IN THE HIGH COURT OF HIMACHAL PRADESH AT SHIMLA. RSA. NO. 407 of 1998 Judgment Reserved on: 14.7.2009 Date of Decision: 18.8.2009 Banta Ram …Appellant Versus H.P. State Forest corporation Ltd. …. Respondent Coram The Hon’ble Mr. Justice Kuldip Singh,Judge Whether approved for reporting? Yes For the appellant: : Mr. Ajay Sharma, Advocate. For the respondent: : Mr. S.S. Sood, Advocate vice Mr. Neel Kamal Sood, Advocate. Kuldip Singh, J The defendant has come in appeal against the judgment, decree dated 2.3.1998 passed by Addl. District Judge, Sirmaur District at Nahan in Civil Appeal No.36-N/13 of 1993, reversing the judgment, decree dated 30.3.1993 passed by Senior Sub Judge, Sirmaur District at Nahan in Civil Suit No.71/1 of 1989. 2. The facts in brief are that respondent in the year 1988-1989 had invited tenders for extraction of resin in Lot No.4/88 at Rajgarh and _____________________________ whether reporters of Local Papers may be allowed to see the Judgment?Yes 2 the lowest tender of the appellant was accepted. The appellant was required to extract resin out of 13.911 blazes and supply 44 quintals resin per thousand blazes at the rate of Rs.210/- per quintal. The appellant had deposited a sum of Rs.13,000/- by way of security at the time of tender and an agreement dated 5.4.1988 was executed between the parties for extraction of resin. 3. In case of short fall in the contracted yield the appellant was liable to pay compensation to the respondent at the rate of Rs.1,000/- per quintal. As per agreement 612.08 quintals of resin was to be supplied by the appellant to the respondent but he actually supplied only 414.56 quintals resin against which running payment was made to appellant of Rs.14,000/- in June, 1988 and Rs.29,181.60 in October, 1988. The respondent had given benefit of 15.79 quintals to appellant for decrease in yield on account of fire and fall of trees due to wind and further 10% decrease in total yield which comes to 61.20 quintals. Thus the appellant was given benefit of 15.79 + 61.20 = 76.99 quintals. The appellant after availing the benefit of 76.99 quintals was required to extract and supply 535.09 quintals resin. Thus, he supplied 120.53 quintals less resin to the respondent. 4. The extraction charges for 414.56 quintals at the rate of Rs.210/- per quintal were payable to appellant comes to Rs.87057.60 inclusive of the running payments. The value of 120.53 less resin at the rate of Rs.1,000/- per quintal comes to Rs.1,20,530/- , therefore, after adjusting the amount of Rs.87057.60 payable to appellant against the resin supplied to the appellant and after giving credit to 3 security amount of Rs.13,000/- a sum of Rs.67,260/- remains due from the appellant to the respondent. On the amount of Rs.67,260/- a sum of Rs.9200/- had accrued by way of interest on the prevalent bank rate of 18.5% per annum. The respondent had thus filed a suit for recovery of Rs.76,460/- against the appellant which he failed to pay to the respondent despite repeated demands. 5. The suit was contested by the appellant by filing written statement. It was pleaded that respondent had arbitrarily fixed yield of 44 quintals of resin per section of 1000 blazes which is illegal,. The appellant never agreed to such yield. The extraction of 44 quintals of resin per thousand blazes was impossible task especially by applying conventional method in cooler areas. The yield so fixed is otherwise in violation of yield per section prescribed in the Punjab Forest Leaflet No.13 which governs the parties to the agreement. At the time of auction, respondent had assured bidders by announcing that the yield of resin per section shall not be more than 30 quintals. The appellant agreed to give 30 quintals yield to respondent but the officials of the respondent fraudulently inserted 44 quintals per section yield instead of 30 quintals yield in the documents. 6. The appellant has also pleaded that the auction had taken place beyond the period prescribed in the Punjab Forest Leaflet No.13 which had resulted late crop setting. The work of extraction of resin could not be started by appellant in time. The extraction was hampered on account of late supplying of the necessary material. The labourers of the appellant had fled away due to floods from where 4 they had come which was beyond the control of the appellant. The penal clause of payment of Rs.1000/- per quintal is wrong and arbitrary and cannot be enforced. In the year 1989-1990 and 1990- 1991 the respondent had fixed yield 35 quintals per section for the same lot. The demand of yield at the rate of 44 quintals per section is arbitrary and unreasonable. If the rate of resin extraction of yield is fixed 30 or 35 quintals per section then the respondent has withheld an amount of Rs.58,156.20 of security and extraction charges inclusive of interest at the rate of 12.5% per annum and therefore, the respondent be directed to pay the same. 7. On the pleadings of the parties, the following issues were framed:- 1. Whether the suit is not legally maintainable ? OPD 2. Whether the plaintiff has no cause of action? OPD 3. Whether the defendant is bound to pay Rs.67,260/- with interest to the plaintiff as alleged? 4. Relief The trial Court answered the issues No.1,2 in affirmative and issue No.3 in negative and dismissed the suit of the respondent. In appeal Addl. District Judge on 2.3.1998 reversed the judgment, decree of the trial Court and decreed the suit of the respondent for recovery of Rs.63,753/- along with interest at the rate of 12% per annum. The appeal has been admitted on following substantial questions of law:- 1. Whether Ld. First appellate court below erred in appreciating the provisions of law applicable, pleadings of the parties and evidence adduced by 5 them in its true and correct perspective, thereby vitiating the impugned judgment and decree? 2. Whether documentary evidence with special reference to Ex.PA and PC has been mis-read and mis-appreciated by the Ld. First appellate court below, thereby vitiating the impugned judgment and decree? 3. Whether a clause in an agreement which is against the law and statute is void ab initio ? 4. Whether in view of clause No.39 in the agreement Ex.PA, the matter was required to be referred to the MD/Director and for not appreciating the said clause in its right perspective, judgment and decree of the First appellate court below stand vitiated? 5. Whether in view of specific clauses in Ex.PC and PA, Punjab Forest Leaf-Let No.13 was to be adhered to by the parties and for want of the appreciation of the same, judgment and decree of the first appellate court below stand vitiated? 8. Heard and perused the record. The learned counsel for the appellant has submitted that agreement Ex.PA and condition for inviting rates for extraction etc. of resin during 1989 resin session, Ex.PC have been misread. The clause with respect to Punjab Forest Leaf-Let No.13 mentioned in Ex.PA and Ex.PC was to be adhered. The fixation of 44 quintals of yield per section is against the provision of Indian Contract Act and Punjab Forest Leaflet No.13. As such requirement of 44 quintals of yield in the agreement is void and cannot be enforced. In view of clause 39 in agreement Ex.PA the dispute was required to be adjudicated by way of arbitration. The Divisional Manager of the respondent was not competent to file the suit. The learned 6 counsel for the appellant has prayed for setting aside the impugned judgment, decree and restoration of the decision rendered by trial court. The learned counsel for the respondent has supported the impugned judgment, decree. 9. The substantial question of law No.4 is taken first. The clause-39 of agreement Ex.PA provides any dispute/difference or question which may be at any time arise between the parties hereto or any person concerned in respect of the agreement or the subject matter thereof shall be referred to the Managing Director/Director concerned whose decision shall be final and binding on the parties. On the basis of this clause, the learned counsel for the appellant has submitted that the suit filed by the respondent is not maintainable. I have gone through the written statement. In the written statement there is no reference of clause-39 of the agreement nor there is any pleadings to the effect that suit is not maintainable in view of arbitration clause in Ex.PA. The appellant has submitted to the jurisdiction of the civil court, he of his own has not invoked clause- 39 of the agreement. Now it is too late for the appellant to take shelter under clause-39 of the agreement and say that the suit is not maintainable in view of the arbitration clause. In these circumstances question of law No.4 is decided against the appellant. 10. The substantial questions of law No.1 to 3 and 5 are inter-connected and therefore all of them are taken together 7 collectively for disposal. The learned counsel for the appellant has submitted that in agreement Ex.PA in clause-7, it has been provided that tapping and collection of resin shall be in accordance with Punjab Forest Leaflet No.13. Learned counsel for the appellant has drawn my attention to statement of DW-3 P.C. Thakur, Assistant in the office of plaintiff Corporation at Nahan wherein he has stated that he has brought the Punjab Forest Leaflet No.13 and its clause-16 is the same in the copy which the counsel for the defendant has produced and is mark-X. In fact clause-7 of Ex.PA is mere reproduction of Punjab Forest Leaf let No.13 of Ex.PC. In continuation of this submission the learned counsel for the appellant has drawn my attention to mark-X under the heading tapping, technology, at a glance. The page-3 of this document is having the title Himachal Pradesh State Forest Corporation Limited Instructions for Resin Tapping Works Summary of Resin Tapping Data. The clause-16 of the said data provides a tapping unit consists of section worked by one coolie. Ordinarily it contains 1000 channels. The number of trees per section varies from 600 to 700. The seasonal out- turn for a full working season (15th March to 15th October) should be about 30 quintals per section. On the basis of clause -16 of mark-X the learned counsel for the appellant has submitted that 44 quintals per thousand blazes mentioned in agreement Ex.PA is contrary to clause-16 of mark-X. 8 11. Mark-X has not been proved, it is not legal evidence but otherwise also statement of DW-3 P.C. Thakur is not in consonance with mark-X. As noticed above page-3 of mark-X is having the heading Himachal Pradesh State Forest Corporation Limited Instructions for Resin Tapping Works Summary of Resin Tapping Data and clause -16 of this data refers the seasonal out- turn for a full working season ( 15th March to 15th October) should be about 30 quintals per section. This cannot be said to be Punjab Forest Leaflet No.13. In fact Punjab Forest Leaflet No.13 has not been proved on record. In addition to this clause-3 of Ex.PA agreement provides that Corporation in consideration of the payment of extraction charges of Rs.210/- per quintals for a minimum quantity of 44 quintals per thousand blazes crude resin and delivery thereof and subject to the terms and conditions appearing hereinafter hereby grants to the Agent the right to extract and supply crude resin from the blazes/channel marked in lots mentioned in Annexure-I hereto. In other words the appellant has specifically agreed to extract and supply minimum 44 quintals resin per thousand blazes. It has not been shown what is the legal value of Punjab Forest Leaflet No.13. In any case it has not been shown that Punjab Forest Leaflet No.13 has statutory force in Himachal Pradesh. This being the position the parties are bound by agreement Ex.PA. The respondent was bound to supply 44 quintals resin per thousand blazes. He had supplied less quantity of resin as discussed by Addl. District Judge. On 9 facts also the agreement Ex.PA has not been shown in violation of Punjab Forest Leaflet No.13. In these circumstances, the appellant has failed to establish that agreement Ex.PA is void being against statute. The Addl. District Judge has rightly appreciated the material on record including the pleadings and evidence. No case for interference has been made out. The substantial questions of law No.1 to 3 and 5 are decided against the appellant. 12. The learned counsel for the appellant has also submitted that Divisional Manager was not competent to file the suit. In the written statement no specific objection to this effect has been taken nor there is any issue to this effect, therefore, this contention of learned counsel for the appellant is also rejected. 13. No other point was urged. 14. The result of the above discussion, the appeal fails and is accordingly dismissed. No costs. ( Kuldip Singh) Judge August 18, 2009 (sks)