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High Court Of Madhya Pradesh
T. C. Shrivastava and P. K. Tare, JJ.
SURAJDIN LAXMANLAL - Appellant
Versus
STATE OF M.P. - Respondents
Misc. Petn. 109 Of 1956
Decided On : 04/24/1959
LAND REVENUE - SURCHARGE ON LIQUOR CONTRACTORS - NOT RECOVERABLE AS ARREARS OF LAND REVENUE - NOT A COMMUTATION CHARGE - NOT A ROYALTY.
Fact of the Case:
The petitioner challenged the State Government's right to recover certain amounts from him as arrears of land revenue. The amounts were sought to be recovered as a surcharge on the amount of bid on the liquor contract, which the petitioner had to pay to the State Government. The surcharge was imposed on the basis of a condition announced at the time of the auction, which stated that a surcharge of 7 1/2 per cent would be charged to all outstill contractors for the privilege to remove fuel and mahua from the Government forest.
Finding of the Court:
The court held that the imposition of the surcharge was without the authority of law and the recovery of the amount as arrears of land revenue was illegal. The court found that the condition announced at the time of the auction did not amount to a contract to pay the surcharge, and even if it did, it could not be recovered as arrears of land revenue in the absence of an express condition in the contract to that effect. The court also held that the surcharge was not a commutation charge under the Rules framed under Section 32 of the Indian Forest Act, 1927, as it was not based on a voluntary agreement between the parties and did not entitle the contractor to collect fuel from a protected forest. The court further held that the surcharge was not a royalty, as it was not a payment made for the privilege of removing articles belonging to the Government and was not based on an agreement.
Issues: Whether the surcharge imposed on the petitioner was recoverable as arrears of land revenue.
Ratio Decidendi: The court held that the surcharge was not recoverable as arrears of land revenue because: (1) there was no express condition in the contract to that effect; (2) the surcharge was not a commutation charge under the Rules framed under Section 32 of the Indian Forest Act, 1927; and (3) the surcharge was not a royalty.
Final Decision: The petition was allowed, the orders passed by the Divisional Forest Officer and the Deputy Commissioner were quashed, and the State Government was directed to refund the outstanding amount of the security to the petitioner.
( 1 ) BY this petition under Article 226 of the Constitution the petitioner challenges the right of the State Government to recover certain amounts from him as arrears of land revenue.
( 2 ) THE facts leading to the petition arc as follows. As a result of auction, the petitioner was granted a licence to distil liquor in Kawardha in 1953 and 1954. The amount which the petitioner had to pay to the State Government was Rs. 18,100/-and Rs. 27,000/- respectively for the two years. At the time of the first auction, the State Government had intimated to the bidders that a surcharge or 7 1/2 per cent over the amount of the bid would be charged to all outstill contractors for the privilege to remove fuel and mahua from the Government forest. At the time of the second auction also, a similar condition was announced. Accordingly, the State Government sought to recover Rs. 1357-8-0 for the first year and Rs. 2032-8-0 for the second year from the petitioner. Respondents 2 to 4, who are respectively the Deputy Commissioner, Durg, the Divisional Forest Officer, Durg Division, Rajnandgaon, and the Tahsildar, Kawardha, have threatened to recover the amounts due from the petitioner as arrears of land revenue. Actually warrants for recovery of the amounts by attachment have been issued. The petitioner's case is that the demand of the amounts is without any jurisdiction and the mode ot recovery as arrears of land revenue is also illegal.
( 3 ) THE respondents in their return have stated that the petitioner is liable for the surcharge as claimed by them on the basis of the condition which was announced at the time of the auctions. Shri H. L. Khaskalam, Addl. Government Advocate, for the respondents, justified the levy on the grounds that : (1) It is recoverable under the contract; (2) It amounts to a "commutation" charged under the Commutation Rules framed under Section 32, of the Indian Forest Act, 1927 (XVI of 1927); and (3) The amount is in the nature of "royalty" and is recoverable as arrears of land revenue. ( 4 ) IN the Excise Sale Memorandum of the Durg District inclusive of integrated States for the year 1954, condition No. 63 is as follows : "the State Government have decided that with effect from 1-1-1954 royalty at 7 1/2 per cent of license fee for outstill shops should be recovered from Excise contractors in the merged States to cover the value of muhua and fuel extracted from the reserved or protected forests by a contractor for his still. This will affect outstill contractors of Kawardha Tahsil only. " In the Excise Sales Memorandum of the Durg District inclusive of integrated States for the year 1955, the same condition, as reproduced above, is repeated, but it is added that "the matter is under Government's consideration and orders will be issued in due course". The petitioner has admitted that these conditions were announced at the time of the auction and that he offered his bid, subject to these conditions. Shri D. L. Jayawant, for the petitioner, however, contends that these conditions merely amount to giving information by the Government regarding some liability which might arise in future. From the wordings of the clauses in the memoranda, the contention seems to be justified. It is not, however, necessary to decide whether the inclusion of the condition amounts to a contract to pay the surcharge. Further, under section 143 of the Madhya Pradesh Land Revenue Code, 1954, moneys due to the State Government under any contract can be recovered as arrears of land revenue, only if there is an express condition in the contract to that effect. It is not alleged in the return filed by the respondents that such a condition was included in the auction sale of the right to run outstills. Accordingly, the amount cannot be recovered as arrears of land revenue, even if there was a contract to pay it.
( 5 ) THE learned Additional Government Advocate sought to justify the levy under the Rules framed under sec. 32 of the Indian
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