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IN THE HIGH COURT OF UTTARAKHAND AT NAINITAL
U.C. Dhyani, J.
Uttaranchal Forest Development Corporation - Petitioner
Versus
Managing Director, U.P. Forest Corpn. & Others - Respondents
Writ Petition No. 1959 of 2007 (M/S)
Decided On : 23-11-2016
Forest Corporation - Apportionment of Assets and Liabilities - U.P. Reorganisation Act, 2000, Section 47(4), Section 67(2) - The court discussed the apportionment of assets and liabilities of the Uttar Pradesh Forest Corporation between the State of U.P. and State of Uttaranchal as per the U.P. Reorganisation Act, 2000. The key legal provisions of Section 47(4) and Section 67(2) were interpreted to determine the allocation of assets, liabilities, and the overriding effect of directions issued by the Central Government. The court's decision was influenced by the interpretation of these provisions in directing the release of funds to the petitioner corporation.
Fact of the Case:
The petitioner corporation sought a writ to release 54% of total money along with interest from the U.P. Forest Corporation as per Government Orders. The dispute arose from the apportionment of assets and liabilities of the Uttar Pradesh Forest Corporation between the State of U.P. and State of Uttaranchal.
Finding of the Court:
The court found that the respondent corporation was liable to release a sum of Rs. 229.55 crores to the petitioner corporation as per the apportionment of assets and liabilities, and the exemption granted to the U.P. Forest Corporation under Section 12AA of the Income Tax Act.
Issues: The issues involved the apportionment of assets and liabilities between the successor corporations of Uttar Pradesh and Uttaranchal, the tax liability of the petitioner corporation, and the release of funds as per the Government Orders.
Ratio Decidendi: The court relied on the U.P. Reorganisation Act, 2000, and the Central Government's orders to determine the apportionment of assets and liabilities, and the exemption of the U.P. Forest Corporation under Section 12AA of the Income Tax Act.
Final Decision: The writ petition was allowed, directing the respondent corporation to release a sum of Rs. 229.55 crores to the petitioner corporation within six months, failing which corresponding interests would be payable.
U.C. Dhyani, J.
By means of present writ petition, the petitioner corporation seeks to issue a writ, order or direction in the nature of mandamus commanding the U.P. Forest Corporation to release 54% of total money alongwith interest in favour of the petitioner corporation as per the Government Order dated 13.02.2004 (Annexure no. 5) and the order dated 11.07.2005 (Annexure no. 6) passed by this Court in Writ Petition no. 248 of 2000 (M/B).
2. In writ petition no. 248 of 2000 (M/B), titled as Dr. M.S. Pal vs. State of U.P. and others, which was filed as a Public Interest Litigation, challenging the order dated 18.012.2000 issued by the third respondent Principal Secretary, Department of Forests, Govt. of Uttar Pradesh, Lucknow, the Division Bench of this Court vide interim order dated 20.12.2000, restrained the Managing Director, Forest Corporation, Uttar Pradesh from withdrawing any amount deposited against the name of Uttar Pradesh Forest Corporation kept in the reserved fund of the Uttar Pradesh Forest Corporation. The above mentioned writ petition was disposed of vide order dated 11.07.2005 in view of the Government Orders which have been mentioned in the selfsame order.
3. According to the petitioner corporation, the respondents be directed to pay the entire amount of money due to the petitioner pursuant to the order dated 11.07.2005 passed by Hon’ble Division Bench of this Court and the Government Orders dated 13.02.2004 and 28.07.2004 in the ratio of 46:54, i.e., 54%, to the petitioner Uttaranchal Forest Development Corporation.
4. After the reorganization of the State of Uttar Pradesh, w.e.f. 09.11.2000, bifurcation of various government companies and statutory corporations was on the anvil. Section 47(4) of the Uttar Pradesh Reorganisation Act, 2000 (hereinafter referred to as ‘the Act’) deals with the apportionment of the assets of the statutory corporation and government companies between the State of U.P. and State of Uttaranchal.
5. Thus, according to the petitioner, the assets and liabilities of the existing body corporate, as on appointed day, are liable to be divided between the State of U.P. and State of Uttaranchal. The status of Government of U.P., after the appointed day, has been reduced to that of a custodian, in respect of the assets and properties of the various government companies and statutory corporations and it has to perform the duty of a Trust. Section 67(2) of the Act gives overriding effect to the directions issued by the Central Government.
6. It is pointed out by learned counsel for the petitioner that Uttaranchal Forest Development Corporation came into being on 31.03.2001 and became functional from 01.04.2001.
7. Learned counsel for the petitioner, therefore, prays that sub-clause (4) of the Notification dated 13.02.2004 may kindly be enforced through present writ petition.
8. According to learned counsel for the petitioner, in the balance sheet of U.P. Forest Corporation (year ending 31.03.2001), a sum of Rs. 425.11 crores was shown as reserved and surplus, of which the petitioner corporation is entitled to 54% as per Central Government Notification.
9. The respondent Corporation has filed counter affidavit. In para 9 of the counter affidavit, it has been averred that the Central Government, vide order dated 28.07.2004, directed status quo regarding sub-judice liabilities of the erstwhile Uttar Pradesh Forest Corporation, therefore, status quo with regard to the assets from which these sub-judice liabilities are to be met shall also have to be maintained. The liability of income tax and sales tax cannot be shifted because Uttar Pradesh Forest Corporation is still the ‘assessee’ and both the present day Forest Corporations are not the successor Corporations of the erstwhile Uttar Pradesh Forest Corporation as per the taxation laws. The erstwhile Uttar Pradesh Forest Corporation has not been dissolved/repealed and Uttaranchal Forest Development Corporation is new creation, being created by
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