ORDER
Dipak Misra, J.
1. The petitioners are bhumiswamis of Khasra No. 75/12, Village Condia, Khasra No. 59 Jaisinagar, Revenue Circle, Tahsil and District Sagar. They hadgrown teak trees over the said area. According to the petitioners teak is a forest produce and the State Legislature has created a monopoly in favour of the State Government by enacting M. P. Van Upaj (Vyapar Viniyaman) Adhiniyam, 1969 (hereinafter referred to as 'the Act'). Under the provisions of the aforesaid Act there is total restriction on purchase or transport on specified forest produce except in accordance with the provisions of Section 5 of the Act. Under the Scheme of the Act timber is required to be sold to the State Government, its officers or its agents and they are in turn to dispose of the same in accordance with the provisions of the Act. Under the provisions of Sections 240 and 241 of the M.P. Land Revenue Code, 1959 permission is accorded to a Bhumiswami to cut the trees. As per the said Code the Bhumiswami has to apply to the Collector for permission for cutting the trees. The Collector on the basis of a report obtained from the Forest and Revenue Authorities considers the application and may accord or refuse permission. On grant of permission the trees are felled and removed to the forest depot of the division under the transport permit. The timber is hammer marked for preserving the identification by the authorities. Thereafter the timber is cut into logs and hammer marked under the Supervision of the Forest authorities. It is set forth in the petition the cut timber is disposed of in public auction at the depot of the Divisional Forest Officer concerned. It is further averred that the petitioners applied to the Collector Sagar for grant of permission under Sections 240 and 241 of the M.P. Land Revenue Code. The said application was registered as Revenue Case No. 17-A/63/93-94. The Collector after being satisfied by order dated 27-9-1994 accorded permission to the petitioners to cut 1465 teak trees. After the trees were felled they were hammer marked and removed to the forest depot of the Divisional Forest Office, Sagar and arranged in stacks duly numbered. After stacking was made the procedure for disposal commenced and upset price was worked out by the S.D.O. Forest South Division Sagar and the same was approved by the conservator of Forest. The upset price determined in respect of the timbers belonging to the petitioners has been brought on record as Annexure P.2.
2. According to the writ petitioners theState Government had brought a circular dated 30th May 1984 which provided that the upset price determined shall be price payable to the Bhumiswami for his timber subject to deduction as provided for in the circular. It is set forth that two more circulars dated 4-7-1994 and 10-3-1995, Annexure P-4 and Anneuxre P-5 respectively have come into existence providing for determination of the price of timber payable to the Bhumiswamis and the said circulars have given a go-by to the upset price as determined for the timber. The said circulars stipulate that there should be increase of 10% of the sale price of the preceding year. The Chief Conservator of Forest Production Bhopal has issued a letter/circular to all the Conservator of Forest in the State to fix upset price as per circular dated 5-1-1994. It is pleaded in the writ petition that the Divisional Forest Officer, South Sagar issued an auction notice for auction of timber at the Forest Depot Sagar. As per the notice the auction was to be held on 17-2-1995. The entire timber belonging to the petitioners contained in the lots were sold at the upset price on two dates namely 17-2-1995 and 10-3-1995. The State Government received Rs. 14,62,260.50. It is put forth that though the State Government had received the aforesaid price the petitioner was paid Rs. 8,81,300/-.
3. The petitioners while claiming differential sum have urged in the petition that the process for determining the price of the timber belonging to the Bhumiswami is regulated by the M.P. Disposal of the Timber and Forest Produce Rules, 1974 (hereinafter referred to as 'the Rules') framed by the State Government in exercise of powers conferred on it under Section 76 of the Indian Forest Act, 1927. It is further put forth that circulars dated 4-7-1994 and 16-3-1995 have been arbitrarily framed for fixing the price of the timber belonging to Bhumiswami by providing an increase of 10% over the average price. It is highlighted that the State Level Committee which has framed the circulars has exceeded its authority while deciding that the rate of timber to be paid to Bhumiswami would be on the basis of the last years price received from the entire circle. The State Government's action has been criticised on the ground that the State Government has adopted the recommendations of the State Level Committee which has unilaterally taken a decision in fixing theprice and the same has no sanction of law.
4. A return has been filed by the answering respondents contending, inter alia, that as per the scheme of the Act the State Government or its agents purchase specified forest produce from the owners thereof at the price fixed by the Committee and thereafter the sale of the forest produce is undertaken by the State Government or its agents. The purchase price for the forest produce is fixed by the State Government in accordance with the provisions of Sections 6, 7, and 9 of the Act. As averred in the return for the purpose of fixation of price a Committee is constituted which has laid down the guidelines on the basis of which the purchase price has been fixed. It has been pleaded that the petitioner had 1465 teak trees to sell and the said trees were cut in utilizable pieces by the petitioners. The number of such utilizable pieces were 34960 and the price for the same was fixed as per Annexure Rule 1. It is highlighted that the petitioners were not entitled to be paid at the rate of upset price fixed by the State Government for selling various forest produce. It is further put forth that the attack that the price has been unilaterally and arbitrarily fixed by the State Level Committee is untenable as the same has been done in accordance with the provisions of the Act.
5. It is relevant to state here that this Court by order dated 17-11-1997 directed the State Government to state on oath in respect of certain queries made by the Court. Pursuant to the aforesaid order an application was filed on 3-1-98 for taking additional information on record.
6. I have heard Mr. V.S. Dabir, learned Senior Counsel for the petitioners and Mr. P.D. Gupta, learned Dy. A.G. for the State.
7. It is submitted by Mr. Dabir that the Committee mentioned vide Annexure Rule 4 is basically a departmental committee which has no legal status and the said committee cannot be conferred with the authority to fix the price payable to the Bhumiswami in respect of the timber intended to be purchased by the State Government, its officers or agents in accordance with the provisions of Section 5 of the Act. It is canvassed by him that Section 6 of the Act provides for constitution of a advisory committee but the said provision has been given a go-by and departmental committee has been constituted which is not in accordance with the mandate of law. It is his further submission that as there has been non compliance of mandatory provision enshrined under Section 6 of the Act the Government cannot take resort to Section 7 of the Act and the circulars that have been brought into existence by the State Government have no sanctity in law.
Resisting the aforesaid submissions it is contended by Mr. Gupta, learned Dy. A.G. that there has been experience of the State Government that the committee could not afford advice within the prescribed period and, therefore, a departmental committee was constituted to fix the price and hence, no fault can be found with the State Government in taking action as stipulated under Section 7 of the Act. Mr. Gupta has placed reliance on a decision rendered in the case of Ram Kumar Asati and others v. State of M.P. and others in W.P. 4507/98 and the order passed in L.P.A. No. 162/99 affirming the order passed in the writ petition.
8. In view of the facts stated above the sole question that falls for consideration is whether the State Government could have fixed the price in the manner it has done. It is not disputed at the Bar that under Section 240 of the M.P. Land Revenue Code the State Government has powers to prohibit or regulate the cutting of certain trees for preventing erosion of soil or to prohibit or regulate for cutting of certain trees in the public interest by making rules and regulations for cutting of such trees. It is also not disputed that the State Government has framed rules for grant of permission for cutting of specified trees. Section 5 of the Act provides that the State Government or an officer of the State Government or an agent has the authority to purchase or transport the specified forest produce. Sub-section (3) of the aforesaid section further stipulates that any person desiring to sell the specified forest produce may sell the same to the Government officer or agent at any depot constituted within the said unit. It is graphically clear the provisions of the Act create a monopoly in favour of the State in respect of certain forest produce. The Act also lays down the procedure for constitution of Advisory Committee. Section 6 of the Act provides for constitution of Advisory committee which reads as under :
'6. (1) The State Government shall for each calendar year constitute in respect of each specified forest produce an AdvisoryCommittee for each Revenue Commissioner's Division in the State consisting of not more than nine members as may be notified by the State Government from time to time for the purpose of advising the State Government in the matter of fixation of a fair and reasonable price of each specified forest produce at which such produce may be purchased by the State Government or its authorised officer or agent as are offered for sale in such division in accordance with the provisions of this Act, Provided that-
(i) two of the members shall be from amongst the traders of such specified forest produce or manufactures of goods in which such specified forest produce is used as raw materials ;
(ii) at least two members shall from amongst the growers of such specified forest produce other than the State Government;
(iii) one member shall be from amongst the members of Parliament representing the State, and belonging to Scheduled Tribes, and
(iv) one member shall be from amongst the members of the State Legislature belonging to Schdeduled Tribes,
(2) It shall also be the duty of the Committee to advise the State Government on such other matters as may be referred to it by the State Government.
(3) The business of the Committee shall be conducted in such manner as may be prescribed.
(4) The members of the Committee shall be entitled to such allowances as may be prescribed.
(5) The Committee shall tender its advice to the State Government within such period as the State Government may, for each Committee, specify in this behalf.'
Section 7 of the Act deals with fixation of price in consultation with committee. It reads as under :
'7. Government to fix price in consultation with Committee :-- The State Government shall after consultation with the Committee constituted under Section 6, fix the price at which specified forest produce shall be purchased by it or by any of its authorised officer or agent from growers of specified forest produce in the Revenue Commissioner's division and shall publish the same in the Gazette and in such other manner asmay be prescribed not later than the 30th day of June of the Calendar year for which the Committee is constituted and the price so fixed shall remain in force upto the end of such calendar year and shall not be altered during that year;
Provided that if the Committee fails to tender advice within the period specified under Sub-section (5) of Section 6 for such further period not exceeding fifteen days as the State Government may also allow, the State Government may proceed to fix the price without consultation of Committee.
Provided further that different prices may be fixed for different units, and in so doing regard shall be had amongst other things to,--
(a) prices of specified forest produce obtained or fixed under this Act or any other enactment during the preceding three years in respect of the area comprised in the unit;
(b) quality of the specified forest produce in the unit ;
(c) transport facilities available in the unit;
(d) the cost of transport; and
(e) general level of wages for unskilled labour prevalent in the unit.'
9. Submission of Mr. Dabir is that the State Government is required to fix the price in consultation with the Committee constituted under Section 6 of the Act but unfortunately such a committee has never been constituted. In the case of Ram Kumar Asati (supra) the learned single Judge after taking note of the relevant provisions held as under :
'According to respondents, there had been general experience that the Committee could not submit its advice within the period used to be prescribed and therefore, in practical the provisions of Section 6 could not be implemented and the State Government started fixing the rates of the forest produce under the provisions of Section 7 of the Act. The State further submits that vide notification dated 7-8-1974 inter departmental committee was constituted for rationalising forest produce. This committee consists of Forest Minister, Finance Secretary, Forest Secretary and Secretary Commerce and Industries and some other members of the other departments. The Conservator of Forest is Secretary of the said Committee. For the present case, it is submittedby the State that a meeting of internal departmental committee was held on 5-5-1998 and on basis of the decision taken by ' the Committee, the State Government issued orders on 29-5-1998 fixing the rates for year 1998 of specified and non-specified timber to be purchased from Bhumiswamis. According to Annexure R/4, the average price of 1997 was taken as the base price and for the year 1998 10% addition was given. According to Annexure R/4, the State had issued instructions that the prices be fixed on basis of the average sale price by adding 10% to 1997 price. Annexure R/5 is the rates fixed by the Conservator of Forest, Balaghat.
The petitioners submit that the rates have been arrived at arbitrarily and without application of mind. In the opinion of this Court, the argument cannot be allowed to stand because under Section 7 of 1969 Adhiniyam, the State is entitled to fix the purchase price having regard to particular facts. According to Annexure R/4, the prices of 1997 were taken as base price and 10% escalation was given. Ordinarily it cannot be held that the prices of the timber or other forest produce would show the tendency of escalation beyond 10% in one year. Exceptions like drought, flood etc. apart the base price taken by the State Government appears to be justified and cannot be condemned as capricious or arbitrary. The rates provided in Annexure R/5 do also appear to be in accordance with the provisions of Section 7. The rates are not only on basis of the species of wood but are in fact based on the basis of the dia (girth) and length of the wood. It would clearly appear that while fixing the prices, the State Government has taken into consideration that the small pieces of timber having low girth are sold in the market at the lesser price. I am unable to hold that while taking the policy decision as contained in Annexure R/4. the respondents/State has not kept in mind or has not taken into consideration the necessary mandates of the law.'
10. The aforesaid order was challenged in L.P.A. No. 162/99 where in the Division Bench after scanning the provision enshrined under Section 6 held as under :
'According to Section 6 of the Act, the Members of the Committee are from traders and growers and certain elected representatives also. It further says that the Committee will be constituted each calendar year and certain time frame will be given to the Committee to submit its report as required by Sub-section (5) which clearly lays down that the Committee will have to give recommendations within a period fixed by order of the Government constituting the Committee. Section 7 says that on recommendation of the, Committee, the Government shall fix the rates. Proviso to Section 7 says that in case the Committee fails to tender its advice as provided under Sub-section (5), then in that case, the State Govt. will be free to fix the rates and proceed in the matter. It is submitted that neither the Committee as contemplated under Section 6 was constituted, nor such price was fixed and the Govt. Is pressing into service the proviso to Section 7 fixing the rates arbitrarily and purchasing the timber from the timber growers and exploiting them to the benefit of the State. As per the provisions of the Act, it is the mandate of the law that the Committee should be first constituted in each calendar year and if the Committee fails to tender advice within the stipulated time, the State Government can press into service the proviso to Section 7 of the Act. State cannot take benefit of its own wrong by not constituting the Committee and resorting to the provisions of Section 7 of the Act.
It is unfortunate that the State has totally lost sight of Section 6 and proceeded to fix the price by the Department without constituting the Committee. However, so far as the present case is concerned, we are not inclined to interfere, because the purchase price of 1997 escalating 10% has been fixed. That appears to be a reasonable method to fix the price. State Government should keep in view the provisions of Section 6 of the Act before resorting to decide the price under Section 7 by the Department. It is the mandate of law and State cannot take benefit of its own wrong by not constituting the Committee and resorting to the proviso to Section 7 of the Act. We hope and trust that the Government will take into consideration the provisions of Section 6 of the Act in future in fixing the price. We are satisfied that by fixing the price as best price for 1997 and giving 10% escalation, the timber purchased from the petitioner is on reasonable and rational criterion.'
11. I have referred to the orders delivered by the learned single Judge as well as the Division Bench to high light that the Division Bench has expressed its anguish over the inaction of the State Government in not constituting the Committee as mandated by the Statute. The Bench has also observed that the State cannot take benefit of its own wrong by not constituting the Committee and resort to the provisions of Section 7 of the Act. That apart the Division Bench has expressed its hope and trust that the Government will take into consideration the provisions of Section 6 of the Act in future in fixing the price. However, while so observing their Lordships affirmed the order passed by the learned single Judge on the ground that the purchase price has been fixed by escalating 10% of the price of the previous year. In the case at hand the public auction was held on 17-2-1995. It is not disputed that there was escalation of price. The observations in the L.P.A. are prospectively applicable. As the Division Bench has taken note of the price fixed by the departmental committee and had given the stamp of approval to the orders passed by the learned single Judge, I am of the considered opinion the ratio of the said case would squarely be applicable to the present case as auction was held prior to the Judgment delivered by the Division Bench. If the auction would have been held after rendering of the Judgment in the Division Bench the matter would have been different but the facts being not so, I am of the considered opinion that the price fixed by the Departmental committee on the basis of the circular dated 4-7-1994 Annexure P.4 would hold good.
12. While affirming the fixation of the price I may observe that it Is not borne out on record whether the State Government has constituted the Committee as mandated under Section 6 of the Act. The observation of the Division Bench is graphically clear to the extent that the Government would take into consideration the provisions of Section 6 of the Actin future in fixing the price. Needless to emphasise that if the State Government fails in its duty in complying with the order passed in L.P.A. No. 162/99 it would face the consequences when the fixation of price would be called in question in respect of the transaction made after the judgment rendered in L.P.A. No. 162/99.
13. In view of my preceding analysis the writ application being sans merit stands dismissed without any order as to costs.