the circumstances of the case, I leave the parties to bear their own costs. S.C. Mohapatra, J. 18. I agree. Final Result : Dismissed