ivil Appeal Nos
313 315 1974
From the Judgment and Order dated 8 8 1972 of the Jammu and Kashmir High Court in Civil First Appeals Nos 46 to 48 of 1972
Naunit Lal for the Appellant
VC Mahajan and RN Sachthey for the Respondent
The Judgment of the Court was delivered by BEG J
These are three appeals by certification against the judgment of a Division Bench of the High Court of Jammu  Kashmir allowing appeals from the judgment of a learned single Judge
938 Jammu and Kashmir Government had filed three applications under section 20 of the
Jammu  Kashmir Arbitration Act 2002 to refer disputes arising out of three agreements between it and the appellant Company to arbitration under the arbitration clauses of agreements between the parties
The applications had been dismissed by the learned single Judge on the ground that the arbitration clause was in each case a part of an agreement which was not duly executed in accordance with the provisions of Section 1221 of the Constitution of Jammu  Kashmir which correspond to those of Article 1991 of the Constitution of India
The Division Bench had allowed the appeals of the Conservator of Forests Jammu Circle after holding that the provisions of section 1221 of the Constitution of Jammu  Kashmir could not be said to have been infringed if contracts were signed by the Conservator of Forests in compliance with an order of the Government
The main stay of the case of the appellant company was an instruction or rule contained in The book of the Finan cial Powers which reads as follows  section 13
The power to sanction or cancel the terms of instruments leases agreements is delegated in the follow ing cases section Nature of power To whom delgated
Extent No 1 2 3 4 X X X X X X 9
To sell forest produce Chief Conser Upto Rs 7000 and to enter into con vator of forest in value in tract for the same each case provided the highest tender conservators of upto Rs3000 in forests each case provided the highest tender is accepted
Divisional upto Rs1000in each forest case provided the officer highest tender is accepted
The Division Bench observed that this rule existed prior to the coming into force of the Constitution of Jammu and Kashmir
It may also be pointed out that this rule deals with the power to sanction or cancel leases agreements and other instruments which was delegated to the officers mentioned there with limitation on their powers specified there
But the Constitutional provision relied upon on behalf of the appellant relates to the manner of the execu tion of the formal 939 document containing the contract after its sanction
It is true that the contract could not be executed without the sanction
Nevertheless if the sanction could be either expressly or impliedly given by or on behalf of the Govern ment as we think it could and if some acts of the Govern ment could fasten some obligations upon the Government the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee
In the case before us we have agreements from which the appellant company has derived benefits
And there are contracts validly executed on behalf of the Government of Jammu  Kashmir by the Conservator of Forests
It is true that if the appellant could take up the legal plea that the contracts were not duly executed in accordance with section 1221 of the Constitution of Jammu  Kashmir it could urge that they did not have any effect at all as contracts whatever other legal consequences its acts or conduct may have had
But this does not mean that if a party obtains benefits on the understanding that it would abide by certain conditions as the appellant company had done it could not be compelled to observe those conditions such as the condi tion to refer disputes to arbitration
However in the instant case we need not go into that question because the plea of a violation of Section 1221 of the Jammu  Kashmir Constitution is itself not sustainable for the reasons indicated below
As the Division Bench of the High Court had pointed out there was a Government order and notification of 23rd February 1957 which reads as follows In exercise of the powers conferred by sub section 1 of Section 122 of the Consti tution the Sadar i Riyasat is pleased to direct that the under mentioned contracts and assurances of property made in the exercise of the executive powers of the State may be executed on his behalf by various Officers subject to any limit fixed by Government rules and orders as follows VI
In the Department of Development 1 Agreements relating to Forest Leases and appropriation of forest products By the secretary to Government Chief Conser vator Conservators of Forests and Divisional Forest Officers
The three leases containing the arbitration clauses which the appellant wants to avoid were executed on 27th Febru ary 1963 and 28th February 1963 and 19th March 1963 after the notification mentioned above
The leases were duly signed by Conservators of Forests who were expressly authorised without any limits imposed on the valuation of the leases to sign and execute them on behalf of the Gov ernment
The delegation of power made prior to the Jammu 10 1338SCI76 940 and Kashmir Constitution related to grants of sanction and their cancellation
It did not expressly refer to powers to execute leases which is a separate matter
The notification of 1957 however is specifically related to the execution of formal documents including leases
Hence it will cover the three leases before us even if the former rules relating to the limits of the authority of Forest Officers to give or cancel certain sanctions could be said to be in existence at all after the enactment of the new Constitution of Jammu  Kashmir and the notification of 23rd February 1957 cited above
We may mention that as has been indicated in the separate judgment of the learned Chief Justice of the High Court the Jammu  Kashmir Government had tried to remove the doubts it entertained about the validity of past leases executed by the Conservator of Forests
It therefore passed two orders one of 14th April 1965 and the other of 29th April 1971
The order of 14th April 1965 ran as follows In supersession of previous orders regarding signing of lease agreement it is ordered that the Conservator of Forests will sign agreements relating to all cases of For ests leases and appropriation of forest products and Chief Conservator of Forests will act as the arbitrator as provided under C1
44 of the Agreement
By order of the Government of Jammu  Kashmir
Sd Bharat Bhushan Secre tary to Govt
Forests Department
The order of 29th April 1971 runs as fol lows Government Order No FST 31 dated 14 4 65 shall bedeemed to have taken effect from 29 1 63 and all actions taken by the Conser vators of Forests in executing the lease agreements by virtue of the said order are hereby regularised
By order of the Government of Jammu  Kashmir
Sd RC Bhargava Secretary to Government Agricultural Department
The learned Chief Justice had observed that these orders purporting to ratify the leases which were valid did not have any legal effect whatsoever and were unneces sary
If there had been any question to be decided as to whether the Government had sanctioned the leases its ac tions apart from the execution of leases could be consid ered
But once there has been a valid execution of leases by duly authorised officers the documents would be the best evidence of sanction also
That was one of the objects of
prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interests against mala fide and other unauthorised acts of its servants or agents as indicated by this Court in Mulam Chand vs State of Madhya Pradesh1 1 1968 3SCR 214
941 In the cases before us the only question which needed decision was whether formal execution of the leases by duly authorised officers had been proved
We are of opinion that the Conservator of Forests was for the reasons given by us duly authorised to execute the leases
Accordingly we affirm the orders of the Division Bench so that matters in dispute between the parties could be validly referred to Arbitration under the appropriate clauses of the agreements
These appeals are therefore dismissed with costs
Civil Miscellaneous Petition No 8573 of 1975 for interim orders is also dismissed as infructuous
SR Appeals dismissed


Summary:
All the three applications filed by the respondent state for a reference to an arbitrator under section 20 of the Jammu  Kashmir Arbitration Act 2002 were dismissed by a single judge of the Jammu  Kashmir High Court on the ground that the arbitration clause was in each case a part of an agreement which was not duly exercised in accordance with the provisions of action 1221 of the JK constitution which correspond to those of article 2991 of the Constitution of India
But the Division Bench allowed the appeals hold ing that if contracts were signed by the Conservator of Forests in compliance with an order of the Government the provisions of Section 1221 of JK constitution could not be said to have been infringed
 Dismissing the appeals of the appellant company by certifi cates the Court
HELD  It is true that the contract could not be execut ed without the sanction
Nevertheless if the sanction could be either expressly or impliedly given by or on behalf of the Government as itcould and if some acts of the Government could fasten some obligations upon the Govern ment the lessee could also be estopped from questioning the terms of the grant of the sanction even where there is no written contract executed to bind the lessee
938 G H 939 A But once there had been a valid execution of lessee by duly authorised officers the documents would be the best evidence of sanction also
That was one of the objects of prescribing a formal mode of execution of instruments on behalf of the Government apart from the need to protect its interest against mala fide and other unauthorised acts of its servants or agents
940 G H Mulamchand vs State of Madhya Pradesh   applied
In this case the contracts were executed by duly autho rised officials under Government s orders