This writ petition is filed assailing the orders in Rc.No.2124/S2/94, dated 25.7.2001 passed by the 1st respondent-Divisional Forest Officer, Khammam Division, cancelling the Saw Mill licence of the petitioner, confirmed by the 2nd respondent-Conservator of Forest, Khammam Circle, Khammam vide proceedings Rc.No.4503/02/M3, dated 18.3.2003, as arbitrary and illegal.

2. The petitioner is the proprietor of Sri Venkateswara Saw Mill, Pallegudem Village, Khammam Rural Mandal and District. He was granted licence bearing No.25/99 under the Andhra Pradesh Saw Mill (Regulation) Rules, 1969 (for brevity “the Rules”). The said licence was being renewed from time to time and was valid upto 31.12.2001 at the relevant point of time. During the surprise inspection of the mill on 3.5.2001, the Divisional Forest Officer (Vigilance), Hyderabad found timber illegally stored in the mill and thereby committed forest offence, violating Rules 3 and 4 of the Andhra Pradesh Forest produce Transit Rules, 1970. On the aforesaid allegation, the petitioner was given a show cause notice proposing to cancel the licence. The petitioner submitted his explanation on 18.7.2001 denying the said allegation. Not being satisfied with the explanation, the 1st respondent cancelled the licence vide proceedings Rc.No.2124/S2/94, dated 25.7.2001. The appeal preferred against the said order was dismissed by the 2nd respondent vide proceedings Rc.No.4503/02/M3, dated 18.3.2003. It is against these orders, the petitioner has filed the present writ petition.

3. Heard Sri P. Veera Reddy, learned counsel appearing for the petitioner and the learned Government Pleader for Forests appearing for the respondents.

4. Learned counsel for the petitioner would urge that the petitioner is only the owner of the saw mill. The timber was brought by one Satyanarayana chary, a local carpenter for conversion and that the stock did not belong to the petitioner. The learned counsel would further urge that, in any event, the alleged offence was already compounded by collecting an amount of Rs.13,520/-as compounding fee and hence licence cannot be cancelled on the basis of the same allegation.

5. On the other hand, the learned Government Pleader for Forests would submit that the petitioner was found to be guilty in holding the stock in the mill contravening the Rules. The petitioner admitted the violation, as is evident from payment of compounding fee. It is urged that mere acceptance of compounding fee does not absolve the petitioner from action against the licence under the provisions of the Rules.

6. Admittedly, the petitioner has paid compounding fee, thus admitting the allegation levelled against him. It is, therefore, not open to him to contend that he has not committed the offence.

7. The question that arises for consideration is, whether it is permissible to cancel the licence when once the offence has been compounded.

8. Section 59 (2) of the Andhra Pradesh Forest Act, 1967 requires to be noticed, which reads as under:

“59. Power to compound offences:--

(2) On receipt of the sum of money referred to in sub-section (1) by such offer,--

(i) the accused person, if in custody, shall be discharged.

(ii) the property seized shall, if it is not to be so retained, be released, and

(iii) no further proceedings shall be taken against such person or property.”

9. From a reading of the aforesaid provision, it emerges that once the offence is compounded and the compounding amount is paid, no further proceedings can be taken against the person or his property. The offence gets obliterated and no further action can emanate thereafter on the same allegation.

10. Identical issue fell for consideration before a learned Division Bench of this Court in DIVISIONAL FOREST OFFICER vs. LACHI REDDY (1978 (2) ALT 96).

11. In that case, the petitioner was a Forest Contractor. He was accused of illicitly felling the trees. The offence was compounded levying fine for the said offence. His contract was als