1981 Supreme(SC) 304

SUPREME COURT OF INDIA
D.A. DESAI AND R.B. MISRA, JJ.
The Divisional Forest Officer, Appellant
Versus
Bishwanath Tea Co. Ltd., Respondent. 1369
Civil Appeal No. 218 of 1970, D/- 5-5-1981.
Advocates appeared
Mr. S. K. Nandy, Advocate, for Appellant; Mr. S. N. Chowdhary, Advocate for Respondent.

Headnote:

Settlement Rules - Rule 37 - Constitution of India,1950 - Articles 19,19(1)(g), 226 - Payment of royalty for trees cut and felled from area under lease - Breach of Contract - Lease land admeasuring acres from Government - Lease was executed between Company and Secretary of State for India - Lease in first instance was for a period of years commencing from April - Lease was to be exploited for cultivation and raising tea garden - Lease was subject to conditions set out therein and generally to Assam Land and Revenue Regulation and rules made - On February 1966, manager of Company approached appellant seeking permission to cut cubic feet of timber utilising same for building of staff and labourers houses - By reply appellant noted that timber was to be cut for constructing houses in Tea Estates and that it was necessary to ascertain whether any of the aforementioned two Tea estates was situated within the grant evidenced by lease N. C. Tezalpatty No. 1. It was made clear that if it was not so full royalty will be payable by company for cutting felling and removing timber - Manager by his letter informed appellant that as the lessee is Tea Co. Ltd it can cut and fell timber from any of its leased area to be utilised for its purposes in any other division - Therefore manager suggested that permit must be issued without insisting on Payment of royalty - Appellant by his letter informed manager that as timber was required for use in tea estates which were not within from which timber was to be felled and cut full royalty will be payable on timber so cut and removed because it was to be utilised for purpose unconnected with grant - For this assertion appellant relied upon a portion of clause (2) of Part IV of lease deed - Correspondence further ensued between parties and ultimately respondent company paid an amount of Rupees as and by way of royalty under protest and then filed a petition under Article 226 of Constitution in High Court alleging that upon a true construction of relevant clause of grant as also proviso to Rule 37 of Settlement Rules as timber was required for purpose connected with exploitation of grant company as lessee was entitled to cut and remove timber without payment of royalty and, therefore, the recovery of royalty being unsupported by law, the appellant was liable to refund same - Company also prayed for a mandamus directing present appellant who was respondent in High Court for issuing permits without insisting on payment of royalty whenever timber was to be cut from leased area for purposes connected with exploitation of grant - Whether company was entitled to enforcement of its legal right under proviso to Rule 37 of Settlement Rules - Could these facts be assumed without evidence ? Was High Court justified in observing that it was not called upon to decide complicated questions of facts ? - Whether such timber was to be used outside the leased area because such use would be in connection with exploitation of grant and there is such a reservation in grant evidenced by the lease - Whether that has been done or not is always a question of fact - If pre-condition is satisfied benefit can be taken. - Whether such contractual obligation can be enforced by writ jurisdiction ? How dangerous it is can be demonstrably established in this case - Whether applicant (respondent herein) was entitled to enforcement of legal right under the proviso to Rule 37 of Settlement Rules - Held, Court further observed that even though part of the proviso to Rule 37 of the Settlement Rules was incorporated in the lease itself, nonetheless what the Court had to consider was the interpretation of a statutory rule and that is function of Court under Art. 226. On merits High Court held that as the grant was in favour of Tea Co. Ltd., company was entitled to cut and fell timber from grant area for its use in other tea gardens namely even if the latter two gardens were outside yet they being under the ownership and management of company felling of trees from area of one grant for utilisation at other places would fall within second part of the proviso to Rule 37 in that felling and removal of timber was for use not unconnected with exploitation of the grant and therefore company was entitled to fell and remove timber in aforesaid situation without payment of royalty - In accordance with this finding High Court made rule absolute directed refund of the amount paid under protest and issued a mandamus directing appellant to issue permits to respondent company without payment of royalty for removal of timber from Grant No. 1 for use in tea garden of division for exploitation of tea plantation - Hence this appeal by special leave - High Court got over this difficulty by observing that grant being in favour of an incorporated company it can cut and remove timber from leased area for use at any place which is owned managed or controlled by company and it is immaterial whether one is directly connected with other or not - If timber is being felled from area of one grant to be used at some other place where the Company is carrying on its operation benefit of removal of timber without payment of royalty would be available to Company anywhere in World - To stretch this logic a little further it would mean that if respondent (Company) is to set up a tea garden outside India it can as well cut and remove timber from Grant No. 1 in Assam to place outside India without obligation to pay royalty - Appeal allowed