State Of M. P. vs Kaluram - 1966 Supreme(SC) 188

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1966 Supreme(SC) 188

SUPREME COURT OF INDIA
K.N. WANCHOO, J.C. SHAH AND R.S. BACHAWAT, JJ.
State of M.P., Appellant
Versus
Kaluram, Respondent.
Civil Appeal No. 559 of 1964 D/-5-9-1966.
Advocates appeared
Mr. B. Sen, Senior Advocate, (Mr .J. P. Dube, Govt. Advocate of Madhya Pradesh and I. N. Shroff, Advocate with them), for Appellant, Mr. B. C. Misra, Senior Advocate, (Mr. S. S. Shukla, Advocate, with him), for Respondent.

Advocates:
B.C.MISHRA, B.SEN, I.M.SHROFF, J.P.Dubey, S.S.SHUKLA

Headnote:(1) Agricultural Produce Markets Act, 1935 (C.P. & Berar) - Ss. 3 & 16-A - effect of declaring a market area - right of the owner not affected - only management is taken over - consultation with local authority not mandatory - notification issued without consultation - is not invalid.
       Under section 3 of the Act, the State Government may make a declaration that any place or market is a market for the sale and purchase of agricultural produce. This section no doubt provides for consultation with local authorities, but the provision is not of such mandatory character that it should render the notification invalid if the local authorities had not been consulted, or on consultation, refused to consent. But the fact that the notification was valid has no relevance to the title to the land or market so declared. [Para 9
       After issuing the notification declaring a market all that happens is that the management of the market is validly taken over by the State Government. [Para 11
       (2) Agricultural Produce Markets Act, 1935 (C.P. & Berar) - Ss. 3 & 16-A - results of the notifications declaring a market - rights of the authority getting the management of the Market - rights of the authority owning the market,
       (3) Mesne profits and rent - right of the owner - possession transferred by consent - cannot get mesne profits but can claim rent or compensation for use and occupation.
       Where the State Government after declaring a place as market by notifications, hands over its management to a Co-operative Society, and the place where the market is situated is owned by the Municipal Committee, and the transfer of management is made with the consent of the Municipal Committee, the results are:
       (i) the management entrusted to the Society is valid and cannot be claimed by the Municipal Committee;
       (ii) all the fees and income which arise under the statute vest in the authority entrusted with the management;
       (iii) the owner, the Municipal Counsel has no right to claim mensne profits as such but can claim rent or compensation for the use and occupation of the market. The consent in delivery of the management does not take away the right to get rent. 1962 JLJ 1142 REVERSED. [Paras 12 & 13

Judgement

SHAH, J. :- This is an appall with special leave against the decree passed by the High Court of Madh. Pra. in appeal No. 123 of 1958 confirming the decree of the Additional District Judge, Hoshangabad, decreeing the plaintiff s suit. The State of Madhya Pradesh has appealed to this Court.

2. At an auction held on July 20, 1954 by the Divisional Forest Officer, Hoshangabad Division, for sale of "felled trees" in Coupe No. 66. Dhekna, Range Seoni, one Jagatram was declared the highest bidder and the trees were sold to him for Rs. 12,100. The amount of the bid was payable in four instalments of Rs. 3,025 each; the first instalment to be paid immediately on acceptance of the bid, the second on December 1, 1954, the third on February 1, 1955 and the fourth on May 1, 1955. Jagatram executed a contract in favour of the Governor of Madhya Pradesh in which were incorporated the terms and conditions of the sale. The following are the material terms of the contract :

"2. The quantity of the said forest produce to be sold under this contract shall be the quantity which may exist at the time of executing this indenture or may come into existence thereafter in the contract area all of which forest contractor may collect and remove from it in accordance with the conditions herein contained during the period from the date the forest contractor furnishes the necessary coupe boundary certificate after inspection of the contract area to the 30th day of June 1955, * * *

3. The forest contractor shall commence his work of Collecting and removing the said forest produce within one month after furnishing the necessary certificate mentioned in Clause 2 above, * * *

5. The said forest produce shall be removed by the forest contractor from the contract area by the routes specified in the following table and shall be presented by him for examination at one or other of the depots specified in that table :-

(Table omitted).

6. The Forest contractor shall be subject to the Forest Contract Rules as amended from time to time * * * and the Rules shall be deemed to be part of this contract in so far as they are applicable thereto: * * *".

3. Jagatram paid the first instalment due under the contract on July 28, 1954, and subscribed his signature to the terms of the contract. Nathuram and Kaluram stood sureties for him and executed the following bond:

Whereas the Governor in order to secure the due performance of conditions of the above contract demanded security from the forest contractor, I (1) Nathuram son of Kashiram resident of Chaterkheda, (2) Kaluram son of Jhandusingh resident of Pipaliya-Kalan, by occupation Agriculturists, surety on behalf of the forest contractor, undertake to discharge the liability of the forest contractor in case of any act. omission, negligence or default on the part of the forest contractor for any sum which may become payable by the forest contractor to the Governor by or under the conditions of the above contract.

I also agree that any sum which may be payable by me to the Governor under the terms of this bond shall be recoverable in the same manner as an arrear of land revenue."

4. Jagatram removed almost the entire quantity of trees sold to him, but since he did not pay the remaining three instalments of the price, the State of Madhya Pradesh took proceedings to recover from Kaluram the amount due by Jagatram as arrears of land revenue.

5. Kaluram then commenced an action against the State of Madhya Pradesh for a declaration that he was not liable to pay the arrears of forest dues recoverable from Jagatram and for an injunction restraining the State from realising or from continuing the recovery proceedings with regard to those forest dues from him. The principal ground in support of the claim was that the forest authorities gave time to Jagatram and omitted to take steps which their duty to the surety required them to take i. e. prompt seizure and sale of the trees after the second instalment had fallen due, and since on that

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