Mahendra Pal vs State Of H.P. & Ors

State of H.P. & Ors. .... Respondent(s)

JUDGMENT

P. Sathasivam, J.

1) Leave granted.

2) This appeal is directed against the judgment and final

order dated 12.08.2008 passed by the High Court of

Himachal Pradesh, Shimla in O.S.A. No. 13 of 2002

whereby the Division Bench of the High Court while

affirming the judgment dated 02.07.2002 in Civil Suit No.

36 of 1998 passed by the learned Single Judge dismissed

the appeal filed by the appellant herein.

1

3) Brief facts:

(a) Kutlehar was a small princely State in Kangra Hills

having 16 Tapas (Tikas) as forests which were known as

`Kutlehar Forests'. These forests were managed by the

Raja of Kutlehar subject to the terms and conditions

specified by the then Government. Such management

continued generation after generation. The appellant was

appointed as a Forest Officer in the capacity of

Superintendent of Kutlehar Forests under Section 2(2) of

the Forest Act by Notification dated 01.10.1958 issued by

the then Government of Punjab before the formation of the

State of Himachal Pradesh. The said forests were under

the charge and management of the appellant and he was

entitled to dispose of the forest produce such as resin,

timber, bamboo, grass etc. in accordance with the working

plans prepared by the Forest Department. As per the

terms and conditions of the management, he was entitled

to retain 3/4th share of the total income from the said

2 forests and 1/4th share of the gross income was payable to

the Government. The entire expenditure on the

management and exploitation of the forests were to be

incurred by the appellant. In the year 1992, the State

Legislative Assembly passed the Himachal Pradesh

Kutlehar Forests (Acquisition of Management) Act, 1992

(hereinafter referred to as `the Act'). Pursuant to the

provisions of Section 4 of the said Act, the management of

these forests was taken over by the State Government.

Challenging the constitutionality of the Act, the appellant

filed Civil Writ Petition No. 707 of 1992 in the High Court

whereby the High Court, by judgment dated 09.05.1994,

upheld the constitutional validity of the aforesaid Act

except Section 5.

(b) During the year 1995, when the management of the

Kutlehar Forests was with the appellant, he offered

1,33,591 resin blazes to Divisional Manager, H.P. State

Forest Corporation Ltd., Una (hereinafter referred to as

3 `the State Corporation')-respondent No. 3 herein, for resin

tapping, but on 14.02.1995, the State Corporation took

over the resin blazes so offered and invited tenders for

undertaking the work of tapping. On 10.03.1995, the

State of H.P. issued the notification and enforced the

provisions of the Act w.e.f. 11.03.1995 and asked the

appellant to hand over the management of the Kutlehar

Forests. On 16.03.1995, the appellant filed Civil Writ

Petition No. 127 of 1995 challenging the notification dated

10.03.1995 in the High Court. The High Court passed the

interim order to the effect that the appellant would

continue with the management of the forests.

(c) On 25.04.1995, the `Pricing Committee' of the State

Corporation decided the prices of resin blazes @ Rs. 25/-

per blaze for the season 1995. On 09.08.1995, the High

Court dismissed the writ petition observing that the

disputed questions of fact could not be gone into in

exercise of extraordinary jurisdiction under Articles

4 226/227 of the Constitution of India and the appellant

was given liberty to resort to appropriate proceedings

before the appropriate forum. On 05.01.1996, the

appellant filed a Special Leave Petition before this Court

which became Civil Appeal No. 239 of 1996 and was

dismissed by order dated 22.08.2000.

(d) On 07.02.1996, the management of the Kutlehar

Forests was taken over by the State Corporation in

absentia. In the year 1998, the appellant filed a suit being

Civil Suit No. 36 of 1998 for recovery of Rs. 35,67,722/-

along with interest @ 16.5% per annum with costs in

respect of 1,33,591 resin blazes offered to Divisional

Manager, Himachal Pradesh for resin tapping when the

management of the Kutlehar Forests was with him in the

1995 season.

(e) By order dated 02.07.2002, the learned Single Judge

of the High Court dismissed the Civil Suit No. 36 of 1998

stating that all rights, liabilities and obligations of the

5 appellant in relation to the grant or management under

any contract entered into before the appointed day and

properties and rights stood vested in the Government

w.e.f. 11.03.1995. Questioning the said order, the

appellant filed Original Side Appeal No. 13 of 2002 before

the Division Bench of the High Court which was dismissed

by the impugned order dated 12.08.2008. Aggrieved by

the said order, the appellant preferred this appeal by way

of special leave petition before this Court.

4) Heard Mr. P.S. Patwalia, learned senior counsel for

the appellant and Mr. Naresh K. Sharma, learned counsel

for the State.

5) It is the categorical claim of the appellant that

Section 4 of the Act does not take away the vested right of

the appellant which had accrued to him before the

appointed day, i.e., 11.03.1995. The appellant, who was

still in the management of the Kutlehar Forests, offered

1,33,591 resin blazes to the Divisional Manager of the

6 State Corporation, respondent No. 3 herein, for resin

tapping during 1995 vide his letter dated 03.02.1995. It

was also highlighted that respondent No.3 took over the

blazes so offered and invited tenders for undertaking the

work of tapping on 14.02.1995 and the tenders were

opened on 01.03.1995 at 2.30 p.m. Respondent No.3

acknowledged vide letter dated 22.03.1995 that the work

on these blazes was in progress.

6) Before considering these factual aspects, it is useful

to refer the earlier litigation and ultimate order passed by

this Court between the same parties on 31.03.1999 in

Civil Appeal No. 9495 of 1995. The erstwhile ruler, Raja

Mahendra Pal approached the High Court for issuance of

the command to the State Corporation by treating him

equivalent to the Government of Himachal Pradesh with

conferment of monetary gains which were permissible to

the State Government on the basis of the decision of the

Pricing Committee. The High Court granted the prayer

7 sought for by Raja Mahendra Pal. By the said judgment of

the High Court, Raja Mahendra Pal was held to have been

equated with the Government and entitled to the relief

claimed by him as according to the High Court he was

found to have been deprived of the right to life as

envisaged by Article 21 of the Constitution of India. By

way of issuance of writ of mandamus, Raja Mahendra Pal

was held entitled to the interest on the delayed payment of

royalty, damages with respect to illicit felling plus 100 %

penalty for the illegally felled trees. He was further

conferred with the grant of interest on interest and share

in the levy of extension fee chargeable by the State from

the Corporation under the terms of the agreement of the

provisions of law applicable. The said judgment of the

High Court had been assailed on various grounds before

this Court in C.A. No. 9495 of 1995. By judgment dated

31.03.1999, the directions of the relief granted in favour of

Raja Mahendra Pal have been set aside. However, certain

8 details/materials mentioned therein are relevant for

disposal of the present appeal. It is seen that by

Notification No. 4531-FT(CH-58/523 dated 1.10.1958

issued under Section 2(2) of the Act, Raja Mahendra Pal

was appointed as a Forest Superintendent and the

employees working under him in the aforesaid forest

declared as Forest Officers with respect to Kutlehar

Forest. As per the terms of his appointment, he was held

entitled to retain 3/4th of the income derivable from the

forest where 1/4th of the gross income was payable to the

Government. The conditions explicitly provided:

"The Raja shall keep a register showing all the receipts from the sale of timber, bamboos and other forest produce whether to zamindars or to traders. Of this income, the Raja shall in case of Kutlehar, receive > and Government <."

However, this practice was discontinued after the forests

were nationalized by the State in the year 1974 when the

State Corporation was incorporated under the provisions

of the Companies Act, 1956. Produce of the government

forests, thereafter, could be sold only to the State

9 Corporation. Though several other details are available,

we are not concerned with those details except the

proceedings of the Pricing Committee. In the ultimate

conclusion, this Court observed as under:

"The respondent No.1 as already noticed could not be equated with the State Government of Himachal Pradesh, and had no basis to claim the ownership in the trees grown in the Kutlehar forest after he accepted his appointment as a Forest Superintendant in the year 1958 under Section 2(2) of the Forest Act. The acceptance of his position as a Forest Superintendent in law, `a forest officer' appointed under Section 2(2) of the Forest Act clearly established that the respondent No.1 had accepted the State Government to be dominant owner of the property and that he was merely an officer appointed by the Government in exercise of its sovereign power. But for his position as a Forest Officer, he had no jurisdiction to deal with the forest or even enter into it. The arrangements made earlier in the form of conferment of rights upon his forefather stood extinguished and merged with his position as a Forest Officer of the State Government. He was entitled only to such benefits to which the Forest Officer is entitled. His entitlement in the present case was restricted only to the extent of sharing of the royalty and not for anything more."

Hence, it is clear that Kutlehar Forests were under the

charge and management of the appellant and he was

competent not only to maintain and preserve the said

forests but was also entitled to his share in accordance

with the working plans prepared by the Forest

Department. It is also his claim that he took adequate

1 steps for the protection of Fauna and Flora available in

the forests in question. It is also his claim that according

to the terms and conditions subject to which management

of the said forests was entrusted to the appellant and his

forefathers, they were entitled to retain 3/4th share of the

total income derived or derivable from the forests whereas

1/4th share of the gross income was payable to the

Government.

7) It is further seen that pursuant to the powers

conferred by clause 51 of the Memorandum and Articles of

Association, the Government of Himachal Pradesh vide

Notification No. 10-26/72-SF, Shimla dated 18.05.1974

constituted a Committee of Officers to determine the price

and terms and conditions for the supply of resin, resin

blazes, standing trees and other forest produce to be

handed over to the Himachal Pradesh Forest Corporation

Limited from time to time. The appellant has also pointed

out that the Pricing Committee vide its decision recorded

1 in item No.8 of the minutes of the proceedings of the

meeting held on 16.05.1988 decided to apply decisions of

the Pricing Committee to the Kutlehar Forests also. The

relevant portion of the decision is reproduced hereunder:

"Item No.8 : Charging of Royalty for Kutlehar forests.

It was decided and clarified that the royalty will be charged for Kutlehar Forests on the same lines as fixed for Government lots linked with the nature of trees and intensity of marking. No differential rates or system can be fixed for Kutlehar Forests."

That as per the decision of the Pricing Committee dated

25.04.1995 at Item No.1 the price for 1995 season was fixed

@ Rs.26/- per blaze tentatively. Item No.1 read as under:

"Item No.1 Royalty rates of resin blazes for 1994 season.

The royalty rate of resin blazes is fixed on the basis of percentage of increase, decrease of price of `N' grade resin over a period of time during the year concerned. For the year 1994, a tentative rate of Rs.25/- per blaze was fixed. There have been decrease of 11.90% in the average rate of `N' grade resin during the period from 1.4.93 to 31.3.94. After deliberation, it was decided to fix the royalty of resin blazes @ Rs.24/- (twenty four) per blaze for 1994 season and Rs.26/- (twenty six) tentatively for 1995 tapping season."

In this way, the appellant made a claim for a sum of

Rs.34,73,366/- to be payable by the State Corporation

1 towards the royalty of resin blazes relating to 1995

season.

8) Apart from his own evidence and other materials

placed before the learned single Judge of the High Court,

the appellant also relied on the statement of Shri Chander

Bhusan Pandey, Divisional Manager, Forest Corporation,

Una who was examined as PW-3. The appellant has

pressed into service the following statement made by PW-3

in support of his claim:

" On S.A. 7.3.2001

I am posted as Divisional Manger of the State Forest Corporation at Una since 8.12.2000. I have brought the summoned record. Letters copies of which are Ex. PW 3/A and Ex. PW 3/B were received from the plaintiff. A public notice with regard to auction/tender of labour supply mate and tapping of resin blazes for the year 1995 was issued on 14.02.1995. Copy of such public notice is Ex.PW 3/C. In pursuance of this public notice, tenders were received and final tender was accepted, and as per this final tender accepted, royalty to the extent of Rs.34,73,366.00 was payable to the plaintiff as claimed by him. Letter dated 1.9.1995 copy of which is Ex.PW 3/D was also received from the plaintiff. Similarly, letter dated 18.10.1995 copies of which is Ex.PW 3/E was received from the plaintiff. On 5 th September, 1995 and 6th September, 1995, letters were addressed respectively to the plaintiff and Managing Director, H.P. State Forest Corporation. Copies of the same are Ex.PW 3/F and Ex. PW 3/G. Ex.PW 3/H is the copy of the reminder dated 22.12.1995 addressed by the Divisional

1 Manager of the Forest Corporation, Una to the Director (North) at Dharamshala.

XXXXXXXby defendants 1 and 2.

Presently, Kutlehar Forest is under the State Government. I am not aware since when it is under the State Government. I never participated on behalf of the Forest Corporation in the acceptance of tenders received in pursuance of public notice dated 14.2.1995. As per the record, the plaintiff was claiming royalty of Rs.34,72,366.00 on the basis of acceptance of tenders. I do not have personal knowledge in this regard. I have stated about the claim of the royalty by the plaintiff on the basis of letters received from him which is available on the record brought by me today. However, complete record with regard to acceptance of tenders have not been brought by me today.

XXXXXby defendant No.3.

Nil. Cross-examination by defendants 1 and 2 adopted.

R.O. & A.C. Sd/- illegible Sd/- illegible March 7, 2001 (R.L. Khurana) Judge"

9) The learned Single Judge and the Division Bench of

the High Court basing reliance on Section 4 of the Act

held that the right, title and interest of the

plaintiff/appellant herein grantee/superintendent of

Kutlehar Forests stood extinguished on the appointed day,

i.e. 11.03.1995, therefore, he was under no obligation to

1 continue with the management of the forests nor has any

right to share in income arising out of the produce of the

said forests on and after 11.03.1995. It is true that after

11.03.1995, the appellant cannot have any right over the

forest produce. However, in view of the earlier order of

this Court clarifying the position and his entitlement,

there is no need to go into the vesting right etc. as claimed

by the State Government. Admittedly, the appellant was

asked to look after the forest produce as Superintendent

of Forests and in lieu of salary he was assured grant of

3/4th of the price of resin blaze. It is specifically pleaded

and the materials were also placed by the appellant about

the work done such as maintenance, manuring protecting

the trees etc. It is also specifically pleaded that before the

appointed day, i.e. 11.03.1995, he was still in the

management of Kutlehar Forests, offered 1,33,591 resin

blazes to the Divisional Manager of the State Corporation

at Una for resin tapping during 1995 vide letter dated

1 03.02.1995. It is also seen that the State Corporation-

respondent No.3 herein took over the resin blazes so

offered and invited tenders for undertaking the work of

tapping on 14.02.1995 and the tenders were opened on

01.03.1995 at 2.30 p.m. All these details are available in

the letter of the State Corporation dated 22.03.1995.

Inasmuch as the appellant was continuing as

Superintendent of Forests without a specific salary but

with an assurance of 3/4th price of forest produce such as

resin blazes etc. till the appointed day, i.e. 11.03.1995, we

are of the view that the appellant is entitled for his

legitimate dues till such date. Those aspects were not

being correctly adverted to and appreciated by the learned

single Judge as well as by the Division Bench of the High

Court and mainly concentrated on the "vesting" of forests

on or after 11.03.1995 in favour of the State Corporation

by holding that the appellant was not entitled to claim

anything thereafter. Even though the appellant placed

1 relevant materials including the assertion and statement

of PW-3 who is none else than the Divisional Manager for

the State Corporation, Una, those aspects have not been

properly appreciated. In those circumstances, we are of

the view that ends of justice would be met by remitting the

matter to the learned Single Judge for fresh disposal and

quantifying the eligible amount.

10) Under these circumstances, we set aside the orders

passed by the learned Single Judge as well as the Division

Bench of the High Court and remit the matter to the

learned Single Judge for fresh consideration with the

available materials. Except pointing out the claim of the

appellant, we have not expressed anything on the merits

and it is for the learned Single Judge to determine the

quantum of the amount till the appointed day, i.e.

11.03.1995 as per the materials placed by both parties in

the form of oral and documentary evidence. Inasmuch as

the matter is pending from 1999, we request the learned

1 Single Judge to restore the suit to its original number i.e.,

Civil suit No. 36 of 1998 and dispose of the same within a

period of six months from the date of receipt of this

judgment.

11) The appeal is allowed to this extent. There shall be

no order as to costs.

..........................................J. (P. SATHASIVAM)

..........................................J. (DR. B.S. CHAUHAN) NEW DELHI;

OCTOBER 26, 2010.

1