tition Nos 7597 99 of 1983
And Writ Petition Nos
7606 09 of 1983
Under Article 32 of the Constitution of India
AK Sen FS Nariman SN Kacker AK Ganguli RF Nariman A Patnaik and MM Kshatriya for the Petitioners
F Shanti Bhushan SN Chatterjee GL Sanghi Dr YS Chitale G Rath Advocate General RK Patra RK Mehta and H K 
Puri for the Respondents
The Judgment of the Court was delivered by G JAGANNATHA SHETTY J
Sal seed which is a minor forest produce at Orissa has again become the major subject of litigation between commercial users and the State of orissa
The petitioners herein are holders of long term license from the 318 Government of orissa for collection of sal seeds from certain A specified forest divisions on payment of royalty
The State of orissa enacted Orissa Forest
Produce Control of Trade Act 1981 The Act
It received the assent of President on August 21 1981
The object of the Act was to prevent smuggling forest and also to provide State monopoly in such forest produce
Under Section 13 3 of the Act the State is empowered from time to time to issue a notification specifying the area or areas the forest produce in relation to which and the date from which the Act shall come into force
Purporting to act under this provision a notification dated December 9
1982 was issued by the State Government directing that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds
Thereafter the Government refused to accept royalty from the petitioners in respect of certain forest divisions on the ground that the notification had the effect of rescinding the existing contracts between the Government and the petitioners
The petitioners thereupon moved the orissa High Court with Writ Petitions for declaration that the said notification was void and did not have the effect of rescinding their contracts in relation to sal seeds
The orissa High Court dismissed the Writ Petitions
The matter was brought before this Court in Civil Appeal Nos
6230 31 of 1983
This Court allowed the appeals by judgment dated May 5 1987
which has been since reported in Utkal Contractors  Joinery Pvt Ltd and ors
vs State of orissa and ors
 AIR 1987 SC 1455   The nub of the arguments in those appeals was that the Act was not concerned with the sal seeds grown in the Government lands or Government Forests and in any event the petitioners  contract remained untouched by the notification dated December 9 1982
It was also contended that since the Government was already the owner of forest produce in Government lands all that was necessary to create a State monopoly in any forest produce was to vest in the Government the exclusive right to such forest produce grown in private holding
After dealing with the object of the Act and relevant provisions a bench of this Court consisting one of us o Chinnappa Reddy J said Thus none of these provisions deals with forest produce grown in Government lands nor is there any other provision in the Act which expressly deals with forest produce grown in Government lands
The scheme of the Act is 319 therefore fully in tune with the object set out in the Statement of objects and Reasons and in the Preamble namely that of creating a monopoly in forest produce by making the Government the exclusive purchaser of forest produce grown in private holdings
It as argued by the learned Additional Solicitor General that section 511 was totally out of tune with the rest of the provisions and while the rest of the provisions dealt with forest produce grown in private holdings the very wide language of section S1a made it applicable to all forest produce whether grown in private holdings or Government forests
We do not think that it is permissible for us to construe section 51a in the very wide terms in which we are asked to construe it by the learned Additional Solicitor General because of its wide language as that would merely introduce needless confusion into the scheme of the Act
Having scanned the object and the scheme of the Act having examined each of the provisions of the Act textually and contextually we do not think it is proper for us to construe the words of section S1a in their literal sense we think that the proper way to construe
section 51a is to give a restricted meaning to the wide and general words there used so as to fit into the general scheme of the Act and section 51b are concerned by the conjunction and  and having regard to the circumstances leading to the enactment and the policy and design of the Act we think that clauses a and b must be construed in such a way as to reflect each other
We have no doubt that the contracts relating to specified forest produce which stand rescinded are contracts in relation to forest produce grown in private holdings only
If the very object of the Act is to create a monopoly in forest produce in the Government so as enable the Government among other things to enter into contracts there was no point in rescinding contracts already validly entered into by the Government
Again section 51 does not bar any future contracts by the Government in respect of forest produce if so what is the justification for construing section 51 in such a way as to put an end to contracts already entered into by the Government
Viewing section 51a and 51b together and in the light of the preamble and the Statement of objects and Reasons and against the decor of the remaining provisions of the Act we have no doubt that section 51 like the rest of the provisions applied to forest produce grown in private hold 320 ings and not to forest produce grown in Government landS  Then the conclusion was expressed in the following terms We declare that the Act and the notification issued under the Act do not apply to forest produce grown in Government forests and that it was not therefore open to the Government to treat the contract dated May 25 1979 as rescinded
 On May 29 1987 the Governor of Orissa promulgated orissa Forest Produce Control of Trade Amendment and Validation ordinance 1987 The ordinance
The ordinance shall be deemed to have come into force with effect from September 5 1981 when the principal Act was notified in the Orissa Gazette
The ordinance purports to render the aforesaid decision ineffective
The petitioners have again approached this Court challenging the validity of the ordinance
Before we examine the contentions raised in these petitions lt will be useful to set out the provisions of ordinance 2 It shall be deemed to have come into force on the date on which the Orissa Forest Produce Control of Trade Act 1981 hereinafter referred to as the principal Act had come into force ie 591981 when the principal Act was notified in the orissa Gazette
2 3 In clause c section 2 of the principal Act the full stop at the end of the clause shall be substituted by a comma and thereafter the following shall be added at the end namely Whether grown or found on land owned by private persons or on land owned by the State Government j or in Government forests
In Section 5 of the principal Act in sub section 1 1 i for clause a the following clause shall be substituted namely 321 a all contracts for the purchase sale gathering or collection of specified forest produce grown or found in the said area shall stand rescinded whether such forest produce is grown or found on land owned by private persons or on land owned by the State Government or in Government forests
 ii After Explanation III the following Explanation shall be added namely Explanation IV The Explanations I to III shall be deemed to be explanations to clause b of this sub section only and shall not be deemed as in any manner qualifying or detracting from clause a of this sub section or saving any contracts referred to in clause a from the operation of the provision for recission of contracts contained in the said clause a
In section 9 of the principal Act for sub section 4 the following sub section shall be substituted namely 4 The State Government or its authorised officer or agent shall be entitled to take delivery of any specified forest produce collected by any person from land owned by the State Government or Government Forests on payment of only such collection charges as may be determined by the State Government from time to time
Provided that it shall be open to the State Government or the authorised officer or agent to refuse to take delivery of any such forest produce which is not fit for consumption or use as raw material for manufacture or for trade Provided further that in the case of any dispute the Divisional Forest officer or such other officer who may be specifically empowered in this behalf as specified in sub section 2 shall hear and dispose of the same in the manner provided in this Act and the Rules made thereunder  5Notwithstanding any judgment decree or order of any Court to the contrary the Notification dated the 9th 322 December 1982 issued by the State Government under sub section 3 of section 1 of the principal Act in respect of sal seeds shall be deemed to have been issued in respect of sal seeds whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests and shall be as valid and effectual as if it were issued under sub section 3 of section 1 of the principal Act as amended by this ordinance and all instructions and orders issued or made and all actions taken or things done pursuant to the said Notification in respect of sale purchase and collection of sal seeds shall be deemed to have been validly made taken or done under the principal Act as amended by this ordinance Section 2c of the Act has now been enlarged to include forest produce whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests Section 5 of the Act has been amended to nullify all existing private contracts in relation to specified forest produce
It reads 5
Restriction on the purchase and transport and rescission of subsisting contracts
1 on the issue of a notification under sub section 3 of section 1 in respect of any area a All contracts for purchase sale gathering or collection of specified forest produce grown or found in the said area shall stand rescinded whether such forest produce is grown or found on land owned by the State Government or in Government forests b No person other than i the State Government ii an officer of the State Government authorised in writing in that behalf or iii an agent in respect of the unit in which the specified forest produce is grown or found shall purchase or transport any specified forest produce in the said area
323 Section 5 would come into effect only upon the notification issued by the Government under Section 13 of the Act
The Government has not issued a fresh notification under Section 3 so far as sal seeds are concerned
But the ordinance itself by Section 5 purports to validate the notification issued by the Government on December 9 1982 the legality of which we will presently consider
Mr Nariman learned Counsel for the petitioners contended that the object and drift of the Act was to provide state monopoly in specified forest produce only to prevent smuggling and the notification dated December 9 1982 was extraneous to the purpose of the Act
In support of the contention the Counsel relied upon the Statement of objects and Roasons of the Act the ordinance and Industrial Policy of the State Government
We do not think that the purpose of the Act or the ordinance was to provide State monopoloy only to prevent smuggling
Even in the previous decision of this Court it was observed that the object of the Act was to prevent smuggling and to provide for State monopoly in the specified forest produce
The Preamble of the Act which is a key to the enactment is also clear on the object
It reads An Act to provide for control and regulation of trade in certain forest produce by creation of State monopoly in such trade  Secondly the validity of the statutory notification cannot be judged merely on the basis of statement of objects and reasons accompanying the Bill
Nor it could be tested by the Government policy taken from time to time
The executive policy of the Government or the Statement of objects and reasons of the Act or ordinance cannot control the actual words used in the legislation
In the Central Bank of India vs Their Workmen   section K Das
J said The statement of objects and reasons is not admissible however for construing the section far less can it control the actual words used In State of West Bengal vs Union of India  1964 1 SCR 371 at p 382
Sinha CJ Observed It is however well settled that the Statement of objects and reasons accompanying a bill when introduced in Parliament cannot be used to determine the true meaning and effect of substantive provisions of the statute
They 324 cannot be used except for the limited purpose of understanding the background and the antecedent state of affairs leading up to the legislation
But we cannot use this statement as an aid to the construction of the enactment or to how that the legislature did not intend to acquire the proprietary rights vested in the State or in any way to affect the State Governments  rights as owner of minerals
A statute as passed by Parliament is the expression of the collective intention of the legislature as a whole and any statement made by an individual albeita a Minister of the intention and objects of the Act cannot be used to cut down the generality of the words used in the Statute
 The petitioners cannot also contend that the annulment of their contracts and the restrictions brought about on their rights to trade are unreasonable or arbitrary
Such restrictions must be presumed to be reasonable and in the interest of general public
It is open to the State to make laws for creating State monopolies either partially or complete in respect of any trade or business or industry or service
The State may enter into trade like any other person either for administrative reasons or with the object of mitigating the evils in the trade or even for the purpose of making profits in order to enrich the State exchequer
The law relating to such trading activities must be presumed to be reasonable and in the interest of general public
That was the view taken by this Court in Akadasi Padhan vs State of Orissa 1963 2 Supp
SCR 691 where it was observed that the law relating to such state monopoly should be presumed to be reasonable and in the interest of general public within the scope of Article 196ii of the Constitution
As to the contention of Mr Nariman that the provisions of the Act and the Rules made thereunder do not bar future contracts the like of which the petitioners are having we may say that it would be impermissible for the State to enter into such contracts hereafterwards
The parties or Agents employed by the State cannot work for their own benefits
They must work on behalf of the State
That is what has been stated in Akadasi Padhan vs State of orissa Supra
It seems to us that when the State carries on any trade business or industry it must inevitably carry it on either departmentally or through its officers appointed in that be half
In the very nature of things the States as such cannot function without the help of its servants or employees and 325 that inevitably introduce the concept
Of agency in a narrow and limited sense
If the State cannot act without the aid and assistance of its employees or servants it would be difficult to exclude the concept of agency altogether
Just as the State can appoint a public officer to carry on the trade or its business so can it appoint an agent to carry on the trade on its behalf
Normally and ordinarily the trade should be carried on departmentally or with the assistance of public servants appointed in that behalf
But there may be some trade or business in which it would be inexpendient to undertake the work of trade or business department or with the assistance of State servants
In such cases it would be open to the State to employ the services of agents provided the agents work on behalf of the State and not for themselves
 The next question to be considered is whether the State while purporting to amend the Act has encroached upon the judicial power and set aside the binding judgment of this Court
We do not think that Mr Nariman was justified in contending so
The principles have been well established in a string of decisions of this Court and we may briefly summarise as follows The legsilature may at any time in exercise of the plenary power conferred on it by Articles 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law
There is no prohibition against retrospective legislation
The power of the legislature to pass a law postulates the power to pass it prospectively as well as retrospectively
That of course is subject to the legislative competence and subject to other constitutional limitation
The rendering ineffective of judgments or orders of competent Courts by changing their basis by legislative enactment is a well known pattern of all validating acts
Such validating legislation which removes the causes of ineffectiveness or invalidity of action or proceedings cannot be considered as encroachment on judicial power
The legislature however cannot by a bare declaration without more directly overrule reverse or set aside any judicial decision
Hari Singh  ors
vs The Military Estate officer  Anr  19731 1 SCR 515 Government of Andhra Pradesh  Anr
vs Hindustan Tools Ltd 11975 Supp
SCR 394 VN Saxena vs State of MP  326 and Misri Lal Jain Etc
vs State of Orissa  Anr
   In the instant case having regard to the then existing provisions of the Act this Court declare
that the Act and notification issued thereunder in relation to sal seeds did not apply to sal seeds grown in Government forests
The Act has been suitably amended by the impugned ordinance by removing the cause of ineffectiveness pointed out by this Court
The new provisions would now cover specified forest produce whether grown or found on land owned by private persons or on land owned by the State Government or in Government forests and the contracts relating thereto
Such contracts shall stand rescinded when a notification under Section 13 of the Act is issued
What remains to be considered is whether it is necessary for the Government to issue a fresh notification under Section 13 of the Act
Mr Nariman contended that the notification issued on December 9 1982 was held to be applicable only to sal seeds grown in the private holdings and in the absence of amendment to section 13 the validation of such a notification would not be effective to nullify the con tracts which the petitioners are having
It was also urged that the notification was still born and could not have been validated
We are unable to accept this contention also
The definition of forest produce under Section 2c has been enlarged to include among others sal seeds grown or found on Government lands or in Government forests
Clause a of Sub section 1 of Section 5 has been substituted covering all contracts for the purchase sale gathering or collection or specified forest produce  grown or found
in the area specified in the notification issued under Section 13 of the Act
Both these provisions shall be deemed to have come into force with effect from September S 1981 the date on which the Act had come into F force
The notification dated December 9 1982 issued under Section 13 of the Act reads SRO No 85282 In exercise of the powers conferred by sub section3 of Section 1 of the Orissa Forest Produce Control of Trade Act 1981 orissa Act 22 of 1981 the State Government do hereby direct that the Act shall come into force at once in the whole of the State of Orissa in relation to sal seeds  This notification has been validated under Section 5 of the ordinance not withstanding any judgment decree or order of any Court to the contrary
It shall be deemed to have been issued in respect of sal 327 seeds also grown or found in Government forests
It shall be valid and effectual as if it were issued under Section 13 of the Act as amended by the ordinance
This validation in our opinion is more than sufficient to make it operative to cover the contracts of the petitioners
It does not suffer from any infirmity
The impugned ordinance is therefore valid and cannot be challenged on any ground
In the result these petitions fail and are dismissed but we make to order as to costs
NPV Petitions dismissed


Summary:
The Orissa Forest Produce Control of Trade Act 1981 was enacted to prevent smuggling forest produce and also to provide State monopoly in such forest produce
The State was empowered under section 13 of the Act from time to time to issue a notification specifying the area or areas the forest produce in relation to which and the date from which the Act shall come into force
The State Government issued a notification dated December 9 1982 directing that the Act shall come into force at once in the whole of the State of Orrisa in relation to sal seeds The petitioners were holders of long term license from the Government for collection of sal seeds from certain specified forest 315 divisions on payment of royalty
Consequent upon the issue of the above notification the Government refused to accept royalty from the petitioners in respect of certain forest divisions on the ground that the notification had the effect of rescinding the existing contracts between the Government and the petitioners
The petitioners thereupon filed writ petitions before the High Court for a declaration that the above notification was void and did not have the effect of rescinding their contracts in relation to sal seeds
The High Court dismissed the writ petitions
The Supreme Court allowing the appeals of the petitioners held that the Act and the notification issued thereunder did not apply to forest produce grown in Government forests and that it was not therefore open to the Government to treat the contract dated May 251979
as rescinded
On May 29 1987 the Governor of Orissa promulgated orissa Forest Produce Control of Trade Amendment and Validation ordinance 1987 deeming it to have come into force with effect from September 51981 when the principal Act was notified in the Gazette rendering the aforesaid decision ineffective
The petitioners challenged the validity of this ordinance in this Court
Dismissing the writ petitions this Court  HELD 11
The impugned ordinance is valid and cannot be challenged on any ground
327B 12 The object to the Act was to prevent smuggling and to provide for State monopoly in the specified forest produce and not to provide State monopoly only to prevent smuggling
The validity of the statutory notification cannot be judged merely on the basis of statement of objects and reasons accompanying the Bill
Nor could it be tested by the Government policy from time to time
318B The executive policy of the Government or the statement of objects and reasons of the Act or ordinances cannot control the words used in the legislation
323F Central Bank of India vs Their Workmen  and State of West Bengal vs Union of India 1964 1 SCR 371 at p 382 relied on
316 13 It is open to the State to make laws for creating State monopolies either partially or complete in respect of any trade or business or industry or service
The State may enter into trade like any other person either for administrative reasons or with the object of mitigating the evils in the trade or even for the purpose of making profits in order to enrich the State exchequer
The law relating to such trading activities must be presumed to be reasonable and in the interest of general public
324D E Akadasi Padhan vs State of Orissa 19631 2 Supp
SCR 691 relied on
14 The legislature may at any time in exercise of the plenary power conferred on it by Articles 245 and 246 of the Constitution render a judicial decision ineffective by enacting a valid law
There is no prohibition against retrospective legislation
The power of the legislature to pass a law postulates the power to pass it prospectively as well as retrospectively subject of course to the legislative competence and other constitutional limitation
325E F 15 The rendering ineffective of judgments or orders of competent Courts by changing their basis by legislative enactment is a wellknown pattern of all validating acts
Such validating legislation which removes the cause of ineffectiveness or invalidity of action or proceedings cannot be considered as encroachment on judicial power
The legislature however cannot by a bare declaration without more directly overrule reverse or set aside any judicial decision
325F G In the instant case having regard to the then existing provisions of the Act this Court declared that the Act and notification issued thereunder in relation to sal seeds did not apply to sal seeds grown in Government forests
The Act has been suitably amended by the impugned ordinance by removing the cause of ineffectiveness pointed out by this Court
The definition of forest produce under section 2c has been enlarged to include among others sal seeds grown or found on Government lands or in Government forests
Clause a of subsection 1 of section 5 has been substituted covering all contracts for the purchase sale gathering or collection of specified forest produce  grown or found in the area specified in the notification issued under section 13 of the Act
Such contracts shall stand rescinded when a notification under section 13 of the Act is issued
Both these provisions shall be deemed to have come into force with effect from September 5 1981 the date on which the Act had come into force
326A B E F 317 The notification dated December 9 1982 has been validated under A section 5 of the ordinance notwithstanding any judgment decree or order of any Court to the contrary
It shall be deemed to have been issued in respect of sal seeds also grown or found in Government forests
lt shall be valid and effectual as if it were issued under section 13 of the Act as amended by the ordinance
This validation is more than sufficient to make it operative to cover the contracts of the petitioners
It does not suffer from any infirmity
326H 327A B 16 It would be impermissible for the State to enter into such contracts in future
The parties or Agents employed by the State cannot work for their own benefits
They must work on behalf of the State
324F G  Utkal Contractors  Joinery Pvt Ltd and Ors
vs State of Orrisa  ors
 AIR 1987 SC 1455 1987 3 SCC 279 Hari Singh  ors
vs The Military Estate officer  Anr 19731 1 SCR 515Government of Andhra Pradesh  Anr
vs Hindustan Tools Ltd 119751 Supp
SCR 394 VN Saxena vs State of MP  and Misri Lal Jain Etc
vs State of Orissa  Anr
   referred to