ANDHRA PRADESH FOREST PRODUCE (FIXATION OF SELLING PRICES) ACT, 1989

29 of 1989

An Act to provide for the Supply of Forest Produce and the Fixation of Selling Price in respect therefor and the constitution of an Industrial Plantation Fund and for matters connected therewith or incidental thereto. Whereas , agreements have been entered into, or other arrangements made by the Government with certain industrial concerns for the supply of bamboo and other forest produce; And whereas, certain rates of royalty (selling price) have been fixed by the Government for the supply of bamboo and other forest produce; And whereas, it is considered necessary to rationalise the periods of supply forest produce and the selling prices thereof; And whereas, it is considered expedient in public interest to terminate certain existing agreements or other arrangements made for the supply of forest produce. Be it enacted by the Legislative Assembly of the State of Andhra Pradesh in the Fortieth Year of Republic of India, as follows:-

Section 1 Short title, extent and commencement

(1) This Act may be called the Andhra Pradesh (Fixation of Selling Prices) Act, 1989

(2) It extends to the whole of the State of Andhra Pradesh

(3) It shall come into force on such date as the Government may by notification in the Andhra Pradesh Gazette, appoint.

Section 2 Definitions

In this Act, unless the context otherwise requires,-

(a) `appointed date' means the date specified under Sub-section (3) of Section 1;

(b) `forest produce' means such forest produce as may, from time to time, be specified by the Government by notification for the purposes of this Act;

(c) `Government' means the State Government of Andhra Pradesh;

(d) `notification' means a notification published in the Andhra Pradesh Gazette, and the word `notified' shall be construed accordingly;

(e) `prescribed' means prescribed by Rules made under this Act.

Section 3 Supply of forest produce under agreements, etc

(1) No lease, agreement or any other arrangement entered into or made by the Government providing for the supply of forest produce by the Government shall be for a term exceeding ten years; and the supply under every such lease, agreement or other arrangement shall, notwithstanding anything to the contrary contained in such lease, agreement or other arrangement, be subject to the condition of availability of such forest produce.

(2) Notwithstanding anything contained in the Indian Contract Act, 1872 or the Transfer of Property Act, 1882 or any other judgment, decree or order of any Court, Tribunal or authority to the contrary, every lease or agreement or any other arrangement providing for the supply of forest produce by the Government granted or entered into prior to the appointed date:

(a) for a term exceeding ten years and in force on the appointed date, shall cease to be in force on the expiry of the period of ten years with effect from the date when such lease or agreement came into force; and

(b) shall be and shall be always deemed to be subject to the condition of availability of such forest produce.

Section 4 Fixation of selling price

Notwithstanding anything contained in the Indian Contract Act, 1872 (Central Act 9 of 1872) or the Transfer of Property Act, 1882 (Central Act 4 of 1882) or any other law for the time being in force or any judgment, decree or order of any Court, Tribunal or other authority or in any lease, agreement or other arrangement, it shall be competent for the Government by notification to fix sliding rates for each year effective for three years and also to enhance or reduce such sliding rates for the next three years in respect of the selling price of the forest produce to be supplied under any lease, agreement or other arrangement with effect from such date as may be specified in the notification, having due regard to such principles as may be prescribed.

Section 5 Termination of leases and contracts

Notwithstanding anything contained in the Indian Contract Act, 1872, the Transfer of Property Act, 1882 and any other law for the time being in force, it shall be lawful for the Government to terminate any lease, agreement or any other arrangement granted or entered into before or after the appointed date, in case:

(a) the price for the produce sold has not been paid to the Government in accordance with the terms of the lease, agreement or any other arrangement;

(b) the negligent operations of the lease resulted in depletion of the forest produce.

Section 6 Recovery of amount due under the Act

If the selling price payable under any lease, agreement or any other arrangement has not been paid within the time specified therefor to the Government, the Chief Conservator of Forests may if the amount continues to be due, issue a certificate to the District Collector who shall proceed to recover the same as arrears of land revenue.

Section 7 Saving in respect of acts done in good faith

No suit or other legal proceedings shall lie against the Government or any of their Officers for any damage caused or likely to be caused or any injury suffered or likely to be suffered by virtue of the enforcement of the provisions of this Act or for anything which in good faith done or intended to be so done in pursuance of this Act or the rules made thereunder.

Section 8 Act to override order laws

The provisions of this Act and the Rules made thereunder shall have effect, notwithstanding anything inconsistent therewith in any other law for the time being in force, or any custom, usage or agreement, or decree or order of a Court, Tribunal or other authority.

Section 9 Constitution of Industrial Plantation Fund

(1) There shall be constituted in the manner prescribed a fund called the Andhra Pradesh Industrial Plantation Fund.

(2) From out of the selling price payable by the allottes of forest produce under Section 4, such sum or sums as may be prescribed in this behalf shall, first be credited to the Consolidated Fund of the State, and thereafter under appropriation duly made by law in this behalf, form part of, and be transferred to the Andhra Pradesh Industrial Plantation Fund.

(3) Any sum or sums transferred to the said Fund under sub-section (2) shall be charged upon the Consolidated Fund of the State.

(4) The sums at the credit of the said Fund shall not be expended for any purposes not connected with the raising of industrial plantation or afforestation or purposes incidental there to.

Section 10 Power to make rules

(1) The Government may, by notification, make rules for carrying out all or any of the purposes of this Act.

(2) Every rule made under this Act shall immediately after it is made, be laid before the Legislative Assembly of the State, if it is in session and if it is not in session in the session immediately following for a total period of fourteen days which may be comprised in one session, or in two successive sessions, and if before the expiration of the session in which it is so laid or the session immediately following, the Legislative Assembly agrees in making any modification in the rule or in the annulment of the rule, the rule shall, from the date on which the modification or annulment is notified have effect only in such modified form or shall stand annulled as the case may be, so however, that any such modification or annullment shall be without prejudice to the validity of anything previously done under that rule.

ANDHRA PRADESH FOREST PRODUCE (FIXATION OF SELLING PRICES) RULES, 1991

In exercise of the powers conferred by Sub-section (1) of Section 10 of the Andhra Pradesh Forest Produce (Fixation of Selling Prices) Act, 1989 (Act No.29 of 1989), the Governor of Andhra Pradesh hereby makes the following Rules:

Rule 1

These Rules may be called, the Andhra Pradesh Forest Produce (Fixation of Selling Prices) Rules, 1991 and shall come into force from the date of its publication in the Andhra Pradesh Gazette.

Rule 2

In these Rules, unless the context otherwise requiries:

(a) `Act' means, the Andhra Pradesh Forest Produce (Fixation of Selling Prices) Act, 1989 (Act No.29 of 1989),

(b) "forest produce" means timber bamboo and other wood suitable as per Industrial raw material"

(c) "selling price" means the price payable by the wood-based industries for the forest produce allotted by the Government of Andhra Pradesh and includes the royalty rate payable by the wood-based industries for the rights given to them for extraction and use of such forest produce;

(d) "supply year" means a period of 12 months commencing from the 1st October and ending with the 30th September of the next calendar year in case of bamboo and from the 1st April to the 31st March of the next calendar year in case of miscellaneous mixed wood and timber.

Rule 3

The selling price for the bamboo raw material for supply to Paper Pulp Industries shall be fixed basing on the production costs, but not below the market value of the produce, at the point of supply;

Rule 4

The selling price for the miscellaneous mixed wood suitable for particle boards, rayon grade pulp and paper pulp shall be fixed basing on the production costs, but not below the market value of the produce at the point of supply;

Rule 5

The selling price for timber for supply to plywood Industries shall be fixed basing on the market value, at the point of supply.

Rule 6 Determination of production costs

(a) The production costs for bamboo raw material shall be worked out based on the projected production costs, plantation projects of Andhra Pradesh Forest Development Corporation using the discounted cash flow techniques to arrive the present value;

(b) The production costs for miscellaneous mixed wood raw material shall be worked out based on the projected production costs of Eucalyptus Plantation Projects of Andhra Pradesh Forest Development Corporation using the discounted cash flow techniques to arrive at the present value.

Rule 7 Determination of market value

(1) The market value of a forest produce shall be determined after taking into consideration the following factors:

(a) The sale prices obtained in the open and negotiated sales of such forest produce effected by order or on behalf of the State Government or the Forest Development Corporation within the State during a period of twelve months preceeding six months prior to the date of commencement of the supply year: Provided that, where no such sale was held in the State of Andhra Pradesh during the said period of twelve months or number or magnitude of sales transaction that have taken place during that period is not,in the opinion of the State Government adequate for the purpose of determining the market value, the State Government shall take into consideration the sale prices obtained in such sales held during a period of twenty four months preceeding the period of six months prior to the date of commencement of the supply year; Provided further that, if in the opinion of the State Government, the quantity of forest produce involved in a sale is too small and insignificant to serve as a representative instance for the determination of the market value,the State Government may, having regard to the facts and circumstances of the case, ignore such sale;

(b) the general trend in the prices of the forest produce since the date of sales referred to in Clause (a);

(c) the weightages to be given for the following:

(i) quantities involved in the sales referred to in (a);

(ii)proximity or othyerwise of the areas, where the sales refered to in (a) have taken place, to the areas from where the supplies are to be made;

(d)any other factor which, in the opinion of the State Government, is relevant to the determination of the market value

(2) Where no sale of forest produce has taken place within the State, during the period referred to in Clause (a) of Sub-rule (1), the market value of the forest produce,be determined by the State Government taking into consideration, the open and negotiated sales,transactions of such forest produce effected in one or more of the State/adjoining the State of Andhra Pradesh but keeping in view as far as possible, the factors mentioned in Sub-rule (1). Explanation :- For the purposes of this rule "open sales" shall include in the sales effected by public auction or by inviting public or limited tenders, and "negotiated sales" shall exclude in the sales in which the price or the rate for sale or supply is fixed by the supplier under a pre-existing agreement .

Rule 8

The Selling Price shall be fixed for each year basing on market situation. The price so fixed will not be lower than the selling price of previous year. The selling price so fixed will be based on the recommendation of an independent consultant appointed by the Government. The figure so arrived will be rounded off to the nearest rupee

Rule 9

The selling price shall be revised at the end of every block period of three years. The prices shall become operative from the beginning of the supply year, in which it becomes due for revision irrespective of the date of its communication.

Rule 10

The Government shall constitute Andhra Pradesh Industrial Planatation Fund and make available, a sum not less than 20% of the total selling price payable by the allottees of forest produce under Rule 8 above, every year to the Andhra Pradesh Forest Department or Andhra Pradesh Forest Development Corporation, as an addition to the plan budget, for the purposes connected with the raising of Industrial Plantations or afforestation or improvement to natural forests or purposes incidental thereto.