Civil Appeal No 218 of 1970
Appeal by special leave from the judgment and order dated the 10th September 1968 of the Assam and Nagaland High Court in Civil Rule No 56 of 1967
SK Nandy for the Appellant
SN Chowdhary for the Respondent
The Judgment of the Court was delivered by DESAI J
This appeal by special leave arises out of a writ petition filed by the respondent Bishwanath Tea Co Ltd in the Assam and Nagaland High Court questioning the action of the appellant the Divisional Forest Officer Darrang Division of recovering Rs 706937 p as royalty for cutting and felling trees from Tezalpatty grant No 1 held under lease dated September 27 1932 and for a mandamus directing the appellant to issue permits without insisting upon payment of royalty for the trees cut and felled from the area under lease
Respondent Bishwanath Tea Co Ltd  Company  for short took on lease land admeasuring 110726 acres from the Government
The lease was executed between the Company and the Secretary of the State for India
The lease in the first instance was for a period of 15 years commencing from April 1 1932
The lease was to be exploited for cultivation and raising tea garden
The lease was subject to conditions set out therein and generally to Assam Land and Revenue Regulation and the rules made thereunder
On February 15 1966 manager of the Company approached the appellant seeking permission to cut 7000 cubic feet of timber from Grant NC Tezalpatty No 1 of Nagshankar Mouza for utilising the same for building of staff and labourer s houses
By the reply dated April 4 1966 the appellant noted that the timber was to be 665 cut for constructing houses in Partabghur and Dekorai 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 of NC Tezalpatty No 1
It was made clear that if it was not so full royalty will be payable by the company for cutting felling and removing timber
The manager by his letter dated April 23 1966 informed the appellant that as the lessee is Bishwanath 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 the manager suggested that the permit must be issued without insisting on payment of royalty
The appellant by his letter dated May 12 1966 informed the manager that as the timber was required for use in Partabghur and Dekorai tea estates which were not within NC Tezalpatty Grant No 1 of Nagshankar Mouza 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 the purpose unconnected with the grant
For this assertion the appellant relied upon a portion of clause 2 of Part IV of the lease deed dated September 27 1932
Correspondence further ensued between the parties and ultimately the respondent company paid an amount of Rs 706937 p as and by way of royalty under protest and then filed a petition under Article 226 of the Constitution in the High Court alleging that upon a true construction of the relevant clause of the grant as also proviso to Rule 37 of the Settlement Rules as the timber was required for the purpose connected with the exploitation of the grant the 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 the same
The company also prayed for a mandamus directing the present appellant who was respondent in the High Court for issuing permits without insisting on payment of royalty whenever timber was to be cut from the leased area for the purposes connected with the exploitation of the grant
The appellant filed his return to the rule issued by the High Court
A preliminary objection was raised that the right claimed by the respondent flowed from the contract of lease and such contractual rights and obligations can only be enforced in civil court
It was contended that apart from the fact that interpretation of the contract of lease is generally not undertaken by the High Court in exercise of its extraordinary jurisdiction under Article 226 it was further contended that even if interpretation of the relevant clause of the lease as alleged on behalf the respondent finds favour with 666 the court yet facts will have to be investigated before any refund could be ordered or a blanket injunction could be granted for all times to come against the appellant from performing his duty namely of granting permit and recovering royalty
The High Court overruled the preliminary objection observing that the court was not called upon to decide any complicated question of fact and the question for decision before the Court was whether the company was entitled to enforcement of its legal right under the proviso to rule 37 of Settlement Rules
The 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 the function of the Court under Article 226
On merits the High Court held that as the grant NC Tezalpatty No I was in favour of Ms
Bishwanath Tea Co Ltd the company was entitled to cut and fell timber from NC Tezalpatty grant area for its use in other tea gardens namely Partabghur and Dekorai and even if the latter two gardens were outside NC Tezalpatty Grant No 1 yet they being under the ownership and management of the company felling of trees from the area of one grant for utilisation at other places would fall within the second part of the proviso to rule 37 in that the felling and removal of timber was for use not unconnected with the exploitation of the grant and therefore the company was entitled to fell and remove timber in the aforesaid situation without payment of royalty
In accordance with this finding the High Court made the rule absolute directed refund of the amount paid under protest and issued a mandamus directing the appellant to issue permits to the respondent company without payment of royalty for removal of timber from Tezalpatty Grant No 1 for use in tea garden of Dekorai division for exploitation of tea plantation
Hence this appeal by special leave
Unquestionably the rights and obligations between the parties to this appeal are governed by the terms of the lease dated September 27 1932
Specifically the respondent who was a petitioner in the High Court claimed the right to relief under Clause 2 of Part IV of the indenture of lease which reads as under 2
The lessee shall pay to the lessor as provided by rules for the time being in force under the Assam Land and Revenue Regulation for all timber if any on the 667 demised lands cut down removed or utilised by the lessee during the period of the lease
Timber valuation at reduced rates estimated at Rs 124727 Rupees Twelve thousand four hundred and seventy two and annas seven only was credited into the treasury by Challan Nos
43 dated the 24232 The lessee shall be liable to pay timber valuation at full rates on all timber sold or removed for sale and on all timber removed for use unconnected with exploitation of the grant during the period of his lease or renewed lease According to the respondent it would be entitled to remove timber cut and felled from the leased area without liability to pay royalty for its own use irrespective of the fact whether such timber was to be used outside the leased area because such use would be in connection with the exploitation of the grant and there is such a reservation in the grant evidenced by the lease
True it is that if the timber is felled and removed for purpose connected with the exploitation of the grant there would be no liability to pay the royalty
Such a positive right is claimed from a negative covenant in the lease
Clause 2 provides that the lessee had paid timber valuation at the reduced rate at Rs 124727 on 24 2 32 The lessee according to the respondent would be liable to pay timber valuation at full rates on all timber sold or removed for sale on all timber removed for use unconnected with exploitation of the grant during the period of the lease or renewed lease
The implication of the negative covenant would be that if timber is removed from the leased area connected with the exploitation of grant there would be no liability to pay royalty on such timber
The respondent claimed to remove timber without the liability to pay royalty in exercise of the right reserved under Cl 2 thus interpreted
In para 5 of the Writ Petition filed by the respondent in the High Court a reference has been made to the aforementioned term in the lease deed
It was further stated that the respondent paid the royalty under protest which it was not liable to pay as the timber was urgently required for the purpose of the business of the Company in connection with the grant
These averments in the petition would show that the respondent claimed the right to remove timber without the obligation to pay royalty as flowing from the grant evidenced by the lease
Anticipating a possible contention about the jurisdiction of the High Court to entertain 668 a writ petition for enforcement of contractual obligation the respondent contended that the levy of royalty had no authority of law and that this was an unreasonable restriction on the fundamental right of the respondent to carry on its trade
This camouflage of contending that the levy of royalty was not supported by law and that this was an unreasonable restriction on the fundamental right to carry on trade successfully persuaded the High Court to entertain the petition
Shorn of all embellishment the relief claimed by the respondent was referable to nothing else but the term of the lease viz Cl
2 Part IV
Maybe that this term is a mere reproduction of proviso to Rule 37 of Assam and and Revenue and Local Rates Regulations but that by itself is not sufficient to contend that what the respondent was doing was enforcing a statutory provision
Proviso to Rule 37 is an enabling provision
The relevant portion of the proviso reads as under Provided that if any person taking up land for special cultivation is unwilling to pay the full royalty valuation of the timber as estimated he shall have the option of paying a reduced valuation representing only the profit which is likely to derive from the use of the timber for the purposes connected with the exploitation of the grant
If he exercises such option he shall be liable to pay royalty at full rates on all timber sold bartered mortgaged given or otherwise transferred or removed for transfer and on all timber removed for use unconnected with the exploitation of the grant during the period of his lease or renewed lease
 A bare perusal of clause 2 of Part IV of the indenture of lease extracted hereinbefore and the proviso to Rule 37 would at a glance show that the proviso enables a grantee to take benefit of it by fulfilling certain conditions namely by paying a reduced valuation representing only the profit which it is likely to derive from the use of timber for purposes connected with the exploitation of the grant
It is thus an enabling provision and the grantor of the lease may permit this option to be enjoyed by the grantee
But whether that has been done or not is always a question of fact
If the precondition is satisfied the benefit can be taken
That again is a matter to be worked out by the parties to the indenture of lease
In fact clause 2 of the indenture of lease would show that the respon 669 dent grantee paid Rs 124727 being timber valuation at reduced rates
The respondent having made the payment whereupon the grantor of the lease agreed that the grantee will have to pay timber valuation at full rates on all timber sold or removed for sale and on all timber removed for use unconnected with exploitation of the grant during the period of his lease or renewed lease but the grantee will not have to pay royalty for timber felled and removed for purpose connected with the grant
It thus can be demonstrably established that the respondent was trying to enforce through the writ petition the right to remove timber without the liability to pay royalty not under the proviso to Rule 37 which was merely an enabling provision but the specific term of lease agreed to between the parties
Proviso to Rule 37 may not be incorporated in an indenture of lease
If incorporated after fulfilling pre condition it becomes a term of lease
The High Court in our opinion therefore was in error in posing a question to itself as to whether the applicant respondent herein was entitled to the enforcement of legal right under the proviso to Rule 37 of the Settlement Rules
The camouflage successfully worked but once this cloak is removed it unmistakably transpires that the respondent was trying to claim benefit of clause 2 of the lease having fulfilled its pre condition and obtaining the inclusion of its latter part in the contract of lease
The question therefore really is whether such contractual obligation can be enforced by the writ jurisdiction How dangerous it is can be demonstrably established in this case
But we would first address ourselves to the question of law
article 226 confers extraordinary jurisdiction on the High Court to issue high prerogative writs for enforcement of the fundamental rights or for any other purpose
Undoubtedly the respondent contended that its fundamental right under article 191 g to carry on trade has been violated
The High Court overlooked the well settled legal position that a juristic person such as a Corporation is not entitled to any of the freedoms guaranteed by article 19
The respondent was the sole petitioner in the High Court
It is a company incorporated under the Companies Act
The fundamental right claimed under article 19 1 g is to practise any profession or carry on any occupation trade or business
The respondent company contended that it had a right to carry on its trade or business of cultivating and raising a tea garden and as part of it to cut timber and remove the same from the leased area without the payment of royalty and that insistence upon payment of royalty unsupported by law is an unreasonable restriction denying the fundamental right guaranteed to the respondent
article 670 19 1 g guarantees the fundamental freedom to a citizen
The respondent not being a citizen was not entitled to complain of breach or violation of fundamental right under article 19 1 g
See State Trading Corporation of India Ltd vs The Commercial Tax Officer Vishakhapatnam and Tata Engineering and Locomotive Co vs State of Bihar  However the shareholders of a company can complain of infringement of their fundamental rights See Bennett Coleman  Co and others vs Union of India and others
Such is not the case pleaded
Therefore the writ petition on the allegation of infringement of fundamental right under article 19 1 g at the instance of respondent company alone was not maintainable
It is undoubtedly true that High Court can entertain in its extraordinary jurisdiction a petition to issue any of the prerogative writs for any other purpose
But such writ can be issued where there is executive action unsupported by law or even in respect of a Corporation where there is a denial of equality before law or equal protection of law
The Corporation can also file a writ petition for enforcement of a right under a statute
As pointed out earlier the respondent Company was merely trying to enforce a contractual obligation
To clear the ground let it be stated that obligation to pay royalty for timber cut and felled and removed is prescribed by the relevant regulations
The validity of regulations is not challenged
Therefore the demand for royalty is unsupported by law
What the respondent claims is an exception that in view of a certain term in the indenture of lease to wit Clause 2 the appellant is not entitled to demand and collect royalty from the respondent
This is nothing but enforcement of a term of a contract of lease
Hence the question whether such contractual obligation can be enforced by the High Court in its writ jurisdiction
Ordinarily where a breach of contract is complained of a party complaining of such breach may sue for specific performance of the contract if contract is capable of being specifically performed or the party may sue for damages
Such a suit would ordinarily be cognizable by the Civil Court
The High Court in its extraordinary jurisdiction would not entertain a petition either for specific performance of contract or for recovering damages
A right to relief flowing from a contract has to be claimed in a civil court where a suit for specific performance of contract or for damages could be 671 filed
This is so well settled that no authority is needed
However we may refer to a recent decision bearing on the subject
In Har Shankar and Ors
vs The Deputy Excise and Taxation Commissioner and Ors the petitioners offered their bids in the auctions held for granting licences for the sale of liquor
Subsequently the petitioners moved to invalidate the auctions challenging the power of the Financial Commissioner to grant liquor licence
Rejecting this contention Chandrachud J as he than was speaking for the Constitution Bench at page 263 observed as under Those who contract with open eyes must accept the burdens of the contract along with its benefits
The powers of the Financial Commissioner to grant liquor licences by auction and to collect licence fees through the medium of auctions cannot by writ petitions be questioned by those who had their venture succeeded would have relied upon those very powers to found a legal claim
Reciprocal rights and obligations arising out of contract do not depend for their enforceability upon whether a contracting party finds it prudent to abide by the terms of the contract
By such a test no contract could ever have a binding force
 Again at page 265 there is a pertinent observation which may be extracted
Analysing the situation here a concluded contract must be held to have come into existence between the parties
The appellants have displayed ingenuity in their search for invalidating circumstances but a writ petition is not an appropriate remedy for impeaching contractual obligations
 This apart it also appears that in a later decision the Assam High Court itself took an exactly opposite view in almost identical circumstances
In Woodcrafts Assam vs Chief Conservator of Forests Assam a writ petition was filed challenging the revision of rates of royalty for two different periods
Rejecting this petition as not maintainable a Division Bench of the High Court held that the complaint of the petitioner is that there is violation of his rights under the contract and that such violation of contractual obligation cannot be remedied by a writ petition
That exactly is the position in the case before us
Therefore the High Court was in error in entertaining the writ petition and it should have been dismissed at the threshold
672 In substance this was a suit for refund of a royalty alleged to be unauthorisedly recovered and that could hardly be entertained in exercise of the writ jurisdiction of the High Court
As the High Court has also disposed of the case on merits after overruling the preliminary objection it is but meet that we may examine the case on merits and that itself would demonstrably show the dangerous course adopted by the High Court in examining rights and obligations claimed under the contract without proper or adequate material or evidence to reach a conclusion more so when the petition raised disputed questions of facts which needed investigation
Respondent No 1 had entered into a lease dated September 27 1932 with the Secretary of State for India
Part II of the lease describes the land leased to the respondent
The description is as under N C Tengalbasti Village in Sootea Mauza in the Tezpur Sadar Sub Division of Darrang District
Block No 1 Field No 2 1804 B 4 K 12L Block No2 Field No 3 1544 B 2 K 13L Total 110726 Acres on 3349 B 2K 5L This land was taken on lease for cultivation and raising tea garden
Under the relevant Clause 2 above the lessee was to pay timber valuation on full rate for all timber sold or removed for sale and on all timber removed for use unconnected with exploitation of the grant during the period of lease or renewed lease
From this negative covenant in the indenture of lease the respondent says that where timber is cut and felled and removed for a purpose or use connected with the exploitation of grant during the period of lease or renewed lease royalty shall not be payable
Assuming the respondent is right in its construction of Clause 2 of the indenture of lease in order to obtain relief namely to cut and remove timber from the leased area for purpose connected with the exploitation of the grant it must show that the timber is being felled and cut from an area covered by the lease in which Clause 2 finds its place and that such timber is being removed for a purpose connected with the exploitation of the grant
To be more specific following facts will have to proved for obtaining relief i The area covered by the grant
673 ii Felling of the trees from the area covered by the grant
iiiUse to which the felled timber was to be put to
iv Such use will have to be one connected with the exploitation of the grant
v What is meant by the exploitation of the grant  Could these facts be assumed without evidence  Was the High Court justified in observing that it was called upon to decide complicated questions of facts  Some averments in the petition were disputed
The appellant contended that Clause 2 of the indenture of lease only means that if there is some use of timber which is being felled and removed from the area covered by the grant for the purpose connected with the exploitation of that very grant then and only then the relief can be claimed under Clause 2
The High Court found as a fact that the timber was sought to be removed for the purpose of constructing quarters for the workmen employed in Partabghur Garden situated in Dekorai Division
Admittedly this Partabghur Garden is not situated in Tezalpatty Village
At any rate Partabghur Garden where the houses for the workmen were to be constructed was situated outside the area covered by the grant as also outside the Revenue Division in which the leased area is located
The High Court got over this difficulty by observing that the 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 the company and it is immaterial whether one is directly connected with the other or not
If the timber is being felled from the area of one grant to be used at some other place where the Company is carrying on its operation the benefit of the removal of timber without payment of royalty would be available to the Company anywhere in the world
To stretch this logic a little further it would mean that if the respondent Company is to set up a tea garden outside India it can as well cut and remove timber from NC Tezalpatty Grant No 1 in Assam to the place outside India without the obligation to pay royalty
The fallacy underlying the approach of the High Court becomes self evident
It is immaterial that the grantee was the Company
The specific provision is that the grant is for a purpose of cultivation and raising tea garden and that from the area covered by the grant if timber is felled for purpose connected with the grant itself namely cultivation and raising tea garden in that area then alone benefit of removal of timber without payment of royalty can be 674 availed of
It is admitted that Partabghur Tea Garden is outside the area covered by the grant in fact in an altogether different division
In such a situation upon a true construction of Clause 2 Part IV of indenture of lease the respondent Company was not entitled to remove timber without payment of royalty
Therefore even on merits the High Court was in error in granting relief
Accordingly this appeal is allowed and the judgment of the High Court is quashed and set aside and the writ petition filed by the respondent in the High Court is dismissed with costs throughout
SR Appeal allowed


Summary:
Respondent Tea Company took on lease land NC Tezalpatty No 1 from the then Government
The lease was to be exploited for cultivation and raising tea garden and was subject to conditions set out therein and generally to Assam Land and Revenue Regulation and the rules made thereunder
The respondent company sought permission from the appellant to cut 7000 cubic feet of timber from Grant NC Tezalpatty No 1 for utilising the same for building of staff and labourers  house as per clause 2 of Part IV of the lease dated 27 9 1932 and Rule 37 of the Assam Land and Revenue Regulations
Since the timber was required by the company for use in Partabghur and Dekorai tea estates which were outside Tezalpatty No 1
the appellant demanded full royalty on timber cut felled and removed
The company paid an amount of Rs 706937 Paise under protest and later filed a petition under Article 226 of the Constitution in the Assam High Court praying for refund of the amount and for a mandamus directing the appellant for issuing permits without insisting on payment of royalty whenever timber was to be cut from the leased area for the purposes connected with the exploitation of the grant
The preliminary objection raised by the appellant that since the right claimed by the respondent flowed from the contract of lease such contractual right can only be enforced in civil court and therefore cannot be gone into under Article 226 was rejected by the Assam High Court
On merits the High Court further held that as the grant of NC Tezalpatty No 1 was in favour of the respondent the company was entitled to cut fell and remove timber from that grant area for its use covered either by the same area or in other tea gardens which are outside the grant
The High Court made the rule nisi absolute and hence the appeal by special leave
Allowing the appeal the Court  HELD 1
The Writ Petition on the allegation of infringement of fundamental right under Article 191g of the Constitution at the instance of respondent company alone was not maintainable for the reasons that a a juristic person such as a corporation is not entitled to any of the freedoms guaranteed by Article 19 and here the respondent is a company incorporated under the Companies Act b Article 191g guaranteed the fundamental freedom to a 663 citizen and the respondent being a company is not a citizen and c the shareholders of a company alone can complain of infringement of their fundamental rights
669 E H 670 A C Tata Engineering and Locomotive Co vs State of Bihar   State Trading Corporation of India Ltd vs The Commercial Tax Officer Vishakhapatnam 1964 4 SCR 99 and Benuott Coleman and Co and other vs Union of India and others   followed
21It is undoubtedly true that the High Court can entertain in its extraordinary jurisdiction a petition to issue any of the prerogative writs for any other purpose
But such writ can be issued where there is executive action unsupported by law or even in respect of a Corporation where there is a denial of equality before law or equal protection of law
The Corporation can also file a writ petition for enforcement of a right under a statute
Here the relief claimed by the respondent was referable to nothing else but the terms of lease namely clause 2 Part IV
The fact that this term is a mere reproduction of proviso to Rule 37 of Assam Land and Revenue Local Rate Regulation but that by itself is not sufficient to contend that what the respondent was doing was enforcing a statutory provision
The validity of regulations is not challenged
Therefore the demand for royalty is supported by law
670 C F 22
Ordinarily where a breach of contract is complained of a party complaining of such breach may sue for specific performance of the contract if the contract is capable of being specifically performed or the party may sue for damages
Such a suit would ordinarily be cognizable by the Civil Court
The High Court in its extraordinary jurisdiction would not ordinarily entertain a petition either for specific performance or for recovering damages
A right to relief flowing from a contract has to be claimed in a civil court where a suit for specific performance of contract or for damages could be filed
Here this was a suit for refund of a royalty alleged to be unauthorisedly recovered and that could hardly be entertained in exercise of the writ jurisdiction of the High Court
670 F G 671 A G 672 A Har Shankar and Ors
vs The Deputy Excise and Taxation Commissioner and ors
   applied
Woodcrafts Assam vs Chief Conservator of Forests Assam AIR 1971 Assam p 92 approved
Upon a true construction of clause 2 Part IV of indenture of lease the respondent company was not entitled to remove timber without payment of royalty
The specific provision is that the grant is for a purpose of cultivation and raising tea garden and that from the area covered by the grant if timber is felled for purpose connected with the grant itself namely cultivation and raising tea garden in that area then alone the benefit of removal of timber without payment of royalty can be availed of
673 G H 674 A 32
In order to obtain relief namely to cut and remove timber from lease area for purpose connected with exploitation of the grant the company must show that the timber is being felled and cut from an area covered by the lease in 664 which clause 2 finds its place and that such timber is being removed for a purpose connected with the exploitation of grant
To be more specific following facts will have to be proved for obtaining relief i the area covered by the grant ii felling of the trees from the area covered by the grant iii use to which the felled timber was to be put to iv such use will have to be one connected with the exploitation of the grant and v meaning of the exploitation of the grant when controverted these aspects will have to be proved by relevance
And that was the situation when return was filed by the present appellant in the High Court
672 G H 673 A D